good morning and welcome to "squawk box." i'm andrew ross sorkin along with the cast, the crew, ross westgate on my right, mr. liss man the professor on high left, and kelly evans. of course joe and becky are off today. >> you're going casual. >> the sweater came out. >> would joe disapprove of the sweater? >> i'm going to utah. figured i'd -- >> here's the irony. andrew ross sorkin is the most experienced american anchor he table. you are the senior member of the

team at the tender age of, what, 22? >> joe would say what is this about the -- not the tallest midget, but -- >> minute knhe has something li lepper with five fingers. with the most fingers. >> the difference is between the ones that he tells on air and the ones that he tells on a commercial break. >> he does that one on air. the short people joke he doesn't and apparently i should not have. >> i'm getting a accepts that trying to tell joe's secondhand are worse than listening to tell first time around. >> joe hovers over the table like an aura. he's in all of our heads in some way or another. and of course we miss becky even more. >> and to channel joe just real quick -- >> uh-oh. >> no, there is a cover sore in

busine story in business week and it's about president obama and the which i. and it's is the president good or lucky. and that is the question they positive it. . >> i would guess it's lucky. >> joe would say the economy is better despite him. >> the question is it better to be good or lucky. >> and maybe it doesn't matter. >> most people say lucky. i have contended for a very long time that the ttical establishment, the mind of the nation, gives the president more credit and more blame than he deserves when it comes to the economy. i mean, you're talking about these broad cycles. the whole argument over oil production is a good example. when do you have to sink the wells in order to crate the production. when is the productivity that creates the jobs. these are long cycle things and we sit there and we blame the

presidented for this regulation or that regulation. >> i almost feel the same way which is that really what matters is kind of recognizing where are you in the business cycle, reacting accordingly. his timing on that coming when we were unleashing the stimulus plans, again, supporting them being a policy choice, but -- >> maybe a difference, though, is ronald reagan who came this with a very optimistic attitude at a time when the country was -- >> now you're channeling joe. we can continue this conversation, but making headlines this morning, and there are a lot of help including a very interesting story about goldman sachs reportedly starting to scan internal e-mails no the term, are you ready for this, muppet. ceo lloyd blankfein has told partners that the financial giant is looking for evidence that the employees referred on

clients in deroguer to ways after greg smith resigned in a scathing morning times op-ed smith says he saw five managing directors refer to clients as mupp muppets. >> this is a british term. >> this is not jim henson. >> syeah, wil in britain, muppe derogatory term, as in really dumb or stupid and you can add any other anglo-saxon expletives you want to. but you typically say that guy's a real muppet. >> on this side of the atlantic, it's expletive. i'll be on you all morning. >> the question i have is i'm sure goldman sachs as many companies in america scan e-mail for real expletives, four letter

words. there are systems for that. the question is how you start scanning for, quote, derogatory phrases or a lot of people will put a let errands then a couple of asterisks and things. >> it's one thing if they're going back to look for the terms or monitoring the usage. >> if they can't figure out muppets, they'll find another one. >> is the point if smith was right or is the point here to examine whether or not they have a culture is that is anti-customer? you don't scan the e-mails is the purpose is the latter. >> no, it's one to say we're doing something about this. we're taking it seriously, we care about our clients so we're doing a review to look at what mr. smith had to say. and two, it's to scare the be jesus out of every employee in the company to say this is not working anymore. if you were doing this before, you're not anymore. >> do you think it drives more

e-mail activity off a goldman e-mail account on to other ones where it's the same -- >> good question. >> so all you do is have the word muppet used his in less in e-mails but nothing done about the culture. >> a thin way on look at your corporate culture. >> so if i were to call you a muppet, that would be -- i like the muppets as a kid. >> it's a real barrow boy trader's term. and it's derived from the fact in a that muppets are puppets. because if the puppet wasn't being managed, it wouldn't do anything. and about about there isn't anybody controlling the puppet, the puppet doesn't know what to do. >> and here we think of kermit. >> yeah, not good. but nothing to do with that they don't like the muppets show. nothing to do with that.

>> and i don't know about if you know this, the muppets -- >> mcdonald's ceo, jim skinner, retiring after more than seven years at the helm. don thompson will take charge. analysts expect to be a smooth transition. skinner is weidely credited wit executing a turn around for the past food chain. shares more than tripled while he was ceo. will that get a thumbs up? >> probably. do you think it won't? >> i'm just asking. >> i imagine yes. what do i know. >> and apple's new iphone will reportedly have a sharper and bigger 4.6 inch retina display. i have no idea what i just said. apple has started placing orders

to its suppliers and the device is set to be launched around the second quarter. >> i'm very excited about that. >> is there any other company whose supply chain is more monitoreded? the company can't do anything in secret anymore. apple orders switches or plugs or something like that and everybody knows about it. >> this is the ipad 3. >> third generation. >> i'm blown away by the resolution. >> i showed you this yesterday and just killed it. if you can see this, i'm going to talk out loud. here we go. are you ready? good morning, period, we're on the "squawk box" set, period, hopefully, comma, having a great show, period. is that amazing some can you read that? it said perfect. and this is the future. is that unbelievable? >> i don't know how i feel about the future. >> i think it's a remarkable

thing. i just got it. >> is it running 12 degrees hotter than the 2? >> i nevered that t ehad the 2, 1. >> we were talking in the news meeting yesterday and our fearless managing editor said whatever happened to that story and general conclusion was it went away, the heat story. >> the voice thing is unbelievable. >> you take that to utah, if it's cold up in the mountain, put it in your pocket and warm yourself right up. >> today president obama -- did you have something else? >> no, but the voice thing, that's designed for journalists like us, two finger journalists. >> i am plowing through e-mail just by saying thanks so much for your note. it's amazing. >> are you really? it's that useful? >> touch typing was the one class i paid attention to in

eighth grade. so i actually learned to touch type. >> that's why i hate all the touch screen devices. >> we no longer have a competitive advantage. >> i know. >> it was the thing that separated us from our colleagues. today president obama will direct federal agencies to speed approvals of one portion of the controversial keystone pipeline. the move designed to ease political pressure on the white house as the industry worries about a glut of oil trapped this in the region. republicans are calling the announcement a subject. today the president will go to oklahoma where the southern leg of the project will be built which obama reports. harold hamm and larry pick ols will join us live and they argue that the president's announcement is not enough.

let's check on markets this morning. futures down 52. a little pressure. i did want to talk to loss, some of the european purchasing indices were not all that healthy. >> these are gauges of sentiment, but they do a really good job of calling turns points. and you just have to think back and not to draw too many parallels, but fall 2008 here in the u.s., we had the collapse of bear stearns, there was the sense of the world didn't implode around us, we had some small problem, we're working through it, and you saw an increase this some of the data and u.s. holding better than expected. are we in a similar moment where all of a you had is the mini crunch comes home. >> playing out in the real economy. that kind of slag very normal, that you have a change in lending standards, a tightening of credit availability. >> and it takes four to six months. >> exactly.

we have two quarter, three quarters back, somewhat of a loosening of lending standards. and that makes people optimistic about where we are right now and it raises this interesting question that we have ross here for and yourself. which is can we with is an what's happening in china. >> my view is this data morning pretty much confirms the eurozone will be in technical recession. another quarter of negative growth. what's key about this is that even in germany, manufacturing has gone back into negative. new orders are really weak across the board. and france is back down, as well. let alone the peripheral. but here's the thing. i think america -- i think investors have had the view that if it growth is just weak in europe, america won't get too impacted by that.

>> ross and i went out to dinner last night with bob pisani before we headed to see the all mcam brothers. and i asked you the question why don't portugal and ireland just go for the deal that greece got? >> and they will. at some point. . this that's a lot of speculation that they'll have to have more bailouts and particularly portugal. ireland are pulling 50/50, but a lot of people saying that dynamic is still unsustainle. when they come to another bailout -- >> ai'm not sure that there's s much of a deal other than they did whatever they could.

the question is what does that solve? >> it's a default on the debt. it lessens the burden on the budget. >> ross said the argument of the europeans is that it's a one off and i said it's probably at least a three off. >> exactly. >> i do want to -- i know i passed it by, but let's go back to the oil board. down 1.28 after a decent rise. we've had pressure on the italian ten year overnight up over five. and spain up over 5 1/2. >> let's look more at that. time for the dwleb global marke. beccy, good to see you.

those pmis, how much of an impact have they had on european trading ahead of the u.s. some. >> we that had a double wham any. chinese were taken negatively. that spilled over. and then we got the eurozone pmi, which has add more pain. we have significant decliners sending us down by over 1.1%. let's take a closer look. the ftse 100 is down by 0.9% we'll call it. 1.3% lower for the dax. cac by 1.5% and the ftse mib down by 1.5%, as well. so the pmi data is definitely having a negative impact on the

equity markets overall. remember it was representing a decline from the previous month and also worse than expected. so negative on both fronts really. now, the reading came in at 4 7 48.7, so it wasn't borderline. also data in the uk which is effecting sterling as we turn to the currency markets. 1.31 6 1.3163 on euro-dollar. and dollar general 28-yen 82.86. retail sales for february down by 0.8%. much worse than had been expected and also a significant negative revision to the retail sales data for the previous month, as well. so just adding to the picture as it's developing today of negative economic data. so sterling is trading at

1.5786. in the bond markets, low yield on the bund. 192. so a bit of safe haven buying. i want to draw your attention to some of the debt levels, yields around peripheral europe. interesting moves. spain for instance is one of these peripheral european countries which really tends to spook the markets. over the past few weeks, we've seen the yields beginning to tick back higher. back to you. >> let's get right to the trading block. john from -- again capital? again capital. >> is that new? >> no, it's a couple years now.

