welcome back, everybody. i'm becky quick along with joe kernen and andrew ross sorkin. the s&p fell on the first day of the quart either for the first time since the fourth quarter of 2011. historically, april has been the best month for stocks since all the way back to 1950. the dow's small losses, though, rm accompanied by a larger percentage drop in the transports and the russell 2000 indexes. it is worth noting it was the second lightest day of volume this year. equity futures are indicated higher this morning. dow futures up about 28 points above tear value, s&p up by just over 4. among our market news watchmakers coming this morning, we have scott manard, he

overseas $70 billion in assets managements. we'll be talking to them and many more today. first, some headlines. >> let's set the economic agenda. i was going to see set the economic table, but -- >> that would have raised eyebrows. >> or in your case, raised your eyebrow. >> oh, that's not -- >> it's early. actually, you're not one of the people that has those rows across. but they're just so defined. they're groecho like. but at this point, bare anywhere is good. >> the nation's automakers will be reporting march sales today, expected to be the highest in nearly six years. splash my why you vehicles, low interest rates are among the reasons. the other economic release of

the day, february factory orders at 10:00 eastern time. polled economist res looking for an increase of about %. >> and we're watching the hmo stuff. yesterday it was crazy, right? >> it took off before the decision even came down on this. >> then they really -- i mean, nine points on humana. >> all-time high for the morgan stanley index. >> last week or the week before, the journal had some editorials about how suddenly democrats were looking at the medicare advanced program and finally hearing from some seniors that, you know, we like these things. and it occurred to them that maybe privately run health care in terms of medicare is something that some seniors -- i guess this 14 million. so you can see it sort of moving that way. you about i think one of the things -- you know, we're going to have to talk about it, but it's sort of not the way obama care is supposed to work, right? i mean, it's weird. but it does seem to be they're pulling back on the notion of trying really to put these --

because i remember during the rhetoric, during the health care rhetoric for the first you foo years of the obama administration, there was a lot of anti-rhetoric about these medicare advantage programs, that they were expensive, they dent know what they were supposed to do. now, i don't know, maybe they're here to stay. i haven't looked to see whether the journal weighed in today on this in the editorialal section. but the u.s. government will increase so far the payment rate for health insurers that offer coverage through the medicare advantage program. the rate will be up by 3.3% in 2014 is. it's supposed to go down. reverse of the 3.2% cut that was announced in february. we're short of backtracking on it and shares of the health insurance, the entire group went up yesterday.

but i'll tell you, the din, can you hear the din of people that are apparently not in this market? there are so many people -- >> come down. >> so many people that -- >> it's supposed to be coming back to the states. >> so many people say there's reasons for it to come back, i hope they keep hammering, you know? >> it helps. >> hopefully that doesn't accommodate people that didn't get in in the first -- remember, months ago database. >> we have a lot of people who said something was going to happen. >> yesterday, same stuff. same, you know, sort of -- they looked just a little more nervous. what do you tell clients if you didn't really tell them to get in six months ago? what do us? >> we'll see what happens. >> i'm going on vacation. >> we probably shouldn't talk

about your -- >> no, i think we should, actually. >> that's a cool one percenter. >> that's talk bit afterwards. nasdaq is buying espeed from bgc partners for $750 million in cash. the transaction gives the exchange operator more exposure to fixed income. join news studio at 7:30 eastern time to talk about it. an interesting bet to be making given that, frankly, there's not a lot of sales in treasuries right now. you have to be speculatively gambling and somehow the fed takes his foot for the private market. also in deal nugs this morning, michael dell is trying to take private, i guess. he's more energized for the future of dell than ever and he

claims the company's best days are still ahead. that letter was filed with the s.e.c. and i did ultimately write my column, guys, about this dell situation. >> i saw in this morning. >> after i was previewing -- >> i was going to say, you told -- >> after previewing and practices what would i want to write yesterday, but i've got to a separate conclusion, which is that if michael dell doesn't roll into the blackstone bit, do you believe -- they want to break up my company. i think they're going to hurt the hundred thousand employees. this is not for the hired hand man, this is a founder the. >> and michael dell's interests don't necessarily align with the other shareholders.

>> and there's the flip. >> although you start thinking about it as the company, the employees, the shareholder and if their foerchs don't go in the same direction. >> i just like watching the amatny of a column being put together yesterday. i had never seen that before and you did some of your work here. >> right. >> you left and went up there and you are on the phone and getting information from secret sources and thee is better than two, right? >> yep. >> faster is better, like those at&t commercials. but i was watching you and nothing worked. and the column, it was written and i'm going to read it, but i knew it was going to be on dell.

>> i was trying to see if there was a wait yet. >> this is good. >> oh, you didn't go that far. all right. >> you have a new story. >> i do. >> among those interested parties in dell is carl icahn. the billionaire investor disclosed a stake in nuance communications. shares of the speech software company rose in after hours trading on that disclosure. that stock is down 21% over the last 12 months. they did rise on this news. >> if we see one note on nuances for those who don't know. this is the speech software on apple phones. there's been speculation that somebody will buy nuance because they are the only player that does speech recognition

software. >> who besides apple would be interested? >> you could see samsung. >> but wouldn't apple freak out if somebody else -- >> you would think. but basically nuance is a huge machinesing business. the question is when and if we're going to take you off the market, we're going to get rid of this idea that you'll be licensing to everybody and take it exclusively for ourselves. >> i'm sorry, i'm afraid i can't do that. >> again, 9% is a pretty big stake? they fell from 4% in february. the trade group's approximated says that the seconder is off to a promising start. joe. >> yes? oh. >> go ahead, your turn. >> how are you? . >> let's check on the markets this morning.

we are going to get back the five. >> five points. just relax, will you? anyway, up 30 so far today on the industrials. and after what we saw in march and for the 35% plus gain we've seen in the last 12 or 13 months, we'll see. we'll see. so far, so good. this is a nice bull market that people are afraid to even talk about whether there is a bull market. >> you have been right and you have called this for a lock time. i think these people are doing it. >> no, in this case, i really want you to be right. >> even in other countries, one it's a sum game sfp. >> i would be very pleased if

things would go up, except for oil. i guess it's not as much as it was at one point, but oil continues to pretend that maybe things in the world are pretty good in terms of global economic growth. but that isn't themed and this is respond to go other stuff, the ten-year, 1.84 and that's because of the central banks around the world and ours here, as guess, sort of the biggest open. in global markets news, a record low of 3%. policymakers left open the possibility of further easing if the economy fail toes respond to pass cuts. it's now time for the global markets report. we can talk more about this and other things. kelly evans is stanning by in london. kelly.

>> hi, andrew. yes, i'll get to the australian decision in just a second. first, i want to show you what's shaping up in europe because it's been an interesting and in many ways telling session. we've gotting bearish weak economic data. we got weak pmi showing us manufacturing activity across the eurozone is contracting. spain, ireland were particularly weak. the french data continues to be awful. unemployment, there are now 19 million people unemployed across the eurozone. the employment rate of 12% amid all this, the fact that monte depaschi comes out and is has a weak earnings report talking about deposit flights. but look at the tone behind me. we're still seeing green across these markets. the ftse mib is up by 0.5%. up here, the xetra dax adding 1.32%. bottom line, shrugging off that,

shrugging off weak europe data and marching higher. it's been green arrows for the most part across the board, suggesting it's not necessarily a rotation out of some of these markets and into equities so much as a general bid in europe today. italy, spain, prices rise a little bit. again, as i mentioned, despite the fact that they need government forms, neapolitano is o out. punch selling off the a little bit, 1.3%. and just to finish on this point, andrew, that you made about australia, good signs for the economy down under. even though there's been concerns coming out of the readings on copper, maybe chinese growth figures, as well, the australian central bank decides to hold rates steady, sees signs that potentially the economy is moving away from its

reliance on china map the aussie/dollar is rallying on that. not the case for europe. the yen putting pressure on the japanese markets. bank of japan meets tomorrow. the euro/dollar was roughly flat. now it's trying to decide. the idea that maybe the ecb comes bite into the rescue. >> wellky, i don't think want i don't think it's ever been done. andrew is going on this great vacation. we're not going to talk about where it is. but what about where in the world is andrew ross sorkin? i don't think it's ever been -- >> you don't think that's been done on tv before? >> not that i'm aware. have you heard of such a thing? >> not in the morning show. >> where in the world is andrew

ross sorkin. and it's not ate trail ya. >> it's possible that there could be -- there's other things. >> there are. there are. >> not going to tell anything. >> no. but it's tomorrow. >> it is tomorrow. >> let's give the first clue. let's think of a good clue after the break. >> how long is the flight? >> that gives too much away. it doesn't? yes. >> is it greater than or less than four hours? >> it's greater than fours hours. that's all we're going to get today. >> we have time. you're leaving tomorrow. we have to do a lot of things today. >> no. he could send us clues from -- >> i want to do it while you're here. you're not going to be on when you're. >> i'll accepted you pictures from where i'm at and you can

actually try to figure it out. apple was removed from the conviction buy list at goldman sachs. goldman sachs has a list called conviction -- i don't think any firm, especially goldman sachs, can have conviction and -- >> and now they have no constriction on apple. the analyst sites that the company's most recent product was tort. the target was cut from 7735 to 6/6to 660. hewlett packard was downgraded from sell to neutral at goldman sac sachs. and the price target there at 16. finally, goldman sachs downgraded -- oh, they were making the moves.

now i guessback of america is downgrading goldman to neutral from buy at bank of america merrill lynch. when we come back this morning, facebook is reportedly courting an online dating site to have re buffaloed. first, as we head to break, take a look at yesterday's winners and losers. zap technology.

