competitors. try to be different. >> the ten surprises which i come on and talk about every year is a good example of that. when i started out as a strategist at morgan stanley. there were a lot of smart guys doing strategy. didn't think i could be better than they were, they were smarter than i was. but i thought i could do something different. >> these are great lessons. we have to have you back. thanks for joining us. that does it for us today. right now it is time for "squawk on the street". good morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber live at new york stock exchange. we have got news boiling on a number of burners today. central banks in action. lot of jobs data. jeff skilling may get out of prison early. futures mixed to negative after yesterday's sell-off, the for the dow since late february. in europe the ecb's press conference is under way after the bank left rates unchanged.

the euro at its lowest level since november 21st. our road map begins with the central banks. the bank of japan pumping up its monetary easing plan and atlanta fed president dennis lockhart just told cnbc he wouldn't rule out tapering qe this summer. a new way to buy samsung products as best buy looks to crack down on showrooming. the retailer will open samsung experience shops within best buy stores across the country. brinker, the owner of chili he's and panera getting ym upgrades while domino's gets removed from the conviction buy list. we have reaction from the domino's ceo in a cnbc exclusive. breaking news from cnbc's own scott cohn. jeff skilling may be getting out of prison early. the aggressive monetary policy in japan. pledging to double its

government bond holdings in two years. central bank ending a two-day policy meeting with the statement it will pursue quantitative easing as long as it is needed to achieve its 2% inflation target. nikkei closed at a record high. disappointing economic numbers, tensions in north korea, dow, s&p and nasdaq all had their biggest drop since february 25th. transports at a one-month low. let's do japan first. they are calling this the most radical easing since vimar. that didn't end well. social unrest, you never want to see that. seemed like yesterday, the man in the mirror, bill gross, talked about that?

maybe there's no money manager that's going to make money. japan has a structural problem we do not have. they don't have any kids. if the bank of japan could mandate two children per family they would do a lot better than 2% -- whatever, buying back bond. this is why. because if you don't have a growth economy, if you don't have 290 million americans going to 310 million, maybe 350 million, you just don't need anything. you don't need anything new. you don't need new malls. you don't need new schools. you don't need new post office. you don't need new anything. they're saying what we can do is sell more cars than gm because we'll make our cars much cheaper. that will only last so long. >> today the yen is getting absolutely demolished. you've got the stocks of the exporters such as sony and the like going up sharply because it will make their products more attractive overseas which is the key part for them. this is a agreement experiment

that's going on in japan. we've been talking for many years. kyle bass is a frequent guest with his thesis. many of those fund that have played that thesis by shorting the yen have had extraordinarily good years. so far this year, finally. there is a cheap way to do that so you haven't suffered that much in the past. they are targeting the monetary base now. they're going to expand it enormously. >> going after the longer end of the curve as well. >> whoa! are they going to be printing money. they want to create velocity for an economy that's seen nothing but deflation and the emotion that goes with it for years. >> the overhang. the japanese ruled the world 24 years ago. >> they ruled the world. >> they ruled the world. tokyo real estate. >> a lot of the banks covered here in 1987 were mitsubishi, fuji bank, they were the big lenders. >> this is the beginning of --

she should have done this years ago -- of letting some of these companies fell. micron is going higher because three different japanese semiconductor companies combined and well belly-up. look, it's one thing to devalue to sell more. it is another thing to have products people want. >> that's true. >> tvs. you want to devalue? people don't make any money in tvs. is this the toyota play? >> are we going to get in a little bit of a trade war now? because they're aggressively devaluing? >> sure, they are. but they have no natural resources to speak of other than a thrifty group of people. they have no ag. i'm trying to contrast what we have going versus what the japanese have going and versus what they had in 1989. they're beginning to get over the hangover of the deflation period. they finally realized we got to go back to 1984-85.

>> this is korota's first meeting. the atlanta fed president on squawk this morning making some comments about qe and in what form or fashion it might come to an end. listen. >> i think there are three or four options. one which of course has been mentioned a lot is to taper. i think we could conceivably at some stage just announce an end date. we might change the mix while we're tapering or toward the end date. there are a number of different approaches that might be taken. i thought curtail was a good way of just talking about all of those options. >> starting to have that conversation more and more, although the claims data today, jim, worse since november. >> i think we have to end the notion that the clock is ticking on bernanke's view. i think bernanke laid it out

very honestly. we don't have employment coming back. we don't have commercial real estate coming back. we do have deflation in this country. so let's just let things ride. i'm just saying that the obsession that we have about when is it going to end should switch to -- maybe it doesn't end. >> maybe so. >> david henry saying largest -- this is the -- real estate investment trust that has a great sense of going on. >> in terms of traffic which we talked about in a lot of the malls. what did he say? >> he said look, we're not building any new malls in this country and where we are getting the great growth is we're having four new dollar stores opening every day in this country. you got this combination what's the one part of the retail that's doing well. there's not enough demand yet. the rents are so high that they're not building anything. how do you put people to work in this country, commercial real estate. it's nowhere.

>> if the bank of japan is going bananas on easing, our own bank is farther away from curtailing than we think, what is going on with gold at $1,544? >> deflation. >> europe. >> europe's done nothing. we sit there. like today. what did europe do? nothing. because everything's fine there? you got the anti-vimar going on there. china has the real estate bubble that we dreaded. they've got it big-time. it turned out there were people buying two and three homes. they were flipping real estate just like we were in 2006 an '07. >> interesting story in today's "journal" about china, export numbers from hong kong where things come before they go out are very different from the export numbers that china is actually listing. huge discrepancy because the china may be overstating it for any number of reasons. we're having a hard time getting

a read. >> do we have to say we're being too gloomy here? because all that's happened in our markets with this backdrop is pretty good. >> yesterday did not feel good. >> yes, but remember we're 14,000. when you're down 100 -- >> that's not bad but it didn't feel great. >> no, it felt awful. cyclical stocks were terrible. but look. i struggle every day about why we're not down much more -- but we aren't! >> so that in and of itself is dispositive that we're not going to be? >> no. it is just kind of a wondrous thing though. again, it is the fed. you want to be in the fishs national bank of conagra because the first national bank over in europe -- whatever. conagra will not confiscate that last thousand dollars. conagra is going to let you have an investment. they're not going to cut off your up side. conagra did not have a great

quarter. >> is it an anti-cat market or an anti-cag market. >> wouldn't it be something if that goldman guy called the bottom in cat? i don't think so. there's a lot i can't take the pain! same way kimberly. >> well, so many different cross currents today. its he's funny, you may be looking at a samsung tv but maybe sony's going to be a lot cheaper because of that move in the yen. that does get us to best buy and samsung making headlines today on this offering of a 30% discount on its current stock of ipad 3 tablets. the retailer also teaming up with samsung to bring special samsung branded sections to best buy and best buy mobile. samsung shops can already be seen in some best buy locations. in total more than 1,400 best buy stores will get the new

samsung shops. samsung is a south korean company. >> where the missiles are pointed and stocks are doing great. there's another example! >> it's been doing incredibly well. panasonic we don't even have that conversation anymore. but sony. not to mention what it's done in the most important thing -- the smartphone. >> is this the ron johnson solution for best buy, store within a store? isn't it funny the places that don't have a store within a store are doing better than places with stores within a store? that's some business. >> as we know, best buy shares have moved up sharply. that is one heck of a move. >> i got to hand it to them, this is a good use of real estate. >> if schultz had been able to put together a buy-out -- >> he looks like a visionary now. >> the new guy in charge at best

buy is trying to do some things. you got to give it a shot. right? >> i think that the world of this new team at best buy -- now i'm aided by the fact that gary balter has been right about a lot of retail for the last 25 years. but i think that best buy is here to stay. did we talk about cons at all? c-o-n-n? big retailer appliances -- >> next time when things are not going well -- >> best buy is last man standing other than conn. >> you said that for a while. >> it's last man standing. david henry said listen, the companies that are left in retail are not going to be amazon. >> conn. i don't even know where you come up with these things. >> ulta was up today! >> it was. >> conn. >> it is an appliance company.

lawn and garden. it is a big company. if you lived in texas you wouldn't be dissing it. >> that's true. but i don't live in texas. >> i've been trying kyle. i want to hear about japan. they've issued nor debt than they've taken in this tax revenues. >> sounds like medicare! >> more adult diapers than baby diapers. i got a million of them. >> he was talking about the older diaper trade. i'm raising numbers, kimberley. >> we will talk more about the apple call out of rbc today and the ulta call and a lot more. when we come back, how former enron ceo jeff skilling could be getting out of prison a lot sooner than expected. a pizza stock near 52-week highs until goldman took it off

its buy list today. the ceo will be here, scoring big business in the middle of march madness. slow improvement during the course of the morning. back in a minute.

