kerr gh kernen and andrew ross sorkin. we finally have the final report card for the first quarter and during that time period, the dow gained 8%, the s&p was up a whopping 12%, the nasdaq, up 19%. and the russell up another 12%, as well. financials edging out technology for the title as the best sector performer. as for specific stocks, bank of america was the dow's best performer. bac the worst blue chip performer last year. but as you can see right now, it's done well coming up back up. first stock performer was hewlett-packard, it was down 7%. >> same time we were talking about the 30% was bank of america as five bucks. >> can i mention the biggest business news of the morning? ashton kutcher is going to play steve jobs -- you saw this? not in the walter isakson bio,

but in another indy flick. i was trying to think about when i thought ashton could really -- if he looked like him. >> you know what that did for me, it drove home the point of how actors can never -- they can try, but ashton kutcher is so -- here's the next thing. keanu reeves will play bill gates because he's so smart and so cerebral and so -- but the idea that this dude, ashton, that said, woah, what's happening with joepa, he's a more ron. moron and he'll play this unbelievably smart guy which is what acting is all about. because they're never who they're acting to be. >> i was trying to book ashton, but not anymore. >> i don't think he's up this early. >> no way, dude. >> we've had comments about his

other escapades if you remember in the morning. >> dude, where's my car, is that his movie? >> krno, but -- >> that '70s show. >> what i'm saying, you can't get -- you'll never find an actor who is like steve jobs, but it's beings because he's ju playing him, but i would like to have an actor who with a -- >> who would be your pick? >> i don't think there's one that exists. >> we'll challenge the squawk audience this morning. they can tweet us with their pick if this they could have cast him. and by the way, there's still an opportunity given that sony has the walter isakson pick. so tweet us if you have a pick. >> who is the smartest actor in hollywood? >> it doesn't have to be the smartest. >> see, that's my point. to play steve job, you would need someone really innovative and -- i don't know.

maybe not. >> sorry to take us off the news. >> you love stuff like that. >> i would like to see tweets. >> i can't remember the last thing you had with some actor thing. with me, there's only one guy, only one actor. >> bill murray. >> well, yeah. charlie sheen. i want to go in the -- >> think about it like this. charlie sheen, whose job taken over by ashton kutcher. >> that's true. there's a sectiix degrees of separation. ♪ manly man, man, man >> i can't believe that show is working. is it working? >> "two and a half men." doing very well, apparently. >> we do have a busy start to the month. all leading up to friday's employment report. today we get ism manufacturing and construction spending.

today we'll be getting factory orders, auto sales and minutes from the last meeting. wednesday adp report, thursday jobless claims. and friday, the march jobs report. estimates range from 180,000 to 240,000 for nonfarm payrolls. friday of course is a market holiday in observance of good friday, but we know that money never sleeps here. we'll be here to talk about will this. don't miss a special "squawk box" which is live from 7:00 til rn time. >> and other people are working, our normal guests will be here. that's honestly sleeping in. >> fantastic. i thought we might be at 8:00. >> but we decided this is very important. >> if it was -- the half hour at

9:30 they're adding on, that raised a few eyebrows. >> ahead of the markets that don't exist? >> yeah. what happens at 9:30? go home. >> nothing. >> probably put a documentary on. i don't know. >> we've got a few of those to spare. they never run out of those. anyway, go ahead. >> it's good stuff. we do have a bit of weakened fed speak to bring you. over the weekend, minneapolis fed president says inflation will be above the 2% target for next year. fmoc says it expects to keep short term borrowing costs near zero, but we've heard a number of guests who have come on and said that may not be the case.

>>. >> you could put in ashton kutcher and iouldn't be able to tell you that was him. andrew, have you ever laid eyes on him before? >> i don't think i have. >> are you sure that's him? >> fairly sure. he believes the fed 1450 act to raise rates well before that time. most see inflation at or below the target in coming years. >> last guy we had on said 2013. >> yeah, lacker said 2013 he thinks the economy will pick up before then. and we have the richmond -- sorry, the dallas fed president joining us. >> i was looking through one of your pafrt nfavorite newspapers. the. not one of. >> without the wall stre"wall s journa journal", i don't think what i

would think. did you see yesterday's piece in the "times" but b. how this will define the roberts court and this is judicial activism on steroids. and that if judge roberts wants to completely side step the constitution and do this -- but then you read the journal,s's all about upholding the constitution. so you have the two main newspapers that are -- somebody's lying about what the truth is. i guess it's all interpretation. >> the truth is probably somewhere in the middle. in other news this morning, we have a bid out of china driving trading. china's manufacturing gaining momentum for a fourth straight month in march. beating expectations. the increase driven by recovery in auto, tobacco and electron being sectors, but there's still worrying signs in weakness, exports and consumer demand. major asian markets, it's mixed

across board will. today's eurozone pmi adds to signs that the bloc is in recession as the down turn spreads to core members, france and germany, the pmi drop to go 47.7 last month, it has now been below the 50 a mark that divides growth from contraction since august. >> markets this morning, let's check on those. the futures after the quarter ended and we had the best one in a decade, indicated down about two pi two points. if m. ca it would be down.00000000000000000 -- >> i don't understand why we do this board. >> 00000001 in case you were

wondering. anyway, there is the energy markets. 102 now. been a little pull back in oil. and that was even aft there was interesting news last week about what if iran were to just -- they cut us off completely and the president thinks we'll still have enough. and the ten year note, 2.221. dollar note euro has been annoyingly headed back up as the visiting season for europe comes up in the summer. and i had like it at about 33 cents. just at that time dolltake the there. but god know what is that would mean. and then god, 1665. . >> unemployment at the highest levels since the euro was created. >> i don't want to bring this up, but i was reading something about spain and spain is the underlying inflation -- or the

underlying employment rate -- >> 23.6%. >> i saw the headlines. teenage unemployment in spain? >> that, too. op-ed page showed that we were trying to head back -- or that the supreme court since the reagan nominees of scalia and another have now decided that their political entities intent on trying to enforce the free markets, trying to yu7 houphold free markets and limited government at the expense of general welfare. the editorial market really does believe that free market, sort of backing free markets and limited government is the antithesis or is in direct opposition to the general well it fair.

and i fell like pointing it europe. does it look over there like big government and anti-free markets sdrks does it look like the general market has been served? what is it in spain? >> 23.6% on the headlines that came out today. >> but on the youth unemployment -- >> i'm not sure. 40% or something. >> that's the general welfare that's when you're nice to -- you try to help the general welfare out with more government. >> same thing with fed policy. if take you care of inflatioinf the rest follows. >> i might be able to actually find the quote. >> i don't know which piece you're referring to, but let me make one suggestion, which is there is a view in the world, which i'm not sure i'll completely agree with, but there is a view in the world that free markets in this country did not

work properly. that's what i imagine this piece has to be referring to. and they didn't work properly. >> what do you mean the free markets didn't work properly in. >> we didn't allow the free markets to take place. >> if they were truly free, they would have. but they weren't truly free because they weren't allowed to fail. >> yes and no. there's a two pieces. there's the dwlidea that we let markets be so free if an unregulated way and then we have this horrible situation -- >> but that's not true. there was so much regulation already. >> i will disagree with that. had this been properly -- >> what would have saved it, fannie and freddie? >> we can start at the very beginning. you start with fannie and freddie. i'm not dismissing that, but also the fed didn't do their job. i'd say the sec failed in their job. i would say that we failed to regulate the credit rating agencies. i could go down the list. there's about 100 fathers of this crisis.

but the idea that free markets have worked in their totality is hard to argue on both sides. >> that's all we have. that's the only thing we have. if you need to go in and try to figure out where the system went wrong based on do you tweak it here or tweak it there, but free markets, that's what we have. it goes back to -- >> it's a better option than socialism. i'm not dismissing that. but i'm just suggesting to you that free enterprise without any regulation, which is what ultimately i think you do want, i'm not saying i want, i think you want, is what the "new york times" op-ed page is arguing against. that's what the the argument is. >> they're talking about the court that we've had for the past i guess they call it the one that did citizens united and the one that did bush versus gore. they hate those opinions, i guess. and that was from these

conservatives who were put on the court. and they matt point that they're more interested in limited government and upholding free markets than the general welfare. and to put those two in opposition, limited government and free markets, and what would be good for the general welfare, it's like coming from the view that maybe central planning and statism is the way we should be in this country. and the "new york times" consistently takes that point of view. which is frightening to me. looking at the evidence that we've seen. did you see the"the hunger game yet? it reminds me of north korea. the capital, all of the elite politicians have everything. they have food. and all the outlying districts, people are starving. and it's the perfect example of -- it's the first movie that's come out that's really been based on like trashing central planning instead of upholding central planning and being anti-corporate. the lorax, for example, which is a great universal film, but i think global headlines,

quarterly survey by the bank of japan finds no rise in business confidence. japanese manufacturers remain gloomy about high oil prices. the strong yen and weaker growth in asia and many analysts had forecast an improvement giving easing concerns about the crisis in europe and signs of a rebound in production following last year's natural disasters. >> and it is official, the united states is now home to the developed world's highest corporate tax rate. japan's rate dropping this weekend to 38%. the oecd says the average 2012 corporate tax rate for the 34 developed countries is 25.4%. earlier this year, president obama proposed a corporate tax reform plan that included a 28% top rate. republican presidential hopeful mitt romney has said that he wants to cut the corporate rate to 25%. the big question of course is what you do with a lot of the loopholes that have been used because most corporations are not paying that highest rate here in the united states. speaking of taxes,

international trade groups are warning that india prime minister new taxation proposals have led foreign businesses to reconsider their investments. india's federal budget outlining proposals that would allow authorities to make retroactive tax claims andbly in new anti-tax avoidance measures. sichb overseas business groups september a warning and a letter to the prime minister. will is the broadest criticism yet by the overseas business community, but especially when you talk about retroactive taxes that can reach out. makes a lot of people very nervous. >> and it's now time for the global markets report. ross westgate standing by in london. ross. what happened to our music? i'm very key pressdepressed. we used to have the whole package and now i just get you with a little bit of red -- well, more red than green behind you at the moment. ♪