>> oil finally coming off. you think oil has been too high relative to where production is. >> production trends are incredible in terms of what it should be doing to moderate the recent price rise and the pressure it should be coming on. libya major refinery getting ready to come back on line. iraq has followed saudi arabia saying that they will fill the iran gap if there is one in terms of production. they're bringing on the offshore flat forms that are rapidly wrapping up production and of course the shale story here in the u.s. as you look down the road, it will be an incredible story, but the big question is can it break the back of prices the way the natural gas boom has here. not so sure about that. >> i was struck by the complete lack of attention that was paid by the markets to what the saudi oil minister said. and you say have discussed this

issue that the market doesn't necessarily believe in the saudi excess capacity. is that the reason why the comment that they would fill the gap landed like a hud? >> i have to say so. i was struck by the transparency. i made this comment to a bunch of folks and investors it was unbelievable to me at what they were able to produce, but disclosing how much storage they have of oil that's sitting ready to be landed on to vessels both in the kingdom and in asia. so they are really prepared. >> and you have this great idea that gets to the discussion we had this morning which is short china, long north america. what is that raid? >> right. so end of the year when i was onset, i talked about the idea of going shot aussie cat, which is australian dollar is

basically progs cixy for asia p still had a lot of optimism about the risk trade. but that has started to really work very well. that's coming off 107, now raid 1g 03 and go go to parity. as the market begins to realize that the bloom is off the rose in asia, we're starting to see relatively slow growth and australian dollar will start to come back in because the rba will have to start to lower rates. so i think that seems to be working for the time being. the other interesting trend is is that we've been so conditioned to basically trade the risk raid, equity is up, risk currencies are up. but now watching the bond market more than the equity market and the dollar trading off of yields. >> so the dollar strengthen as interest rates rise. >> exactly. >> talk about the pmis in china.

what happens to the euro? >> i think it does argue for a weaker euro. these are ugly numbers and especially since this is the first month after the resolution of the greek crisis and as you were saying, there is a natural credit contraction in the eurozone right now. it may argue the other issue that we may have a third ltro because if the situation gets relatively grave, the only way they can stimulate this is another l it tro and i think that will press on the euro forward. >> all the correlations have broken down, but we've been in such tight ranges. i can't see might be gets might go out of that. >> no, it's been a range trader's market. it's been a 3430 market and those are critical. if we break below 30, that would suggest a much more severe economic conditions going forward. so for the time being, you have

a lot more definitie itive flow. >> is tpeso becoming a leverage play? >> to some extent. the only reason why i'm saying away is because it's not part of the majors. but, yeah, absolutely, i think it that definitely has some spillover effect. oil as you were talk about this morning, gas very important. you're seeing higher gas prices are definitely pinching the consumer. oil prices need to stop if obama's luck wants to continue. >> the price of gasoline, let's say what will it average in the month of october. >> national average right now afternoon around $3.85. i would put it at $3.50 if not lower. we'll avoid the $5 a gallon

bullet. >> that's very bullish macro, bullish obama. >> i think the pmis you're see dag, the ch ing today, the china slow down should be critical. and again, this production story. so this whole thing is turning on the iranian situation that nobody can really know what the outcome will be. right now we're all planning for a conflict if it doesn't get resolved by the summer, so that would change everything. so i'm assuming that there is no armed conflict with iran. >> great conversation. thanks for joining us. coming up, more job cuts at bank of america. plus why alan sanford has a big problem with twitter. but first, after hours of uncertainty and one huge snag, it is a done deal, is this bigger than any wall street deal i know about. tim tebow coming to the morning jets. a trade with the broncos officially confirmed last night.

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hour down across the board making headlines, bank of america has reportedly eliminated jobs in its equities mortgage backed securities and research divisions.

the firm's been pairing staff since last summer as business dwindled during the european debt crisis. and alan stanford has asked for a new trial. now today's fashion al praflt. scott williams joins us from the weather channel. i just want to tell it you, andrew ross sorkin, wire the'rew york, he's wearing a sweater. would you confirm this is inappropriate wear for the weather we've had? >> absolutely. because we continue to find temperatures that are going to be topping out in the upper 70s. but i guess he can wear it this morning because we're dealing with a little bit of that fog out there across the greater new york city area and that will be a cause for concern. expect some of those airport delays for some of those first flights out with that reduced visibility. as you can see behind me right now, we're really socked in

around the new york city area here with the reduced visibility. new york city down to 4 miles, lower at jfk. we have a quarter of a mile around the richmond area. so a little cool out there this morning. we have drizzle going on at jfk. 54 degrees is the current temperature here. so with those fog advisories, but after the fog burns off, are you ready for this, nourk ciew city, flirting with records. near 80 around boston. chicago, record today 79, a high right around 80. so record warmth will continue all across the region here. and we will track heavy rain along the gulf coast and also the slow moving system here will an cau be a cause for concern. memphis moderate airport delays. new york city, those first flights out, we'll watch for the

airport drelays because. foggy conditions. minneapolis watching out for cloud cover as well as showers in the forecast. dallas we'll watch out for some of the clouds. but take a look at the swirl. you can see the storm system that we're tracking. it's slowly but surely moving toward the east. memphis toward jackson as well as new orleans, we're looking at the showers and thunderstorms and also that heavy rain. we're quiet for parts of the northeast and new england. the exception, though, that morning fog out there that will slow your go. and then if you have travel plans toward the pacific northwest, we're looking at snow. so head to places like portland if you want the snow. but otherwise we're tracking a slow moving system as we go hour by hour, tulsa to kansas city later on in the day. minneapolis, then eventually toward chicago. we're watching out for some of the showers and thunderstorms and this system slowly advances toward the east on friday making

its way eventually for saturday and sunday toward parts of the northeast and new england. so new york city highs today in the mid and upper 70s. scattered showers for you in atlanta. 80 degrees for the high temperature. showers moving in later in the day. temperatures in in the 80s for you in florida. and then of course with the upper level low, we'll continue to track the clouds and also the showers for you around places like kansas city, eventually moving toward your area. indianapolis, 84 for the high. showers. and minneapolis, 66 degrees. cloud cover and then of course the snow will continue for parts of the pacific northwest. so, yeah, you can wear the swert first thing this morning, but take it off after you leave the office. >> you have to help me with one other thing. i have a flight, i'm going skiing in utah. i don't know if i'm leaving out of jf complaint or laguardia. what time do you think this fog will lift? or burn off?

>> it will be pretty thick. i'd probably say around 11:00 maybe this morning. >> it looks like i can get out then. i appreciate it. we'll talk to you soon. thanks again, scott. turning in to a very short ski trip. >> but what can you do. coming up, your money, your vote. is the republican party any closer to deciding on a presidential nominee in we'll you we? we'll turn up the heat. with you first, hunger game fans are hungry for the nation wide release of the movie based on the best selling novels. midnight showings are set across the country this evening. many theaters are also sold out. industry insiders suspect it hey gross as much as $150 million on its first weekend. >>ed take a look at yesterday's winners and losers.

they sound awesome tonight. and when i do find it, i share it with the world. you landed the u.s. tour ? done. this is fantastic ! music is my life and i want to make the most of it thout missing a beat. fly without putting your life on pause. be yourself nonstop.

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take a load off, fan afanny put the load right back on me ♪ ? >> if you want to blame somebody on the music, steve liesman is right over there. joe and becky are off today. >> i had no idea. >> are you now programming the music? >> no, they do that to embarrass me. i did it years ago to play for paula abdul as part of a gag. she was a guest on an old show called bull's-eye. and "american idol" was at its height. so and i did short interview and at the end, i pulled out my guitar. and she judged me. >> what do you think, paula?

i'm too old to go on the show. >> you're awesome. >> wow. we need video. >> that's what happened. and that's hopefully the last time we'll see it in the light of day. >> so sweater thursday. >> which by the way you can make fun of my music or you can make fun of andrew's sweater. i think the sweater is funnier than my music. >> thank you, sir. >> let's remind you making headlines payment processor pricing shares at the mid point of expected range. it will use the proceeds to repay loans. diamond foods is reportedly he talking to private equity firm ps a possible minority investment. the smack food company searching for capital to bolster its balance sheet. >> now to pot tilitics.

