becky quick along with joe kernen and andrew ross sorkin and it feels good. >> i missed you guys last week. >> i any mimissed you on friday. >> it's been two weeks. >> you were watching. >> no, we were -- no, did not see. >> you were in a different time zone. >> and even though we sometimes got up early, but, no. and we got a lot to talk about. how do we want to do this? we should do a few headlines first. are there things happening? the corzine news. >> very big. >> i thought it was big but then the "new york times" said they talked to his attorneys and said, yeah, he said cover the losses, but he didn't say which accounts to use. >> two pieces of news. so on friday you heard that this e-mail suggested that he directed the trade. this morning the "new york times" reports that there was another e-mail exchange where he

literally asked this woman in chicago where did the if you said comfunds come from and she writes back and says the transfer came from a, quote, nonseg account, which means a house account. they said it several times. the idea that he knew that -- does it make you feel better or worse? >> it's very obscure. i'm not sure what it means. i sort of have santelli's take that if these weren't fat cats that hurt, where are they, 50 cents on the dollar? people that thought they had segregated accounts and -- >> it's not like a bank, though. >> but they didn't lose it, though. it was like a madoff situation. >> and the other thing is so the

bat guys, finally tried to -- they said, listen, we have never done an ipo, we can did an ipo. and let's do it ourselves and we'll list ourselves on our own exchange. let's do it. and it was the biggest -- you can't say pig -- what's another word for pig -- screw up instead of -- >> it was a -- >> it was monumental how badly this worked out, right? >> the only good news is that at least it was their own ipo. >> they said never mind and everybody has been made whole, right? >> yes. >> like it never happened. and it may never happen. >> other people saying it will come back but listed on the new york stock exchange. >> and it was a software glitch in the ipo part of their business. is that safe to say? >> it was broader issue.

remember, they halted apple stock on friday. >> right, they think maybe it was the ab server. >> oh, that one. yeah, the ab server. what color is that one? >> i don't know. >> could never get a server in the right color. they came in boring tans and greens. i want a server with some color. >> i wrote an article called why you can't buy a pink computer. >> is this when you were visiting emery? >> no, but what was that about. you said something in the makeup room. >> joe got intel last week. >> i got intel on andrew. college escapades. just didn't seem like you. i thought you were cultivating sources. >> in high school? >> but were all your sources in bars. >> because that's basically what i heard. >> what did you hear? >> no, let's go. we'll come back to that. >> this is the last week of the

first quarter and the dow up 7% for the period. the s&p up 11% for the quarter. and both these major indexes are on track for their best first quarter since 1998. best performing sector, financials and technology. the worst performing sector is utilities. the nasdaq is up 17% since the start of the year and, yes, joe's call is looking better and better. >> i may be right for the january call. my hair, there's a lot going on. it's big. it's big. it's still real. >> that's the good news. >> when i walked in and saw you in makeup, did it look like this? >> no. >> they tease your hair. >> anyway, a new survey of economists suggesting that short term interest rates will remain at current levels for at least 12 more months. the national association for business economists also find that most believe the fed should

pot buy more bonds to try and simulate the economy as it has been doing the last pew years. and an economic policy conference in arlington. ben bernanke will deliver remarks at 8:00 amt. the topic is a view from the federal reserve. that's what they call it in quotes. we'll bring you that speech live right here on "squawk box." >> and in corporate news, i can't yahoo! reporting three new board members to its board. dan loeb's firm launched a campaign to win four seats. it has sharply criticized the internet strategy. harry wilson was one of four nominees. loeb is seeking a board seat for himself. harry wilson will be joining us live at 9:00 a.m. eastern as

our -- >> 7:00 a.m. >> what did i say, 9:00? that's when squawk on the street begins. >> but will this great. we have the one guy who both sides find acceptable. >> other interesting people is jack zucker. >> i figured i'll say the guy's name right. that's just me. >> michael wolf was one of the appointees. interesting list. >> the crazy michael wolf? >> i don't know who you're referring to. not vanity fair michael wolf. >> that's who i would put on the board. he's crazy. i like him. we have him on. he always says something that's like i can't believe what you just said. >> michael wolf of -- the dan loeb version is the one who

famously tweeted alex baldwin was in -- >> alec. >> i can't say anything right this morning. >> i thought it was the other michael wolf who did that. >> no, he was the one because i actually saw him at a dock it ta cocktail party -- >> there's a commercial out where someone refers to you can play games on that and he goes not when you're sitting on a plane. both charlie sheen and alec baldwin are making great rehab moves. have you seen the direct tv charlie sheen? >> they're embracing it. >> but alec baldwin is really good at what he does in terms of -- >> why are you putting baldwin in the same category as charlie sheen? >> oh, i've seen some great history. the voice mail and -- >> i don't put them in the same league. charlie sheen is here and alec -- >> i hold charlie sheen in higher regard, right. >> alec baldwin is tweeting

again. >> he's really good in those commercials. >> when you say that joe should follow him, does that mean joe has done something the past week? >> no if you got a twitter account, you could actually follow him. he's a fun one to follow. >> we skipped eed the greg news. he's writing a book? we're just as shocked he's writing a book as he is. >> he has an agent and going around town. >> couldn't make it big at goldman sachs, so he'll make it big this way. >> we'll see. interesting to hear what he has to say. >> can't you just say, yeah, that's true? >> real question to me is what is he going to say in the book that he hasn't said already. >> i'm not going to read. >> let's get to the global

markets report. ross westgate is standing by in london. and ross, i'm heart broken, i can't believe i missed you last week. i thought you were going to be here on friday. >> i know, were through friday morning? >> i was. and i was like where's ross. no, he's already gone back. >> i know. i'd gone. but joe's seat was very comfortable. >> it's called a hemorrhoid pillow. they left that there for you? it is comfy. heated. medicated. >> worked really good. i cooperate work out whether you knew i was going skiing because you knew i was coming over or i come over because i knew you'd gone skiing. >> i'm smart enough not to be on the same set with you. i don't need that. people comparing me to you. >> guys, it was great to be will. andrew, thank you very much. >> it was pun. >> joe, did you see what he did? it was very clever. we had him up on the boards as

if he was doing this right now. and then he said he was in london and then all of a sudden he walked over and sat down. >> that was great. i missed that. >> how do you know i'm not still are this? i might just come on the set right now. >> joe's looking for you. he'll believe anything. >> yeah, i'm here. anyway, a great week. >> yeah, not there. sorry, guys. it was a great week. thank you very much. i'm sorry i missed joe and becky. european stocks right now pretty tlat ahe flat. around about 6:4. we had data out, remember last week, weak pmis that came out on thursday particularly for the core germ ifany and france. so we wondered about the ifo index. came in for the first month in a row up. that steadied nerves although economists said sentiment in manufacturing is still declining. and it was the manufacturing

pmis that were weaker. new orders if particular suggest those economies are still slowing down. xetra dax up 28. cac flat. focus still on spain. we saw yields rising. yields currently around 5.3%, so they haven't kept going up despite the stock market going down. portugal yields still elevated, italy just below 5%. bund yields, everybody was talking about the big selloff in bond markets two weeks ago. so in determine angermany, down. so further away from the 2% m k

mark. we have eurozone finance ministers meeting later this week. but the key message is they still believe politicians will do whatever they need to to resolve eventually the eurozone crisis. back to you. >> ross, thank you very much. are you planning on come being back any time soon? i can't believe i missed you. >> well, i'm going to have to come back now because i missed you and joe. so we'll -- i'll have to do it. >> let's work it out off line. >> yeah. the other thing is i was talking to -- we need to get to you come on the road over here. >> we're down for that. >> maybe that's what we need to do. >> but i'm not going on that i. >> again. >> no. >> ross, we'll figure something out. we'll get together, find a time that we can all actually see each other in person again. all right. joining us is bob dahl.

good machine morning to you. the last week of the quarter. the dow sun 7%, s&p up 11%, the nasdaq's up 17%. they're all on track for their best quarters of the year and the wall street journal is out with a story suggesting that maybe just maybe this long bull market for bonds is over and stocks may eclipse that. what do you think? >> i've been on that band wagon a little bit too early, but i would endorse it with a few explanation points. when you look at the stock market having a roughly 2% yield, it's a no-brainer. the next ten year, we'll have fixed income in bonlds and equity will have a little bit of growth anyway, maybe dividend increases. and so i'm there. it's going to take reasonable economic activity and continued improvement in confidence for folks to go there. we still know the average retail investor is buying a bond fund and selling the stock fund. >> average retail investor may

not have gotten there yet, but it does seem like all the pros have been there. other people say can these gains really continue for the stock market. what continues to pul fuel it f here? >> no question the first quarter was good, but january and february were up. march is beginning to go side wise after the early month strength and back part of the month more weakness. for us to go higher, we need continued reduction in the uncertainties. this is not a year in my judgment about strong economic growth or strong earnings growth. it's about a reduction in the fear premium, the crisis premium, the risk premium and that started of course with europe beginning to move to a second or third page in the newspaper as the ecb said we're going to finally do what's necessary. we he have the uncertainties about the u.s. fiscal problem that hits january 1 of next

year. investors will start paying attention to take. so i think it's a grind higher, two steps forward, one step back. the easy money from october 1st until now has probably been made. >> the europe situation is no long other page one, generally two or three. but there are some new things that are circulating today. germany talking about potentially increasing the amount of money that it will put up, but other people saying that they would be doing this by cheating and not really increasing the fund. is there a point where europe bounces back to the front pages? >> i think we have to keep that on our radar screen. i think the probability of it on the front page is much less than it was. the ecb changed religion in the fourth quarter of last year. until then, they were fighting inflation. whether it was an inflation day or deflation day or somewhere in between, they got up and they fought inflation. in the fourth quarter, they woke up and said, you know, if we're going to solve europe's problem, we have to be part of it.

