stock of the day is a tie. wells fargo and j.p. morgan. both stocks are lower following earnings and we have becky to pretend it's the boyfriend shirt. >> in case brent muss berger is watching, that's all she's got. just that jacket. make sure you join us on monday. "squawk on the street" is next. >> and good friday morning. welcome to "squawk on the street." i'm scott walker and jim cramer live from the new york stock exchange. carl quintanilla is on assignment this morning. we do have breaking news we want to begin with. it has been reported that jc penney has hired blackstone for $1 million. blackstone is talking to banks to make a $500 million or greater five-year term loan to jc penney secured by inventory.

blackstone is talking to three private equity firms who expressed interest in making an investment in the company. given where the stock price is currently trading it's unlikely that the company would look to raise equity now. it's my understanding that the time to raise equity would be later in the year once jc penney has time to try to improve its financial standing. that seems obvious given where the stock currently the sits. they're figuring, give time, we're bringing back coupons and we're bringing back promotions. let's try to turn this thing around and get this ship righted under ullman and then pursue other strategies later in the year. >> first grade scoop because i read through the paperis and couldn't figure out what the heck is going on. >> would this be the kind of thing that could never happen under ronny johnson because ullman is a guy they all bank with and respect? >> i think -- i think they're

considering by any means necessary, jim, at this point. >> no, malcolm x. >> i didn't know he was figured in, but what this really does say to me is that some people believe. until a couple of days ago no one believed. she's are savvy guys. >> ullman has come into a very, very bad situation. the board recognizes that and they finally got bill ackman to get rid of his guy and now they're desperately trying to shore up the finances of the company before it loses the confidence of its vendors, suppliers and its creditors. >> i understand that the inventory can be some sort of collateral, though i think the inventory is not necessarily what you want to base it on, so i'm wondering what is the big here? how much are they asking here? this is a risky loan to make that i wouldn't make if i were in their firms. it depends on what you're secured by.

500 million, you can get that secured. free private equity firms, i don't know what you structure, whether it's some sort of a preferred that pays you some sort of a decent -- >> interesting. >> and then you get to convert at a very reasonable level in terms of where you converted to comment down the road because they can't go to the junk market. >> no. >> bonds are not yielding -- over 9% and you can't pencil that out. i don't know if the demand would be there, but at what coupon it would make the balance sheet look better. >> it buys time. >> one thing they have in their favor to buy some time the kind of assets they have, they have real estate, right? and that's the kind of collateral that they do have to try and secure whatever kind of loan they would possibly need. yes, jim, it buys time, but they're desperate, it would seem, to try to raise some capital. >> so this $900 million figure

that was cash, we have to believe that was completed substantially in the last few weeks, even. >> is that entirely possible. maybe march was really horrible. >> i do remember the analyst that we brought on -- >> that was on tuesday or the day before? >> i know, i lose track as well. when did you break the story? on monday? >> i think that was tuesday and he talked about half a billion dollar cash burn and we watched the stock react that day negatively because the market was open and i think it was after 10:00 a.m. eastern. so there was concern. >> it also happens to come a day after this news that we're breaking this morning. bill ackman was at a luncheon yesterday making some comments which were supposed to be off the record which then got recorded by some news organizations that were in the room anyway saying things like i don't see a scenario in which we don't work this thing out. the company will continue. amid some of the questions that remain out there about how long

this company can remain, is a growing concern, just given questions about the balance sheet. >> i wonder if he has to put more money in, more skin in the game with the 18%. >> the betting is the settlement can't pull this off. i spent a huge amount of time in the last 48 hours and ken ullman pulled it off and there are a lot of people think he can't because of how difficult it is to break the spiral. >> it's a total of 25% if you count the shares that he owns in swaps or whatever that he's got a bigger part of this company than, you know, beyond sort of this 18%. >> he's going all lampert with us. >> he didn't put himself in the ceo role. >> that's not eddie lampert. >> and we'll issbe watching the stock very closely and it's unclear how it will react. whether it's a positive reaction to gain the confidence to

stabilization or if people will reaction to how desperate things will be. >> normally you can go to cit and get a factor loan, right? >> right. >> normally you would think about going to a bank. why private equity? why is private equity making loans to a faltering retailer? >> i don't know. it's a public equity. they do it sometimes. plus, this is not a large -- if your talking half a bill for them, that's nothing. you go to as many firms as you want, but you're lookinging for a fairly small investment, but, you know -- i don't want to short the common. >> it's the kind of thing where warren buffett shows up. i'll take tens down ten, but in this case i don't think they'll give him 10%. >> it's buying time. it's my understanding the way of thinking here is you bring

coupons back, you bring flyers back, promotions back under ullman. you can get this thing stabilized and you can get it turned around and later in the year you can have conversations of other ways of potentially raising capital. that just doesn't make sense. >> it's a hot button that three days ago, ullman comes in, and they couldn't run anybody else. >> let's move on. we have a lot more to cover this morning before we even get to our first break. let's talk about the markets and the new all-time closing highs and the best four-session winning streak sense september and the s&p is now within seven points of 1600 and on pace for the second best week this year. the nasdaq close at new 12-year highs and still off the 5200 we saw in march of 2000, but hey, also 31% of stocks hit new 52-week highs in yesterday's session and that is the largest

amount in three years. wow! i hear all of that stuff and all i want to do is sell. >> i'm want going to disagree with that after seeing the quarter with wells fargo today. how could they not kill it with mortgag mortgages? >> isn't this the great mortgage moment? they did not kill it. they disappointed. this was not a good quarter from wells fargo. i could make the case at j.p. morgan. they had a good credit situation and they did not blow out the interest margin nor did wells fargo. the j.p. morgan did have some international banking business, and i thought it was good, and i think that j.p. morgan, incredibly well managed given the fact this we didn't necessarily see small business. small business is simply not there. you listen to "squawk box" this morning, small business is a confidence play and a lot of people want to blame the government. there's no growth. no revenue growth. i was disappointed and i've been telling you guys over and over again, i needed to see the banks

do better and this is a weak start. >> the wells fargo thing surprised you. >> wells fargo should have crushed it. i was going through the number and look, i want to hear from wells and it's entirely possible they'll say cramer, you don't know what you're talking about. wells is a dominant player and i think it should blow out. does this mean we should be worried about the legs of housing at this point? housing is still very strong. i think some of the regional banks will be good, it's just in terms of when you're coming into the earnings period you needed to see both companies do well because they've had great runs and that's why i'm worried. these have had great runs. they still lagged celgene. this is not the first national bank of celgene. and it's not bristol-myers, but i don't think you want to start buying stocks aggressively from wells fargo. ? we should point out as you said, the call going on right now with

j.p. morgan, jamie dimon, a few things here in terms of the fed's congressional approval, the capital plan and talking about a number of thing, the fed wants more granular and idiosyncratic forecasting. they're creating a card that has to do with the stress test department focused on the capital review department, and this all coming off the analyst call. >> wells fargo on paper looks bad. these conference calls are everything. so i -- look, let's put it this way. on paper, it looks bad. i await the conference call and on paper not that bad. i know that the company's very proud of it of the fact it had very few bad loans and that does matter, but it's a small business situation. look, wells is a creature of most of the small business formation and also mortgages and i just expected more lending to people buying homes give know the numbers. >> you've been saying all week that wells is the key to this

market. >> yes, i was disappointed. i could be less satter -- >> act, this weekend. >> some people pronounce that door. >> ligubrius. >> jonathan isn't taking the s.a.t. >> boit is, like, ten. >> doleful. >> does this make you at all, jim, less confident about the ability of the rally to move to that next stage? >> i don't want -- i love the financials as a tell and j.b. hunt was disappointed and look, i like the market, but i need to see all systems go. i need to see wells fargo surprise the upside and i can't expect it to roar. i also know that commercial and industrial loan, and i told you it would not be a blowout. i like the j.p. morgan dividend and i await wells fargo to tell

me why this was a blowout. maybe they can. i know when they come on they tell a good story. maybe you're right. >> international was not so bad for j.p. morgan and maybe city has a better story to tell than people realize. i think corvette so far kind of impressive. >> early. >> early. >> it's early to make a judgement. >> stay in the masters. >> let's give it a while. it would be nice, right? if you being get away from sort of the defensive nature or tone. >> oh, yeah, i know. >> -- of the rally, right? i'm getting tired of telecom and health care being the best almost every day? >> i am because verizon by david has been the best guy in terms of the stretch of verizon. i saw some downgrades of coca-cola and pepsico this morning from a little davidson. i don't want to say that's goldman downgrade, that's nice, but at the same time, yes.

this whole increase is verified by the weaker retail sales and i'd like to see the broadening and i know transports, and you want to see the airlines continue to go and housing starts and wells fargo will make us feel like, wow, maybe housing and toll brothers has been right. >> i'm not a bear. >> right. >> i'm just saying i would have liked to see it bet or paper. let's see what they have to say. we have a lot to cover this morning, power packed and we'll have john malone. also ahead, macy's ceo jerry lundgren and marianne lake. that's a big show. >> plus the scoop, jc penney scoop. let's take another group at futures. more "squawk on the street" with a lot going on back here at post 9 in just a minute. but we can still help you see your big picture.