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making headlines, facebook is reportedly in the process of acquiring a start-up called -- yep, that's right. that's what it says. you can say it aloud. go for it. >> really? >> yes. that is it. say it. >> it's called bang with friends. >> what? >> yeah. and it's an online dating service. tech crunch says the price tag will be about $30 -- no, i'm sorry, not $30 per bang, that would be krags craigslist,

wouldn't it? >> remember, they were the ones who invented the poke. >> no, i don't remember that the. >> there was a featured on facebook called poke. >> what does that mean? >> i'm just saying there's poking, it's banging, it's all very -- seriously, why did they name it that? that can't -- >> it's not a -- this is april 2nd today. >> the price tag is about $30 million in cash and stock. and facebook reportedly considers the dating market to be bigger than e-commerce. in an interesting twist, if you need something more interesting, tech crunch says that yahoo! made the start-up a competitive offer, but the founders weren't interested because of marissa mayer's incorporate visual work from home ban. are you there? >> yes. >> you're banging with friends right now? is it honestly about hooking up, sort of? >> that's what it is. >> look at this.

it's a little -- the little thing. >> definitely. that's not even a -- i mean, that's -- in some southern states, that's sodmy, right? >> wow. >> that's like what they have on this. >> those aren't dogs, are they? >> those are figures of people. don't do that in alabama. >> wow. another story, i don't know how you go from banging with friends to this. >> i can't believe this is real. >> you know, i saw that movie. this is not surprising to me. >> where is the big life twins? >> who? >> the linkel wives. >> i'm surprised they're not

involved in this. >> they're still out, they're still down at the -- >> because you flip the vs and ws. we have a story about mary schapiro. former fcc chair woman mary schapiro is joining promultory group. she says there is no resolving door really, because, she's not going back to government. >> but you are -- you think this is -- you find this tawdry. because you think wall street in and of itself is a tawdry -- >> no, i don't. >> tell me why you think this is -- >> wait, so she won't be able to lobby? >> she says she won't be able to lobby. >> what is it that disgusts you about this? >> after after working at the s.e.c., she went tr being at

finra, being paid $9 million at fimra, then to the s.e.c. -- >> she's the only person to have led all three -- but promultory advices all three firms on regulation. >> they're restricted in their dealings with the agency for at least a year or two after leaving the organization with a permanent ban -- >> nothing would ever get done in your world. you don't even like brabry in mexico. >> she has agreed to never appear before congress on behalf of a client. >> watching tim geithner, he's going to write a book. he'll disappear for a year or two. maybe he'll ultimately wind up at goldman, which is fine, ultimately. but i think it's one thing to go straight from your job, to go right back into the industry. and there's so many perception

issues out there about how the government and others deal with wall street that this doesn't help. >> do you know that you were one of the most admired respected financial journalists of the "new york times" that they ever had and now you read a teleprompter every morning. >> i do. i do. >> and you read it badly on top of everything else. >> that is true, too. that is true, too. >> something i know about. >> those in glass houses shouldn't throw stones. >> i know. it shattered. we have some guesses about where you're going. someone wrote in amsterdam. >> that would make sense. you and john travolta from pulp fiction. and is then you could run the music we were just playing for bang with friends. >> you would probably be too wasted to bang with friends over there, right? >> my wife and i are going on the trip together, so -- >> so that cuts out the red light district, but not necessarily the -- it's not amsterdam. >> it's not amsterdam. >> but that was the one guess i

got. >> and we're doing this new segment that's never been done before called where in the world is andrew ross sorkin. >> we luke ike it. >> what do you think? >> it's a good idea. >> if our dude, fisher -- he's not going to have a jacket on because he's manly. >> eric fisher from the weather channel. >> you see. >> depending on where sorkin goes, we can talk to eric about the weather there. >> we need a global report today because he could be going anywhere. >> if you need a field producer, i could do it from the field. >> oh, you heard amsterdam, so you're ready to go. his bags are packed. >> i like it. we'll be there. let's check out a couple of coffee shops along the way. new york city this morning is all about the cold. yesterday was the warmest day of the year so far. 62 degrees. it was nice at yankees stadium. but the cold, you look at this map, this could be mid february

and you would believe me. 16 at sue st. marie. burlington, vermont, checking in at 24. factor in the wind and it feels like 12 degrees in buffalo. philly feels like 29. so the theme here is that spring is still off to a very slow start. with lake-effect snow showers here today, nothing with travel. 44 in new york. boston up to 43 for today. the next storm is the other story and we have a lot of rainfall across oklahoma and texas. especially central and southwestern texas around the big bend. midfield, san antonio, storms around dallas and an isolated tornado can't be ruled out. a big rainmaker over the next couple of days, this will ease the drought a little bit here. particularly around oklahoma, texas, two to three inches of rain for okc in dallas. 2 to 3 inches in shreveport and that will track along the gulf coast. travel today, houston, dallas,

those are the hubs to watch. denver, a wintry mix. wouldn't expect any major issues in the mile high city. guys, back to you. >> all right. and, eric, facebook is buying something called bang your friends. >> bang with friends. >> bang with friends. and they have instructions on how to put on a condom. >> it's so bizarre. this has to be an april fools' joke. >> i thought, but it was something that said -- >> bang your friends -- >> anonymously, but friends will never know you're interested unless they are -- >> maybe they're buying bing. >> facebook, don't they own bing? >> this started in college times, right? and if you were in college right when it came out, you would go out and if you couldn't remember who you met that night, you would go on facebook, do the research and dpirg out who -- it's not too far off. >> eric is right. wow. >> eric seems to know.

>> he does seem to know. >> i heard from other people that that's the way it worked. i was busy studying. >> yeah, exactly, but this is real, eric. check it out. >> it's bangwithfriends.com. >> if i connect using facebook, is that -- >> don't do it. don't do it at work. >> right. are you sure it's not bing? >> it's not bing. it's not bing. >> wow. >> let's get to the trading pits in chicago. kevin ferry, seriously, we're not kidding. and it's april 2nd. so there's no -- you know, you can't see that we're getting duped, i don't think. although this is -- anyway, probably -- >> maybe. >> don't talk about spreads today, if you can avoid it or any naked straddles. it might not be -- try to stay away from all option today at all, kevin. >> or energy trading. >> espeed could merge with bang

with friends. >> yeah. >> so i think the big story has been corn the past 48 hours. 13% decline, a really big wipe down while everybody was taking a little break. so finding its footing a little bit this morning. and same with the yen. 400, almost 500 tips off the low for mid march and the yen. very, very slow, steady crawl out. there was a lot of shorts in that market. they've been orderly. i think they still a large short remains. so we'll be watching that to see if any resumption in the decline comes back. that has been highly correlated to bring it around to the bond market. so i think that between now and the end of the week, look for bonds to take a little breather. you can already see theopean markets were able to stabilize when they reopened. and so probably a little bit ahead of ourselves, considering that the next move will be for unemployment. >> yeah.

so what happened with corn, exactly? we had a segment on it yesterday. what happens yesterday? >> well, a good reality had been going on until thursday. locked limit down, then as people were winding down, the options continued to trade. so it was well through the limits for the reopening and then another 50 cent move yesterday. so 13% in two sessions is a pretty big move. i think it goes along with the theme of abundance economics. there's too much of everything. and the idea that commodities as an asset class is a dangerous bet when there's no reduction in capacity for anything. so it is a brutal move. so the fact that it's up at all, you know, a few cents this morning, i think at least shows it's getting its feet. >> and that chart, it's been in sort of lower lows and lower highs for a while.

and that was easily a new low yesterday and recently, right? >> brutal. and when these things move, it was a pretty steady move up. but into the session, people were trying to be bearish it was holding in. when when they move that abruptly, people get called out. that's the key. it's one of the few commodities. they go into limits. they continue to trade synthetically through options. if you're in that position, it can get dicey as it starts to trade again. and the long weekend only kept people talking about it, looking for the reopening. so we think you have to be -- still we talk about 15, 65 last week, we were looking at a short yesterday at 66, stop a little short. we'll see how that goes today. but i was surprised the market was down at all the first day of the month. they were catching up. >> how does the yen and yuan or -- you know, the renminbi, how does that trade? isn't it hit a new high or

something recently, the yuan? >> right. so the renminbi as they call it, so the extent that the changes, to a trade and it's becoming more open to trade. that's going to loy beyond pong conga, the it's going to continue. as the yen gets pushed down, which is the proper thing to do, it puts stress on the relationship between those two countries. and so i think that stress comes up in the eye legions. you'll see more rhetoric, more nationalism. the chinese were slower to move their currency with the wide availability of yen trading. it's easier for them to get it down. with the meeting, i would expect that pressure to reemerge over the next 48 hours. >> all right. seeing stuff now, kech, about

people thought this was -- >> it was out there for several weeks. but some people, there was an article that speculated whether this bang with friends is -- >> you don't know if there's anonymity behind it. you don't find out unless the other person -- >> i pressed the button just to see and it says kiss, kiss, bang, bang, keep the chatting and get to smacking those cheeks. i know we're in a morning show. which of your friends do you want to -- >> who did you -- >> so now -- >> did you hit joe? >> no. >> why? >> why not? >> it's picked up all of my facebook friends, in this case females and this is everybody who is a facebook friend. a friend of mine on facebook, marissa mayer, i won't do this, but you could say down to bang. >> she'll know in is an experiment. >> no. i know her husband, too, she knows my wife.