and i think that reduces the risk. the bears say we've just kicked the can down the field. there there's truth for that. but with the underbelly of that protection from the ecb, i think europe can slowly but surely work on some of its problems. >> i don't know if you got a chance to see it, but morgan stanley has the report on unemployment. have you seen it yet? >> i have not. >> they're suggesting the numbers we get on april 6th will be much worse than we anticipate, saying the job growth will actually start to moderate. they're expecting the mums to be more in line about 175,000 down from about 245,000. >> i think it's based in part on the jobless claims. >> in part on jobless claims, in part on weather. what's your take on that? >> i wouldn't disagree. i agree with the weather issue as it relates to the home building improvement as well as the employment statistics. i think we did in the first quarter with the warm weather borrow good stuff from the second quarter. so second quarter maybe gets a little sloppy. i don't think it's bad, just not

as good as we've had. >> and what about the higher oil prices that we've seen, higher gasoline prices at the pump, is there something that you worry about that derailing anything? >> not yet. we obviously are monitoring it, but oil prices are only up a little more than half of what they were last year from the fall of 2010 to the height of the arab spring and that didn't bring us to recession. yes it did slow the consumer. got our eye on it, but i think the world is a little stronger today than it was 12 months ago and can handle it. >> all right. bob, have a great week. coming up, your money, your vote. rick santorum recording a weekend win in louisiana. we'll talk politics with john harwood. first, though, tiger woods ending a 30 month title drought. yesterday he won the arnold palmer invitational.

second for all time tour victories. masters only a week or two away. first, though, i was skiing, too. turns out andrew was in utah. >> you were in colorado. >> that's the g man. world famous instructor. and he rocks. but the only problem, he told me to ski well with your 8-pack. you have to have your 8 can decrease park really strong and then your legs don't turn as much, and i don't have any 8-pack muscles. >> you don't wear a helmet? >> i don't wear a medical mehel. >> you're a appear. >> i'm not in trees skiing. >> who was out there sf. >> david faber. didn't know he was going to be there. walked in in the greatest resort.

you're half i with a up the mountain and you walk out of your room and there's a valet with your skis and boots. greatest staff. but jonathan wall who used to run cnbc. tim pawlenty. he was not skiing. in fact, he was if his skivvies coming out of the spa. not skivvies, but t-shirt and gym shorts and i was like governor, governor. and he looked scared as i approached him. because it was like who is this stalker. >> in this squawk ward moment has been brought to you by joe kernen. >> and one of the old faber five in a white outfit that was so embarrassing, but i guess they make it in a man he's size. but i wouldn't have thought that they did. but anyway, we'll head to break and then -- and your cousin.

who said that you threw up at emory university when you went down to visit him. >> that was in high school. >> you're not supposed to drink in high school. i think it's final seconds, ohh, down by two, shoots a three, game over. so two seconds ago... hey mr. and mrs. harris, where's kevin? say hi kevin. hi. mom, put me down. put...the phone...down. hey guys. did you hear... the choys had their baby? so 29 seconds ago. well we should get them a gift. [ choys ] thanks for the gift! [ amy and rob ] you're welcome! you're welcome! [ male announcer ] get it fast with at&t. the nation's largest 4g network. &t. ♪

time to talk politics. john harwood joins us from washington. not a lot of hoopla about that louisiana win. i think it's all being pretty good perspective at this point when you're, what, less than 50% of the delegates of romney? >> yeah, it's not looking as if

rick santorum's got the capacity to stop mitt romney win the nomination outright himself. but he can keep going as long as he he has the money. he's not anywhere nearly competitive with mitt romney on television. romney's way outspending him by multiples in the state of wisconsin. santorum still because of his reputation among conservatives can still run reasonably close to him. we'll see if he can break through. hasn't been able to do it in the midwest before. but it will keep going without a lot a suspense. >> i heard ohio arts, the stock surged. do you know what i'm talking about? >> i do not. >> maker of the etch a sketch. >> oh, right. yeah, that was quite a major blunder by one of romney's aides and the kind of they think that had resonance and both sink

grich a gingrich and santorums have been waving etch a sketches around. >> but if you understand politics as you do, and if you're not ready to be flexible, you're not going todecent campaign. and i don't know if you show that much of your hand to admit what really goes on in a campaign. maybe that was a little bit of a blunder. but it's like we've used this earlier, uh-oh, there's gambling going on here. yeah, no kidding. this is the way candidates run an election. whatever will play at the time, you need to get elected to do -- >> but it was like when austan goolsbee said the thing about canada. >> you know it's true, but you just don't say it. i don't think it was a big mistake really. >> joe, the same mistake or the same statement has a different impact on different kinds of candidates. if somebody working for ronald reagan had said something like

that, it wookt have the impact because reagan had an image for steadfast conservatism. if you're mitt romney and you've been battling your whole career, political career, against the idea that you're very malleable and flexible, that is the wrong image to reinforce something like that. >> he was running against ted kennedy when he was tack to go t tacking to the left. so i can kind of understand that. >> right, but what i'm saying is that, and you appreciate this, too, i know, but this is the underlying afrgt that both gingrich and santorum have been making. even though everyone knows that people run different campaigns in a general election than they do in the primary, the extent of your transformation and depending on the reputation you bring to the campaign, it can

have a significant impact. >> but much bigger than that, health law heads to court. three day marathon a weights lawyers in health case. usa today. three days that may reshape america. and every time we talk about it, you talk about obama care and then the next thing that people will want to talk about is romney care. so that's going to be front and center again, too. >> yeah, well, rick santorum will certainly play on that. but i think this health law debate is pretty significant. we've talked about this before on the show. depending on who wins or loses the case and we'll find out later in the year, presumably before election day, whoever wins or loses, the short end of the stick will have a major mobilization tool. so if the law is upheld which some in the white house expect, you'll see renewed energy on the right. and if the reverse happens, the

left will say we have to win. >> only guy for sure is clarence thomas. you go to the other four conserve i have justices and you can find stuff that they've written in the path that certainly doesn't make any of those guys a shoe-in at all. they've talked about the broad powers of congress. >> no way it's being overruled. >> that's why they're confident. the interesting thing, joe, is if they decide, and i'm not expecting it and i don't know enough about the legal an that will sis to know about the probability, but the fact hers debating the question of whether they can even decide the case now because the penal ties don' take effect until later that could be a punt. either side, if they feel

they're going to lose, might punt and wait. >> all these great things are happening and that's why people are -- you're not 26. and i know you're trying to stay on your parents' -- does anyone buy that, that you're under 26 and you still got the health care with your parents, john? i know you've been trying to pass that off even with that gray hair of yours. >> my mom says i can stay on as long as i want. >> you don't even like that part of it. >> i get so much hate mail when i talk about it. if you're 26, i do understand if you have a pre-existing condition, but the other part of the law is supposed to change the pre-existing conditions. that part i agree with. >> are you calling my daughter who just got out of college on my policy a slacker?

>> i'm calling you a slacker because you're on your mother's policy. and duke also sucked. >> a lot going on this morning. >> duke was embarrassing. >> i'm impressed by the ohio state team. >> that's my pick. i'm leading the brackets. i'm in first place. on the tv newser challenge. they won't update it because the guy who works it is in last place. so he's hiding. update it. >> john -- >> we're going to show is it because if they don't update it -- >> can i ask john a question on the santorum outburst, thocomme? he says the worst republican in the country to put up against barack obama is mr. romney and then he goes after jeff zell any when he asks what speech did you listen to, stop lying. >> he meant it only in the micro

chasm of what was going on in health care. >> he said obama would be better to reelect better than elect romney, he backtracked on that, right? >> here's what that incident shows is that when you run for president, it is a killer, killer grind. and you you believe in yourself, you're trying to make something happen, you get a glimmer of possibility from the voters. you win some primaries. but he can feel right now that everybody in the country who is talking about the race believes he has no chance. think about the frustration and difficulty that that -- and the anxious issues really that that puts you through. when you're breaking your back to try to make something happen, you have some people who believe in you, and you're feeling the air compago out of the balloon. and rick santorum is experiencing that and i think he'll experience it for a while. because now that we're past louisiana, he's going maryland and wisconsin, wisconsin, we

could expect that to follow the pattern of the other mid western states. we'll see. he could break lieu. matt through. maryland is not friendly for him. yes, there's pennsylvania, new york, connecticut p. he's looking at getting hammered in many, many places. >> a lot of tough sledding. john, we have to run. thanks so much. talk to you very soon. i'll try to be nicer. but do say hello to your mother. coming up, the social offering, how wall street makes sure the ipo price is right. the next revolution in music is happening here.

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it's just another way you'll be traveling at the speed of hertz. the book the book on takes book with the mega ipo possibly just weeks away, the attention of wall

street now turns to making sure that facebook's ipo's price is right. kayla tausche joins us with -- what is the important number? >> the range was sort of broad, 75 to $100 billion. and that range is narrowing to between $90 billion and $110 billion. >> moving on up. >> it's early. can't even say it. moving up. between big reasons. first of all, the ipo number has improved significantly. we'll talk about that in a minute. but also the new ad initiatives. they have investors really buzzing and the advertising companies. mobility ads. you have the new time line for facebook for advertisers which cheryl sandburg announced. but talking multiples right now might be a little bit premature since those forward looking numbers won't really come into the mid april analyst meeting if they're disclosed at all.

but as of right now, about 100 times earnings and about 25 times their revenues for the numbers that we have in the first that was filed. but there's a reason that this is different and it's it actually the reason that makes it less interesting and that's because there's already a lot of liquidity on the secondary markets where facebook has been trading for several years now. so you have a little bit of an indication as far as pricing goes and last year -- guy, i'm having a hard time this morning. last week, 250,000 shares traded at $40 a share on second market, but not only that, second market also announced that it was starting a facebook fund for the little guy to be able to get into these shares when they can't afford one of the giant block trades. and that's interesting because to get in to this fund, you have to be committed to at least 5,000 shares or at least $200,000. so even second market is saying they're clearing price for this fund is about $40. so that's where they're

expecting will this this to be. gives you a rough window of about $36 to $44 a share. >> explain this to me on the second market thing. how does it work where they're selling shares, but selling pre-ipo shares -- i don't understand how a regular person, regular joe can by these shares ahead of the ipo. am i missing something? >> i'm not the a regular joe. >> a regular joe can get in because they want to get this before the ip off the. if you're a retail investor, you have a small slice of a deal that is even available to you because a lot of it goes to institutional shareholders. the big hedge funds. >> there's something that makes me feel uncomfortable. the whole point of the ipo is so that you can see more information. >> but the echo he can tech tec

companies are staying private longer. they're going through a life event, going through a dwrivorc for whatever reason, their timing is right for liquidity. >> we do have a great guest on the set. j.d., great to see you. you are the co-head i should say of the technology group at b of a. ipos. you are part of the facebook ipo, so i assume -- >> we are. >> so you probably can't talk too much about it. but actually, let's go one other place. can i go to bats with you for a second? >> probably need to stay away from that one, as well. >> does that say anything about anything in terms of the ipo market or in terms of what's going on in the world it in terms of electronic trading? >> that outcome is actually quite different, it has very little to do with the broader ipo market which has done

