>> good morning. happy friday and welcome to "squawk box" here on cnbc. if you haven't gotten your mega millions tickets yet, this is the last day. and joe, i know you said there are a million things you would do instead. >> i won't. >> did you see the odds, though? 176 million to one that you you pick them, but it's a $540 million lottery. so if you bought every single alliteration, you would still come out on top. >> if we bought it together and you didn't, what happens if we came in on monday, how how feel? >> i think about odds a hot. and i just think about -- >> would you be comfortable? >> i told you you this, how many horrific debilitating awful diseases have much better odds. the odds are huge. one in a million of getting a horrible disease, but if you think you're going to get -- you

could walk outside and get hit by a satellite coming down. >> but if you have $176 million to put into it, and you get back -- the cash component, it's like -- >> you can't buy every iteration. do the math on -- >> standing in line at the 7-eleven? >> no, one out of 176 million. >> so on monday if we came in and we were the winners, who you would you feel? i'm not joking. you'd get the show yourself by the way. >> you know how you round things down? i say nobody has ever won the lottery. the the chances are so little that -- i know they show people. >> so you would really be okay with it? >> if you won? it's not going to happen. >> but about it did, how would you feel? >> i won't engage in ridiculous speculation like that. i really won't. >> you'd probably get to host the show show low every day forever. >> i bet you wouldn't win if it was one in ten.

>> darren are a vel srovell sur. you were more likely to win than getting eaten alive by a shark. which tells you how you should feel good -- >> the karma about all the horrific things that could happen to you with much better odds than that. >> i was just surprised when you look at some of the odds, it's not as bad as it might have been. not that i think you're going to win. but -- >> if you've ever looked -- there's something he called earned success and this all has to do with my whole philosophy on this country, how it's different from -- instead of where you try determine outcome like they do this europe, you don't appreciate money being dumped in your lap. someone who makes $50,000 that earns success, that earns that or someone makes 500,000 or 5 million, doesn't matter the happiness person gets from doing a job well done. >> i feel like you do have to do a job. >> that's why kids don't do well if you just leave them billions

of dollars. you have to leave them enough -- >> leave them enough to be comfortable, but not enough -- >> you have to be able to do something. >> where they can do something, but can't do nothing. exactly. but earned you can says -- i want to earn it. which is what we do here every day. >> i'd still be here on monday. >> me, too. >> i would not. >> today is the the last trading session of the quarter.bulls are firmly in the winning column. the dow is having its best start to the year since 1998. it's up 7.6%. the s&p is up almost 12%. and since 1928, the broader index has only seen double digit first quarter gains 11 time. of those 11 times, the s&p delivers an average double digit full year return of 16.6%.

those are pretty good odds for the rest of the year. as for the nasdaq which is so heavy with technology company, we are seeing the best quarter since 1991. it's up about 19% quarter to date. we do have economic tests for the bulls today, though. coming up at 8:30 eastern time, we get personal income and intending. at 9:45, the chicago pmi. and ten minutes later, consumer sentiment. finally, speaking of our economy, our news maker of the morning is richard fed president jeffrey lacker will be joining us automatict 8:00. you can't afford to miss it. >> and also a couple big tech stories. let's begin with research in motion. not a good situation. company's q4 results missing street estimates as it reported the first slump in blackberry shipments for a holiday quarter since 2006. r.i.m.'s new ceo also announcing

a review of strategic opportunities. they're saying partnerships to leverage its assets, but verse when they talk about strategic opportunities, it also means that they are not ruling out an eventual all sale of the company. the question is who would buy the company. could nokia actually do something with the company. it is an absolute training wreck i'm sorry to say. >> $7 billion market cap. >> and a handful of senior executives including former ceo and current director will be departing the company. shares of r.i.m. dropping as much as 9% after the bell before recovering some of his losses. when mr. heins came on the program, you you knew it was not going to work. it was as if he was being put into this job as a muppet, if i

was goldman sachs, bad joke. >> remember it was a situation where he said he thought their biggest problem was a marketing. he said they're still looking to hire a new chief marketing officer and they think the serpg is going very well, but it's two months later and all kinds of serious changes have to be made. >> we all know that's not the problem. my whole interest in it is the notion that the canadian government wouldn't allow a sale because it's still national pride. even at 13 and -- i love cuove and they're our friend, but i'm sorry about that pipeline. that is your real -- the greatest resource that country has, we're in the allowed to bring it down here. you can send to china, but about this is all you got -- >> the thing that concerned me the most is my blackberry still going to work a year from now.

>> they're going after like the public and now they'll focus back on corporate. >> but the problem was corporations had not been buying the apple stuff before because they were worried about security measures. now that that's tightened up, employees saying we want to bai these things. >> having said that, if i remember correctly, david einhorn and a number of other hedge if you said managers made big bets that it will come back. >> i've tried the iphone and my problem is i like the keyboard that i get on my blackberry. i write columns on my blackberry. i don't want a touch screen. >> anywhere he bought it, he would say he's probably down because the low is 12.45, headed to 13.20. so would he have had to bottom it out. does it go up from here? i don't know. elsewhere, apple speaking of apple and its main manufacturing partner in china are agreeing to set new standards for work conditions there.

fox con will hire tens of thousands of new workerses and eliminate illegal overtime. they said as long as 60 hours which the average in this country, a lot of people work 60 hours. >> 49 hours is the number that i -- >> i saw some work as long as 60. now it's 49? >> the chinese law says that it should be 49. >> a lot of people in this country work a lot more than 60. i think that someone in europe got a look at 49 and said that is cruel and unusual. because if you're over 35, i think you can -- >> but these jobs, the most interesting part about this audit that they is these jobs at the end of the day, he said of every single day, these workers were saying they were in physical pain. from doing the exact same thing over and over. >> including 60 hour workweeks. >> and of course living on he's do he's dorms on top of each other. i read 9 hours 49 hours in the k

times." >> oh, you you read it in the "times." which had done some pretty interesting coverage on this that actually spurred some of these audits. >> so it's in the digging ditches, is it? >> no. the problem is that these people are standing on their feet, legitimately for, you know, 10, 12 hours at a shot. and they're putting these things together. will this ipad that i have here is part of it. and the real question then becomes how much more am i going to be paying for it in the future. this isn't just about apple. this is a new one, yeah. i got it while you were out. we did a whole little thing where i talked -- >> does it have the longer battery sf oh, oh, my god. >> sorry. it's the cover. it's magnetic. >> i thought it's just like me to break -- how is the resolution? >> fantastic. >> does it have siri? >> it has what they call rakauc

transcription service. >> i used to sit there running a lathe for nine hours and the lubricant was spitting out and ied for acne and -- >> you're serious. >> i am serious. a big rubber apron and i would that hallucinate finally. when the big thing would come down, it would pull your hands back. but, yeah, it's hard to isn't up and work. put something on there for me. can i see mad men or something? no, i got a better idea. get mad money on there. >> we could get mad money on there. >> see how i'm constantly thinking about synergy? >> i'll work on it for you. >> in the meantime, president obama has to determine today whether there's going to be enough oil in the world market to allow countries to cut imports from iran. analysts expect the president to say, yes, there is enough supply. a sanctions law the president signed in december requires him

to decide by march 30th whether price and supply are sufficient to allow consumers to significantly cut purchases from iran. he'll then be required to rule on the same question every six months from now. after june 28, that law lets the president sanction foreign banks that carry out oil related transaction with iran central bank, effectively cutting them off from the u.s. financial system. >> we're also watching natural gas prices today, they stumbled to a ten-year low yesterday following a surprise jump in u.s. supplies. there he's enough natural gas and storage to supply all the country's immediates for more than a month. analysts say storage facilities across the u.s. will be pushed close to capacity in coming months and we'll talk all things energy this morning with shell oil president. he'll join us live at 7:40 eastern time. >> the interesting thing about that is shell has decided it's going to be at the low end of what it's looking for in terms of exploration and drilling with some of the natural gas prices because of that price. so we'll get a chance to talk to

him more about it and see what else it needs. >> cool picture on the cover of the journal about -- oh, yeah in, overseas new, spain new conservative government will unveil a long a wait 2012 budget today expected to include billions in deficit reduction measures. the country struggling to fend off fears thatle it be the next eurozone country to need a bailout and this is what the pictures on the journal, a lady looks like that's her shop. if you get a chance to check it out. and her barcelona shop was -- the windows shattered and she looks horrified. tens of thousands of spaniards protested the austerity measures this week. yesterday a general strike almost paralyzed heavy industry. and in denmark, euro finance chiefs agreeing to almost double the size of bailout funds. germany continues to favor a small increase. according to a draft statement by the ministers, in case of an emergency, the eurozone could raise the combined fire power of its two bailout funds to 40

billion euros. i'm sorry, 940 billion euros from 500 right now. time for the global markets report. ross westgate standing by in london. even with that you will rall th managed a slight gain here. >> yeah, we had three days of fairly significant losses and right now as you can see, we're weight the to the up side nearly 9:1 advances outpayi papa poutp decliners. losses of around 1%, #.7% for the cac and dax over the last couple of days. ftse 100 right now just up 35 points. for the quarter, up nearly 3.5%, but we were up nearly 6% aing .