it's not a good situation. >> i don't know where you're going with this. >> but the point is, so you would say -- >> down with couples. >> no, they would say on the other side -- they wouldn't know you wrote that down. but if they clicked you, then you'd get match. >> a lot of the times the producers don't like us going -- didn't they write this story right into our -- they blind-sided us into this. >> we fell right into it. >> we did. >> let's get out of here. coming up, from the trading pits in chicago to a longer term investment perspective, we're going to talk to one of the -- we're coming right back with a little bit more about bang with friends. >> it's bing. revolutionizing an industry can be a tough act to follow,

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welcome back to "squawk box" this morning. joining us on set, jeff from bml management. you heard us talking about -- we think it could be a fake story. we're not sure. >> bang your friends. >> it could be an april fools' joke. >> a late one? >> it could be a tech crunch april fools' joke. >> the app actually exists. the question is whether is facebook paying $30 million for it. >> anyway, back to the market. april, are you a buyer in april? >> i would like to see some weakness in order to really, i think, get in. >> there's a lot of people who say they would like to see some weakness and they've missed the boat on weakness. >> at bank of melon, we're fully

participating. >> and what is overweight? >> it's a few percent. >> we have been, really, all of last year. we put more money in in december. >> not obese, but we would tend to stay within a -- >> your bmi. don't you wish you had be obesely overweight? >> well b with your clients come with you with a risk tolerance. he you vary with that to some degree. >> overweight could be just barely above that. >> our clients and a lot of clients with a lot of worry last use and worry continues into this year. >> so we continue to like equities. i like valuations. three things tend to kill bull markets, valuation, interest rates and none of those are prevalent as we sit here today. we continue to be optimistic on equity markets. i think they're discounting as i've said for a while now too pessimistic of a future.

it's almost embedded in price. it's showing us that. so i think it's a good time to continue to -- >> you know what? cheryl sandberg, there's no way she would go for this. zuckerberg, he's kind of a low life. he would. >> no. >> she wouldn't go for this. >> i think it's still a joke. >> i think it's still a joke. i think bang you -- >> bang with friends. >> that app, it's been around for several week, i think. but i think the idea of facebook fo for $30 million, i can that's a joke. >> right. >> we're totally preoccupied. sorry, jeff. >> it's complicated. >> it makes no sense that a -- >> a legitimate company. >> it makes no sense it would embrace -- i mean, really, that's a porn site, isn't it? but the way it works is interesting. did you get any takers? >> no. i would have to -- no, it's a

two-way street. >> he hasn't clicked on anyone. >> you have to click on people. >> oh, you downloaded it in your facebook thing. >> they have to click on certain people and they have to click on people without knowing you'd ever clicked on them. >> couldn't you just click on one? you'd have hundreds of clicks knowing you. >> no. i'm married. it's a bad idea. >> no. i'm saying a lot of people probably had the intentions, not that you would act on it. >> let's talk about the markets. so i guess the question i have is if you think you're waiting for this pullback, wa is it that's supposed to happen in your mind that actually is going to create the pullback? >> it's hard to know why markets would pull back. there may be another scare within the eurozone, slowing growth. there could be issues that growth is slowing and they're trying to cool their real estate market. markets tend to pull back 5% and 10% on a regular basis. we haven't had one since

november last year, 5% pullback. >> although i think part of the problem may be that so many people are waiting for the pullback. when you start to see it down 3% or something, everybody rushes. >> and i'm not here. if we were underweight equities, i don't know if i would wait for the pullback. we were in a position of strength so we could continue to add even more. but if you were underweight equities, i would begin getting in. our clients are already in, but if i was looking at what i should do, when everyone is waiting for a pullback, the pullback won't come. bull pullbacks might be extremely shallow. >> what are you expecting on employment number these friday? >> we don't go out and guess individual numbers, necessarily. i certainly know what our consensus is. unemployment has gone from 10-2 and bernanke is saying we want to get it to 6.5%. so i think the general trend tons be favorable. i wish the employment numbers were stronger faster.

we all do. but i think companies can do quite well in that environment. and also i look at the news itself, but then i also look at market reaction and that's what you have to consider. and market reactions, they've taken bad news in surprised and it rallies on good news. i would buy that if markets react poorly. >> and thank you for indulging us this morning. consider it april 1st, if you could. >> will do. >> when we come back, earnings season is right around the corner. we're going to talk financials right after this. ♪ [ laughter ] ♪ [ female announcer ] each one of us is our own boss. ♪ and no matter where you are in life, ask your financial professional how lincoln financial

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welcome back, everybody. the first quarter is behind us and that means earnings are just around the corner. gerard, overall for this season, you're expecting earnings season to be up in terms of the numbers year over year, but down sequentially? >> well, wa we're speccing to see is dependant upon the banks. certainly the big capital market banks may have some struggles. but year over year basis, the should see reports of positive earnings. >> jpmorgan is out of the gate next week. what do you look for in those. >> wells fargo, how their residential mortgage production goes. the residential business has been very strong for the banks in the second half of last year. the gain on sale has been particularly strong. morgan also is a residential

supplier, but capital markets is a bigger focus for them in the first quarter. >> and in terms of financials, they've done very, very well for the first quarter of this year. what do you expect? have stocks gotten ahead of themselves or do you think there's a really good republican for them to continue to run? >> i think there's a really good reason for them to continue to run. the stocks are still very cheap. we anticipate that normalized earnings for the industry would probably materialize sometime next year. because remember, they're still carrying a lot of costs from the downturn in '08 and '09. as those costs leave this year, earnings will improve. >> are there favorite stokts that you have in this sector, favorite banks? >> you get the most bang for your buck. >> yeah, i think, joe, it's the large cap banks. regional banks are still recovering from the '08/'09

crisis. we see big improvement earnings over the next two years for these companies. >> the laggers are the really safe banks, names like u.s. bank corp.. as a result, they are up as much as other names. >> just in terms of where we're headed just beyond this quarter if you were looking at a place to put your mope, would they be good for the remainder of the year? >> as the economy improves, housing will drive not only loan demand but the improvement in credit quality. so it should improve throughout the year. with evaluations where they are, there is still meaningful upside in these names. >> thank you very much for joining us. it's been great talking to you today. >> thank you, becky. still to come on squawk, april, may, the best month for the dow. the second quarter is often tough for the s&p. we'll get ready for any possible

scenario. 170 billion, give or take, in assets under minerd. ♪

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a chance to talk about some of the things that may not be quite as -- we have already done a little bit of that today. but anyway, kevin ware,

successful operation hopefully. >> he may be back for the final four. >> that was incredible. that would be good. >> it would. and now new york is funny because one win, one win. and you're on the front page. it's a big paper. it's the daily news. but one win. that shows you what you as a fan have had to do. it was kind of bizarre-o world. the mets won big. yankees lost big. a game named youkilis is now playing for the yankees. took 13 innings to get one run. fully in baseball mode now. it's a bizarre-o world. cubs are in first place. i saw that. and the yankees in lost place, which is kind of where i hope they stay, along with the reds. >> really? that's so sad. what have you got there. >> i don't want to make you sad.

i hate when that -- sports too? usually companies. >> i have a company story. >> you're sad now that facebook is not buying -- >> the front story on the financial times. apple bowing to pressure over china complaints. >> tim cook. >> well, they were using refurbished parts and had a different warranty program. >> the chinese media came out and criticized them and said they don't give interviews. they are arrogant, greedy. >> it's kind of unbelievable. >> anyway, i was surprised. 20 seconds. >> irs is still behind on tax returns. congress didn't get their act together. they were 10 days behind. they are 6% behind where they were for last year. we can talk more about that. >> i'll do my first clue for where in the world is andrew. i don't think i have time to do it now. >> coming up, charles schwab liz

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are stock still a a bargain? investment advice from a man who overseas $170 billion in assets. scott minerd is here. >> a change to the medicare advantage rate sending stocks higher. government increasing the rate for health insurancers. we'll tell you what it means for those stocks. and first on cnbc interview. nasdaq jumping into the fixed

income market. nasdaq chief will join us to talk about the deal and the future of trading as the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box". i'm andrew along with becky quick and joe kernen. it will hope 30 points higher. s&p up a little over 4 points. also, the morning headlines this morning, nasdaq is buying u.s. treasuries trading platform e speed for $750 million in cash. bcg could receive $1.23 billion depending how it performs. it has been trying to expand into areas to combat to climbing trading volumes. we have nasdaq's ceo bob

greifeld in 30 minutes. also, health care stocks getting a boost after the government said it would increase medicare payment rates by 3.3% for 2014. that reverses the 2.3% cut announced last month after protests by both health insurers and members of congress. finally, goldman sachs just removed apple from its conviction buy list but maintains a buy rating. it hasn't driven market share and growth the way it had expected. take a look at shares the past 52 weeks. you can see not a great story. to see apple's analysts are a buy sign or sell sign at this point. are they doing this sort of after the fact. they probably should have got it off their list a couple months ago if they were going to look really bright. >> michael dell is trying to rally the troops. the pc maker that he founded is

now trying to make private. he said he is more energized for the future of dell than ever and claims the company's best days are still ahead. the letter filed with the sec. people have been waiting to hear from him after some of the competing bids that have can come forth. also, with equities coming off one of the best quarters of the years, is it time to start thinking differently about investing? our guest host has a few ideas. he oversees $170 billion in assets under management. scott, great to see you. >> great to see you, becky. >> he's already kicked sand in my face already. 90-pound weakling. would you not offer to take your jacket off if you were scott? i would take my jacket off all the time. but when he said do you want me to take my shirt off, i thought

that was going a little bit too far. >> joe, i'm sorry. >> it's you a little bit difficult. >> did you play football? >> no. i was a swimmer. >> but if we did get shoulder to shoulder like that -- >> we could put both our arms together. >> i know. amazing. >> scott, i know you have a knew answered view of the market. do you think we could see a pullback of 5% to 10% but you don't think that the run is over at this point? >> no. >> more room to go? >> i think so, becky. i liken where we are to 2004. and when you start to look at the fed, where the fed was in 2004, versus where we are today, when you look at credit spreads and where they were in 2004 on high yield corporate bonds and where we are today, it really looks very similar. >> where was the fed in 2004? still easy policy? >> the fed had just started thinking about reversing policy.