we've learned that former enron ceo jeff skilling could get out of priz an lot earlier than expected. our senior correspondent scott cohen joins us. >> we knew going in that the original 24-year prison sentence imposed in 2006 was not going to stand. a federal appeals court ruled in 2009 that that was too harsh but we didn't know how much it would be shortened and we still don't. we know now that there are tax under way between skilling's attorneys and the justice department about a possible agreement that would get him out early. we don't know how early. and do away with all of the rest of the appeals and expected motion by the skilling team that could have gotten messy alleging misconduct by the elite enron task force that prosecuted the case in 2006. skilling has served about six

years of the prison term. he was convicted in 2006 on 19 counts of fraud, conspiracy, insider trading. remember, he rose to ceo of enron in 2001 only to resign six months later. just a couple months after that the epic collapse of the energy giant began. at the time the largest bankruptcy in u.s. history. >> scott, the discussions have been going on for a while but we're now learning about it because justice, by law, has to tell victims of the crimes for which he was convicted? >> that's right. obviously this is a sensitive topic and the parties didn't want word about this to get out but there is a law that victims have to be notified of any potential proceedings. so quietly this morning the justice department issued this victim's rights notification which says that there are talks under way about a potential sentence that would, again, do

away with any appeals and would put the whole thing to rest. >> we don't know. he's served six years so far. we simply don't know is it going to be another year or could be another ten. is that fair to say? >> well, presumably they wouldn't be talking about a deal, at least from the skilling camp, if it was going to be another ten. we can make some educated guesses. the reasons that the appeals court threw out original sentence and sent it back to the judge for approval was that the court ruled that the judge had basically enhanced the sentence too much because he ruled that enron was a financial institution which the appeals court says it wasn't. a lot of time automatically comes off of the sentence as a result of that. potential as much as ten years could come off of it. there are other ways to lower a sentence. good behavior. participation in drug treatment programs and things like that. so he could be out within a matter of years. he could be out sooner than

that. we just don't know what they're discussing. the leverage from the skilling camp presumably is that they have this motion for new trial based on misconduct. it would drag this out a whole lot longer, potentially pretty messy and potentially embarrassing for the justice department. the thinking may be -- again, this is conjecture on my part -- that he's already served a lot of time. he's definitely paid a price for this and maybe it's time to move on presumably with a little bit more time -- >> scott, if i can just be philosophical for a second. in the prosecution of enron versus the prosecution of the banks for gangsters. pretty different, huh? >> it's very different. there are a lot of people down in houston who believe in this country and believe -- in this company,i is should say -- and believe that the biggest sin that enron made was not being on

wall street. it was a firm down in houston doing the kind of trading folks did on wall street but how dare the folks in houston intrude on our territory. that's the thinking down there. if you look at what went on during the financial crisis and what the banks were doing and you compare it to what enron was accused of, what a lot of executives were convicted of, there are some very interesting similarities and lot of what went on in wall street five years after enron makes enron looks like child's play. >> scott, great reporting as always. takes us back to a different time. thanks for coming to the phone today. scott cohn for us today. want to know how to play today's market after the big sell-off yesterday? then you need "the mad dash." "squawk on the street" from the nyse straight ahead. clients are always learning more

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use the ford service credit card. did you tell him to say all of that? no, he's right though... time for cramer's "mad dash" ahead of that market open. let's talk a little apple. >> there are 60 firms that cover apple, 50 have it have a buy. now a new one -- lissard.

they think apple will earn $42 this year. earned $44 last year. that's down earnings. that's how you got a stock -- >> we hear about this movement from growth hand to value. less than ten times earnings though? >> look. do i think the valuation is insane? i think that if you had a cfo there who literally wanted to put the cash to work the stock would be much higher. that's financial engineering. no one feels apologetic at apple. the stock's up 6%. why do they have to do anything at all? i think it is the attitude. >> they could buy an oil company with a big shale that they could drill. they could do anything they want. at the same time do people think this is going to trade through cash one day? this is a cash machine.

it is a storage company and cash machine. it is everything but a computer -- apple sells storage through nand. >> i know. we got the opening bell about four minutes away. right? we've seen the dow move back and forth. gains some days, losses. are the bulls back in charge after yesterday's sell-off? we'll find out soon. acceler-rental.

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who are paid on salary, not commission. they'll get straightforward guidance and be able to focus on other things, like each other, which isn't rocket science. it's just common sense. from td ameritrade. after a fair amount of pain yesterday, the worst day for the dow and s&p since february 25th. nasdaq, transports, russell at one-month lows. we'll see if we can repair any of that today, jim. plus the nikkei, 5% move up in two days. >> crazy. it's almost traded like a small cap stock. all the winners of the first quarter that are non -- let's

say non-pfizer are just getting clocked. i think people are getting discouraged very quickly. saying wait a minute. airlines are bad. rails. transports. we need them. we need them. >> airlines, too. one-month low. there's the opening bell. a look at the s&p top of your screen, down here at big board. atlantic trust and barclays celebrating the recent listing of two etfs. on the nasdaq, kid's nutrition company plum organics celebrating its partnership with "a place at the table," a documentary about hunger in america. hard to ignore the action on some of these japanese exporters. >> what do you do if you're gm and suddenly they can come in as what i regard as currency manipulation -- that's my opinion -- say listen, our cars

which are equally as expensive as gm's are now well under. >> they do make most of the cars they sell here. >> they're a beg imemployemploy. that means they can get away with it? how about kubota and caterpillar. some people feel they're as good as ours. >> exports from japan moved up sharply along with the nikkei. when was the last time we saw 2 1/2 -- 2.6% move in the yen one day? >> these guys aren't just pulling out every single stop. >> they're buying etfs! they're buying reits. >> they're buying stocks -- >> they're buying etfs, they're buying jgbs, jreits -- you got a bridge you want to sell?

>> that's unbelievable that they're doing that. in the 1980s you'd get a call from your broker, who was in japan, saying tonight we're taking up tokyo electron. you just bought 100,000 shares. isn't that like illegal? no, not in japan. no, we're allowed to take up stocks. so now the government has joined that theory. we're going to take up the semis tonight. do you think they sit around wherever they are and say we ought to really give a boost to the fishing industry tonight? >> they got to get the money moving. it is about the velocity of money. they've got to get it moving. they've got to give some credibility to assets. >> is this not what bernanke is afraid of? why shouldn't he be. though we have a growth country and they doesn't. deflation is very hard to break. this is the hardest spiral. they cannot get prices up! and they don't have a lot of young people. >> 2% inflation.

that's going to be interesting if they can get there. clearly having an. impact in our market. >> if you're an industrial company in our country, you're saying to yourself, are they out of their minds? they can't do that. how can they just decide to put on a buy one/get one sale? it's bogo. that's what we call bogo, david. buy one, get one. >> kind of like yolo. you only live one. >> how about byod, bring your own device. >> let's talk about dell. what would you like to know? i'll tell you, blackstone at this point from what i hear -- the hope is that they have some sort of fully financeded offer if they are going to submit one by the end of the month. the worry on dell's part, they don't want to have to hold their annual meeting at or before they hold the shareholder meeting. hop knows what carl icahn might try to do in terms of running a

proxy fight. >> that business is going down every -- microsoft got downgraded today. >> it is not doing well at all. >> you talk about windows 8, you talk about dell. i mean business is bad! what's the point of taking it private if business is bad? you're not stealing it, i'll tell you that much. >> the idea would be you need to make significant changes that are better off made in a private setting without having any public equity out there, therefore, that reflects how bad things are getting and erodes confidence of your customers. that's his feeling. you're going to put a lot more debt on that company. >> it still generates a decent amount of cash. >> they have big government business. university business. charles river labs downgrade yesterday. that's a business that does research. you need a little government money. look, if the government is a client of yours, it is a real bad client. >> speaking of sequester,

goldman today, an seanimal cyst says he thinks the impact on federal payrolls in the next few months, could be like this slow burn we talked about the past couple of weeks. >> wasn't the justice department say they were trying to get rid of prosecutors so that the bad guys would go loose? the target -- are they targeting the national parks, air traffic controllers and prosecutors. well, why don't we shift that to some areas that are not as vital -- >> to national security. >> that's one of the main criticism of the sequester. it was not rational. we have not touched on the goldman upgrade, panera. they think the traffic concerns aren't that big a deal. >> the payroll tax came and went. the consumers's feeling good. there's only 417 calories if you

buy that chicken -- asian chicken salad which i know you like so much at panera. and the bread bowl. panera was upgraded, raymond james, this 52-week high stock -- remember, it costs you $5.5 for a meal at panera, david. >> i'm looking forward to it. i did go to olive garden recently. >> did you really? was there a line? did you play the david faber card? did you say i'm david faber -- >> no. we got in early. it was in arizona. it was packed. monday night. packed. when we left there was a 30-minute wait. so there you go. >> yet they can't do well. bread sticks are fabulous. that's why you you wear cargo pants. >> darden is the sixth biggest gainer today. >> you wear cargo pants -- >> go to target, get the cargo pants, then beat bejesus out of olive garden by eating all the

rolls. you want a bargain? bring the cargo pants! >> how about taking dpz of off the conviction buy list. patrick doyle's going to join us at 10:15. >> that downgrade has got real power. the stock's up. the conviction buy list versus the buy list. david, what is that? what kind of -- how much different levels of buys are there? >> it questions what they really mean when they buy. have you no conviction in your buy? >> i'm recommending a stock i have no conviction whatsoever. >> from now on when we refer to a buy at the goldman sachs, say it's the no-conviction buy. >> jeff skilling. no-conviction buy. you go to jail for many years but there's no conviction. >> there are 19 convictions. the sentence is changing. we will talk to patrick doyle at 10:15. you're going to come back for that? >> of course! pat itty doyle?

have you used the mobile app at domino's? that's killer. >> you know where your pizza is at any moment. >> what kind of music do you say when it's coming. oh, man, it's so good! >> no, i've never used -- >> you still go to pizza hut, huh? >> you live in new york city and you order from domino? >> yeah, i love domino's. i have no problem admitting it. my wife and i have this dispute all the time. she wants to go to some fancy new york pizzeria. ain't you ever heard of cheesy bread? >> let's get to bob pisani who knows more about italian food than any of us at the table. >> i was at patsy's last night. the shrimp was outstanding and the rest of the food was great, too. i'm a little disappointed by the open. i hoped to see a little more move into some assets, xhomdty stocks that we've been killed recently. utility stocks up, tech stocks

are kind of down, energy stocks are kind of down. japanese guys are up. metsby she is up, honda is up. all up 46%. i thought we'd get a little pop on the asset side and commodities. copper is down, gold is down -- but not here. i struggle to try to explain what happened in japan. it is pretty remarkable. they're buying about $78 billion of assets a month. that's what they announced. here in the united states the fed buys about $85 billion. it is not that far off. but the japanese economy, the gdp of japan is one-third the gdp of the united states. so in terms of comparable gdp, essentially the japanese are buying three times the assets that we are on a monthly basis if you account for the size of the gdp. that's pretty remarkable overall. we sort of settled who's got the bigger bazooka. does it matter, is it going to replay the japanese economy.

that's what this is all about. the extent of the buying and breadth of it, long-term japanese bonds, reits, corporate bonds, e it. etfs. anything that's not nailed down they're buying. that's the theory, create the reflation of what they're hoping for. how much more life is there to the biggest trade of the year? most of the guys i talked to said this has extended the life for sure. certainly not two years. no way. they're going to know in less than a year if this is working. if it doesn't the market will abandon that and people will make a decision on that pretty quickly overall. is it going to help the u.s. economy? if you get a wealth effect, people in japan feel better, they buy more imports. we have a cheaper yen though, that creates a problem. mr. draghi is still speaking but the first thing he said after his written comments -- this

whole thing is cyprus, not my idea. he said including insured depositors in the cyprus bail-in was a not-smart idea. he said that, "not smart." he called out everybody who was part of the bad first deal that they had. he again reiterated it was very important to find some consistent way to resolve insolvent banks. they need a single resolution mechanism over there. that means the ecb. they don't have one right now. guys, back to you. >> japan, no growth, no immigration. few children. no progress. doesn't matter what the boj necessarily wants to do. but a man who knows about whether we should be buying japan bonds is on tap here. let's shift to the bond and dollar. rick sansantelli, cme group. should we buy those bond? >> not with my money, jim. i don't care if they go from 44 basis points to 2 basis points which is a great rally. sometimes missing making money isn't the end of the world.

think nasdaq four months before it went down in 2000 and almost doubled in price. let's get to it -- a big day in the markets! 24-hour chart of 10s. low yield around 1.76. you know why that sounds familiar? that's where we closed last year. open it up and you can see how the 10-year chart is definitely flirting with some of the lowest yields since december at least on an intraday basis. let's switch gears overseas, a 10-year bund is hovering at 1.25. let's look at a 2-year bund. when you look at a 2-year note in eurozone, it is minus yield. not that we haven't been there before, but it is still hard to fathom. this is a 20-year chart of 10-year jcbs. people are falling over each other to lend to the japanese government for ten years for less than .5%.