nothing but accelerate for the last month. so the ipo market broadly has been doing well and it's just unfortunate timing. >> was the news out this morning, when did i see on zynga, founder will be taking out -- there will be a secondary on that, so there's a little bit of an overhang on that stock. is there some worry that these stocks that have gone on a huge rise, there will be these secondaries and people cashing out and what it ultimately means to the stock price? >> the market deals with secondaries all the time and you saw within last week for michael kors. certainly hard to suggest that there was huge overhang there. in fact the market probably anticipated it quite well. we're in a spot where the ipo market overall has been very hard to call this year. if you told anybody who does my job in the second half of last

year that we would have the best first quarter on record since 1998, that volatility would be consistently below 20, and that the first six or seven weeks of the year for the ipo market would be anemic at best, we wouldn't have agreed with that. we have a great secondary market conditions and it's taken the first two months of the quarter for the i about po market to realize that. so for the last four weeks, the ipo market has been extraordinary. for the average investor, if they bought every ipo this quarter, they would be up 29.7%. >> to what sent is that the effect of a lot of these ipos pricing at a discount to the the range especially in the first month of the range? a lot of those came below the range so that's where sewyou're

seeing a lot of the rise. >> over the last month you've seen higher profile technology ipos. so that's consistent with the last three years is these companies where revenues are growing anywhere from 45% to 75%, these are companies that have had a very open window for the last three years. there's a real preference for scale. last week you saw allison transmission. importantly industrial ipo, we have not seen many of hose. so what we're seeing is a broadening of the window. the window that has for three years been open largely just to tech nology companies. i've experienced a different ipo market than my. >> caller: colleagues who cover financials. allison is signature and it potentially prood broadens the dough. but over the last three years, there have only ban three quarters where you would suggest

that ipos are rewarding investors relative to the s&p. this quarter is notable. the beginning of the year where these deals priced poorly, absolutely factoring into it. but the knmomentum is strong. >> last question. pricing. on some of the tech ipos have been a nice pop. is the bank mistriesing tpricin deals? >> they tend to look at that time on a one day basis which we think is a mistake. >> on the first quarter basis, they're up 30%. does that mean her pricthey wer priced too low in. >> early in the process when we know we have a deal that will work well, we gets a much long term feedback as we can, share it with the company, and price it in a way that the company is happy with. the one way the ipo process has changed dramatically in the last ten years, that's very good

transparency for corporates as to what investors make. >> and how is price determined by float? because i know that's something we see, it will tiny slice, people on cnbc all the time, we always say that's a financial engineering characteristic that causes the stock to pop. >> it's a balancing act. one of the things we're trying to do, it we have a company that has a substantial enough market cap, then we're comfortable floating a low percentage of the company. it's ale about aing act between absolute dollars and percentage. and you really have to strike that balance which is something we spend a lot of time figuring that out. >> j.d., thank you for coming in. coming up, oil shock, the story behind rising gasoline prices. first, though, we'll talk a little final four. kayla had north carolina. >> did you have to bring that up? >> i was shocked at how good kansas is. i have ohio state winning it all

and now i think it will be kentucky and kansas. but this is great. louisville versus kentucky. which is going to be great. and then ohio state versus kansas. here's the tv newser thing that i'm talking about. it's not really an office pool, all the people in the tv business. i've been in first for a while. you see -- >> for week and a half. >> will that talmost the entire. you see brian sullivan. >> i am beating willie geist. >> willie geist gets up way too early to do any good. john roberts should be thinking about this health care situation. and alex weprin, that's why they won't update it. he's in last lays. ♪

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gasoline prices gasoline prices rising another 11 cents. courtney reagan is standing by at the gas pump at the luke oil just down the road from cnbc headquarters. what are the prices today? >> the gas prices here are $3.73 a gallon. that's 20 cents less than the national average. 15 cents higher than what drivers are paying in tulsa, oklahoma. but drivers in chicago are paying $4.58 a gallon. that's the highest. the national average has rich about a quarter for the highest ever level this time of the year. it's pushed consumption down.

the amount of the price hikes may be decreasing week over week, the national average is just seven cents away from $4 a gallon and consumers are growing increasingly concerned. >> i drive quite a bit to the city and i've been thinking about alternative plans. >> you have to get to work every day. >> according to a pew survey, rising gas prices are the number one interests. 58% believe congress and the president should take immediate action. but economists have also begun to worry. mark zandi says rising gas prices are the most serious threat for the broader economy. and ghs says the economy is in the early stages of demand construction because of gasoline prices and he expects a mild reduction in retail sales growth

starting in may as a result before while the economy is in much better shape right now than it was in june of 2008, the last time we saw prices at >> for more on this topic now, we are joined by the vice president of government relations. >> we know that gas prices continue to climb and i'm wondering what's that meant, what you've seen from the consumer as they're going about their way, trying it find gas when they fill up. >> we know the consumers want to find the best deal at the street pump. we did a survey earlier this year and found the the number one driving force for consumers, pick wig retailer to buy fuel

from. >> i guess what surprised me was 40% of them said they would drive at least five minutes to save 3 cents a gallon? >> it's surprising because when you do the math, it doesn't make a whole lot of sense. we know from experience buying gasoline is more of an emotional purchase. you have to get to work and have to get to school. we're putting our prices on 20-foot signs in front of you every single day. it's not a price point that you're not aware of. so you're constantly looking for the best value you can find. >> what are your convenience store operators doing in terms of this? are they raising prices? some say they've ris kbrin not as quickly as crude oil. >> not all retailers experience cost increase tess same time. a lot of retailers can't pass their price through as quickly

as they would like to. we typically see it on the way up. margins at the retail store go down. as crude oil prices go down, retailers can catch back up and recover lost marges they lost on the way up. >> so the prices don't go down as quickly as they've gone up? >> it depends. some retailers say i'm going to follow the market down. that causes every other retailer in the market to follow them. >> we are looking at national averages, the prices just below $4 a gallon. what is the tipping point? >> we did a survey and in 2008 the tipping point was around $3.72. i don't think we're there yet. the devaluation of the dollar does change the actual economic impact of crude oil prices and retail prices. the emotional side of the consumer has changed and i think once we get above 4, we'll see

consumer behavior shifts. in 2008 when we saw $4 in the summer, we saw a significant shift in what consumers were buying in terms of vehicles. >> john, thank you very much. it's a pleasure talking to you. >> cnbc will have coverage all day long. we'll have a special guest on "squawk on the street." highway maintenance is underfunded, costing drivers $67 billion a year, and countless tires. which drivers never actually check because they're busy, checking email. this is why we engineered a car that makes 2,000 decisions every second. the new audi a6 is here. the road is now an intelligent place. ♪ laces? really? slip-on's the way to go. more people do that, security would be like -- there's no charge for the bag. thanks. i know a quiet little place where we can get some work done. there's a three-prong plug. i have club passes.

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former top adviser to the auto task force harry wilson joins us to discuss the state of the economy and the race for the white house. >> and making it america. former assistant to president obama's manufacturing policy ron bloom and top business consultants tell us how to get manufacturing jobs back to american shores. >> and yale economic professor robert shiller making a powerful case for more breakthroughs in

the financial street. ♪ pressure, pressing down on me, under pressure ♪ >> good morning, everybody. welcome back to "squawk box." let's get to your monday morning headlines. gasoline prices have jumped another 11.5 cents over the last two weeks. the latest survey puts the average price just under $3.93 a gallon, after a rise of more than 12 cents over the last two-week period. >> bats global coe is apologizing for his company's botched initial ipo on friday. it was terminated after a serious failure. and it was blockbuster box office numbers for "the hunger games." it took in $155 million in

ticket sales. we've been watching the futures this morning and keep in mind it is the last week of the quarter. right now you see those dow futures are indicated to open up by about 60 points. we're going to keep an eye on this as we go through the morning. joe, back over to you. >> i almost saw that, beck. i had a ticket yesterday. >> why didn't you go? >> because, i don't know, a couple of ncaa games on. >> because you were doing well in your bracket. >> they were going at 3:45. >> everybody else went and you didn't go? >> these are kids killing each other with spears. >> i was a little concerned about it. they were interviewing kids -- >> my daughter had to see it. she's read all the books. >> what did she think? >> she loved it and my son liked it and my wife was in shock from watch being kids kill each other. hey, what is it, 2012? what year is it? let's welcome harry wilson, the chairman and ceo of we have mava

advisers here. is that -- >> mava group. >> and that's after your -- >> wife and kids. >> it's very hard to come up with a name these days. he's senior adviser for the auto task force. you don't really want to i guess talk about it that much but in the context of board governance, you think that a lot of boards have just been horrific in recent years and have driven -- like gm's board, entrenched, in large part maybe responsible for what finally had to happen, right >> virtually every company i've worked with could have avoided that fate if they had a better board. the only exception is tex logical chang. >> hewlett packard?

>> that was a huge failure. >> what is george fisher still doing on gm's board? >> he came off it. >> but the damage was done, was it not? >> gm's board was a textbook example of how not to run a board. management would come in, they would never hit their numbers and there would be no consequence, no second guessing, no pushing back, no accountability. you had directors who not focused on driving shareholder value and most importantly didn't hold management accountable. >> it is bad. whatever you talk about it, no one wants congress to get involved with ceo compensation or governance issues and everybody that wants the hands-off approach says, hey, the shareholders can vote on what they do with the board but the shareholders a lot of times they're not big enough adults to deal with getting rid of the board. they rubber stamp -- or they

don't even open their proxy material. how dough get it to where you do hold boards accountable? >> i think it's hard. one is you dramatically improve the quality of directors if had you a concerted effort, an industry policing effort to effectively screen high-quality directors. we want people to be part of a company board be part of a broader process. for a relatively modest investment of a few million dollars, you'd find a must better candidate. >> where do you want to go? back to yahoo!? >> no, no, i wanted to go back to the comp issue, which is how much in terms of aligning the interests, what percentage of somebody's not income but net worth ultimately as a board member do you want in a company?

