kernen and andrew ross sorkin. and, yes, everybody is in the house today. we have a lot on oured aed agen. weekly jobless claims coming out at 8:30 and economists see cams rising to 350,000, but they do expect to remain right around the incredibly low level. also at 8:30, a final reading on the fourth quarter gdp and at this point, forecasters are looking for a slight upward revision. last time around, it came in at 3%. they're looking for maybe 3.1. i've seen as high as even 3.5% by some economists oo expectations. at 11:00, we get the kansas city fed survey. also it is earnings central. quarterly results from pest bbu research in motion. and the white house says it is too early to make contingency plans. it has every confidence in the solicitor general's handling of the high court debate over the

reform. there have been three days of oral art before the court this weekend. issue the constitutionality of a mandate requiring nearly every american to carry insurance. we'll be joining this debate at 7:40, two congressman will be squaring off on squawk. democrat rob andrews an republican tom price. and then at 8:00, former chairman and ceo from aetna will share his thoughts. >> i heard what rob had to say. he was one of the authors of the bill and i like rob and i have some things i want to ask him about that. i feel bad for the solicitor general because the huff post liberals are really mad at hill. it they think that it's not the law, they think -- >> they think he didn't do his job in court. >> did he have a coughing fit right at the very beginning where it looked like he was

overcome by the whole xwrafity of the situation? >> apparently online, you can -- >> i think i'd be too uncomfortable. but i have ohio state, you know, winning everything. and i think kentucky look so is good that i'm not comfortable with my own -- i'm afraid to think that i can win this whole pool and i'mafraid to believe that kennedy won't side with the four liberals. he's been the swing vote on every big issue. and he soundeded so critical of the whole idea. and then he gave the other side -- he t a huge bone and said but then again, this is so unique and so important that we may need -- and i have in idea how he will eventually rule. >> the worst is that you have to wait until june to find out. you feel like the delivery will be here, you'll find out one way or the over, but -- >> there's a lousy son of a

lawyer -- you wondered what i was going to say. you think constitutionally and you have a problem with the mandate. >> i think ultimately it will get struck. >> but you also have a problem with it. >> the question is does it work. once you take the single mandate out, then you have -- doesn't mean i'm not it for single payor. >> and all of you, i mean, liberals by that, that is the holy grail. single payor public option. and i think this was a baby accept for liberals to get to single payor eventually. unfortunately, it involved an unconstitutional step. if you had just xwn for single payor -- it's interesting in the "journal," dwa they talk about true judicial revant woustrainte striking down the whole thing. if you only strike down the mandate, it will be such a mess to go through 2700 pages.

>> my understanding, once you take the single mandate out, the whole thing falls apart. >> it would somebody expensive. >> it's the only way you can fund is it by having healthy young people who are paying for the others. >> don't you think what happens is you at that time sin take th out and congress has to go back to work completely. probably back to square one. >> square one would be easier about they threw out the whole thing. but it really is like another kind of a ponzi scheme like social security or something elsewhere you have all the young people that aren't going to get sick for 40 years -- >> it's not a ponzi scheme when you have a agreeing population. if you were to open the doors to immigration or -- >> well, in my grandmother had, she would be my grandfather. but that is the demographic situation we find ourselves in. >> but the whole system -- >> it's always been a ponzi

scheme? just like with medicare and social security, though, there's a huge looming unfunded liability that's out there when only you've got this group of people paying for all of the care coming out the other side. you did your part this year, right? popping them out. >> i got two out at one time. one shot. >> all right. >> but the question that i still have is if you find this unconstitutional, what's the difference between this and social security. and i don't know the answer. i haven't been able to anything it out. i'm sure somebody could and if you have that answer, please help us out. >> someone said that with a got me is funeral services before every single person will die. and most people don't make any arrangements for paying for that and the state ends up paying for that and you could definitely say you got to buy this funeral insurance, which i don't even want to think about. do you?

mortali mortality? >> trying not to. >> but you were very forthcoming. l i liked it because you admitted you felt uncomfortable with the mandate, but then you went further to the left. >> i said i would be acceptable of -- first of all, i think sink goal payor is constitutional. >> it is constitutional, but that would be -- would we ever have any innovation again? if you don't -- if you believe in limited government and the power of the individual, do you really want our entire health care system run by the federal government? >> i'm not suggesting that. all i'm suggesting is single payor could work and ultimately you have to bring the costs down. and the question is how do you do it. every other country has managed to do it in a way that we're five to ten percentage points above everybody else on health care costs. >> and we still have a much better outcome. >> no, no, no. the outcome is not better. >> lifestyle differences, obesity, it has drugs.

all kinds of things that affect it. but when people need the best health care in the world, they come here. they don't go cuba. >> you come here if you can afford it. >> what does that tell you? it's the best. cancer outcomes, all the things are -- >> outcome if you can afford. and we need to -- what i'm saying is in other countries, they're able to provide services that seem to have better yut comes for people who can't afford -- >> you can cherry pick some, but i don't want to get -- i would not go to the uk for health care. i don't want to go north for health care. like denmark or something, maybe one laplace. >> i lived will london. it's not -- i went to the nhs absolutely. >> did you get sick when you were will? >> yes, but only to get like antibiotics. >> what could you possibly -- wait a minute. i don't want to know what you got over there. were you single then?

>> what's going on with goldman sachs? >> is it gone, whatever you had? do i have to worry sitting -- >> i think it was bronchitis. >> it's crawling across the desk here. yuck! all right. goldman sachs -- >> i know. >> where is the squawk ward moment for this? >> goldman sachs board members are meeting in mumbai today for an annual meeting. gathering comes amid reports that senior executives talked about splitting the roles of chief executive and chairman and the meeting is the first in india for the directors of that bank. >> in other corporate news, rupert murdoch vowing to hit back hard against what his company president calls baseless piracy allegations. the bbc karnlgs a news corp subsidiary ran a secret unit to promote privacy against pay tv rivals. hur dock writes it seems every competitor and enemy piling on with lies and libels. so bad easy to hit back hard.

>> and we have a bit of deal news. roche hitting its cash bid for gene sequence city company, raising its bid $51 per share. initial offer a 44.50 was dismissed as too low. company adopted a poison pill. roche wants to win over shareholders. >> i'm having trouble reading that. is it far away or blurry? >> i thought it was less instead of lies. >> and i've had trouble, too. >> is it the lights? >> because the prompter is not any farther, but i did have the same glare. >> i thought the viewer is not supposed to know we're reading. >> and we're usually so smooth. >> you know what has been green lighted, blond burgundy two. >> i was going on surprise you about that.

joe's hero is anchorman 2. >> my hero. now to the ipo market. oh, ipo market. sorry. organic food maker ann's enjoying the biggest opening day gain an offering. the stock soaring 89% on its first day. anme makes about 125 organic and natural food products. best known for its signature macaroni and cheese with pasta shaped like rabbits. i'm a vegan, i'm not going to eat something that's even shaped like a rabbit. something that -- right? >> you're going off prompter. casey, is that okay with you, pasta shaped like -- is that okay with you, pasta shaped like rabbits? you're not going to -- she's afraid. but it has a face. if it has a face, i'm not eating it. no way. it's fitting that the company is -- oh, it is not fitting at

all. bnny, bunny? you know what, i -- i had some of that last night. not shaped like bunnies, but i do know what anne's is. i'm on a no carb thing and i'm craving carbs. >> i had some last night. it was good. >> have you ever been on before? >> well coucome to the show. she's the most important person here. but true vegan. and we talked about that all the time. anyway, private equity backed industrial parts maker -- man, everything is -- rexnord. pricing its ipo at $18 a share, low end of its expected range which is between $18 and $20. apollo owns the milwaukee based company and the offering raised

$426 million. among the names to watch, toys are us. >> can we go off script for one second? did you see this piece? bain gave staff swell iras by investing in deals -- >> is this a bad thing, though? >> it's very interesting. you remember how romney in his tax can disclosure said he had up to $100 million in his i.r.a. and people said how could you have $100 million in your i.r.a. there's usually a limit in terms of how much you can put in. and the way bain would structure these things is they would create two classes of shares. one crass that was highly valued, and another class which was typically 10% of what the other class was and they give you the very low valued stock,

you'd put it in your i.r.a., and it would glow like a weed. in one case, 1,000%. >> if this is the way that you help with compensation and that you luretal re tata talent -- >> apparently not many others do it this way. a bigger issue according to some tax lawyers is whether you could look at this and say that they were a little too clever with their valuation of the stock. and people were co-investing. they had a great co-investment program. young associates would actually leverage up on their credit cards so that they could co-invest into this program because you could get these tax free gains. >> if the deal went badly, you -- if the deal went badly, it would be terrible, but it's one way that you get the gains without having to pay out the taxes up front. >> no one will argue with tax

deferred growth. >> it's fantastic. the question, though, is if you're getting some kind of special discounts on these shares and the valuation of the shares is incorrect, that could ultimately create a problem. >> and who got the other class, clients of bain? >> clients would get the other. but you would have one crass th class that would have a dividend and those would go to the lps. this was a class that would get if the other thing got wiped out first, they would get wiped out much more risk on this. >> time for the global markets report. ross westgate standing by in london. hey, ross. >> hey, joe. >> would you -- you wouldn't turn down deeply undervalued

share, would you, ross? >> deeply undervalued some we like deeply undervalued shares as long as we know they're deeply undervalued. >> why is it all red? is it spain? spain has something hideous going on. >> a national strike going on. so not going to get an awful lot done. the spanish government is presenting its budget tomorrow. certainly more cuts coming. and what we are seeing is spanish yields just heading higher as we go through the session. we now have it impacted last week. so decliners outpacing advancers around about 8:1. and we are indeed down on session lows. yesterday losses pretty much across the board. around 1% for european stocks. pretty much what we've got now. german unemployment declined for a fifth month in a row. also dipped down to a post

unification low. but we did see a fall off in engineering. export side of the german economy being impacted by lowing growth elsewhere. again, this is despite the fact they had a pretty between auction. a ten year auction and a five year and they went pretty much as expected. the yields on the ten yields came below the 5.55 at the end of february on the 2022. bid to cover pretty much similar. bid to cover was okay. they think is we're sort 1/2 a situation where we maybe need to have better than expected auctions for us to get any benefit from them. but they did get the money away. but despite that, we have seen yields ticking higher and it's the the spanish yield just to move on and show you that, that remember last week we got to about 5.55 by the end of last