44 -- yes, 44 basis points. wow. now let's look at the currency market. if we look at what's going on with euro versus the dollar, it's violated 1.28 but it isn't falling apart giving the dovishness and the idea that mario draghi and the insolvent banking system in southern europe is going it's their fault. i can't see that instilling confidence. in terms of the dollar-yen, this is the second biggest chart of the day on this trading floor. wow. i mean the dollar is a rocket ship. months and months ago ira harris and i were on and ira was saying that the currency wars aren't going to start out as wars. they're going to start out as skirmishes in the effect market and the battlefields will be the lots that sell cars. seems like he was awfully correct to me. jim, it is all yours sg. >> great job, rick, as always. good morning. part of the collateral damage in those currency wars today are

commodities with the dollar zooming after the boj action. we're seeing pressure on dollar denominated commodities here. gold again. lot of folks watching gold. it is nearing bear market territory from its highs back in 2011. folks are watching that and copper at an eight-month low. on concerns also about the weak data -- weakening data that we have been seeing and what that means for demand. in terms of energy we're also seeing pressure after a big decline yesterday on those higher than expected inventories when it came to crude. we're seeing continued losses this morning. nat gas bucking the trend. we expect a drawdown of 90 billion cubic feet. seems spring does not want to make its way to our parts. >> bertha coombs, thank a lot. the android announcement a few hours away.

facebook close to its lowest levels of the year. serving slices of march madness. we'll talk domino's with ceo patrick doyle about his game plan for boosting business in this economy. [ male announcer ] what?! investors could lose

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"new york times" has a front page story on walmart today saying the big box retailer has been having a tough time stocking its shelves because it's cut too many employees.

the article cites employees and industry analysts and says walmart is also struggling with low customer confidence. we talked a lot about this story this morning, david. a company you know well. odd sourcing on it. not really sure where it is coming from but almost anecdotally trying to argue that they can't run inventory because they're too lean. >> yeah. because they've been cutting too many people. we haven't heard a response from walmart per se. it was interesting especially if customers start to feel the produce -- that was cited in the story -- is not up to snuff, in part because it is not being replaced quickly enough. again, i do await some sort of response from walmart. i think we've reached out to them but not having an impact per se on the stock at this point at all. in fact, every time "the new york times" seems to do a walmart related story you probably want to buy. >> i'm working on a piece for "mad money" about how walmart, whatever is said about it, just moves the stock higher. this has been a major proponent in the dow -- which, by the way,

is doing quite well. remember i told you earlier the market surprises? it still does very well. it doesn't seem to respond to a lot of these negatives. walmart is a sterling example of what's going on in the dow. which is that it seems almost bulletproof. no stock is bulletproof. >> it is a time story, it is a leak of some internal memos. nothing seems to keep it down for long. >> walmart now versus when i used to go a couple years ago. i remember asking for rice cakes when i went to walmart. they went, rice cakes? we got cheetoh's. they now have -- branched out. one of the reasons why whole foods i think is challenged. walmart's got a decent natural foods thing going. >> one of their strengths -- i've been to that morning meeting on saturday mornings where people get up and everybody talks. they do communicate for an enormous company, communication becomes very important. talking about what the customer wants an to your point, responding relatively quickly given its size to try to meet

what it sees as potential consumer demand. >> you don't get that company being as big as it is, that stock being as good as it is without the stores being as great as they are. >> how about lulu really quick? they let their chief product officer go yesterday. today rbc cuts to sector perform. >> i think the issue is, the sheer pants gate is behind them. i think that people have to recognize that when they make a mistake, as lulu -- they are taking almost starbucks-like action. the ceo. starbucks -- and why is that? because she worked at starbucks. recognizes when you got a problem. got to address it. i don't think a lot of places would have even pulled those pants. >> so investors should be encouraged. >> yes. because i think that a company that owns up -- i betcha they don't lose a lot of brand loyalty. people say maybe people would stop going to lulu? i don't know. i think maybe this was a tylenol

issue. you know? they recall the pants. they get a little brand repositioning of being the highest versus athleta, gap. you go to lulu because it's like a victoria's secret -- never mind. when we come back, jcpenney could use a little shine. will showcasing some bling do the trick? we'll talk to a high-end designer who will be featured at penney's new jewelry bar. but first -- coming up, looks like some people are going through "walking dead" withdrawal. well, we have something even better they can watch. jim cramer's six stocks in 60 seconds. he'll keep your portfolio alive. "squawk on the street" will be right back.

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the dow's up almost 60. speaking of which, six stocks in

60 seconds with jim, give or take a few. >> there's a bunch of guys raising targets. citi, this is more what should have happened yesterday. >> facebook phone. >> this is about monetizing international. they have to do it. i think it is going to be a success but nothing overnight. >> pepsi. >> one of the things we've seen over and over again is these companies continue to go higher. they are saying valuation is bad and maybe there are some slowing trends. i have not seen that myself. >> citi talk about the dividend. >> watch out, dividend cut. i'll take their word for it. >> you mentioned rails earlier. norfolk. >> interesting. >> alcoa. b of a. >> they do not want their debt downgraded. that would be very important for alcoa. they do not want that. >> how about tonight?

>> one of the missions i've been on is to try to explain how dangerous some of these double and triple e tflt fs are. i feel that this is so important. i'm bringing on someone who has a solution for them. at the end of the day people think you can play trends with them. they're day trading instruments. i feel like i got to guard people against them. >> you're not going anywhere? >> no, i got patty doyle coming up. we'll talk pizza in a moment. sean matthews of canter first gera fitzgerald. who should be on our radar. as goldman sachs removed domino's from the conviction buy list, we'll talk to the ceo, patrick doyle, with cramer, david and me back in a minute. everyone's retirement dream is different;

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welcome back to "squawk on the street." let's get the road map for the next hour. fed heavyweights weighing in on the economy, including bernanke in a few moments. we'll assess the impact. the ceo of domino's pizza joins us. the stock is around a 52-week

high, international sales surpassing the u.s. there's that pizza perfect event called the final four. we'll dial in on facebook's big announcement today and rumors it could be an operating system for your phone. walmart reportedly struggling to keep shelves filled after cutting too many employees. that's a "new york times" story. we'll find out whether restocking issues could mean bad things for the stock. before all that, robert frank our wealth reporter joins us here at post nine. you'll bring us a couple things today involving the pope and the irs. hopefully not together. >> yeah, not together. it is actually the pope family and the irs. it is tax season and the irs is following the willie sutton rule, let's go after where the money is. they're going after the wealthy big-time with audits. we'll talk about that this morning. >> i'm audited every year. >> really. >> once you're a high earner -- >> same irs guy? >> they once pursued me as being both a resident of new york and

new jersey at one point because i was spending 18 hours in new york working but living in new jersey. dual residence. yeah. >> state of new york will always try to -- if they can get you as a resident, they will. >> try the caymans next time. puerto rico apparently is where -- >> they got a nice beach. when we go down there, our families -- >> yes, absolutely. >> it is great to have you here, robert. it is a big day for central bank moves. our own steve leisman is in ohio at the university of dayton where ceos and policymakers are gathering for the redefining strategy education investment forum. you already sat down with lockhart today. you've had a busy morning. >> yeah. lockhart and evans from chicago both on the stage right now. they're just wrapping up, they've been speaking for about an hour and a half. 2,000 students from all over the country in the audience. probably the most important thing said by chicago fed

president during the conference is that he would entertain the idea of a 5.5% or lower the unemployment target for the fed moving interest rates if inflation remain low. this was a proposal that came before. lockhart said he wouldn't rule out a summer quantitative easing but he needs nor positive data. >> i think we need a few more months of really solid data and solid evidence that the recovery is moving ahead. if you remember the last two years, we've had strong first quarter which i think we will certainly get when the numbers come out, followed by kind of a swoon in the middle of the year. i really want to get beyond that. >> lockhart wants more evidence. i pushed him a little further and see if i could get him to agree to the idea some other fed guys have said, when we reach 7% unemployment rate you would stop

or taper qe. >> i'd love to see 7% but the approach that i'm taking is i'm thinking of this as a confidence in the outlook building process. if my confidence in the outlook -- key word there is outlook. if that increases, then i will be in a position to make a judgment that we've seen substantial improvement in the outlook. >> so not very successful in getting him to agree to a 7% figure. i just want to show you the audience here. you see they're just finishing up the first morning session. i'll be moderating a panel next on the economy with diane from black ro blackrock. 2,000 kids from all over the country interested in finance listening to details of federal reserve policy. guys, these are our viewers a couple years from now. >> maybe even right now. let's hope. >> oh definitely some of them

are watching. >> i'm going to villanova for a college tour coming up, couple weeks. go wildcats. >> go wildcats. steve leisman, thank you for all that great reporting. want to bring the conversation back to the u.s. markets at least a bit. as that market charges forward shrugging off some disappointing economic data interest this morning. sean matthews is the ceo of cantor fitzgerald. sean, i'd love to get your take on the boj move and that move in the yen and what, if any, impact you see on whether it's currencies, treasuries or our own stock market. >> i think the bank of japan is clearly trying to inject liquidity into the system. it's been a long time. 20 years since their economy's gotten any sort of kick start. they're trying to do anything they can at this point to make sure it is going in the right direction. if you look at the treasury complex they rallied on a global basis.