take a look at the mib, up 3% for the year. up 1.17% here. we'll be focusing on the finance ministers meeting. the question is actually whatever the eventual size of the bailout if you safund, whet very much to one offer allow to run to 2013, whatever the actual number is, does it make actually a whole lot of difference because the markets of course have decided post ltro that was the big news. no systemic financial collapse has been put off the table. and whatever, when it's 940, 800 billion, whatever, those punds wouldn't be big enough anyway for any collapse in confidence in either spain or italy, so the key thing is to keep eyes really on yields in spain and italy. a little higher than we have been. these will probably be the best indicators for investment sentiment, but it looks like we'll finish the quarter on a

positive note. coming up, private equity industry's most dangerous enemy. you'll be surprised it's not -- who or whom? i don't know. and newsmakers turn to squawk first every morning. you know what i mean. but next week, we may outdo ourselves. a special series of newsmakers that you'll only see here, including david -- no, mark faber, bob doll, richard fisher, donald trump, trump tuesday, senator marco rubio, david bon derman, michael eisner and richard branson who needs to come in here to sign my thing. stay tuned. >> and we have a fewer who has everybody but -- oh, my gosh, jack was here and i didn't have him sign. >> busy bring still ahead.

when fed presidents talk, they talk to squawk. today at 8:00, a special extended interview with richmond fed president jeffrey lacker. and monday, we'll talk to dallas fed president richard fish ir. er

do you have coming dow coming back after two days of losses. up 54 points above fair value. in the headlines, fda says heart safety studies should be required to obesity drugs even if clinical trials to not initially show evidence of increased heart risk. that decision could add a new hurdle to the drug's approval. right now, let's get you your weekend forecast. scott williams is standing by and he joins us from the weather channel. scott, what are we expecting for today and this weekend? >> good morning, everyone. we are expecting some rain and snow to eventually move into workers, the firm themselves pay themselves a dividend. so doesn't come out of a company's earnings, it actually comes out of putting extra liability on the company. and to me, it's improper and kind of immoral. >> and i'll take that. my question then becomes this new obama tax proposal does what to those dividends? >> what the new tax proposal does in prood strokes, it's favoring equity over debt and one of the things it would do is to reduce the deduction on corporate interest payments about so that right now you get 100% deduction if you're a company on the interest payments you pay on your debt. the obama proposal would reduce that, they haven't said by how much, but by doing so in effect it would discourage the recaps because it would be much harder for the private equity firms to justify. >> but i thought the premise of

the piece was that private equity wasn't its own worst enemy, that it wasn't the president. in a way, you could argue if you were a private equity executive that the plan itself is bad for them. and not just bad for private equity executives, but bad for the pension funds that fend on this money. >> let me say this. the pension funds that rely on this money probably put about maybe 10% on average into private equity. cha that means the vast majority of their investments are in public markets or public equities for the most part. and what they want is sustained businesses once the private equity firms tonight own them. whether they produce the them publ brought them or sold them. dividend recaps weaken he's companies, which hurt wils the of the public pension. >> that's an interesting argument, that the longer term impact of these dividends is impacting the overall markets.

once you're out of the company, if you have the money in your back pocket already, you should walk away and say it worked out for me even if the company doesn't do well later. and i'm not going to argue the moral issue because i'm probably closer with you than i am on the other side of this. >> that's part of the argument here. and in fact it's interesting. i was at a big private equity conference in berlin last month and you heard a lot of these pension fund managers say we're obviously looking at the private equity fund's track record. but we're also taking a look at what happened to those companies after the firm no longer owned them. >> how big an issue does this become in the election? >> in the election, not at all. i don't think most people can define dividend recaps and even though obama and treasury put out in framework, i don't think anyone believes it will actually pass. >> and just to define it, romney, a big offender or not? >> when he was at bain, yeah. bain was a one of the poster children for recaps. a lot of people see what happened at bain and they don't

get it. how did bain buy a company, the company goes bankrupt and bain made money. the idea should be if you buy a company and it fail, you lose money on it, but bain did it via dividend recaps. >> heads you win, tails you win argument. but last piece, i'm just trying to understand is bain one of the worst offenders or not? my thought was that they were not. >> they're not anymore. they were back during romney's day, they were kind of one of the firms that did the most of these sort of dividend recaps. >> fair enough. dan, we'll leave it there. thanks for coming in so early this morning. >> thank you. coming up, the richest of the rich. most powerful of the powerful hedge fund managers with the midas touch. ranking of the top 25 earnings well-known names on the list. and later, an industry under fire on main street. what does wall street make of big oil right now? the president of shell u.s. makes his case at 7:40 eastern.

monday on "squawk box," the full line up of newsmakers to kick off the second quarter. we'll talk global growth with the real dr. doom, mark fan ber. we'll find out where black rock is investing trillions. and we'll go inside the reserve with richard fisher. don't miss squawk box. so, how was school today ? i have to be a tree in the school play. good. you like trees. well, i like climbing them, but i've never been one. good point. ( captain ) this is your captain speaking. annie gets to be the princess. oh... but she has to kiss a boy. and he's dressed up like a big green frog ! ewww.

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welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. making headlines, congress averting a weekend shut down of thousands of transportation construction projects. lawmakers passed the stop gap funding bill that gives a 90 day funding extension for road, bridge and rail construction projects. this buys time for john boehner to resolve republican differences over long term financing for that transportation bill. >> and mitt romney, rick santorum and newt gingrich will all be in wisconsin today. romney looks poised to win. he's up by eight points in the latest poll. today house budget chair paul ryan is expected to endorse

romney. no surprise. signaling conservatives are lining up behind him. wisconsin has 42 delegates at stake and it is winner take all. >> and you heard president george h.w. bush gave his -- >> kenny rogers got to know when to hold and when it fold and it's time for the other guys to fold is what he said. all the conjecture just shows you this could hurt romney, because more of the establishment republicans are now joining. but that's such -- when who could come up with that take on that, that having george h.w. bush endorse you could be a negative. >> newt gingrich. >> right. newt or left, or the media. >> we've been talking about hedge funds. would he have been talking ab t we've been talking about the pr

prchlg answ performance of the dow. today the rankings of the 25 top earn earners. joining us to talk more about the results is michael p about e p peltz. we look back at what happened last year and it was a pretty good year for investor, but hedge funds, not such a great year. >> overall they were down depending on the index 2%, 5%. and hedge funds are supposed to deliver positive returns. >> no matter what. >> regardless of the direction of the market. that's really the mandate. that's why investors go to them for protection. >> so as a result, you saw all kinds of shake ups in this list of the top 25 mcers. >> yeah, if you go back historically over the 11 years we've been doing this, it's the biggest shake up, 15 managers from the previous year fell off lot of the big names are all

gone. at least they were last year. and so we've got 15 new names, eight people who appear for the first time. >> and a new person on top. >> yes. ray galo was bullish and very -- bullish on treasuries, bearish on the economy. and treasuries was the place to be in 2011. >> as a result, bridge water associates came out well in this entire situation. and two more people from original barbridge water in the top 25? >> right. his top two attendants also matt list. it's pretty impressive. ? the last two years, he's brought home about $7 billion. and he's also looking to actually give away a bunch of that money. >> i'm curious -- ray dalia will

actually make my argument against me which will is size the enemy. meaning some of these funds, john paulson and other, scale and size became so big, and i just wonder whether it's not just the bet themselves, but the fact they have to put so much money to work that it doesn't work the way it it used to. >> i would agree. in why nogeneral, size is the e. bridge water is an exception because they're playing globally across hundreds of markets and they have a quantitative approach to investing that enables them to put a large amount of assets to work. >> so what happens to the john paulsons of the world? was he a flash in the pan? david tepper, are these names that you imagine come back on your list in the next year or two? >> definitely. if you look at both paulson and tepper, one of the problems they had, they were both a little too positive on financials making a

comeback. so last year it hurt both tepper and paulson. this year it's clearly going to be helping. >> they were just too early on the calls? >> way too early on those calls. >> is there one name that's been consistent on your last for the past couple years? >> if you look over the history of the list, jim simons is the within manager who has been on all 11 times. >> you didn't even have to think. he's like the -- >> he's a math genius. and he's also -- they're looking at lots of fundamentals. but they're trying to analyze them to see -- looking for an anomalies and mispricings. >> short term, too? >> short term, medium term, some longer term. the's really impressive. >> carl icahn is number two on the list. where is he traditionally

ranked? >> he's generally only last few years has he actually been a hedge fund manager. so in the past he hasn't been ranked that highly. this year he comes in at number two. he made $2.5 billion which is pretty impressive. returns up over 30% last year. >> he's been scaling that fund down. >> he has. and actually this will probably be the last year he makes the e list because now money. >> they want to get away from the regulations. >> george sor roos the same thi. it's family money. it's function of regulation. >> carl icahn? >> i think he prefers to invest his own money. why should he have to -- as an activist investor, he's making bets that he's not sure how

quickly they'll play out. he doesn't really want to worry about his investors coming back it redeem. could throw off the timing. >> we've had dal dalio on with a strong conversation and there was a time that he had a recent to come because there was that piece that entity maintimated b water was cold or something. is there any reason why these guys would want to come on after having a great year without any negative are press? >> will you place a call? >> absolutely. and we had dan mccormick on from dallas. but one other interesting piece, as a part of the new jobs bill, hedge funds can advertise and will be supposedly much more open or could be more open, so they can't use this as cover. so often journalists call a hedge fund, they say we can't talk to you because we're not

allowed to. how do you see that changing the landscape? >> i've been covering hedge funds now since the mid-90s. and if you look at just the last five years how much more open hedge fund managers are about talking with the press, coming on "squawk box" and doing conferences, the reason that they don't want to talk is less about the marketing. they've always sort of hidden behind the restrictions against marketing. it's really more about protecting their investment. and that's really what they want to do. >> they might actually be right unlike most sell siders we have on. >> do you want them marketing? do you think they should be out there marketing themselves and does that -- >> i never understood why it was. >> the boiler room market. >> i e seat flip side the flip .

michael, thank you very much for coming in. we should mention that the next cnbc ir delivering al pa conference is coming up on july 18th. you'll hear a lot more about it. >> if you have comments, questions about anything you see on squawk, squawk@cnbc.com. coming up, banking on the the big deal. why wall street hopes the tide might be turning. plus the halls of congress have nothing on the squawk board room. congressman david schweikert is taking issue with his own government's plan. next week on "squawk box," an icon, a rebel, a space traveler. the one and only sir richard branson. he's landing on "squawk box" next wednesday. se control. introducing gold choice.