>> it's a great question. i think it's hard for it to be meaningful if it's less than 5 to 10%. depending on the person, that could be a lot of money. that's where it gets complicated. the median required equity ownership for a director is 3d 00,000, you have five years to get there, so $60,000 a year. so that's a less 1% proportion of their net worth for the average person on a board. >> it's supposed to be tied to performance. >> but a lot of times it was. >> but when it is tied to performance, they don't -- what happened? >> it was tied to performance, it's not always necessarily the stock price increases. there are other metrics. the guy at nike had great numbers that came out -- >> they're not talking about stock price. >> but they have other metrics they use. in years when they haven't been able to get the stock price and

earnings and revenues, like in the case of nike -- >> this isn't stock performance. this is just profit and revenue. >> a lot of times they haven't wanted it tied to profit and revenue, they've wanted it tied to other things. as a result you're not going to get as much. >> but profit and revenue is what went up. >> but there are other metrics they use. >> i didn't see that article but i think nike focusses on eva. >> it's hard to argue you should be using other metrics when those numbers aren't doing well and change it to say those numbers are doing well, we'll go back to this. >> you're a romney guy but on the obama task force for autos. you think romney made a mistake by bashing the auto bailouts? >> yes. >> have you advised his people that's not a winning -- is it a winning strategy for conservatives? >> i don't think it is. it's yesterday's news, first of

all. i think what romney should have done -- first of all, he made a mistakes by saying there was private financing available. everyone know there is wasn't, including mitt romney in my opinion. he should have said gm and chrysler failed because they failed to pay attention to problems in their companies. they fixed the problems at ford because they focused on them and what i want to do for america is what they did for ford before the president allows what happened to gm and chrysler. get in and fix the problems before it's too late. i think it can fit the broader problem. >> you are a republican. do you still get flak for a lot of people for being part of the -- >> it's funny. i consider myself a staunch fiscal conservative. i went through the entire state of new york and talked to thousands and thousands of conservatives and republicans and independents and any time i

explained my position with a glaring example of one person in brooklyn who i met, people really kind of understood why we did what we did. so i think i've managed to work through that. >> who saw "60 minutes"? >> i did. a great piece. >> we have them on a lot, they're good interviews. how do they make it seem like it's such a huge interview. it's their editors or something. >> they did a great job with the interview. they followed him around. i learned things about sergio i did not know before. >> he's cool, isn't he? >> he is. there was a lot of things -- this is stuff we follow and i learned a lot. >> we've had him on. they make it seem like -- >> did you see his reaction to the question what do you think when people say you got this bailout from the government? >> what do conservatives say. >> his reaction was i paid that back at more than 19% interest.

>> they also say what do you say when conservatives use of clint eastwood commercial? he said i turn off the camera for what i'd say about those conservatives and steve crawford's like, yes, i got him to slam conservatives, that's why i'm here on "60 minutes." you saw that part, right? >> there was a cameo of me in the oval office. >> that was the money part for steve. that's what he's most excited about what he got out of sergio. >> can we talk yahoo! for one more -- >> you can't really -- >> last night yahoo! named the three directors, john hayes from american express -- >> i don't know them. >> are these people qualified to be good board members? >> i'm going to have to stay away from that question unfortunately. it's obviously a sensitively situation. one of your comments earlier i

was one person both sides could agree on. the surest thing of changing that is if i comment. >> is the company fundamentally fixable? >> i do think it's fixable. if you look at the asian assets, that's the decline. there are fundamental underperformance issues in the u.s. business driven by its inability to monetize its position. in all situations the board sets the goals along with management and holds and drives accountability. also really creates in a well-run board a construct of dialogue around what's feasible and what's not feasible. some boards it's easy to push too hard and overshoot and have a management team that's demotivated. it's better to have the right balance and have a stretch plan

that's actually feasible. >> you brought no diamonds again today? >> no, no, i got to fix that next time. >> you have the most beautiful stuff. it's a new york store? >> yes. >> there's book written about him called "chasing." you know the book i'm talking about? it's a novel, lauren weisberger. i went to college with her. >> she wrote a novel? >> she also wrote "the devil wears prada." up next, the financial industry is under the gun with regulators and investors but our guest says there's great promise in some of the products of the financial crisis. [ male announcer ] you are a business pro.

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checking the futures right now, let's get a quick look. they've been trading a little bit higher. oh, that's much better. up 7 1. we were down 22 points in fair value. a pretty good move after last week wasn't great. >> that's not saying a lot. we've had a lot of great weeks. it was a very low bar to jump over to say it was the worst week. >> but we want good weeks every week now. >> because of your 30%?

>> yeah. >> junk bond funds may be on their way to a record year. investors have put $12 billion into junk funds this year. that's already more than the $8.2 billion that those funds took in all of last year. they're on the pace to break the record of $28 billion, which was set back in 2009. >> i read somebody called john and said it's like equities in drag. i thought -- that was this weekend. junk bonds, equities in drag. >> you have heard that song by the magnetic fields? >> no, what's that -- >> no, you don't want to -- >> they play it all the time. and it's a big band. it's not you -- you're not the andrew they're talking about. >> i know where in is going. >> no, we're not going there. i hear it all the time. >> you know where we're going? we have a great guest now. we've talked about complicated financial products.

our next guest argues financial innovation is necessary to create safer products to promote the public good. his new book provides a defense so called financial engineers and systems of defense that have been set up there. professor shiller, this t is great to see you this morning. >> it's a pleasure. >> you are the man that people know for housing, for irrational exuberance. you called the housing market bubble and the stock market bubble and now you're out there with this book about finance. why don't you tell as you little bit about why you wrote this book. >> this book emerged from my teaching. i have a course on financial markets, which you can take. it's free online through open yale. in that course i'm training young people to go into finance.

so i think i have to -- young people are often idealistic, they want to do good, they want to make an impact. i wanted to present the way our financial capitalism is going. and there's some hard and important realities that i'm trying to convey about where our society is going in a framework of financial capitalism. >> but professor, you are zigging when the rest of the world seems to be zagging. this is a time -- obviously you started this book before the whole controversy with goldman sachs erupted. what we heard just over the last couple of weeks with the gentleman who stepped down from goldman sachs and said it was basically a bad place that doesn't do anything good for society, what do you say putting all that in context? >> well, i'm sure there are bad people in every business so i don't want to -- i don't know what's going on right now in goldman sachs but i know that goldman sachs has a history which has been extolled by many

people, people admire goldman sachs. >> tell us what good they've done -- not just goldman sachs but in terms of finance, what good things come out of finance. there are a lot of people who think that wall street is a bad place right now. >> we are going through a revolution in the world, which is bringing up the emerging world to modern levels of -- it's the -- this will be the greatest half century in the history of the world if it continues to play out. and how is china, india and a whole bunch of emerging companies suddenly seeing rapid economic growth? it's because they're adopting institutions of financial capitalism. it's a dynamic process. and that's what i wanted to convey. and there's a future to this process, which is very interesting. >> but can you tell us specifically, what does finance do, things that are done that wouldn't be done without it? >> you know the answer to this question. but maybe it's a little bit

subtle. you can't see it as much. if a young person goes into medical school, he'll have grateful patients, you know, that know that the cure was done by some modern technology. but you don't see it in finance so well because a lot of the benefits are difused. for example, mortgage securitization is criticized widely because it seemed to be the source of this crisis. well, it was part of the source of this crisis. it wasn't done exactly right. but the concept of mortgage securitization is very powerful because it makes housing available to people. >> professor, it's great to hear you. i wasn't necessarily sure that you would, you know, be promoting that side of it as much. last week the journal had a piece on hayek. i guess he died exactly 20 years ago last week and draghi said

the social experiment in europe has ended, it's just not working. are you frustrated we are once again examining whether some type of social democracy is the best way to go in this country again? we're at this point looking for some type of neocapitalism because in the mainstream media there is a -- they are positing that capitalism has failed because of the financial crisis. >> joe, i'm going to send you a copy of my book because you and i are in some ways kin dread spirits. you wrote a book about capitalism -- >> yes, the paper back comes out tomorrow. we're going to have an ad in the wall street journal and we even changed the subtitle. it's so important. and we didn't plan this, honestly. it's important to start telling our children that it's great to go into the giving fields, that's fine, that's a wonderful thing to do, to go into social work or charity work but if you

start a company and give someone a job or give a hundred people a job and entrepreneurialship and innovation, it's not a dirty word and i see it again, in this latest movie, it's a universal picture, a guy says -- one of his songs is "don't make fun of me, i'm helping the economy" or something, i'm not a bad guy. it's absolute business bashing from beginning to the end of this movie. did you see it yet? it a universal picture and -- >> i like dr. suess. you're not going to get me to see anything bad. the kid love it. >> my daughter loved it. >> but it was noticed again how business and -- >> but i don't want to be an apologist for everything that goes on. there's good people -- there are

people. some of them are good and some of them are bad. i think both kinds go into all different walks of life. >> some go into government, too. >> that's right. >> i'm curious when you look at the regulatory environment, what's going on on wall street right now, are they doing the right things? the wrong things? how do you think about it? >> government isn't perfect either. i'm inspired by what's happened over the last couple years. the dodd-frank act was on balance a good thing and now we have this new jobs bill, which i think is exciting from the idea that it's working with, to have, you know, crowd funding to become a more important part of our -- that's democratizing capitalism. that's the kind of thing that i think may well be in our future, which will even -- >> the left is hammering. the people hate that, say we're opening the door for all the charltons to come out and the

boiler room bill. they're hammering it. >> that's the same thing that people said in 1811 when the new york securities law started this whole thing. in 1811 they allowed anybody to set up a company and they allowed free purchases of stocks by anyone with limited liability and people were shocked and they said that's going to create all sorts of shenanigans. it did create shenanigans but it also created economic growth. >> professor, while we have you here, let's ask you about housing, too. we've had a number people come on our air over the last six, seven weeks from warren buffett to donald trump and said they think home prices are nearing a bottom if they haven't already hit it. what do you think? i say this knowing that the number is going to be hitting a little later this morning and the expectation is numbers came down again. >> the numbers are coming out tomorrow. >> tomorrow, tuesday.