i think there will be a sell-off when people realize if people are going to put money in work in japan, certainly there is a knock-on effect. you'll see companies doing better. >> shawn, jim cramer. good to see you. we have currencies weak all over the place except for the dollar. if i'm a rich person in japan -- they do have rich people -- rich person in europe -- they do have rich people -- why wouldn't i be in here buying u.s. stocks that have good yields? >> i completely agree with you. that's the trade dujour that's out there. when you look at the equity complex, there's a rally in place. balance sheets are in terrific position at this point. revenue growth is not great but it is okay. m and a activity will be coming back aggressively as well. you want to be in u.s. high-yielding equities. >> we've been looking at pmi numbers out of europe all week

long and trying to get our hands around the contraction that's going on there. you're expanding not necessarily in some of the troubled economies but in the uk and ireland. why? >> certainly large-scale financial institutions will be pulling back. there's some headwinds in place for them. from our position we look at it as a long-term opportunity and we're growing aggressively right now. >> in what ways? we talking personnel, infrastructure, both? >> both. at this point in time we're aggressively -- growing organically plus we're looking for opportunities to buy broker dealers and other assets that are out there. >> last time you were on you predicted a new wave of m and a activity as all this corporate cash would get put to work. you want to retract that, extend your window? what's going on there. >> no. i still think it is going to happen.

we are seeing m and a pick up a little bit. i think to think it is going to pick up over the next year or so. you have to grow your revenue in top line somehow, some way. it is difficult in this environment so people are going to look for opportunities to buy revenue and put it into their existing infrastructure especially looking at their own cap structures they're in good position. they're going to put the money to work somehow, some way. >> are you worried at although about a little floppiness in things like the high-yield market? >> high-yield market has definitely got a little bit of covenant life so you always get a little suspect when that happens. but in reality you have to put your money somewhere. i think corporations will be looking for opportunities. they could still access the high-yield marketplace so that's a great place for them to finance, and equities are cheap. it makes sense for them to look to acquire as many assets as they can in a relatively short window. >> all right. shawn, appreciate your time.

thanks for joining us. shawn matthews, cantor fitzgerald ceo. david, you and i talk a lot. you've been right, the m and a market has tailed off. you raise a good question, which is where did it go? if everyone has so much money, why aren't they doing that? >> i know. doesn't mean we're not going to see something of a resurgence. we just got a little ahead of ourselves, give us some of those huge headlines we saw. people's animal spirits kicked in. >> look, again, i come back. we can be as gloomy as the headlines are or we can try to figure out who's buying things. i felt that the executives just had a good point. foreign money coming here. >> only place to be. >> it is the only place to be. late night place to be. right? >> yes. in a cnbc exclusive, one of the big headlines this morning, we've learned former enron ceo jeff skilling could get out of prison a lot earlier than

expected. our senior correspondent scott cohn breaking that news today joins us now on the phone with a lot more. >> reporter: good morning. we've been trying to get some comment officially from the justice department or from jeff skilling's long-time defense attorney about this development. we do know that talks about this potential deal have been going on for some time and intensified after a private conference call in the chambers of federal district judge tim lake in houston last month. he presided over the trial and would have the ultimate say in the resentencing of jeff skilling. but the justice department quietly issued a notice to victim which it has to do under federal law saying that this agreement is in the works, potential agreement in the works, that could restrict the parties and the court from recommending, arguing for or imposing certain sentences or conditions upon it. it also presumably would do away with a motion that the skilling team was planning to file

arguing that there was misconduct by the elite enron task force which prosecuted the case back in 2006. that presumably would be dropped in partial exchange for an early release of jeff skilling. again, he has served six years of a 24-year prison term. the prison term was going to be reduced anyway under an appeals court ruling in 2009, but now as the process moves along, as that motion became ever present. >> scott, thank you. i'm sure we'll talk more about judge lake and what happens next. i got another great exclusive by you today. goldman sachs taking domino's off the conviction buy list today. the ceo will give us his reaction in an exclusive interview next. plus he'll serve up a read on the consumer, commodity costs and what doing business is like during march madness. patrick doyle in a couple of

minutes. if you're worried the rally may not be real, we'll take a look at the technicals in several sectors that the rally has left out in the cold. x [ male announcer ] there are people who find their own path.

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goldman sachs taking domino's pizza off its conviction buy list today. returning that pizza. shares of domino's pizza have been up nearly 40% the last year, the second-best performing restaurant after afce. one thing fueling the company's success, its growth outside the u.s. here for an exclusive, the ceo, patrick doyle. gold man doesn't think you are as good as you used to be! >> that's okay. he's a big syracuse fan so after saturday night i'm not listening to anything that he says. >> it sound like you are from michigan then. >> i'm a u of m grad. i don't listen to anything he says until after saturday night. >> i don't know, he likes panera. pat, listen, last time we spoke you had just put through a new app. it was a credit card app.

people like us are tired of figuring out whether we have enough cash. is it working? is it bringing in people? spl absolutely. what we've done is we've now got a card on file, a system where people can register their profile, basically like you see as an amazon. they can go in, once they've set that up, they don't have to enter in their credit card information and place their order that way. just makes it easier for them. we're real pleased with the uptick on it. >> pat, i was listening to some reports about how in the united kingdom it's been very cold. when it is cold people order in pizza. i know are you doing a lot of in. is this the way they do it over there? >> yeah. uk had a great first quarter. they actually just released this morning. i think they were up 6.6% same-store sales. so they had a great quarter and, yeah. weather -- at the marg cold weather, worse weather is a little bit better for us, although it is not that big a

deal. overall they just had a really strong quarter. >> patrick, not too long ago we were talking about some alterations to the recipe. then you had to market and communicate those changes. in retrospect how difficult and do you feel you've seen the full payoff quite yet? >> we clearly have. when we relaunched the pizza beginning of 2010, we were trading at about $10. we're at about $50 today. same-store sales have been terrific for the last three years. so, yeah, it absolutely has worked for us. >> we got some comments from gm on a different sector this morning on "squawk," but talking about the degree to which consumer spending was suppressed in the early part of the year because of the expiration of some of these tax cuts. is that visible from where you are? >> i mean overall we set ourselves up. we knew that that was going to be happening. we got good value out there. so it wasn't a real surprise for us. so i think the consumer is doing

okay. we've still got to dig out of our fiscal issues in d.c. and i think consumers are going to continue to react to that until all of that is behind us. but overall, i think the consumer is still doing all right. >> patrick, we joked earlier about the final four but we've got some very big games and a surprise factor. we had 20 minutes after a super bowl. it does impact your numbers in the united states, doesn't it. >> yeah, it does. we are the official pizza of march madness. we got a bundle out there for it. we take full advantage of it. super bowl is a really, really big day and it is particularly big two hours. march madness actually overall is even better just because it's spread out. and so we'll have a great big night on saturday night and monday night, god willing with my wolverines playing, and -- but it helps. because it is spread out over three weeks. it's just a nice bump over time.

obviously it happens every year so that's already kind of in the numbers. it doesn't change anything from a year over year perspective but we definitely feel it. stores are definitely busier during march madness. >> i can't let you go without trying to figure out how many people are ordering online. they've been unbelievable. carl and i are ordering online constantly because we love the app. david has not adapted to it yet but are you able to have fewer people working at domino's -- i know for the franchisees, and at the same time serving up more pizza via the app? >> we've been growing so much, we've probably reduced a little bit of the increase that we would have seen in labor. it certainly makes us a little bit more efficient but the really big play is just that the customer satisfaction is dramatically higher when they order online, when they order over the phone. and that's really i think why it's important for us. so there's a little bit of leverage on the labor line. not a lot.

but the big play is just a happier customer. >> i also wonder. you do get to collect a lot of data about your customers online i would think as well. is that helpful and how do you use it? >> yeah. it's incredibly helpful. that's a big part of our business. we're making a very big investment in kind of our data, data warehouse. starting to look at big data and kind of the opportunities with unstructured data. but absolutely. as we are putting together offers we can see what it's doing to each individual customer, how it's affecting their order frequency, their ticket, all of those things and it allows us to start designing things specifically based on past order. so that data is incredibly important to us. >> i would say that reordering -- because you know what we've gotten in the past, the process is almost instant. just reorder what i got last time. boom. finally, patrick, in previous appearances we've asked you about commodity prices, we've worked our way through a drought not too long ago.

is there relief that you see for the rest of the year at least? >> we're feeling okay about commodities. we're kind of calling up 3% or 4% for the year. so far it is looking pretty good. cheese is kind of in a normal trading range right now and overall it's good. the thing i keep my eye on really is gas prices. because ultimately oil and gas prices play through really all of the commodities. so for me, that's kind of what i really key on over the longer term. near term, cheese is the big one and everything's in good shape there. we're a 90% franchise in the u.s. so that doesn't flow through immediately for us anymore. >> how much twitter, how much facebook, how important are they? >> yeah. absolutely. we get a terrific return on investment on kind of digital marketing, digital spends. we're involved on twitter,

social media, all that responding to people. from an advertising standpoint, it's still a lot of banner ads, lot of paid search. so a lot of that with google and bing, microsoft, all of that. but that's an evergrowing part of our overall marketing mix. >> patrick, i do have louisville. sorry. but you never know with michigan. i remember the fab five. those were the great days. thank you so much, pat. >> this team is terrific. >> patrick doyle, ceo and president, dpz. i regard it as a technology firm because of all the work that they've done. thank you so much. warning signs amidst the rally. a deeper dive into the technicals on several sectors sitting out the big run of 2013. plus, playing facebook ahead of the android announcement. just a few hours away. will the news push shares even higher? i know what you're thinking...