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i-banking fees down 24% dragged done by steep decline in m&a, but the ipo pipeline building up quickly. matthew tool is joining us. so building up, but the ipo offerings were down how much compared to the first quarter? >> globally 65%. proceeds raised. although we're seeing pretty healthy volume of deals by number of deals. so if you look at the actual number of rtransactions coming, it's looking pretty healthy. last year we saw a huge buy back which changed the numb as bit,

so the 6 a% is misleading. we're see building a 25% increase in the number of ipos coming globally. >> how do the numbers match up to the five years before that? >> they're still extremely low. pretty muted. the pipeline has been full for almost two years now on the ipo side, lots of tech, energy, financial services. despite the high profile names we've seen come lieu, it's still pretty paltry. >> if we had had more, would we see a difference in the jobless rate? >> i think from a venture capital perspective certainly. they he see themselv they see themselves creating jobs. so that's certainly part of the overall dynamic of the market is getting though companies to come to market and raise capital to

either higher expand or grow. >> all right. so in terms of i believe investment banking fees, that see seems like a horrific number. >> we're back to 2009 levels. it's the slowest quarter dragged buy can done by a lack of m&a. m&a down 34% from lasthe transa strategic, but knonot tranc transformational m&a. 30% -- >> do you think they've right sized their groups? the bankers that i talk to, i don't think they expected m&a activity to have fallen off the cliff that it did. >> i think it's starting to feel difference in the last couple of weeks. >> different as in good or bad?

>> different that is good. a lot more activity. two weeks ago we were going to be the lowest year for m&a since 2003 and now we're up to 2009, 2010. >> what kind of staffing levels do we have? 2009 staffing levels or 2003 staffing levels? >> that's a great question. a lot of people have moved around. a lot of deal makers have moved. some of the boutique investment banks or other firms. staffing levels, i think it's hard to say. i think last year was the second half dropping off, i think this year will be kind of you powered by the kind of growth in the ipo markets, the debt capital markets which are growing tremendously and releasing a lot. second half of the year i think we'll see the m&a activity pick up. so i wouldn't make any decisions on hiring until then. >> thanks for coming in today. >> all right. when we come back, why one republican congressman says his party's budget doesn't go far

enough. david schweitkert joining us onset right after this. next week interviews with the newsmakerses you can't afford to miss. global markets expert mark faber, dallas fed president richard fisher, donald trump, florida senator marco rubio, a rare tv interview with texas pa sifbs david bonderman. michael eisner and a lot more. turn into "squawk box" next week for the news makers that make headlines. we'll be right back. 

deep spending cuts, that's what's needed to get it under control. the cbo says under their current baseline, it takes a long time to balance it. weep get the debt completely paid off in this if we get faster economic growth which would result in tax reform. >> that was congressman ryan unveiling his budget proposal. congressman schweitkert joins us on set. you came out with a proposal that would get rid of the debt

even faster. >> we refer to it as the republican study committee budget. it was five years. it's tough in many categories the ryan budget has siem mazingly good kolcy in it. but if you're like i am where you're really, really worried about a debt crisis coming at you very quick, how do you convince the market and our citizens and investors that we're take this on and taking it on quickly. >> when this was looked at last year as a plan and it was going to get the votes to pass, the democrats were not going to vote it in. >> those are the parliamentary games you get. one of my great joys we're finding this year is the american public and even some folks in the back are

whispering, we admit we have a debt crisis, $1.4 trillion more in debt that we were a year ago. then you get the games on the floor if we vote this we're, we'll use the budget as a political wedge. >> is yours seen as the one that's too unpalatable, if we put your plan out there, paul ryan's looks better? >> it's a lot more than my plan. we had 100 members on the conservative side vote for it, it's the republican city committee budget. >> what are the best parts? >> i think it start to tell the truth if you really care about something like medicare and want to save it, you have to step up and bend the cost curve because your government is very, very, very quickly becoming a health insurer with a shrinking lawyer. >> were you a lawyer?

>> finance guy. >> i'm proud to be part of the house of representatives that is has overturned many facets of this terrible law and will keep working to finish the job so obamacare never has the chance to see its third anniversary. those are yours -- very nasty. >> actually, that's me being polite up. >> watch what happened this week. i'm looking at a piece from kimberly strauss in the journal today that is taking issue with the eores, from winnie the pooh or something? that if the supreme court strikes down obamacare, i don't know what the approval rating is for obamacare, but republicans, buying into the notion that if is the supreme court does it, it's going to energize the country to rise up and say, please, let us keep obamacare.

>> that's the classic debate that it's good politics. some of us care a lot more about what does it do to sustainable future economic growth. you know, what sort of drag do we have? you just had a guest talking about ipos and why aren't we investing and growing. how do you do it in this sort of regulatory environment? if you're really concerned about the debt, you don't stack a command and control economy on top of it. >>a lot of republicans wand to retake the white house repeal obamacare and it was still going to be a tough road to hoe at that point. you'd need 60 votes and a different president. here they'd get what they wanted all along and now what are they worried about? that's what they wanted in the first place, that's why they wanted to get rid of it in the first place. >> when you look what the this administration has done and you step back and move away from the personalities of we may personally like the president

but let's look at the policy, whether it be the way dodd-frank is being implemented, mlrw policies, go up and down the food chain policy wise there,'s a lot to be worried. >> there's a michael bloomberg op-ed. he said the democrats, the president planes is a economic strategy. that's on your side. he said the republican candidates have unveiled plans that are just as divorced from reality, they'll make the bush tax cuts permanent and will eliminate the deficit. if you believe that, we'll have a bridge to sell you. >> actually, from what i can get in tolls, i might buy a bridge. look, it's politics. but you have to step up and do

some of the math. the other night we actually did the calculations on we'll call it the buffett rule and how many democrats talk about about things like we need to do that buffett rule. we borrow 3.5 billion every day. you do the calculation in a day, borrow 3.5 billion in a day, buffett rule will pay for -- >> warren buffett has even said that. >> but that's the point. at some point i've come to the realization in washington, at least at my level in the house, you have conservative, liberals, moderates and democrats but what you really have is those that do math and those that live in math fantasy. >> i which we could expound on this conversation. but you'll come back? >> i'd love to. >> congressman, thank you very much. >> coming up, investing in america. we've got the man of the hour.

today's guesthouse is here.

. shell shocked over prices at the pump. shell's president goes behind octane prices and tells us if $5 a gallon prices are in the future? >> and investing in america. he's one of the best examples of the nation's jet setting spirit. the second hour of "squawk box" takes off right now.

good morning, everybody. welcome back to the "j oh, i mean "squawk box" on cnbc. we have a handful of analysts who have cut their price targets for research in motion. the results were short of expectations. blackberry says it will no longer issue financial forecasts. rim is beginning a strategic overall. that stock is done 75% over the last year. jetblue is out with a statement this morning thanking the public forall of well weshs for the crew of flight 191, the flight where the captain had to be restrained by passengers and becoming incoherent and

irrational. jetblue also says the crew is declining all media opportunities. >> a key executive is departing. ian ashby will be stepping down on july 1st, just a week after he trig aerd slide in bhp stock price with comments that demand in china is dropping. right now the dout futures look like they're indicated to open higher. dow is up 53 points above fair value. >> to investing in the auto industry now but when a twist, on the dealer's perspective and not the manufacturer's. and we're at prestige bmw in new jersey to explain.