friday on the ten year spanish debt and just climbing up again. safe havens are going down. so just keep our eye on that through today's session. back to you guys. >> thanks so much. appreciate it. the oecd warning that eurozone nations are falling far behind the united states and canada as a fragile recovery takes route in advanced economies. i want to start by asking on tuesday, you said that europe needs the, quote, mother of all firewalls. what does that firewall look like, how big is it? >> well, we don't know yet. they'll be working on it over the weekend. and we've been listening to some larger numbers which is good and at the same time, there is also the incorrect impact on the

italy and spain in particular of the ecb funding of the banks. that help willed relieve some of the pressure. and last but not least, hopefully this will also detonate the chimf package wher some european and noneuropean members will put together a growth pack annual package for several. so all together, it could do the trick. >> but when you hear someone like angela merkel say they're willing to raise the bailout fund to 700 billion euros, is that enough? >> well, the question is 740 be billion is related to the maturities of spain and italy over the next 12, 15 months. now, that is long enough and large enough in order to produce a sense of tranquility and security, peace of mind, but at the same time, it is not all the story because you have the incorrect impact of the one

trillion euros which the oecd gave asly liquidity to european banks. a large part of which went to the european bond markets and then as we said the end of the story and to round it all up would be the part of the imf that would be going to support europe. so i think what you have is the makings of very large credible firewall that could deter speculation and which could really ease conditions in the bond market, particularly for the countries that have been underpressure in the last few months. >> how much should we be worried about portugal right now? >> pore could ytugal has a more case. it spent too much.

did not take the measures early enough. now it's been taking those measures, but the measures will take time to produce a result. so i think that is not -- it's also receiving funds from the eu and imf rather than directly funding all its needs in the market. so in that sense portugal is less of an alert. it's really the large debtors spain and italy where the consequences of contagion could be serious. and both of which have been doing everything that they have to do and sometimes even more in order to convince the markets. >> what should we take away then from the fact that yields on portugal bonds remain at elevated levels at the moment? >> i think what is really the

case, we still do not have all the homework done. there's been good progress because greece was done. there's also this financial or budgetary discipline pact. the capitalization of the banks is still pend, although the liquidity of the banks was addressed by the ecb which is a good thing. and then we still obviously need to deal with the right mix of the consolidation, fiscal consolidati consolidation, and the growth elements. and the firewall again not yet there. we may be 72 hours away from it, but it still has to be in place. >> still kicking the can. thanks for joining us. >> we got to go. just give me one second. you still work at the "new york times," right some can i ask you one fast question? >> go for it. >> the lead editorial here, i love this. talking about the court.

the ideological nature was obvious in all these oral arguments. by the time the proceeding is over, much of what the conservative justices, you know those guys, it was like a politically driven exercise, had very little to do with the constitution. now, that -- is that what you got from this, that it was a politically different thing, that it wasn't constitutional? who this? who actually writes this thing here? >> i cannot speak for the editorial page. i read like you do. >> it's a combination. >> andy rosenthal is a good friend of mine -- it is one of great if not the greatest newspaper. >> so does ponch tell people what to say? >> no, no. >> and he's not fat. why do they call him ponch?

>> you call him ponch. some people used to call him pinch. >> no, that was chips, right? >> i think we have to go. >> carville says this will be the best thing that ever happened to obama. >> to energize the base. probably true. >> i don't think so. >> why not? >> you spent a year and a half apneglected jobs for a year and a half to get this through to transform society? >> you're speaking from a perspective. >> oh, no. i am definitely not. coming up, the simpson-bowles debt tour, consider it a must have concert ticket for budget geeks. first, president george h.w. bush is expected to endorse mitt romney today. the candidate will meet with the former president in houston. the two plan to appear together and speak to reporters. romney was pretty funny, picking santorum as his press secretary

so he can say b.s. to all the questions. if you're one of them folks who gets heartburn and then treats day after day... well, shoot, that's like checking on your burgers after they're burnt! [ male announcer ] treat your frequent heartburn by blocking the acid with prilosec otc. and don't get heartburn in the first place! [ male announcer ] one pill a day. 24 hours. zero heartburn.

deficit crusaders al wlan several son anner skin bols are meeting with mayor bloomberg today part of hair national debt tour. committee for a responsible federal budget is behind the tour and, mia, thanks for coming in. we've been talking about simpson-bowles for quite a

while, trying to see how things have been building up. you can give us a sense of what's happening with the national debt tour and what you think might be able to be accomplished? >> simpson-bowles has been a great brand ever since it came out and you have a crew of ceos who keep coming here saying why don't we just take a vote on it. but in washington, it's still in such partisanship that it's really hard to come together on a bipartisan plan. but what we have seen is progress. where simpson-bowles didn't have a vote when it first came out. a lot of members both from the house and senate have start the taking that and saying we have as to put this in legislate i have language. we need to have a plan that's actually ready to go even though it's an election year and kind of the common narrative is we can't get anything done, we don't have a year to wait and we shouldn't be taking the year off. >> if you look at what happened yesterday in the house, it was a vote that went down, a similar sort of simpson-bowles they called it compromise, went down

382-38. so how do you get through the sense of you're only voting on party lines? >> especially when it's on the budget resolution. paul ryan comes out with his budget and advice van hollen coming out with his. they'll be the book ends of what might happen. and they're showing we need to break the way we do things in washington and talk about what a bipartisan plan would look like. and in the end, we know it will be something like bowles simpson. spending cuts, titlement reform and revenues should come from tax reform rather than just raising marginal rates. >> 382-38 is really bipartisan. >> and it shows that we need to build more support. >> that's a preview of the simpson-bowles vote. >> i think it may be -- i'm not sure on this. maybe fill us in. that's because they want to be able to vote on the paul ryan thing that comes next. the president's measure went

down 414-0. >> right.budget resolutions are about as partisan as gets. this is where you need to lay your flag and say i'm on this end or this end and neither will pass ultimately. so then the next step has to be, okay, if you don't get your first choice, how do we compromise. and that's part of what's going on now. we figure this is a a complicated couple months, so we better take it out on the road. >> do you think there's spg that could happen in washington before november? >> there may have to be. what happened last year was there were so many moments where we were completely unprepared, think about what went on ceilin no backup plan. we also have to make sure that during the campaign, we focus on how we're going to fix this problem instead of all the things people wouldn't do. so what strikes me is i don't think you get to run for president without actually having a full-fledged plan if how you would fix the national debt. this is one of the major problems facing the country.

and we need to be able to look at how you'll fix the problem. >> people will say i agree with that, but then gets lost in everything else that happens in an election. people don't look at a lot of the substantive stuff that gets put forward. >> i understand cpi and means testing isn't the most easy thing to take to the road and talk about. but what about this. what if we had one of the debates that actually focused 00 how would you fix this problem. because what people do know is that will is a problem. that is now squarely on the top of the nationaled a jen ca agen. we know that real solution will have to be bipartisan. so what if about we had a debate that focused on the two candidates looking at how they would fix it and talking about the pros and cons. because otherwise we'll have a whole election season of people promising no to the touch medicare, social security, taxes. and nuchb thoone of those thing

actually work in the end. i think having a real debate on this would be a real service, it would staurt trt the national discussion. and there are politicians who want to do this and come together. but we need there to be a broader sort of voice from leadership, from all different areas calling to pass a plan because we know we need to do this and the notion that we should just wait for a whole year is really irresponsible in the face of the kind of crisis we face. and if you look at what happens at the end of the year, the fiscal cliff that bernanke is talking about, we're talking about a lift $7 trillion either taken out of the economy or added to the debt. and if either of those two options are what we do, we could be in real trouble. and i know in washington we tend to wait until the very last minute to put something in place, but we have to start planning for this now. >> no arguments here. we hope you'll bring simpson and

bols both back here. >> two attorneys general suing over the health care law. now they'll make their case to squawk. do you have your meg fwa mia mi ticket? now the pot is getting even bigger. it's $500 million. the largest in the u.s. lottery history. winner could get $19.2 million a year. >> let's do one. $10. a single payment of $359 million. >> i don't care. >> divided by three of us. think about that. >> it's tax on the stupid. and the rarest diseases in the world, you have a better chance of getting. and you're just asking for one. >> it's $10. >> i'm not doing it. >> okay. everybody else around the set. we're all doing it and you'll be here by yourself. >> the next drawing is tomorrow night at 11:00 eastern time.

so if you want your ticket, go do it. ♪ when your chain of supply goes from here to shanghai, that's logistics. ♪ ♪ chips from here, boards from there track it all through the air, that's logistics. ♪ ♪ clearing customs like that hurry up no time flat that's logistics. ♪ ♪ all new technology ups brings to me, that's logistics. ♪

supreme court holding hearings on the constitutionality of the health care reform law will week. joining us now, two attorneys general who are part of the 26 states suing the federal government. j.b. van hollen from wisconsin and pam bondi, florida. i tell you, these three days, has it been surprising to you? >> yeah it has. it's you will l it actually bee three days.

we were in the courtroom all three days of course and it's been a great three days. our constitution is our last line of defense and this is all about protecting our rights under our united states constitution and we were in front of the highest court in the land this week and we were very proud to be there. >> and what i was alluding to, the "times" has a piece in the business section about the mit professor who came up with the mandate and he was watching the proceedings or reading about them and he says as soon as i started reading, my stomach started churning as if -- and i remember nancy pelosi said when someone asked her, she said are you kidding and wouldn't even address the question. hasn't a lot happened in the past three days that people didn't really anticipate? >> i think a tremendous amount has. and i think general bondi could tell you, as well, that from day one when the suit was anticipated by a number of

attorneys general, there were an awful lot of talking heads out there. academics and other people who thought we were crazy. >> lawyers. >> we were bringing a frivolous case. >> lawyers. the entire bar. >> we take it very seriously. this is really an extension of our founding appea ining father. that's into the debate you have once, sign a document and it ends. and it's up to us to make sure that we continue to battle for the states and for the individuals and i think we have shown collectively very strongly that we can do it successfully and that the federal government needs to be mindful of an overreach. >> from a guy who wrote in a letter to the editor of the "wall street journal," we don't have that yet, do we? i'll do that later. but it was so closer to me about what our forefathers said about the things that the individual decides and the things that a i limited government decides.