>> there it is. we are concentrating on the data andrew today that we've had out of both china and the eurozone and the uk ahead of of course of the ism numbers you've been talking about. stocks have just come off the session lows. advances being outpaced by decliners by around about 5:4. after very good first quarter, ftse 100 today absolutely fla. . weakness in spain and italy. we've had very contrasting pmis. you were talking about it. in the eurozone, still contracting. manufacturing pmi down 33 months in a row. in germany, new orders continue on the export side to fall. and that's in stark contrast it to the uk where we saw manufacturing pmis actually

showing a ten month high in activity driven by new orders. so in some way the uk on this month of data to separate itself slightly from the eurozone. what that did do was boost sterling, we hit 4 1/2 month highs for sterling against the dollar, got up to about 1.6060. sterling index up around 13 month highs. aussie dollar got a brief boost against the u.s. dollar earlier on from the china pmi, but that was the official data, only really concentrating on the larger companies. it was a boost this morning. a lot of technical resistance up above the 1.3370 mark. that's where we stand. back to you guys. >> appreciate it. in corporate news this morning, a lot of people talking about this one over the weekend,

groupon unnerved a number of investors late on friday, the company increased its previously reported fourth quarter net loss and cut its revenue. groupon blaming hire than anticipated refunds on deals, in its annual report, the company's auditor said groupon has a material weakness in internal controls over it financial statements. and this one has -- >> that's what your and i had t auditor says about you? >> how they were reserving returns. so what was happening is they were selling high priced items, including i think -- why not if it was laser eye surgery or really high priced stuff. and then i don't know how you can -- i'll take that back. but people were returning high priced items and typically you're supposed to reserve for them and they were not. and so it's an issue for people.

>> i found it. it says when scalia and kennedy were selected by the reagan administration, that goal was to choose judges who would undue liberal precedence. by the time be berts and alito were selected, judicial restraint was no longer a name of conservativinconservativings. they were chosen because their professional records show that they would advance a political ideology that limits government and break motes market freedom. with less regard to the general welfare. my only point is when i read that, it was like i think about the constitution and our forefathers. and you always hear less government and flee market. the new york teams has no idea that when they say that, with less regard to the general welfare because they promote smaller government and free markets, they have no idea that they're actually saying big government and less market freedom is the way to proceed. and then this got even better.

if the conservatives decide that they can in health care side step the constitution to they go gate congress' choices on you view shal national policies, then chief roberts' will bear -- >> that's the entire reason for the supreme court is to act as a check and balance. >> to look at the laws to see about if it matches up -- they're insane, andrew. >> i've said on this program that i think there is a constitutional -- potentially a constitutional issue around health care that the single mandate may ultimately be a problem. >> this is a direct answer to -- >> i have not tried to argue that point with you. >> this is a direct answer to the "new york times" piece. that entire piece was to as sale the roberts court and try to scare them that they'll hear it from the left. but they don't trash kennedy yet. but this is a prelude to what they'll do to kennedy if he does

swing that way. i don't know whether you think he's going to. based on last week. i don't think we know anything, did you? >> i don't think we know. >> do you? >> no, i was surprised mifld by the question, but i'm not convinced that means anything. >> i've already said it, i think that they may overturn. >> and you think because it's the right thing to do constitutionally because you can't get away from your deep down son of a lawyer -- >> i may think the mandate is difficult. no, look, as somebody who -- >> did you eat your broccoli today? >> i have not. >> i would like you to. and i'm ordering you to. new month, same momentum, that's the goal of the bulls. joining us, chief investment officer of vny mellon wealth management. all we read about this weekend was about the greatest three months we've had in a decade. what does that make you feel like, leo, positive that we'll continue or maybe that we've already gone too far in your view? >> the underlying fundamentals that drove the market in the

first quarter are still in place and the market is well supported from a valuation point of view. economic growth is choppy, but positive. so i think the underlying fundamentals still look positive to us. all that said, after a 12% quarter entering in to a seasonally more challenging period, more focus perhaps on the election and the massive fiscal cliff coming at the end of of the year, we can't be surprised if the second and third quarters are a little more challenging than the first. we've got a year end target of 1450 to 1500, so we think the market closes higher from here at the end of the year, but as you can tell, when it's decomposed, i think the first quarter will turn out to be the strongest quarter of the year. >> if someone says spain to you, do you get sweaty palms, is europe off the radar screen or has spain put it back on and is it possible contagion is not over? >> i think your last point is

the right point. that i think the market is pretty much discounted a recession in europe that we're in as we speak. i think the worst case fears around contagion and that would would sven a have been a disord default with greece. more stimulus by the ecb. so i think the worst case fears are gone. but i think to make it a page two or three story would be dangerous in here. so investors really can't extrapolate out the period of complacency, low volatility. i don't think we're quite out of the woods. but the first case fears are a meal you're rated certainly. >> do you think we go 17,000 on the dow eventually? %. >> i loved interview with jeremy

seigal. we've got what we think is a pretty conservative earnings forecast for the next year on the s&p of 100 to 10 5. valuation looks very attractive on a snapshot basis, but i think reverting to the historical means of pe levels is dangerous for a whole host of reasons. demographic, supply did-demand imbalances. i still think invest toors are still cynical. so i think the trend is up. there is certainly a wall of worry, but i get a little worried about assuming 80s and 90s types of pe ratios getting us to those types of targets. >> all right, leo, thank you. >> quick note before we get on to the next topic. deal book fame writes in to say that people buy lasix coupon and help decide they don't like the

doctor. so then they refund it. i was thinking to myself how -- >> you don't wear contacts, do you? >> no. >> i do. >> when did you start wearing contacts? >> i've had them since i was in high school. >> do you still wear the bifocals? >> and i have bifocal in my left. it's a contact bifocal. >> but i've seen your glasses. >> now i got that problem. i got everything. nearsighted and far cited. that's what you have to look forward to. >> you know some viewers are doing something with that right now. >> well, they're nearsighted and far cited -- yeah, yeah, with my viewpoint. i have problems with both. >> anyway, it is your money, your vote. gop presidential hopefuls preparing for the next big primary, wisconsin is the place it will happen in. john harwood joins us from washington. good morning, john. i watched all of the weekend shows and mr. sap tore rum

doesn't seem to be backing down even though the numbers suggest that he probably should. >> neither does gingrich or paul. >> that's true. >> yeah, it doesn't really -- in the case of newt gingrich, it doesn't matter if he makes a decision to get out or not, he's not getting much of the vote, not demanding very much attention. santorum is a different story because he's running relatively close. but the odds are, the polls suggest that wisconsin will be another case like michigan, ohio and illinois where you come close to romney, but he can't hurt him in the way that he needs to hurt him in order to halt his momentum and have some realistic shred of a chance that the nomination. and because that is where we appear to be headed, you have republican elected officials, paul ryan, ron johnson, the senator, you've seen this from jeb bush and marrco rubio fallig in behind romney. >> all before april. so maybe not in the basketball

poll, but i've checked us both off as a win if calling the presumptive nominee in march. i've already put it down as a win. and you should -- i know you're trying to be an objective washington reporter or something, but put yourself down for a win for calling it by march. and it happened. >> i do, yes, i think more or less it happened. didn't happen in quite the way that i thought it was going to happen. >> better than your duke pick. that was embarrassing. but meanwhile, i'm one to talk. >> i think you're opened up a whole new area. i was enjoying the squawk in the supreme court chambers. >> i went down in flames with ohio state. >> have you resolved the case, is this a 2-1 decision? >> we haven't resolved the case, but -- >> andrew is voting with the majority if they do throw it out. >> i personally resolved the case, but my curiosity is whether, and will this is a question joe has asked, does it

ultimately galvanize whoever is the loser in terms of the elections. >> i think so. i think if the mandate goes down, democrats who have been looking for a way to recapture some of the juice and the electricity that they had in 2008 will all of a sudden have this bloody shirt that they can go wave and say just like in bush v gore when you had a republican majority on the court deciding against in that case what that he thought was a presidency, the democrats had won, here of a policy victory the democrats thought that they had won after decades of trying. if that were taken away or if that core issue were taken away, i think democrats would have something to rally around. republicans have been rallying around it for a couple of years. and so the policy victory political defeat circumstance which democrats have been living with for a couple of years could be reversed and they could have a policy set back and political victory, although i will say i think if the mandate's struck

down, they will figure out ways to save most of the important parts of the law because, remember, when barack obama ran in 2008, he wasn't even for the mandate. >> you're assuming public opinion will change -- >> no. >> what do you think that the like/dislike numbers are on obamacare right now? there's different polls, but it's at least 55 against, 45 for. >> the last number i saws saw was 43 in favor, 50 against. so the balance is against it. but i think it's a different matter when you're talking about something to charge up the base of your party. >> i think that to spend a year and a half -- and that was divisive. we for got already. they lost ted kennedy's seat to a republican, lost their 60, had to to reconciliation, spent a

year and a half really ushered in the tea party, all of that without -- and even democrats said that they underestimated the depth of the recession and didn't focus enough on the economy. and all that was for naught and it gets throw out? you you don't think people say look -- >> when you ever a really close election and you're trying to figure out ways to galvanize your side, the vast majority of people in this country have already made up their minds in the presidential race. you have a circumstance that's like a 48-44 race right now, 47-43, something like that, obama has a slight lead over romney. either one could win the race. but most people have already taken sides. so you have to figure out a way to get your side helped. >> what about women?