>> well, the big three are the big three. if they continue to right size their numbers to dealerships, the foreign brands have expan d expanded. foreign names increased by 156 with 40 new dealerships. this is why it's investing in america. hyundai is involve for 61,000 jobs in the states. that's not counting workers at plants and r & d facilities. vw has struggled in the u.s. a little bit. they've added 7. bmw has been investing billions dating back to 2007 and the anymore that stepped up in the last year was mercedes investing

$1.4 billion in 300 dealerships nation wide. if you're curious of the status of domestic automakers, they're not expanding at all. they're trying to make the ones they have more profitable. chrysler is an example. in '08 49% of their dealers were profitable. last year it was 86%. they're doing a good job with a lot last dealers. z >> joining us now is kenny d

dichter. firks you saw gabe kaplin this week? >> we had dinner. doug allen a free man, he's got the "entourage" movie, of which all three of you are going have a cameo. >> i've had promises from doug on "entourage" before. we're really excited about the project, the success of "hunger games," "21 jump street" tells me that high school crowd is out there. >> i had a midnight meeting with john travolta. i don't care if he's an executive producer, be a key

grip but he's excited about just what we're doing. doug has a role for mr. woodman, the principal. he wants to write it for jack nicholson. if we can get that done, i think everything else might take care of itself. >> anybody talk to jack steeple yet? >> not yet but maybe if we threw in some jet hours, jack might be there. >> what are you hearing about the leasing business at this point? >> net jet's business is firm. >> firm? back to where it was? >> i wouldn't say it back to '07 levels. the corporate market is coming back. very exciting. the global, which is coming, first time we've been in business with bombardier, i love what they're doing with the challenger series, the embraer product is come on, too, the platinum, the entry level. i think that jet will be there a long time. >> one of your competitor isn't me 15 hours for $66,000 and i

started laughing. >> there's dinner, steaks and -- >> i'm laughing because they're sending this to me. if you get to 15 hours, does the 66,000 cover the actual hours when you go somewhere? >> i think there's netjets and everybody else. >> i still think you have to pay for gas pup can go to california twice maybe. see, people can't -- you need to save the money. you got to fly commercial. that is a different level. just get a marquis jet card. >> what is the average per hour -- what do you think the average either income or net would worth is of a marquis jet cargo? >> i think you have to have $10 million of net worth and several million of w-2 money just to play in the space. >> and what number --

>> you're saying that's 1% of -- >> and what's the number on being a netjet owner? >> i would say you probably need a little more net worth than that,probably want to start at 20 or 30 to consider owning it. netjet's big opportunity is in the corporate space. if you want the balance sheets tightened up, you don't need five airplanes. you can have one or two. >> a lot of companies have g gotten rid of their planes because of the optics of it. >> the anonymity is the biggest option in the world for flying netjets. >> if you're a fractional owner, it shows up -- >> i think joe's talking about being tracked around on internet systems. >> have you done that, look a gum shoe, a chinatown type of --

back in the day -- >> back in the day when you could track tail numbers for mergers. >> oh, for mergers. i shouldn't tell you this. i had a great source years ago, peterborough airport, when people were coming to town, i'd get a phone call. a lot of false positives, though. >> do you remember when sir lawrence wildman was coming in and looking at endicott steel? >> we could make a movie with andrew. >> did you have a motorcycle and drive around and follow these people? >> we would make a movie with andrew plane spotting. >> i'm going to try and be nice but what is the stuff you brought in? i'm not drinking that green stuff. >> we could do the avian.

>> mother earth? >> these are the ones that are good for you, right? >> this is company called juice press. howard's following mark and i into the space. >> he's following you or you're following him? >> howard's following us. >> you have to drink this on camera. how is it, andrew? >> fresh. it's fresh. >> this is very good for you. you'll live a long life. there's natural sugar but nothing added. juice press is a business that was founded -- becky, you're going to love it. we have four retail stores -- >> might be better. >> that one is highly caloric. >> mark texeira, in a firm we called wheels up, we were offered $500,000 by a national

shipping company that wanted to buy the url of wheelsup. >> what is it? >> it's an investment firm, small, early stage, we made two investments so far. first is in juice press. we're firm believers. >> what's the red stuff? >> the red stuff is water mellon. >> this is part of a juice cleanse. >> no, this can be part of a juice cleanse. >> six juices $54. >> am i supposed to do six juices a day? >> can you do a cleanse. >> you have done one? >> i'm done a couple of them. obviously i'm still a work in process. i'm enjoying the juice. it not what you eat, it what you don't eat. if you eat this stuff, it meal replacement, it's incredibly healthy. >> i'm telling you, you could get back to college shape. >> they're charging $10.99 a

bottle. >> have you gone to the deli and bought a turkey sandwich, it's about $10.99. >> i'm cheap. >> can you make the green stuff red? >> this i might try. >> you'd put artificial coloring in that? >> i would, just to get it down, i think. >> we're really excited about this investment. >> sorry. >> we're oversubscribed on series a on this and we're really, really excited about it. >> what's in the tiny bottles? >> they're a volcano and ginger fire ball. it's a great way to start your morning. >> you miss this with vodka? >> off camera i'm going to try one. maybe. >> we got to run. still to come, he's the broker to many of the world's most influential brokers.

and a look at whether microsoft can succeed in the tablet nearby. and we go behind the scenes with shell oil's president after this. >> next week, nt views with the newsmakers you can't afford to mix -- miss. a rare tv interview with texas pacific's david bonderman. former disney ceo michael eisner and a lot more. tune in next week for the newsmakers that make headlines. we'll be right back. to our supp. 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. ♪ 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. ♪

checking with futures right now, after a pretty good day yesterday they didn'tnd positive at all given what happened in europe. two clean technical companies plan to go public today, solar inverter company, enphase energy

and luca technologies is expected to price shares later in the day. we'll let you know what that price is. >> the bulls charging ahead to the end of the quarter. the dow on track for its best start of the year since 1998. >> thanks for coming in. >> thanks for having me. >> i keep wondering if you're an investors whether you missed the train. the train left the station and you should have got on a couple months ago when joe was telling people to do it. >> it's like 11% -- >> for those investors that are with you in cash, what are you telling them? >> the problem is a lot of investors, sentiment is a little mixed and a lot of investors seem to be chasing performance. they missed the train leaving the station and a snowball feblt where as stocks go up, investors

are chasing. some have been al kating a lot of asset to ek quits -- >> what do you tell the chasers to do? >> everyone is looking for a dip in the market. every time you get a dip in the market, there's enormous demand and you don't get the dip you're looking for. it's been the kind of environment where you have to buy every single dip. >> jerry siegel, you heard him yesterday. >> he thinks we're going to 17,000. >> having lived through a dow at 800, every thousand points was a top, we were talking 2,000, 3,000, 4,000 -- don't make me go all the way up. >> we're going to get earnings in the next two weeks. >> i think investors are looking ahead to earnings as continued positive momentum.

>> what's the chance of disappointment? that's the big question, right? >> low. >> low? >> seems like corporate balance sheets are strong, you have a low interest rate environment and it seems like the trend is your friend right now. the path of least resistance is on the up side. >> multiples still outrageous and there are still 4% yielders. >> where are you going to put your moneys? you have to put your money in equities. >> and rates are going to double. >> until interest rates move up, equities -- >> where are you on high yield bonds? >> safe triple a stuff. >> safe triple a? >> stay away from junk bond, right? >> i have my favorite position, aia, hong kong based, came off

aig. it's got more brand recognition than coca-cola in thailand and just an incredible sales force. you know me, i like front end businesses. 200,000 people selling the insurance product that aia is out there with. with an emerging and growing middle class, it's not trading to -- >> do you have a numero uno? >> i don't pick stocks. >> merck is still over 4%. >> there's a lot of value it seems. >> it seems if you got 2% there -- and dividends can increase. i don't know of any treasury bonds that start raising their coupon, do they? they raise their coupons once

they're issued? >> what does btig stand for? >> bass and trading -- >> they have something coming up that's amazing, the btig charity. tell everyone about that. >> we started donates our trading commissions to children's charities. it's really snowballed. we've raised about $20 million in neen years. april 19th we have a bunch of celebrities, giants. >> you have eli manning, matt dylan. >> if any of these athletes or celebrities were going to be a trader on your desk, who would be the most successful one? >> joe namath.

>> we'll take that. thanks for coming in this morning. >> when we come back, a squawk newsmaker with market insight. jeffrey lacquer will give us his insights on the economy. in less than an hour. this is an interview you can't afford to miss. and a quick shout out to graduates student from the fairly dickerson university masters program. we'll be right back. time for today's aflac trivia question. who became ambassador to ghana in 1974?

who became ambassador to ghana in 1974? the answer? shirley temple black. >> we're back. among the stories making headlines this friday among, u.s. drug advisers want the fda

to require companies to conduct heart safety study for new obesity drugs. if the fda goes along with the recommendation, it will add a new hurdle to pharmaceutical companies. >> if you have any comments or questions about anything you see here on squawk, go ahead and e-mail us. when we come back, rick will tell us whether the company can compete against apple and amazon. carfirmation. only hertz gives you a carfirmation. hey, this is challenger.