and it was just some guy who wrote it in. and it made so much sense. but then the norn"new york time says the conservative justices are purely acting on ideological and politically driven exercise ignoring the don't tugconstitut. how does somebody write that? >> that's all about their first amendment rights, as well. >> because they can say two plus two equals eight. >> but let me tell you you, we were in that courtroom and as attorneys general, we believe in the constitution. we believe in a limited federal government. because that's what our constitution tells us. and the federal government is trying to force us to purchase a product and they're threatening us about we don't purchase that product. if they can get away with this, they can get away with anything. and there would be absolutely no limits on the federal government

over the states. as you know, we've been having to sue them constantly. the epa, which we're winning, the nlrb, which we won. all the different issues about the invasion of the federal government on our states. but this is the biggest case really one of the big cases of our lifetime. just the ramifications are so very great. >> how about the medicaid provisions it that were discussed yesterday that in it op-ed piece, it says that because it's a voluntary federal/state partnership, that the idea that there is something unconstitutional with the medicaid -- they're going to expand it drastically and if you don't sign on, either's almost extortion. or does the times have a point here that that is not unconstitution al, is it? >> the word that continues to be

used is coercion. because basically at the give you a choice that really isn't a choice. and i think justice scalia repeatedly referred to and other justices picked up on it, as well, is somebody put as gun to your head and said your money or your life. i guess you are voluntarily giving over your money. and obviously we don't really have a choice. the reality is you you lose so much money from the federal government about you don't agree to spend more of your own money on their program that you really just can't choose that option. >> the "times" said talking about justice scalia's point said a guy came up later, barton farr, and he was able to show just how careless and wrong scalia's view was. i just love this. anyway, the one last thing to ask both of you, is this supposed to be a state rate? i read a guy in the journal said even if all this when it's said and done, it's not -- someone has to give you an individual than date, it will be a state anyway because that power does

not reside in the federal government. >> we're convinced that the power to do what they have done does not reside in the federal government. the reality is that they said under the commerce laws they can force you to buy something. the commerce clause has never gone that far. >> what about social security? >> that's not a commerce clause jurisprudence. that's a tax. and the federal government -- >> so if they use the word tax -- >> is it a semantics? >> they didn't have the votes to call it a tax and pass it. they didn't have the political courage to call it a tax and try to pass, so they tried to slip a fast one by the american public and i think if you look at the polling, most of the american public didn't buy into their fast one and those who recognize the real of the constitution and how it pit balances federalism didn't buy into either and that's why we needed to fights back and think we've done so quite successfully.

>> all that's kicked in as been -- >> unless you're a hospital. >> you about for the public. no pre-existing conditions and you're leaving the kids on policy. and the approval rating has gone down. >> the change is scary. it's confusing. >> i hate when politicians say that the public is too stupid to understand whether they like something. >> i don't understand this. i'm telling you right now, i've gone through this and i think something this massive that was slapped together this quickly, i don't know the unforeseen consequences. >> but then be smart must have to say i don't want the government telling me that i have to do that. >> that's other people who say i don't even know what it is. >> you want single payor. >> i do think there's a massive problem with people who run insured and it has to be addressed some way. i don't know if this is the best way to do it. >> attorneys general -- i think it should be attorneys general. there's two of you. how about attorneys generals --

i may change the whole nomenclature. thank you for your time came. when we come back, do you just get up early just to get things done? are you trying to look to be morre more% productive? we have a man who helps organize some of the nation's most powerful ceos.

coming up, are you pulled in a million directions, never able to find time to get important things done? i know that's my rob. our next guest has the solution. he organizes the most powerful leaders in the world and we'll see if he can help us.

box." is it a thursday morning? it's already a thursday morning. joining us, tony swartz, the ceo and founder of the energy project. i've been reading about tony and reading what he's been writing for a very long time. he's one of these amazing guy. he knows everything about productivity and your life and how to manage your day.

he worked google, facebook, apple, all these company, they tell this guy and tony tells them what we're supposed to do with our lives. i'm a multi-tasker. we all think we're multi-tasking like crazy. you don't multi-task. >> no. >> yes, you do. >> i do? >> i'm overwhelmed. every person i know is overwhelmed, except for joe. what are we supposed to do? >> one thing at a time. in a world of overwhelming tasks, every things we do more things at a time. even though it's intintive thinking that's the only way to get things done, the reality is you're less efficient, do you things at a lower level of quality and you're slopping. so the very thing that everyone feels compelled to do is costing

us in almost every dimension. >> so in my day i have 10,000 things on my list and i want to get through them. how am i supposed to do that if -- the phone calls and -- >> should we shut off the blackberry? shut off the phone? how do you actually do that in practice? >> the first thing is we didn't -- in in a world in which our capacity exceeded our demand, which is true for hundreds of years, we didn't have to think intentionally about these things. if you walked from in the parking lot from the work to the car, you weren't on an iphone. now we have to be fiercely intentional by b how we manage all aspects of our lives. yes, to your question, you need to make choices in advance about how you're going to manage yourself. we're going to talk a little bit about some of anyway my

suggestions. >> here's the question you have. you work at a company. the boss sends you an e-mail. you feel you have to respond right at the time so if you're going to respond to the e-mail, you're already doing something else. what do you do? >> there's an emerging science of high performance and it has to do with what's going on inside the body, neurologically, physiologically, psychologically. in truth, the inner life is a vast unexplored territory, the source of the competitive advantage. you've got to understand how the body and mind works. >> you have a couple of practical tips for managers. if you're a ceo or manager of a company, you should be doing what? >> the very first thing i talk about is really rethinking how you run your meetings. you run them at 45 minutes

rather than an hour. human beings aren't designed to run like computers, at high speeds continuously for long periods of time -- >> we do a show for three hours. >> i like that. >> that's not the way human beings are designed. we're designed to pulse between spending meetings and -- >> shorter meetings, i like that. >> meaning very clear starting time, very clear stopping time, very clear agenda with a period of time in between to metabolize what you've experienced. that's number one. number two would be to not demand the very thing you were talking about with ceos, not demand that your people be constantly responsive. because if you are demanding that, what you are -- >> i like this. this is good. no meetings and don't really answer the boss, right? >> i think he's -- stop demanding this instant response.

it interferes with a person's inability to absorb and it's reducing the likelihood they'll be productive. >> and the third one is my favorite. >> encourage renewal. >> we're designed to pulse between spending and renewing energy. when you become skillful at renewing energy, you're capable of getting more done in less time at a higher level of engagement in a more sustainable way. of great athlete understands renewal is as important to performance as spending energy. fitness is the speed of recovery. the fitter you are, the faster you recovery. >> vacation it is. >> tony, you have to come back. >> we have bosses. can you provide more suggestions. >> i will do it. protect the lan.

economically, it seems like a good choice now. we need environmental protection.

we've got more than 100 years worth of energy, right here. [announcer:] who's right? they all are. visit powerincooperation.com. only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz.

capitol hill's mountain of issues. house financial services vice chairman gives us his diagnosis for america. >> sound medicine. >> just a spoolful of sugar helps the medicine go down ♪ >> congressman robert andrews and tom price square off over the viability and legality of obamacare. >> and he larges the largest maker of semi-conductor equipment. the second hour of "squawk box" begins right now.

good morning. welcome to "squawk box" on cnbc. i'm andrew sorkin, along with becky quick and joe kernen. tim cook getting assurances from officials today saying they're going to step up regulations. apple has come under fire for its labor practices. a closely watched earnings report after the bell today. the stock has lost three quarters of its value over the last year. and finally, lottery ticket sellers are reporting brisk business for the mega millions jackpot drawing set for friday night. the jackpot stands at $500 million. it's the largest in history. if one of us doesn't show up

monday, you'll know why. we have some red airios across the board. can you see the percentage implied open right there. >> andrew, thank you very much. our guest host is a titan of the semiconductor industry. he's led his company to record revenue and profits during his tenure. joining us is michael splinter, the chairman and ceo of applied materials. it's great to have you here on set with us, mike. >> it's great to be here. we're here in new york. we had our analyst meeting yesterday. it was a good day. we talked about future of applied materials and some of the markets that we're addressing. >> you had better than expected numbers for the first quarter. things came in both on the revenue and earning side better than people had been anticipating. what do orders look like right now? >> our second quarter is going to be a good quarter for us. we said our revenue would be up between 5% and 15%. so earnings certainly up in line with that.

>> and where is the real strength coming from? what's driving things? >> it's really mobility. it's tablets, smart phones. we make manufacturing equipment for all those chips that go into these devices. the great thing is those chips are getting bigger and more complex. that's an excellent thing for applied materials. not only that, the displays on these devices are getting better and better and better. almost all those displays are made on applied materials' equipment. >> the displays themselves, too. we've been talking about that here, about the death of the pc in some ways, about how that is something that is not going away but you're not renewing these. >> we've been thinking pcs need a bit of a renewal. the ultra book is quite a device. we've seen the new laptop pcs that are thin and have great

great battery life. as windows 8 comes out and the touch capability is present, it's going to give incentive for buyers to get back into buying pcs. >> when you look around at some of the problems we've run into around the globe over the last year or so, do you get the sense we're really coming out of this? >> i think what we've seen in our business is that the global economy is still coming along. >> slowly. >> slowly. our business has been improving since the fall and continues to improve and get better. so i think if we saw a bit more of an upturn in the global economy, it would accelerate that. >> you you're not going anywhere obviously, applied materials. >> sounds awful, not going anywhere. what does that mean? >> it means applied materials is going to be around. whether the company is going to

grow and the stock is going to grow is another matter. i don't know the answer to that. chips are going to be more ubiquity us in the future than they are now and they're going to be made out of silicon and they're going to cost a penny eventually and they're going to be everywhere. they're going to be on your toilet measuring whether you have any cancer cells that are going to come 20 years from now. it's an impossible to grow earnings or the stock price for 20 years. is it going to be possible to grow again? >> some stocks are going to cost a penny but what's happening in the mobile deep vices is they're becoming more and more feature rich. people want these features. when you need more features, you need more silicon and those pieces of silicon don't cost a penny. it's not just the volume but the amount of silicon going into these die dee vice-- devices.