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>> all day today we'll be airing a long sitdown interview i conducted with john malone, and prove his control of liberty media and liberty global. the latest company to fall into

that category, charter communications, taking malone back to where he started. cable. >> this is a unique opportunity to take this vehicle and grow it through both superior market and promotion and through interior growth, organic growth. >> sure. >> i think we can be exceptionally strong with that company for a number of years and in particular the rate of free cash flow can be very, very strong which allows it then to access the leverage market in order to do rollout transactions, particularly where there's horizontal synergies, okay? that's kind of the old tci formula. >> right. >> and that's the growth scale and then look for opportunities to work with other cable companies to form consortia like

we used to in the old days that called us the cable mafia? you want to bring back the cable mafia? come on. >> with the political leadership. >> but yes, we want to bring back the days of at home, and the days of ted turner, the days when we all got together because together we provided national scale. now i think we have the opportunity to create global scale. >> of course, it sounds as though he's talking about things that we may not want from a government perspective and that's not the point he was making and there are a lot of things that can come there you cooperation and whether it is at home and remember that was the first national broadband product or bailing out ted turner as the cable companies did when kirk kerkorian came calling. interesting. we'll have a lot more on charter and the thinking behind that, you may have heard him reference already the idea of a rollup. is it a consolidator charter

through tom rutledge, and its ceo that we have a great deal of respect for and so much of what he does has tax consequences. >> virgin media, they're becoming a uk company to take advantage of those tax loss carry forwards and sirius satellite. he loves those kinds of companies. >> that's a great skop because this man knows more about where we're going than anybody else. david, do i now feel that what he's saying is let's go ininto a hotel room and fix prices. am i hearing that virgin media will take over the faltering cable companies in the world? >> don't jump to that conclusion. liberty global has to finish liberty media which will probably close in may. there's one in germany that they want to do and the idea of coming back overseas. he's not talking necessarily about that, but he is talking about partnerships and things of

that nature that can be powerful. >> let's go back to the greg buffet interview which i loved. sirius radio is a very successful company. there seems to be one off, there is no other company that can be like sirius. they want to be in automobiles worldwide? i hear this international thing and i know that our cable companies have been domestic and a lot of people feel that they've been -- >> there's no more growth here and by the way, if you're a cable programmer there's no more growth in audience. you are fully penetrated and we're not dealing with it again and we'll talk with mr. malone about the bundle and you're dealing with that world, the over the top world where people are using the broadband. so, yeah, you potentially do need to discover and i mention that because discover is one of the stronger international companies if you want growth. >> and aereo. what's your take on the idea that diller blows everything? >>y think it's one more ship

against the monopoly to a certain extent. >> but the stocks have been red hot? how do we pull it all together? how do we say that this group is roaring? it's domestic because the domestic cash flow is so good and how do you relate it version us a verizon or fios? >> it's not been a great success? and don't forget the cable companies. they make most of the money from the broadband connection and not from sending you the programming and not just going back to the espns of the world. most of it. >> the bottom line for me is i want to get in these stocks if they get hammered. >> we have a lot more from malone. he's never left, but he's back in a big way. by the way, how can you end a record-setting week on a profitable note, you may ask? jim cramer is about to fill you in. his mad dash is next. and an exclusive interview with marianne lake. i wonder if she's nervous.

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five and a half minutes before the opening bell and time for cramer's "mad dash" ahead of the market open. where are we headed? >> biotech is the strongest sector today and you can say now they come in? bank of america says we like biogen and we like gilead.

here's the problem, david, when you talk about stocks that run big, is this where you come? ? i am looking for signs that this the kind of overreach, and i like this group, that will determine whether this market's going too far too fast? >> they're cheap on the out years and i went over with nicole erkin, my research director for "mad money" and we said are you kidding me? are you kidding me? today. i haven't looked at these stocks in a while. a 32% increase in the value of this company. a third of its value in three months and the same for biogen. by the way, these are large companies to begin with. and biogen has a great m.s. drug and this was something that was not seen by investors previously or is it banking that much on the future? is it underlying earnings growth or multiple expansion? >> pipeline, and yes, it was mentioned almost right up top. now let's step back and not be so cautious. if these stocks do well today it

tells you, game on for these companies that have no economic sensitivity. >> those are incredible. >> those are incredible moves. this stock has gone from five to 205. celgene is -- i can't even look at celgene, and this will be the tale of whether we still have another leg. >> all right. gilead which, by the way, look it up at home. huge market value. we forget about that. we have a lot more coming up ahead including my exclusive interview with chairman of liberty media john malone. rally software and evertech are both making their wall street debuts and we'll bring you both company's first trades. the opening bell just a few minutes away.

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street" live from the financial capital of the world where the opening bell is about to ring and hear that applause. they're rallying the troops at rally software. >> and the ipo market has been good and the secondary market has been incredibly strong. these are signs of health. >> as we said, ringing the opening bell here at the big board rally software, and over at the nasdaq caesar stone. manufacturer of quart surfaces and they're doing the hon porps don't go with the marble. it stains. go with the caesar stone. >> should i go with the marble? >> this is the first consumer product that i have ever mentioned that i knew something about that he didn't. >> have you heard of italy? they have the greatest marble over there, man. >> every one on the planet instead of caesar stone.

>> i know coldstone creamery. >> it got upgraded. >> jefferies upgraded it and these are bridges too far although, i think the world of frank blake and it is the season. they actually need warmer weather this weekend and don't forget, their christmas is now! >> right. right. >> i don't know if they'll get it, right? the weather is all right. >> let's go for -- >> this week. >> let's go for a second to jc penney. it's up .81%. what have we got? it is outperforming the group. it does seem to be that there is a bid, jc penney for the common stock, for once. it doesn't feel as if today is the day that it's going to roll over big. today could be the day that the preferred to stabilize the whole time. yeah. >> so i just think it's important to point out to people at home that it does seem to be less preprecarious. >> at what point do you take less precarious to, you know what? this could be a decent entry

point for the stock? >> i need to see some comp numbers. i really do. i'm sorry. >> it's a big leap from less precarious to take the stock. >> yes, it is. i just wanted to point out for a second, and i think i'm trying to work through the j.p. morgan quarter and feeling a little better about it in terms of some of the things going along at j.p. morgan. credit cards, very, very good. i think that matters a lot. the capital markets are pretty decent. mortgages, a little bit slower and $1 billion in cost-cuts coming? a good dividend and let's not rule out this group. >> the group has had a very nice run. there are still those who believe you can trade it, but you can't necessarily invest in it. given all of the changes that are taking place. >> i don't know that it's become the airlines although maybe the airlines have now become investable, and the united continental cfo the other day.

i don't know, man. these companies are really coming back as vehicles that are not trading. >> right. >> they're earning their cost of capital which is shock in and of itself. when we look at the banks wells fargo is down 2% and he wants to wait to a certain extent and that interest margin is something we tend to focus on there and higher rates help where we are now on the ten-year hurts. >> right. >> i mean, bernanke is not making these guys make as much money as they'd like. at the same time i was hoping that i'm not being facetious here that they could make it up in volume. >> however, he has made life a lot better for most of corporate america allowing it to borrow at extraordinarily low rates. >> right. >> and refinance maturities from here to companies that you follow. >> they've really been big beneficiaries and that's resulted in huge buybacks of stock. they bought back almost 50% of

their shares over the last six years and that's not unique. maybe the percentage is a bit higher in media or in predictable cash flow businesses where you can borrow and therefore, you have discounted cash flow and you know what your borrowing rate is. >> that was a great point that you made in that interview which i think people are upset with the idea. there are a lot of buybacks which i regard as phony, it's not down very much. >> by the way, there are also buybacks scott, that have the best idea. two years ago, jc penney spent $500 million to buyback stock. >> i'm calling that early. that was early. >> they had a big buyback and the stock reversed 68 yesterday and follow that company, and it's a big balance sheet and just in terms of things that are doing well where they issued equity instead of bought equity. netflix issued a ton of equity and the stock is up almost a hundred now and we have another price target bump.

i'll tell you what else is interesting about the stock target bump. >> barclays, say it's a top pick. 120 goes to 190. what would they do with the 12 will price target. malone has a lot to stay about netflix. >> what? >> stay tuned. >> don't tease me! don't you dare tease me! >> you just have to keep it on cnbc. >> jc penney is down almost 1%. >> some of us might think they equity coming and these p.e. firms are -- maybe it's a i'll have my bond situation, you know what i mean? >> to your point in the mad dash, we've got biogen up about 1.7%. celgene up a half a percent. >> these stocks could react positively. >> gilead could be half a billion. >> biotech is as big as some of

the -- >> i've been saying, listen, this is the new -- from the days, david when pfizer was the king of this market, these are our new pfizers. it is a disease that is horrible and when they bought the pharma set which i know you and i were questioning it was brilliant. >> it didn't hurt. there's rally software, by the way. it just opened. >> rally software is rallying. >> you have dueling crowds. it's funny to see half the floor over at this post, over at post 6. >> with evertech and then post 5. >> with rally. look at that. >> let's get a little rumble. >> my ipo's better than yours. >> i like that! >> yesterday you got -- rejecting the sharks. >> 35 million shares and the stock is at 45 and 90 cents. when the headline number came out, i am telling you, be

careful people at home. the headline numbers and the shortfall, big, big mistake. maybe jc penney can plug the market quickly with the secondary. >> whoa, just get it over and it would take the pain and move on. that's the netflix situation and netflix had a business model that many people can say, okay, i can see you burning through some cash, but i have a real belief that you'll grow enormously and international will come into its own and don't forget the walking dead factor which is you can't crack into game of thrones unless you go this way. by the way, the rails and this is a very important calls and i don't focus firms where they say listen, these rails are okay and buy the icsx. natural gas that has been up, up and up. >> j.c. penney. >> right? >> because to the rails.