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on this friday morning. among the stories we're

following this morning, spain set to unveil significant budget cuts this morning as it tries to fulfill demands by the eu for austerity but it's causing fear about causing a recession. this after a strike disrupted business and brought thousands of protesters into the street. and 2011 wasn't a great year for hedge fund managers. ar magazine saying ray dalyo earned the most of hedge fund managers at nearly $4 billion and followed by krarl icahn. john paulson fell off the list this year entirely. >> microsoft is hoping its upcoming windows 8 will help it make inroads in the tablet market. that's every's question about whether it can really work. rick shirlen joins us.

if they mess this up, it's not good, right? >> pc is not where the growth is. microsoft has not been well positioned. there's windows 8 that will position them better -- >> it operates on touch screen? >> yeah, it's touch screen. apple will continue to dominate the tablet market. microsoft might get like 5% of the market in that sector. the other half of the consumer market has value associated with office and i don't think you'll see office on the ipad. and there will be a new device called the ultra book touch, your really thing mac book era-like notebook. it will be able to pull a screen

off, use it as your tablet, handwriting recognition, save the files up to the cloud, go back to the smart, pull the same files off, put the screen back on, it's your full featured notebook. it gives you the ability to consume media, but it also gives you the ability to produce content, which for anyone that works with office extensively, it gives you both environments, a tablet and notebook in one. that's the market that is really good for microsoft. it's not like microsoft and apple only one wins, i think they segment the marker. if you're a consumer that doesn't need office, you'll continue to buy the ipad. >> there was a rumor that microsoft would put office as an app -- >> the day before we said don't hold your breath for that and the next day there's a picture of it on the ipad. but, no, not going to happen, i don't think. >> clearly for microsoft to sell

a tablet, you're going to have an edge. >> if they would to offer that, would it be that we just can't beat them? >> microsoft is not going to put itunes on and apple is not going to put microsoft. >> where are you on microsoft? 32? >> it's a buy. >> it hasn't been at 32. >> i mean, this could break out here. this would be a multi, multi break out. >> it probably need as little while for people to think about this. you have a rich flow on products coming up later in the year, it's not just windows, it's the new office. >> have you seen windows 8? >> i have it on my laptop. >> is it life changing? did i want to run out and get it like with the ipad? >> for using office, the answer

is no, it's kind of the same but it positions them in the touch market. so you begin to use angry birds, cut the rope just as games but soon all the software and that's where all the growth is in the market is in touch. it's just positions microsoft where the growth is. again, i don't think it's so much against apple in a pure consumer market. it's for those of us in the enterprise and also for those of us on the consumer side. it really positions them where the growth is, not in the path. it's not about where they've been. it's kind of where they need to go going forward. >> microsoft is not going to get in the hardware business and start making in? >> no. look for hp and del and all these companies to launch the ultra book touch devices. that i am have tablets but the vast majority of the market will be the ultra touch -- >> do you think microsoft will

try to buy them? >> i think microsoft has enough issues without inheriting rims issues. if you were to do a merger model, it's probably about 5% accreted to do the deal. enterprise value is about $5.4 billion. microsoft generates that much cash flow in a quarter. can you do it but do you want to inherit all those issues. >> what about sherlund mining? i'd like to know if you'd like a partner up there in fair banks. rick is in the gold business. you were up there yourself like -- did you look like the profit -- >> i grew up in california. >> did you grow a beard? do you have -- >> i almost look the part. >> you wouldn't recognize him.

>> it's called plaster mining, not hard rock mining. >> i'd like to start the hard rock mining division. >> that's a lot of capital. >> the other thing with microsoft, these forays into -- they've tried everything. technology hasn't left them behind obviously, the revenue is huge. any other future health? xbox, how's that? >> that's worked out pretty well for them. >> we love it. i have my old x box to play the game. we have two x-boxes. >> if you were to grade steve, what grade would you give him? >> i think steve is a very good mathematical guy. he's a very good drill sergeant. i don't think he's done a good job of innovating and i don't think he's done a good job of keeping a lot of his key people. >> do you keep him? >> i think that's up to the board and to bill and i think

there's a tremendous amount of loyalty toward steve. >> is the google envy over or facebook envy over? or are they comfortable when who they are? >> they have so many friends to address, don't they? it's like why? google won. they've got this tenacity. they just keep at it. bing is a good product but they've got 15% market share. if you look at what happened if they didn't want to be in that business, that's about $2.5 billion a year they lose. so that would expand margins by about 10%. >> how much gold do you -- >> we do about an ounce or two of gold. >> we have a shot of you with apparently one of your biggest finds. see, you do look -- that was your best day right there. you have got that down, how to

do that? >> no. the journal did go up one summer, did an article on it and it was a fun article. >> gentleman miner. i love that. you didn't even fly commercial up to fair banks, did you, mine your gold? >> no. >> he's mining the gold to pay for the hours from the jets. rick, thanks for coming in. appreciate it. >> up next, we'll go behind pump fuel prices with shell oil's president where he says prices are headed from here. and we go live with jeffrey lacquer. more squawk right after this. [ male announcer ] introducing a powerful weapon in your fight against lawn weeds.

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welcome back to squawk on a friday morning. a beautiful shot of the capitol there. the dow looks like it would open 57 points higher, the nasdaq 14 points higher. you can look at the implied percent and open right there. making headlines this morning, honda recalling about 540,000 suvs in the u.s. to inspect for faulty wiring in headlights. it affects crvs from 2002 to 2004 and pilot models for 2003. >> rising gas prices have been creating a lot of concern that $5 a gallon gas could be on the

horizon. joining us is shell oil president marvin odum. thank you for joining us this morning. >> good to be here. >> we worry all the time about where gas prices are headed. up have a much better idea than we do. where do you think oil prices and thereby gasoline prices are headed? >> it's a little hard to predict. it depends on world activities, geo politics and what happens in the middle east. the question we have to ask ourselves as a country is how do we produce more of our own or improve these issues from our side. >> do you see anything on the horizon likely to bring that down? >> i think we're going to have to see stability around the world to start to have an impact on that. even though gas demand, if you will, is fairly stable and even declining a bit in the u.s., when you take a global view of that, we're seeing an increase in energy demand across the

world. so there's a pressure on these supplies that continues and those that look at it in the future are very concerned about where this picture is going. so producing more resources to help solve the supply side of that equation is the most critical factor. >> we've heard all kinds of stories about france, britain getting to the to tap the strategic reserves. is that something that would bring prices down for more than a week or so? >> i think we have a pretty good test case of what that does. it was done not so long ago in the past. it had a very short-term impact, some would say a negligible impact. in my opinion it's not what the strategic reserve is all about. this isn't an emergency-type situation where we're worried about running out of the supply. personally i think. we should save that for those situations. putting that on the market on had a short-term impact. >> we've had a lot of people talking about what's really happening in oil prices, what's

happening with drilling and where you can drill. one side will tell you oil production and natural gas production in the united states is better than we've ever seen. the other side will say if you're looking at the land that is cold controlled by the u.s. government, it been giving out less leases than we've seen in 20 years. if you had your druthers, would you be trying to lease more places to drill on land that's owned by the federal government? >> we would. what we seen over the last couple years is the energy outlook for the u.s. particularly has changed dramatically. as new natural gas discoveries have occurred, we're finding new resources on shore and talking with the federal government about drilling offshore alaska and now you've seen the geophysical study will start oft coast of the atlantic. the area where this gets confused is there are tremendous

resources in this country. our ability to have an impact on that total pictures, how much we import versus how much. we produce is in our hands to do something about. the government can make strategic decisions there. >> what's been the biggest problem from your perspective? >> it's a matter of getting a clae view of what our energy strategy is. this has been a point of mine for a long time. the degrees of freedom are relatively narp owe been we need year going to need oil and gas for quite some time into the future. just getting clear on how much we want to produce versus how much do you want to import? and putting policy in place is what needs to happen. >> we know shell has said it would look at $3 billion to $5 billion to invest in the shale field. whichnd does that push up toward in terms of how much investment

you'll be putting in? >> ilt not going to surprise you we're at the lower end of that investment level, at what we call dry gas reese sources. we're just producing natural gas, we're at the lower end. its prices start to shrink a bit. we have a port foalio now that can absorb $5 or $6 billion of investment. but the coral larry is we're also investing in those same-type drilling reservoirs but there are those that have more liquid than oil in them. it's part of the reason you're seeing an increase in oil production right now. >> at this point we're looking at natural gas prices for around $2.31. what's a level that would make you say it's profitable? >> that's a great question. we do need to get back to a more normalized level. shell looks at that and said over the very long term, we think natural gas prices are in that $4 to $6 but certainly for

the foreseeable years, around $4 probably makes the most sense. that's enough to be afford to do the work to develop the resource and that's an incredibly strong beneficial price to the country, providing cheap feed stocks for manufacturing and lowering people's costs. >> how do i get into the econ challenge? >> it is pretty exciting. you think about what we can do. pro can produce more. the thing is we can be much more efficient. these are -- over 75 high schools and universities across this country and across the entire hemes fear, this is amazing what they're doing. it allows the brightest minds to think about solving one of the

world's greatest problems. it really gets you excited about the future. >> what kind of things have they come up with in the past? what are you expecting to see? >> they have a fairly wide degree of freedom in terms of what they can do here, so the fuel pipe,coming up with innovative aerodynamic designs, new braking systems, prototypes that use the energy from breaking that go back in to move them forward. you can see the cars behind me. these are not the stores that you would take to the store right now but the technology developing, these at happening. >> we want to thank you very much for joining us. before i let you go, i know this is not something you had a crystal ball into but you you had to get,bet, would you bet

we'll see $450 or $500 a gallon, wh whatting is within the realm of possibilities. slightly different activities could take it downtown other way. >> thank you for joining us. we appreciate your time today. >> up next, we knows what it takes to start a successful business in america. more from kenny detective r -- dichter. we'll be right back. >> today at 8 a.m., a special extended issue with richmond fed president jeffrey lacquer.