women have swung -- >> by 18 points. >> 18 points prefer it. >> and men have swung toward the republicans. >> but only by one point. >> hold on a second. if there's a poll that you're talking about that shows obama down by one among men and up by 18 among women, i don't believe that poll. because his lead's not that big. if you're up 18 among women and down one among men, that means you're ahead by like eight or nine points. and the race is not that wide. >> apparently in the 2008 election, there was a 12 point gender gap, too. >> look, we have very consistent gasoline d gender gap with n. this country with men being much more republican, women more democrat, and sending gel women are who are democrat and married women less so. so, yes, all of those things are consistent and not new or unique to barack obama and mitt romney. but that's built into the

calculations of these close races that are going to end up getting decided in 10 or 12 states that we already know which ones they are and they'll be fighting out on a fairly narrow battlefield. >> my vote matters more than yours. >> it does. >> john, thank you so much this morning. talk to you soon. when we come back -- >> we would never cancel you out. >> my vote matters to everybody ought to come and try to win my vote. >> coming up, i didn't why swits seeking the arrest of german tax collectors. and we'll have richard fesher, when he speak, he always makes news. you'll hear it here first at 8:30 eastern. first, though, which might be the best video of the morning. long before he was a billionaire investor, warren buffett was a paper boy. and this weekend, he he called upon his newspaper tossing skills once again, performing before a crowd at the omaha

press club show. the oracle was dressed as a world war ii era street boy and folded and tossed copies of the owe mamaha world herald. a still ahead, interviews with the newsmakers you can't afford to miss marco rubio, donald trump, and a lot more. let's -- let's start over from the beginning. we were just driving along, comin' back from the lake,

and all of a sudden, ka-plam. it blindsided us. what is it? our college savings account. how do you think it happened? not sure. i think something we bought a while ago turned out to be something else, annnnnd, i remember a lot of other stuff in there had the word "aggressive" in it. is everyone okay? well, now, yeah. who knows later. ♪ only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz.

switzerland issuing arrest warrants for three german civil servants. the swiss government accusing them of industrial espionage for buying the bank details of german tax evaders. it's the latest chapter of a very ugly dispute over tax evasion. the news came as twot countries worked over the weekend to salvage a landmark deal on taxing secret offshore accounts.

joe. >> coming up, we'll start the second quarter off strong with a picture from the futures pits. and then top of the hour, sally krawcheck will be our guest host. first, congrats to hunt her mayhema hunter mahan, first time he's ever the highest ranked american, really playing well. and then we know what's coming. the masters begins thursday at augusta. ♪

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futures pits. daniel, last week the numbers were strong coming out of the quarter, very strong quarter. can it continue for the bulls? >> that's the big question right now. it looks as if things will go pretty well. but the big obstacle if any is next week we've got earnings coming out with alcoa on tuesday and jp on friday. and that's the beginning of a whole new season. that combined with the upcoming economic data should show the way. this morning we see chicago pmi-pmi ichi pmi-not chicago, excuse me, nag should give us a good indication. glt the markets are closed friday when the jobs report comes out. how much do you think there will be trading and jockeys ahead of that number and how much of it is kind of wait and see what happens and react on monday? >> the futures markets are open onfully. it's always an interesting thing. i've been here before and it tends to be an active day and

just brief period, people using the futures to hedge whatever position they might have. going into it, i don't know that you'll have a lot of -- it's all purely a guess or speculation. so i think you'll want to see what this number is before you make any commitment. >> so what does that mean as we head into friday as we get into next week, how much volatility do you think that brings? >> i don't think it brings much. i think people stay on the sidelines and play safe. next week in the number comes out as a surprise, then the volatility might spike up. >> we've had a lot of fed speak. and we'll be hearing from another fed president a little later this morning on "squawk box" when we get to talk to richard fisher. they have been more hawkish, the individuals we've been hearing from, not only hear but also making comments over the weekend. is that something that the the market is worried about at this point if they raise rates before 2014 as they've said they're holding off, does the market say that's great news because that means the economy is doing better than we had anticipated? >> i think that's how they do

look at it. and about they do feel the need to raise rates, it means we're doing better. they they won't go at it aggressively. so i agree with you, they are looking more hawkish and i also believe that it's going to be before 2014. >> daniel, thank you very much. appreciate your time. >> comments, questions about anything you see here, shoot us an e-mail, squawk@cnbc.com. coming up, calling the ultra wealthy. wells fargo opening a very new business today and the firm wants you. he's the market master with a pension to predict the future. is he seeing boo or doom in the markets? we'll find out. mark faber is our squawk news maker in our 7:00 a.m. eastern hour.

take a look at the equity futures. 4 points below fair value. we're watching what happens as we just heard from a trader, there are a lot of people who are hesitates to make too many bets on that jobs number friday. wells fargo opening a business for the ultra wealthy, its new abbott downing division a merger of two of the wealth management units. the business will cater to families with $50 million or more of investable assets.

up next, we'll talk basketball. joe's picks didn't go well over the weekend. >> who is coming, is rovell here? he jinxed me. >> you jinxed yourself because you said i'm in first lays. >> i went down in flames by two points. did you see it? >> no, i didn't. choose control.

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2," we run that really -- it's a joke. let's do it that way. pretend that what you just watched was meant to be tongue in cheek and a joke. because it's so lame that we couldn't be serious. could we? you were just saying you don't like it, right? >> you know, there's nice people who worked on it, so it's hard for me. >> i see you. you know what i think. i see me you know what i think? >> tool. >> you, not tool. but what's the girl version of tool. anyway, but i digress. is that a blue shirt? >> no, it's purple. i'm not supporting either team. >> no, autism awareness day. >> i didn't know. >> this is my thing.

i got this here. watch this. this is a way for me to promote autism and my daughter's blog. my daughter blogged about it today, "peace, love and nonprofits." it's national autism awareness day, 1 out of 88 children, a lot more diagnosis but still unclear what's happening. you look on the autism web site or autism speaks web site, every day there's stuff, a genetic pathway that seems to indicate something this, that. in our lifetime there could be progress made either in detection or some type of actual -- hard to imagine but can you -- not just an adhd drug or something they try to give these kids but something that actually facilitates what's m s miss. >> cholesterol was one thing. >> there's issues in the gut, all kinds of strange ancillary -- you look at the funding of other diseases, it's

mind boggling what's spent on other things and there's so many families affected. why did i pick ohio state? i was leading. i've got more games than anybody el ? . >> you picked ohio state because it's ohio state. >> what happened during that game? >> you didn't know what happened at the end of the game because cbs kind of missed it, the lane violation. >> did he jump off the free-throw line too quickly? >> he did. >> it almost worked. >> it almost worked. we have kentucky and kansas tonight, the two winningest programs. calipari, if kentucky wins gets a $350,000 bonus. kids get nothing of course. $200,000 for bill self. what else do i got? kentucky is nike sponsored, kansas is adidas sponsored.

>> is that a matchup, adidas versus -- >> yeah, but nike has blown it away. the last ten champions have worn blue. syracuse in 2003 is kind of weird. they have a little blue in their alternate. you said you're not watching it, joe. >> it's on too late. >> can i talk about the late start times, if we have it? this is a 9:23 tipoff. >> are you kidding me? >> so here's comparisons here. one shining moment usually comes about 12:20, 12:25. if i'm thinking about a nap, i just -- i just can't get it. i understand it's during the week but still. >> thank you. when we come back, our guest host krawcheck crkrawcheck. stick around. will provide secure and reliable energy

to the united states. over the coming years, projects like these could create more than half a million jobs in the us alone. from the canadian border, through the mid west, to the gulf coast. benefiting hundreds of thousands of families throughout the country. this is just what our economy needs right now.

not quite knowing what the next phase was going to be, you know, because you been, you know, this is what you had been doing. you know, working, working, working, working, working, working. and now you're talking about, well you know, i won't be, and i get the chance to spend more time with my wife and my kids. it's my world. that's my world. ♪

bloom, boom and doom. mark faber tells us where he sees the next big crisis emerging. >> tracking do you know the loot. the argument against playing mf global executives bonuses as they search for more than $1 billion in missing money. one of the men in charge of regulating the futures market is on deck. >> she's known for turning around troubled financial businesses. >> some numbers can't be trusted. >> not that sallie. this one. sallie krawcheck is our guest host today. the second hour of "squawk box" begins right now. good morning.

welcome to "squawk box" here on cnbc on this monday morning. i'm andrew ross sorkin along with joe kernen and becky quick. groupon revising numbers after failing to set aside enough money for customer refunds. the change will reduce the quarter's earnings by 4 cents a share. they reported a profit by 5 cents a share, excluding certain items. and the contract for satellite tv and tribune tw directv has expired. and the ipad was running a bit

hotter than its predecessor. a consumer report is saying the high temperatures are not cause for concern. take a look at the futures as we speak. we have a little bit of red. dow jones looked like it would open up about 15 points lower right about now. joe? >> our guest host has had one of the most storied careers on wall street. sallie krawcheck, i missed you. you were on a month ago, two months ago. i don't know where i was. >> i missed you. >> i didn't watch the show either. what should i know about what you said last time? >> i don't remember. >> you missed the meaning of life. >> i think we talked about women and money. we talked about andrew's mom. >> you did? >> you said stay long because the first quarter is going to be gang buster. >> i'm sure that's what i said, though it couldn't sound a lot like me. >> is the second quarter going to be okay do you think? >> first of all, my job for years hasn't been to be a

research analyst but you should absolutely stay invested and trying to call things quarter to quarter is a fool's game. what's the market going to close this quarter, next quarter, the next quarter, nobody knows the answer to that. the real answer is to stay invested and stay well diversified and try not to do too much timing. >> was it before greg smith last time you were on? >> i guess it was. >> greg smith, goldman sachs. >> just a bunch of criminals and crooks and a bunch of muppets? >> i've never heard any client called a muppet before. now,ly say wall street is a competitive place that likes to win, that's full of complexity. there a lot of issues with wall street the fact that these companies have multiple client bases. everybody talks about focussing on the client. the question can often be which client? which client am i focusing on now? there are many issues. the issues that he addressed which sounded like people in a room looking for ways to rip off

clients quite frankly is not something i'm seeing. >> i was in that business, in it, the retail broker is so far out on the line where you get in trouble for everything you do. you get credit for what you do, everything that goes wrong you get credit for. it was something that i learned about the business was if your clients didn't do well, you weren't going to have them very long. gregg smith said all this is going to come home to roost and it hasn't yet. so he's got that sort of out on what he said. but in general goldman sachs has been around for how long? you don't become the preeminent firm on the street, you've seen those commercials where only the guys at goldman had yachts. it's like where are my yachts, only the advisers have yachts? that doesn't last very long. doesn't clients stay with goldman because they're treated well? >> i saw it with merrill lynch and smith barney. the misperception is clients are

leaving, clients don't like their adviser. attrition rate is 2% to 3% a year. if this were other businesses, people would be doing back flips over how well they're doing with clients. what we saw in the research is clients very much like their adviser. they stay with them for ten plus years on average. these financial advisers are heros, right? they're out there every day. when i was on the institutional side i thought this business is so tough, look at all the analysis we have to do, look at all the work we have to do. to do that on the one hand and then be presenting it through and working it through with families, these are very, very tough jobs and these people keep these clients for years and years. what the clients tell you is love my adviser, yeah, i lost money but this person worked hard for me, disappointed in the company backing them, i thought it was a better company, but i'm glad my adviser is there.