>> i haven't seen them yet so i'm not going to talk about them. what we did notice for the last four months is prices have been falling, at the same time indicators are looking stronger. permits are up, the housing index is up and the economy, the confidence is up. so there are signs that it could be a turn around. i give it a chance that this could be a turning point but i'm not saying it is. i think it's still too uncertain to call a turning point and it could continue to go down. >> professor shiller, i want to thank you very much and wish you the best of luck with your new book. >> thank you. >> still to come, president obama trying to force cooperation with china at this week's nuclear summit, hoping to turn the heat up but -- doesn't

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welcome back to "squawk box." we are less than 30 minutes away from the beach by fed chairman ben bernanke. he's going to be addressing an economic conference in arlington, virginia being held by the national association for business economics. you can see that speech live here on cnbc. and greg smith is reportedly seeking a book deal. he resigned from goldman sachs by way of a scolding op-ed in the "new york times." >> and china could bring back millions of jobs back to the u.s.

i'm going to start with you, hal, because you're here. do you think we're related, sorkin, sirkin? >> we may be. >> so you're not a harry or harold? >> i could have been a harry. i was supposed to be a harry but there was a fight in our family when i was born. >> let's talk china, let's talk manufacturing. i read the report and the good news is we could be bringing some jobs back here because costs are going to go up in china. >> wages are rising in china at 15% to 20% a year and we're seeing numbers higher than that in the last few months. there's a fundamental shortage of labor supply. it was very simple in 2001 when you went to china, labor costs were 58 cents an hour. it was simple to outsource. >> what kind of jobs can we expect will come back this way and how quickly? >> we think over the next decade

we'll see 2 million to 3 million jobs come back to the united states. some will be in service businesses, some will be in regular manufacturing businesses and we expect that will happen in the next few years and it will be a very significant move. >> okay. larger question, if costs go up in china, which may be good in terms of manufacturing here, what does it do to the overall economic picture in terms of the fact that costs are going to go up more broadly? >> costs will be going up around the world because the days of very low cost labor are disappearing. that will make things more expensive for consumers. transportation costs will be going up, too. that's making it more favorable to come to the united states. >> ron, big news this morning or today, you've been involved with it every day for the past couple of month, the post office and what's going to happen there. you're representing the workers. your take on where we are in the battle over what's going to happen to the post office and particularly to postal services.

>> well, thanks. great to be here. there is -- postal service reform looks like it's going to be on the agenda this week. there will be a cloture vote this evening. >> what is going to be part of that vote? >> there's a comprehensive bill, s-1789. is there have been changing over the weekend so we don't know exactly what it looks like. unfortunately the way we understand the bill is it really going to be a band-aid. everyone knows the postal services faces tremendous problems, decline of first chase mail, very significant issue. the postal service needs to change. but unfortunately the business plan that this bill is based on does not really address the key challenges facing the postal service. it does provide some relief on the inappropriate prefunding mandate for retiree health care,

it does provide some relief in terms of new resources into the postal service. but it really doesn't -- it really doesn't address the fundamental fact that if you want to have a world class post office, you have to have a vibrant network. what the postal service has come forward with is a series of initiatives to degrade the network. >> i call it the austerity plan. the question is what do you do to fix it, to grow it? what are the new, inventive ideas out there? >> i think there's a couple things that have to happen. this is a restructuring so sacrifice will be required from all stake holders. if you look at the project i worked on with harry, the restructuring of general motors, all the stake holders have to come together. labor needs to be part of this picture the postal services does have some challenges like that because of the decline of first class. on the other side, we have the most affordable postal rates in

the world. there ought to be more flexibility in pricing. the postal service ought to be given an opportunity to grow. last mile delivery, which is what the postal service is very good at we ought to be giving the postal service more chance to do that. instead we're trying to shrink our way to success. there's very little evidence companies can do that successfully. >> hal, you have a way to fix the postal service in. >> i don't know. it's a tough problem. i'm glad we've got someone good working on it. >> i don't want to relitigate the past. we talked to harry about this earlier. we've heard what romney and others have said about the auto bailout, and there has been argument that -- he's argued that we shouldn't have had it at all or we didn't need it. i assume you take the other side of that. >> yeah. look, this argue is really extraordinary to me. at the moment that gm faced the

crisis the president had to deal with, the capital markets of the united states of america were not functioning. there were no funds available. so if we had not stepped in and provided the debtor in possession financing, which the government did, these companies would have gone into liquidation. if you're prepared to accept the liquidation of those companies, that's fine. and people have estimated some say 1 million jobs, recently other estimates have come out as high as 2.5 million jobs. so i have no problem with someone saying that we should have let gm and chrysler go, but they need to face the fact that if that's their view, we're talking about millions of jobs that would have been lost. >> hal, we're going to have to run. my question for you talking about manufacturing, is all those jobs that would have been lost and some were, are those people going to be able to be retrained into these positions that you're talking about? >> yes. it will take training.

people aren't just going to be able to fall into a job and get it but it will take training and that's one of the roles government can help support in the transition. >> we have to leave it there. thank you very much, guys. >> still to come, more from our guest harry wilson coming up. >> tomorrow on "squawk box," the american resurgence. our guest host will be florida governor rick scott. we'll talk politics and american jobs with texas governor rick perry and florida senator marco rubio. and it's trump tuesday, we'll ask the donald what america needs to do to stay on top. [ man ] predicting the future is hard.

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pope benedict visiting cuba this week. this will be the first papal visit to the island nation since 1988. cnbc chief international correspondent michelle caruso-cabrera joins us now from cuba where the pope is visiting

a much different country. and you're cuban. you got to feel it's kind of cool for you to be down there, michelle, right? >> it is absolutely cool, yes. my mother's cuban, my father's italian. it's wonderful to be here. it's been ten years since i've been here. pope benedict arrives today at 4:00 east coast time. he does a mass at 7:30 east coast time. let's be frank, cnbc doesn't normally cover papal visits, right? we're here because it's one of the few times cuba will let us in. i've asked for a visa several times in the past years and they've never said no but they've never said yes. right now in particular what is important, there are two changes that have happened on this island in the last year, two changes to law. first for the first time in 50 years cubans can buy and sell homes and cars. may not seem like a big deal to the rest of the world but here it is a big deal.

additionally, there are now 181 categories of jobs where you are allowed to be self-employed. up until now everyone worked for the government, or nearly everyone. of those categories, restaura restauranteur is one of them. in miami, florida, christina morales is packing for her upcoming trip to cuba. but her bags are not filled with clothing. >> there's stuff they cannot get there. >> rather supplies for her brother's restaurant. this will be christina's third trip in a year to help her brother miguel. >> this is the first business in the area. >> he's very happy because that was something you couldn't have or do in cuba before to have your own business. >> reporter: thanks to recent changes in cuban law, miguel can have a license to operate his on business.

miguel's restaurant was originally started by his grandfather but was nationalized by the castro regime. now it's miguel's turn at being a restauranteur. >> you can see more tonight when we air "cub"cuba: forbidden changes." people ask is cuba starting down the path of say the early 1980s. if you ask members of the cuban government they say absolutely not, do not look as this as any approach toward capitalism. they say instead, joe, that they are perfecting socialism and just wringing inefficiencies out of the government model. >> good luck with that. everything's a movie for me. i think of the potential that

hyman roth saw in cuba. if they had just gone that way, i think of how rich that country would be with a few casinos and a couple of tourists. >> absolutely. tourism here a larger group of tourists come heariing here wou absolutely help. when you drive around and look at the architecture that ironically has been preserved because of socialism, there's been no investment, this is a city that clearly rivalled london and paris. if it were a couple of home depots and a lot of blood, sweat and tears and you would see just an incredible, incredible cities americans would love to flock to if the embargo were to ever go away. >> it's said that castro has really decided for his people that this is the life that they've had to lead. i know that's frustrating to a lot of cuban-americans, too, that still have relatives there.

the best can you hope for is trying to take a '56 chevy and get it seaworthy and head to miami. it's sad. >> i will say this, compared to ten years ago, things have gotten better. it's not because of an improvement in this economy or how they're running it. it's because they now get a lot of oil from hugo chavez, who arrived here last night for more treatment of his issues with cancer and he's a big fan of the pope. because they get that oil, they can now run their power plants, which are run by oil. there are far fewer blackouts, there a lot more cars on the road. they're still old cars but gasoline is more available, even though it's $5 a gallon. but that largess from venezuela that prereplaced the largess they used to get from the soviet union is holding this place together. >> and you're blackberry doesn't

work? >> almost no access to the internet. you have to be a doctor or something like that to be able to get in. but the average person only have a very simple -- there's very few smart phones. we're carrying around these phones we would have had maybe ten years ago in the united states beep as journalists can get on the internet at our hotel. they installed wireless just 15 days ago in order to supply it to the journalists who have just arrived. they'll tell you it's part of capacity, they don't have a fiber optic line, that it's not necessarily about control but that if everybody got on the internet, it would be really slow. it's really, really slow, uploading photos to facebook. it's painful. >> if people got on the internet, their days would be numbered. >> we would see if there would be a facebook or twitter revolution like some would call we've seen maybe in the arab

spring. >> she does have some good assignments. >> she's going to be there throughout the day. can you continue to watch and get more from that, too. up next, since joe is back, that means the animal orchestra is back, too. they're tuning up, waiting for his return. and for his list of stocks to watch. we've got the name at the open this morning. and coming up at the top of the hour, live coverage of ben bernanke's comments on the economy. we'll carry his speech live. i bathed it in miracles. director: [ sighs ] cut!

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song that we playing. when this sounds better than the artist. there he is, he's giving her the good -- go, honey, go. man, that's love. >> illumina, extending its 5.7 billion cash bid. analysts expect roche to raise the offer but it hasn't done so yet. amgen, we've got monthly injection of an amgen drug did cut cholesterol levels by up to two-thirds in a clinical trial. are we still working on statins? seems like we've got that, don't we? we have extended release, all these ways to extend patents --

let's cure alzheimer's. they will extend for as long as they can. for 15 years -- >> but work on the side effects. i'd like to see them do that. >> yeah? >> yeah. >> it's hard to even understand cholesterol and the connection. and finally, cal-maine foods. i had an egg this morning. that's all i'm eating. eggs and pork chops. >> you're back to protein? >> the largest egg producer reported third quarter profits of $1.09 a share, 7 cents above estimates. and carb bread, you have ever seen that? it's got 5 grams in a slice and you put cheese on that. no-carb bread?