endorsement from jeb bush for romney. major garrett is the white house correspondent and mark halperin. good morning to you both. quick question for you. i'm looking at the front page of the "new york times." and mr. santorum is holding an etch a sketch, i don't know if you can see that, you know where i'm going with this. mark, i'll ask you first, does it matter or is this just theatrics and games? >> i only agreed on on do the program as part of an elaborate hoax on paula abdul. that's why i'm here. it does matter because romney's almost certainly going to be the nominee and i think i've said for a while, take out a calendar marking the shows every day between now and november. i think his chances of winning is based on how many days is he talking about the economy and how many days is he talking about his own record and gaffes

in his campaign. and his top adviser said something that will linger with -- >> won't we forget about this in a week? >> no. because presidential politics is about controlling your image and they'll use this image. it won't determine the election, but every day mitt romney has to talk about this stuff, and he'll have to talk about this for a couple more days, is a day where he's not talking about the economy and the president's record. this has cultural resonance. it's bad for mitt romney. >> let's talk campaign money. you say this idea that somehow the obama campaign because they're expecting the republicans to spend all the super pac money, that the democrats have gone on a

starvation diet? >> what i meant and what i wrote is the white house has put nancy pelosi, who is currently the minority leader in the house, wants to be speakerin, and harry reid on a starvation diet at least for now. they were told you'll get no money from the democratic national committee, no money from the obama re-election effort except at a couple of structured fund-raiser, but don't come to us expecting any assistance. pelosi and reed owiid had hope 0 million and they were told you won't get it now or in the summer and you won't get it in the fall. now, i've since talked to people close to pelosi and reid and they understood and took their 34ed s medicine plight olitely. but they're hoping there might be more ehas tisity, but for

now, it's for his campaign only and house and senate democrats are largely on their own. >> let's talk jeff bush. what is the significance of all of this? >> he doesn't huff him and he endorsed him late in this process. even after his father had endorsed. he's no big fan of mitt rom notice a lot of issues, but this is just another sign of the establishment of the party 37, the elected officials. jeb bush say ing this is what's going to happen. a lot wanted romney to prove he could win it on his own. and people are saying we may not love everything about him, a lot of people would prefer jeb bush himself, but this is the guy we'll be running with.

and i think jeb bush will be followed by a lot of other names. >> there was a piece on the cover of the journal about harold simmons and the money he's given. what's the chance that there is some form of backlash against this? if you read some of the comments he's made wouabout obama. but just in general about all the money being spent. >> i think there's a very real possibility at that. look at the race in virginia where tim kaine, very close ally of president obama, running against george allen in virginia, he has pledged let's keep the super pac money out in trying to say to voters i wont take it if they won't take it. people understand and look at the underlying polling data find the voters begin to recoil and say wait a minute, this advertising itself troubles me. i'm not sure what it's all

about, but i'm not comfortable with it. so they may pot listen to that advertising even before it starts. and i think that is going to be a dynamic that will play out at the margins of political races. but in the main, the super pacs are here and i think they'll stay for a good long while and one reason is because people like harold simmons, bob perry and others liked the instantaneous accountability of this kind of donations. in the past when you gave money, let's say you gave soft money, 200,000, 500,000 to the democratic national committee or republican national committee, you call up and say what happened to my money. they'll say we're working with it thanks very much. had no idea what it was doing. now with the super pac, you can give money and a set of consultants are will say here is your issue, here is your candidate, we'll move the needle. and about if we don't move the needle, you can throw us over the edge of the rail. so they like the direct linear accountability and they'll stay

in this game because they think it is a better bang for their buck politically than they've ever seen before. >> major garrett, we'll have to leave it there. mr. halperin, thanks very much. i haven't seen you on the air on hbo's game change. very good movie. >> thank you. >> you can still get it on demand. my wife read the book and said it's fanfantastic. >> definitely worth your time. >> comments, questions about anything you see here, e-mail us at squawk at cnbc.com. coming up, if it you're worried about the beef you're buying, two grocery store chains have a message for you. only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in,

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welcome back to squawk on we're calling it sweater thursday. tim tebow -- i should be wearing a jersey. our sports reporter darren rovell joins us. >> to go from tim tebow to linsanity. the "new york post" is going to have somebody following tim tebow every day. it's pretty boring. the question i'm grasping is the marketability, that he's physically closer to madison

avenue. does that make him more marketable? the answer i think is no. >> what? >> if he's the starting quarterback of denver and say he's doing well versus only playing so much in new york, i think he could be less marketable. >> i think it makes him more marketable. we're already talking about this, it's all over the place. it will be better for him if he's actually playing in the games. it's not like he's a weak quarterback. >> joe namath says it doesn't make sense the jets back ofs doesn't know what they're doing. >> and most of these icons do front office jobs, they kind of mail in their comments and he's been very brash. >> what's his problem with it? >> he doesn't think it's a good move. >> the jets lost brad smith and

tim tebow could come across the middle. >> what year is tebow? >> this is his third year. >> where was eli manning in his third year? are people too quick to judge if thee can throw the ball? >> eli manning was in his first super bowl almost. >> who has tebow locked up in endor endorsements? >> he has nike, srf. >> once he's locked in, it not like he can get much more money out of those this year. >> no, but he can get a lot more endorsements. >> if you're in soccer, premier league, you sell a player's shirt, you take a lot of money out of selling that shirt. >> we lock had the nfl deal and now nike's going to have it.

nike's deal starts april 1st. we're in no man's land now. what happened is reebok is making shirts -- they're making a couple jerseys but no one wants to buy a jersey now because in ten days the nike deal starts. >> and nike's going to start to chang the way all of this looks. >> this is what i've been told, nike paid a lot of money -- we were talking about this because nike reports earnings after the bell. they're not going to be drastically changed but kanged enough so you'll be forced to buy them. they're going to be tighter, different materials. just with the tighter change -- >> let's not make this for the consumer. >> let's not go too much tight are for the consumer or everyone will have to buy the xxl.

because of his overt -- i don't want to say selling of his christian belief, he's the most polarizing player in sports. i will tell you the highest -- the biggest book sales of any sports figure last year, he sold 200,000 books and a lot of that is because in the christian book stores, they buy 20 at a time. >> i don't know how religion plays in new york. it's an interesting issue. >> coming up, why roger altman says wall street needs to think twice about the goldman action flap. and then later, he's rumored to be a potential vp candidate. what does senator rob portman make of the republican presidential race? we're going to ask him at 7:30 a.m. eastern. nal pull and hurtle us all into space,

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. business and politics collide. an exclusive interview with congressman portman. >> a classic bull versus bear. >> can you dig it? >> richard bernstein and david roseberg tell us where the market is headed no matter what side of the trade you're on. >> hunting for muppets. goldman sachs allegedly scanning e-mail for that and other dr derogatory terms. >> plus does fedex deliver?

we'll break the numbers as the second hour of "squawk box" begins right now. good morning. welcome to s" squawk box." ross west gate is here, as is kelly evans. here are your morning headlines. goldman sachs reportedly scanning internal e-mails for use of the terp "muppet." this comes after executive director greg smith resigned last week with that infamous "new york times" op-ed claiming goldman managing directors used that term. the next version of apple's iphone getting a little bit closer. the next iphone will be unveiled

during the second quarter and will have a 4.6 inch retina display, which should be bigger and sharper than the current version. and a collaboration between rivals boeing and airbus. the two will work together to develop affordable ayagts biofuels. let look at the futures at this hour. you can see green arrows across the board. starting the day a little bit of red territory. mr. liesman, i didn't think i properly introduced you as being here, the professor. >> i am here. and in other news, andrew ross sorkin wearing a sweater. somebody writing in, andrew, lose the sweater or one of your

names. afraid you'll be bullied. >> i saw one that said that the sweater was more offensive than the goldman sachs e-mails. i don't know. >> walk to the set while that music is playing. >> did you see the twit are e-mail that said that mr. rogers liked my sweater? gave it two thumbs up. >> did he really write in? >> not mr. rogers himself but somebody tweeted. >> later you're going to do movie reviews -- >> i may start wearing a sweater vest in the summer. it almost 80 degrees. >> as a tank top, right? >> nothing underneath. just the sweater. to show how buff you are. >> oh, i don't know about that but we can try. >> they're probably one of the industry's most famous bull and bear duos. teaming up for many years at meryl lynch and reunited right

here on squawk box. richard bernstein and david rosenberg. is that a smile, david? there's a smile. i didn't know what passes for a smile. there we go. that's an actual smile right there. >> i'm always smiling. come on. let's begin the debate. richard, you think has the american economy turned the corner here and have stocks fully priced in that turn? >> i think the last quarter was disappointing. largest number of negative surprises since 2007. however, the household sector continues to improve. is it good on an absolute basis? no way. but i think it continues to improve. >> i want to follow up because in your notes you talk about this interesting idea of corporate profits would come

down. that doesn't mean that the economy overall does toorly. eight shift in the distribution of the output of the economy or the incomes in the economy to households. ultimately does that ricochet back? >> i think it does. the twist where you invest in the stock market changes a little about the dave pointed out many years ago corporate profits were the largest percentage of gdp ever. i think that was an important insight. >> the bearish call on the economy has not been the right one to date. are you saying you've been early here and the worst is yet to come sp. >> i guess i would argue on the premise we went into last year believe we go would have 3% to 4% growth. we had 3% growth in 2007 and we would hit escape velocity and improve. layears real gdp came in 1.7,

about half of what the consensus thought. normally going into the full second year of rekof rircoverre normally gdp, 4, 5%. we have a fed balance sheet that's tripled in size, zero percent policy rate for three years, of course we're going to get some growth. if you want to take a big picture perspective, this goes down as the weakest economic recovery ever, despite all the ramp in governor stimulus. that really tells you something. >> in order for that argument to stand, have to ignore the recent stuff. we had fourth quarter growth that was 3%. we've had several months in a row now of 200,000 plus growth, a pretty precipitous decline in the unemployment rate. i wonder if you're missing the current boat that's leaving the dock here. >> no, i'm not. i'm basically doing what i do, which is dig beneath the veneer

of the headline data, which makes for nice headlines. 3% growth in the fourth quarter, true. two third of that growth was just inventory. real final sales were 1%. that's very weak. in the first quarter, cannot really not critically analyze the data? we're coming off a january and february where the weather both months were 5 degrees above normal. that's a standard deviation event. you great bull curve on the data because usually the country is snowed under. you had a dramatic skew. because there was no winter, had you $30 billion of low are utility bills bring up cash flow for the household sector. so rich is talking about the household fundamentals improving. well, you had basically a tax --

a de facto tax cut for the personal sector that's reason its course. we haven't seen $4 gas hit yet. the employment data were affected by seasonal adjustments. it felt like march and february, okay? >> it felt like february -- >> if you apply the mash seasonal actors to february, employment would have declined. >> i think this has been going on for two or three years. stock markets respond to better or worse, not the absolutes of good or bad. it hard to argue that the u.s. economy has not improved over past two or three years. even over the past year. does that mean it good in an absolute sense? no, and that not my argument. that's something for politicians to argue about. from an investor point of view, do you think things are going to get better or do you think things are going to get worse? >> haven't we been going through a period where it been getting better and better and isn't this where it get worse? >> why, kelly?