>> the switching goes on. >> what's the matter? switching goes on constantly and coal, we saw wlt say good things about coal. coal is the most written off sector perhaps because you have to remember the black long, rainbow coalition, but i do think you have to watch the rails. >> you've been talking about that. you have to get to pisani so i can collect myself. and you need to talk about the rails for a few weeks and seeing what the possible could be before a lot of people. >> look at union pacific, for heaven's sake. >> look at it -- they've got to go. >> we've really got to go. bob, be careful there. is there anything going on between the two warring ipos? >> it's a little bit of a packed crowd here. we've got all sort of new people toasting here, a little orange juice. we've introduced beverages on the floor for these days because rally software priced 6 million

shares at $14 and just opened at $17.10. evertech which is right over here. we want to swing right around here, 25 million says it's $20 and it's 21 and change right now. have you noticed what's going on with ipos this week? this has been a huge week for ipos right now and they're starting to catch up with the overall markets and it's been a laggard for a long time. they're not really leaders and six companies went public this week and raised 1.5 billion and four of the six companies increased the terms either priced above the initial price top or increased the size of the offering. that's bullish. you don't see that in a down market. that's a very bullish development. more is coming. i just talked to some of the people who trade these. seven are on tap for next week. $1.9 billion they're trying to raise next week overall and big ones are being raised and h.p. supply which was taken private a number of years ago and they just announced a $1 billion ipo

that will be coming probably in the next several weeks so the market's starting to heat up overall and that's a good sign, too. on the earnings this morning, you had the usual litany and everyone comes on complaining about earnings quality for j.p. morgan and wells fargo. you have the usual reserve releases and that wasn't that good. and all sorts of notes about why they should talk down the numbers. the bottom line about all these companies right now are the currentest hats for j.p. morgan are $5.50 for the year and everybody i talked to said they could do $6 a year. they raised the dividend and they've got a 3.2% dividend yield right now and enormous amount of reserve leases and $21 billion in reserves, the company has. so you're dealing with a company that is raising their dividend, buying back stock. they're eight times earnings right now, not bad at all and very likely continue to hold up very well and if rates ever go

up the company will virtually explode. we finally got a downgrade of consumer names, jim, davenport and they downgraded coke and pepsi on valuation and heaven, you know what's been going on, and coke 36 to 41 in the last couple of months and pepsi cola is doing better and that stock is sitting at a historic high today. the volume growth is not huge. i think they had 1% volume growth last quarter, so the bottom line is i think we're doing all right for the companies any it's time for them to pause a bit. here's rally software currently trading at $17.99 after pricing at $14. quite a ride for them. guys, back to you. >> the consumer stocks are still rallying. >> look at this. procter & gamble still going up and i would point out that j.p. morg morgan, the asset management. >> and mary lake, j.p. morgan asset management just incredibly

strong. what gross margins they have there and could that be foreign money coming in, too. j.p. morgan, that stock might be up and let's head to the bond pits at the cme group in thick chick. rick? >> hi, jim. if i look at the ten-year intraday chart and it's been a two-tiered drop in rates that translates into the buys of treasurys. the first is the weakness in europe on the equity side that which might have to do with the issues that move gold. cypress, they're gold and what happens. their package seems to be sized up without any changes and there might be a canary in the coal mine and the weakness in europe and you see it in the boons as well and we closed 171 and 10 last week and 179 yesterday and we're splitting the difference and the jgbs once again. they win for volatility and they had a range that was astronomical from the 30s to the

60s and they settled at 44. last night they moved up from a 54 settlement to 61. i don't like looking at percentages on fixed income markets, but that's a lot of volatility. let's look at their currency, two-day chart. the evening before yesterday, boy, it moved right up towards 100. i believe 99.95 was the high. we'll get there at thissome point. a lot of knockout options in fr what i hear on the derivatives over-the-counter markets and if you look at the euro versus the dollar it's firmed up and it's also come down to what many would perceive to be this 130 1/2, 131 area bouncing off. there are these currencies affected by the yen carry trade. i can't tell you, but i know in the near-term they were affected by a general end of the week uncomfortablity with the idea of how much the marks in europe may have moved. back to you. >> thank you so much. let's check out the commodities.

>> jim, we've done a 180 a year ago and it was nat gas that had all of the luster and take a look at nat gas today hitting up against a new 52-week high and we've had good demand this winter with the long, cold winter and production has come down and we have supplies in nat gas and now 5% below the five-year moving average and that data, traders will be watching the 9120 area and the interesting thing is as we've seen this decline in oil, we've also seen a decline in the premium of brent over the nymex and it's less than $12 after having been closer to $20 and gold this morning tufouching th 52-week low and if the gld and the etfs and also in terms of fund interest, as well. that strong dollar is really a

big headwind for gold. scott? >> bertha, thanks so much. jim, i just want to point out before we go to the tease here. the market has this amazing ability to hold up in the face of a lot of headwind and to your point about j.p. morgan that it can be up by the end of the day, it could be up by the time we get back from the next commercial break. >> it's a great boost. dividend is what you want. we're not going get too hung up on that in this market. the fed controls that and the more terminal equity business by the welcome wealth management in the world. they want to bank at j.p. morgan. >> literally, as you're talking, jim, it will go positive right now. can we get a j.p. morgan -- there it is, positive, rid now, literally. >> stay focused on that. that could be part of the rally that we may need to take us to the next level. >> a very expensive stock. a cramer move. >> oh, thank you. >> coming up, speaking of the

man next to me, cramer bit coin in the small screen. we'll put them all together for you right after this break. a live and exclusive interview, as well. how about this one with macy's chairman and ceo, terry lundgren, the state of the consumer, the battle over martha stewart. we'll ask him about jc penney, as well. also steve liesman talking with boston fed president eric rosengren, when will it be the time to wind down qe3. keep it here. post 9. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet...

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about bit coin and whether or not it's a legitimate investment or currency. by the way, this is a topic that jim cramer tackled more than a year ago back in january 2012 with his appearance on "the good wife." mr. cramer, do you consider bit

coin a currency? >> no, i don't. there are none of the characteristics associated with coins and currency. >> in what way? >> there are no central banks to regulate, it's digital and fun s functions purely peer to peer. >> that was more than a year ago? >> that was serious acting on your part because you kept yourself so level. >> at the time i have to tell you was blinded by julianna -- >> i was blinded by the lights. >> she is very lovely. >> she's brilliant and lovely. these guys are great. let me just say that the winkle vie that looks like a corner of the bit coin market. i got the script and i said what the heck is bit coin? >> $11 million world of bit coin? they're tall guys, green-panted guys and great guys. i've met them in the social setting and they are great guys and they're pioneers.

facebook, as some would say, they've taken some of the proceeds and rolled them in and there is a bar -- there say bar in the city that accepts bit coin and i'm sending some on monday to see if they can knock back a couple of guinness. >> the more people that use it. >> by the way, that was a highly-rated good wife. >> we have breaking news with consumer sentiment and six in 60, that's when we return.

before we get to "six in 60," ever tech has opened for tradin ore money made. >> it has been as bob p/es annie pointed out, a very busy week for offerings and ever tech also is priced at $20 a share. >> the top callers, pnt, i think it's friday and the old bull market mess. >> let's get to 6 in 60 and let's start with ipo. >> there's nothing more container. the price increases are

sticking. >> williams sonoma added to top picks. >> this is expensive house wear. whenever you buy that le creuset. >> and stern says they're no longer cheap. >> the mexican peso, how's the vacation home? >> i want to tell you that the peso has gone from 14 1/2 to 12 in the last year. lookout, i think the peso will go 10 to one dollar. >> we have a google call here. i think a lot of people are worried about the margins. >> and finally, infosys. >> wrong clients and the discretionary clients and this has been a strong sector, the consulting sector. i like accenture. >> for some reason we didn't trigger infosys, and i assume. >> and you were correct in your assumption. >> i was. i was. >> tell me about malone.

you have to watch it all day, man. i'll give you the hour and 20 minutes. >> we have breaking consumer news on consumer sentiment. rick santelli, take it away. >> april preliminary on michigan, 72.3 and this matches a level we saw in july of last year, exactly 72.3, but to find a lower number you'd have to go to december 2011, so this is the preliminary read and we're benchmarking it against final reads and it is definitely a disappointment. back to you. >> rick santelli, jim cramer is still with us, of course, thank you, rick, by the way, "mad money," it is to me the greatest real estate investment trust of our time. he's actually building and that's why j.p. morgan and you want to get the next leg in real estate and the next leg in banks. david, we have to start putting up things and wood's building

because there are so few vacancies in shopping centers. >> have a great weekend. >> do a lot of shopping. >> maybe a little masters. >> okay. that sounds good. and i will do some shopping. go to the mall so i will do it for both of us. >> get some trousers at jc penney. we have more of my exclusive interview with chairman john malone plus macy's chairman and ceo, plus the fed president eric rosengren and marianne lake. can you imagine all of that coming up in just a little over an hour? >> "squawk on the street." outstanding. >> yeah. are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind... mom and dad, i have great news. is now providing answers families need.