>> in any business anywhere, that would be the first thing. if you're keep screw are your clients or you're not treated well, you're going to fall by the wayside. >> our guest said we need goldman. who told us that? >> jack said that. >> one of the questions when you're working at a big bank these days is who is my client, right? you have multiple clients. it raises the question to me whether the banks themselves are too big, have gotten into too many businesses, as a result have too many conflicts and can we go backwards, should we be going backwards to a different time? >> again, as you talked about the financial advisers, note they have one client, which is their client. so that gets to the point of when you have the client to folks on, can you do a terrific job. it's when you get up the line, you get into management teams

where the trade-offs have to be made. i found it easier when we were at bernstein we determined not to do the investment banking, when we separated at citi, smith beirne and the research respiration from the investment bank. when we were at merrill, we said where's the client. i found it easier to do one client rather than the trade-offs. >> did you ever have some stock or issue or something pushed on your wealth clients knowing that either the firm had a position either a proprietary position in the trade or the investment bank was pushing it because they were behind the ipo or what have you? >> of course. >> no, but then you talk about -- that's where it gets complicated in the wealth business. >> brokers, you're working for a firm. if merrill lynch is bringing out -- we had scripts written for philadelphia funds saving

society when it went public. you're going to be the person -- >> but if you're the underwriter of groupon and you're pushing groupon, it becomes more complicated. >> of course. but the issue is when there's a hot underwriting issue, the wealth management side gets more. if it's not a hot issue, the wealth management gets more. that's why we have committees that looked at these things and research analysts that said are these good or bad for the client base and made a decision based solely on that client base. >> and mutual funds, you used to get paid more for -- >> that's gone. >> that's gone now. there were all kinds of things back then. there were more commissions, it wasn't as fee based. there were conflicts everywhere. but if you didn't balance everything out white rooiright,

clients would go elsewhere. >> can i ask you about a pension fund ish that have gotten involved with hedge funds and riskier outfits out there. they look at pennsylvania, the state employees retirement system spent $1.3 billion in management fees and they've had a return of 3.6%. if you take that up against georgia where its municipal retirement system has earned 5.3% and only paid about $54 million in fees, what does this tale us about what's happening particularly with public pension funds? >> and it's across the investment world, isn't it? one of the certainties is fees. you know they're going out regardless of what the performance is and you hope you're paying for higher performance but that's in the future. it's interesting how little still people pay attention to these higher fees, that somehow, you know, they don't -- well, i

think in part certainly when you get into the individual businesses it's all there in the disclosure but good luck finding it. i was reading the other day a checking account agreement is 111 pages on average. nobody's reading that. and then you get to investments and it becomes multiples of that and these disclosures are really to cover the producer of the product as opposed to inform the individual. >> a bank will tell you for the checking account it's the regulators making them put all that stuff in there. >> it's the regulators, it's the lawyers inside. there's a view in this country that more disclosure is better and sunlight is best disinfe disinfecta disinfectant. but who is reading page 57 now? >> do you say we're all big boys? >> it doesn't particularly matter whether i'm for or against the consumer financial

protection agency. it's there. so we should really use it as a tool. the government, the industry should use it as a tool to make sure we're moving forward. there's no doubt this disclosure issue, there's way too much of it. forget about if you're an environmentalist or tree hugger. we've got too many pieces of paper being thrown around to people they absolutely don't read. if i were in the consumer financial protection agency, i'd look at disclosure and look to get very usable information to individual investors. >> we can ask you this next time. this viewer ywrote in, the gaug of success for financial advisers, brokers. you get your vp when you do a certain amount of approach ducks, you get your senior vp, you're ranked in terms of production. every gauge of success for a financial adviser, for a stock broker, is based on how much production he does. it's never based on client return or composite of clients

and how well they've done or risk somehow helping pension plans for his clients. it's always based on production. is there any way you could reward people for how their clients do rather than how they do? >> it's interesting, i thought can you reward for performance and the answer is which performance. it's not beating the s&p because you may want to beat the s&p. you on the other hand are a conservative old lady, no offense, of course you're not, you're a conservative young lady -- >> not far from the truth. >> if you're 85 years old, your goal isn't to beat the s&p. the work that you do with clients that is away from investment performance, every client in the world says investment performance is most important to them but what is important, when they rank what's really important is client service. investment performance is about eighth. how do you rank returning phone calls, talking to people late in the evening, helping them get

through a difficult period of time. if, however, size of business can be highly correlated with client satisfaction. >> if you stay in business, add clients, you're going to do more business and that's a reflection of whether you're taking care of your clients. >> that's why there are massive infrastructure controls in place. you wash out. first of all, you know, if you got the right compliance infrastructure in place, which these organizations should, that won't happen, won't happen for a couple days, a couple weeks. in the old days you'd wash out anyways. >> sallie is with us for the rest of the program. when we come back, we'll talk to one of the men responsible for regulating the energy markets, mf global's missing money and much more. and the bank charged with financing exports could soon lose its charter as lawmakers

wrangle over budget cuts. fred hochberg will talk to us about what's at stake for america's business. we'll be right back. >> he's the market master with a penchant for predicting the future. is he seeing bloom, boom or doom in the global markets? we'll find out next. the real dr. doom. mark faber is our squawk newsmaker. ertz gold plus reward, you skip the counters, the lines, and the paperwork. zap. it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz.

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welcome back, everybody. take a look at the futures. you'll see the dow futures just below fair value, the s&p just above. visa says it has now dropped global payments as an approved partner after a data breach last week exposed customers of visa and others to possible fraud. >> known as a contrarian, he holds the status of both "squawk" newsmaker and master of the market, mark faber, otherwise known as dr. doom is the editor and publisher of gloom, boom and doom report. thanks for joining us this morning. >> it's my pleasure. i don't deserve these compliments. >> you're going to scare everybody. i was going through the notes. you say the crucial question over the next decade is not,

quote, where will my returns be highest but where will i lose the least money. why do you say that? >> well, basically i think that whole bailout and the money printing will not create long-lasting wealth, nor will it create healthy economic growth. and if i look at the world, then i see essentially well to do people that have done unbelievably well and i see the middle class and working class that hasn't done well. and i think somewhere down the line we will have a massive wealth destruction. that usually happens either through very high inflation or through social unrest or through war or credit market collapse. maybe all of it will happen but at different times. so i think that people have to -- >> marc, i'm sorry to interrupt

you. coty is pro poeiposing to buy a. >> it sounds like a bear hug. they decided to try and do it. looks like they weren't getting any satisfaction from avon's board. the stock is already well above the 23.25 prierks trading 24.50 to 24.73. this would be a big deal. >> it says it has no intention to pursue a hostile bid. >> what is it, though? >> it's in play. >> let me finish up with marc and we can come back to this news. marc, i just want to understand because you could be scaring the viewers, including myself, when

you say that there's a down side, how big a down side? put a number on it. >> well, i mean, i would say that well-to-do people may lose up to 50% of their total wealth. they'll still be well to do. instead of a billion, they'll have say 500 million. but think i think there is a massive waeealth destruction coming down the line. i'm not saying it's coming tomorrow but looking at the bailout and money printing, they have postponed the problems and actually made them larger in the sense that the government debt has increased dramatically and somewhere a solution will have to be found for this government debt. >> so, marc, we have sallie krawcheck on the set. sallie, if your clients were watching this morning and saw marc and they called you and said what do i do, what do you

do about a prognosis? >> marc, isn't the answer you hold more gold? is it you're holding on to stores of significant value, right? >> i pointed out there is one asset class that this relatively depressed and these are properties in the south of the united states, in georgia, in arizona, in florida and so forth. i think there property values will not collapse much more and will stabilize. and so i think to own some land and some property not necessarily in the financial centers but in the secondary cities is a desirable investment relatively speaking. i think that people should own some gold and i think that people should own some equities because before the collapse will happen with mr. bernanke at the

fed, they're going to print money and print and print and print. and so what you can get is a bad economy with rising equity price. >> marc, thank you for depressing us this morning. we appreciate you being with us. >> no, it not my intention to depress you, but i think we have to think realistically that the debt contraction basically has been postponed but huge debt is still there and still growing. you look at, say, student loans. i don't believe that all the student loans will be repaid ever. >> marc, we're going to have to run but what is the tipping point? i know you're calling this sort of a decade that you expect this will happen in the next decade, but what do you imagine would be the tipping point? what is going to set off that hyper inflation that you inspect? >> i'm not necessarily saying hyper inflation will occur but i think that we can have first

inflation in asset prices, as we had in the last 20, 30 years and then that asset price will come down like the real estate market came down in the united states for residential homes. and what will be the trigger you never know for sure. i mean, i didn't know that the nasdaq would peak out on march 21st, 2000 and then collapse. but i knew it would happen. that is the difficulty and i always tell investors the problem is if you go 100% into cash and you have money printing and asset prices continue to go up, you may lose all your clients or you may lose the purchasing power of your money because we have negative real interest rates. >> marc, i want to say thank you for, you know, listening to you makes me nervous. it's a good way to start the