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we're putting the wonder back into air travel, one innovation at a time. the new american is arriving. welcome back to "squawk on the street." jcpenney in the red, down at the lowest level since march 2009. the stock down some 27% this

year, down 60% in the past 12 months. earlier this week we learned that ceo ron johnson received compensation of $1.9 million in 2012, a big decline after a year when the retail sales fell hard. jcpenney down 1.5% right now. >> that's a weak number. almost everyone who files taxes worries about getting audited but if you're wealthy you might need to be more worried than most people. robert frank is here on set with that story. just had this conversation with cramer. >> when it comes to revenue the irs is following the willie sutton rule, go where the money is. increasingly it is with wealthy taxpayers. new data from the irs shows tax filers making $1 million or more in income were 12 times as likely to be audited in 2011. 1 in 8 of them are audited, compared with 1 in 100 for the rest of the population. those audits have been extremely lucrative. 400,000 audits of millionaire

earners brought in an additional $4.8 billion. that averaged more than $100,000 per audit. it is not to say that all the wealthy are tax cheats but a lot of additional money came from minor clerical errors or different accountings. but the irs created a special s.w.a.t. team aimed at just the rich with dozens of tax experts trained in the arts of wealthy tax avoidance. if you're wealthy, watch out. irs will be looking at your return this month very carefully. >> aren't they always supposed to be doing this? or is it not -- i don't know. are you supposed to just take a cross section? >> whether it is because previous republican administrations were not as aggressive or they didn't have the data. but right now they have come to the conclusion that again the highest returns when it comes to audits are the wealthy. they have more data right now than they've ever had before so they can match their forms, their data against your reports.

and because they now have so much more information they have a better sense of that. again, they have a special team that's raising billions of dollars so it makes sense to devote their energies to the wealthy than which everyone else. unfortunately for the higher earners. >> better look out, carl. after the break, breaking news on nat gas inventories. after the sell-off we've seen so far this week, is the data finally going to push us back up? we'll see. we'll be right back.

welcome back to the nymex. i'm bertha coombs. we are awaiting the number on the weekly eia storage number. appears to be a withdrawal of 94 billion cubic feet. that's about in line with the expectation ahead of today and about in line with what we saw last week. cold temperatures on the east coast in particular keeping demand up but we are expecting temperatures to warm up next week and, carl, we also have the nuclear outages which have been supportive to nat gas now back below the five-year average. so we could see a little bit of a mix. nat gas right now is up about at 3.91, down a little bit from the highs. back to the tech news of the day. we're 2 1/2 hours from facebook's big announcement. the company expected to unveil a new facebook operating system for android mobile devices. our own julia boorstin is live outside facebook's headquarters

in menlo park. >> reporter: good morning. facebook's announcement today is about tackling two key growth areas, mobile revenue and inmarkets where people are more likely to access facebook just on their mobile devices. we do expect facebook to unveil a new operating system built for google's android which it will showcase today on an htc device. texting, voice calling and eventually search. zuckerberg has said he's not interested in building a hand set like so many other tech giants because even if facebook were to sell 20 million phones that wouldn't move the needle. >> we're going in the opposite direction. we want to build a system which is as deeply as possible integrated into every major device in things that people want to use. >> being deeply integrated aims to drive more use and ad revenue. e marketer projects facebook will capture about 13% of the

$7.3 billion u.s. mobile ad market this year, while google takes more than half the market. facebook's new phone software definitely aims to boost its share. the fact that facebook is partner be with taiwan based htc indicates the company's focused on growing revenue from international markets which dramatically lag its u.s. advertising dollars. zuckerberg has said he he's making a mobile for his company. carl, after today's announcement we'll see how many of facebook's users want to make facebook the first thing they see on their mobile device. >> that is the key question, julia. thank you for that. julia boorstin in menlo park. for more on the speculation surrounding the big announcement did, joe, good morning. >> i think a lot of people want to see facebook when they turn on their phone. facebook has e-mail, facebook has chat. it shows you what all your friend are reading, taking pictures of, what their babies are doing. it is increasingly a much more,

as they say, social web experience and people just don't want to read. >> they're not exactly putting a new horse in this race. meaning they're at least up likely some believe to introduce hardware but they are trying to put a jockey on a winning horse, and that is android. is that a fair comparison? >> that's quite a deep analogy. but i mean -- yes. there's no advantage to facebook building a phone. they're not a hardware company. it is not a good idea. zuck has said that. but getting people to an spoorns where they use their phone more is something the company needs to do. they need to be able to take over every aspect of your web life. facebook is kind of like a casino mentality. if you walk in a casino and you have a quarter, they have a place for to you put the quarter. facebook wants you to be doing whatever are you doing through them. they have their own browser

inside of your facebook back. they bought instagram. there are so many ways facebook wants to capture its data, users and habits. >> there's already a facebook app on the phone. what will this new operating system allow you to do that you can't do right now? >> well, again we're all speculating here but i think what you're looking for with a facebook app or a launcher or skin to an operating system is a more deeply integrated experience. if you take a picture of your baby with your phone right now you can either put on flicker, you can do a twit pick, post it to facebook, you can instagram it. facebook wants it to be easier to put in your news feed. if you want to message a friend you can use gmail and give them your data, you can use yahoo mail, you can text them on i message. they want you to do it through facebook messaging because they're scraping all of your

data to understand your habits so you can be a more viable ad target. >> will it restrict you from doing those other things? >> i don't think that facebook is going to try to be in the business of restricting you from doing anything had. that that's a losing proposition in tech. i think zuckerberg's smart enough to know if you start hemming people in, you'll lose them. you want to feel like everything you want to do on the internet is easier and it is so easy to get this on facebook from my phone, this is great, i'll just do that instead. >> how much is this had going to help to monetize mobile advertising if in fact they succeed? >> facebook has said a lot about how they have to become a mobile centric company. it's totally true. developing world as your correspondent was saying and also teens using facebook, they're not maybe on their computers at school but they're on their phones all the time. it is really important to own the mobile market right now because honestly the internet and mobile market with becoming

inextrickable. >> joe, you made the statement last fall -- he made the statement that the phone wouldn't move the needle. do you think he'll eventually turn on that promise and actually create a hand-held device? >> i don't see it as a winning proposition for him to create a mobile device. facebook is big enough that like he said, you could go very deeply integrated into a version of android and it could go across so many different ha handsets. htc is just one phonemaker. they have a lot of cool phones but samsung has so many more phones and motorola has phones. it is far more appealing from the company to make somebody that could be on any phone. >> there's something about a facebook phone, i'm sure you see this on twitter or other feeds, that elicits snickers. i just wonder if you think that's fair or not. >> what it elicits i think are rumors. that phrase facebook phone, just

like apple tablet did or apple phone did, when you pair a really ubiquitous device with a really powerful company people want to talk about it. especially on the internet, people want to snicker. >> joe, thanks for that. we'll see what happens in a couple hours. joining us from "wired" today in new york. best buy, the stock started up a bit modestly this morning. now almost 8% move upward. we haven't seen that stock price i would venture to guess at least in some time on best buy. on the news out this morning, we've confirmed on cnbc, they'll have a store within a store for samsung products. a number of analysts apparently quite pleased with that possibility. i believe janne saying it will use square footage with better productivity and margins and could be a wake-up call for google, sony and microsoft to say maybe we need to do the same

kind of a thing. >> best day in a month for best buy. don't see a move like that too often. >> no. certainly off the lows. whoa! after the break, a look at several key sectors that have sat out the rally for 2013. we'll check the charts and technicals and see where they're pointing. perhaps a rally that's in jeopardy. plus, more troubles -- maybe troubles for walmart. not for the stock price at least. but "the new york times" is reporting walmart has cut so many employees, it is no longer having enough workers to stock its shelves. is the big box retailer about to lose some cussers in? what will it mean for the competition? we're back in two. this is kev. to prove to you that aleve is the better choice for him, he's agreed to give it up. that's today? [ male announcer ] we'll be with him all day as he goes back to taking tylenol. i was okay, but after lunch my knee started to hurt again. and now i've got to take more pills. ♪ yup. another pill stop. can i get my aleve back yet? ♪

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♪ [ shouts over music ] turn it down! and, of course, talk to farmers. hi. hi. ♪ we are farmers bum - pa - dum, bum - bum - bum - bum ♪ welcome back. want to take a look at some of the sectors that have set themselves apart from recent moves in the market. housing, techs, copper. mark, good morning. let's talk about transports

first. trend line support. how bad is the damage? >> in the near term we have seen a little bit more signs of deterioration just in the last couple of days. that's starting to happen in a lot of different sectors. transports have actually broken this trend line which has been intact since november. but remember transports made all-time highs in january. the dow followed the new highs. now it is showing the first side of leading us to the downside. as a leading sector it is something to concentrate on. bigger support down near 5650 or so which were the highs from 2011. >> housing though, which had led us so well, what's going on here? >> that's also seeing a bit of deterioration. we haven't seen the same extent of the breakdown. in my opinion i like buying home builders. the entire consumer discretionary sector has continued to do extremely well. home builders have shown good

relative and absolute strength. this is still a sector you can favor. >> you favor this over transports. >> absolutely. >> okay. let's talk about some other -- copper. you discuss copper as an economic tell all the time, a global tell. but man, you can see where it's been versus support recently. >> people have pinpointed the divergence between the s&p moving up and copper moving down. we've taken out the late 2012 lows. i think we can continue to weaken at least in the near term down to 3.25, potentially as low as $3 per pound in copper. >> you would expect because the divergence is so marked verses this long trend line that we'd be in somewhere near a bottoming process. why is that not true? >> potentially. when you have several different longer term lows like this that are broken, a lot of times you don't see immediate support. the key is that when you have in this case since 2011 four

different lows and have all been right now taken out to the downside, oftentimes you can see an acceleration and you don't see immediate support. >> interesting. let's take a lesson of all of these sectors and put them against the broader market. >> this has been fairly stable. this is -- xlk, apple a huge weight, almost 15%. tech has been starting to outperform the larger industrial space. though the trend line is still positive here, i still think this can continue to regards to xlk. it's been a huge underperformer in the last 6 and 12-month period down -- i think the greatest underperformer on a 6 and 12-month. but in my opinion we're starting to see relative signs of this starting to bottom out. semiconductor is still somewhat weak. so broader market, at this time still intact but more and more sectors are starting to roll over. i just don't think tech in this case should be underweighted. >> it is so hard to divorce from

and many. mark, thanks so much. when we come back, rick santelli gives us his take on the uncounted and the unemployed ahead of tomorrow's big jobs number. next. heir process? at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. we like this idea so much that we've applied for a patent. i'm colin beck of fidelity investments. our integrated technical analysis is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. ♪ ♪ ♪ ♪ ♪