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the moment you land. it's just another way you'll be traveling at the speed of hertz. welcome back to "squawk on the street." february inventories up .1%. a subtle .1 revision on last month's original release 1% which now stands at 0.9, and of course, being a february number it will be in the calculous that will give us our first look at gdp and that would be something to pay attention to, but the two big drivers today were weakened retail sales and a disappointing

miss on the preliminary which could change on april's university of michigan sentiment survey. back to you, judge. >> let's get a check of the markets on the data that just came out on business inventories and also in the context of retail sales, consumer sentiment, as well and that's where the picture is. after trimming the losses, we have started to go in the other direction again. a comeback there for j.p. morgan which went positive, david, when jim and us were talking about it and it's now moved back negative. the market is not taking the news all that well, but it's a bit of a modest, muted sell-off. >> i mean, actually, the situation is not really good on retail sales. if you have the core figure and you have a slight rise in january and then you're declining. so there is a big issue with the consumer if you strip out those more volatile elements and when

you have the employment report this time last week they were losses in jobs within the retail setting sector that was co to getting the overall number so thank goodness that we have the ceo of macy's to talk about consumer confidence and what is happening with middle america. >> there's a real question as to what the impact the sequester will have and the payroll tax. everything combined and, you know, whether that is yet to be really felt or we're in the early stages of actually feeling it. >> on retail, i think some will tell you and i'm very interested to hear what mr. lren have to say. sequester has different impacts in terms of joblessness and potential layoffs and what reverberates with the economy there. i should mention, scott, jc penney down 4% after being flat to up a bit in the early going. >> if you broke some news on that continuing saga, if you will, and what blackstone is

trying to do in terms of raising money for the company. should we get to that now or do the road map, guys? all right. scott? >> we were talking about jc penney this morning and we're looking at the stock at the lowest levels of the morning. it's down 4%. it has been reported over the last day or so that the company has hired blackstone to try to raise a billion and to try to shore up the balance sheet. in the earlier story they broke this morning according to a source, blackstone is talking to banks about making a $500 million or greater five-year term loan to jc penney secured by inventory. blackstone is talking to three private equity firms that expressed interest in making an investment in the company, but david, you know -- >> can i just say, the journal is reporting that they might sell a minority stake. maybe you have a fear of dilution. yes, they will be shored up and

that's great for shareholders and on the other hand, there is a possibility that you dilute. >> i think i can say based on my understanding, the situation is what we talked about earlier is that where the stock price currently is and now uglier, right? this morning. it is unlikely that they'll look to raise equity at this stage. i think it's more likely that the strategy becomes, push it off as much as you can and try to get the financial house in order and then you're in a better position later in the year and once you have a chance to get back to what they think is going work, david, couponing and some of those other strategies that they think are the way to turn this thing around. back to your early reporting it may behalf a billion in terms of the term loan that they would secure very well and the pipe deal, private investment into private equity, buy a private equity firm. i don't know the structure and i know you haven't reported on structure and typically those can take the form of a preferred

with some kind of a dividend and that's pure speculation on my part. >> but it's interesting. so many moves with ron johnson going and now the talks at blackstone in advance of the release of the quarter, god knows what is in the quarter for what they're trying to shore up against. >> weren't we sitting here having this discussion with the analyst that was the first to speak with mike ullman and there was some discussion about half a billion cap. >> i think that was his estimate that they may have burned a billion cash in the quarter and having burned a billion overall and partly because of the investment in furnace, you know? >> for more on retail? >> macy's is also expected to ask a judge to expand an injunction designed by martha stewart's company designed by -- and courtney reagan has been covering this from the start. she joins us live from outside

court. >> court is restarting and the first order of business is for jc penney, for the judge to rule on jc penney's three motions to dismiss. they're hoping to clear the deck of the arguments they'll have to make when they present their defense, but after that, you said the judge will rule on an expansion of a preliminary injunction that's already in place preventing jc penney from selling products designed by mslo in the branded products that are every day and some of the martha celebration products already online are in violation of the contractor mslo. they have the everyday products sitting in warehouses are worth $100 million. that's a lot of money to lose if they can't put those on the shelves and the judge is issuing stern warnings and this is a business matter best decided by you guy, but at this point you've given me no choice. the ship is getting ready to sail and someone will be

unhappy. investors growing increasingly concerned about jc penney's cash situation and the cash balance. the retailer tells me that over the last several months or more, they gauged outside advisers to provide the financial standpoint during the company's transformation. it's safe to say this will continue as a part of the work under way as we develop a game plan under mike ullman going forward and what jc penney, we do know that jc penney is involve said as you and scott kelly. >> just a few blocks from here. speaking of macy's, we should note, we will have a live and exclusive interview with terry lundgren and that's coming up 23 minutes from now. that's not the only big interview we have coming up, david? >> i recently sat down with the

media titan as the chairman of liberty media and where he had a significant vote, as well. i did ask him, give know so many companies that he has a perspective on, how is it looking from the business view he has and he did express about america losing its competitive edge. take a listen. >> how do you make america a better place for business? we have the worst corporate tax structure in the world on the large in? and, you know, what the politicians forget is decisions aren't made on the average. decisions are made on the margin. so if caterpillar is looking at building the next plant, where are they going to build it where the tax rate's 12% in brazil or where the tax rate is 39% in peoria? >> we have a lot more w mr.

malone after the break including the deal he says he wished he'd never made. that coming up on the program. >> also ahead on the program, an exclusive with marianne lake in her very first tv interview ever. she sits down with kayla tausche and a lot of concern from the givebacks from the reserves and mortgage banking. that's ahead of the show and if one big-name investor isn't enough in addition to john malone, stick around because we'll talk, request e, the marks and the economy with boston fed president eric rosengren for a first on cnbc interview. ♪

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>> john malone is back in the cable business with 27% of charter communications and the four board seats that came long with it. so why then after more than a

decade away from cable is malone back and why charter? >> what's attractive to me about charter is first of all, a great management team. tom rutledge, is i think by all accounts, the best operating manager in the business. charter itself is an undermanaged asset, and underinvested asset for a number of years. it was kind of the victim of a lot of market share stealing by the satellite guys. it faces the weakest competition terroristially. the majority of the systems are not in verizon and at&t u-verse areas and i think it's at a point in history where i think the most addictive thing in the communications world is

high-speed connectivity, so everywhere in the world they operate we should see the public want more and more data rate whether it's wireless or wired. there's a big appetite for it and all of these developments in video, particularly the over the top stuff really drive to more and more speed, and cable technology right now is the most cost effective way to deliver that growth and speed. when we projected out that the cable world is probably going to go to guying hertz -- gigabit type connectivity. >> and google is -- you can do it. the question is can you do it cost effectively on a large scale. >> you don't think -- >> they can make an argument that it's benefiting the other business, but on its own, it can't pay for itself.

>> no, if fios didn't give it a positive return, i can't imagine why overbuilding would not work, i am personally convinced that cable can get to one gigabit. your entrance back into cable. >> right. >> am i right in assuming it is about the continued growth and penetration of broadband as opposed to anything else that you see is a sustainable business model. >> i think that's the lead service and keep in mind, it can also drive b-2 b businesses in addition to the consumer businesses and the growth rate of the b to b opportunity is quite large. so i'm not giving up on the video product. i think that you will find over time that a lot of these over the top video products will turn

out to be wholesale products marketed and deliveredy th cable guys and maybe even bundled with the broadband as opposed to their video so they're interesting opportunities. >> and cthe consumer would have more choice at that point. >> the other way to look at charter is with the large tax position it's in a unique position to be in a consolidator and the space at least in the short run here, that is very cheap. the credibility of the cash flow streams has been groeling and leverage is available, and there is consolidation, and malone is always opportunistic and huge nol and great management team and you sold out of cable. you were the largest cable company in the country in 2000. >> broke my heart, david, actually to do the at&t deal,

but, you know, when you're the control shareholder and somebody comes along and offers you a 40% premium to a record high stock price, into is a liquid security so that your shareholders, for the first time in many years would have access to monetization, you just can't turn it down. so, you know, in retrospect, i wish i hadn't done it. >> you regret it? >> oh, absolutely. >> interesting, of course. >> that was the sale of tc ito at&t. that's the old at&t and he doesn't just regret it because he took at&t shares which, think, sank dramatically. today's at&t is sbc, and i know it gets complicated and also because he genuinely believes, & for cable yet again, and the lead service being broadband and not being the offering of the video product itself.

we'll talk a lot more later and we'll have about that bundle of programming you get and you pay for with your sports and what his thoughts are on that and what that will mean for the entire media landscape. >> it's like the virgin media thing, as well. >> it all gives you a real good idea of where he thinks the power really is, and clearly, david, as he told you, it's cable and something to take away from that is charter and he does see as a consolidator. you have management at time warner cable in transition. you've got an 87-year-old chuck dolan at cablevision, but cable owe vision, at least by the way raise the prospect of consolidating a big. >> malone is no spring chicken

hips. >> no. >> we talked in a fact that you rarely get an opportunity to with people like that about his estate, about his exit plan. he is, in fact, not leaving any of this to his children and he has a younger of foundations and we're going to share it later, but voting control stakes will have an opportunity to go back to the management teams of which they're a part -- and it's not dynastic. >> he spoke about netflix, too, right? >> if he's betting big on cable, you know he has an opinion on that. he does, but it's an interesting one. >> let's get a market flash from josh at hq. >> an analyst changes his mind on herbalife and well-known herbalife cue and earlier this week he went neutral on the stock with kpmg could have a serious negative impact on the

shares, but the company says it does not see the risk of a delisting notice on the nyse. it does not expect to be in v e violation of the loan covenance. he takes it back as a buy and hlf is down 1% right now. wapner, back to you. >> we should also note in the new york times there's a pretty provocative article right here about herbalife that's interesting, as well, may be playing into some of the reasons and it's certainly a good rod what'sing there. >> macy's shares hitting a fresh 52-week high. what's next for the department store chain? we'll find out when macy's chairman and ceo, joins us for an exclusive interview. we'll talk to fed qe and the economy and the markets with boston fed president eric rosengren. stick around. we are back in two. ♪