♪ 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. ♪ takes to start a successful

takes to start a successful

. the retailer stocks upgraded a buy to neutral. >> let's get some final thoughts from our guest host kenny dichter, marquis jet founder and former ceo. tell bus -- it's sports yapper?

>> two incredible entrepreneurs we're backing. second screen sports media. >> what does that man? >> you, me and joe are watching the final four at home. 86% of people are on their -- you want to watch and we're all yapping to each other what's going on, we think there's a great local ad platform. it's twitter for sports. it's connecting friends and fans -- >> it's a mobile app? >> it's a mobile app. we're in submission process for the apple store. my partner at y & y is on this deal. >> what is that? >> it's a company we set up to lean on existing infrastructure, what marquis did with netjet? the health care space. there are lots of companies that have 3d 00 million market caps

that are billion dollar brands. >> is this drink thing a y & y thing? >> the drink thing is a y & y partnership with wheels up. the other piece we're dmog this space is home fitness. i believe there's add 3 to $ 5 billion equipment space world wide. we're partnered with the biggest. we have a company called cirrus fitness, two of my guys formerly in marquis are heading up the sales effort there. >> we have to run. thank you for being here. i'm going to continue drinking the drink. we'll see about that actually. thank you for being here. >> when we come back, we've got breaking news. new personal income and spending numbers in about 30 minutes. but first jeffrey lacquer will be joining us.

no economic topic is off limits. "squawk box" will be back right after this. >> next week on "squawk box" being an icon, a rebel, a space traveler. the one and only sir richard branson. the countdown is on and he's landing on "squawk box" next wednesday. 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.

he's the squawk newsmaker of the morning. >> an interview with jeffrey lacquer. >> and europe anti-trust enforcer. he's in charge of europe's cases. >> plus breaking economic data. >> cannon ball! >> personal income and spending numbers for february due out at 8:30 a.m. eastern. the third hour of squawk box begins right now.

welcome back to "squawk box." joe kernen along with becky quick and andrew ross sorkin. ahead, richmond fed president jeffrey lacquer. first let's get to our headlines for the morning. >> today is the last trading session of the quarter. at this point the bulls are firmly in the winning column. the dow is having its best start to the year, right now up 7.6%, the s&p up almost 12%. with the nasdaq, the best first quarter since 1991, up about 19% to date. the dow up 60 points, the s&p up by just over 7. however, there have been disappointing earnings for blackberry maker research in

motion. the company misting street estimates as it reported the first slump in blackberry shipments in holiday orders. and rim ceo is not ruling out an eventual sale of the company. the question is would anybody be a buyer. microsoft has been mentioned but rick sherlund said it may not make sense for them. jim balsillie will be leaving the company. spain is set to unveil significant budget cuts as it tries to fulfill demands by the eu for austerity.

it all comes after a strike disrupted business and sent thousands of protesters into the streets. and you can see the european markets are in the green. >> let's go to our newsmaker of the morning. steve liesman is in charlotte, north carolina with our newsmaker and special guest. >> thanks very much. i'm here with richmond fed president jeffrey lacker at the richmond fed symposium which is one of the most in the weeds forecasters out there. >> i think we've managed to pick some good topics, and get into details and bring in some really smart people. >> let's talk about the broader story out there.

there's concern the 3% growth in the first quarter is not going to continue and, in fact, there's continue that as the year goes by, in fact growth could weaken. what's your outlook? >> it hasn't changed much in the last couple months, i'm still looking for season between 2% and 3% and rising next year. >> to what? >> it could get to 3%, a lot of uncertainty around that. i think growth gradually will pick up. it's consistent with the trends we see in the data. consumers are going to move ahead more rapidly some quarters, less rapidly some other quarters. business investment still seems to have a lot of momentum to it. there seem to be a loflt opportunities out there for firms to deploy new capital, to reduce costs and rationalize business processes. so fundamentally i'm reasonably hopeful we're going to get good growth this year. >> interesting debate that the chairman addressed in a speech

as to what the jobs numbers are showing us and income and spending numbers are showing us and what growth should be. the difference is between 4% and 2%. where do you side? >> that's interesting. in the old days productivity would fall a lot in a recession. but this millennium in 2001 and then the last recession, productivity increased a lot. firms were able to lay off workers, cut down, trim and really get lean and mean. and get awfully efficient. so naturally some of the pressure they're under in a recession when things are falling and they're not sure where the economy is going, well, that pressure eases up after a couple of years. and then the productivity ers softer. we see that pattern big time in this recession and i expect some of the gap is due to that phenomenon. >> so you expect productivity to

fall cyclically. let's go to your other favorite topic, which is inflation. seems when i read the fed's recent policy statement, it pushed ahead the time period for the expectation for inflation to fall. how much concern right now is there over higher oil prices and inflation? >> so i think we're in reasonably good shape right now. i'm expecting inflation to be around 2% in the next year or two. that's our new now official as of january, inflation goal objective. i think energy prices are going to push that a little bit away from that for the next month or two. core inflation numbers are running close to 2, though. i think the broad firming trend we've seen over the last couple of years is coming to a stop right now, i hope. if inflation pressures kept

going up, i'd be really concerned. but i don't expect them to. i think we're going to hang around 2. >> you dissenter twice and also back in november. what is your issue with the fed promising to -- i guess not promising. i guess that's probably your issue. it forecast it will remain exceptionally low until 2014? >> i disagree. my estimate is economic conditions are likely to warrant low rates until sometime the middle of next year. if i had to pick a central tendency of a forecast, that's when i would choose to when rates are likely to rise. that's not a promise and neither is the committee statement either. it's a forecast of what we're likely to find appropriate in the future. and that's just the way i see it so i voted accordingly. >> but is your issue with the date or in the act of putting it in the statement? >> i thought the january meeting would have been a great time to

step away from keeping that date that is correct calendar date in the language. the reason is that as of january in our economic projections that we do four times a year and release to the public, we began including our projections for interest rates for the federal funds rate. and you get a very rich view of the various views on the committee about interest rates paths going forward, what they think is most likely under appropriate monetary policy and i thought that was the way we ought to be communicating about how long we thought policy would keep interest rates low. >> how big of an issue is it if the committee has to step back and say it's not late 2014, it's late 2013? >> this is the tricky part. if it's not a commitment, if it's a forecast, it ought to vary as the outlook varies, kind of sensitively. which means it could move kind of like a trombone. it could move out when things weaken and the outlook weakens. it could move in when things strengthen and it looks like it

might be sooner we raise rates. >> it would be a tightening, wouldn't it essentially? >> if you think of it that way. i don't think of it as a tightening. >> you gave a really interesting speech last night in which you put forward your own financial stability plan. you were pretty critical of dodd-frank. >> well, it does some really good things, i got to be clear about that, that we welcome. the enhanced prudential supervision provisions are great and what i talked about last night was this requirement that a lot of financial institutions file with supervisors so-called living wills, these plans for how they would be unwound in an orderly way -- >> you said some other stuff. >> there are some other things that are sort of extraneous and you could argue whether they were really productive or not. >> let's talk about your plan. eliminate 13-3. no emergency powers for the fed,

change the bankruptcy code to handle too big to fail through the bankruptcy code and it floored me, allow money markets to halt redemptions. >> if you go and get your money out today, you can stick other money market mutual fund shareholders were losses that that fund has realized if they wait till tomorrow. that just everybody an incentive to head to the exits to stick someone else with the loss. money market funds aren't allowed to protect themselves against that without totally liquidating their fund. that's just an artificial regulatory induced fragility. >> becky quick has a question. becky? >> thank you very much, steve. president lacker, if you were talking about what you've seen with oil prices, you mention it could push inflation hyper for the next month or two. what do you see happening that brings oil prices back down after that time frame?

>> well, becky, as you well know, economists face this dilemma with energy markets. it's hard to argue with the futures markets. the price is built in there represent amalgamation about where oil prices are headed. when they're flat or declining, it's hard to argue there's going to be an upward trend in oil prices. having said that we've been surprised on the up side more and the down side the eight years or so. it's hard to be overconfident about oil prices. >> do you think the higher oil priceser here because of instability around the globe or political issues or is this a supply issue? that would probably determine how long up think it's going to last. >> i think it's a combination of all three. i think the long-run global trend in growth is putting pressure on all sorts of energy

supplies around the globe and the way those markets are knit together, that pressure is going to be transmitted to a lot of local markets as well. i think the geopolitical uncertainties are certainly a factor now. you'd expect that to be temporary, not to last more than a couple of quarters. so i think it's a mixture of the two. and that makes it really hard to pick where oil prices are going to be a year from now. >> president lacker, you must have a disagreement with the fed chairman because in your world if you think things grg to be pretty good a year from now, there wouldn't even be a thought of qe3, i idea of it wouldn't be on the table. am i wrong on that? and then why is it? >> well, you know, further easing moves are something that's part of the arsenal, part of the tool kit and there are conditions one could con receive of in which you'd pull they oum and enact them. >> if you're right, what you

said about the next year, then am i wrong to say that there would be no conferring at all, no need to consider qe3? >> i think that's right, joe. i think if we get growth about what i'm expecting, about what a lot of people are expecting, you look at the blue chip consensus, other forecasters. if you can get growth along those loons, i don't see where the rationale forfurther easing is going to come from. >> that's saying something i think. everybody who is scratching their head is not crazy when they heard that the other day then. >> well, heard what? >> when bernanke -- >> when the street decided that qe3 was a pos at and some of these traders that are like drug addicts, i mean, anything from the fed -- i mean, why they don't want just good economic growth or corporate profits. they always want some steroid for the stock market. they're so happy to hear qe3 but

most people are saying you got to be kidding at this point. >> i can't comment on drug use on wall street really. >> you know that's the cliff we're going to go with. it does raise the question about higher interest rates, which has come along 180 or so on the ten-year and then nearly 240. how much of a threat when you look at what's happening with interest rates does that represent to the recovery? >> the threat from higher interest rates? >> yes. >> i think if higher interest rates come about, it will be because of the stronger recovery. it won't be an obstacle to it, it will be because of the stronger recovery. >> when we look at the threat or the risk to your forecast, where does europe play in? >> it's a minor risk that's receded at this point. it was a much strong are risk third and fourth quarter last year for sure.