why would it get worse? >> i just want point this out because it important. stocks key off expectations. they've been ratcheted off so much to this point, we've seen the magazine covers -- >> is it your point it's overvalued? >> no if we get data that says we're losing momentum, we're worried about year up, asia, global growth slowing, do those negative surprises make it harder for stocks to keep climbing? >> in the short term of course. the next quarter could be messy in my view. as you look out and look at the u.s. economy over the next year, two years, three years, is the u.s. economy going to improve more or less than other economies around the world? i think it clearly more, that we are in the early stages of a u.s. asset improved performance. >> how many jocks are because of

the heat? >> i would say over 40% of the jobs created was weather related. >> that's 80,000 out of 200,000? >> that's productivity doing? it's going negative. >> what's hours worked doing? >> what gdp to you get from hours worked? >> but -- >> answer the question. >> output is lagging well behind. this is whabd to last year's first quarter, steve. we have four months in a row of private payrolls over 200,000, productivity was negative in the first quarter last year, corporate sells responded to that by curbing rehiring plans over the last six months. >> i'm curious how you express this view. do you go into fixed income given the high prices we're seeing there? >> i think what started

performing very well this time last year -- i dividend growth is going to reclaim leadership. i want to go in the fixed income market. corporate balance sheet we know are in great shape. rich said earnings are looking murky. the earnings outlook is pushingy but the balance sheet in the corporate sector is great. you still pick up 550 points spread in the treasuries. that's a good place to put your money. >> one has to be care beating up dave because dave has an uncanny ability to be right when people think he's really stupid. >> you think the market is higher because of the relative outperformance of its recent

past. >> i think outputs o the united states relatively to envestors are extraordinarily low. >> where do you want to be if david is right. >> in 30-year coupon bonds. >> i want to be under a titanium desk. ross? >> still, more on the muppet hunt at goldman sachs. roger altman shares his thoughts next. "squawk box" will be right back. a carfirmation. u hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz.

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welcome back. we're watching shares of diamond foods this morning. they've reached an agreement to access catch. the wall street journal reports diamond is if talks with private equity firms about taking a possible stake. >> the wall street journal publishing an article called "wall street can learn from the

goldman flap," in response to a former goldman sachs executives that accused of firm of wanting to earn money even at the expense of clients. good morning, roger. >> hey, andrew. i read this piece in the journal earlier this week. wall street can learn from the goldman flap. what i thought was so interesting about the piece was it suggested that whatever greg smith's complaints were about goldman, that it's actually a larger problem across all of wall street and that clients, corporate clients, need to ultimately understand that they are not necessarily clients in the traditional sense but that they are ultimately counterparties. do you agree with that? >> no, i most definitely do not agree with that. a perception has developed reflected in that column, that all banking firms and all

bankers treat clients as counterparties, as the other side of a trade in a zero sum game. there may be some in the industry who take at that prech but -- approach, but is that a universal practice? no, it isn't. there remain some firms that practice the best principals of quality and integrity and client service and i'd like to emphasize that. >> one of the things i want to staunt, though, and there's almost two parts to goldman's business. there's the advisory component. that's the business that you're in that clearly you have clients you're advising, i pwould put that in the category of asset clients that you're advising.

but there is the counterbusiness. are those two different things and do the clients understand those two different things and does the public understand those two different things? >> there are two different things. our firm is just an adviser. we don't lend, trade security, commit capital to anything. just advisers. there are a number of other firms modelled that same way. we're not principals. there are firms that do both. they have the advisory side and we interact with those other firms every day and they have the principal side, the lending side, the trading side. most firms when they're acting in an advisory capacity are taking just an advisory approach, even if they operate as a whole on both sides. >> roger, do you think there's a difference if you come from a trading background and run a business or you come from the

advisory background and run a business, does that make a difference? >> it depends on the individual. there are many people who have come from the trading side who fully appreciate all the principles of client service and their requisite quality and integrity that you have to bring to that and there may be some who haven't. it a case-by-case thing. >> you've worked alongside goldman sachs and worked on the other side of the table with goldman sachs. when you read greg smith as op-ed you thought what? >> it made my blood boil because the premise of that piece, which was that all clients who don't realize that they are counterparties are themselves fools is wrong. that promise is wrong. there are some in the business who act that way and there are some firms that from time to time act that way but what is

not a universal practice, i'm sorry, it isn't. >> but how do you feel directly about goldman sachs? i ask you given your experience working against them on the other side of the negotiating table and also in sometimes in concert with them? >> i have a lot of respect for goldman sachs. i've never them since i began on wall street? 1969, have had very close interactions with them every single years i've been in the business with exception of the year i was in government service twice. i have a lot of respect for them, it's a strong firm, they are the single toughest competitor in this industry. most other people in the industry envy their talent and envy their strength. >> do you think their culture's changed? that is the knock. that was greg smith's argument in his op-ed when he resigned. >> it has probably changed some, andrew. but the idea that it's changed from white to block is not

correct. i have a lot of -- there a lot of people at goldman sachs today at senior levels whom i know well and they have some of the best and highest integrity bankers in the industry. >> is this going to damage any of their business? are you picking up goldman clients? >> well, is this is a difficult time for goldman sachs? yes. have they suffered irreparable damage? no, they have not. are they a strong firm with a strong future? absolutely yes. >> brand index has goldman at their lowest score since the financial crisis, a negative 36 compared to rivals at negative 4. if you were running the firm today or chairman of the board, what would you do? >> well, andrew, i'm not running the firm today, that firm. no one has called me and asked me to do that. and i don't have any of the information that would be

necessary to have an intelligent view on that. i'm in the privy to the, you know, internal data on goldman sachs or any of that. so i can't answer that question. i don't know what yugov.com is. >> i agree with you. can fedex deliver for investors? squawk is returning after the break. [ male announcer ] lately, there's been a seismic shift

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expected highs today. new york 75, chicago 76, green bay 69, billings 70 degrees. portland, slippery snow made driving and walking dangerous. caused a number of trees to crash into roadways. forecasters say even more snow is in the federal court for today. perhaps andrew with his sweater should get on a plane to portland where your clothing would be more appropriate than it is in new york? >> to be fair when you got up today, it was foggy. > >> and it was a little chilly in here. >> as long as mr. rogers likes the sweaters. >> if you have any comments about andrew's sweater in particular, e-mail us. you can all follow us on

twitter. i like once a month, andrew, i think is sweater thursday. european markets are down today primarily because we have weaker news out of china and out of the eurozone this morning. looks like we'll get contraction for the eurozone overall and that means a weak other opening here as well implied for the u.s. markets. call down half a percent for the s&p 500 and the nasdaq. "squawk box" is coming right back with senator rob portman in just a few minutes." >> coming up, jobs, the economy and giving credit where credit is due when it comes to the nation's energy policy. fidelity's next generation ipad app

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♪ it's a beautiful morning ♪ i think i'll go outside for a while ♪ ♪ and just smile >> welcome back to "squawk box."

here are stories making headlines today. the federal housing finance agency will report on home prices for january. prices are expected to register a 0.3% increase from december. the forbes reports the new york yankees are major league's baseball most valuable team for 15 years in a row. the average value of a baseball team is up 16% from a year ago. the only two teams whose values didn't increase over the past year, the tampa bay rays and new york mets. andrew. >> we have news across the wire, fedex reporting earnings, beating estimates. also looking at some of the projections, earnings expected to be 1.75 to $2 per diluted share in the first quarter and $6.60 per dutied share for

fiscal 201. you can see the bid-ask there. things looking slightly on the up side. let's go back to revenue quick. was that light on -- >> what was the revenue number? >> i'm just looking through here. >> 10.56 billion, compares with an estimate of about 10.62 billion. looks like revenue was a little shy of expectations. earnings well above. you can see the shares are a little weaker on that. fedex being a global gauge of what's happening with cargo volumes, china's been slowing but it's hard to get a real read lately because of the timing of the chinese new year. certainly ever is looking through this as everything they say about the outlook. >> david rosenberg said the company also benefited from a lower tax rate and mild winter weather and they also said they had a record christmas? >> if you're a company, every year should be a record year. >> and they said they're

evaluating access to adjust our capacity to improve efficiency. does that sound like layoffs? >> anything on fuel here? >> they said the current outlook is based on -- their outlook is based on current outlook for fuel prices and modest growth. >> they use fuel sur charges, which come through with a bit of a lag. that should help them. if we see a turn in oil prices from here, they might get a little bit of a lift from that in the months ahead. certainly with the prices continuing to climb higher it's going to be a problem for them. >> the weather thing, they're talking about it, it's been a huge benefit -- natural gas prices as oil prices have gone up. >> i don't think fedex uses a lot of natural gas.