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longtime friends and it it is the stock partner for kpmg. for relaying private information about his client on companies like herbalife, skechers, deckers and perhaps more. our own jane wells is live outside the country club where both london and his jeweler friend belong. jane, over to you. >> well, you know, simon it all started here innocently enough, two guys joined the north ranch country club, which is gorgeous. they become friends and buddies and his business takes a recession in 2009 and he starts asking his friend for inside frgz in, some tips all starting here right on the golf course. where is ittening? as we roll the video, you will see scott london on the left leaving court staying free on $150,000 bond. his attorney says london will plead guilty to criminal insider

trading regarding at least five companies including herbalife and he being face up to five years in prison, but quote, there will be no trial. the hope is that his full admission will mitigate photos like this showing london allegedly accepting five grand in cash from shaw after shaw started working with the fbi. the feds say london reaped about a total of 50 grand in the venture. his attorney says it's less while shaw made over $1.2 million, a figure london apparently didn't know about until yesterday. >> his reaction to the $1.27 million for brian shaw. >> i almost vomited in my car. >> how did he think the guy made? >> he thought he made 100,000, 200,000 and it was beyond his comprehension there was that much money. >> london is expected to plead guilty in court. brian shaw has yet to be charged. so what about the money he made? >> in the not so distant future mr. shaw will be disgorging all

his profits as part of any resolution, i imagine with the sec and the u.s. department of justice. ? and to scott london faces future court action not just from the feds and the kpmg's chairman and ceo says he is appalled at the details and that firm is planning legal action. guys? >> we should say david faber is flabbergasted that everybody's going on the record. >> jane, have you ever had a lawyer say something like that and get every detail of what they were doing and where they were doing? >> let me tell you, i've covered a lot of legal cases in this town. harmen braun goes way back. i asked him yesterday, and have you ever had a client admit everything, plead guilty before he's even been in court. i can't really think about it, but his explanation is that scott london wanted to get ahead of this to protect the firm so that people wouldn't think that it was a kpmg problem that any

of these audits were at risk and it was all a scott london problem, and of course, the fact that it's only 50,000 he took which seems laughably small given what he was making and may help all of this mitigate what will happen and that he could potentially avoid prison time. >> he took it, so he knew. he took it. >> oh, yeah. >> but he's -- he's disputing how much he took. we'll talk about that in the next hour. >> okay. >> jane, thank you very much. >> all right, jane. >> that is the most stunning development of all -- that everybody's talking the way they are. >> that he wasn't making that much. >> maybe he'll come straight off with it and cut off the pain. apparently. i don't know. got a mover in the tech space we want to talk about. sema moti. >> infosys posting its sing single-day percentage drop and the top line came in short of

expectations and here's what's really getting the street worried and its outlook and 6% to 10% for the 2004 fiscal year whereas analysts were estimating roughly 12% and infosys which was referred to as a poster child of india's economic growth story and outsourcing boom has been dealing with weak demand from u.s. and european clients and slowing growth domestically, as well and falling below 5% and hydened competition from the indian peers and they were both listed here as adrs on the nasdaq and you can see shares of both companies moving lower in today's trade. >> back to you. >> we have more breaking news. let's get back to josh at hq. >> some quick headlines and we want to bring you guys back to speed on and the interim ruling in the jc penney and macy's case and the judge dismissing, dismissing macy's claim of unfair competition against jc penney and claimed that jc penney engaged in unfair

competition practices and the judge hearing arguments on temporary injunction and this is not a final discussion and we'll bring you more headlines as they come. jc penney down 2.5% right now. >> thank you, josh lipton. we have questions on the case. who better to ask than macy's president and ceo terry lundgren who will join us after the break in a cnbc exclusive. >> we have another exclusive. we have a lot of them. mary ann lake, it's her first ever, we keep saying that, we want to make her nervous. >> she'll do it. >> if she wasn't nervous, she is now. >> you tell by the head. >> nothing will unnerve her because she's british. that's great. >> stiff upper lip. governor of. you know how to dance... with a deadline. and you...rent from national. because only national lets you choose any car in the aisle...

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a judge says jc penney is not guilty of unfair competition over martha stewart's brand of goods. that is an interim ruling in a case that continues in court today. the final rulings of which have yet to take place. yesterday's martha stewart's complaint lost a bid, and the company lost a bid to dismiss the contract claim from macy's that it had exclusive rights to sell martha stewart home goods. all of this as shares of macy's hit a 52-week high this week with a $17 billion market value going up by 2% this morning and here now for a cnbc exclusive is terry lundgren, he's macy's president and ceo and he joan

us from tucson, arizona. give us your take, at least on this inrim ruling and explain its significance and the lack thereof of the central case. >> david, i can't talk in any detail and frankly, i'm in tucson, arizona, and that's taking place in a new york courthouse. so i'm not exactly tuned in. you're probably more up to speed than i am at this moment because i'm trying to focus on these students and the retail conference, but the important thing is that i think you know this, but we are simply trying to capture the spirit as well as the legal issues attached to our contract. we just are trying to enforce the contract that we think we have and it's pretty straightforward as far as we are concerned and it's unfortunate that we have to argue every word and does that word mean this? does that word mean this? it's disappointing that we're in this conversation and we're doing so in court.

we never had to do this with any of the other resources and any agreements with my vendor. so it's unfortunate in that regard, but we're getting through this and hopefully at the end of the day we'll have the answers that we've been looking for all along which is simply to enforce the contract agreement that we have with martha stewart. >> we do want to get to the broader retail environment and it doesn't look particularly good, terry, given what weave seen and we don't want to get same-store sales on a monthly basis, but january, february, march, not great. what can you tell us about the environment right now. >> we're 90% of retailers who are reporting on a quarterly basis now as opposed to a monthly basis, but i can just tell you in general, we are very confident with our original forecast for the quarter, for the season, for the year, and i think what's happening, and i

tell you, i get a lot of data points from the various boards i sit on or groups that i am in conversation with about the consumer including this conference right here and we are all very worried about the payroll tax affecting the lowest household income consumer. and we're also worried about the significant increase in taxes on the higher household income consumer, as well, both federal and of course, some state issues that are happening as well. but having said that, you know, our customer seems to be resilient and seems to be continuing to buy when the product is right, when the value is there and when it makes sense on the price value relationship. >> so we continue to be confident, at least in our case that the consumer is still in a buying mode. >> terry, it's scott. i would like to get back to something related to jc penny, if you would allow me, based on

some of the reporting that we've done this morning about the company trying to get a loan to shore up its balance sheet. as you look at what happened to jc penney in the fallout of ron johnson not being there anymore. how do you feel about what's taken place there? do you feel bad for ron? animal spirits take over and you want to step on the neck of the competitor at this point? can you shed light on that for us, please? >> look, you know, there's been so much noise in the -- in the press about this subject and honestly, we're really not very focused on jc penney. i know they had a lot of complications and not just one issue there, but in our case we seem to get lost in the shuffle of all the -- of all of this noise and our business for now, three years plus and going is

solid for one reason and not for any other competitor, and not only just for macy's and it's a consistent, focused with a talented group of people and executing against that strategy and that's really what it's about for us. it's not about one competitor or another and what we think we're doing in favor of the customer. >> let me pick up that precise point and she had a very, very good year last year. it is not so much about the markets of atlanta, miami or new york which are very important. the trek is what can you sell to a woman who has $50 to spend on a pair of jeans and i wonder if that's the central era. city slickers have come in from theest on and don't understand what it means to sell if the united states. >> i can tell you in our case that is central to our success

and central to our strategy and that is understanding that not all customers are the same. not all customers want the same products. i'm in tucson, arizona, today. it's probably going to be 85 degrees here. colorado had a snowstorm. this is all in the same week and if you don't really have a sense of about what the customer wants in these various markets and you don't have the infrastructure to react to those unique requests by consumers then you'll have a very hard time performing the way that we're performing. that's the key for us. it's all about -- we have talented people living in 69 cities around the country who are guiding our decisions on the size of the product. on the inseam on the color and the weight of the fabric and those details and it's very complicated to do and that's what's happening at macy's and happening at most of competitors. >> what kind of job is mike ullman going do at jc penney? >> he's a solid, experience red

tailer and i think he'll bring stability for that organization and if i were that organization i would be surprised. >> were you surprised it was him? >> i don't know who it may be and the board just said we can't leave the job open and meek will try to do what's rid for jc penney and i'm sure he has a lot of vested interest to do so since he put a lot of his career into that company. there's speck ligz that macy's benefited if has that been the case? do you expect it to continue? >> we are in the same shopping centers as jc penney for about 50% of on you are stores and in those stores our business is a little better than the other

half of our stores, if you will, indeed, we are probably taking some of that market share. i can tell you one thing, i didn't pick up 4.3 billion. i didn't get it all. so it went out to multiple competitors, i'm guessing, not just us. so we got a piece of that, but again, i think we're getting market share from a lot of of different retailers. i think we're getting market shares from a lot of specialty stores today particularly as we focus this young, millennial consumer. >> tell me about the tax or impact or lack thereof that you see or what the impact's been and how long it's going play out for. >> the answer is it hasn't shown its head in our case, so i haven't really seen the impact for us, but i have to presume that at a certain level customers are making decisions about gasoline in their tank or food on their table as opposed

to items they would like to have. so they moved toward the need items as opposed to the want items and that's my concern for that consumer that they're going to be making difficult choices that the payroll tax is forcing them to do. >> there's another former retailer, ron johnson and considered a visionary at apple and look for example a big. would you hire him? >> ron's too expensive to me. >> it continue nos new york versus jc penney and there was a mediation period and a lot of people thought you would be able to get it to court and figure it out. why didn't you? >> listen, what we want to

figure out is how do we enforce a written contract that we already have? we don't have contracts with most of our vendor asks our suppliers. we don't need contracts with most of the vendor asks suppliers. we shake their hand and do a deal and we agree to something. this is not that complicated, so yeah, we should be able to solve this and we should be able to not be in court fighting this out, but we're not asking for anything other than execution of the contract that we have. that's what we want. so that's why we're in court. it's not because we want to be there at all. >> what happens if you lose. if we lose we'll appeal because we're right. we are in the right, and i'm confident about that. if the lawyers are successful at twisting a word here or twisting a word there and capitalizing on little details that they can twist without addressing the

spirit and the idea of the contract itself then shame on them. shame on them for trying to pursue that route, but if we lose on that basis we will certainly appeal. >> terry lundgren, as always, we appreciate you spend something time with us. joy and good luck at the 85-degree weather there in tucson at the global retailing conference. terry lundgren. >> david -- most importantly, you would be blown away if you were here listening to all these presentations from the founder of costco or from the tori bunch who is speaking this arne and these kids, these graduating students here are focused on retail are unbelievable. they're among the best. i just hired 36 of them for this year and they're stimulating in terms of their questions and their commentary. you'd love this session. >> you mentioned hiring. are you going to be doing more hiring or is it just going to be 36 people? >> we hired 5,000 permanent jobs last year and hired 5,000 in

2011. i don't know what the number is going to be this year, but we'll probably hire around 1,000 college graduates this year and i have to tell you, i am very motivated by the talent that we're seeing out here in the universities. >> all right. we are glad to hear that as well and always happy to have you join us. terry lundgren, macy's thank you. >> before we head to break, let's take a look at gold. pretty big move down 3.5%. that is one heck of a sizeable move in gold. >> yeah. in fact, commodities have sold off across the board. you have oil, but gold appears to have broken an important level there. we'll come back and talk about bouillon and also ahead on a related issue. a lot of people are wondering actively and at what point the fed will start tapering down its purchases of qe. up next, we're headed to boston to sit down with eric rosengren and to tackle that question.