>> what's happening to revenues? >> margins will also get better. >> it's impossible to grow the company at this point, isn't it? that's what i say, you're not going anywhere, great company. how many different facilities around the world? if you need chip making equipment, you're going to get it from applied materials. but when you're valuing stocks and trying to decide on investment, if the status quo is maintained, that's one thing. growth is what -- unless you become a dividend grower. >> what's happening in the fab equipment area, from 2000 to 2010 the overall capital spending by our customers was pretty much flat. what we're seeing in these last few years with the inflexion really happened about late 2009, early 2010 that these mobile

devices really -- the smartphones, the tablets, we're going to see a renewal in pcs started to use more and more silicon and the value started to accelerate. also for applied materials, we've been investing in adjacent markets. display is one of those i mentioned but also in the solar industry as well. >> we used to talk to you about solar. how has that worked out? you glad you did it? >> sure. last year was a very good year for us. a lot of capacity got put on. we're very used to be in cyclical businesses. and capital equipment is a cyclical business. this is a down year in capacity. the end market is growing fast. we think capacity and demand will rationalize somewhere in the next 12 month ps.

>> when will solar business pay or? >> we think as we go through the cycles, we can be profitable -- >> do you wish natural gas was $8 -- >> well, natural gas is cheap in the united states. the united states is a relatively small player in solar, though doubled last year. >> what percentage are we globally? >> 10%. >> what's china? >> china last year was about a little more than 10% and will be much more than 10% this year. >> so who is the biggest player then? >> germany, italy. europe as a whole is the biggest part of the solar deployment. >> but the economics still don't work? >> economics are getting dramatically better. if you just think about almost versus retail prices in many parts of the world now, solar is cheaper than retail prices without incentives. with incentives of course it's much better than retail price. certainly in the united states,

many parts of the united states today certainly in -- even if germany today better than retail price. >> what do we make of it when your competitors are still finding that they have to get together just to, i don't know, maintain relevance? will there be one chip making equipment company five years from now? it could be you. >> that would be great but i don't think that's about to happen. but there is consolidation not only in among our competitors and ourselves but among our customers. people who make chips, really make chips, make the wafers who make chips, 25% come from our customers. that a big consolidation. that's happening on our

horizontal level of the business. we've seen kind of that grow top-five competitors are 67% in business. >> you've gotten bigger yourself. >> yeah. >> how has that transition gone and are you on the prowl for anybody else? >> well, we really liked ovarium. it was the best company out there, leading manufacturer in their particular segment and the integration has gone extremely well. and the timing of it is very important. our customers are changing the way they make trannistors today. as these devices have gotten smaller, it becomes more difficult. the more complex it is, the better we like it and the more we can help our customers. >> nothing has changed the human existence probably more than the chip. you're close to sainthood for what's happened and i think you deserve more in terms of stock -- >> certainly many people in our

industry. >> the changes we've seen in what we do as human over the past 50 years almost directly attributable -- >> i've been lucky enough to watch this for 40 years and then participate. >> are we slapping up against anything yet? >> not yet. not yet. there's lots of difficulties but -- >> do physicists get around it somehow? >> physicists find a way. >> unfortunately they keep getting cheaper and cheaper and it hurt margins and it harder to grow. we get back to that again, right? >> the thing is it's ubiquitious. we've helped every industry become more productive with these chips. you just look at your desk today. now you're multi-tasking again, joe. >> how many chips are running on this? >> many, many, many being ma, m. >> i see you have an ipad there. >> of course i have my ipad so i

can multi-task. >> we'll come back and ask you again if you're on the prowl for anybody. are you going to stick with us for the hour? >> of course i'm going to stick with you. >> up next, supreme court case putting the president's health care law in jeopardy. from that to the massive budget deficit. this guy will talk about obamacare, too. plus we'll take a dip. pits. the activity behind future dollars and trading. and where jeremy segal sees the market is heading. [ grandfather ] that a boy!

this is my grandson. and if it wasn't for a screening i got, i might have missed being here to meet him. the health care law lets those of us on medicare now get most preventive care for free like annual wellness visits, immunizations,

and some cancer screenings. and that's when they caught something serious on mine. but we could treat it before it was too late. i'll be around to meet number two! get the screenings you need. learn more at healthcare.gov. you don't want to miss any of this!

take a look at the futures. they are indicated lower after two down days in the market. now the dow is down by about 33 points. >> we are on washington watch for progress on fixing the massive budget deficit and on the legality of president obama's health care law. joining us to discuss these topics and more, jeb hensarling. you're sugar coating these things, jeb. it says here that obamacare was a legislate of abomination two years ago. it still is today as it continues to threaten our nation's job creators, taxpayers, families and senior citizens. >> that sounds about right. >> you're going to tell us what you really think today. what did you make of the last three days?

is it in the bank in your mind that they're going to throw out the individual mandate? or are we going to have to wait till june? >> i think we're going to have to wait till june, joe. i don't know. clearly i don't like the policy for a number of reasons. we were told we would save money. now the congressional budget office has doubled their estimate who almost $2 trillion. we were told it would save jobs. now we know the congressional budget office says it could cost a million jobs, it imposes a new board to ration the quality of our seniors' health care. putting all of that aside, what we really have here is a constitutional question that has to be litigated and, you know, frankly if congress can force people into commerce, essentially regulate inactivity, for all intents and purposes the interstate commerce clause is meaningless, the enumerated powers clause is meaningless. so i don't know what will happen but i am hopeful the individual

mandate will be struck down and i believe that would be the right ruling. >> i mean, nobody ever thought if you add 30 million or 40 million people with a new entitlement, no one ever thought that wasn't going to cost money, did they? really? did they? cbo you know it's garbage in, garbage out. they double counted things, they used taxes being collected now to pay for things and there's nothing in the future for it. it was almost a wink and a nod from both sides of the aisle. >> well, listen, if private individuals and businesses used the same kind of accounting gimmicks that government uses, they would either go broke or go to jail. so did somebody believe it when they heard it? i don't know. as one of my constituents said, do they think we're stupid? no, you can't add millions and millions of people to the government health care rolls and save money. at a time when we're facing the

worst debt crisis in america's history, regardless of what people may believe to be the merits to the president's health care program, you have to quit spending money you don't have. we're october way to bankruptcy. >> you add 30 million and save 2 trillion. why don't we just add china and we could make up the deficit and make a trillion dollars, right? >> you would go far in the administration. they have a place for you. >> how about these budget things? this was a simpson-bowles budget and they got 30 guys voting on it. are we going to run into this trillion dollar cliff at the end of the year? >> first if i could, joe, the think the more interesting vote was that last night the president's budget was brought to the floor and received zero -- zero votes out of 445

members of congress, not one single democrat voted for the president's budget. i think that speaks very loudly. i think there was a lot of good work done on simpson-bowles. i personally was a part of that commission. i'm very glad it received a vote but at the end of the day unfortunately they didn't deal with the drivers of our debt crisis, which even the president has admitted are medicare, medicaid and health care. nothing comes close. that's a quote of the president. it reminds me again that i agree with 80% of what the president says. i just disagree with 80% of what he does. he doesn't deal with it in his budget. unfortunately notwithstanding there was a lot of good work done in simpson-bowles, they didn't deal with the drivers either. we deal with it under chairman paul ryan in our budget with a system that we believe will secure and save medicare for future generations, ensure that we don't have the rationing of health care for our seniors that this independent payment

advisory board, 15 unelected, unaccountable democrats to impose price controls on medicare. we don't do that. we use the power of kcompetitiv markets, a transparent marketplace and bipartisan plan supported by senator wyden, a democrat. we are hopeful this is the plan that will work and not only safe health care but frankly save our nation from bankruptcy. >> who do you think will blank as we ged toward the end of the year on that claf? would you be okay with the sequester kicking in and bush tax cuts expiring? it's a huge wall that could hurt a fairly tepid recovery in that we're in already. >> i totally agree, joe. the president is proposing the single largest tax increase in american history, $1.9 trillion. but what's interesting, if you give the president every single tax increase, 40% of which is

going to fall on small businesses, but if you give the president his entire tax increase, it's about 17% of the $11 trillion of additional debt he's placing on us. my point is you can't tax your way out of this problem and without spending discipline, those tax revenues don't do any good anyway. so when you say who's going to blink, i don't know. it's a rather tepid recovery. frankly i think public policy has to do with that. but you're right, we looking at a sequester, the expiration of tax relief, we're looking at a potential debt ceiling vote. but ultimately we have to deal with the fundamental drivers, which are health care, medicare, medicaid, our retirement programs. we have to deal with the drivers and send the signal to the credit markets that we're going to get our act together. we had secretary geithner on capitol hill i guess it was last week warning of the perils to

the american economy of the european debt crisis. i conceded the point but i said, mr. secretary, the greater threat to the american economy is the american debt crisis and your administration isn't do anything about it. >> thank you. we'll see you again. >> thank you. >> still to come, we're going to examine futures, oil and the dollars. and the legal side effects of the president's health care law. rob andrews and tom price will go head to head. more on "squawk" when we return. time now for today's aflac trivia question. which perfume house did madonna advertise in the late 1990s? isnl enough? huh! no! who's gonna help cover the holes in their plans? aflac! quack! like medical bills they don't pay for? aflac! or help pay the mortgage? quack! or child care? quack!

aflaaac! and everyday expenses? huh?! blurlbrlblrlbr!!! [ thlurp! ] aflac! [ male announcer ] help your family stay afloat at aflac.com. plegh! demand media expands on the big board.

introducing gold choice. the freedom you can only get from hertz to keep the car you reserved or simply choose another. and it's free. ya know, for whoever you are that day. it's just another way you'll be traveling at the speed of hertz. now the answer to today's trivia question. the answer max factor. back on this thursday morning. one of the stories that we're following, spanish unions turning out for a general strike today, protesting government

budget cuts in reforms. the unions say the work stoppage have already brought heavy industry to a halt but the government says the day is proceeding normally. scuffles breaking out between protesters and police while unions picketted madrid bus top. as the first bus started to leave the depot, they blocked the bus. it looks a little scary out there right now. >> you got to feel bad. >> 25% youth unemployment. it's really scary. >> was it 40% of the youngsters -- young adults who live at home with their parents still? >> 25% youth unemployment. >> right. if you have any comments or questions about anything you see here, go ahead and e-mail us at squawk@cnbc.com.