it want clear everything was going to gel and come together in an unbumpy way shall we put it. but they've got mechanisms in place, they've got broad consensus on how to approach this. there are a lot of disagreements, a lot of things to work out in the margins, a lot of fine print to sort out. they've got a course forward and managed to convince people they've got a plan and a way to deal with it. >> jeff, i was hoping to come here to the credit market symposium and hear that the credit markets have revived. i'm not hearing that. what can you tell us what is happening can securitization and bank lending right now. >> i think it's a matter of supply and demand. i don't think the demand for bank lending is there? if you talk to beak lenders and say what's lacking, they'll sacred it worthy borrowers.

banks are falling all over themselves looking for credit worthy lenders to make yield off of. >> you oversee an army of supervisors. there's been a credibility that super advisers are pushing and pulling, lend, lend, lend, no, don't led. >> there may be a case here or there where something's got i don't know misinterpreted in the telling but for the most part the examiners are well trained where they can use discretion, where the judgment is supposed to fall and how to apply the standards we had. becky? >> president lacker, just going back to this idea of what you see, how optimistic you are about the economy, when chairman bernanke spoke on monday, a lot of us were thinking he's got real concerns about the labor market and whether the positive moves we've seen lately are temporary. do you share his concerns or do

you think the numbers with the labor market were spot on and they might be here to stay? >> i like the number i've seen in the lab market but we've had runs above 200 before only to see it fall back to runs of hundred thousand job per month numbers. yeah, you have to be cautious, you have to keep in mind the possibility that things slow down a bit. but i've been heartened by the recent numbers. my reading of what i hear from the field, what i hear from our contacts around the federal reserve district from maryland to the carolinas to virginia is consistent with the pick up in optimism and sentiment in the business community. it definitely has a different tone, a different feel than it did a year ago when we get the string of positive numbers. i wouldn't say that i differ on the chairman on this but i think there's room for optimism.

i share his concern about the tremendous hardship being suffered by the families of long-term unemployed and, you know, the tremendous gap between, you know, the number of people that are looking for work and the number of jobs we can provide as an economy. >> but if you look to next year when you think economic conditions are going to warrant potentially raising interest rates at that point, does your forecast include an unemployment rate that is well below 8%? >> i think we have a $ good chance of getting below 8% by 2013. >> a good chance but the unemployment picture doesn't necessarily weigh too heavily on your forecast one way or the other? >> well, i think we need to be prepared for the possibility we need to start raising rates, withdrawing monetary stimulus, which is a tremendous magnitude right now before unemployment has gotten down to a place where

we can call it full employment or call it sustainable, long-run employment or whatever you want to call it. think inflation pressures can arise even if unemployment is above 6% or 7%. >> that's critical. that's a place where you do differ with the chairman, right? the chairman sees high unemployment as something that will lead to low inflation outcomes. you don't believe that? >> well, i think we've overestimated -- in the past i've seen people overestimate the extent to which slack is going to depress inflation. we've done that time and again and we've had plenty of experiences of inflation pressures rising despite relatively easing unemployment rates. >> this is the output gap beats low inflation. what does cause inflation in your mind? what would you be looking at to say this is the thing that bothers me to cause inflation? >> it's going to show up in

people pushing up margins. it going to show up in court, in a broad range of price expectation. when the had your va evidence and all you a lines up and tells you you've lost a bit of credibility. >> i want to make sure andrew doesn't feel like he's left out. >> i just have one other and then andrew can. we have this idea that it's been positive that at the time of the financial crisis a lot of managers immediately laid off a lot of people because they panicked and then it was an overshoot and then it snapped back recently as we've come down quickly to 8.3% but that the biggest -- or the easiest gains in employment have already been had. do you ascribe to that theory as well or not? >> well, maybe not entirely.

i mean, we certainly have heard plenty of stories from around our district of very rapid layoffs in 2009. i wouldn't call it panicked. they were generally concerned and for good reasons, very concerned about their economic prospects. they were hunkering down and trying to get by on as few workers as they could. to me it doesn't mean that fundamentally about some confidence that the business is going to be there, the need's going to there been. >> i just wonder if there's a permanent one p one or two percentage point, we never get back because construction and housing never gets back to the bubble year. in clinton 5%. second bush 5%. is 7 where we are now?

>> you know, if you look historically, unemployment gradually declines and gradually keeps declining during the expansion. so i don't think we should think of it as a floor we get to and stay at a while. it continually declines. it got down to 3.9% under clinton. >> yeah. okay. >> okay. >> i think that's all the time we have unfortunately. thanks for joining us and good luck today with the rest of the symposium. >> from charlotte, back to you. >> and not disappointed. i just leave it on wires all, don't you? we have this saying in every flash lacker, lacker. it's almost to a point where it less than a minute and then we see what he says. coming up, we'll get personal income and spending data. plus europe's antitrust

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apple and its main

manufacturing partner in china agreeing to set new standards for working conditions there, eliminating illegal overtime, improving safety protocols and upgrading amenities. it comes amid one of the largest investigations ever conducted of u.s. companies outside america. they agreed after criticism products were built on the backs of chinese workers. >> dell, hewlett packard, motorola around -- >> by the way, it's 48 is the number. >> some go with 60. >> it's more than a coincidence, isn't it? >> it's down 75% for rim.

>> it almost identical. 75 and 74, but much bigger market cap obviously. adding that much to apple was adding a lot more than rim lost. even if you go back five weeyea we forget rim was 160. >> we've had analysts who have said there's room for both of them. >> remember one in particular, i won't mention a name, he said doesn't worry about rim, it's going to be fine. >> rim screwed it up so badly. this is horrible. >> you can't take rim's market cap, take of that and add it to apple -- >> still nothing? >> no. there's look 15 other companies to throw in there that apple stole their market cap, too. >> we have to run. we're just a few minutes away.

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. welcome back to "squawk box." we're seconds away from personal

income and spending data for february. michael is standing by in chicago. you're a long-time friend of the show. you've done this a lot. no reason at all to be nervous about this. even though rick's not there. i'm going to say the numbers, please, michael. >> well, first of all, with the personal spending you're looking for .6 versus the prior .2. everybody has been focusing on that to see if it's going to be better than expected. a lot of eyes have been on the metals market this morning with gold up over $14 after such an abrupt selloff. one of the reasons -- >> looks like income up is 0.2%, consumer spending up 0.8%, michael. what do you make of that? >> the spending exceeds what the estimate was. i'm not surprised on that. the personal income is basically your wall street/main street scenario where it seems like now

the jobs data is working in line with how personal income is. i'm not surprised the markets are reacting the way they are but as we end on the kwaurp here, everyone is going to keep an eye at 1,400 in the s&p is a good psychological level for support. >> do you think there's more room to run with there or at this point would you be a little nervous? >> technically it looks a little bearish. if the earnings are going to support this, the markets are going to trend this way. it's going to be the expectations that rates can't stay this low for this long because it's going to start cutting off oxygen to the patient because it's hard to stand alone on your own merits. keep an eye on dollars futures because that's where the impetus is where rates will be over the next year or two years.

>> and if you're really trying to look around at the point of concern, i said do you want to -- any time you see any bit of a debt, run everybodies in and buys. if we're at, the dips are going to be s&p down below 1375 or something abrupt, i think you'd see buying coming out of the wodwork. but a lot of our dips are short lived. >> michael did -- i mean 160-point move on the qe3, did you hear lacker? was anyone listening to what he said down there? >> i want to say there was a a lot more emphasis on what lacker was saying but the market took it in stride.

the bond market was somewhat soft off that news. expectations are higher after watching something more for the come persian gulf. ing. >> do you think qe3 for a reason. europe is there for a reason to get that kind of support, i think our markets, it seems to go with making it a sustainable recovery. i don't think it happening. >> i remember riding a bike training wheels. it's no fun. you feel good, you go faster and streamline and make a lot of plexibility. unless you're the made the tranning wheels, there's no reason to keep the training wheels off and think what the confidence becomes for the

driver the andest of the market. >> so you can fall oaf easier with training wheels because if -- i don't know someone has to explain that. maybe he didn't ride a bike. >> there's a lot more body armor nowadays when people just had sneakers and shirt. when you fall, you're okay. you're better supported. >> thank you. when we come back, we'll meet aerosmith's "trust entorzer." we' and we'll hit the hardwood with darren rovell. and we have huge week of newsmakers coming including

michael eisner, donald trump and many more.