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our very own steve liesman is at the boston fed conference today on monetary policy and the labor market. in other words, when are we going to get some movement in qe. let's go live to boston and to an important guest with steve. steve, over to you. >> simon, thanks very much. i'm here with eric rose green, president of the boston federal reserve bank at the conference, as you say, simon, what the fed can and should be doing about the growth rate. >> thank you for being with us. >> thank you for being in boston. >> you are saying accommodative policy was appropriate where we are right now, but maybe suggesting that the fed should be more aggressive in times of high unemployment. should the fed be more aggressive than it is right now? >> i think what our comments highlight is that this is not the time to take away the

accommodation. so i supported the program that we adopted at the march fomc, and i think we should continue on that program, that we really need to see substantial improvement in labor markets before we start the asset purchase program or taper it. >> so you're saying that the current policy is aggressive enough if it continueses. >> correct. and it's not a stretch that saysio are are not in the camp that says we should stop qe in the summer. >> it depends on economic continues and i would suggest we get a pickup on the economy. the first half of the year i'm expecting roughly 2.25% average. it looks like it will be much slower in the second quarter and more like 1 1/2. we should see more substantial improvement not only in the labor markets but growth in the economy overall. >> do you have a number in your head for a period of time, is it 200,000 in terms of payroll

growth and i would like to see it happen not by people pulling out of the labor force and to get the payroll that's consistent with the improvement in the labor markets. >> at that point we should do an assessment of what's happening with inflation assessment of what's happening with inflation. what's happening in the broader labor markets for seeing pick up in employment and markets tightening up, it may be appropriate at that time to stop the purchase program. but it depends on a variety of economic variables. >> there was a panel that the fed ought to be taking account of the unemployment rate. should they take more account of the overall slack? >> i think it's ametric. it's not the only metric we should look at. if we have high unemployment rate for extended periods of time, it starts having a broader

impact on the economy. that's one reason to have an aggressive enough policy to bring the labor department down. >> retail sales were reported this morning. how much concern do you have that we could be rolling over? >> we shouldn't put too much weight to any one report. so the numbers in february were pretty strong. some of the numbers recently have been weaker. if you asked me six months ago would we have the kind of growth with tax increase, with the sequester, with the problems in europe i probably would have expected a slower economy than what we are b finding. i think we are going to get a pickup. i'm confident of that. i want to taper. i want to stop the program because we're getting strong growth in the economy and strong improvements in labor markets. >> can you be more specific? what is your expectation for when we achieve that? >> any expectation would be that

would be the end of the year. that's a little bit stronger than what any private sector economists are currently forecasting. i do think there's underlying strength in the economy and we'll see more of a pickup in the second half. >> would you taper before that 7.25%? >> i think we could consider tapering before then. we have to see what the economic conditions are over the next few months and what's happening with inflation as well. >> do you worry that your colleagues are a little too concerned about the potential costs? especially when it comes to inflation, given what the inflation numbers have been. especially the ppi coming down 0.6%. >> inflation is well behaved. that's well below our 2% target. my expectation is we're going to continue to be below 2% inflation. that gives us run room to get the growth that we want and get

improvements in the labor markets. >> what is the behavior of the fiscal side of the government when it comes to deficit spending? >> that's not helping the fed. the fiscal mix is not ideal right now. most of those problems have not been addressed. the sequester is a blunt way of trying to reduce the deficit. it was originally something that nobody supported. unfortunately that's the outcome that we have gotten. >> the president of minneapolis fed has suggested that maybe you should lower the unemployment target for when you change interest rates to 5.5% to 6.5%. are there other measures you think the feds should adopt? >> 6.5 is a threshold. it may well be that we're in a

situation at the the time where it's appropriate to wait longer before we start raising short-term rates. it depends on what's happening with inflation. it depends on what's happening with other labor market indicators. so if we think inflation will continue to be quite low, it may be reasonable to continue with the 0% interest rates. are there other measures that you can think about? >> my hope is that the economy picks up and we can remove the accommodation. that's what is in my forecast, that the economy is slowly improving. and we'll be in a situation where we can remove the accommodation. we can do more if that's necessary. i hope it's not necessary. >> thank you for joining us today. >> from the boston fed. i'll see you guys back in new york next week. >> all right. enjoy the weekend. thanks so much. still ahead, jp morgan executive

sits down here exclusively with "squawk on the street." plus, the japanese bonds.

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welcome to "squawk on the street" and the santelli exchange. japanese government bonds. jgbs. april 4th. three central banks have their meeting. a week ago yesterday. a week ago thursday. the one we all remember. the one that is in many ways at the epicenter of a huge amount of volatility in the aforementioned jgb market was the bank of japan. how much volatility are we talking? of course, given the time zones if we look at our charts, the session that started out on the fourth, crossed into midnight on the fifth in the u.s., had a range of 32 basis points as their low, 65 basis points as their high and on that session they settle at 44 basis points k which is the current historic low for that ten-year maturity. yesterday to today they closed up about seven basis points.

this is a market that closed at 61 basis points today, just to give you an idea of the percentage type moves we are seeing. the future markets have been going crazy. why should any of us care? because many markets may be impacted in the past, currently or in the future by what i've talked about, the japanese carry trade. be the carry trade is on zero interest ratepolicy. now we had the discussion not only on japan but in the u.s. they can do it on the short end and now they can buy all matureties. in the end no matter what central banks do, if the markets get a life, that changes the landscape quick. that is the nervousness regarding the jgbs. what if they go over 1%? what does that do to the curve? more importantly the financing trade and all the positions they

carry. next let's talk about cyprus. mario draghi weighing in. if you sell gold it has to sell to commercial banks. but their central banks has independence. but just a couple of things quickly. one of the finance committees yesterday had this. the escalating gap in funding confirms my doubts in the finance framework repaired by cyprus. it's going the way of greece, ever more funding gaps keep coming to light. hey, they have a lot of gold, but not enough. they have 13.9 million tons. this is something we have to pay attention to because the gold market is down $60. >> yep. >> i'm sorry. that's metric tons. metric tons. they have 13.9 metric tons.

and david, we're going to have more of your interview, your exclusive interview. still to come, the cfo of jpmorgan. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> we have zombie consumers who are just walking around barely able to make ends meet. >> now it's time for the big reveal, the newest squawk market master, if you haven't guessed already, our very own jim cramer. >> i didn't know it was open to cnbc employees. >> only jim. >> only jim. and i am honored. >> according to a source, blackstone is talking to banks about making $500 million or greater five-year term loan to j

jc penney. >> can he pull it off? a lot of people think he can't because of the history of how difficult it is to break the spiral. >> you sold out of cable. you were the largest cable company in the country in 2000. >> broke my heart. >> there's a former retail ceo out on the market right now. his name is ron johnson. testifies considered a visionary at apple. he's looking for a gig probably. would you hire him? >> ron is too expensive for me. >> good friday morning. we're live here at post 9 of the new york stock exchange on a very interesting day for the

markets. retail sales disappointing today. interesting moves across a number of asset classes that are negative. not just the stock market after a very good run through the first quarter. let's put it in context. you have oil down. you have gold down. you have copper down today. we'll come back to all of those. there you go. thank you very much. look at that move on gold. there's some speculation. it's been around for a while that greece may sell a big bond. cyprus may sell part of the gold in reserve in order to meet the deficits. we'll come back and talk about that in a moment. but oil just pushed it above $90 as you can see, as we stand at the moment. more on that and the possibility of deflationary forces. blackberry back in the green as the company gets a regulatory review claiming the return rate for the new model outpaces sales at some retail locations.