coming up, we'll look to see if president obama's health care law is sound medicine. and our trading block is coming up. "squawk" will be right back. ♪ when your chain of supply goes from here to shanghai, that's logistics. ♪ ♪ chips from here, boards from there track it all through the air, that's logistics. ♪ ♪ clearing customs like that hurry up no time flat that's logistics. ♪ ♪ all new technology ups brings to me,

♪ here i go again on my own, going down the only road i've ever known ♪ >> best buy is expected to earn $2.16 for its fourth quarter with revenues of $17.2 billion. analysts say tighter expense controls rather than improved sales will be the key driver for the quarter. we are watching shares of gene sequencing company illumina today. roche hikes its takeover bid to $51 per share. >> we are tracking crude oil,

the dollar and futures. john, why don't we start off talking oil because it looks like oil prices are indicated lower once again. we've seen several days of down days for crude. is that because of the talk we hear about britain and france and the united states potentially looking at releasing strategic petroleum reserves in the next few weeks? >> on a day-to-day basis those discussions can have an impact. if we look at long term, you're seeing a case where we have record demand worldwide and that's why we've seen prices over $100 a barrel. >> you think these levels are the new normal and here to stay? >> i'm not in the business of forecasting. we've seen almost 90 million barrels and with supply declines in libya, south sudan and other

areas, we have a tight market. >> i can't figure out why we continue to see the spread between oil prices and natural gas. natural gas coming in a under 225. is there a way to find to use more natural gas and break down that spread? >> they may be in the future but right now they're completely separate market. natural gas is a north american market and oil is a global market. >> and how much of this do you think is some sort of premium that's taking place because of tensions in the middle east? we don't hear those headlines over the last few weeks. >> i tend to think it's market fundamentals. if you look at inventory levels worldwide, they really aren't changing much. if you had some type of an artificial increase in price for whatever reason, you'd see inventories increase and they're not. >> ben, let's talk stocks for the moment. we're going to be getting

jobless numbers. how important is that number? >> it's a big number. for the most part we've been seeing a decline in jobless claims supporting the up side activity we've been receiving. basically traders are looking to see that trend continue. anything below 350,000 would support that. there's a lot of focus on a lot of major products across the board, he touched on the crude product and we've been watching the bonds. it all focusses on the dollar, waiting to see as the dust settles or traders trying to establish what the correlation between the dollar and stock is now. it's been breaking done from what we're used to seeing in the last few months. we've like to see that number come in right around 350 or below. >> it's expected at about 350, up about 2,000 from last time around.

ben, is there the sense on the these numbers are something that are kind of a given? we know where the trend is. ben bernanke had been talking about how he thinks these are temporary. what would happen if there was a surprise number that came in? >> i think a surprise number in terms of negative number, in terms of more jobless claims would certainly have an impact on just that psychological factor in the market right now. there seems to be this kind of very optimistic type approach towards market activity. when we look around and we're seeing again what appears to be resolution in terms. european economic crisis that we were dealing with. we're watching jobless -- or the unemployment rate slowly inch its way lower. there was a lot of fear around the 10% level and now we're working our way back into that 8% level. again, i think it could certainly heighten concerns out there and possibly would even sort of spark some talks again of a double-dip recession considering the issues and

concerns we're dealing with in terms of china right now, for example. you just touched on in terms of bernanke, it seems to be status quo right now. we're really looking at this kind of continued to increase this wealth effect if you will, through building up the stock, indices future products and building up the dow. we're watching these bonds and everybody was talking and concerned as we watched the bonds trade into the 133 handle, that the rates were going to go through the roof and it was similar to when the s&ps in october were trading 1050. i was like the sky's not falling, guys. it's just a similar situation again. these markets are testing out our extremes basically. they've yet to breach any major level of supportive resistance. crude trading up to that 110 level. so again, for the most part, you know, euro currency as well,

we've been trading outer extremes. when you hit the outer extremes, there's a lot of tension and nervousness associated with it but for the most part, status quo is basically what i'm saying. a long winded explanation of saying status quo. >> ray, let's talk about the euro. there seems to be the sense that maybe europe has gotten through some of this. we saw today the riots taking place in spain. a lot of the protests taking place there. how convinced are you that we've gotten through the roughest patch of this, at least for the foreseeable future? >> i think the euro rally owes something to easing of tensions because of the ecb's action and the greek's second bailout. we're also getting concern as we head into april, we're going to be approaching the greek general election and we know some of the minor parties seem to be gaining great strides because they're

seen as the anti-establishment parties, the establishment being blamed for the mess that they're in. i think some of the rhetoric will be coming from the front-runner candidate in france. potentially more bank bashing and wanting the ecb to be more compliant in helping to solve the crisis. i think the headline news there is going to play negatively for the euro. we think this run-up has good justification. but heading into april, we feel europe could well be heading back down 130, perhaps as low as 125 during the early part of the second quarter. >> thank you very much. >> thank you. >> when we come back, can obamacare survive the supreme court legal challenge? we're going to get a prognosis from both sides of the aisle. and a member of squawk's master

class out with a very bold and bullish prediction. jeremy siegel will join us live a little bit later. "squawk" returns after the break. 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.

omnipotent of opportunity. you know how to mix business... with business. and you...rent from national. because only national lets you choose any car in the aisle. and go. you can even take a full-size or above. and still pay the mid-size price. i could get used to this. [ male announcer ] yes, you could business pro. yes, you could. go national. go like a pro.

take a look at the futures this morning. i like all the mousse thick hour. this is really good. futures are a little weaker, though. this comes after two other days of losses. >> the property weighing the legality of president obama's health care law. it comes after three days of argument. joining us to discuss whether the massive law can survive, congressman john price of georgia, the house of the republican policy committee and congressman rob andrews of new jersey. he helped write president obama's health care legislation. i'm going to start with you, rob. just listening to what we've heard during the supreme court, the questions that were asked, your sense of what kind of outcome we could get from the

justices. >> i have no idea. one thing i've learned in oral argument is it's rarely a clue to what people are going to do. i wouldn't want to forecast what the court is going to do. we'll obviously live with its consequences once the decision is made. >> mr. price? >> i'm a physician, not a lawyer. i don't know about any of that stuff. i do know this law is a disaster for patients and doctors and for the country from an economic standpoint. regardless of what the court does, the country will have to readdress this situation. the status quo is not acceptable. this will bankrupt this country and it doesn't work for patients and doesn't work for doctors. >> if the mandate portion of this gets struck down and the entire bill doesn't, what happens? >> it's a major problem because what would happen. if you say insurance companies have to take all comers and

charge a uniform rate, premiums would skyrocket. it's like good conservatives originated the idea of the morj nal mandate and has embraced and supported it. it would be a big problem. >> the larger question from a practical perspective is -- i've read a lot of analysis that says it may very well get struck down but that that piece of it would get struck down, not necessarily the whole thing. then the question becomes what ultimately does that mean and what does congress do? >> well, it means that tom and i and our colleagues would have to have a negotiation over what to do about that. tom would favor repeal of the law. i would favor fixing it in that circumstance, which leads me to a larger point. i think the decision about the future of this bill should be decided by 130 million voters on election day, not by nine justices this june. and we're going to have a presidential election fought over this issue, congressional

elections fought over this issue and i think the voice of the people ought to prevail as to what happened. >> congressman andrews, did you like the way it was passed? now you want everyone to vote for it. did it make you proud the way it was passed? >> i think it passed in a proper procedure where people had their say, one side won, another side lost. we had an election in 2010 where people expressed their displeasure. we'll have another election in 2012 and the people will decide. i don't think there was anything illegal about that at all. >> oh, my god. do you remember how close it was? it was so divisive. how many of your colleagues lost their jobs? speaker pelosi is not speaker anymore because of the way it was handled. >> how many major decisions of this country have not been controversial? >> you don't take 17% of the economy and decide that it's coming home to roost now with the public opinion numbers for this law. >> rob can talk about the

negotiation he wants going forward. i can tell you the negotiation last time did not happen and that's why the american people are so upset. as a physician, this law doesn't work. >> congressman price, i'm not going to relitigate how we got here. >> nor am i. >> my question for you is if it gets struck down, if you could get rid of the bill, my question is what would you put in its place because clearly what we have on the table today does not work. i think you would at least agree on that. >> you're absolutely right. the status quo doesn't work at all. the bil i have authored, hr-3,000, we call it empower patients fishs act, which gets folks covered in this country regardless of their financial situation, solves challenges in portability and preexisting conditions. and finally we address the issue of lawsuit abuse the practice of defensive medicine in this country costs about $600 billion, one out of every four health care dollars.

the key is you don't have to put the federal government in charge to solve the challenges that we face. >> congressman andrews, what's wrong with mr. price's argument, if you don't agree with it? >> well, i will say this to you, that tom said -- i haven't read his whole bill. he said if you have a preexisting condition, you can't be discriminated against. i would ask him does your bill have an individual mandate in it? >> it doesn't have an individual mandate. once you have that is correct the federal government has to decide what's being mandated. it works like every single self-insurance plan, coke, home depot, walmart, all of the self-insured plans. it works for them because they have a critical mass of employees. you allow people access -- >> but here's the problem. if you let people opt out of that market and you tell the

insurance companies they have to take on all comers with preexisting conditions, the premiums are going to skyrocket. >> it's simply not true. >> congressman, why is that not true? what mr. andrews says makes a lot of sense to me and maybe some others at this table as well. >> you have to make it financially feasible, attractive and foolish for anybody not to be covered. >> how do you do that? >> through tax deduction, tax credit as you come on down, tax credit and refundable tax credit soap every american says it makes more sense for me financially to be covered. >> rob, you were one of the authors of this and you've heard the last three days. i don't know whether you immediately dismiss those four, five conservatives on the supreme court as idea logs, a

guy wrote into the journal "when our forefathers founded this country, they did so with the knowledge that for man to be free, rice and responsibilities must be derived from the individual, not the state and thus power must be invested in the individual. this is the founding principle of the u.s. and it guides and informs the spirit intent and letter of the constitution and in a broader sense the entire concept of limited government. what would you say to a normal citizen that wrote in with that, congressman? >> first i would say he has half of it right, that we do have individual autonomy in this country. we also have individual responsibility. and if a person chooses not to insure himself, uses an emergency room in a hospital, his neighbor pays his bill. >> what about a funeral? should we make people pay for a funeral as well?