morning. >> well, i think you should be nervous. >> we got to run, marc. thanks so much. appreciate it very, very much. joe. >> so they want to mutually -- is that typical for bear hugs to say we -- >> i don't think they mean it. >> they say we want to do it. >> then it shouldn't be trading at 24.50. >> they don't want to meet mutually agreeable -- they want share holders to get a chance to weigh-in on this. >> that's otherwise known as a hostile take yefr. >> andrew young has been under pressure recently. it was trading at $18. it's an iconic brand. coty says put those together and it's even more iconic. >> this is an excerpt from a letter, it says if can you demonstrate there is greater value than is apparent from the

publicly available, we'd be prepared to increase the proposal. they say basically they go out and say that they want the shareholders to have a say in this because the board has not engaged with them in negotiations. they say they came on march 7th at 22.25 a share, got no responsiveness from the board, they raised it to 23.25 -- >> down 50% from where it was a couple years ago. >> i thought you'd be doing back flips, sorkin. >> marc faber will scare the heck out of you. >> are you still thinking about him? this is you, this is m&a. >> there's no m&a. the other thing we haven't talked about is express scripts is being halted. we haven't got the news on med co but we were expecting an ftc ruling as early as today. >> can we talk about coty and

avon? >> we took it off the ball with the ashton kutcher things. >> ashton is going to be playing steve jobs. >> that could be a very handsome steve jobs. >> you, too? i know men like women without brains, some of them but women like that, too? i guess demi did, right? >> i think it's demi. >> coty says is makes such a great match with avon because they have fragrance and nail. coty says it's not for sale in a lot of different areas. you have 6.4 account representatives with avon door to door and they'd like to get access for that. >> i've never liked the sound of coty. it sounds like cooties, doesn't it? >> no, i never thought that until you just said that. >> now you're finally involved. >> i'm reading the letter.

look, i was talking to marc. >> this is you. >> give me time to read the letter and we'll come back to it. >> do we need to call favor? >> still ahead, he has a major role in shaping the nation's monetary policy. he's so good, so outspoken, handsome, dashing, dallas fed president richard fisher. i'll take him over ashton kutcher any day. he gives us our prognosis for the economy. >> time now for today's aflac trivia question. in this day in 1971 what song by rod stewart reached number one on the billboard hot 100 list? u? huh! no! who's gonna help cover the holes in their plans? aflac! quack! like medical bills they don't pay for? aflac!

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they've been relatively flat this morning. we have data coming out at 8:30 where we'll be getting a look at some indications of the economy. it all leads up to that jobs number on friday. that's going to be key. among the stories we are following, actor ashton kutcher will start in an indy pick about apple co-founder steve jobs. he'll play skojobs in the film t chronicles jobs. sony is developing its own film about jobs, one based on walter isaacson's best selling book. this is a question andrew's been asking about today. who do you think should play steve jobs? >> we got a couple of good tweets. christian bale. stanley tucci. noah wiley. >> that would be cool, too. >> interesting. kevin spacey. george clooney, somebody threw him in and somebody wrote "just

use pixar animation. >> how about you? someone wrote it in. someone wrote you should play him too. >> yeah, right. you could tell jesse eisenberg played mark zuckerberg. can you tell how smart jesse eisenberg. it's like keanu reeves is going to play bill gates? dude, where's my car? don't taze me, bro. >> if you have comments, dude, or you have a place of who should play steve jobs, shoot me an e-mail at squawk@cnbc.com. >> one of the money in charge of regulating the futures markets is saying don't you dare. bart chilton will join us when "squawk" returns.

new data this morning shows

higher gas prices have pushed more americans to buy a greater number of smaller, fuel efficient cars. here's a man who doesn't fit in one. phil joins us with the number. you're always ready. >> nothing like coming back from vacation and seeing you. we've got mr. incredible. we put him in that little car. >> you don't have the animation ready, though. >> we should have. >> so they're buying them? >> yes. and this is not surprising. the automakers have been forced to come out with more fuel efficient vehicles and as a result people are saying i want at least 30 miles per gallon. there's no shortage of these vehicles. look at this data coming in from general motors. they're going to release complete sales tomorrow. look at the percentage of march 30 miles per gallon sold versus three years ago. 40% versus 30 prz.

-- 30%. you look at those models and say how many people are actually buying? they're going to sell 100,000 of those or they did in march. that is a monthly sales record in terms of the fuel efficient models. where is it coming from? clearly people are transitioning out of trucks and suvs. you have greater margins and profits with your trucks but clearly people are transitioning to smaller cars. look at gm versus the dow over the last three months. no comparison here. they have moved considerably higher over the last three months. >> does this do for domestic automakers versus foreign automakers? it used to be when prices went up and people went smaller, it was great news for japanese auto makers? >> they're better prepared.

ford has a lot better fuel efficiency. they're among the leaders. chrysler has a ways to go. they still tilt towards trucks and suvs. there is no doubt people are saying i will buy domestic if you give me fuel economy. that's why you're seeing more 4 cylinder models being sold, 6 cylinders replaces 8 cylinders on trucks and suvs. >> how much of this is a shift simply because of what's going on with energy prices and how much of this is we've hit a tipping point where those gas guzzlers are yesterday's cars? >> a little bit of both. i think they clearly because of what's going on with gas prices you have people transitioning that way and also you have people saying i want better fuel efficiency. now, i still want the space. joe was talking about how he wants a big suv. americans will always want suvs -- >> that's true. >> i have three dogs and a german shepherd. >> when you look for that suv, you're going to look for 6 cylinders. someone is going to say you want to buy one with 8 cylinders,

you're going to say no if. >> i think i'm going to look for one with 8 cylinders. >> later on "squawk," the flying car. >> what? >> the flying car. >> what? >> it's the car that flies. it is certified as a plane as well as an automobile. >> can you drive it in. >> i can drive it. i can't fly it. they asked if i wanted to fly it. i said i don't have a pilots license. >> mike jackson is going to be on tomorrow. i'm going to see if what you said is really true. >> he'll back me up on this. >> you call him right now and ask him how many people are coming in and looking for 30 miles per gallon. he will tell you they're flooding into their dealership. >> he's coming on tomorrow. i don't have to call him. >> you want to see truck sales. >> gm is saying for march they have seen a big transition away from trucks and suvs. >> you might be right about this.

i'll ask him tomorrow. >> phil, thank you so much for coming in. >> it's always great to be here. like a visit to the doctor. >> which one? describe it. >> no, no, no. >> can you cough? >> go ahead. >> there is a vote expected on whether the commodities trading commission should approve a political contract. joining me is bart chilton. bart, you say something like this and you immediately think of the futures contract. is that what this is akin to? >> becky, these are contracts that would be based upon the election of the president and the election of the house and senate. there's something out on deal book right now, andrew, and i won't argue with that. i think we're going to disapprove these later today, these contracts. the dodd-frank law says that we shouldn't be doing any contracts that involve gaming on the one

hand and we also shouldn't be doing any event-based contracts not in the public interest. clearly things like acts terrorism or assassination or a celebrity death pool or something like that, event-based contracts aren't in the public interest and i think today we're going to make a decision that says we can't be betting in the futures market on the outcome of political elections. >> that sounds fairly certainly clear from the dodd-frank interpretation of it. why would anybody even bother trying to bring one of these potential contracts up given what it says in dodd-frank? >> people are creative in how thee-th they do these contracts. i commend people for being creative. i agree the law is pretty clear. they don't even allow gaming on elections in vegas and they know something about gambling. >> that brings me back to intrade, though. what do you think when you see the contracts that are traded

like intrade if. >> i don't think you want to federally sanction something like this. if people want to do this, it may be good fun, it may be entertainment. but for me you don't want to give the bold federal flavor of regulation. we've got a lot of serious things to be worrying about with regard to dodd-frank and i think we immediate to keep our eye on the ball. >> the cftc is expected to interview lorie fervor from the mf global situation. can you give us an update on what you know at this point? >> we've got sort of a two-pronged attack on this. our investigators are neck deep in the investigation and i can't really speak to that. but we also have the other prong, which is trying to recover over $700 million that was shifted from mf in u.s. to mf in the u.k.

and the brits suggest that once that money crossed the pond that it lost its identity as segregated customer funds. you know, money that comes from anyplace else in the world and comes into the u.s. futures markets, it has to be segregated and be protected. so there's a disconnect with the brits on this and we're working, the trustee, mr. giden is working, they've got a bankruptcy lawyer there, a british barister, if you will. hopefully we'll call clau back that money and get it to people who are still hurting. i was pleased to see the trustee, mr. giden, announced that close to 80%, maybe a little more, 80% of the customers will be reimbursed, but that's the u.s. customers. that's not the customers who have their money over in the u.k.

u.s. citizens who have their money in the u.k. >> we have to run but before we go, you've seen the e-mails around john corzine, what he knew and didn't. sounds like he may have authorized the transfer but didn't completely understand where what the transfer came from. what's your sense? >> i really can't talk about it, i'm sorry. these investigations and investigators are neck deep into it and i just can't get into it. i'm sorry to not be able to answer you. >> thanks so much, bart chilton. >> coming up, what's at stake for american businesses if the country's import/export bank loses its charter. we're going to talk about that and talk to the chairman about whether or not he's going to survive. the next revolution in music is happening here. pandora rocks the big board.