now we're nowhere near that at this point. so i think if you look at 2004 as a model and you say, what happened between 2004 and seven, which is we saw the beginning of an asset bubble, we started to -- we continued to see equities move on about 30% to 35% for the next three years. you know, we saw credit spreads continue to tighten because of the easy policy. if you recall what had happened there, greenspan had attempted to take back liquidity in a very measured way. five years later people were criticizing him for following behind the curve, we had too much liquidity in the system and that caused a housing bubble. you know, as mark twain said, history doesn't repeat itself. it just rhymes. >> do you think they will have a hard time getting out of all the liquidity that's been pumped into the system? >> i think that would be an understatement. >> so if they are doing that,

it's a sign that the economy has turned around. when the fed starts to pull out, it's a sign things are better from the economy. what do you think the market's reaction is? >> i think our worst-case scenario is something like a 1994 reaction where the fed began to pull liquidity out. but equity prices continue to go higher. the real economy continued to do well. but of course the bond market had the worst performance it had since 1927. and having lived through it myself as a bond trader in those days, i would have called it a bond market crash. and so, you know, i think the fed has a herculean task in terms of trying to convey to the market that it's going to normalize policy and reverse accommodation without setting off some sort of wholesale selling panic. here's an interesting statistic i think most people aren't even aware of.

given the propbjections for qe, the fed will purchase the equivalent of all issuance of all debt by every investment category issued in 2013. so when you look at the size of qe and then you add corporate bond buying in -- or corporate bond issuance and everything else, like the retirement of every debt. but the amount of bond buying in 2013 is equivalent to all the debt that will be issued in the bond market this year. >> do you think it will be the stock market doing okay as a result? how do you set up for it. >> we will go back to your comment, which is, you know, if the fed starts to remove accommodation it's going to do it because they believe the economy is strong. and the market is going to take that cue. and so the question is, can they

pull this trick off without having the bond market go into a full scale route. because how do you go from buying 100% or virtually of all the new issuance of all the debt of 2014 to reverse a course. >> that's why the fed recently suggested that it would taper purchases, slowly ramp things down. does that work or does the market see it as the beginning of the end. >> we saw the minutes when the tapering discussion came out. the market just, you know, puked on it. i hate to use that expression. but it was pretty vicious the selloff that occurred. just the concept that the fed might start thinking about seems not to be going down. >> is that just a short-term blip? we have had other people who have come on, jim poulsen and others who said ultimately once the market could get over the fact that the fed was doing this that they would actually embrace it. >> it's interesting because the

models we have to where we would project long-term rates to be if we didn't have qe, puts the 10-year note 3.5% to 4%. so i would say that a move from sort of the 185 rate today to 3.5% on the 10-year note would be more than just -- >> we have had people cite studies saying 70 basis points. that makes you feel better about the possible dislocation in the market. but you're saying more than double. >> 150 basis points. >> people don't know. 70 didn't sound right. but the other thing -- >> the point is it's a distorted market. >> it is. when there's dislocation it's like trying to hold down like a balloon. in other places there are things inflating other places that inadvertently you don't want to do. why are we under the impression that the fed did all the biology that it doesn't make its way into the economy, that it stays

on the bank's balance sheets. it's not really creating money. well, it's not really. it's just held in reserve. >> right. >> does that give us say false sense of security. is it coming into the economy or not? >> certainly banks are holding excess levels of reserves. growth at 3% to 4%, which is where we're currently going is not exactly a barnburner. so there is no doubt that from a liquidity preference standpoint people are holding larger cash balances, whether banks, corporations or whatever. but at some point when confidence returns there's going to be a desire to use this liquidity. and when we start using this liquidity, it's going to cause bubbles to start. >> the bouncing never goes back to where it was. >> i don't think so, joe.

i don't think we can ever get back there. >> does it ever go down? ever go back there? >> well, we were $850 billion when we started this exercise. our projection is that we will be around $4 trillion by the end of this year. i don't see how we could ever shrink the balance sheet to $850 billion. >> right. >> the dislocation of the pause in the economy. i think we can talk a little bit later about what i think the long-termism indications are, but i think they're pretty profound. >> scott, be with us for the rest of the show. time for your first clue for where in the world is andrew going to be. i don't know whether you can glean anything from this. but it is the global appeasement tour that you're going on to apologize for all of our -- you really don't know where this music is from? >> i do. >> gives it away totally.

and i thought it was really good music for david stockman to come up on the set for. this great apocalypse now music. listen, david. da, da, da. he has a new book out today. the future of america and why he thinks there's a long, hard road ahead. here's a look at futures right now. "squawk box" will be back after a quick break. everyone's retirement dream is different; how we get there is not. we're americans. we work. we plan. ameriprise advisors can help you

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welcome back. a grim diagnosis of the u.s. economy. political conflict and misleading stock market highs in his new book "the great deformation." david stockman. did you make that word up? great music coming out. this recovery has been fueled by, in his words, a flood of phony money. i just like when you talk, david. because no one -- you're an

enigma wrapped in a riddle. you start talking. you say this is all bush's fault. and the left go, i love him. he's a hero. and you totally pop the bubble. i thought he was going to say i love this book. he read it and urinated all over it after that and said you didn't do any fact checking or something. >> i don't know. i think we're all in the bubble together. we have been for years. as a result we have a massive recency by us. my book says there's a massive state wreck ahead that's going to take down what remains of the free enterprise economy, prosperity on main street. it's not fixed. if you get rid of rosie scenario, which is what they are using today. and i know. i invented the first. i know what they look like.

if you use realistic assumptions, the thing is 15 or 20 trillion. beyond the past of congress to deal with. the pain they're talking about, like cpi. that would save 200 billion, 1%, 2% of the problem. it's frozen, paralyzed. we have fiscal crisis year in, year out. quarter in, quarter out. >> go ahead. >> the other branch of the state is the fed, the central bank. it's a rogue system. it's the most dangerous bubble, serial bubble machine in history. it truly is. here we are for the third time back in the region of 1550. when we were last here on s&p 500, some of you were here. 4,750 days ago in march 2000. we have had two massive crashes since then. two bubble reflations. we have only created 17,000 jobs

a month when we need 150. most of them have been part-time jobs, not in the middle class families supporting the economy. we have an economy drifting. a fed that pumps and repumps. >> you're not anti-capitalist. >> no. >> do you wish you could go back to free enterprise. and we have gotten away with that with crony capitalism. >> david, david, what is the role of the fed in a crisis? what should the fed be doing? >> exactly what badge et said in 1871. that is loaning freely at a penalty rate above the floating rate of the market. and that's where bernanke went totally wrong. the interest rates wanted to go to 6, 8, 10, 15% in order to basically cut down the excess and the wild speculation that was in the canyons of wall street at the

time. he should have let interest rates go up. jpmorgan did it in 1907. they carried out the real estate. >> would you say volcker did it too. >> when he went after the speculators, commodities he didn't say, please, can i raise the discount rate 25 basis points. >> torpedos began. >> it doesn't come without pain no matter how you -- >> there shouldn't be bubbles. and my book is really, among many things, an attack on the greenspan predicate that we can't see a bubble, hear a bubble. it just comes along and wait until it crashes. then after it crashes, flood the market with liquidity and then begin to inflate another one. that's wrong. the fed shouldn't be creating bubbles. if it were doing its original mission, to supply liquidity to

banks at a floating interest rate -- the the fed is the central planner for the u.s. economy. 12 people on the open market committee are the monetary bureau of the western world. they can't do the job. they're failing. >> where would the economy be if the the fed had accepted and hadn't taken the steps. it's a hypothetical. the view according to you. >> it's what the whole case is based on. if you didn't violate every single rule of finances ever invented. sound money, balanced budget, free markets, consequence of failure. if you didn't violate all of that they say it would be far worse. here's what i do know, if the fed hadn't created the bubble by lowering interest rates to 1%, the housing calamity, we wouldn't have had the crash. you can't say once you have a crash created by the bubble of the fed but now you have to -- >> should the fed have done

anything after 9/11? that's where things went haywire. >> it's very strong, becky. if you look at the history you will see that the recession of '01/'02 was so slight it could barely be measured. it was .1 or.2 of gdp. greenspan panicked, totally panicked. third time he had done it. he did it in '87 after the meltdown. he did it in 1998 after long-term capital. that was terrible. >> david, i think what people worry about is you're describing, and i agree, we're going through a death of a thousand cuts. we're just bouncing along the bottom. some people wish we just flushed the system, let it out, let it go where they may. some people think with the depression that fed on itself and became worse than it had to be because you didn't do anything to stop it. a qaa their particular flush doesn't always work.