>> there are states that would generally cover that. the point is most people don't have an income or estate sufficient to cover $100,000 er bill from a motorcycle accident. should you pay for that? >> i might be for an individual mandate, but i might be for an individual mandate if it said, look, by virtue of being a citizens, you've got to have some health coverage. you pick it. >> why not do a tax? you guys are so afraid to do a tax -- >> tom's not for taxes. >> tax credits, refundable credits. >> you should have used that word, tax whurks wrote this thing. >> i want to go back to congressman price. does that mean can you get behind some form archsingle payor if it's some for the of basic -- >> no. the reason is because whb we do that in this country, what we do is empower washington to make the decisions about the

definition of health care and thefinition of health coverage. that's where you get into problems. >> sort of like medicare. >> true. >> the program you referenced, this idea you said you might able to get behind, how would that work? >> if we said you've got to have health coverage that's right for you. savings account, a high ealth deductible catastrophic plan. the example rob gave, you come into the emergency room and your neighbor has to pay for you simply isn't true in the nuts and bolts real world. if you come in the emergency room and you want to bypass the system from a health coverage point, you could pay for it if you want. >> if you don't have the assets to cover it, then your neighbor pays for it. >> that's why you need an advanceable refundable credit. so every individual gets the coverage they wants. >> guys week have to leave. you guys should probably have

lunch together. >> mitt romney did this in massachusetts. >> we have the music. they're playing us out. we will talk to you again very soon. >> up next, more from our guest host, applied material ceo michael splinter. ♪ home protector plus, from liberty mutual insurance,

where the costs to both repair your home and replace your possessions are covered. and we don't just cut a check for the depreciated value -- we can actually replace your stuff with an exact or near match. plus, if your home is unfit to live in after an incident, we pay for you to stay somewhere else while it's being repaired. home protector plus, from liberty mutual insurance. because you never know what lies around the corner. to get a free quote, call... visit a local office, or go to libertymutual.com today. liberty mutual insurance. responsibility. what's your policy?

our guest host is applied

materials ceo michael splinter. where do you want to go from here? what kind of health care do your employees have? >> they have great health care. >> will you keep it if obamacare goes through? >> i'm sure we will. our biggest concern is predictability. when are we going to have ideas of what's going to happen in the future so we can do our plans. and then the cost issue for us is a big deal. it's been a big deal for a long time. >> we heard at the time -- i heard it again and again. if you like your plan, you can keep it. but that was the devil was in the details with that because we know that there are a lot of people on the other side that said when corporations and costs get too high, they're going to say go ahead and we're going to get rid of our plan, you go with the government. would that have happened at applied material? >> i don't think so. from what we could see, we thought we could manage our existing plan and provide for our employees. but we do have to address the cost issues. we've been seeing costs go up

year to year. our employees have to share more of the cost as we've gone through time. part of that is good because they see the cost, they're going to make better decisions but too much of that is bad, it becomes too much of a burden on them. >> because it is if you own it, it might be a little bit different if you're paying for more. >> you're more concerned about it. >> better utilization. >> certainly the cost of our drug plan has gone up over time and so people are making more decisions about generic drugs or making different choices than they might otherwise make. >> mike, we want to thank you very much for joining us today. we hope you we can get you back again soon. >> it's always a pleasure, becky. just invite me back any time. >> you an open invitation here. when we come back, we have breaking news. and jobless claims. plus what if supreme court

shoots down the president's health care law? and we'll be going bull riding with one of wall street's finest. jeremy siegel will join us to tell us why he thinks stocks may be on the verge of hitting new levels. and, to those who say... [worker 2:] we need environmental protection. [announcer:] conocophillips says, you're right. find out how natural gas answers both at powerincooperation.com.

only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the spef hertz.

♪ when your chain of supply goes from here to shanghai, that's logistics. ♪ ♪ chips from here, boards from there track it all through the air, that's logistics. ♪ ♪ clearing customs like that hurry up no time flat that's logistics. ♪ ♪ all new technology ups brings to me, that's logistics. ♪

he's a quack mast -- squawk master of the market and a raging bull. he'll tell us why we could see 15,000 by the end of the year and he's not ruling out 17,000 either. >> former aetna chairman and ceo ron williams will tell us what will happen to health care if parts of the law are struck down. >> and breaking economic data. weekly jobless claims and fourth quarter gdp numbers out. the third hour of "squawk box" begins right now.

welcome back to "squawk box." i'm joe kernen, along with becky quick and andrew sorkin. checking earnings future. doesn't look that bad compared to what we're seeing in europe this morning. a lot happening on the content. not much of it is very good today. >> not very much. spain and italian yields. a lot of stuff. >> we're keeping a close eye on an earnings report that's going to be out after the bell. it's the first earnings report under the watch of the company's new ceo and a lot of people are going to be watching to see what happens this afternoon, though. i imagine they may even suggest this is not the quarter to actually watch. we may have to watch next year when they get their new system out. >> ipo news this morning, annie's enjoying the biggest opening day gain for an offers this year, the stock soaring 89%

in its first day of training. annie's makes 125 natural food and organic products. joe eats them regularly. it's fitting the company is trading under the ticker bnny. ita italy's tenure hit 5.2%, the lowest figure since august. a spanish workers strike and protester dramatic budget cuts set to be announced on friday. >> we have best buy earnings out. the company is coming in on an adjusted basis when you strip out charges of 2.47 a share. comp store sales for the quarter were down by 2.4%. they did have some disappointing

comp store sales over the holiday period. they're now also looking for some comparable store sales for the fiscal year down -- i'm sorry, that was for the full fiscal year was down 1.7%. taking a look through -- i don't know if this is guidance for the quarter or not, i'm just digging thr through. hold on a second. very long release here. at this point it looks like that stock is going to open a little lower, down 25.85 to 25.97 after closing at 26.62, even though the number did come in a little better than expected. >> all right. with health care hearings complete, the supreme court will now decide the fate of president obama's health care law. decision is expected in june. joining us to weigh in on the supreme court case and future of health care, former aetna chairman and ceo ron williams. good to have you. i remember a lot of our conversations over the past five

years and he we are. you supported the individual mandate but you think at this point it might be -- you might stand handicapping it as being struck down. i'm reading between the lines, do you think they should have done it as a state right and is it clearly not a federal right in the constitution? >> let me say first it's a pleasure to be here and have some time to talk about this critical issue. as you know, i was a big supporter of the individual insurance mandate, but it was something that was required once you placed a mandate on insurance companies to take all comers and insure everyone. i think i thought about it in the context of balancing the mandate on insurance companies. i'm not an attorney and i really don't know constitutional law. but as i've read about it and thought about it, i think i have come to the conclusion that there is a very legitimate constitutional question and reading and listening to the

testimony, my belief is right now that the mandate stands a high probability of being jor overturned. >> i don't know anything about that either. having listening to comments from the justices, it seems to be left more up to the states and it would have worked that way but it got rushed through. i'm glad you're not at aetna anymore. you're not quite as vested in it. remember when we used to talk about how you were vilified as an insurance industry executive when all the demagoguing was being done by the white house about insurance executives and yet the entire industry after being raked over the coals totally backed it. do you feel like the industry made a deal with the devil and now you're getting what you deserve? >> well, i think the industry right now is focused on the fact that it is the law of the land. i think when you're in that political process, the companies

had to make judgments about what was best for their shareholders. >> would have been great if every person who to be covered, i watch united health care. they're like rubbing it all over themselves. yet they had just been vilified as people that turned were the people that were dying with preexisting conditions. you heard about fat cat insurance executives every week from the white house, yet the whole industry signed on because of the possibility of covering everyone. now what? >> i think also we have to back up and recognize as a country we do have a moral obligation to make certain that everyone has access to high-quality health care services. there are lots of ways to accomplish that. i think the industry would have preferred different solutions. and you had to play the and that you were dealt. it's also important to recognize

the rule making process is still ongoing. it's an imperfect law. whether the mate day is upheld or not, the law will continue to have to be refined. but the real issue that gets lost in all this is the fact that affordability of heck is. i think i law doesn't provide a clear solution and a clear path. >> that was the main problem, the value and affordability weren't even part of the law. i have to ask you as a health care expert, ron, we've been having off-camera discussions about whether single payor or whether a government-run system, is that the way to go? would there be a loss of innovation if the government were to run our health care needs here? we'd cover everyone but would we have inferior health care to what we have right now?

>> my belief is that we would. my belief is whether you look at the level of innovation around one area, information technology and health care innovation of the private sector has invested literally hundreds of millions of dollars in connecting the data in the health care system in ways to improve quality. the pharmaceutical industry, there have an enormous amount of innovation i believe would be lost. i do not believe that single payer in the way to go. >> becky's got a question. i don't want to argue with him but i have a question for him. >> no, argue with me. >> ron, we had two congressmen on earlier who were talking about what would happen if the mandate was struck down and some sort of legislation was put into place to require insurance companies to make sure that they covered people with preexisting conditions and "loud pooh kids to stay on their parents' bill

until they were about 26. if the health insurance insurance companies are required to everyone, what would happen? >> well, i think there would be a serious economic challenge in the context of how the industry would have to respond. ultimately it all finds its way into a price that the consumer ultimaly has to pay and i think we have to back up and said p say nom -- there's a mandate on be the un, there's a mandate to buy insurance and then there's also a mandate on the way the product is priced. one of the things that happens in the legislation is young people who buy their own policies who are 25 or 26, are going to pay a substantial subs deto make health care affordable to older individuals.

that's not good or bad. it's primarily -- these are all interrelated issues. when you adjust one, you have to adjust the other. >> we have the highest health care rates in the world. despite the innovation we have in this country, some would argue, we don't necessarily have from plain, pure numbers, in terms of the health care coverage and in terms of results, you don't even -- if you could be king for a day, what would you do to change it? >> i think you have to really examine that data very carefully. one of the reasons that the study ranks the u.s. so low hasn't been repeated regularly is that study place as huge emphasis on access. that's an area where the u.s. clearly falls down and as said,

we need to get everybody insured. >> we subsidize the world, ron, right? >> we wla we have to do is improve access to health care and strengthen the primary care dlif. >> but how do we do that without increasing costs? >> it does come pack do affordability. i think that's where we need collaboration, innovation. and large employers in particular are the most innovative. >> what is the role of the health insurer in all of this? some people would argue too many of the money that should guantanamo bay to doctors and hospitals are going to the insurance companies. >> may have lost the audio. did we lose you? >> ron? >> maybe --

>> we lost audio. >> that's not good. >> he didn't want to hear my question. no, it was -- but would you like to answer the question? >> yes. >> i know you want to. >> in addition to providing all the security for europe for the last 40 years, for nato, in addition toboro describeding all the innovation in health care and pharmaceuticals, in medical devic devices, in i.t., we still grow 40% faster than europe based on gdp and our citizens are that much wealthier from what we've done. that needs to all be taken into account. they provide health care but we subsidize half the innovation they've got over there. in that study that you keep referring to and use that as a gauge to whether we have quality get and.