>> daily package volume down 1%. i guess that's international. >> we'll keep an eye on fedex all morning. in the meantime coming up we've got senator rob portman and in less than an hour breaking economic news we're going to have the latest jobless claim numbers and reaction. and the latest on hp's revamp with carhp's cfo. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade.

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you're looking at the stock of fedex. premarket trading indicated higher open here after fedex just reported earnings that were 20 cents ahead, $1.55 versus $1.35. revenue just a little pretty much inline with expectations. we'll follow that whole group today and seeing what guidance says -- >> their domestic package volume in the u.s. fell year end by 4% but between higher pricing and higher fuel, they're more than making it up. as you dig through the results, you can see shares and the market trying to get a sense of whether this is positive or

negative. >> that will be coming up in a little bit, kelly. >> shall i save it? >> no. we're going to ask those questions of an analyst coming up. >> president obama in ohio tu talking about higher gas prizes. senator rob -- >> good morning, joe. >> good morning. it's steve. >> oh. >> we're all the same except for the hair. >> if you look at what's happened over the last few years, we have less drilling, less exploration, therefore less exploration on federal lands.

last year on federal lands there was a 14% decrease. with more supply we're going to see over time lower prices. that makes sense. keystone pipeline is another thing we should move forward with because that will proceed described more supply, not just from canada, our neighbor from the north but also north dakota and the bakken shale find where we have lots of oil. these are things we should be doing that the president has not moved forward on. >> some would argue at the end of the day the united states is just a marginal -- has a marginal effect on overall prices. how do you argue prices would go down with more production here? >> it's clearer if you have more supply and you have the demand staying the same, you're going to see price goes down. right now. we have the opposite. we have a constriction on supply as to what we could be producing and increased demand globally

and increased demand in this country. this notion that the united states is a bit player, marginal player, that's not true. we have more natural gas than russia and saudi arabia and one of the largest oil finds now in the world that are accessible. we do have the ability to play a role here. we should do more in terms of efficiency and conservation, do more in terms of producing other forms of energy, some of which can be used for mobile sources, including natural gas, which we have an abundant supply. people sap this will take a few years to come online. of course it will, which is why we should have started a few years ago. >> this is rich bernstein speaking. >> how are you? >> good, thank you. it was my impression u.s. demand was down year on year and our

economy is not exactly booming. most of the demand was coming from emerging markets and overseas and that was really where we're getting this issue. so if we do, i understand the point about investing for the long term and i'm with you on that one but realistically what we're talk about is nothing is going to chang in the next 12 months. is that right? this is a political issue more than anything else right now. >> i would disagree with you and, look, you're the market expert but you tell me, people are talking about speculators and, frankly, these are people, many of whom you know, who are speculating about the future. and if we become less dependent on foreign oil, which we can do now, we have the ability to do it, we will not be subject to these volatile price hikes as much as we are now. look what happened last year with libya. look what's happening now with iran. it's a question of supplynd it's a a question of where you get your supply. if you're reliant on dangerous,

vol toll parts of the world, which we are, places like venezuela and nigeria are not as stable in terms of supply, it makes a big difference. people are projecting out. if they knew the united states was making a real commitment to domestic production, i think it would make a difference. >> after the illinois is it game over now? >> i think it is. we were done in ohio about 12 days before the primary. he turned it around, getting his message out. people liked what they saw. the places he went in ohio tended to be the places we did well. i think he's going to be our nominee and i think he's going to be a strong candidate in a place like ohio, a state that's going to make a big difference in terms of who the next president is. >> speaking of the next president, there's also

speculation, senator, this is coming about the next vice president and your name has come up. how does that title sit with you? >> it's only on "squawk box" where it comes up first of all. it's just because of becky. i mean, that's it. no, look, i'm really happy -- >> we're all fans here, senator. we're all fans. >> i'm happy where i am. i think the key thing right now is for us to address the big issues and that includes getting commit going. there's lots of things we can do to help the economy grow. we talked about energy, the same is true with tax relief, regulatory and trade. if mitt romney is elected president and i believe he will be, he's going to need people who have an interest and experience in getting things done. that's what i got elected to do. i plan to stay right where i am. i think it could be -- >> is that a firm no if offered you would not accept?

>> it means i'm truly not interested. it's not something i'm looking to do. i'm looking to stay here to work with him to be able to make a difference. we've got to address these problems and it's got to go through the process. in the house and senate, we have political paralysis. we can't afford that going forward. >> the last time we were here we did a little clucking off the set. it's a little off topic but how are your chickens? >> the chickens are great. i had to get the chickens after i was on last time, there was this debate, which came first the chicken or the egg so we have four chickens. i did improve my cluck. my press secretary went nuts. he thought it was the worst thing i'd ever done and then he got nice e-mails from people saving that was a pretty good chicken cluck for a republican. >> hold on. we can't let you off without doing cluck or two for the morning audience here.

>> i'm going to just just a short one only because this is "squawk box" overall. >> that's good! >> thank you. >> he's got a real question to ask. >> that's where the interview should end. senator, when i ran into you not too long ago, you were thinking about this russia issue and you were undecided. have you decided how we ought to proceed when it comes to lifting those i guess what are called cold war era trade sanctions against russia? >> i've never been undecided about the importance of us getting russia into a wto because it puts them under a a rules based body. the question is what do you get as a part of pntr in terms of concessions and specifically with regard to human rights, crass circumstance all the things we are concerned about right now with regard to russia. so i'm interested in the united states getting pntr, which would mean that the united states, our

workers, our farmers, our service proceed vividers get th benefits everybody else gets. i would like to have discussion about what goes along with that to be able to ensure that our relationship with russia continues to be a positive one, not a negative one, which i think it's heading toward right now. >> it's rich bernstein again. you have great expertise in budgets and tax cuts and everything else. one of the things that's been a big issue for me is i love tax cuts but how do you ensure the tax cuts stimulate the u.s. economy? i mean, the bush tax cuts were huge but yet the data seemed to show they stimulated nonu.s. economies more than the u.s. economy. how do we ensure tax cuts -- which i'm all in favor for, don't misunderstand my question -- how do we ensure they stimulate our domestic

economy. >> going into 2007 and 2008, we had incredible growth. there was direct connection between the tax cuts and gdp. the issue to me is not so much tax cuts given our deficit situation. it's tax relief. on the corporate side and also on the individual side. it means lowering rates so it's not net tax cut, it will have to be revenue neutral for the time being but it will generate income lieu activity. economists agree that our current code is outdated and inefficient. how to get the economy moving,

we've got to update our tax code. the corporate code, we haven't done it since 1986. every one of our competitors, the other developing companies have reformed their tax code and the japanese are about to do it in april and we'll have the highest rate in the world. >> one of the questions we've been asking around this table for a long time but this week kelly has asked the question, too, do you get rid of the mortgage deduction? how important is that, especially if you bring the rates down? >> it depends how far you can bring the rate down of course. that's true with a lot of these, the health exclusion, charitable deduction, mortgage, those are the biggest ones. if you were able to get the rates down substantially and use the preference reductions to drive down the rate, i think it would have a net positive effect. in 1986 there were some inadvertent real estate impacts from that but we also saw in '86, the last time this was done, that had you incredible growth in the economy in the succeeding years because of the

fact, again, you had more efficient allocation of resources, you had a tax code that wasn't motivating behavior that was not in the interest of businesses. in fact, people were making decisions that helped to create growth and jobs through smart business planning. >> senator, thank you very much for joining us this morning. >> thank you guys. good to be on again. >> gentleman, how do we great guy objectivity out the window, can cluck like a chicken, friend of "squawk box," there's an interesting in getting him as vice president. getting portman in at vp, you're going to cluck like that, he sits here. can you imagine a friend of squawk, vice president, comes on the show. was it firm? >> no, it wasn't firm. if you said "if your country needs you, will you answer the

call." >> you should have jumped in. >> i want everyone to practice their clucking. coming up, squawk is returning with a little bit of clucking and a lot more. >> tomorrow on ""squawk box," or guest will be steve crawford. we'll break down the supreme court's obamacare case.

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fedex out with earnings this morning. joining us is john barnes. good morning. >> hey, good morning. thanks for having me. >> looks like markets trying to make a little built it of bit o these numbers, figuring out if it was driven by weather, lower tax rates or more encouraging signs beneath the surface. what do you see? >> i think there are encouraging signs. the profitability at the ground division continues to outpace expectations. but there are a couple of one-off things. i think the profitable issues at the express division, especially in the domestic business is going to be a cause for concern.