>> no. you digest yourself. because there's nothing to burn. you got go right in and start eating away at your stomach and your muscles. it works, though. i don't know if it's good for you. coming up chairman bernanke gets ready to talk. he's going to deliver a speech. you've got nothing to eat. you're rail thin already. but you're young. he'll deliver a speech at the economic conference. we'll deliver the speech live as soon as he steps up to the podium. ressive, but don't just listen to me. listen to these happy progressive customers. i plugged in snapshot, and 30 days later, i was saving big on car insurance. i was worried it would be hard to install. but it's really easy. the better i drive, the more i save. i wish our company had something this cool. yeah. you're not... filming this, are you? aw! camera shy. snapshot from progressive.

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it's just another way you'll be traveling at the speed of hertz. welcome back to "squawk box." we're here with john maeva.

how does it work? >> that's really nice. named after wife and three daughters? >> four daughters. >> wow! >> do you have a dog? >> we have a male dog. >> thank god you have somebody there with you, right? >> fed chairman ben bernanke is giving a speech. steve liesman joins us with that. >> the fed chairman talking about jobs and the recent decline in the unemployment rate. he said he sees some positive signs on the job front recently and calls the improving job market a welcome development. the unemployment rate declined faster than had been expected by many but he does point out the number of jobs is still below the level that we saw before the crisis and the number of jobs and job market in general is still far from normal. the dominant cause of high unemployment is cyclical weakness so the fed's policy

should help reduce long-term unemployment. the picture you get is there's nothing he's seeing in the improved job market that changes his outlook on policy. he talks about the better jobs numbers being out of sync with the overall pace of growth and he offers three reasons to the conflict. bad data. maybe it's going to be revised away. he doesn't think that's likely. he says there's other data that shows gdp growth is relatively weak while jobs data strong. what about discouraged workers lowering the unemployment rate? goes through reasons that's doubtful. but the concept of catch up that the employers were quick to fire in the recession and are scrambling to bringing workers back, that's the dominant reason he settles on. he does warn if the gains are catch up, we're going to need stronger growth ahead to boost the labor market because you just don't have that catch up to have all the time. a large part of labor market gains he says are from a decline

in layoffs. you're going to need an increase in hiring in order to keep it going. he does warn, as he has several times before, of the effects of long-term unemployment and says let's not turn a cyclical problem into a structural problem. he's addressing the big issue out there, which is the faster than expected decline in the unemployment rate and sort of hinting at what it means for policy. i think he's saying not much. he's not a big believer we've had this shape or shift change in the jobs market. >> he thinks it's temporary. >> when he settles on the third reason it's catch up, okay, fine, we can catch up for a while but we're going to have to have stronger growth. there's a lot of discussion for the economists, our two famous economists right now. there's 12 charts and stuff, you want to go to the fed web site and see all this stuff. >> the beverage -- that's a new one?

>> the beverage curve. it's the relationship of job vacancies to the unemployment rate. when it gets out of whack -- basically there's a pretty smooth relationship overtime. >> i've heard of okie. >> you have to do like double the growth above potential to bring down the unemployment rate by one percentage point. i can do a whole thing on beverage. you'd be very excited by that -- >> how do you spell it? >> beveridge. >> if the gains have already been made, that sounds like a new normal and that's kind of depressing. >> bernanke is careful not to say new normal. he seems to go back and say when i looked at the rate, the

beveridge rate is not that different. >> april 6th, is that the next time we'll get the unemployment numbers? we're going to be only 175,000 jobs, that we're going to start seeing it come down. >> there is an expectation on the street, i don't think morgan stanley is alone, when you factor weather related construction jobs and think about how high gas prices are that could you have a step down, that 220, 200 was more of a weather-related boost and 175 is more the right track. >> they also cite the initial jobless claims over the last several weeks saying we've reached some sort of plateau again. it dropped off and then plateaued. >> that's an interesting discussion. i don't know that i believe that. what they're suggesting is the change in jobless claims is -- i believe the level of jobs is more indicative of payroll numbers. the jobless claims have been the withins that are stalwart about this jobs recovery.

it's what they call -- this will engender several jokes from joe but the desert island indicator, if you asked give me one piece of data on a desert island -- joke, why would you want data on a desert island? >> i do have a joke. >> go ahead. >> about a desert island? >> oh, no, no, no. i'll tell you. give me a second. you said the counterfactual is now, you're going to have to have the republicans arguing that, that it's now and that it would have been worse -- >> more obviously than it was before. everyone is going to argue that. >> if we don't get below -- >> 8. >> 7.8. obama was at 7.8. >> chairman bernanke is heading to the podium now. >> that might be right. >> kind of like being in a

little club here really. but anyway, thank you for coming. i'm going to be talking today about recent developments in the labor market. we've seen some positive signs on the jobs front recently, including a pick up in payroll numbers and a decline in the unemployment rate, which of course is good news. at the same time some key questions are unresolved. for example, the better jobs numbers seem somewhat out of sin sync with the overall numbers of expansion. despite the recent improvement, the job market remains far from normal. for example, the number of people working and total hours worked are still significantly below the precrisis peak, while the unemployment rate remains well above what most economists judge to be its long-run, sustainable level. of particular concern is the large number of people who have

been unemployed for more than six month. long-term unemployment is particularly costly to those directly affected of course but in addition because of its negative effects on workers skill and attachment to the labors for, long-term unemployment may ultimately reduce the productive capacity of our economy. deet bait about how best to address long-term unemployment raises another important question. is the current high level of long-term unemployment primarily the result of cyclical factors, such as insufficient aggregate demand or structural changes such as a worsening mismatch between worker skills and employers' requirements? if cyclical factors freedom nate, then policies that support a broader economic recovery should be effective in addressing long-term unemployment as well. but if the causes are structural, then other policy tools will be needed. ly argue today while both cyclical and structural forces

doubtlyless contributed to the increase in long-term unemployment, the continued weakness in aggregate demand is likely the predominant factor. consequently the federal reserve's accommodative monetary policies by providing support for the demand and for recovery should help over time to reduce longer term unemployment as well. as background for my discussion, i would like to provide a brief review of recent job market indicators. as this audience is well aware, job creation has picked up recently. let me refer you to the screens. can you look first at chart one, which shows private payroll employment or changes in private payroll employment, which has increased by nearly 250,000 jobs per month off average in the last three months and about 190,000 jobs per month on average over the past 12 months. that was private numbers. at the same time layoffs in the

public secretary soartor appear moderating. these gains have contributed to a significant increase in aggregate hours worked as shown in the chart number two on the right, the top curve shows aggregate hours and the bottom two lines show alternative measures of the average work week. this increase in hours shown in chart two is encouraging because the decline in hours during the recent recession was quite extraordinary. from the peak of this series in december 2007 to its trough in february 2010, aggregate hours on the job by production workers fell by a remarkable 9 1/2%. by comparison production workers declined only, quote unquote, 5 3/4% during severe '81/'82 recession. hours worked are still about 4%

below prerecession peak, still quite far from where we would like to be. the government estimates payroll employment, the number of jobs from a survey of businesses known of course as the establishment survey. a monthly survey of about 60,000 households, which provides the data needed to construct the national unemployment rate offers an alternative estimate of the number of jobs. employment estimated from the household survey adjusted to correspond as closely as possible to the concept of employment as measured in the establishment survey also shows an improvement in the labor market. you see that in chart three, the black line is the -- is the payroll and the red line is the household numbers of private employment creation. indeed as you can see, the household numbers are actually a little stronger than the establishment numbers. i should note, however, that month-to-month changes in this

measure are much more volatile than the employment numbers from the establishment survey, which is why the federal reserve normally puts more weight on the establishment survey for the purposes of short-term forecasting. the positive signs for the labor market have shown through measures of labor utilization. after hovering around 9% for much of last year, the unemployment rate shown in figure four in the black line has moved down since september to 8.3% in february. and the share of employment represented bip people working part time for economic reasons, an indicator of underutilization, the red line in chart four, has declined modestly as well. surveys of households and firms about their attitudes and expectations offer yet another window on job market developments. since the summer, household expectations for labor market conditions over the next year have gotten brighter.

that's chart five. chart five shows two survey measures of households and their expectations. business hiring plans have also shown modest gains. there you also see two indicators. other indicators such as new claims for unemployment insurance and measures of the breadth of hiring across industries also point do better labor market conditions. notwithstanding these welcome recent signs, the job market remains quite weak relative to historical norms, as i've already noted. after almost two years of job gangs, private payroll employment remains almost 5 million jobs below its previous peak and it's larger when the increase in the labor force are taken into account. the unemployment rate in february was stiff roughly 3 percent and points over its average over the 20 years

preceding its recession. a significant improvement in the labor market has reflected a decline in layoffs rather than an increase in hiring. this last observation is illustrated by data on gross job flows, figure seven. the monthly increase in payroll employment, which commands so much public attention, is of course a net change. it equals the number of hires during the month less the number of separations, where separations include layoffs and quits. in any given month a large number of workers are being hired or are leaving their current jobs, illustrating the dynamism of the u.s. labor market. between 2001 and 2007 private employers hired nearly 5 million people on average in each month. total separations on average were only slightly smaller. taking the difference between gross hires and separations, the net month live change in payrolls during this period was

an average less than 100,000 jobs per month, with which is a very small figure compared to the gross flows. the recent history of these flows suggests further improvement in the labor market will likely need to come from a shift to a more robust pace of hiring. as figure seven shows, the decline in aggregate payrolls during the session shown by the gray bar stem by a session in hiring but also a large increase in layoffs, which is the sharp increase in the dotted line at the bottom. so both the decline in hiring and an increase in layoffs were responsible for the decline in payrolls over the period. in contrast, the increase in employment since the end of 2009 has been due to a significant decline in layoffs. you can see at the bottom dotted line, which is returned more or less to normal levels but only a moderate improvement in hiring, as you can see from the black

line at the top. to achieve a more rapid recovery in the jobs market, hiring rates are going to need to return to more normal levels. so what will lead to more hiring and consequently further declines in unemployment? the short answer is more rapid economic growth. indeed the improvement in the labor market over the past year, especially the decline in the unemployment rate, has been faster than might have been expected given that the economy during that time appears to have grown at a relatively modest pace. about 50 years ago the economist and presidential adviser art oakin identified a rule of them that has come to be known as oakin's law. this rule of thumb describes the observed relationship between changes in the unemployment rate and the growth rate of real gdp. oakin noted because of ongoing increases in the size of the labor force and in the level of