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walmart reportedly has cut so many jobs that it's having trouble keeping its store shelves stocked according to the "new york times." the world's largest retailer running into problems in its grocery areas where it is struggling with slipping consumer confidence about quality and freshness. managing director, senior equity analyst at mkm partners, patrick, first, is this something you've heard about and secondly, is it something investors should be concerned about? >> i mean there are always rumblings out there about walmart doing one thing or another the wrong way. and generally speaking, they are just rumblings. no, it's not something i'm concerned about as an analyst covering this stock or it's nothing i'd be concerned about as an investor. they're doing very well in grocery, in particular in the fresh food area. they've taken tremendous market share over the years. that's one of the very good pieces to walmart story.

the negative on walmart is more what's going on in general merchandise on that side of the store. but the food side of the store is doing very well. >> this basic idea that they cut employees, as they actually cut down on skus for cut down on skus for a while there, and also as the economy was very slow, and they haven't added the employees back, while meanwhile they have added a lot more items. it would seem to me in terms of the customers who go in there, food is not as fresh as you like or the vegetables you may consider going to another market. >> well, they're getting more efficient, i think, so they're able to pull back on employees. and, i mean, grocery was 55% of wal-mart's u.s. sales last year. that translates to $150 billion in the grocery area. kroger is number two with $97 billion. and safeway is number three,

less than $50 billion in sales. and go back to 1988 when wal-mart started opening super centers in the u.s. so it's been a tremendous market share story in grocery, and a lot of that is because they're doing the right things. >> well, back to things that investors do care about, how are margins holding up for the company? >> well, the companies overall operating margin has been flat to down over the past few quarters. i'm not recommending the stock. i've got a neutral rating. but my ffocus has been on the general merchandise business which has not been doing so well. grocery was actually up low single digits. so that implies the general merchandise side of the store was flat to maybe negative. but margins overall had been flattish. they've had pressure on gross margin as they have grown in the food business, that they've been

able to offset that with deep expense management. >> is that an overall macro issue about the consumer? we keep talking more and more about the dollar generals and the dollar trees. are they losing ground for the low end? >> they've lost some market share over the past several years to the dollar stores. there's no doubt about that. but not so much in fresh grocery. the dollar stores really aren't in that in a major way just yet. they're moving in that direction. again, i think they're doing quite well overall in the fresh food area, up in the low single digits. >> patrick, i appreciate your time, thank you. >> sure thing. >> let's get to the cme group in chicago. rick santelli with the santelli exchange. good morning. >> good morning, carl. everybody is always excited for the thursday before the big labor report. the employment report for march,

and it takes on larger significance these days, especially the unemployment rate. currently at 7.7. not expected to move much. that's what we're expecting tomorrow. it's hugely significant in so many ways. in my mind the two biggest issues facing the country are jobs, jobs, jobs. so the unemployment rate figures in largely and the second issue is debt and deficit driven by many programs underfunded or on automatic pilot, entitlements, disabilities, things we need to address. sometimes it's best to look o r overseas because we don't have the product in the unique environment. they're shared by many economies. so in the uk they're doing means testing. now means testing isn't mean. it's very much needed because there are abuses. there's people who need programs and there are people, believe it or not, who abuse programs.

in the country, back to unemployment, i've talked about how we have 14 million people on disable that are not even counted as unem ploited. uk has a similar problem. so to means test it, to address it, and they are addressing it, let's read something from april 1st. a total of 878,300 claimants decided not to go ahead with an assessment of their fitness to work. the figure was more than a third, a third of the total number of people claiming sickness-related benefits. now in the u.k. they don't call it disability, they call it incapacity. now let's put the next screen up. these figures demonstrate how the welfare system was broken under labor and why the reforms are so important. so let's put this in perspective. means testing not even implements yet, and once this

the news basically a third, a third, 800 to 900,000 people dropped right out. we have 14 million. all things being equal that's a lot of people, a lot of expense. we want to give it to who needs it, not to who gains it. now cyprus has been in the news everywhere. sometimes there's things you know, but you vice president looked at lately, and that is what we're going to talk about. do these numbers mean anything to you in viewer land? and if you're listening on your satellite radio i have 4.5% and 17.7%. those are the percentages of contributions by the uk and by the u.s. in the imf fund, which means that a billion dollars comes for the imf to cyprus. 45 million are coming from the uk and 177 million of those euros are coming from the u.s. i'm not saying whether it's right or wrong.

i'm saying, have you thought about it lately? back to you, david. >> thank you very much, mr. santelli. he will be talking to mohammed el-erian. that's the big story of the day. and we'll talk to someone who said last year that facebook would disappear in five years. will today's announcement change his mind? revolutionizing an industry can be a tough act to follow, but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year.

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got the jobs numbers tomorrow, of course, and that means another chance to get the numbers. tweet us your predictions. our handle is @squawkstreet. the entire "squawk on the street" gang has signed it. you'll have until one minute before the friday release at 8 kwln 30 a.m. eastern. estimates still around the 200 area. >> ism. the tone on balance for tomorrow has softened. but we'll see. these things are incredibly thard to predict. but all for this.

how could you not even try? >> you've got to try. i want to look at more shares of best buy over 10% today. what a move there. let's not forget here, you have a lot of people who are expecting the demise of this company. again, another one of those names in ret retrospect that looks like it was oversold, it was a $12 stock at the the beginning of 2013. >> yeah, and in that company for year to date gainers with the likes of hp and others that where written off late last year. in the meantime, if you're just joining us, here's what you missed, is. welcome to hour three of "squawk on the street." here's what's happening so far. >> there are a lot of gm cars on the road. i have a feeling there's an underpinning strength that may

go for four or five years. >> i would say businesses are still cautious about hiring. there are a lot of unknowns, so they're not quite ready to pull the trigger on at least large scale hiring. >> there is a deal in the works between the attorneys and the justice department that could shorten in the sentence. we don't know by how much. >> we don't have employment coming back. we don't have commercial real estate coming back. we do have deflation. let's just let things ride. the obsession we have should switch. it doesn't end. >> here's the opening bell. >> may i suggest -- go to target, get the cargo pants, and beat the bejesus out of olive garden by taking all the roles.

so that data is incredibly important. >> good thursday morning. we're live here at the new york stock exchange. want to get you up to date on the markets after yesterday's tough session. the worst from the dow since february 25th, trying to hold onto some gains today. up 34 points to 24,584. s&p is up almost five handles. the nasdaq had a one-month low as of last night. we'll kick it off with lululemon. the chief operator will leave the company. they recalled pants that were unacceptably sheer. and jcpenney hitting the lowest level since march of '09.

stacks down 28% since the start of 2013. our road map looks like this. but phone operating system, whatever it is, will it be enough to move the needle? a phrase ma mark zuckerberg himself once used. then as best buy ramps up the attempt to turn around, we'll look at samsung for stores within stores and to note that shares are up sharply this morning. jcpenney is still struggling with the turnaround. the latest initiative, unique jewelry designers. a little less than two hours facebook will make an announcement. speculation is we may see a new operating system for android. he thinks facebook will lose its place as the darling of social media in five years. eric, it's good to see you again. welcome. >> hey, carl. >> they're saying it's a good

play on modernization. what don't you like about it? >> probably a deal or announcement for some sort of version of a facebook type focus phone. i think it's the right thing to do. and this is the first step in getting there. but just like we saw in facebook and search we can't get too overexcited about this. this is going to be la long road if they do it themselves. i think today's announcement could be much more important for htc, which is kind of a basket case, than for facebook. >> and we keep looking at user engagement statistics that are not good, certainly versus a couple of years ago. don't they have to reach out to

the core audience and say when you fire up your phone, we are going to be the first thing you see? >> yeah. that's the idea with this move. android is the most popular now for users to get to facebook as it is. facebook has had a problem with the majority of its own employees using ios phones and they've tried to change that. i agree 100%. this is where they need to go. i think there is hope. we sort of forget about it now, but back in 2005 when the sidekick was around with t-mobile, that was a very new kind of phone. new from a hardware and software perspective. facebook could do something really interesting like that if they put their muscle into it. >> we said earlier, you wrote a piece about a year ago in which you said they could disappear in five years. you don't mean going away completely. you mean losing the majority of

their relevance. you think they'll be replaced by a series of younger, more nimble, lower players. are there candidates that you have in mind to take their spot? >> sure. i think it's going to be a death by a thousand cuts for facebook. i do kbpt some bigger players like twitter to increasingly flex their muscles and draw people away from facebook to twitter over time. but it's only been a year since i wrote the post and so much has changed. we didn't know about snapshot back then. we didn't think about apps back then as a serious threat to facebook and something like pinterest. nobody today sees that has a potential candidate for dethroning facebook. yet, i think it's very possible. pinterest in particular is one to watch closely as we go

forward. >> finally, you don't own any shares. is there anything that could get you to take a stand? put your money where your mouth is? >> i feel bad that i missed the runup. we'll have to see how this year plays out and where the stock goes. even though i might think that five years from now they may have trouble. if there's evaluation at play here, i think this is a company where a lot of global brands still want to pay a lot of money to dip their toes in social media. >> that's for sure. see a lot of them trying to play the facebook page. we'll see what happens this afternoon. >> thank you. >> got new news on boeing. phil lebeau is with us. >> hey, carl. we have first quarter delivers from boeing. two notes of interest regarding the delivery number.