you don't always coming out rip roaring. >> great depression was a unique circumstance. i have a couple chapters, joe. you might want to take a look at it. it was the delayed aftereffect of the qaa fast any of world war i. >> you think we should have flushed the system in 2008? >> we should have flushed it in '87, '98 -- >> let the markets work. >> '08. we're doing the same thing over and over. didn't einstein say sign of insanity is when you do the same thing over and over and expect a different result. this is what we're doing now. >> any way for us to avoid? you have read mark faber. any way to avoid paper money being worthless? >> you know, i don't know. i think we're headed more for deflation than inflation. i think essentially people say the bond vigilantes they're happy. this is what he says. bond vigilantes are smart. they're simply front running the

fed. everybody is front running the fed and repoing the bonds they buy at 98 cents on the dollar for 10 basis points. when the fed says i've got your back, you can borrow overnight, day in, day out. . revolutionizing an industry can be a tough act to follow,

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you need the whole store to be redone. >> back on track or a disaster in the making? >> it's a slow turn back. it's definitely going to take a lot of time. this is going to be multiple year. >> yesterday on "squawk box" talking about jc penney. the they will roll out revamped home areas. they will highlight 50 new brands. it gives more of a mini mall feel. it has worked at bloomingdales and macy's shares down 60%. by the way, this format of all the mini stores within a store led to the whole battle with martha stewart and macy's. that's why she says it's okay to do that. her contract had that mini store thing. >> store within a store. >> is that a stand-alone store or not? >> toughy. comments, questions about anything you see on kwaubg,

whether you think a store in a store counts. coming up next, nasdaq bob greifeld. "squawk" is back with bob after this break.

welcome back to "squawk box", everybody. u.s. auto majorers expect to report their best sales month in six years. march sales figures will be rolling out throughout the morning. edmunds.com forecasts that g.m. will have an 8.8% srufpl. and putting pilots through refresher training in june many they are planning to use the 787 initially for cargo jets to reassure the public that it is safe. and new figures show unemployment in the eurozone reached a record high in february. more than 19 million people unemployed in the 17-block nation. and the unemployment rate stands

at 12%. andrew, over to you. >> nasdaq omx is expanding its business. the nasdaq is going to be paying bgc partners $750 million in cash, a half billion dollars in stock. joining us first on cnbc is bob greifeld, omx ceo. a lot of words. >> a lot of words. >> go with nasdaq. we'll work with you on it. >> thank you for coming out. >> well, i live in new jersey, so it's my pleasure. >> what is this deal all about? >> well, it's about believing that the government will actually spend more money than they take in. so to the extent the country runs -- >> joe, are you with me. >> yeah. >> to the extent they spend more money than they take in they have to raise money through debt financing. they do it through u.s. treasuries. this asset is in the business of buying and selling in the secondary market u.s. treasuries.

we run the marketplace. it doesn't take any principal positions. so we think the size of this market will grow and probably grow every month. every month they do a treasury auction. it is $11 trillion. reasonable forecast has it growing to about 16 trillion. we look at patty murray's budget proposal. the deficit cut down to $560 billion. that's new opportunity coming enlarging the market. >> you have to bet bernanke takes the foot off the gas. >> this year probably a trillion dollars of new treasuries coming to market. the fed will probably buy 54% of that. $540 billion of that. so to the extent the fed is not the buyer, the rest of the inventory will come to a natural market environment, with a higher rate of trading.

once they buy, they park it on their balance sheet and don't do anything with it. we're not predicting when but we will predict they will. at some point that unnatural buying. >> when you decided you're going to pay this amount of money, which is not insignificant. >> yes. >> you had to be gambling. i assume you did some projection. when did stk this all come to an end? >> $750 million purchase price with the current state of affairs, will do well. >> who is the big competitor? >> a number of competitors. the largest is from icap. but a number of competitors, two large is being one of them. >> you think this is created in the first 12 months? >> that's the goal. we think it will be a fantastic asset for us over time as fundamental drivers keep coming

in. understand with the fed buying the velocity in the market decreased dramatically. back three, four years ago the rate of trading in the market was about 11%. it's down to 4%. if it goes back to 6% or 7% that will be a wonderful outcome. >> i think we're buying at the low end of a cycle. so many fundamental drivers that will go in our favor. look at the car drivers, fed buying, velocity rate being very low. that will change. we're not predicting exactly when but we believe it will change and change for the better. >> this guy to your right controls $170 billion. where do you do it? >> basically with the street. >> so not doing it through espeed. >> not through espeed. >> well, you are but not directly. they are connected to all the government deals. there are direct customers who come in to us. >> what's the long-term outlook

for equity buyings? >> well, we see in flows into the equity world for the first time in the last four or five years. i would say the inflows are dominated going into passive investment. and i think the question is when do you see active investment come backen vogue? we don't have a direct answer for that. it's definitely correlated to a bull market scenario. when you have a market that is widely held and recognized as a bull market you suck in more investors. >> so to speak. >> yeah, so to speak. i think also it's missing in this environment the star money manager. we don't have a bill miller. >> you've got them right here. >> and available to all investors whether it be -- >> what do you think that's a function of? that it hasn't developed? that there's a skittishness.

>> to get back to where we are. we're seeing the first positive signs of it. the van guard of that is a solid and protective ipo market for a sustained period of time. so we had the ipo market in fits and starts. ream it looks good. but we have to get it on a solid trend line. >> we had someone on yesterday who suggested if we do have an ipo market in the fall, which he suspects is going to happen, it will ultimately hurt the broader market because there's going to be bigger supply. >> i would like to have that problem. i don't agree with that analysis. i think the ipo market really is the primary advertising mechanism for the equity world, right? when ipos come to market they have a lot of publicity, gets investors thinking about the market again. it has a ripple effect. >> will the pendulum swing to the bull market that we have seen historically? >> well, it's a question of will you have a market -- >> some day.

>> i would agree. certainly obviously as you know the indexes are high. >> 800 at merrill lynch. 800 on the dow. let's not even go to 14,000. >> that will be this dow going to 140,000. do you know how many new highs there are from 14,000 to 140,000. is that coming some day? >> well, i like to break it down into a reason that happens. and you really have to have pure entrepreneurial activity in the country with the large companies and also the small companies. you see truly the entrepreneurial like activity across the country. you see it not just in the valley, you see it in austin, texas. >> if we become europe, it may never come. because they will never have a bull market like that again. >> technology-based companies are coming to market and certainly looking to the u.s. as

the eco system that will support their growth. so i agree with your assessment there. but the point is the market can go higher but only based on solid economic progress. >> it's not a given. we can screw it up. >> i like to be more positive than that. i see in my travels that there is tremendous energy developing in this country. what's fascinate to go me is other parts of the country have tried to learn from what's happened in california and the valley. it will be widespread. >> if you say 20,000 people, we'll send you to a shrink. if you even predict 20,000 on the dow at this point. so i mean, to see the kind of move that is possible. no one even admits the possibility of that. they don't even think we can go to 18,000. some day we will. i want to see it. and the nasdaq will be there. >> we'll be there. >> leading the way. >> we will lead the way. >> i know it.

good luck with the transaction >> up he next, rally on the health insurers after the government reverses a decision to cut medicare rates. as we head to break, up 22% the last 520 2 weeks. squawk will be right back. ♪ ♪ ♪ the new blackberry z10 with time shift and blackberry balance. built to keep you moving. see it in action at blackberry.com/z10 tdd#: 1-800-345-2550 seems like etfs are everywhere these days.

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a major victory for health care insurers. a final estimated payment growth rate of 3.3% for these advantage programs. back in february the government proposed a payment reduction of 2%. that sent shares yesterday up three, soaring in late trading. joining us now to tell us what this means for the sector and the the affordable care act or obama care, sarah janes. since we're not experts, sarah, and you are, take us back during the obama care debate. didn't we just see piling on against these types of programs, that they were wasted money or not any good? isn't this a reversal?

what happened. suspect it an endorsement of private health care versus obama ca care. >> it's a partnership by cms and the administration to keep managed care in the market. obama always says he wants seniors, if they're happy, to keep that option. if they prefer a government plan, to have that option as well. throughout health care reform several cuts hit the managed care plans. it is taking down rates by 2.3%. there's an mlr minimum that assures if they don't hit 85% of premium revenues spent on medical expenses it's getting rebated back. so there are still those items intact. but what really changed last night is what with he refer to

as the dock fix or sustainable growth rate. since 2010, physicians were supposed to have their fees cut. and that was supposed to bring down overall health care spending. but if you put these in, some of us are going out of business. they have been playing it. the current delay was scheduled to expire at the end of this year. they had been paying the managed care, as if these cuts were going into place. what happened last night is they're on apples to apples basis. we saw 500 basis points improvement from that change. >> i still don't understand, though. or i'm not sure that's the way i remember it. aren't these programs seen as as expensive? weren't we going to save money by getting rid of these advantage programs and having everyone in the public option?

wasn't that the intent? that they had to acknowledge these were popular? didn't they want to get rid of these? >> i don't think they wanted to get rid of them entirely. there was a pulling back of private fee for service. that was one of the higher price points. that was cut in 2011. we are seeing a shift to some of the more valued hmo plans. i don't think there was ever intent to put managed care out of business. we saw a few other points that indicated that the government does want to keep managed karas an option. >> while we have you here we saw what's going to happen in california and some other places. and i know for the truly in need that's going to be subsidized. a lot of people that are in the middle, they're going to have to pay a lot more. we see things like 30%, 40%, 50%

hikes. is that going to happen? and will he gradually see private insurers say you're on your own, go with the government at this point. that's the worry of everyone. >> workplace. >> yeah. they're going to say, i'm out of here. you go ahead and, you know, let the government take care of you. and it's like a baby step to single payer eventually. is that not going to happen? >> you know, i think this health insurance exchanges are not going to go the way the administration initially thought they would. price points will be a lot higher for health where people. they will supplement all the sick people. you have a large, healthy population supplementing a smaller, sicker population. they will say, you know what, even though there is a fine, the fine is nominal and i don't want to be involved in the system. it leads to margin compression and could leave some of these insurers saying it's more profitable and advantageous for us to participate outside the exchanges. so i think there's probably going to be a lot of new information coming to light

about the exchanges, several iterations of them. and higher price point sticker is shock. >> is there a disconnect between where the hmos are trading and what the future looks like? in 2030, will there be a vibrant hue manna? >> yeah, absolutely. >> really? >> there's a future for commercial insurance with large group employers and trying to bridge the gap with small phroeurs and individual. medicare advantage should double in size by 2020. that's exciting for humana. there's about 300 to $400 billion in new contracts in the medicaid space being issued the next couple of years. for united, you get the added bonus of optum, it., pbm. a lot of great growth opportunity. >> no stopping the amount of

patience we will need to take care of. sarah, appreciate it. thank you. >> thank you. >> coming up, it is the battle for tech supremacy blackberry taking on big blue. that's ibm. oh, this one seems easy to me. what song is this? who will win the stock showdown? and can one of them -- are you not to play the chorus? who will make it to the final rounds of squawk money madness tournament? we will find out. i know what you're thinking...