productivity, real gdp close to the rate of growth of its potential is normally required just to hold the unemployment rate steady. to reduce the unemployment rate, therefore, the economies must grow at a rate above its potential. more specifically, according to currently vepd versions of oakin's law, to achieve a 1 percentage point decline in the unemployment rate in the course of a year, real gdp must grow approximately 2 percentage points faster than the rate of growth of potential gdp. for illustration, if the potential gdp rate is 2%, oakin's law says gdp must grow at 4% for one year to achieve a 1% reduction in the rate of unemployment. in the light of this historic regularity, it is something of a

puzzle. resolving this puzzle could give us important insights into how the economy and labor market are likely to evolve. to illustrate the tension, i'll show you a picture, consider the relationship between the recent changes in unemployment rate and real gdp relative to predictions of oakin's law. so the black line there shows oakin's law. it's the relationship between unemployment wirks is on the vertical axis and gdp growth, which is on the horizontal axis. when real gdp growth is high, unemployment tends to fall. and when gdp growth is low, unemployment tends to rise. and the black dots refer to years over the last couple of decades. as illustrated by the position of the square down towards the bottom in red labelled "2011" relative to the oakin's law

relationship, the decline in the unemployment rate over the course of 2011 was greater than would seem consistent with gdp growth during that period. indeed with last year's real kb dp growth below 2%, less than what most economists would estimate to be the u.s. economy's potential rate of growth, one might have expected a little change in the unemployment rate last year or a slight increase. what does the confluence in unemployment rate and increase in gdp telling us about the economy and how oakin's law will be resolved in the parent failure could reflect in part statistical noise. for example, it may be future data revisions will show real gdp grew more quickly over the past year than currently estimated. however, although it is certainly possible that revised data will ultimately explain part of the puzzle, at this point we have in specific

evidence suggesting that such a revision might be in the offing. for example, gross domestic income, an alternative measure of economic activity constructed using source data that are mostly different from data used estimating real gdp provide some check on the information revealed by the better known gdp measure. however, gross domestic income is estimated to have ib i increased less quickly in 2011 and does not point to an explanation of a a drop in the unemployment rate. another possibility is the decline in the unemployment rate could be overstating the improvement in the labor market. for example, potential workers could be giving up on looking for work to an newark extent because a person has to be either working or looking for work to be counted as part of the labor force.

an increa a story centered on potential workers dropping out of the labor force might seem in line with the low level of labor force participation. figure nine on the left line shows the percent of the working age population either employed or unemployed, participating in the labor force. you can see the very substantial decline since the recession. but other data cast out on this idea. for example, looking at figure ten, a broad measure of labor underutilization that includes people only marginally attached to the labor force has declined about in line with the unemployment rate since late 2010. in chart 10, the red line is the unemployment rate, the black line or gray line is u-5, which is a broader measure which includes -- treats its unemployed people who are

marginally attacked. this doesn't look to be a purely discouragement type of phenomenon. yet another interpretation of the recent improvement in the labor force is it represents a catch up from outside job losses during and just after the recession. in 2008 and 2009 the decline in payrolls and the associated jump in unemployment were extraordinary. in particular using the oakin's law metric, the run-up in unemployment in 2009 appears sort of too large relative to substantial decline in gdp. i'm showing figure eight, which shows the oakin law relationship. we've already looked at the square, which is 2011 below the line. above the line you see the triangle. that's what happened to unemployment in 2009. what that's showing is the increase in unemployment in 2009 was much sharper than even would

be expected given the decline in real gdp. in order, employers reduced their work forces at an unusually rapid rate near the business cycle trough. perhaps because they feared an even more severe attraction to come or they were trying to conserve available cash. the diagram figure eight suggests what we may be seeing now is the flip side of the fear-driven playoffs that occurred during the worst part of the recession. as firms have become sufficiently confident to move their work forces into closer alignment were the expected demands fo there products. this would explain the position of square 2011 being far below the line representing oakin's law. oakin's law is a noisy relationship. we don't know if the better than expected labor market performance of 2011 has largely

offset the performance in 2009. however, to the exthe decline of the ub employment rate has brought them back into line, then further improvement will likely require faster economic growth than what we've experienced during the past year. going forward it will be especially morning to evaluate incoming information, to assess whether the recovery is picking up as improvements in the labor market feed through to consumer and business confidence or whether the head rinds that have at which the labor market and economic activity continue to normalize. discussions of the labor market at this juncture necessarily have a glass half empty, glass half full kind of tone. recent improvements are encouraging. as i've noted, in an absolute sense, the job market is still far from normal by many measures

and many families continue to suffer the day-to-day hardships with not being able to sell suitable plou suitable employment. >> the consistently high rate of high unemployment we've seen over the past three years is especially concerning. the median and average durations of unemployment have reached levels far outside the range of experience since world war ii, shown by chart 11 where it shows the mean and median length of unemployment spells. and the share of unemployment that represents spells lasting more than six months has been higher than 40% since december 2009. chart 12 shows the percent of unemployed who are long-term unemployed. you see going back to the 80s and the 70s, there's no peak even close to the recent experience. indeed by way of comparison, the

share of unemployment that was long-term in nature never exceeded 25% or so in the severe 1981/'82 recession. those tho experienced unemployment know the burdens it creates. for example, research has shown that workers who lose previously stable jobs experience sharp declines in earnings that may last for many years, even after they find new work. >> surveys indicate nearly one half of households experience long unemployment spells withdraw money from savings and retirement accounts to cover expenses. one half borrowed money from family and friends and one third strugged to meet housing expenses. um employment also take a toll on people's health and may have long-term consequences for their

family's as well. for example, studies suggest the unemployment suffer from higher related incidences of depression, heart disease and may have a lower life expectancy. in addition, unemployment, especially long-term unemployment, imposes important economic costs on everybody, not just the unemployment themselves. elevated unemployment strains public finances because of both lost tax revenue and the payments of increased unemployment benefits and other income supports to affected families. people unemployed for a long time have historically found jobs lesse easily, perhaps because their skills erode, they lose relationships in the workforce or they acquire a stigma that deters firms from

higher them. in the shorter term because the process of matching the long-term unemployed to jobs typically takes more time, the currently high level of long-term unemployment might in itself be a reason that further progress in reach duesiduesing unemployment rate and achieving recovery could be slow. the pessimistic view is the current unemployment is structural in nature, reflecting factors such as inadequate skills or mismatches between the types of skills workers have and the skills employers demand. if this is correct, high levels of long-term unemployment could persist for quite a while, even after the economy has more fully recovered. it appears true over the past two decades or so structural factors have been responsible for some increase in long-term

unemployment. for example, because an ordinary worker who lose as job typically takes longer to find a new job than does a younger worker in the same situation, the aging of the baby boom generation has probably contributed to a gradual rise in long-term unemployment. factors such as globalization, technological change and the loss lower skill manufacturing jobs all likely reduce the ploumability and personingses potential of some group of workers. to the extent that higher rates of unemployment, especially long-trm unemployment result from structural factors. the benefits of a more complete economic recovery from any workers unemployed or discouraged would be more limited. those structural shifts are no doubt important in the long term, my reading of the research is a modest portion of the recent sharp increase in

unemployment is due to persistent structural factors. consider, for example, rates of job finding for those unemployed for varying amounts of time, figure 13. it shows the rate of finding a job, where the highest level goes are people who have been unemployed for only one to four weeks, mid levels are people who have been unemployed for 27 weeks or more. and the team period is since early 1990s. unsurprisingly, the rate at which the long-term unemployed find work is lowerer than those who have been unemployed for only a short time. an average for the period of 1994 to 2007, a bid more than one third of those already unemployed for one two two weeks found employment over -- if the

recent increase in long-term unemployment were being driven by structural factors rather than say the severity of the recession, then the job finding rates of the long-term unemployed should have fallen sharpt sharply relative to those out of work for only a few weeks. but there's not what it shows. it all fell over the recession in roughly the same proportion and remain low. this is consistent with cyclical factors. similarly the fact that labor demand appears weak in most industries and lope cases is suggestive of a general shortfall of aggregate demand. counterexamples like the energy boom in the upper midwest where there may be mismatch in the

geographic location of workers might be the exception that prove the rule. an empir call relationship economists have long used is known as the bereridge curve. that compares unemployment, the number of employers looking for employers to job vacancies, the number of workers employers are seeking. the vertical axis is the vacancy rate and the horizontal axis is the unemployment rate. in good times when the unemployment rate is low, businesses are growing and workers are hard to find and so job vacancies tend to be high. similarly in bad times unemployment is high and few jobs are available and soap vacancies are low.

thus the relationship between unemployment and vacancies is downward sloping. on the usual interpretation, a recession is a period in which the economy is moving done along the bevridge curve. in contrast, changes in the structural determinants of unemployment are shot to be reflected in the curve to the left or to the right. suppose that because of changes in technology or the mix of industry and jobs the mismatch between the skills of the unemployed and the needs of employers gets worse. in that case, for a given number of job openings, the number of of qualified are higher.

now, from figure 14 we can see some outward shift in the relationship between job vacancies and unemployment consistent with some increase in structural unemployment since the onset of the recession. however, a more in-depth analysis of the evidence suggests that the parent shift in the relationship between vacancies and unemployment is neither unusual for a recession nor likely to be persistent. rye search has found that during and immediately after recession of '73-75 and '81 and '82, it shifted back outward after the recovery. it may be the result of a typically sharp increase in layoffs which raises unemployment quickly, even as vacancies adjust more slowly. another possible explanation for a temporary shift in the

bevridge curve is extension in unemployment insurance, which encourages people to continue searching for work. or employers take more time to fill vacancies in an effort to find especially qualified hires. in any case the data appear consistent with the shift in the vacancy unemployment relationship in recent years having been both relatively modest and likely to reverse, at least in part as the economy strengthens further. when historical experience is taken into account, these patterns do not support the view that structural factors are a major cause of the increase in unemployment during the recent recession. let me sum up. a wide range of indicators suggest the job market has been improving, which of course is a welcome development. still, conditions remain star from normal as shown, for example, by the high level of

long-term unemployment and the fact that jobs and hours worked remain well below precrisis peaks. we cannot yet be sure the recent pace of improvement in the labor market will be sustained. notely an examining of recent deviation from oakin's law suggest recent decline in the unemployment rate may reflect at least in part a reversal of unusualally large layoffs that occurred in late 2008 and early 2009. to the extent this reversal has been completed, further significant improvements in the unemployment rate will likely require a more rapid expanse of production and demand by businesses. i also discussed long-term unemployment today, arguing that cyclical rather than structural factors are likely the primary source of the substantial increase in long-term unemployment during the recession.