the report come on thursday and blackberry criticized it then as being fall. apple trading lower after the target to the stock to $550 a share from $600. the phone says checks indicate weaker demand in march and it believes the june guidance that we get. it could be disappointing. right. let's get to the road map for the last hour of "squawk on the street." before we hit the weekend. retail sales posting the biggest drop in nine months as americans tighten the pursestrings. find out which retailer employees could take the biggest hits. plus, jp morgan ceo will join us for an interview. we'll touch on everything from jamie dimon to the vast amount of regulation heading her way. then former white house official david malpass will explain why

president obama's new budget will not inspire private sector confidence in his view and it may be too late to matter apparently. more on his exclusive interview with jan malone. find out what he that has to say about netflix and the future role in the cable world. it may surprise you how close he thinks netflix will get. and new record highs just yesterday in kmodsties also tightening. art cashing joining me here onset. he's the director of operations at ups. good morning. did the lows -- does the selloff resonate with you more closely? >> no, i was worried that it was

passionless. there was no sense of frenzy. i spent a good deal of time, as i usually do, at the watering holes in wall street. the feeling is twofold. today would have been a good example to see if it was the buy the differs. they are people who don't care about necessarily the exact pricing they're getting. so they don't try to outrace one another. the other group might well be foreign holders who want to get protection for their money and still get yield. they don't care about immediate performance. they want to get in securely. they may have been the passive buyers of the next week ch i was hoping we would get a chance to see them and took the market a bit higher or certainly cut the losses late in the day. we have a sudden chilly deflati deflationary wind blowing today. i think it's a combination of things. first, to give an extra piece of

credit to your network. this morning on "squawk box" steven roach was on and said one of the things that frustrated him about coming on tv is they were all talking about the american consumer coming back. he said, they have not. the retail sales prove him out today. secondarily the fact that the cyprus situation is being reopened. as you look at gold and oil and copper and look at the yield on the ten year. there's a strong sense of deflation entering the game. you want to be careful about that. oil is is going to try to defend $15. this could be an interesting day. >> if there's one thing determined against it it's deflation. and therefore if the deflation risks are growing, the likelihood is that the fed is going to act stronger for

longer, which appears by definition to mean that the equity marks will go higher. >> not necessarily. let us not forget what happened in japan. now they've suddenly roused themselves up again. but they've fought a deflationary pressure for ten years now and try to get things in order. yes, the fed is alert. we read what bernanke said. we know they're at the ready. they're going to try anything and everything to prevent deflation. today is the first strong gust of deflation that we have seen in a bit. >> i'll let you get back to the watering holes. maybe it's too early. >> it's always noon somewhere. think about that. >> thank you. have a great weekend. thank you very much. let's focus on retail sales in particular falling by 0.4% in march. which is the biggest head drop in nine months. earlier we heard from terry about the resiliency of the u.s.

consume consumer. >> our customer seems to be resilient and willing to buy. we continue to be confident that the consumer is in a buying mode. he joins us live on cnbc. welcome. good morning. what should we make here. you can do the job right you can sell. the government reporting they are deteriorating across the country. >> well, they just had their spring conference. we were talking to all these retail executives. and everybody sounded very much like him. it sounds like things have been sluggish. trends have been soft. the weather has been a big impact. it's not that the consumer has gone away.

when there is value. when there's basic, when there's need or the hot item consumers are spending. >> yes. but the day that does not suggest that overall the net effect of all of this is positive. you know have 0.2% on retail sales for march. last friday when we sat here with a disappointing report that only 88,000 jobs are being created, one of the main reasons is the retail sector overall had cut employment by 24,000. so what you're saying isn't bought out by the official statistics. >> right. well, the statistics have clearly shown that there's a swelling. but it doesn't mean it's fallen off a cliff. i don't think the trend upwards that we have seen earlier in the year and late last year was strong. we continue all along. the consumer is able to spend

when needing to spend. they're buying consumers. and people are going in and buying basic goods. you're seeing solid trends. the value or yepted trades are still selling. the krogers of the world. the supermarkets are selling. furniture was actually up. and the home continues to be an area of brightness for the retailers. >> so joe, just bottom line it for me as an investor, what parts of the retail sector should i avoid? what demonstrates value that could bounce higher? >> we still like the discounters. the more oriented retailers out there and anything home related. those names are still solid and getting good trends.

it's really on the discretionary side. >> so fashion retailers. >> fashion retailers have been more charged lately. yes. >> we'll leaveat . joe, have a great weekend. >> thank you. joe feldman joining for the advisory group. up next on the program, our exclusive interview this morning with the new cfo at jp morgan. she is standing by getting ready for that. a big interview, kayla. good morning. >> good morning, simon. earnings out this morning. also the first for marion lake on her interview. that's after this break. a simple question: we wente how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need

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there is a concern obviously about the united states. notably and parts of asia ya and arguably, most certainly europe. let's send it over to josh lipton. gold is losing more shine this morning. 1500 for the first time since july of 2011. in terms of levels traders are

watching right now. he is watching 1480. if that doesn't hold then 1340 the gdx, etf that tracks the miners new down 30% this year. the headline, it posted a higher first quarter profit as it spent less money on litigation. there's a lot of other questions over where the bank now stands. who better than the new ceo? >> good morning, we're live with cfo marion lake. marion, first of all, thank you so much for being with us, especially on this busy day. i want to start with your high level takeaway on earnings. it appears they show the economy getting better, but you still see loan demand as being soft.

what is making up this quarter? >> so obviously we're pleased with the quarter. a great start to the year with a 17% return on tangible common equity. more importantly for us if you look at the underlying businesses they're all performing strongly. and growth rates in sales. the underline performing of the business. >> and the state of the consumer. what are you seeing there. >> if you take a look at the consumers, we see consumer confidence generally high. even though they had issues and concerns, they're spending 9% year over year across the categories. and you look at the willingness to extend themselves and take credit it's just a softer story. so you have the businesses still very concerned about the national economy, about

regulation, taxation, fiscal issues. and then you have those who build the balance sheets up and have the resources. >> you talk about interest rates and how that's a big sticking point. i know you are edged for the rates to rise. but for now it's killing investors. >> we expect the low rates are driving that and we're marching towards the liquidity ratios this year. we're expecting the understood lying growth that we're seeing in the businesses on the asset side is supporting nii. some time early into next year and nii to stay stablish. that's hitting wells fargo today. i want to talk about things boosting this quarter's industry. cost cuts and reserving the credit cards. at what point do you see the

fundamentals of the business changing where you can spot real revenue growth and real profits without needing them? >> so talking about the credit side for the time being, so mortgages, the charge also going down steadily, and while they are nowhere near where they need to be in terms of all time lows so we expect to see reserve releases throughout next year and into next year at some point they get to the end of next year and into 2015. >> are we close to seeing returns on litigation? you had wins in the corner. are we close to litigation reserves? >> i wouldn't expect it on litigation. on a case by case basis you get up and downs. last year characterized by mortgage issues and we're seeing less of that. >> let's move on and talk about capital. a lot of questions on the analyst calls concerned the capital planning process and the the questions raised by the federal reserve this quarter. what did they ask you to fix and

how confident to you feel that you'll be able to satisfy the returns? we are continuing to buy back stock. but we take it seriously. we are working hard to fix the recommendations that are made to us. and we will submit our plan in the first quarter. >> you bought back $2.6 billion in stock so you must feel okay. >> we had the permission to buy back the stock. we feel great about the position of the company that qualitative issues and not quantitative issues. they're important and we're going to put the time into fixing them. >> your basil three category rates are progressing but there's another number that could be lingering out there. that's now in the draft. 15% capital. some analysts could say jpmorgan chase needs $200 billion more to do that. if you need to get there, how do you do that?

>> we do agree with getting rid of too big to fail. we have stronger capital today. luck widty stress tests. we think that's enough. but as far as what we will see happen to the banks, the bill looks like it will get smaller. he said, quote, we are very concerned about ongoing regulations potentially making investment bank decisions as part of universal banking unworkable for shareholders. do banks need to get smaller? >> the bill as proposed would require either for the industry as a whole to raise significant, extraordinary amounts of capital. and it would have an unintendsed consequence on the economy and the availability of credit. how that will manifest itself if the bill comes to pass we'll

have to wait and see. >> a lot of people want to get to know you better. you went from a bean counting job to being one of the most powerful women in wall street. the predecessor is widely forced ou out. >> and i've been in the community for over a decade. if not for me, it's really a new situation. we have a lot of work to do. we're getting through it. >> your predecessor was criticized for misleading investors about multimillion dollar losses concerning the london whale. when you get on the conference call for the earnings like you did this morning, how do you work to rebuild that trust? >> we are diligent in what we do. we know our facts echlt we say what we know. >> what is it look working for

jamie dimon? >> it's intense. i've worked with him for ten years now. >> so everyone knows he is a great banker. but he points out himself that one of the pitfalls is people didn't confront him. do people at this organization feel comfortable standing up to jamie dimon? >> we do have an open dialogue. it's constructive challenge. we do it every week. we do it every month. >> when was the last time you disagreed with him? >> i disagree with him now and again. >> one last question concerning the splitting of the chairman and ceo role. you say people can stand up to him. he points out there needs to be a way for people to feel that they're not avoiding conflict like he can challenge him. does that involve the splitting of the chairman and the ceo role? >> it's going to be a board

decision. you can all read about that. as far as we're concerned the board will ultimately make the decision. >> as the operating committee weighed in on that? >> no, we have not. >> and half of the operating committee is new in about the last year. do you believe that there is a successor sitting on the committee? >> we're all old to the firm in terms of working together. i don't consider the team to be new. it's certainly well formed and it's a great bench. >> we'll leave it there for now. simon, back to you? >> well, kayla, that was a great interview. that was a great interview. one wonders if there is anybody left in britain at this stage. after the interview we have the cf of wells fargo ahead today.