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welcome back, everybody. money madness continues. we are getting down to the final four. apple beat general electric yesterday with 53% of the vote. face bank of america in the first round of the final four.

first, it is a battle between blackberry and ibm. joining us, managing director matt hoffman and csla senior analyst ed mcguire. i want to start with ibm. you like this stock. stock is about $212 right now. what is it you like? >> ibm is a great investment in tech for the future. one of the companies that invest purely in research. they led the u.s. in patents issued. predicted analytics. they are migrating to being more of an application vendor. so the focus on higher value solutions drives margin improvement over time. they have a quiver of tools that they use, accommodation of organic growth, expansion of share buybacks to drive earnings growth. with $20 earnings target they

really have their eye on the long ball here. so we look at them as really a way to play tech globally. 5 to 10 years in the future. >> is that when the the applied intelligence takes hold? we have seen this for watson. >> sure. the watson and cognitive computing are investments really in the next era of computing. but that doesn't leave them at any disadvantage currently. they have got a lot of investments around the smarter planet analytics and cloud offerings that keep them very relevant and focused on growth for the here and now. >> matt, let's talk a little bit about blackberry. i apologize i want to call you mark. our boss is mark hoffman. you don't like this stock. you are a little concerned about what's happening with the blackberry 10 launch. >> that's right. i'm not sure who set up the brackets but i'm not going to be the guy to argue the case here.

blackberry 10, okay launch. we'll wait and see how it does in north america. we're not terribly realistic how it will do. i don't know if we can talk about them five to ten years in the future like you do ibm. we will have to see if we can get past this one year. >> my question on blackberry, even if it doesn't succeed in the marketplace, there there an opportunity for another company to take it out and buy it? >> we're not really optimistic about the underlying asset value. they have to make a go of it. they have intellectual property. they have to restructure. there hasn't been a whole lot of value. if you look at palm and hp, that's a really good example. >> matt, go ahead. >> motor ol' low taking out

largely. but at the end of the day that's all that's for sale there. >> thank you both very much. our guest host is scott meinerd. if you had to pick black better or ibm for who will perform the best the rest of the year, who would you pick? >> i would pick blackberry. it's a high beta stock. if it's going to perform, it's going to perform really well. i'm a loyal blackberry user. the thing i'm disturbed with about it, though, is that the 10 has abandoned the hard key pad. >> it's coming back. >> maybe it will be here in time for the end of the year. that will give the stock a lift. but i think there are so many loyal blackberry devotees to that keyboard. >> folks, there you have it.

go ahead. bg vote for the matchup as well on facebook. we'll tell you who wins tomorrow. >> don't enable her. >> why? >> you have to move on. >> he wants me to change. >> move on. move on. >> still to come, liz ann

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modest losses to start the second quarter. will investors stick to the sidelines until earnings season >> taking the pulse of the banking sector. chairman and ceo will join us on set. a score card for global mna. a lot more money changing hands. we're going to give you a full report as the third hour of "squawk box" starts right now.

welcome back to "squawk box". first in business world why. i'm joe concerner wi concern ke becky quick. >> michael dell trying to rally the troops at dell. that's the company that he founded and is now trying to take private. dell says he is more energized for the future of dell than ever and claims that the company's best days are still ahead opinion it was filed with the sec. this is a continuing saga. among the parties that are interested in dell is carl icahn. he disclosed 9% passive stakes. in nuance. as andrew pointed out, this is the the company that is responsible for the software behind siri. you wonder who would be interesting.

apple. maybe samsung. >> the question is whether they even need it since they have a long-term licensing agreement with them already. maybe you say go ahead. >> exactly. >> oh, i'm up. nasdaq is buying a electronic trading. $750 million in cash. the transaction gives the exchange more exposure to fixed income markets. listen to what he had to say. >> the first 12 months we think it will be a fantastic asset for us over time as these fundamentals drivers keep coming in. understand with the fed buying the velocity in the market have decreased dramatically. back three or four years ago the rate of trading in the market is 11%. it's down to 4%. if it goes back to 6% or 7%, that will obviously be a

wonderful outcome. >> it could be a pretty good deal for them. evercore downgraded yesterday based on this acquisition. they were worried about the stock buybacks. >> they're in a tough business simply because of the equity business. even the margins on that business. they have to get in. with i.c.e. doing their deal with nyc. >> fixed income market is much larger in total than the equity market. so this could be the first step into corporate bonds and other things where they could pick up a lot of volume. a check of the markets. after closing slightly lower yesterday, take a look at the u.s. equity futures this morning. they have been in the green. dow futures down 34% points fair value. s&p up close to 5.5 points. overnight in asia, a dip for the the nikkei. down 1%. hang seng up a third of a percent. in europe in early trading at this point some green arrows.

da x-up 1.25%. and gains for the ftse and the cac. the environment for the bulls remain strong. liz ann sonders at charles schwab. and he has bench pressed 495. why didn't you do 500? >> because of the increments of the weights. the plates are 45 pounds. i would have had to put a 2.5 pound plate on. >> ask if you mind if you bench press over here. >> one arm. >> i was like wow. >> that would be too easy. you don't weigh enough. >> one hand. >> i said he could do both of

us. >> okay, thank you. >> one hand. >> it ruined it when he said 495. thank you for joining in. you have seen this before. the notion that i'm waiting for a pullback. so many people come in and say that. isn't that music to your ears? >> i think it's safe to say that my firm is a decent proxy for the retail investor of $2 trillion. i spend a tremendous amount of time on the road speaking to adviser clients on our platform. the most telling is not only the common question being asked when do i get the dip to buy. but other questions, is this a new bull market. this is the fifth year of a bull market. and to your point there's a lot of people waiting for that dip and tremendous amount of skepticism. universally i get in q/a

sessions, yeah, but, and fill in the blank. none of that euphoria found in the late stage of a bull market. >> or even mid stage. >> or even mid stage. i think we're still in the optimism phase. >> there you go. you mentioned a rock star from a previous bull market. is there a rock star? there's nobody you even think of. bill miller. peter lynch. >> and the bears are on this intellectual pedestal. >> right, always. >> and the bulls are the less serious folks. >> alan ableson. 30 years. the market moved from 800 to 14,000. he still feels good about themselves. and what good was that? i guess because you built a wall of worry. >> i love it. i'm most comfortable of my view. most people share it. i don't mind an audience.

>> threw rubini said we're going down another 20%. you will still find him everywhere like he's god's gift. 6.66. still bearish. look where we are. >> it turned around. >> it never did. >> you had him on the show? >> rubini? >> yeah. you were gone. >> i wouldn't kulcall him a ter. i think he reflects the opposite. >> you might say, okay, let me just revise. so that's a good sign. >> please don't. >> don't mentioned other ones? >> well, i can name them too. >> liz ann, i'm with you. i think we are actually probably in the early phases of a long-term bull market. >> secular. >> yes. >> i think that obviously

markets don't go in straight lines. but i could see us being at the beginning of something that could last another 10 to 15 years after consolidation. >> as long as there's not a mark fobb or stockman absolute collapse of paper money. >> no, i think it works for us. >> but they say that. >> the demise of paper money -- people are looking to store value somewhere else. we did studies on periods of relatively high inflation versus periods of relatively low inflation. equities do better. >> in both? >> in high inflation. other things like art does even better. but art is not accessible to main street by and large. so equities become a pretty good proxy as a place to store value in paper money. >> you put a number on this for the notes. you think equities could rise 30% to 35% the the next three

years? >> yes. i said early on i think it's 2004. when you look sat where we were in 2004 and what came in 2007, would i be surprised if three years we had a 20% correction, that wouldn't surprise me at all. we get corrections in bull markets. my concern today, to go back to your point, i am sensing a lot of complacency which i haven't felt so far in the last five years. so i'm sort of in the mode right now that sometime over the course of the next three to six months we could see a pullback of 5% to 10%. but obviously if you're not in equities today it's probably foolish not to -- >> i couldn't agree more. i think we can have a few percent correction. i think sentiment is a little

bit elevated here. i think it is such a full scale. even if you look at the last three years and mid year slowdowns. the end point at which you wanted to buy varied from year to year. i think there are some factors that will probably limit not only the pull back in the economy but pull back in the market not least being global central bank ease something of the risks. housing and autos are firing on more cylinders. >> you said 5% to 10%? >> yeah. >> no, that's different. if we had 10% correction people would think the train hadn't left the station. >> look, i think people thought thaw in 2010, 2011, 2012. you had 10% to 20% corrections.

i don't think they are terribly abnormal. >> well, if we knew you were right about the market we could feel really good. the thing that scares me is how many old people we have and how many more are coming and how many we take care of. and one of them baby boomers. and the entitlement state we're building up in terms of how much we promised to do. we don't know how many people will be at that age before. it scares me that could suck everything out, that it could -- >> it does. but too often -- >> it doesn't work? >> well, it works. for health care, financial services, income generation and all those things. too many people, it's almost as if when the last baby boomer retires or dies that's it. we have to remember that they have not been burned by double bubbles. xys and mill lessenals.