>> do you want more access? >> do i want people -- everyone to be shurd? we have to do that, yes. everybody has to be -- >> so how do you do that? >> we have to do it in a market competitive way. >> i understand that. >> he's a doctor! >> how do you do that in a market competitive way? >> he made a lot of as soon as to me. >> what do do you with the individual who doesn't want to pay? >> if there's an individual, after seeing all the benefits of doing it -- >> are you going to cover him? >> maybe he's a cat -- >> catastrophic care? do that alone? >> he's not coming back? the problem is the prices are so expensive but you've -- >> you don't want the cost curve down with ten bureaucrats -- >> but there's always going to be people who doin not want to pay. there was a fascinating story in

the middle of the country where you had to pay to have fire service. and this guy decided he wasn't going to pay, his house starts burning down and decide you're not on the list, we can't help you. and the house burns down. is that an acceptable answer? >> i would deal with some of these ancillary things as long as we satisfy the first litmus test and that is that the government doesn't become the chief innovator or the chief regulator of health care. that's the thing for me. everything else comes secondary. got to figure out a way to do it, figure out a way to cover people. but, you know, we do things differently here, didn't we? didn't our forefathers -- that's why people came here to do things. individual, not the state. not statism. please. please, i'm begging you, andrew. >> we're hearing that ron's studio lost power.

that's what happened. we hope to get him back on the show very soon. >> when we come back today, best buy reporting fourth quarter results just a few minutes ago. earnings number did beat the street's expectations. the bid ask is it now higher. we'll talk more about the guidance in a moment when we go through the report with an analyst who covers the stock. and workers in spain striking in protest of severe budget cuts. we'll have a live report from madrid. "squawk box" will be right back. how can you just stand there?

what do you mean? your grass, man. it's famished! just two springtime feedings with scotts turf builder lawn food helps strengthen and protect your lawn from future problems. thanks scott. [ male announcer ] you are a business pro.

monarch of marketing analysis. with the ability to improve roi through seo all by cob. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. i'm going b-i-g. [ male announcer ] good choice business pro. good choice. go national. go like a pro.

welcome back to "squawk box." the unions in spain holding a strike today to protest a new round of budget cuts.

julia, what can you tell us? >> thanks, becky. the strikes began at midnight last night impacting public transsport, schools, many factories across spain peril liesed. there's tens of thousands gathered on the streets. this morning when i left my hotel there were flyers like this all over the floors, plastered in buildings. they want to finish everything, talking about the labor rights here. it's the first general strike we've had in spain since 2010 but we have seen two protests already this year that have impacted. hundreds of thousands of people were involved to give you some idea of the numbers. we'll get a better estimate later on today when the protesters are scheduled for their striking against radical labor reforms implemented by the government back in february, giving greater flexibility to

fire workers if necessary. the unions are complaining this is going to raise the unemployment further in this country. 23% unemployment in spain. around 30% of the population were in favor of these strikes but the conversations that i've had with people over the last couple of days, they're worried about whether turning out for these strikes will impact their job going forward. also whether just taking a day off from work will mean no salary for that day, an average around 113 years. the key question is whether what we see today impacts the budget tomorrow. everything i'm hearing is no. the government is aware of what's going on in the bond market, regaining credibility of the market here is essential for the spanish government. i do think we're going to get a very stringent budget tomorrow. back to you. >> julia, thank you very much. >> best buy is out with earnings

just a few moments ago. but revenues falling short. the company announcing cost-saving members and a revamping of -- brian nagle, good morning to you. take me through it real quick on the earnings. >> good morning. lots of moving parts today for best buy. on the earnings, they did beat their fourth quarter earnings pretty easily, doing 2.37 versus 3.16. basic takeaway there was the spike continued quick sales and was a bead on cost controls. everyone wants to focus on their restructuring announcement from stock buy. it's pretty much up a reflection as far as i can see. >> let's talk about the

restructuring announcement. they're going to redo the floors, change the format, the big box. i don't know if it's going around but there's going to be multiple different formats. what's your worry about execution? >> the big numbers for me, they plan to close 50 of their big box stores, which is a much larger number than people had been anticipating. cost controls this year, 2012 of $250 million. then the articulated $800 million by -- they say 2015 but i think it's your -- in my view, these are long overdue. they've been competing with internet retailers for a while so i think it's probably the right move. the concern i have in looking at this, though srkts execution. retailers are attempting to undertake this significant of a

restructuring in a weak environment can go very problematic. >> too little too late? >> i don't know about the too little. magnitude-wise they're probably doing the right thing. it just what the concern would be is that you have this type of upheaval at a company with competition getting ever more fierce. i talked a lot about the product cycle very weak. the trouble would be doing this kind of cost cutting when the overall environment is challenging. >> your target on the stock now? >> my target is $27. i've had a perform rating. >> thank you so much for your perspective this morning. >> coming up, is the dow ready for a 3,000 pournt surge by the end of 2013? what's wrong with 2012? squawk master jeremy siegel will

join us coming um. and fourth quarter gdp. "squawk box" is coming right back. the world needs more energy. where's it going to come from? ♪ that's why right here, in australia, chevron is building one of the biggest natural gas projects in the world. enough power for a city the size of singapore for 50 years. what's it going to do to the planet? natural gas is the cleanest conventional fuel there is. we've got to be smart about this. it's a smart way to go. ♪ hey, heard any updates on the game? 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. at&t. ♪ at&t. you know, those farmers, those foragers, those fishermen.... for me, it's really about building this extraordinary community. american express is passionate about the same thing. they're one of those partners that i would really rely on whether it's finding new customers, or, a new location for my next restaurant. when we all come together, my restaurants, my partners, and the community amazing things happen. to me, that's the membership effect.

coming up, breaking economic

data, jobless claims and fourth quarter gdp numbers a few minutes. "squawk" is back right after this. more than 150 million professionals are connecting here. linkedin connects with the big board. introducing gold choice. the freedom you can only get from hertz to keep the car you reserved or simply choose another. and it's free. ya know, for whoever you are that day. it's just another way you'll be traveling at the speed of hertz.

ortho weed b gon max. with a new continuous spray wand. so you can kill invading weeds down to the root. without harming your lawn. guaranteed. ortho weed b gon max.

welcome back to "squawk box." we're just seconds away from the jobs numbers and second quarter gdp data. rick, the number should be here right now. >> mark, your watch, here we go. 3% is still the number on fourth quarter gdp. this is the third time around the block because in a few days we're going to end the first quarter. a month from today we'll get the first view on that. if you look through the internals, no big changes, consumptions stays 259.1sh the price index up .9, stays at .9%, the core pce, all these numbers are steady. jobless claims jump but there was a revision. it was at 346, we move that to

354. we have to monitor the turn we take until we get the new numbers. it gets upgraded to 3.38. it looks a bit lower at 3.34. we were looking at 350 as the threshold. if you look at the currency market, you go the dollar is a bit higher. it's the relationship us -- the u.n. has a nice healthy rally going on against the dollar and that really has been almost a one-way trade of late and i think the japanese are quite happy about that. world trade organization spokesman for all the developed countries talking about how it's appropriate to let your

currencies trade in a fair and appropriate open market sort of way. whether it's interventioned or that really isn't the case. back to you. thanks for more on the dadata. a cnbc contributor. any comments thon these numbers specifically today, jeb? >> i was in rockster's camp. i think the issue moving forward is europe. and rickster and i used to work together in the day back in the 30-year bond pit. the barometer we used was the federal reserve's balance sheet. we're going to sit here in limbo until we get some more out of ben bernanke as he continues on his road show. >> i never know what to think. it's like everything, santelli.

when we'll said -- i thought qe3 was so dead. but then we've had people in the past saying we're doing qe20 eventually. so three 3/is not anywhere near 20. didn't your mouth drop, rick, when that got back on the table again or nothing surprises you about this fed anymore? >> no, nothing does. and it isn't just the fed. it's the entire notion that there's entities out there that have the -- what, these hubris to think they can control everything and they can control the outcome. read mr. taylor's in the journal today. it apes your question as we approach -- this -- when do you stop the tinkering? that's the problem. i used to have a friend who was a painter. he'd never finish his painting.

he'd look at it and go, gee, i don't like, there i'm going to change this. micropainting management. that's what we see in the fed. unfortunately, the government -- it's not even micromanaging as we see from these budget jokes. you get two sides that put forth ideas that aren't presented accurately just for political gain. it's going to be a wild year between europe and politics. up know, i don't think you're going to find any truth surrounding the issues for a while. >> but if you did have delusions about how important your job was and that everything in the economy depended on the little moves you were making, that would be a dangerous person to have in that position, i guess. at this point, the entire onus, even at 3% gdp, the entire -- i thought 3% -- why don't you just

sit back and watch what happens. >> exactly. let it play out. you guys were talking about fire and health insurance, i'm not sure i agree with you, though but and i think it's appropriate in this discussion. why is it that some analysts think every aspect has to be picture perfect and pretty. they should let the market do what it has to do. somebody doesn't want to sign up four fire issues, the next generation sand the person -- we're preventing the economy from learning from its mistakes and we're allowing an individual and a small group of bankers to think they could allocate capital in the biggest economy

in the world in a productive way. it's, you know, get the jar of leaches out because we're talking about alchemy here. we truly are. >> all right, rick. you got anything left for the 11:00? this is my idea. i'm going to start stealing from that now. let you just go. >> oh, yeah. you know the 11:00 we're going to tack about bloomberg. mr. bloomberg wrote a good op-ed. boy, oh, boy, the administration's losing a lot of allies. >> as we dream in color, we have to trade in black and white. this continued easing is harming forry tire for retirees. there's more pain to come. we have to brace for that and get through the next couple of months until the june expiration or the if possible the twist on the twist, which i have dubbed

operation prel zetzel. >> i think we're just about there for the perfect mortgage rate. if the fed can move it just a little bit, the fed can get it to the perfect right. >> i saw 1.75 adjustable. >> we saw the to fix it there some way or another. i think that's the perfect one we should decide on. thank you, rick and jeff. >> coming up, he's a "squawk box" master and ready for a bull run. jeremy siegel is going to tell us why dow 17,000 is a possibility by the end of next year.