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welcome back to "squawk box." futures down about 19 points. we're watching shares of avon product, beauty products maker co coty wants to buy avon for $25 a share. says it's a bear hug, hasn't been able to engage avon in talks. says it doesn't want to pursue a

hostile bid but here we go, sending a letter saying we've been trying to buy the country but they won't listen so we're going to shareholders. they indicated they might be willing to raise their offer. andrew has more on this in a second, don't you? >> a couple of interesting pieces on this. not on is coty making the bid. jp morgan financing the debt. but more interesting is bdt company is arranging the finance. you might say who is bdt?it's b buffett's favorite banker who left goldman two and a half years ago now, starting his own fund. he's going to be doing this in connection with joe ben kazer. ben kaiser directs condoms. that's what they make.

just throwing it out there. >> which ones? >> i think it's durex. >> you looked at me like would i know. >> like you might know. >> also owns -- >> are they a special kind? >> sallie, you want some of the paper over here? >> no, i'm good. >> also labelex group which owns balis and -- >> let me handle the ladies shoes. >> the point being that coty's is -- i wouldn't say front but there's a lot more in this transaction, who is behind it than simply just a coty's/avon deal. i shouldn't have gone there with you. >> you looked at me like you know, the durex ones.

i don't know anything about it. >> they also do woolite. >> here to discuss how it would affect thousands of american businesses, fred hochberg. i'd ask you, fred, if you know about -- i won't go there. it's okay. but at least can you laugh about it. let's just talk about what's at stake here. >> well, what's at stake here, aaron -- i'm sorry, andrew. we have -- our charter expires in less than 60 days. in less than 60 days we have to have congress to reauthorize the bank so we can go on lending money to foreign buyers so small businesses and large companies can export good and services and create jobs here in america. >> give us a state of play now. your sense is a deal with ultimately be reached? >> i'm confident we'll have a

deal reached. it reduces the deficit and we have support on both sides of the aisle. i think we'll find a deal but we haven't found one yet. >> what does a deal look like? >> a four-year authorization, which is standard. we usually have between four and five years, asking for an increase on lending cap from $100 billion level to $140 billion level so we can make the loans and make the guarantees to make sure we create more jobs in america from sales from exports. >> what's the risk here? is it that this is an off balance sheet organization, the government, and there will be high losses? >> first of all, sallie, our losses have run about 1.5% over the last 10, 15 years. >> and you've got a few periods of down turn. >> right now we're running at

about the 1.5% rate. i look at a watch list every month and the watch list is down to about two pages. i'm looking at maybe a dozen transactions. >> it's an important issue. we appreciate you joining us this morning, fred hochberg, president of the u.s. import/export bank. >> thanks for having me. >> still to come, atlantic city rolling the dice at a new spot and we're at the grand opening of a new hotel billing itself as a resort first, casino second. "squawk box" back after this.

i didn't hear it either. our top stock today is avon products. avon is getting a bear hug from not david coty. >> it's coty. byron trot and his capital is backing coty as is how do i pronounce it? joe benkaiser, and their companies, one is the luxe group which owns balis and jimmy chus. >> it's interesting they're trying to take advantage of the situation with no ceo at the company. she's still chairman. they're looking for a ceo and to have her stay on as chairman.

the amount of time between that is today, they have opened up a vacuum. >> they say they don't want to see a new ceo named in the interim, they think this should take precedence over that. >> does a 27% premium which on its face seem high over the last three-month average, is that sufficient? >> i don't know. >> could we take a quick look at avon stock over the last year? >> the stock closed at 19.36 on friday. it's going to open today at at least $24. >> i imagine we'll hear from avon sooner than later. coming up in the meantime, in the next hour, three squawk newsmakers. they're going to take us through their investment strategies. then dallas fed president richard fisher will give us his prognosis for the economy and whether more growth is ahead.

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dallas fed president richard fisher will join us for an interview. >> an atlantic city casino betting big on the resort model. but will it pay off the risk? >> and it's the first trading day of the second quarter. we're going to find out where black rock is investing its company's money. >> $1 million. >> not even close. >> $100 billion. >> try $3.5 trillion. chief equity strategist bob dahl and jeff rirey rosenberg will j us. ♪ my head keeps spinning welcome back to "squawk box"

here on cnbc, first in business wor worldwide. i'm joe kernen along with becky quick and andrew sorkin, with guest host sallie krawcheck. a great quarter for the nasdaq. there you can see down just a fraction this morning. that doesn't indicate where we'll be by 4:00. there's some deal news. i wanted a little more excitement out of you. >> in our headlines this morning, beauty maker coty is proposing to acquire avon for $23.25 per share in cash or about $10 billion. coty says it has been unsuccessful in engaging avon in takeover talks but does not intend to pursue a hostile bid. we should say a couple things about this. the first is even though they say they don't intend to pursue a hostile bid, there is the

equivalent of a bear hug. because they want shareholders to put pressure on the company, they may have to pursue a hostile takeover. we talked how this was a 27% premium over the last three months. it's a 20% premium based on friday's close. this a little bit smaller than some people are suggesting. and the other last piece to introduce in all of this is the idea that byron trot, who we talked about, warren buffett eaves favorite banker, is behind this transaction. his capital fund is behind this, as is joe benkazer. we won't mention what he makes in addition to woolite. >> durex. >> and bali and jimmy chu for the ladies. express scripts and med co halted for news pending the

proposed $29 billion takeover of medco by express scripts has been the target of a law seeking to block that transactions. groups representing drug storms and pharmacists say it would hurt patients and retail farmist -- pharmacists. we're hoping to hear from the ftc this morning. and it's the first trading day of the second quarter. here's the final report card for q1. the dow gained 8%, the s&p 12%, the nasdaq 19% and the russell 12%. financials edging out tech for the title as best sector performer. as for specific stocks, look at this. bank of america was the dow's best performer. there you are, sallie. notable bac was the worst blue chip performer last year. the worst in the first quarter, hewlett packard.

>> black rock's quarterly asset allocation report is out this morning. joining us is black rock's chief equity strategist bob dahl and income stras gist jeff rosenberg. they're both with us on set this morning. welcome. >> thank you. >> andrew, just set up what happened for this last quarter. the best performance in over a decade for the markets. bob, the headline has to be you still think there's more room to run here. >> we do. the first quarter was a good year. going to be tough to repeat. we could have some setbacks even the second half of march was a little sloppier. our view is the monetary conditions are still good, the fundamentals good, not great. sentiment is still negative when you look at how people are positioned and valuation for risk as it's not stretched, we argue more of the same. not at this pace, not in a straight line but we don't think we've seen the high for this year. >> is there a fed out there?

david teper was on a year and a half ago. >> you add a bunch of other central banks that six months ago weren't necessarily with us. the answer to that question is yes, especially when you think about the ecb. they used to fight inflation no matter what the environment, becky. now they're saying deflation is a problem weeks can join that act, too. >> i want to interrupt for half a second to say avon has rejected coty's indication of interest. >> they're not calling it a bid? >> they're not calling it a bid. it was substantially the same as the one made two weeks ago -- >> does it constitute a real offer. >> it was opportunistic and not in the best interest of avon shareholders.

>> doesn't constitute a real offer? it's too low? >> they're raising issues with the financing and premium. they're saying own a 20% premium does not reflect the fundamental value of vafon and its global beauty care franchise. they're saying the multiple over the net revenue represents 8.7 times 2011 ebidta and they believe they're an iconic business brand. >> bob, do you own avon? >> i don't. troubled company. i wish i owned it this morning. they've got a lot to do. you're going to see more transactions, companies with all kinds of cash buying other companies and those saying i can borrow some money pretty cheaply if i can get the money and i think that will be another reason equities -- >> bob, doesn't this feel like the second step in an emerging bull market, to have the m&a

activity start to pick up. in your outlook is correct and the markets continue to do well, two steps forward, one step back, financial services continue to do well at a greater ra rate? >> the stronger the rally, the more financials have to be there. they carried the day in the first quarter and having the negative on financials for some time, i can't say i'm up to market weight but we're less concerned than we were. where is the long-term revenue and growth going to come from and what's nut regulatory environment? >> we have more news on express scripts and medco. in that transaction the ftc is not blocking that transaction. it is going to go forward. the stock had been halted. they've completed that investigation. we'll bring you more news on that in a moment. >> bob, one more time. just listening to you, you're saying it's a good year already and it's not going to be a straight line.

would you ever say this is really just the beginning and i'm looking for many more gains by the end of this year? i'm looking for 30%. would you ever say that? you're already sort of saying it's been a good year, we haven't seen the highs, we way go up another 10 points on the dow but we've already had a really good year. would you ever just come out and say that, i'm really bullish? >> after stocks have doubled in the last three years. >> i doubled from a ridiculous financial bottom. y -- we haven't been anywhere in 12 years. can we do 30? >> sure we can. >> but if the economy is going to be improving here and it feels like sit hearing today it's kicked in, these things can have long tails. >> stocks are still going to win the race. we're 10% away from a new all-time high. we could easily see that this year. >> 30% this year? >> well, we've gotten 12 and

another 10, that's 22 but compounding makes it 23. is that close enough? >> yes. >> that's u.s. how about emerging markets? >> the emerging markets have led the way. they're coming back. we're still worried about how slow will they get, china for example. but if markets are going to move higher, the emerging markets are going to lead the way. i would be overweight the emerging markets and u.s. >> if you're bullish you should be overweight emerging markets and financials. >> what's really interesting in this conversation about equities is i don't think you'll see a return -- most people still own fixed income and allocated into fixed income postcrisis. we haven't seen that change. in the first quarter i think we might begin to see the beginnings of that. fixed income returns were barely