>> like andrew and you. >> it's a hefty chunk of folks. they tend to be more entrepreneurial. a big percentage of them are the ones that are founding new companies. again, they have not been burned by 401(k)s. they are investing earlier on a somewhat automatic basis. i'm not suggesting the psyche is there to replace the boomers. but there is static analysis of the boomers. >> and this whole demographic thing, there's a lot of myths that run around this. when you look at the size of the u.s. working age population over the next 30 years it's going to increase 30 to 50 years. it's going to increase by about 30%. that compares to japan where it's going to be shrinking and your favorite place, europe. >> right. >> the economy is always rosie. it's going to contract.

even if china in the next 10 years it turns out. in the united states the working population will continue to grow. the idea that the baby boomer will somehow overwhelm this huge growth in the workforce i think is a myth. >> we need to do some of the right things to not mess this stkpwhr up. >> no question about it. you can argue for the benefit of establishing the right conditions which is ultimately the best thing. if you don't address the entitlement piece both sides of the aisle notice. but you do not fix this problem unless you address that. there's no question. >> morning in america. >> it is morning in america. >> that's all i want you to finally -- >> it's not different than before. people can still make it here. >> appeasement tour of southeast

asia. >> i will talk about morning in america. >> that's throwing it in their face. just bow a lot. thank her for staying the entire hour. thank you for being part of this lovely conversation. >> don't go anywhere. we'll talk about mna. our score card for the first quarter. the latest numbers on global mergers and private equity. and we're going to talk banking at 8:40. as we head to a break, check out the "squawk box" market indicator.

welcome back, everybody. the march sales figures are just in for chrysler. the automaker sold 172,000 vehicles last month, increase of 5%. by the the way, that was chrysler's best sales month since december 2007. low slightly below estimates by edmunds.com. the number of m&a deals.

the value of deal making increased by 10%. joining us is matthew tool of thompson reuters. good morning. >> good morning. >> what the heck is happening? we had so many deals. dell, heinz, amr, nbc universal with comcast/g.e. transaction that took place. i remember front page articles. we all came back. the total is down. >> two weeks in february, all those deals. by number of deals, this is a pretty important indicator, deals down 16%. so the lowest start to the year. >> i always think mm and a, i think as one of the ultimate barometers of true confidence in the marketplace. it's not just everybody out there speculating. it's the guys in the corner office who see their own numbers

who show shoo know how they feel about their business. >> right. >> what does this say about that? >> it's a couple outliers. consumer stables with telecom, tech. the past three years it's been energy, power. it's down. a typical market. kind of one off transactions. these are, you know, it really is an interesting m&a market where you hear every day confidence is up. buybacks are up. m&a doubled. the biggest start ever.

>> what does this say to you? do you care about m&a? i think it is a confidence barometer. and this says to me something weird is going on. it should be happening. >> there's only one of three things to do. we're either going to hand it back in difficult deposition, stock buybacks or make acquisitions. i would bet all three. on balance, if you smooth them out you can see the confidence is rising. we have reached the phase in the market for optimism. we haven't reached the phase of euphoria. >> i think the narrowness is not

all that different from the narrowness of cap x too. where you look at confidence among the ceo cohorts. >> it may be lagging. >> historically. >> at best. >> you could usually right over s&p. >> so that would be leading. >> i don't think of it as leading. ceos are scared of their own shadow. >> do you think there's a secular shift in the way they think about mergers, period. whatever m&a boom we had, it's over. >> look at all the deals made in

the height of the market. we have overvalued this transaction. we see lawsuits, regulation come into play. so i think there is a bit of a fear. i don't know if we can get aback to the 4.2 trillion number. >> shareholders have a stronger voice. >> it's embarrassing. pharmacy companies need those pbms they need a pharmacy benefit. no, they don't need one. no, they do. they get you to buy, divest. they get you coming and going. they get tired after a while. >> those were all deals built up the past decade. and the they spin them off. it is that cycle. >> real quick, bankers watch as as well doing these transactions but there aren't as many.

what's going on with the fees and who is winning and who is losing. goldman sachs is at the top of the table. is there as much money? >> investment fees up 6%. m&a is down 11%. capital markets driver. equity is back. mostly secondary. the high yield market off to another record start. goldman sachs number one. that's what you get when you get five or six. but you see people moving back and forth. >> there was a time when some of the boutiques show up towards the top. >> we have seen a couple come through strong. lion tree from ubs has had a couple of strong deals. >> thank you for coming in. >> of course. >> bulge bracket. >> bang you later. >> not bang you later.

bang with friends. >> people who are watching now who missed the 6:00 hour have no idea what we're talking about. >> they have no right to -- >> they got up earlier. >> chairman and c of of stifel financial will join us on set. cyprus finance minister sarris has designed. resigned. [ male announcer ] there are people who find their own path. and never back down. who believe the american dream doesn't just happen, it's something you have to work for. ♪ we're for those kinds of people. because we're that kind of airline. and we never stop looking for a better way. it's how we've grown into america's largest domestic airline. we are southwest. welcome aboard.

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♪ welcome backing everybody. in our headlines this morning, demand for worker visa expected to top a quota soon. it is expected to be filled by friday. when that happens it triggers a lottery. still confident about the economy to hire more foreign workers. the popular program will not have reached its base cap to quickly since early 2008 before the economic crisis hit. it brings up questions about immigration. when we come back this morning, get ready for the trading day ahead. the buzz from the traders. "squawk" will be right back. how do traders using technical analysis streamline their process? at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia

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welcome back to "squawk box". take a look at the stocks on the move this morning. health insurers getting a boost as the government reverses a decision to cut medicare advantage payments. it's planning a 3.3% increase,

reversing a previously announced 2.3% cut. and hewlett-packard is under pressure after goldman sachs cut its rating on hp to sell from neutral. it is benefiting from restructuring. it will be off set from weakness. nuance communications. sec filing said icahn has a 9.72% stake in the speech recognition software on your iphone with siri. shares of vodafone. verizon and at&t are working on breakups. verizon would likely buy the 45% stake in verizon wireless. >> a check of the markets. rick santelli joins us from chicago. steve liesman is with us on set. we have been talking about this issue for skilled workers. if you need one of those visas

coming in. apparently they will blow through the quota in less than a week after that period opens up to be applying for those things. the first time that happened since 2008. do you have any thoughts about this? this is a hot button ticket. >> i've been around the country. this issue of being high levels of unemployment and high levels of job openings and shortage of skilled workers is one of the greatest challenges of our time. how we go about training workers, getting business to train them i was going back to a journeymen program, it's really an interesting thing. we have talked about the beverage curve, the relationship from unemployment. we're at historic ratios where it makes no sense. visa side, greatest country in the world. a place where people want to go. we have been kicking out trained, skill, educated workers

makes no sense. >> it's nuts. >> they have been pushing for some sort of change. that's part of the movement for immigration reform that's been taking place on the hill. hey, rick. >> hi. well, i'll tell you what, my feeling real quickly on both issues is, you know, if you want to fill your bathtub, you first have to fix the leaks. otherwise, it's crazy. and i think immigration and reforms is all nuts. we have so many brilliant people that get educated that can't stay. i think the foundation of this is they have to please everybody. securing our borders, clogging the the link in the tub, making sure everything is on track, bringing everybody aboard. it should be easy. but it isn't. as far as the other issue, i think it's about time that everybody starts to be more honest about the structural issues of unemployment. skills bag isn't going to be narrowed by buying more treasuries. we should have been at this

intersection years ago. >> the ft had a story that was highlighted by morning money ben white. the u.s. gained 387,000 managers. they lost almost 2 million clerical jobs since 2007 as technologies replace office workers. that kind of points out how some of the wealthier people have done okay. when you lose 2 million clerical jobs like that, i don't know how you start to make up for some of those things. >> why aren't we training the right workers for the right jobs in this country. >> i like the apprenticeship program. >> business stepping up to the plate. in part, government has been doing this. the question is whether or not business is relying more on government to do this. should government do more of this. it's up to business. >> when you get out of college with a liberal arts degree you aren't trained to do anything. >> we had it being the goal,

target or the the idea for education. i'm not sure that's true for everybody. that for at least some portion of the population, a more apprenticeship program could lead to higher earnings over a lifetime, which is what we're talking about. >> rick? >> i agree, steve, yeah. i totally agree. i think government certainly isn't the answer. i think that when you look back on the liberal arts explosion, not that there's anything wrong with liberal arts. but the whole system, when you think about it, having the government underwrite the loans. they go to college too low. if you really have to sweat to get through college and you have to have a couple of jobs, beg, borrow, and steal, maybe you would be more into the idea of picking something that ends up in a job. >> on the other hand, there are people who say that the g.i. bill in this country, built this country into the middleclass country that it is. you made vast amounts of -- >> absolutely. when you go to war, steve, when

you go to war you have a whole different vision about your education and your job. most of the biggest benefits were after world war ii, korean war. look how that fueled the '50s and '60s. >> coaches talk about the seasonality and whether or not we will have a spring swoon. i brought a couple of charts. the good news we have gotten through the worst part of the first quarter here. take a look. that's the average growth the last three years. first quarter is the weak one. enough we're talking 3.5%. i don't know if the weakness is in our future but certainly not from a seasonal assistant. job standpoint is a little different. we have had this more of a false swoon is i guess what happens. q3 tends to be the weak one. we have done reasonably well. i don't know if rick or anybody is banking on the spring swoon.