. all right, everybody. welcome back to "squawk box." he is the squawk market master who is betting on the bulls right now. they could lift the dow to brand new heights as far as he see things. jeremy siegel, you have some very interesting ideas about where you think the dow could be headed. you're talking 15,000, maybe even 17,000 by the end of 2013.

>> yeah, i think that's definitely possible. not only based on past evidence on returns after we've had bad five and ten-year periods, which of course we've had in the past but i think most persuasively because of valuation of the market. i think compared to bonds, it's one of the cheapest markets, stock markets, i've seen. >> when did you think things could take off. i know you're always optimistic about things but when did you think this is lining up for such a major jump? >> i was optimistic also last spring. we got derailed by the japanese earthquake and tsunami and the euro blowup. japan is recovering. euro is a problem, definitely, but the financial part of it has certainly been -- crisis has been put off by the ecb. that's primarily what the market was worried about.

so now you have left an extremely good earnings picture. i know earnings are slowing down but we don't need much growth because earnings so good compared to prices in this extremely low interest rate environment. i think it is the alternative that investors are going to turn to for income. >> to this point we have not seen -- what does it take to get them excited and convince them that even though they've been badly burned in the past, this is a good bet at this point? >> we need two things. you've had less volatility in the stock market. i think that has continue. but i think on the other side i think they're going to get worried about all the bond funds that they plowed their money into in the last if i have years, which have done very well until about two or weeks can stay anywhere near this low and

then if you don't have bonds to go to, where are you going to go? i think dividend paying stocks, value stocks, in fact the entire market is very attractive. >> for devils advocate, i'm with you, professor, because i got my 30% call for this year. i'm living in the 90s where we had three straight years of 30% plus. i want it to happen again because i'm still not rich. i'm prying we have a period like that. it's a double-edged said. so this is as good as it's ever going to be in terms of the pair son of the bond to the starkt yield. you don't think inflation is on the rise where bond yields go back to 10% or 12%? >> not moving.

i do think, by the way, when the fed starts tightening, there's going to be ripples in the market. when bernanke comes ond and says things are getting better, we may not be able to hold rates that low, you'll see a week of turmoil in the markets but history says that's not where the bull market ends. bull markets go on anywhere from one to two years to five years after the fed begins tightening. so we've got a long way to go before i worry about bonds competing with stocks at this point. >> professor, doug cass wrote a little column called "a question for professor siegel" and yet is this -- wouldn't a 15,000 plus dow jones require the revival of animal spirits driving valuation back to historical levels which would be a difficult feat given economic and geo political

economics in terms of the head winds of our country's fiscal imbalances? >> that's a good point. let me tell you why my answer is yes. we are below that long-term historical means. i think what's very important and that will give us the boost is the low interest rate. 15 is the long run pe ratio over all time but when you take if interest rates are not a double division, the average is actually 18 or 19. so we are really well below to low-to-moderate interest rate pe module. we can get to 15 or 16 even with the head winds in froont of us and still be below the ofaverag. the comparison is favorable. lowest relative to what's

available in fixed income and bonds, we are almost now at an all-time high spread. >> do you care who gets elected? do you care if capital gains and dividend taxes go up? do you care if mashrginal rateso up? do you care if we don't make our corporate rate more competitive? >> oh, yeah, i care about all those things. >> who is going to get elected? are you assuming obama is not going to get reelected? what if he gets reelected? does this still stand? >> my feeling is the worst case scenario is capital gains and dividend tax going to 20%. >> that's okay. >> and i can live with that. i'm not happy with it but i can live with that and i think that that is really the worst case scenario that investors face. >> what if we cut, cut, cut, cut, cut? what if we hit that $7 trillion cliff where physicfiscally and cut taxes and try to deal with

this deficit. that's not going to be easy. >> my feeling is after november we know who is president for the next four years, the congress knows where it's status is and i think they're going to get to work at that point. everybody thinks they're going to gain. there's no incentive to bargain right now. i think the american public and the politicians say, all right, now it's time for to us get together. we know what our strengths are, we know what our positions are. i'm more optimistic something is going to happen after the november elections. >> all right. professor siegel, thank you. >> thanks for having me. >> wow. i like optimists. do you feel optimistic? >> i do feel optimistic. >> you always worry. >> i am worried. you can be both. >> coming up, we're going to teak a look at the iconic retailer that gets 67% of its

revenue from north america. its stock is trading at an all-time high. for me, it's really about building this extraordinary community. american express is passionate about the same thing. they're one of those partners that i would really rely on whether it's finding new customers, or, a new location for my next restaurant. when we all come together, my restaurants, my partners, and the community amazing things happen. to me, that's the membership effect. and what it doesn't cover can cost you some money. that's why you should consider an aarp... medicare supplement insurance plan... insured by unitedhealthcare insurance company. all medicare supplement insurance plans can help pay... some of what medicare doesn't, so you could save... thousands of dollars in out-of-pocket expenses. call now for this free information kit and medicare guide. if you're turning 65 or you're already on medicare... you should know about this card --

it's the only one of its kind endorsed by aarp; see if it's right for you. all medicare supplement plans let you keep your own doctor, or hospital that accepts medicare. there are no networks and no referrals needed. help protect yourself from some of what medicare doesn't pay... and save up to thousands of dollars in potential... out-of-pocket expenses with an aarp... medicare supplement insurance plan... insured by unitedhealthcare insurance company. call this toll-free number on your screen now... for this free information kit, including this... medicare guide and customized rate quote.

welcome to the world leader in derivatives. welcome to superderivatives. welcome back to "squawk on

the street" welcome back to "squawk." courtney reagan joins us with more on it. courtney. >> reporter: hi, good morning to you, andrew. it's hard to think of a company more american than ralph loren. he's not a historic polo player but rather an aspirational man. he designs clothes so we can dress for if life we want. that strategy has catapulted that company to a $16 billion company. sitting just below all-time highs we hit two weeks ago. ralph lauren's retail sales were $2.10 billion. last month they raised its revenue forecast now expecting an increase of 20% for the current year. the company is making a push to move internationally. 60% of its revenue still comes from the united states and

canada. in the most cent quarter they doubled wholesale revenue in the u.s. and europe. what's more american than being the outfitter. he'll design the official opening ceremony and closing ceremony parade uniforms. he has successfully created brand extensions more affordable to the mass market. sold at a variety of retailers at varying formats from its black label to its club monaco stores the brand has evolved with time while remaining focused the classically iconic style, whether it's the paint, furniture, or even the fragrances, consumers and shareholders are finding tremendous value in this american classic. andrew? >> thanks so much. joe doesn't really know this. my suits without belt loops are ralph lauren. >> from the bronx.

>> from the bronx. >> he has had quite a life. >> quite a life. and he's got style without a belt. >> it's weird he has a dart named lauren lauren. it's like major major. quinn and melissa lee is with us now. >> why am i quinn and she's melissa lee. >> if you took a poll of anchor names, carl quinn would be one of them. >> and i assume you've heard of the "anchorman" sequel. >> yes. >> he signed on. that's my idol. i've got to say that. i'm not embarrassed to admit that. >> we're having a discussion this morning, guys, what's going to get talked about and what's going to drive trading. is it that spain is as its

lowest level or is it about best buy, trading cuts? >> it looks like at the end of the quarter we marked things up monday. we got ahead of ourselves. europe, is it on the back burner? all of it, like at where's the american consumer. earlier it was up. >> is this just a secular decline story. i think a lot of the questions are similar for these two companies in that investors are looking for the ceo to come out with a game plan and is it going to be enough in industries where it may be on a secular decline. for ray monday, it's the diminishing demand for its smartphones. >> a lot of calls on valuations, american express, others. >> overrun. they overran the price target so you can raise the price target again or it is up to much. i feel like the bears are saying it's up too much. well, it's up too much. the problem with the up too much

is you were negative, guys. so maybe you should just own that. i don't see how they were negative coming into the corner. >> that comes off the best pos since linkedin last year since may. we'll get more. we'll see you guys in a few minutes. >> cramer, imx was the best financial stock to buy. >> at the time they had great delinquen delinquencies. actually what they were doing was consolidating, becoming a much better marketing company. it was a great story. >> they got rid of the credit risks faster than just about anybody else among all the others. >> yes, they did. it was very telling they were able toll do that. >> what was the low? was it under 10? >> i think -- didn't it get to nine? >> it's been such a well run company and everyone decided for six months that it was poorly run. >> i seem to remember you talking, joe -- >> i remember -- that's why i

brought it up, yeah. i begged john bo bogo. you can't buy it at 9? no, no, no. that's what i remember. yeah. it was 9 bucks back then. >> wow. >> that would have been -- >> what a buy. >> what an opportunity. >> or by the s&p. i don't know. that would have worked too. >> the day you went long, i'll never forget, in january of '09. you said, i'm all in. i had that post-it note on my computer. >> the person who doesn't forget is me. did you hear segal on cracker? >> i know there's a lot of people who say he's bullish. he was very negative. i'm encouraged by what he says if only because we had that piece of research last week saying bonds aren't so great. he's saying bonds aren't so great. you know what? it makes a lot of sense as always. >> still got that halo.

like it. look at him. he's a saint. >> he is. >> he's like an angel. >> guys, we'll see you at the top of the hour. "squawk" will be right back. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.

all right. that does it for us