>> and when we talk about what fuel has done for fedex, is this a lift for them or more of a problem going forward? >> any time you've got rising fuel cost, it will be a little bit of a headwind. the fuel surcharge mechanism is good enough to recoup a lot of the higher fuel cost with us bu it will hurt them a little bit in terms of trying to raise overall rates. i don't think ilt going to be a big drag but it's something we pay a lot of attention to. >> john, they said this morning they're evaluating actions to adjust our fedex express u.s. domestic network capacity and improve efficiency. what does that mean to you? >> i think essentially what you're looking at is there continues to be a trade down from the express product to the ground product. more and more consumers are using the ground business as a cheaper alternative. and i think what it means is they've got to right size the express division. i think what's interesting here is there's no mention of potentially right sizing the

international operation, which i think needs to be done as well. >> they talk about modest growth in the global economy, talking about the international operation. i'm going to look at the growth figures for the economy and put that straight back into their assumptions for fedex? >> i think so. the one good thing we've seen from a data point standpoint is the last couple of weeks in march, air freight data out of asia has been a little stronger. it has a lot to do with new product introduction out of apple. but air freight has been weak out of asia. until we see a more substantial pick up in that traffic, it's going to continue to weigh on expectation for these countries. >> john barnes from rbc, thank you so much this morning. >> thank you. >> coming up, politics and

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>> >> hp formally announcing plans to combine printing and pc divisions. we'll talk to former ceo carley fiorina. >> and we'll talk to america's richest oil man and larry nichols. >> and volkswagen adding a new shift. >> and bringing you economic data. the third hour of "squawk box" begins right now. ♪ welcome back to "squawk box"

here on nbc. i'm andrew sorkin, along with kelly evans, steve liesman and ross westgate. our guest host is richard bernstein. u.s. equity futures, we've got red arrows across the board. the dow would open up about 60 points lower. got a fedex news we're talking about in just a second. the implied open is marginal. >> is this risk-off pressure? >> yeah, it's the euro. >> this morning i saw the -- >> weak manufacturing data, weak data in the u.k., weak data out of china. >> you have to remember risk

on/risk off, trying to keep hope alive, risk on takes off. >> the risk on/risk off this evening is broken down in terms of the correlation have -- those correlations where we've had risk on/risk off -- >> the dollar is risk off. >> the dollar's been risk on for most of this year. it's gone up with the -- >> i guess that's true. >> we have somebody this morning who said now the dollar is tried to interest rates, it's not leaninged to -- >> the bond market will lead the fed. as bonds sell off, somewhere down the road, you might know better than i do where wh that will be, the fed will have to chang policy and we should expect the dollar to appreciate. >> i'm wondering if we're not

talking about the fed right now only because it's my favorite subject but also certainly attitude notice market have changed. i'm not sure bernanke's rhetoric has changed but it's gone from do more qe, do no more qe and now the debate is do you continue operation twist in june? how much has the market been a little spooked? >> can the market stand on its own without fed support? we're reaching this test limit. in previous years the answer has been no. we've seen the fed come in and do more. can it stand on its own now? >> can the market leadership stand on its own? no. over the last tn years, it's been credit-related leadership. we're seeing transition between

the old credit related leadership and new credit related leadership -- >> other than apple. >> that's exactly right. >> i wonder if two things are happening. one is i think the ecb has not been bright -- not been smart -- what's the right way to put it? they've taken the third ltro off the table. i think as a central bank, you don't want to act like i can't come back in. one of the objectives of the policy is to create another side to the trade. >> you said they're saying it's not going to happen. how many this evenings have they said were never going to happen in the last two years have ended up happening? >> i agree with you. >> it's not going to happen imminently, not going to happen this year. if we get to two years' time and things haven't improved -- >> if we get to three months' time and europe is really rolling over, i don't think there's a question as to how they would respond.

>> but don't you want to keep people guessing? that's one of the points of policy is that you create another side of the trade. >> they should try and let them stand on their own. >> i'm not that concerned. >> you want me to read the headlines. >> i have cal carly fiorina com up today. i want to you read the headlines. >> revenue essentially in line with expectations. now it looks like the stock was called down after having earlier been called up. maybe our analyst, the concerns he expressed, was part of the problem. today president obama will direct federal agencies to speed approvals of one portion of the controversial keystone pipeline. the move is designed to ease political pressure on the white house as the industry worries about a glut of oil trapped in the region. the republicans are calling the announcement a stunt.

today the president will go to cu cushing, oklahoma. harold hamm and larry nichols will join you us live at 8:40 eastern. they argue the president's announcement today is just not enough, andrew. >> thank you, sir. no, the fed conversation is an important one. but there's -- >> we went on a little too long. and now talking about the conversation went on too long, it's going on too long. >> andrew in the sweater, that sounds quakeslightly derogatory. >> if you put that in an e-mail, that would be like calling me a muppet. >> you guys call people the erl of sandwich. what is in that? >> a couple of pieces of bread -- >> hewlett packard chairman and

ceo herself carley fiorina. great to see you this morning, carley. >> great to see you andrew of the sweater. >> wow. just to put context around it, there are some people that would suggest the pc business is a different business than the printer business, that the supply chains are different businesses and that ultimately when you talk about selling cartridges and things like that, which it's the razor blades, that's where the profits come from on the printer business, that's office depot, staples, not best buy where you're necessarily selling computers and the like. >> well, first let's just stipulate that reorganizations alone don't create value. the idea behind my doing it

several years ago was that first there is some commonality in the supply chain and distribution channel. but it was about trying to inculcate the system's view from printing into the pc business. in other words, we were really focused on how do we expand margins across those businesses? there is a common customer base but the printing business, which by the way is very r & d intensive, very capital intensive. my concern for the printing business is that it has been starved of r & d and marketing investments for too long. the printer is the razor and everything else is the razor blade. our thinking was we needed to bring that point of view to the pc business where ultimately it is the system around the pc, as you see with apple, for example, that creates all of the margin

and frankly much of the customer loyalty. it will be interesting to see now that printing is being foldednd the pc business, which is a different play, i think this is is an emotional issue at hp. printing is a very core part of the company culture. i think mioshi's departure is particularly concerning. it will be interesting to see what happens beyond cost cut persian gulf when you look at this reorganization, do you say to yourself i want to own this stock, i believe in this company when your former employees and colleagues call you up and say what's really going on here, you tell them what? >> well, i do own the stock and i own a lot of hp printers and i own a lot of hp pcs. i'm a customer, a shareholder and i have a very strong emotional connection to the company. but what i would say is this and

i said this on a blog this morning on cnbc.com, this is a company that has been starved too long of investment in marketing and r & d. a technology company grows its top line and expands its margin through differentialation, and it comes from technology to inkons customers it has a unique business for them. i know meg witman has said that i'm i'm encouraged by her word to do that. it's gok a long haul but this company is capable of having a great fuss given. >> does meg have a great vision for this company? >> i think she needs to outline her vision for the company. >> who's running the company ultimately? meg or the board? >> well, time will tell i think. obviously the board has been, in

my judgment, too dysfunctional for too board. that board has destroyed value in the company and ultimately i think what we need to see is not only a strategic direction for hp, reinvestment in r & d and marketing but a board that functions. and that means to me that the board spends their time on long-term strategic direction, talent development and succession planning. >> has meg reached out to you at all? have you talked to her about either her plans or how to think about the company? >> meg and i are on in contact on a fairly regular basis. i have spoken with her. we haven't gone into great details about the company. she and i do stay in touch and i wish her well. >> can can i switch to politics for a moment? >> of course. >> i'm cure yourks givious, a w courage came out that said the primary process had become,

quote, unquote, corrosive. do you believe that? >> i don't believe that yet. i do think the primary process thus far has strengthened the candidates. i think it is becoming more and more clear that romney will probably be the nominee but, frankly, i think he has been strengthened by the contests he's gone through. we're going to unite behind a nominee and we're going to focus on the real choice that faces this country. and i think as every day goes by, that choice becomes more clear. it became very clear with paul ryan's budget the other day. our nation face as real choice in terms of the direction we take going forward. >> you're a prominent republican, once ran for senate. does the gop have a problem with women? >> the republican whose comments gave us the biggest problem with women frankly is rush limbaugh.

i have been public about that. i'm pleased to see he's apologized. i think people on the right or the left, whether it's bill maher or rush limbaugh, people who coarsen the political dialogue by making incendiary comments about women or anybody else doesn't do this country any favor. we have serious challenges as an economy and a nation and it's important we stay focused on the real issues and do so in a respectful way. >> carley, if romney is the presumptive nominee in your mind, have you said or would you say to gingrich get out of the race right now? would you say to santorum it is time to step down? >> well, what i would say would have zero impact on either one of those candidates, they will make up their own minds. eventually what will happen is

money will dry up, if this concludes that romney is the eventual nominee. i do think the primary process has a way of working itself through. you can't continue forever without money. the debate schedule is basically finished so that opportunity for free publicity is now largely behind us. i think this will start to shake out now more quickly. >> if we could just change the top being -- >> let's talk about the fed, steve. >> we could talk about the fed. i'm not sure -- >> you sure? >> i want to ask you about corporate tax reform, which is out there on the table, there are a couple proposals, a republican and democratic proposal. i want to ask you more about the chances that some of these loopholes actually go away and what kind of impact that would have on a ceo or corporation that had invested based upon existing loopholes, then lost those loopholes. >> first, i have argued for a long time that we need a drastically simpler tax code as