1% positive and most of the returns in fixed income are coming out of the stuff with most equity-like exposure and that's high yield. that continues to be our recommendations as you fact a higher interest rate environment, traditional income long duration will begin to suffer. >> is that a clarion call, though, or is that an okay, let's start to pull out and look more toward equities? >> i think people still want fixed income because they want the diversification. they want balance in their portfolios and want preservation of principal more than anything. to get preservation of principal, you have to think about different sectors in the fixed income markets than you traditionally thought about. duration is a sort of -- principal protection is -- you have to go to tips and go into credit and balance out. >> that's not necessarily saying

pull it out of bonds and put it into wek its. >> that's right. a lot of people don't want that equity volatility they've seen in the past. it's a demographic shift, it a shift in expectations and risk and we regard. if you want the protection of fixed income, the only thing you got to think about going forward is how will fixed income do that? you've got to have shorter durations than you've had in the past. interest rates are more likely to go up than go lower. >> when we look at the yield of the ten year treasury and on the market, they're not that different. joe, i can be bullish. >> you have been. given the last 10, 20 years, all managers are afraid to say we'll ever get back to those big returns again. >> we do have that because there's the head winds of

deleverages. >> it kills me when everybody is optimistic. you can be that forever. >> we are starting to see consumer debt growth. the question is where we are in that path and if we're starting to bottom out on that and it can drive growth again. >> it is. and then we have the government sector that needs to deleverage as well and that's going to be a fiscal head wind for the first of next year we'll start worrying about pretty soon. >> it's difficult to get so bullish on risky assets and 30% returns when so much of this has been policy supported. >> that's true, too. >> before you get to big increase, we'll have a conversation about rising interest rates and the ability of stocks to power through a change in fed policy. >> would a tripling of a ten-year at 6%, does that hurt? didn't hurt in the 80s and 90s. >> depends how quickly.

it certainly hurt in march. >> is it an inflation concern or is it growth? that's a big difference for equities. >> 4% could make us feel good. look at japan. they got zero forever. >> it depends how you get there. when we talk about fed exiting, it's going to difficult for all fixed assets. >> technology, that was one of the best reporting sectors. got beat out by financials in the end. the nasdaq was up 19%. what do you think when u look at the tech stocks? >> still on a preferred list, dell computer if you want a bottom fish, mike of microsoft, ak censure. if the market is going to go up, back to sallie's point, tech is like think li to be there as well. >> coming up, gambling with an ocean view.

it's billing itself as a resort first, casino second. still ahead, richard fisher is on today, dallas fed president. he'll join us at 8:30 eastern. "squawk box" will be right back. this wednesday "squawk" is on a mission. >> this mission is too important for me to allow to you jeopardize it. >> a business rebel and icon. and high flying space traveler. the one and only sir richard branson. the countdown is on. and he's landing here, only on "squawk box." rival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap. it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz.

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welcome back to "squawk box." for the first time in eight years a new casino is opening in atlantic city. residents, owners are hoping it's going to change the luck of the mecca. mary thompson is live from atlantic city. i remember the development of this spot.

it's hard to get this thing finally up and running. >> that's right. it was halted for a little while. they needed new financing, morgue and stanley, which was a partner, pulled out. it has been a long time coming, joe. as far as atlantic city goes, it needs not only a little luck but a whole lot of visitors. gaming revenue for this city is down 36% and this year atlantic city has forecast to seed its second ranking in the country as the nation's second largest gambling destination to pennsylvania. the privately held reffell opportunity is marking the occasion. the $2.4 billion casino, a 20 acre waterfront property, featuring ten swimming pools, a 32-room spa and a 5,000 feet amphitheater that beyonce will be opening next month. there are 2,500 slots and 150

gaming tables. as new jersey's governor points out, revel wants to bring in more than just gamblers. >> we want it to be a family destination, a destination that tourists come to. we want them to see that there's 127 miles of beautiful beaches in new jersey and most of it is right here in atlantic city, most of it is right outside the casino floor at revel. >> unlike other casinos, revel is smoke free and all of its 1,900 rooms as well as some of its gaming tables have ocean views. it's hoped this will bring new visitors but analysts are less optimist optimistic. deutsche bank says it won't be a game changer for the market and a game changer is what atlantic city needs. gaming revenue is set to slide for the sixth time this year as pennsylvania and new york casinos have captured many of the day trippers who used to come to atlantic city.

a number of those day trippers were lined up here right outside these doors to be among the first to use the gaming tables and slots, all of which are open. this is part of a soft open over the next eight weeks, you'll see restaurants and retail space open with all of the facilities open, with hard open, on memorial day. back to you. >> if you're willing to roll the dice at the track, cnbc and churchill downs giving you a chance to win a trip to the kentucky derby and a $100,000 dream bet. can you visit facebook.com/cnbc and fill out the entry form or follow@cnbc on twitter and tweet i want to win the the @cnbc pound derby dream bet.

>> did you write "if you want to roll the dice at the track." >> i did not. >> that's one of those mixed things, isn't it? >> we mixed a couple of metaphors this morning. >> you don't roll the dice at the track. you bet on horses, right? >> so what would be your -- >> i don't know. >> sometimes they have slot machines there. >> okay. >> lucky at the -- >> it's like pulling the bubble, popping the plug. rolling the dice at the track -- ashton kutcher would say that. >> our pick for playing jobs. >> no, he's not our pick. >> he's their pick. >> someone you came up with -- >> christian bale. >> he is trouble. and he gets mad. >> i'm going to call howard before he's out of that job, stringer is going to have to put him in place. >> when we come back, we'll have more of today's top business headlines.

and then dallas fed president richard fisher. we'll ask him about interest rates and the future of the financial industry. "squawk box" will be right back. foragers, those fishermen... e 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. wow. this is new. yep, i'm sending the dancing chicken to every store in the franchise to get the word out. that could work. or you could use every door direct mail from the postal service. it'll help you and all your franchisees find the customers that matter most -- the ones in the neighborhood. you print it or we'll help you find a local partner. great. keep it moving, honey. honey? that's my wife. wow. there you go. there you go.

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welcome back to "squawk box,". >>. the ftc has cleared the proposed $29 billion acquisition of medco

by express scripts. the commission has determined there are numerous vigorous competitors in the pharmacy benefits management business. the company says that transaction as of a few minutes ago is now officially a done deal. let's check out shares of competitor walgreen. walgreen pulled out of express scripts by last year. it's trading 18 cents down. you knew this would happen sooner or later. the investment firm topeka capital has set an unprecedented price target for am shares of $1,001. you knew it had to happen somewhere. >> it was always going to happen. appreciate it. our newsmaker of the morning went from wall street to the treasury department. now he's president and ceo of the dallas federal reserve. richard fisher is going to join us coming up next when "squawk" returns.

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welcome back this monday morning. that was a beautiful shot of the capitol. big news. we could call it merger monday perhaps this morning. avon rejecting an acquisition offer from beauty products maker coty. mr. trott is behind this deal as is benkaiser. the proposal was for $23.25 in cash or about $10 billion and

they rejected it as opportunistic. >> that would be the biggest m&a this year if it were to go through. >> that's depressing on where the animal spirits are on wall street today. >> we have a new resort opening in nunew jersey, a couple of deals. feels like a little of the beginning. maybe not animals spirits, maybe puppy spirits. >> the top ten u.s. banks account for a whopping 51% of u.s. assets, a statistics that could make our next guest concerned about the continued idea of too big to fail. i don't know who wrote that, richard. first thing i'd like to get to is all the conjecture with some

of your peers, whether there's an ice cube's chance in haiti that we get there without raising rates in your view. >> you were talking about puppy spirits. i understand joe turned down byron nelson. how come? >> that's a really sore subject. don't you think it would be good for cnbc if i went to that? i would be allowed to go if i took a vacation day and paid my own freight. that was what i was told. i want to go down there so badly but if you want to talk to the managers around here and tell them it's a good thing but i don't want to air my dirty laundry. i wouldn't normally do it. but you asked. if i take a vacation day and write my own check, i'm allowed to go to represent cnbc. >> that's equivalent to the question about the ice cube melting in haiti. >> i'm still thinking about doing it because it's such a prestigious event, such a great course and great event. who did we have on?

our guy said 2013 we're going to be cranking mid year and that he'd -- >> lacker. >> would raise rates in 2013. how can you guys be so different when you're all looking at the same things? >> i can only speak for myself. i can't speak for jeff lacker or any or federal reserve president or for the committee. my view is the economy is improving. we see our own district as a leading indicator and we're seeing for all the surveys we conduct at both good production, service sector, exports and so on increasing economic activity. it's not overwhelmingly robust, it's positive. it's moving in the right direction, it's gaining momentum. but i think it's a little bit premature to talk about tightening here. the real issue has been -- and

i've noticed a shift. your own questioning used to be qe3. now it's a question of are you guys going to start tightening. that very much depends on how the economy evolves. right now it's evolving in the right direction. but the question is will we go from job creation to growth and final demand? i think we are proceeding along that path but we have a ways to go. >> when we had lacker on, it was only days after bernanke had said some things and the market interpreted it as a possibility of qe3 and was up 160 points and it was only two, three days later that we had someone say i'm sure that it seemed to fly directly into what the chairman had just said, what president lacker was saying. >> well, we all have different views and different perspectives. that's why we have a committee and the committee meets and deliberate. there are 17 people on the

committee and 17 viewpoints brought to the table. ben bernanke does an extraordinary job of pulling together an consensus and then we issue our statement and we're off. tomorrow you'll see the minutes of our last minute and the nature of the discussion at the last fomc. >> what do we do the rest of the year in terms of gdp and what do we do in 2013 in your view? >> i think the idea of forecasting specific rising to the decimal points are silly. we are seeing increasing economic momentum, job creation is moving forward, although we'd like to see it move faster, "we" meaning everybody in this country would like to see it move faster. we're not seeing dramatic inflationary precious. there are some offsets but our own analysis in dallas is still showing a roughly 2% as a run

rate over the last six months. so we're not in a sweet spot but the whole thing has shifted from hyper negativity and a negative perspective in the marketplace, fears about double dips, we're in a much position right now. i've argued extensively the economy is extremely liquid. there's a lot of liquidity out there. even though money has come up a little bit. it's a great time for american businesses if they could just have a little more certainty about what's going to drive their cost factors and here i mean a sense regardless of what it is of what our fiscal authorities are likely to do, i think our businesses are poised to take off. they're lean, they've got their enormous productivity, they've cut their cost to the bone. a little further expansion in