at least from a growth standpoint is getting past a weak one. >> i certainly hope so. >> the underlying fundamentals are fantastic. the housing boom that's under way is half to 1% gdp. when you put it in home price appreciation, the wealth effect is.# 5 to 1%. we're starting at 1% to 2%. if we can just get some ice oinn the cake. >> they are going to do 2.5%, 3% this quarter. >> obviously income growth has not been full support of consumer spending. you have the wealth effect and household net worth are stocks and homes. we're likely to have seen an all time new high of net worth. that's not the number we have. >> we're going to take out when

the fed comes out with flow of funds. that's exciting. >> yeah. >> we went down $16 trillion and we got back $16 trillion of wealth. how much of that is yours? >> some. >> i was listening. everybody is saying earned success. it matters. >> albert brooks, right? >> that's broadcast news. this is arthur brooks. or albert. i like him. he's fine. >> taxi driver. >> i've been sitting here sweating. >> taxi driver. he was in love with -- >> what do you do when your life exceeds your greatest dreams? keep it to yourself. >> steve, thank you. rick, thank you. coming up, we're going to talk with the coach at duke.

no ron krzyzewski.

welcome back to "squawk box", everyone. analysts are citing the most recent product cycle talking about how it was a little bit of a disappointment and didn't see more margins to shared gains. rated to buy. but the target was cut to $575

from 660. that is stillwell above what they are trading at now. the company's second largest market. they have been critical of apple's after sales service. apple's arrogant. said they didn't give interviews to the press there. i don't think that's all that unique. the press is there jumping on. fannie mae reporting $7.6 billion profit and total of 17.2 million for 2012. that makes up all the money they lost in 2011. results were helped by decline in delinquency rates. it will have paid a total of $35.6 billion to the u.s. treasury. >> fannie one of the great stocks of the '80s and '90s.

implied government backing and you're a private company. we saw what finally happened. i hope it's not happening again. on a duller note he yesterday, financials played a key part in this rally. let's find out what the the second quarter has in for for us now. ron krzyzewski. his name bears no resemblance at all to the way it is spelled. zero. >> or how you pronounce it. >> you're the same as the duke guy. there's k, z, ch. krzyzewski. that's close enough. you are now doing more advertising. >> we have to get our brand out there. >> we do. >> probably the best place to advertise would be on a company like cnbc on a show like squawks

box. i'm just saying. >> i think it's the best place to run our ads by far. >> okay. good. you can come back. >> if you can pro announce my name. >> you were going to sign a big deal today but no. liz ann already told us how clients are reacting to the series of highs in this five-year. they're asking whether bull market is starting now even though we have had five years. are you getting the same type of feedback even though there is a skepticism of going too far? >> we are. i think that is healthy for the market. you don't have people just piling in. there's a lot of skepticism. we're going to look back. we're going to look back and say what were they thinking with a 10-year at 185 and yield on the s&p 500 over 7%. if you take deflation off the

table equity markets are under valued. you're going to see investors rotate out. >> but there is an answer for 185. it's not really -- it's there because of bernanke. so that makes it seem like it's not really there. >> that's right. >> it's like it's fake, manipulated, like it's rigged. >> it's still 185. right? >> no matter how it got there, it's 185. if you go forward 10 years and accept a 180 it's not inflation. >> people are worried that the underlying fundamentals of the real economy, that's what the bulls say is causing this. the other people say it's the fed and that the underlying fundamentals haven't improved that much from where they were in that horrific crisis. >> despite what people like to criticize, the fed has done a phenomenal job to the biggest risk of this market and earnings which is deflation. and deflation has pretty much

been taken off the table in my opinion. and with that off the table equities are undervalued in any growth scenario. you're going to have dips, corrections. but we will look back and say, what was i thinking? >> well, i asked earlier whether people think we can't go to 16,000 or 18,000. i'm forecasting 140,000 in my lifetime. the oddest american died yesterday. he was 113. which means theoretically i'm only halfway. >> and that is really bad for the viewers at cnbc if you're going to be on the show another 50 years. >> i signed a contract. to be invited back you should have said that was really good for cnbc. >> there are risks. you have policy risks. european contagion. i would like to get through one

year in the last three where the first quarter isn't all that we see in markets. all right. and we have seen this movie before. and this market probably is calling for a correction. but i think this is going to play out differently than the last three. >> so you think higher than where we are first quarter. >> i do. there will be a few corrections, as there always are. i believe the s&p 500 will be higher. >> we have more people that come on the set that are bullish than bearish. >> it's nuanced. people say near time i certainly would expect a pull back. it's nuance. you can always say prices go up but there may be near term corrections. that's the man try of the sell side chief investment. >> do you think the sentiment has turned so good. >> i think there are still bearish people. >> on the unusual side. >> i use your shove as an

example. all i heard about was a fiscal cliff and the end of the world. enough i turn the show on and all i hear about is stocks are making new highs and what's the best new stock to be buying. >> do you do exactly what the show says or the opposite? >> i try to follow what you do. >> not that many people compared to previous years are hearing us say that we're hitting new highs every day. just so you know that. >> right. >> do you understand what i'm saying? there is no mania right now. people are not -- >> the reason there's no mania is this bull market just recaptured losses. so many investors say i'm back where i was five years ago. >> buy and hold and you're going to be fine. people believed that. people who have are been burned by believing that. >> well, one of the things is

the buy-ins have been low. >> which correlates with ratings and viewers too. >> that's correct. >> exactly. >> and i don't see the euphoria that usually spells the end of -- >> not even close. >> but i do think we have moved from a level of pretty high possess similar just six months ago to a level of complacency. >> we still have a lot to worry about, though. when we say everything is gre , great,. krusveski. >> this is big news. the cyprus finance minister and what it all means. michelle, take it away. >> so minister sarris tried to resign once before. the president didn't accept.

he has once again resigned. this time the president has accepted the resignation. it's not exactly clear why, though, there are a couple of reasons which would seem logical. he's likely to be investigated because at one point he was the chairman in one of the failed banks that is going to be wound down. there will be issues down and t issues that they'll look at and there's a large degree of exhaustion that has come with the job. the likely replacement even though this hasn't been confirmed is the undersecretary of finance, as well, and people behind the scenes have given him high marks. so once again, the minister of finance for cyprus has resigned and we're just waiting for the official announcement now from the presidential palace. >> this does not sound like a change in policy? >> no. i would not read that in any way, shape or form. >> thank you for joining us and we'll be watching the story and hearing from you throughout the

day. we have two mad minutes from jim cramer and the stocks that have him fired up. we'll talk to him after the break. >> tomorrow on "squawk box." we've swapped the east are bunny for the playboy bunny. christy hefner is our special guest. plus jarredon is winning over consumers and investors. find out if the stock can march higher when we speak to the company's executive chairman. that's tomorrow on "squawk box" on cnbc. profit from it. this is $100,000.

we asked total strangers to watch it for us. thank you so much. i appreciate it. i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money? if your bank takes more money than a stranger, you need an ally. ally bank. your money needs an ally.

welcome back. let's get down to the new york stock exchange. jim cramer joins us now. you were on that -- that was, like, the third stock you mentioned or maybe the second stock on "mad money" last night. i tuned in because it happened so late in the day. i have to turn on cramer to see what this means. >> well, look, i see a bunch of stocks that people just love and they absolutely love these health care stocks to talk about because the old health care stocks have already moved up so much. so i always thought it was kind of ironic, joe. medicare, this is a big problem.

what do they do? they decide to make it so that they pay more money than we thought because the doctors were angry and the lobbyists were very effective and this group would scream higher because that would be the gigantic obstacle. >> what else did you see that you talk about? >> goldman goes to conviction buy, apple which is a giant and they don't like hewlett-packard. there's a lot of negative chatter about the hardware group saying that they see a slowdown. i have to tell you, maybe the most interesting story that nobody's focused on, fannie mae just reported the largest net income, 7.6 billion for the first quarter of 2012. remember, fnma, it looks like the guy is dead. i think it's something we're focused on. >> because it scared me, jim, and you were there, and that was as a broker and as being here, fannie was one of the greatest stocks of all time, but then i realize you have an implied

government backing and you're a private entity. something is wrong with this picture and we know how wrong it was in 2008, but we don't want to do that, do we? >> you want them to roll the dice and take as much risk as possible and guarantee the federal government. that was precisely what sunk this nation and let's hope people don't see this number and say maybe fannie mae was a good idea after all. >> they should be the only ones rolling the dice knowing they'll be bailed out. >> there's some regulation in the risk that they can take. let's put it that way. >> all right, jim. facebook is probably not buying with friends, just in case you're wondering. >> that's good to know. the site remains open. it remains opal though we probably -- >> that was news to us. >> probably bombarded. it's quite a site, jim. >> when we come back our guest host this morning has been scott many art and liz ann saunders

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