well as a lower tax rate, a simpler tax code is critically important, especially for small businesses who are still flat on their back in this country. however, to answer your very specific question, i think as a ceo i would welcome and applaud a lower tax rate and a stable and simpler tax regime far more than all of the calculating machinations -- >> this is going to play out if i'm not mistaken in the spirit of every ceo, every industry lobby really working as hard as they can to save their tax break. >> well, and if that's the case, it is incumbent upon politicians in washington, d.c. to remember this, that small business is the foundation of economic growth in this country, that we have more small businesses failing and fewer starting right now than at any time in the last 40 years and what small businesses need

more than anything is a lower tax rate and a simpler tax code. so politicians should should their ears to all that lobbying on behalf of big business and go for a simpler tax code and low are tax rate. >> we're going to have run in a moment. curious about the apple move this week, what tim cook did with the difficult depends. what does it say about the larger company? >> i think it says they're factifac facing reality, with that much cash on the table, they have to begin giving back some of that to shareholders, that tim cook is a leader who has come into its own and apple has a very bright future. >> the squawk guys are suggesting senator rob portman if romney gets the ticket should become vice president. would you support that? >> i think rob portman is a fantastic leader in our party. in many ways i think he can do more good in the u.s. senate. of course i would applaud if he were the vice presidential candidate but i think what he

said is actually right. a president romney is going to need people in the u.s. senate who can get something done. it's frankly why i'm working so hard to republican regain a republican majority in the senate. legislation happens in the u.s. senate. and if we're going to get real tax reform done, which is what we were just talking about, real entitlement reform, real health care reform, real energy reform, we're going to need people like rob portman in the u.s. senate. >> stop thinking about the nation and think how good it would be for "squawk box" if rob portman became vice president. >> i bet you a senator rob portman would come on and cluck -- >> we want vice president rob portman to come on and cluck. >> carley, before we go, do you want to cluck for us? >> no way. i'd rather argue with steve liesman about the fed. >> she chickened out.

coming up, a job story out of tennessee. volkswagen adding a new shift at a plant in chattanooga. and in the next half hour we'll talk energy and politics. harold hamm and larry nichols will join us. hertz gia carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz.

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so who's in control now, mayans? welcome back to "squawk box." we've got a job story out of tennessee. volkswagen adding 800 new jobs in chattanooga. where are they creating this? what's going on, phil? >> they're going to add a third shift. this is what we're seeing from a number of automakers, adding a third shift to increase production rate because of the demand that's out there in the market. it will come at the new plant in chattanooga, tennessee. they'll add 800 workers to further that production. they're adding a thousand workers at that plant this year. they've got to keep up with demand for the new pasat, which

is built in that plant. it's the key to their strategy of targeting american buyers. so far it's been suggest african-american. lo -- successful. 37% game for voks wag -- vo volkswagen this year. last year they reported they made $20.1 billion. we're going to talk with the vice president of volkswagen this afternoon. we're seeing with this with all automakers. they have got to keep up demand. we seeing projections for sales rates 14.5 to 15 million this month. >> i once had a passat. i was amazed by the fuel economy

out of that. how much is fuel economy now driving purchase decisions? >> i think it's a big part of it, ross. i think it's understated that people are looking at their vehicles they've held on to for a long time saying why am i driving this when i want at least 30 miles per gallon, if not 40, 50 miles per gallon. it's prompting a lot of people to buy and saying i want something more fuel efficient. >> obviously they put these jobs in tennessee, didn't put them in canada or mexico. i think that's a big story that people aren't appreciating. do you have any insight as to their decision making and why they chose the united states as opposed to canada and mexico? >> they have been adding jobs in mexico. for a long time the volkswagen looked at u.s. we'll make it in germany, sell it in the u.s.

failed strategy. don't be surprised if we see them put an audi plant somewhere in the u.s. in the next year or two. >> coming up, we have the job numbers and instant market reaction. "squawk box" is coming back with that and a lot more. >> still to come, we'll talk the politics of energy with harold hamm and larry nichols. [ male announcer ] for making cupcakes

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♪ ♪ coming up, we are just minutes away from weekly jobless claims data. as we head to break, take a look at the dow, just ahead of the numbers. down a bit. "squawk box" will be right back. [ horn honks ] hey, it's sandra -- from accounting. peter. i can see that you're busy... but you were gonna help us crunch the numbers for accounts receivable today. i mean i know that this is important. well, both are important. let's be clear. they are but this is important too.

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okay. we're some 40 seconds away from weekly jobless claims. this is to remind you where the markets are ahead of those numbers. futures calling for a negative start. the the dow down 50, the nasdaq down 10. we saw pmi numbers coming in weak in china and the eurozone as well, particularly manufacturing numbers down. yields have just started falling again after backing up a lot

last week. so we're going to keep our eyes on that as well as we get towards this number. everybody's been looking at the u.s. employment number. rick santelli standing by in chicago. >> all right. ross, initial jobless claims dropped 5,000 from an upward live revised, continuing claims, 3.25 million down from 3.36 million. can you say better than expected, we're on the south side of 350 versus the north side but these are splitting hairs. my guess is there's a bit of compression going on there. we see the euro currency is off again today. the pound is off again today and as we know their chancellor talked about a variety of views

as they presented the budget. i walked away with probably a lot of those issues may weaken the pound a bit. many are watching that we're close to a year high with respect to the green back versus the yen. this particular number isn't really doing a lot for us but the weak global picture that ross painted with regard to pmi, draining equities is draining interest rates as well. >> thanks for that, steve. what do you make it have? >> i'm interested in the prior week, we get some of the state level data. for week ago for reasons i probably should admit but i do not, claims dropped 14,000. that's a big number why it would fall on. do you know, richard, why? >> no idea. >> what's interesting broadly is we're getting signs that the u.s. is holding, to rich's point, to the point you've been looking at, steve. the question becomes if the u.s.

is strong, how strong does it have to be to allay concerning for the rest of the world? >> we're still in this transition period, everybody's thinking globally, investing businesses, everything. my view is the next ten years of which i think we're already three, four years into this, people will increasingly look at the u.s. as the place to invest both capital and money. obviously that he was related. financial investments and real investments in the united states. i think these datar the contiea realization of that. >> this time we need the economy growth to be sustainable. >> it's happening slowly and gradually. is it happening quickly enough for people to be happy, probably not? it's happening slowly.

>> we see that money has come out of the european bond market into the u.s. that's a classic risk-off trade here. >> i tell you what, it's very difficult to handicap how these flows will continue. let's just take something real vanilla. everybody's talked the last several weeks about the run-up in treasury rate, how there's a lot of asset allocating going on from treasuries to equities makes sense but the markets don't bear it out. the move started on the 13th and the dow jones industrial average was well higher than its current 13,000 plus area. so i think the markets going to continue to represent a certain type of value that might not make sense for those looking at yields or a variety of other metrics but i don't think it's going to disappear any time soon. >> where did the money go when it came out of bonds? where do you suppose it ended

up? >> i think some of it ended up in money markets. i think some of this is being put in trades or sidelines temporarily because of the end of the quarter, end of the year in japan. i think it moves quickly. the equity trade might move in and out with high frequency trade but the traditional hunker down by and hold, you've heard it all, steve, the equity world is changing and i don't know it's going to change back as quickly as people would like it to, especially ben bernanke. >> i think he makes a good point. the story the journalists told was that there was a portfolio shift going on but i don't think the numbers bare it out. >> i think people wanted to believe there was a portfolio shift. wall street has been bashing bonds, especially treasury for some time. i think people frame the question incorrectly. it's not u.s. stocks versus

treasuries. it's u.s. stocks and treasuries versus the rest of the world. it's not do i want to be in treasuries or stocks -- >> you say that except the dax beginning of the week is up 21% for the year. >> there's two ways to look at the dax. the dax and cac are the higher quality markets of europe achnd use that as maybe an oxymoronic phrase. but they're part of the risk on. as the ecb came to the rescue the banks were doing well and the dax were doing well and dramatically outperformed the united states. >> can i give you some stuff what phil was talking about, boston consulting group, a company that's studied this issue a lot, they're out with a report today estimating 10% to 30% now imported to u.s. from

china could come back on shore. >> that jibes with what we heard from ed morse. his calculations show 3.5 million jobs over the next decade. >> there's also the political issues behind this, too. people make fun of our political system but we are considerably more stable than a lot of governments in the emerging markets. it's something people haven't talked babout, the political rik of putting manufacturing companies in these other companies. we've got natural gas versus oil and coal. we're coming more competitive. are we competitive? no. but are we becoming more competitive? absolutely. >> i wonder if we're making the mistakes of overlooking -- the european union is still the biggest economy in the world. when you get a batch of data

like we have overnight, can we really hold up good enough as that -- >> what about the dollar, kelly? >> in terms of investment vehicle? >> the dollar is a key aspect of the competitiveness of the united states. >> think about what i've been saying. our investment strategies, we are positioned not to gain the emerging markets and have access to the emerging markets. we're trying to protect ourselves from the emerging markets. what you're saying is do we want to have exposure to europe, exposure to china? my answer is i'm not sure do you. i think you want to have exposure from the domestic u.s. economy. >> how do you insulate yourself? >> buy domestic stocks, don't by internationals. >> rick, last word to you. >> i love this conversation but i have my reservation about the global separation or global unitedness. i think we all have very high correlations during times of anxiety and i anticipate a bit

of anxiety ahead. >> that's fair. in the short term, fair. >> why are we paying our hedge fund managers 2 and 10 when ours are 1. >> coming up, president obama talking energy policy in oklahoma today. next we'll talk to harold hamm and larry nichols. [ artis brown ] america is facing some tough challenges right now. two of the most important are energy security and economic growth. north america actually has one of the largest oil reserves in the world. a large part of that is oil sands. this resource has the ability to create hundreds of thousands of jobs. at our kearl project in canada, we'll be able to produce these oil sands with the same emissions as many other oils and that's a huge breakthrough. that's good for our country's energy security and our economy.