if this assessment is correct, then accommodative policies to support the economic recovery will help address this problem as well. we must watch long-term unemployment especially carefully, however. even if the primary cause of high long-term unemployment is unsif aggregate deman, if progress in reducing unemployment is too slow, the long-term unemployed will see their skills and labor force attachments atrophy earlier, possibly turning a cyclical problem into a structural one. if this hypothesis is wrong, then the scope for countercyclical policies to address this problem will be more limited. even if that props to be the case, however, we should not conclude that nothing can be done. the structural factors are the dedominant explanation nor the increase in long-term unemployment, it will be even more important to take the steps needed to ensure workers are

able to obtain the skills they need to meet the demands of our rapidly changing economy. thank you very much. [ applause ] >> thank you very much, bernanke. we do have times for questions. if you would write them on the card and pass them to the center aisle. mr. bernanke, i might just ask you about extended unemployment compensation benefits. clearly we have seen the benefits to supporting cyclical demand and perhaps alleviating some of the costs you were speaking about in terms of a long-term unemployed but thech also may be raising the reservation wage and hurting the ability, in fact, of those long term unemployed to find jobs. cuff speak to how long those benefits should be retained on

an extended basis? what would be the trigger point to reduce them. >> are you sure this is working? can you hear me? yes, okay. well, unemployment insurance obviously is a very important part of our support system, our safety net. it helps people who are unemployed, particularly for those who are unemployed for a long time to make ends me, at least to some extent. it has benefits in terms of giving people the support they need while they look for work, so all that is very important. it probably also has some effect on people's willingness to stay in the labor force and there is some evidence to that effect. we think the effect on the unemployment rate of unemployment insurance is fairly small and in any case there are both been fits and costs obviously involved.

so i would not -- in particular i would not attribute the extend of long-term unemployment or the very high level of unemployment to unemployment insurance. as to how long it should be retained, there's the usual trade-offs, there's fiscal costs, there's the trade-offs between trying to figure out when is the right time to withdraw support, extraordinary support. those are essentially political decisions and i'm going to obviously have to leave that to congress to make those judgments. >> the second question we have from the audience here, "has the long-term decline in the rate of growth of productivity perhaps contributed to the recent republic ducks in unemployment"? >> so logically one way to explain -- one way to explain the fact that unemployment has come down, even though growth has been slow is the possibility

the trend that potential growth has slowed. indeed taking all the evidence to account, we've made some very slight adjustments in that direction. but if you think about it, in order for that to be the explanation, we had about 1.6, 1.7% growth last year. if in fact slow potential growth was accounting for the 1% decline in unemployment that, would mean we had negative potential growth and that just doesn't seem plausible. so that might be a very small factor but i think for the most part of changes in unemployment, both before and after -- well, i would say during the recession and since the recession remain somewhat puzzling and we'll have to continue to look at the various factors that have caused oakin's law to break down to some extent in the last couple of years. >> a few people have questioned whether or not the housing

market has contributed to perhaps the diversions from oakin's law to the extent -- >> no, that's a very interesting question and one we've looked at. so within possibility that could be a small factor, at least people have looked at it, is that with many people underwater in their mortgages, unable to sell their homes, the possibility has been raised by some that perhaps labor mobility has been affected and perhaps people have not been able to move to find new work or to take a new job and that might have some impact on the unemployment rate. again, it's an interesting hypothesis. we've looked at it. we haven't found and i don't think academic researchers have found much support for this view. it's a plausible view but when you look at the data you don't see, for example, much difference in unemployment rates between people who own houses

and who rent. you don't see much difference between people who live in states where house prices have fallen a lot and states where they haven't fallen a lot. so i think the current view among labor economists is that this effect looks to be a pretty small one. there's a lot of things happening in the labor market we don't fully understand and we need to keep looking at all these different factors. >> chairman ben bernanke of the federal reserve. he's been speaking before a nabe conference. the thrust of his comments have been focused on the jobs market. looking at the very particularly at the gains we've seen that have been unexpected. he went on to say that while the gains are good to see, he doubts they're long-term changes, they could be temporary and as a result this is a reason for the fed to keep that long-term easy monetary policy that we've seen for some time out there. we've seen the markets rise. the futures are about 100 points

above fair value and oil prices. >> there's an overall here, when he looks at decline in employment numbers, there's no reason to change current policy. the next question, is it a reason that the fed might do additional -- >> i didn't get that. >> he didn't take that off the table, it's not on the table. i think what's happened is because of the decline in the unemployment, rate, it changes the game on the ground. the fed has to defend the current policy and because of the failure of inflation to react the way the doves predicted on the board, we have to sit up and let them -- so the game on the ground is no longer about pushing for additional qe. a lot of those guys have backtrack nd and said my new line of defense is --

>> that's an important point. to see futures rise and oil prices go up, maybe they're looking at the same thing. we're looking at the game on the ground being when will they pull back. if they're not going to do it any time soon and what we've seen to this point is not enough. >> let just be clear that this is the game the fed wants played here. it wants the market to react to incoming data in a way that correctly predicts how they, as a group, are going to change their mind about policy. everyone said did the fed get it wrong late 2014. that's the fed's best guess for where rates will be from now giving what's going on with the economy. does the fed want to get this wrong? i think they do. >> i would want to be wrong about that. >> that means the economy is improving more quickly than they expected offer anticipated. >> i don't know if it's a psychological game or whatever, but pledging to keep rates low

through late 2014 lowers current interest rates. lowering interest rates helps the economy. the success of the late 2014 promise essentially means getting it wrong. >> but what we can take away from the speech is we know we've seen improvements and it's not changing our mind. >> i think you're going to get a whole bunch of papers looking at this kwi, which by the way we've been talking about a for a little while here. the fact that the jobs data shows 4% growth and gdp data shows 2% or less and that's not the way it's supposed to be working. >> steve, thanks very much. up next, the author of the best selling biography of steve jobs after we return. re, me and you ♪ ♪ on the road

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>> >> welcome back. in an article in the "harvard business review," walter isaacsson talks about what he learned from the late steve jobs. he's the author of the best

selling biography "steve jobs." walter, i read this article with great interest because one of the takeaways from the book, and i imagine it was inadvertent when i thought about steve jobs and management, the question always came up do you have to be a jerk to be a great business leader, seeing a lot of things he did as genius as they were, they didn't always feel great. my sense in this piece, though, is you sort of say that he had to be a jerk and maybe he wasn't a jerk. i wanted you to sort of clarify that for me. >> andrew, you and i know a whole lot of jerks in business and jerks don't amount to much. steve had a passion for his product and a passion for perfection. he sometimes had a reality distortion feel, which drove people crazy but it also drove him to do things that were impossible. what i tried to do in the article is say people have been in business that have read the

biography of steve jobs take away from the that these are the hard core business lessons and that it want that he was a jerk. it was that he jerk, he really had a passion, he inspired people, he brought them into his circle, he had a charismatic, compelling sense to him. people who have not been in business go, well, he was a bit of a jerk, he parked in the hand did catched spot. his sil salient call was that he could drive people to do simple things. >> for your co-workers and everything. you know, part of a narrative, a

part of a biography is a person grows, a person learns, a person matures. when he drops out of college, e he's not the best with personal hygiene, they put him on the night shift. when he comes back to apple, he takes a company away from bankruptcy and then when he finishes, it's one of the biggest companies in the world. >> you talk about the fine line and i think if you're a manager watching this or reading your biography, the fine line between being that jerk, being so tough on your people and somehow also inspiring him. how did he walk that line, did he actually think about that? was that a natural issue?

>> i think he thought about it, and one way he thought about it was that he had brutal honesty. the price of admission in a business meeting at apple is that i get to be brutally honest, and you get to be brutally honest. they gave an award to the person who stood up the best to steve jobs. he probably there's a better way to do it. you may know a better way, with velvet gloves and a steal tongue.

>> one of the most important questions in business is identifying talent and i think back, if one of us saw or any of us saw a young steve jobs, a college dropout, a scruffy kid who would have taken a chance and hired him? >> the man who ran atari. steve jobs said i'm not leaving this waiting room until you give me a job. they look at him and say he's got some aspiring quality in him. >> this famous fbi record came out after your book.

he described mr. jobs as a conceptive individual who's not completely forthright and honest. >> it's a complexity that i talked about in the book. what i said about his early career, about the early '80s in apple. sometimes he would bend reality, for some people that just meant he lied to me, he manipulated me. he drove me to do things that i didn't want to do. steve said you can shave ten seconds off. the buy said no, no, no you don't understand, this is the way to do it and the guy shaved 38 seconds off. steve always did it, not north to get more profit for him, but to make more greater products,

products that were insanely great. >> if you had to pick another great leader today, someone who maybe not the exact same mold as steve jobs, but someone who was an incredible leader who we need to keep our eye on who would it be? >> i think larry page coming back to google in a team with larry smith. i love wendell weeks. >> walter, what would steve job think of steve cook's idea to issue the dividend. he would have loved tim cook because tim gets up every day and runs a great company. i think steve would have admired and approved of him because he

didn't get up every morning and say what would steve do? >> >> our guest host will be florida governor rick scott. we'll talk politics and jobs with marco rubio. and it's trump tuesday, we'll ask the donald, what america needs to do to stay on top. it all starts tomorrow at 6:00 a.m. eastern. it's just another way you'll be traveling at the speed of hertz.

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countless discounts. now that's progressive. call oick today. i bathed it in miracles. director: [ sighs ] cut! sorry to interrupt. when's the show? well, if we don't find an audience, all we'll ever do is rehearse. maybe you should try every door direct mail. just select the zip codes where you want your message to be seen, print it yourself, or we'll help you find a local partner and you find the customers that matter most. brilliant. clifton, show us overjoyed. no, too much. jennessa. ah! a round of applause. [ applause ] [ male announcer ] go online to reach every home, every address, every time with every door direct mail. are connecting here. linkedin connects with the big board.

welcome back, welcome back, everybody, our guest this morning has been harry wilson. we're talking about the vix or the in -- >> it's amazing how quickly complacency has creep eed back into the market place. i think that's a great hedge. so if one buys vixy, i bought a bunch on friday, and it was 36 and change. i think there's a relatively modest up side. i think we look at the geo political risks.