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the european markets are closing now. >> we are falling deeper into the red as we go into the weekend as a result of wall street moving into negative territory. one of the major reasons for this is you have a big event

risk in dublin. the eurozone finance ministers are meeting. the one everybody is worried about what to do with cyprus. will they be able to fill it with structural funds? some other way around it? or will there be some sort of impasse? the likelihood is they won't and they'll have a deal. there's a concern. there's a worry because cyprus is such a wild card. and you don't want to be overexposed on a long position going into the weekend with that. the other thing to watch incidentally is we'll get good news out that the finance ministers will start from the loans to portugal, basically extending the matureties. we knew they might do that earlier in the week. let's look a t the banks, for example that are selling off around europe. they're bearing the brunt of that, as you can see. but it was earlier in the week when we thought we would get a deal that we rallied quite strongly on the banks.

so we're still up 3 #%. the other thing to put in perspective is people are like, wow, look at the rush to the german government bonds. yes, it is. you do have yields coming down with german government bonds, but that's not the picture that you've had throughout the week with the risk rally really engineered from the bank of japan. that isn't to deny that things are bad in europe, they are clearly. you'll see swovolkswagen is dow% today. they clearly show the markets selling and becoming increasingly more difficult.

other regions, particularly western europe have growing uncertainty. they are bearing the the brunt. let's get to sharon epperson -- i beg your pardon. bertha coombs. >> gold is getting crushed. a lot of traders really the feeling the impact of the troubles in europe. some concerns that cyprus may tap the gold reserves in order to try to meet the debts. that started overnight. all the sale stops are being hit here. technically gold is very week here. down over 20% from the all time highs nearly three years ago. and another trader says at this point he is seeing a lot of funds just liquidating here.

the next stop he's looking at is 410 to 1390. we're about $100 away he says on gold from the 50 day moving average on a monthly basis. so that's going to be something critical to watch here. silver, feeling double whammy with concerned about demand and silver getting hit harder. oil is follow iing along as wel. we're seeing a lot of the charts are broken on a technical basis. >> thank you very much. some important news there. we are beginning to cut our losses. >> it's an interesting day. and i know there's concerns about deflationary fears out there. there's an obvious reasons why certain sectors like commodity stocks, energy stocks are to the

downside. and we have lousy economic numbers, folks. look it up for march ism, retail sales. bst been a string of crummy numbers so far. people say what does this have to do with commodities? well, there's a relationship there. copper is telling you look at this. it's near a 52-week low. global growth is low isy. some of you had a big news to the downside. but there's nothing here that sa says global growth is improving. and by and large, they're the ones getting hit the most. technology is weak, too. take a look at commodity stock names. and here it is. a lot of damage going on in

aluminum stocks. sealed stocked. 2%, 3% declines. here are the big energy names. getting 3% and 4% declines as well. this is the commodities sector seeing most of the damage. berth ya was talking about gold. normally they do about 10 million shares a day. as i was coming down it was at 30 million, throw times normal volume at 11:30. and this broke right here. and that's sitting near the 52-week low. the thing collapsed on that. there's a clear technical reaction there. don't say technicals don't matter. they certainly do. 6%, 7 #%, 8% declines. one group up today is the building stocks. home depot, building materials stocks up as well. slow global growth is the real problem that commodities have. they haven't partaken in the

ocean of liquidity the federal reserves of the world. >> not this time. bob, thank you very much for that. of course, this week the white house threw its hat into the ring for the 2014 budget. let's head over to rick santelli in chicago with a very special guest. >> absolutely. thank you, simon. and before we get to david malpass, who is a special guest, i would like to read a couple sentences in the obama economic budget message. rather than making spending choices, the president's proposal turns more of the budget over to auto pilot. entitlements take of 62% of the $47 trillion. now i would like to welcome david ma david malpass. >> hi, rick. how are you? >> good. i want to ask you a question before i wind you up and get you going. you're not referring to income security.

my guess is you're not counting that. i'm pretty sure you're not counting debt on interest. these are going to be big time as well. am i correct in my asusumption f that. >> that's right. there's less discretionary spending for the government. >> tell us about the budget. i'll tell you what, all the three budgets really disappoint me in terms of everything is tep years. how do we know what the president or congress will do in the next term? >> having a ten-year budget is silly because you can promise to cut futurspending in future yea because you're going to cut in eight, nine and ten, and they do that all the time. i think the lesson or the message that's coming through in europe and in the u.s. is the governments desperately don't want to cut anything on themes. so the way they're accomplishing that is by complaining about

austerity. but they never really cut on the governments themselves. if they actually did it would be quite pro-growth. >> there's an ongoing debate going on. versus when you take higher taxes and the government spends the money. what if that's the driver? what if all the hints of higher taxes? what about the psychological effect of that showing up in today's retail sales? >> that's right and the health care costs are going up so fast. so we haven't seen small business want to hire more strongly because of the upturn in the first quarter. so there's no leg to that recovery. that's what the market is worried about today. i want to go back to this point.

you need a government around the world who says we'll begin our own spending. not through new requirements on the private sector, but actually cut a cabinet department. if that happened it would be very positive for that country and the market would recognize it. portugal had been saying they were going to cut government worker salaries and pensions, but then their court system said they couldn't do any cuts autoall on the government. and so that's a big negative. >> david, another point. finish up. what bugs me is economic models always have assumptions. so do budgets. assumptions of growth and interest rates and all the other ones. tell us how they go off the track with the assumptions. >> we're living in a fantasy world where interest rates can be zero and you can project strong growth.

that just doesn't compute. we really have to begin planning by 2016 it's going to be a completely different world. but the budget is being sized out as if this ideal world for the government continues. you know, the government gets all the benefit from having the low interest rate because they're the world's biggest borrower. they're running the interest rates to benefit the government and big corporations and you don't get jobs out of that kind of a mix. >> and you don't get any action out of washington. the fed is setting a pk for decision making in d.c. david, it was a pleasure having you. i hope you have a good weekend. >> i hope you do as well. straight ahead on the program, more of our exclusive interview with liberty media chairman john malone. find out what he sees in the future for netflix. stay with us. where cutting taxes for families and businesses

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dollars and the trillion dollar industry that is taking over the market. we go inside the hottest trends in the etfs with the biggest name this the business. guys, we'll see you in a few. david faber meanwhile is joining me back at post nine, triuphant with more of his exclusive interview with john malone. >> triumphant. >> this is a huge interview. >> you're right. he rarely gives interviews. he was as much on his game as he's ever been. in a world where netflix can argue it's been viewed the most cable network and sports programming costs keep moving higher. a key question is whether a traditional bundle of programming can hold together. >> you've also been talking pretty openly about the bundle, about the cost of sports

programming, i mean, you're no stranger to the conversation that goes on all the time. will the bundle break apart? >> if you believe that 80% of subscribers will reject the sports content if they were offered at whole sale prices, which is sort of what i believe, then, in fact, you have an unsustainable model that just exists purely because of the competitive posture of the business. >> i tend to agree with you but they're signing up. >> and i think there's a lot of exposure in that personally. so i think that this is a transitional thing. in my opinion, i don't know how long that period is going to be, and how that pressure comes on is the cable guys and the satellite guys start to lose customers to the over the top guys. some of that economics will be reflected back on the sports

guys because they start losing advertising revenue. they lose filming revenue. they face the reality that you need to segregate your market like everybody else. maybe it's 20 bucks for the households who really want everything. maybe it's zero for the ones who don't at all. i mean. i don't know. but you start to look at a different model, and you're going to be forced to do that if you start to see major attrition of the traditional bundle. and the real question for the cable industry is can the cable industry replace that? people are not just going to stop watching tv? >> this is going to happen. i've been doing this long enough now that i can have an opinion occasionally. i mean, this is going to happen. it is happening. >> sure. >> and it's going to be slow at

first and then suddenly -- >> look at the kerry and ber berry on aereo. they say they will either shut down or transfer all the important programming over to a cable network and start that way. i mean, yeah, you can have a certain walled garn den for a while. eventually the stuff is getting too expensive for households. if they have an alternative, whether it's reed hastings. i can see him coming to the cable industry and saying why don't we have a wholesale retail operation as opposed to being adversaries? and all the sudden cable is distributing and promoting stuff that doesn't have a lot of sports on it. right? >> right. >> and so the cable guys see the

revenue has gone up over here. maybe it's a bundle. netflix with cable, right, with video. and over here you see the video, the traditional video package starting simon, this will happen, and it is, in fact, a very important conversation that takes place all the time in the media world. if you are paying an enormous amount to a sports network and then passing that along in subfees, you have to start to wonder is that sustainable? when your audience has the opportunity to choose other means of putting together their bundle. >> the cable companies and the sports operators need each other. >> if you have 08% of households that don't want to pay for

sports at all, and then you have a meaty package that can be delivered over the top, meaning via broadband with netflix and everything else, will that be enough to start to really break it apart because you have too many people leaving traditional cable. >> the intervention of congress one day against bundle. who knows? david, it's a great interview. up next we'll take you live to the masters tournament in augusta, georgia, a look at how tiger woods went from rock bottom to flying high once again. one company that really benefitted. with fidelity's new options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens and i helped create fidelity's options platform. it's one more innovative reason serious investors

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>> when the twoots tiger woods infidelity scandal happened, he lost sponsors left and right and his popularity plummeted. it's now getting huge exposure. brian schachtman is live in augusta, georgia, with that story. good morning. >> hi, simon. how bad did it get for tiger with the public implosion of his marriage, his game. all have you to do is look at his golf bag. when buick backed out, at&t pounced. they inked him to a multi-year deal just to have their logo on his bag. they dropped him in late 2009 after the scandal broke, and tiger had no bag sponsor. in fact, he just put his foundation on it. obviously, new deals were not

his priority, and demand was weak. he lost the number one ranking. by 2011 his reputation 't much, but he inked a deal with fuse science. it's a start-up supplement company, and basically tiger went from a $200 billion dow component to a $20 million microcap. >> one of the biggest challenges you have as an emerging company is how do you break through? how do you get your awareness of your technology and your point out there? strategic partnerships like tiger woods are a one in a lifetime opportunity. >> especially now. they bought in when the market for tiger was low. is he back to number one. he is in a relationship with popular olympic skier lindsey von, and even his popularity so the rise. >> well, it's certainly opportunistic, but, you know, also internally it was anticipated. we had every confidence that he was going to emerge and, you

know, for us right now the company is emerging too. we feel confident about our progress. the timing is great. >> low risk, high reward for the company. what's in it for tiger? well, they gave him a partnership, so if their products take off, even though the company's windfall could be huge. back to you. >> in the meantime, a great weekend of golf, brian. enjoy. >> the million dollar watch that's out of this world quite literally. smoke on the street. we'll be right back heading into the weekend. [ female announcer ] it's time for the annual shareholders meeting. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪

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