first of all, only one 787 dream liner delivered. that deliver happened early january, before the grounding took effect. this number, carl, is in line with the first quarter of last year because there's been no growth with the drowning of the 787. and boeing delivering 137 in the first quarter, commercial air plains. is that compares with air bus delivering 144. always hotly contested battle with those two. >> one of the great corporate rivalries of all time. markets trying to hold their gains after yesterday's triple digit selloff. the director of ford trading art joining us. good morning to you. >> good morning. #. >> so much news. what's top of mind today? >> well, i still think japan is the key story. they have basically said they're going to go all in. we're going to have to find out

in a couple of weeks if that begins to move money through the economic system in japan. they can move. they canexpand. i don't like the problem we have in the u.s. will somebody lend it? will somebody spend it? we have to get volatility in it. the other thing to watch carefully is how the chinese react. is it a competitive advantage for them, and how will the chinese take that? next two weeks should play out interestingly. >> i haven't heard the phrase currency war. should we be worried with the dollar as strong as it is? >> well, i think it will be an area of some concern. you'll begin to see it in areas like automobile sales where they are very clearly head to head. and if it's cheaper, will it make that big of a difference? so that's not something we're going to learn today.

although we have been on a currency roller coaster all day. the dow has been up 71 and then up 7. right now we're up about 20. so they're checking out the currencie currencies. >> then we get jobs tomorrow. claims today, the highest level since november. most argue the tone has gotten softer rather than firmer. >> that's probably so. i'm starting to hear people dial back to 160, 170, somewhere in there. so you and i discuss it all the time. the macro picture is nowhere near as good as the earnings micro picture that is carrying us. >> we have learned the former enron ceo could get out of prison a lot earlier than expected. scott cohn breaking that news earlier today. he joins us on the phone with

details. good morning. >> good morning, carl. the original sentence in 2006 was 24 years that is likely to be shortened considerably under the deal under discussion. he has from the day one been contending that he was not guilty. he knew nothing of problems to enron when he abruptly resigned in 2001. a jury didn't buy that and he was sentenced to 24 years in prison. he is in many ways the last person to be held to account for the enron debacle. ken may died shortly after the twil in 2006. his convictions wiped out. the chief financial officer who pleaded guilty has served his time, six years, interesting to note, and currently works with houston law firm. david duncan who pled guilty to

obstruction of justice, those convictions were overturned after the accounting firm was exonerated by the u.s. supreme court. skilling is left, and it's worth noting that the 19 counts he was convicted of in 2006 would almost certainly remain under this deal. and he would not be able to challenge whether there was misconduct by the elite enron tax force. that was part of the plan. that may be relating to this deal. it will all be in the hands of the trial judge. not particularly friendly to the defense in the twil of 2006. there are some indications he may be ready to go along. and it's also worth noting that victims, shareholders, people who were affected by the enron debacle will have a chance to speak about this, but they'll

have to speak soon. they have two weeks to make their feelings known. by april 17th. they also have a chance to speak at a resentencing. >> interesting, scott. everybody has thoughts about this. we reached out to sharon watkins at enron, widely considered to be the one who blew the whistle at enron, wrote the nesinitial memo. my thoughts generally. if skiling gets out tomorrow, he's paying an norm price. his parents and youngest son have died while in prison and he was not out to attend the life passages. his youngest son was not able to visit him in prison. his two older children did. it was an emotional toll on the youngest child who overdosed his freshman year of college. life for skilling will never be the same. the words of sharon watkins in the wake of scott's report.

best buy and samsung teaming up to bring branded sections to best buy. not working out too well for jcpenney. and later on, rick santelli will talk o one of my favorite guests ever on cnbc. hey, rick. >> hi, carl. your favorite guest has said some things that i just love hearing. i'll give you a couple of examples, he calls the fed programs to keep rates unbelievably low, artificially low, he talks about how arfa is forcing other central banks to follow. think japan today. he talks about all of the central banks doing unprecedented things, highly experimental. yes, we're going to talk to the man about all of this in the context of japan's announcements today. all at the bottom of the hour. ♪

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let's take a look at the s&p read sector. it's up more than 1% today. the sector rising to new highs. one specific read helping the sector move higher today. let's get to josh lipton with details. >> yeah. the index hitting the highest level since november of 2007. the average dividend yield for the index stands at some of trading at a new

two-week high today including health care ticker htn, up some 13% this year and yields 4.4%. carl, back to you. >> thank you so much. best buy having the best single day in over a mon. they're teaming up to open a store in 1400 of the best buy retail outlets. the store within a store concept, nothing new. ron johnson has tried the idea. is this a good move for best buy? courtney reagan is reporting on this early this morning as well. good morning to both of you. >> good morning. >> just specifically, what do they have in mind? >> i think the big difference for best buy is they already have these samsung products. they're different from jcpenney where they're also introducing new products. they're going to group them together. they're going to be specially trained employees. that is the big difference, especially when you're dealing with consumer electronics. you may not need as much help

picking up a particular top at jcpenney, but if it's a phone or a tablet, you may need someone to explain it to you a little bit more, and that's where the competitive advantage, i think, comes in at this point in this strategy for best buy and samsung. >> interesting. peter, say what you will about the turnaround efforts. it's clear that they are trying some new things. >> yeah, i think this is a great example of the leaner and meaner best buy. we have new management that has come on board. and so they're getting to work more closely with suppliers. this is just a great example of that. i would think big important suppliers like samsung had a scare last fall when the best buy stock was in a tailspin and they had to think of what the world would like like without best buy. they have a thousand stores essential to this the business to display the samsung product.

we need to better work more closely with the asset that best buy has. >> you took your target from 16 to 26 on march 11th. we're getting close. how greedy do you want to be? >> well, the beautiful think about the best buy stock price is it's still relatively cheap. it's the cheapest stock that i have. some people say there's competitive pressures that warrant it to be cheap. we think you will see the stock get revalued up. so we think this stock will work nicely for a while. >> does that mean you move the target from here, or do you wait? >> we'll wait. we're comfortable where where the target is and where our estimates are. we want to see what the results show and we'll learn more about some of these partnerships with

samsung. also point out that, best buy is getting ipad three products at discount. that should be a nice quarter. so we have a number of things working in best buy's favor. >> yes, and you mentioned the discounts on the ipads earlier today. this doesn't mean showrooming has gone away, right? >> no, not at all. this is what best buy is doing to try to embrace it. price a transparency as high as it's been. showroom all you want. they're hoping if they can get you in store with the experts with or without the discount, you can see the price anyway. it's a very interesting move and working in best buy's favor today. >> it's going to be interesting to watch. thank you so much. >> thank you, carl.

>> it is a story made for the national inquirer. coming up, the pains that money can bring to a family. robert will take a deeper dive into the simmering mother/son feud. ron johnson making another move to try to drive traffic into his stores. this time the new inclusion would be too far a cry from the average jcpenney customer. later on in the hour. want to show your ipad some extra love? why not use the cnbc cover signed by the entire squeak gang? it can be yours if you can guess friday's nonfarm jobs number. tweet your texts and don't forget the hash tag, mail the number for all the official rules and details, tdd#: 1-800-345-2550 seems like etfs are everywhere these days.

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. want to take you to shares of lululemon. the chief product officer they announced will leave the company as they gave an update on a march announcement that it was recalling the pants that were unacceptably sheer. shares up a little more than a percent. not the best levels of the session. interesting to watch. rbc did cut them to sector perform. their price target is now $70. speaking of retail. it's been a rough road for jcpenney zins rod johnson took over. they are hoping diamonds and pearls can change all of that. one of the designers for the new jewelry line will join us after the break. plus the bell is about to sound across europe. we'll talk about what their close may mean for us this afternoon. back in a second.

about 40 seconds until we close europe here. shares falling sharply in the afternoon trade after those comments from mario draghi, curbing investor sentiment. the uk market falling the most today. the ecb keeping the benchmark interest rate unchanged. draghi telling a press conference the ecb cannot

replace the lack of capital in europe's banking system and cannot compensate for action by governments. also the monetary policy will remain acome accommodating. a central bank saying the company will extend capital controls for one more week. they're calling the country's near term outlook very unfavorable. so we will get the european markets. >> the european markets are closing now. >> and we will bring in -- not bob pisani quite yet. he's in position for post night. that could change. you want to walk us through where we are? >> yeah, let's talk about what is going on. the important thing is a little bit of a disapointment today that considering all of the hoopla around the reflation trade over at the bank of japan, we're not seeing a lot of reflation out there.

you may say, well, it's early, but we see gold down and other key commodities down. copper just spiked recently in the last hour. maybe we can get comments on what's going on down the street. i think there's a little bit of disappointment here. these commodities have been killed. just destroyed in the last few days. still stocks have had nothing. nothing. this is new multiyear lows. that's a copper company. these stocks have gone nowhere essentially. i'll close them at $8 essentially all year. let's move on and show you a couple of other things that are moving here. over in japan, yes, japanese stocks. this is the wisdom tree t japan hedged etf. this hedges out the currency risk. that etf has moved up after a couple of days to the downside. they sold off japanese stock. so that's good news for japan. that is up. elsewhere around the world,

things are not so great. you heard carl talking about what was going on in europe. we have little energy in europe. europe is not doing any better. mr. draghi was making comments. this is europe for this year. and you see the divergence. so not a lot of good news over in europe as well. over in south korea, of course, we know the tensions are going on in that part of the world. you can buy the korean stocks. hadn't been doing a lot, but late yesterday started moving to the downside. here we're sitting at a five-month low for korean stocks. so what is going on elsewhere? who is right? take a look at bond funds, once again, for the last several days. great rotation out of bonds and into stocks. i still don't see it here. this is the agg. this is the big one. broad index of bonds. this is treasuries. long-term treasuries. this is corporate bonds.

they're all on the upside. people are buying these today. so what's the message of the market that we're seeing? what are we hearing from people right now? this is just what i see right now. i think the hopes for reflation, the market is saying hold on a minute. slow growth is what i'm seeing and hearing from the market. slow growth is trumping the future inflation that may come down the road, perhaps from the bank of japan, and heaven knows for the federal reserve as well. and all the bold moves, bold as they are, cannot erase the weak global economy that we're seeing. and that's why we're not getting energy out of the commodity or industrial space and why consumer stocks have been leading for the last several weeks. >> s&p 500, underweighting materials again today. interesting. thanks bob. bob pisani. let's get to rick santelli. as we promised, a very special guest to talk monetary policy.