final demand, which we're beginning to see and then better definition as to what it's going to cost them to run their businesses and what the risks are that will come out of the political process in congress and i think you could see american employers take off. we're in awfully good shape and we're in much better shape, i would argue, than our counterparts overseas. >> can i shift the conferring a little bit? this is sallie. you have some pretty interesting and controversial comments on too big to fail, the too big to fail continues to exist and big banks should essentially be broken up. tell me if i've misunderstood or misrepresented. has the moment passed for that? if you want do that, have we wasted a good crisis? >> i don't think so because we've gone from -- you have to remember what happened during the crisis. liquidity disappeared. central bank, the federal reserve stepped in, did what it had to do. this is classic central bank, your lender of last resort. we've gone from a situation

where during the panic there was not liquidity, no confidence in counterparty risk, et cetera, et cetera, to the opposite extreme right now. and i would say the time is now. the time is now because we have corporations that have restructured their balance sheets, they're flush with liquidity. i'm not just talking about publicly traded corporations but private companies as well. large, medium, smaller businesses a little bit different but it's really the community and regional banks that are key lenders to small businesses. we have 52% of the deposits held in five financial institutions, much greater concentration than we had before the crisis. and there's plenty of liquidity out there and the economy is growing. this is a better time to deal with too big to fail and to pare back the potential for damage to this large institutions in terms

of systemic risk and certainly it was when we were under duress. i don't think the time has passed. as the economy gets stronger with the amount of liquidity that's available, it's a better time to talk about this than it was before. >> i tell you what i worry about, we can have the too big to fail debate, i worry about what they call too many to fail -- >> that's what we refer to in our report. >> which is the large banks have put in place these living wills. i worry about -- because so many are after the same business, in some cases have the same strategy that even if your dream came to pass, the problem doesn't go away because you have a series -- a domino effect during downtown. is there any way to deal with that? >> this is one of our concerns. it's not just too big to fail, it's too many to fail. there are these inner linkages. it's like the routes of tries

that might be interlinked. we're talking about too big too fail and the kind of gymnastics we'll have to go through they're stress tested properly, they have the right capital rates, et cetera. you go back to something the president of the bank of england said, mervin king, if you're too big to fail, you're too big. instead of havingupervisory and regulatory authorities tying themselves in knots in order to make sure that something doesn't spread out of these institutions, i would argue it's a healthier situation not to have that kind of risk in the first place. that's point number one. point number two, i think this is something that just is not good for capitalism. we thrive on creative destruction. we are the masters of creative destruction in america. we've shown it generation after generation after generation. i think what makes people angry, whether they're on the right or

the left, is we don't let this process occur in the financial sector. so whooef got from what i call survival of the fittest to survival of the faltest and the fattest are these huge institutions that basically people know or think that if they get themselves into a ris eke situation the government will bail them out. the purpose of dodd-frank was to make sure this neff happened again. yet, they still exist and they have a larger concentration than they had before. so i think the timing is right to talk about this. we've described the pathology with this at too big to fail with our and nal report, can you can go to www.dallasfed.org. i think the timing again is now to talk about it because we're in a better position to deal with it than we were before.

>> stay right there, we'll take a quick commercial break and we'll continue our discussion and "squawk box" will be back in a few minutes. still ahead this week on "squawk box," interviews with the newsmakers you can't afford to miss, florida senator marco rubio, the incomparable donald trump and a lot more. it's all leading up to friday's employment report. don't miss "squawk box," all this week a starting at 6:00 a.m. eastern. we're cracking down on medicare fraud. the healthcare law gives us powerful tools

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we're back on this monday morning. let's get back to our newsmaker of the morning, dallas fed chairman richard fisher. i wanted to follow up with you on this too big to fail idea. if you're jamie diamond and you're watching this right now, how would you break up those banks? in detail. >> if they're watching right now i'm sure they're sticking pin in the voodoo doll of the dow's federal reserve bank. these are very fine people. i know them. some of them are personal friends. our job is to express what we think is inhibiting recovery. >> but how would you do it prakt when -- practically? >> there are plenty of bright minds in this country, whole legions of people who work on transactions who could easily

figure this out. >> in my mind you're suggesting there is a problem and i think we all agree there may be a problem but you're not necessarily proposing a solution. >> no, and i don't think we should. andrew, you're better at this than i am. i bet you have some solutions that you could think through. >> i have some ideas but i thought you might have some smarter ones. we talked to marc faber earlier in the show. he is dr. doom. he did say that he believes over the next decade there's going to be hyper inflation and he was actually or particular lating a view that equities, or investments more broadly may go down 50% over the next decade. i wanted to get your response. >> i'm not going to respond on the markets but on the point of hyper inflation, it important to remind you your viewers and you guys that one of the most important thing we've done in our recent history was issued a formal statement of strategy. we made it clear we were targeting a long-term target of

2% in terms of price influence. this is something that ben bernanke has wanted for 15 years. it's something the entire committee with one be a sense supported. and the hawks and doves, as a hawk i was comforted by it. we made it clear that we couldn't put a number on a target for employment or unemployment and that's because there are, quote, nonmonetary factors involved. we know we have a greater impact on price ability than we have on job creation, though we play an important role in terms of providing the lubricant for job creation. and i hope that that should reassure -- now people like the gentleman you just mentioned make their names by taking bets, sometimes they're right, sometimes they're wrong. but we've made it very clear, we have to make sure that as we

conduct policy, we don't violate what we have declared as our formal long it have term target. i don't doubt for one new york second, anyone at the table, hawk or dove, wishes to violate that long-term. we haven't done this before. chairman bernanke himself talked about it for 15 years. he got it done. i think this is very, very important and i hope it's reassuring. as long as i'm at the table in terms of my own expression and just as one of the participants representing my federal reserve district, i'm going to stick to that as hard as possible. >> richard, as i see it, there are three options for the federal reserve in the coming months, additional still lu ala

quantitative averaging. >> i think we've done enough. i don't think there's a need to add. there's so many liquidity, steve, in the system. why would we add more unless we have a crisis on our hands or something that was happening and we're seeing significant slippage in the economy. the intellectual argument among some is that we could get that money released if we signalled that we were in favor or somehow biased toward higher influence. that's a great theoretical argument but it just doesn't wash. so in terms of my case, neither -- a further operation twist, it's not clear to me it's been effective. there are other forces at work here,manly the weakness in the euro has led to flow noose treasuries and i think has impacted the yield curve significantly. i don't personally feel that

either of those are significantically practicable options at this point. i think we ought to sit, wait, watch and in fact be looking if the economy continues to improve as to how we're going to exit puerto rico the position we're currently in. not ready to tighten from and not willing to support either through greater qe. -- >> the market has this idea that there is a fed put there. that if the economy doesn't improve more, the fed will be there with some sort of liquiditity. do they have the wrong idea? >> i don't believe there is a bernanke put. this question is so interesting. our job is to do what's right for the real economy. we're not there to satisfy any politicia politicians, we're not there to satisfy pure money traders. i almost get a sense, and this may be a little bit harsh, but a lot of investors, quote unquote, have counted on us to provide

the tail winder that than just doing the hard work one needs to do to ascertain underlying valuation. i think i think the easy part for those at this road on the jet stream federal reserve accommodation is over. now people are doing their analysis. >> richard, we're almost out of time. very quickly, what should be done, in your opinion, with the late 2014 language in the statement? >> at the right time that language will have to be adjusted. the question is, when is the right time? i was against it because it's so-called time contingent as opposed to date contingent. at some point that may be be a way for us to express the fact that we have more confidence in the economy but it will depend on what the data shows and what we're seeing and smelling on the street. >> we're doing a thing on

corporate tax rates. are they too high in this country? should we lower them? >> i'm a central banker, not a fiscal authority. i hear, though, that japan pab has cut their rate and we seem to have the highest rate. the question s. what is the effective rate? i think we have to look at the entire structure of incentives. how do we make it more attractive for people to use the money that the federal reserve has provided, high octane, chief bundle and create ways for people to create jobs. and we have to do it in an international context, by the way. it's not just correcting our problems. it's compared to what? capital is free to flow anywhere in the world and we've got to repair ourselves but also do it where we're the best place to come to. >> richard fisher, i hope they get that done. we're going to have to leave it there. thank you for joining us this after morning. >> thank you. i'm afraid to leave the set

after the show now. >> steve, thank you. >> thanks. when we come back, we're going to head down to the new york stock exchange for a look at the stocks on the move with jim cramer. squawk will be right back. looking for a better place to put your cash? here's one you may not have thought of: fidelity. now you don't have to go to a bank to get the things you want from a bank. like no-fee atms -- all over the world. free checkwriting and mobile deposits. now, depositing a check is as easy as taking a picture. free online bill payments. a highly acclaimed credit card with 2% cash back into your fidelity account. open a fidelity cash management account today and discover another reason serious investors are choosing fidelity.

we're back. let's get back down to the new york stock exchange. i'm curious what everyone is thinking about this avon cody situation. >> andrew, while you've been onset, i've been able to make some calls. curious. no doubt curious that they've chose to come now. they can't follow slate for the board of directors, for example. they are not going to come hostile. they are far smaller, as we know. 11 billion compared to 4 billion. >> it's like the dayton hudson offering in the '80s. is there anything to it? >> you can make an argument that the two companies together, despite having different approach to sales, one direct, the other not, still makes some sense. we'll have some other things

that you're not going to want to miss at the top of the hour on this offer, to our potential offer. >> thank you, guys. >> which by the way, joe, if they ever make a movie about your life, ashton kutcher. >> dude, where's my car. >> he wants charlie sheen. >> i want to play every character in the book. >> he's done enough to capture everything that you've done in your life. >> you know, you've got a good point there, carl. he's a little more conservative. >> nick nolte. >> when we come back, we'll get final thoughts from our guest host today. "squawk box" will be back after a quick break. [ woman ] my boyfriend and i were going on vacation,

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♪ welcome back. sally it's the beginning of the second quarter. we have a phenomenal first quarter. what does this all add up to? >> it's the beginning of a bull market. it doesn't mean that it is. we haven't had returns on stocks to speak of. to have the economic numbers, for the longest period of time every time they came in they were below expectations. now it feels like, more often