. welcome back to "squawk box," everyone. on this friday morning the futures are still indicated higher. the s&p up by just over 5 1/2 points. we have breaking news from overseas. spain unveiling its budget this morning. as expected, it includes steep

cuts. the government says it will cut ministry spending by 16%. >> google is waiting to hear whether europe will bring a formal anti-trust case. our next guest is the man responsible for making that decision, he is the commissioner for competition and chief anti-trust enforcer for the european union. you may know his name. it's good to see you. thank you for joining us. >> good morning. >> i have a broad question before we get into google and other issues. when you look at the u.s. anti-trust enforcement that's going on or not going on these days and you look at what you guys have done, which has been much more aggressive, what do you think? >> i think we have excellent relationship with both agencies, the d.o.j. we wee have different procedures, they have a very

good cooperation and in my experience during the last two years we shall have a convergent view on most of the cases. >> most of the people would argue that you have been much more aggressive than what we've done here. >> well, you mentioned the deutsche bank/new york case, it is not useful to talk net tiff decisions. normal what they say. >> walk us through this google case. >> we received two years ago some come plangts and we have continued to receive some other complaints. we opened formally the

investigation on how google uses its market position in november 2010, we have advanced a lot in our investigation. i have to say we have good cooperation not only from the complainants point of view but also google. now we are closer to set our view on how big and what kind of problems from the competition point of view can create the google activity. we will make our our mind probably frozen next month. and if the objections start, we'll continue with our investigation. if we see thes pot act to find the remedy to going further down the road in our swegs investigation, well, weelg try it. >> british air ways is trying to get the deal closed to buy bmi airlines. richard branson, his virgin

airlines is against that. how are you thinking about that particular deal? >> well, we are looking very, very carefully into this operation. british air ways, the new company, aig, wants to buy it. there were some problems. we're discussing almost every day. with british awares tir ways to overcome the problem. we will adopt a decision, to overcome the difficulty or to continue the investigation in the second in-depth investigation. >> you think broadly and this is just about competition broadly. when we think about the airline industry here, we've let a number of big airline deals through. do you think those deals would have gone through had they been happening in europe? >> well, we have different regulations in europe. we have more open possibilities

to deal with the airlines when competition problem arise, i think. in any case, we are discussing the particular situation of some airline companies in europe. we are discussing, for example, the problems that can happen when low fair flights compete with regular airlines. and in some of these cases we are discussing these with u.s. authorities, with the department of transport and in the case of one word, we reach a common view and i think it was a good solution for this. but in this case, have i to say that the airline sector is one of the sector that occupies me most. there are many problems there, not on because of competition difficulties bus because of economic difficulties of the

companies. >> when i talk to u.s. ceos thinking of doing transactions in europe, one of the impediments they say arguably and i don't mean this with offense is you. it the fact that the anti-trust efforts there are that much more grief. do you believe that your department is actually keeping deals from happening in europe from foreign investors? >> no, no. as i told you, with exception of the stock exchange cases, all the other cases have been cleared and probably it will continue to be like that because discussing every case when we observe some difficulties is not difficult to find remedies to clear the decisions. i think it's better to find remedies at the negotiating table than to face the difficulties here in the u.s. or in europe or in other consistencies, taking the risk of a negative decision.

usually we find the solutions. it's true that in some occasions negotiations are difficult but i think that they both, the u.s. authorities enforcing competition and the european commission enforcing competition in europe, we are rick rouse and ewoor understand what the real challenges. we had had never said good-bye, paying attention to the economic analysis, discussing real difficulties, thinking always in the consumer's interest and not in the competitors's interest. this is a view i developed myself. i think following the line of my predecessors that were tough negotiators but they were able to understand also, as i think we are doing right now, the real

challenges of our economy. competition enforcement is at times a difficult task but it's necessary to create the right incentives to speak. >> before we let you go, you're from spain. obviously we've seen the protests. >> yesterday there was a -- you're not -- overall there was a general strike the union protested against adjustments, about spending cuts in the budget, against labor market reform. i think the government has shown determination to go ahead. europe is supporting the effort of the spanish government to modernize the kbhi, to inkress competitivenesses, to overcome

the consequences of the crisis. and i hope that these -- the federal government will comply with the rules, that the fiscal discipline that this warrants in the european union because spain is a very important economy and all the europeans and i tend to think that beyond the european b borders, everybody is interested in the success to overcome the crisis. >> thank you very much. i budget was delivered today. i misspeak erm earlier. . >> thank you for joining us. >> "squawk box" will be right back. >> next week on "squawk box," an icon, a rebel, a space traveler. the one and only sir richard

branson. the countdown is on and he's landing on "squawk box" next wednesday. carfirmation. 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.

welcome back to "squawk box." the supreme court justices have heard arguments all week on the constitutionality of the health care law. today they go behind closed

doors to discuss the case and actually vote. that decision, though, won't be made public today. the next step is for the justices to decide whotoday. health care stocks are been on the move this week. check out charts of aetna, cigna, united health, they've aun risen all risen. let's get down to the new york stock exchange. jim cramer joins us with more. a big friday. what are you watching from down will? >> i'm watching mega millions. waiting for clearly conflicted. this is a r.i.m. deal. most feel it's a take over name. i doubt that. it's a decent day. >> you say you doubt that they're a takeover target.

rick says as far as microsoft goes, it's not much for them in terms of a cash flow. but he was worried about all the problems they would be inheriting. why do you think it's not a takeover target? >> i think you have this terminal worth, $77 million. the decline -- 77 million subscribers. decline in revenue is amazing. i thought the interview was fabulous. he was spot on when he said, listen, bomber. just the good people leaving, and i think this bomber were on buy r.i.m., i think the stock would go much lower. >> he'd like to see microsoft get out of some of the other things its chasing like search. >> he said something like 2 billion. >> yeah, like 2.3 billion they would lose in revenue but margins would come up. >> i'm checking out the numbers

here. >> he has my mega millions. >> that's inside information. >> what are your parents's numbers? >> in the end, i went with the randomly generated by the guy told me this was the winner. >> 70% of winners are quick picks. >> did you buy? >> after the show, i'm going to do that. we're also going to ask jim what stock is the equivalent of mega millions. in other words, what name would you take the longest shot on in the market right now. we'll get to that. >> that could be sprint. >> don't give it away. >> but, no, believe me, i've got one you won't believe. >> cramer, you got anyone left in the final four? >> actually, i've got three of the four. >> i have three of the four, too. >> do you really? >> i do. >> hey, congratulations. >> thank you. >> who do you have winning? >> kentucky. >> i've got ohio state. let's hope we see that name next week. >> gentlemen, thank you. we'll see you at the top of the

hour. i'll race you to the mega millions place. coming up, the stock of the day, any guesses? i bet you probably know what it was. monday on "squawk box," the full line up of newsmakers to kick off the second quarter. we'll talk global growth with the real dr. doom, mark faber. we'll ask where blackrock is investing trillions and we'll go inside the federal reserve with richard fisher. this at&t 4g network is fast. 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.

♪

stock of the day is research in motion. company announcing a review of strategic opportunities including a possible sale. crummy numbers. darren rovell is here. final four tip off tomorrow, kentucky against louisville, ohio state and kansas vying for the title. out of the 60 games, i've gotten

42. i got three out of the four. >> i'm impressed, but i do have -- i'll never hear the end of this. >> remember i worked very hard on this. i don't have kentucky. and people take have kentucky can really beat me still. elizabeth mcdid ncdone legal on couple people who can beat me. because they have kentucky. but there were 50 people in this thing. pewpr ich p pwepr chlt nichlt is the one who put it poeg. > louisville/kentucky is like civil war. they hate each other. let me show you some of the t-shirts. mamas don't let your babies grow up to be cardinals.

calipari drinks wine coolers. n not bourbon. and louisville doesn't exist. by the way, the twin spirals had blue and red. i think in the governor's office, the top two guys, they -- louisville, kentucky -- >> did they play this year and who won? >> yes, they played in december. >> and i canky won. because louisville is scrappy. >> louisville is pretty good. >> kansas looked pretty good. >> let me tell you how big the rivalry is. there is a guy trying to become eligible for louisville. it went to the state stream cou supreme court. it went down 5-4 because there were five state justices that went to kentucky and four that went to louisville. all right. >> all related. no, i'm kidding. >> although this is --

>> i'm from cincinnati. it's right next to kentucky. >> although this is favorites tradition and not cinderellas, no cinderella made to the elite eight, not the one pbuzzer beater, but this is what they want. this is what they want. >> huge tomorrow night. >> watch my show at 7:00. >> had to get that in. >> we do. >> final monday or tuesday? >> monday. >> and we're hoping for kentucky/ohio state, are we not? >> we are. >> joe is because it's in his bracket. >> kentucky/kansas, not ohio state. >> you don't think -- kansas looked really good. >> i know it's slightly off topic. who is going to lose their job over the tebow jerseys? >> somebody is. they put out reebok tebow