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welcome back to "squawk box." president obama presenting his energy policy in cushing, oklahoma. he's expected to endorse the southern leg of the keystone pipeline that would run from canada to the texas coast. joining us harold hamm, founder of continental resources and larry nichols, chairman and former ceo of devon energy. give us an idea, harold, president romney with would one on day one to increase oil prok

pr -- production in the united states? >> increase supply, drill more wells, produce more oil, get it to market. these bottle necks of cushing and other places certainly doesn't help or in the bakken. we need to move the oil to market just quickly and as efficiently as we can. it winds up costing 25 cents or so to the consumer if we can't get the oil to market. that's some of the answers. >> so the key here you're saying is to permit the keystone pipeline project and that will resolve the bottle neck issues and that will bring prices down? >> well, the delay, add that's what we've had, we've had an extensive delay that continues. it does drive prices up at the pump, 25 cents a gallon or so just delaying the project. we need the cushing to houston segment.

that's been talked about a couple years and been in the works for a couple years. it's time that got done. and certainly everybody support it is and we're glad to have the president here in oklahoma. we welcome the president every time somebody comes by. we're treating it as a campaign stop here. >> larry nichols, is the permitting that's going to be allowed by the president or is it a campaign -- >> it will help oklahoma and the central part of the u.s. by getting the oil out of here where it's bottled necked and get it to the gulf coast where it can be used. last year the state department told the army corps of engineers to stop the permitting process. so it's kind of hard to give the president a whole lot of credit

for expediting something that he in fact stopped last year. we could have had this permit and the whole pipeline has been sitting on this administration's desk for three years. it would have been nice to have the whole pipeline but we're delighted, even if it is an election year and it's getting permitted just in advance of the election. >> i wonder if you could help us get to the bottom of this issue we've been debating, which is this issue of federal lands and permitting by the obama administration. we had an official on from the interior department who told us the industry is sitting on i guess it's millions of acres out there and i think the industry, i believe yourself, you've argued these aren't productive lands. what's the right answer here? >> the right answer is our industry needs acreage in certain areas. you just doesn't buy one lease and go out and drill a well. that's not economic. then all your competitors would know about that. you go out and assemble a lot of acreage and then you drill.

that drilling takes time. and while we're getting the permits, in fact the governor of utah just a couple months ago wrote a letter to the president pointing out in utah and this is true in most states, can you get a state permit to drill oil in 30 to 60 days. it takes eight times that long to get a permit out of the federal government. >> are you arguing that the land that the industry has right now is proven to be unproductive? that that land is no good? >> if it's no good, we let it go. >> so then why is it still leased by the industry if it's still good? >> we don't know whether it's good. if you know it's not good, of course you'll let it go because it costs you money, annual rental payments that you pay to the federal government to maintain that lease. if you know it's no good, you let it go. you don't know whether it's good because you're waiting for federal permits, you're waiting for lawsuits filed by the environmentalists to get off your back so can you go forward, you're waiting for drilling results on a nearby well, you're

waiting for pipeline permits. there's a lot of waiting that goes on while you're studying and waiting for these processes. >> harold hamm, what else would president romney do to increase oil production in the united states? >> well, larry has hit on some real important thing there is. we're always waiting on something. and certainly we shouldn't be waiting on a approval to drill. we had to wait on seismic results and a lot of these different things. speeding up the process, we shouldn't be waiting two years for a permit to drill on federal land. those permits and all those things have gone up like 44% in time, you know, during this administration. so it's not something we need out there. it's not very helpful. >> even if the state pumps more oil, have we got enough refining capacity for that to feed directly into lower gas prices? >> well, we do have.

here we are fortunate in the u.s. we've got a lot of refining capacity yet. we do have. so, you know, there's several things going on. we're mandated -- they're mandated to use ethanol, for instance. that's an additional cost to the consumer at the pump, too, for about 9 cents a gallon. so we got a lot of things going on. we're actually having to export some of our gasoline because we can't use it here because we haven't used ethanol in the blends. >> larry, i want to come back to this drilling this evening. i'm sorry to beat a dead horse here. this is from the obama administration, from the interior department. they say industry continues to sit on thousands of approved but unused drilling permits and leases, 7,000 drilling permits and roughly 50 million leased acres are sitting idle. explain why 50 million achers is

leased and sitting idle and not producing? >> owning a gasoline lease costs money. you have to pay an annual rental to the government to have that lease. no one would incur an expense unless you plan to use it and no one would drag that expense out unless there were solid reason for it because it cost you money for no benefit. that's just plain common sense. so if you had a lease that was ready to drill and you had the drilling rig, of course you'd go ahead and drill it. this argument has been used for years, for decades in fact, by the left, by environmentalists who don't want more federal land opened up. it's not about whether or not we're being efficient. it's about the environmentalists trying to stop land from being used. it's nonsensical to think we would want more land if we're not effectively using what we already had. >> okay. i think we need to do more research on this topic.

richard? >> among investors one of the big issues now is how much of the rise in gasoline prices and energy prices in general is because of pipelines and political issues going on right now and how much are simply because of constraint in supply from iraq, libya versus demand? is this this political issue or the global supply demand and balance? >> well, in my opinion i think of course we have a situation -- have had a situation with libya and now we have one with iran, you know, that's probably raised the price of oil maybe $20 a barrel on the world market. so that's a considerable cost for sure. >> harold, larry, thanks so much for joining us this morning. >> thank you. >> coming up from fedex numbers

to muppets at goldman sachs, we'll head down to the new york stock exchange for the latest. without the stuff that we make here, you wouldn't be able to walk in your house and flip on your lights. [ brad ] at ge we build turbines that power the world. they go into power plants which take some form of energy, harness it, and turn it into more efficient electricity. [ ron ] when i was a kid i wanted to work with my hands, that was my thing. i really enjoy building turbines. it's nice to know that what you're building is gonna do something for the world. when people think of ge, they typically don't think about beer. a lot of people may not realize that the power needed to keep their budweiser cold and even to make their beer comes from turbines made right here. wait, so you guys make the beer? no, we make the power that makes the beer. so without you there'd be no bud? that's right. well, we like you. [ laughter ] ♪

keep going. i think there's a "k" in knucklehead. >> welcome back to "squawk box," making headlines goldman sachs is reportedly started to scan internal e-mails for the term "muppet." ceo lloyd blankfein said the financial giant is looking for evidence that employees refer to clients in derogatory ways. the company-wide review comes after greg smith resigned in a scathing "new york times" op. ed, he said he saw five goldman managing directors refer to customers as muppets. muppet is a uk derogatory term, andrew. >> as you well know. and worth pointing out one more time that the muppets, jim

henson was a client of goldman sachs. let's get down to the new york stock exchange, melissa, jim and brian join us now. if i scanned your e-mail, what would i see, mr. cramer? >> we learned from elliott spitser, former governor and new york attorney that every single thing that you send in e-mail you should be able to remember could be on the cover of the "new york times" so be careful what you send. >> they have to dig deeper to get to the heart of the problem. >> we all know people at goldman sachs, i talked to a buddy, his view is it's always been tight, it's getting tighter. you hear stories you send a text message from unwith of your companies, your blackberries, compliance calls you up. it's the new normal on wall street. interesting story how wall street is trying to use twitter and lawyers are proving -- can you imagine being a lawyer, you're out of yale law school, 200,000 in law school debt and you're basically composing

tweets. >> all they were doing before was just proofreading doimcumen in s1. >> they might find in "squawk box" sweatergate 2. >> quick views on fed next? >> it's one of the companies we have to take our cue from how much the stock has run, not necessarily about how the business is done. i was listening to kelly talk about some of the numbers being weaker. i think it's a good quarter but the stock is up 20 points, very much in a straight line so the stock can come in because they didn't say we think the whole world is getting much better. that's not their style. >> and the guidance for the quarter wasn't as strong as wall street wanted it to be. >> underpromise, overdeliver, that's been their nature. >> thaw. see you on "squawk on the street" in a moment. >> when brian said things were getting tight i thought he was talking about your jumper. >> my jumper, my sweater. >> final thoughts from my guest host richard bernstein and final look at andrew's sweater.

"squawk box" is coming right back. tomorrow, guest host steve crawford, we'll deal into this year's big deals with m&a master marshall sorenstein and larry lindsay, former economic adviser to president george w. bush. "squawk box" starting tomorrow at 6:00 a.m. eastern. [ laughter ] ♪ [ female announcer ] each one of us is our own boss. ♪ and no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. ♪

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our our guest host all morning has been richard bernstein. kelly has a question for him. >> there's a letter saying we have to end too big to fail and not only does dodd-frank not do that, it might make the big banks bigger. should we start all over, go back to square one when it comes to financial reform? >> well i have to tell you, i'm still a fan of glass-steigle. i think one of the reasons why we were was the repeal of that. i think that was a big mistake. you have to view this from an investor point of view, you have a choice between regulation and transparency. either the big banks have to become incredibly