there's no better day to do it than today. >> i'm going to read something that he said of the bank of japan, of course, surprised the market by being way more aggressive than many anticipated. he said it puts us deeper in ununprecedented and highly experimental territory. i call him the answer man. welcome, mohammed. >> thank you, rick. >> all right. those were your words. us your thoughts. you're always a straight shooter. i get a bit nervous when i think the chances of this turning out well, with all the central bank activity, i think getting hit by a meteor is a smaller percentage in terms of this working out than the fed. do you agree? disagree. >> i think you're right to be nervous. this is the most experimental that we have ever seen central banking. they are venturing deeper and deeper, using imperfect tools and not getting the numbers they

expect. the numbers are disappointing on the economic side. rather than step back and ask why, they just go deeper and deeper. will they finally succeed in transition from assisted growth to real growth? or will it end in tears? this is a major uncertainty and the market doesn't understand how buy nar this outcome is. >> we have all three. but i would rather concentrate for a moment on the ecb. first of all, do you think at the next meeting that that had this for an interest rate cut? >> probably, and al for a further relaxation of the collateral rules. so the ecb will become more like a fiscal agency, just like a fed and just like the bank of japan are becoming fiscal agencies. >> but it isn't working out well. tell me if you agree with this. when i talk to friends about if

cyprus is important or unimportant, the answer is what is the catalyst? they say it was the haircuts close to 55% of the greek holdings. it seems to me like picking and choosing isn't working out well. that's what you're describing is the ecb. >> i will be the first to say do not think cyprus is unique. cyprus tells you three things. one is there is no growth. secondly, this is not an interconnected world. and thirdly, as draghi said this morning, policymakers zroentd a complete range of interest. we saw the collateral damage in cyprus. so cyprus for me is signaling something much deeper about europe today. >> all right. now let's switch back. we have unemployment tomorrow.

with respect to our fed, and i want just a yes or no answer to this question, mohammed. i'm going to put you on the spot. do you think the employment issues in the u.s. are -- or structural? >> structural. >> i'm glad you said that. anna schwartz in one her her last interviews that ben bernanke may be on the wrong rail with this train. don't compare this to the 1930s. it was a liquidity problem then. this time around it was about trust and toxic assets. if it's a structural unemployment, mohammed, why is he applying medicine that doesn't address the issues? like skills gaps. >> because he feels he has no choice. he feels he has to come to the market with a medication, but he

recognizes it's untested. so he feels he has to do something. in particular he feels he has to buy time for other agencies that can address the structural issues. he has to buy time for them to start shopping. how much time is he going to buy? how much collateral damage will he create in the process? >> last year the mets lost 88 games. the cubs lost 101 games. your mets have scored 19 runs in the first two games. mohammed, i'm going to bet you a sack of sliders that the mets have more losses than the cubs for 2013. >> and you're absolutely right. it's not going to be 162 losses. that's good news. >> all right, buddy. thank you for being a guest for the first time on the santelli exchange. we're glad to have you. you're the man. carl, back to you. >> don't let him ever leave. keep him coming back. thanks a lot, rick. rick and mohammed. welcome back david.

>> i didn't know he was a mets fan. >> oh, yes. we've been talking about this historic move by the bank of japan targeting the monetary move, anyway. certainly it's been one of the more vocal voices. can you be a vocal voice? i guess you can. japan is eventually going to reach this point. the interest costs will exceed the tax revenues, and i would just love to simply get your take on the latest move and what your thoughts are about what they're trying to do, which is essentially engineer at least 2% inflation. >> i think it's really important to understand the magnitude of what they're embarking on. it's essentially doubling the monetary base.

and to listen to mohammed just a second ago talk about it is a giant experiment. doubling the monetary base in two years is extremely experimental. but when you're backed into a corner, and your debts are more than 20 times your central government tax revenue, you're already insolvent. it's to the point that mohammed made. they have to do something. they have to do something big. because they are about to implode under the weight of their debt. what is interesting to me is they also abandoned the bank note rule. they had a handshake with them. they would not monetize the debt. they got to a goal post, and they removed it. when you think about the magnitude of what they're doing on ha nominal basis, the goe will be buying assets at 70% of the rate of the u.s. fed on an

economy that's that's one-third the size of the u.s. just to put things in perspective. well, to the extent that you have said for some time that japan is already in the zone of unsolvency. is this going to change the dynamic or the trajectory? >> yeah, i think what they have done is formalize the announcement that a new sheriff is in town. it's important to follow the bond markets. there are economic zelouts running the central bank. they only know one thing. in this case the trajectory is set. what they're trying to do is materially devalue the currency in order to become slightly more trade competitive while attempting to hold their rates

marketplace flat. the economists believe they can live in that nirvana, and that is not the case. >> you also play that in part by belief that the value of the currency would go down. it's going down more than it has since october of 2011. do you continue to approach this in the same way and tell the viewers how you go about trying to benefit from the series of events that are trying to occur? >> if you're japanese, you need to spend the yen that you have. you're not going to suffer a massive depreciation in your purchasing power. if you're non japanese, go borrow yen and buy assets in other countries not as fiscally

stretched as yours is. there is really no great prescription here. i think it's really important to not be long yen and long japanese assets. there are people that earn equities in this response to weaker yen by equities. you have to remember the japanese industry has been hallowed out over the last 20 years. so i think it's going to be very disappointing for the equities. i think they're macro tourists. >> even with what will be increased -- conceivably increased exports? maybe we'll get the start of a trade war, but i would imagine it would be good for the toyotas and hondas of the world. certainly the investors are expecting that today. >> people are focused on dollar yen.

they lost the trade deficit to korea. the next thing you'll start to see japan talk about is buying foreign bonds. and i think they need to set the architecture up to enable them to do so. when they do that you'll see a trade war. that's the next step that you see out of the doj. but you have to think about where their trade is loss lost? >> you generate inflation. you get real velocity of money. you get an economy starting to grow and generating higher tax revenu revenues. >> when you have the declining population and the death rate across the birthrate and a hollow out of industry, you may get a bump in nominal gdp and with the looming tax inkroes in

april 2014, they'll pull forward some consumption this year. but it's important to focus on the fact that this is not the panacea that everybody hopes it will be. i hope i'm wrong about this. i can't imagine when we look at -- let's say they're trying to get to 2% nominal inflation, 16% of gdp is imports. they have to get the yen to the dollar by the end of next year. so that's our target. but if they lose control it's going to be much weaker than that. >> we are in unchartered territory, are we not? >> we are. the central banks around the world are kreaing tents and villages that are very difficult to invest around. >> very much appreciate you offering insight on a historic day. right before i let you go you have benefits this year from this strategy that you had in

place for quite some time, correct? he made a good amount of return on this japanese investment, or your point of view, your thesis this year. >> so far. >> all right. so far. kyle bass, thank you. >> thank you. >> jcpenney encountering problem after problem recently. now it looks like the old school retailer is trying to go glam with a jewelry bar. my mother made the best toffee in the world.

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coming up on the half, is the rally on its last legs? our traders debate the market's next move. a long time microsoft bull flips. and we're all over both today. and the worst week for netflix since last july. now a top analyst is questioning what house of cards really means for the company. you'll hear from him at the top of the hour. see you in ten minutes. >> jcpenney is going en vogue. the company teaming up with jewelry designers. seven designers, including kara ross and kenneth jay lane will feature a more affordable line for shoppers. karen ross is here with more on what we can expect. it's great to have you. good morning. >> hi. so happy to be here. >> this is the first time you worked for them. they did approach you.

what was their pitch? >> they came to me. they were familiar with my fine line. as a certified gemologist, it's all about diamonds and raw stones. it was different than what they were going after with the other designers. they came designers. i thought it was a wonderful idea. >> you're actually wearing something. >> yeah. >> is this going to be available through jcpenney? >> no, this is mine. this is the inspiration behind the jcpenney line. this is raw aqua marine. it looks -- what we created was a resin interpretation of this. >> looks amazing on you. price point on this is? >> $12,000. >> we're not going to be looking at those price points at jcpenney. >> no. >> start with this one here. >> as you can see, that's resin, like a beautiful ice blue resin that mimics the aqua marine. we use crystals to mimic the diamonds. it's goldplated brass. a piece like that is $150. the price range of the collection is about $45 to about

$200. so there's a real, you know, wide range of prices. >> on the other side for $225. >> that's the largest and most expensive piece. i love it. i actually wore it to a black tie in floridian got tons of compliments. i love it. >> which consumer are we after? this is neither high end nor costume jewelry really. i've heard the term bridge thrown around. >> this is fashion forward. fashionable line that can really reach anyone from -- i have a 17-year-old daughter who would wear it and my mother is in her 70s would wear it. i think it's cross generational. i think it will appeal to a lot of women. >> is this an impulse purchase? >> no, i think jewelry at this point is someone goes to the cash register, sees it and it's eye catching and they buy it for themselves. most women when they buy jewelry they want to wear it tonight. not next week, the day they buy it. i would say it's impulse. >> as someone who is not inexperienced in distribution, what do you make of their challenges over the past year?

do you trust that the playbook today will be the playbook in six months and a year? >> i think that, you know, ron johnson is going after transf m transformational change. i think a large ship doesn't turn around in a second. i think it takes a game plan. i think they have a game plan. i think they have a commitment. i feel very comfortable and confident they're going to do a great, great job. >> april 28th? >> april 28th. live in over 400 stores and online, coinciding with mother's day and, yeah, i really very exciting. >> are you hopes greater for converting shoppers in the physical stores or do you think online is where the action is really going to be? >> i think it will be interesting. i think -- i'm not sure exactly what the percentages will be but i think, you know, maybe -- i think more in store than online. but we're getting a lot of press on it. i think that will drive people to the online to purchase there as well. >> there couldn't be more attention being paid to the company right now because of the change you're talking about. >> and they've got really a fabulous array of designers not

only with the jewelry field but clothing, home goods, everything. they really are making a commitment to change. i think it's wonderful. appealing to a lot of shoppers. >> appreciate you coming in. kara ross. >> thank you very much. carnival and its "triumph" cruise ship cannot seem to catch a break. sustaining more damage while it was at port for repairs. i know what you're thinking... transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business.

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don't look now. there are more problems for carnival. its crippled cruise ship "triumph" broke away from moorings in alabama due to strong winds. the vessel drifted in the water. at one point slamming into a tug boat. two weeks ago, of course, carnival canceled ten more cruises aboard the "triumph." the return to service is now pushed back to june 3 rd. look at best buy. we continue to just shake our