whalen. the world hasn't changed. >> we're going through an economicy slowdown and scare. the fact that i would leave viewers with is the dividend yield on the s&p was higher at the end of the quarter than the beginning. dividends went up to the stock price. >> you have no time, chris. >> yell at him. >> the economy's getting better. we have to restrain the central bankers. >> that's it for us, guys. it's time for "squawk on the street." see you. ♪ ♪ ♪ a good monday morning. the question is is it a good monday morning? welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber live at the nyse. there's a lot going on. we'll walk you through all of it. gold, citi, and futures are down open, down 50. as for europe keeping a close

eye on what they do to start off. the ftse is down about 54. commodities getting crushed again, gold and oil falling as the latest read on china's economy comes in worse than expected. dish network make a bid for sprint. we have all of the details coming up. >> and a strong quarter for sti group and the bank beating on both the top and bottom lines and will this lead the way for the rest of financials earnings. >> penney drawing $850 million from the credit revolver and we'll talk about what that means for inventories and capex. gold selling off 6% after data shows that china's economy grew 7.7% from a year earlier. slightly less than the 8% that economists were expecting and at one point this morning gold was trading below 1400 and more than $100 to lows not seen in more than two years. china's economy grew at 7.7 and that was less than the 8% that

people were hoping for. industrial production and retail sales, but gold is all people want to talk about. >> we've reached a tipping point where everyone feels every commodity has to go down. they tend not to just own the cash. this is europe. i know no one wants to think about this as europe, but europe is the big trading partner in china. they can't figure out where to put that stuff. if europe had any growth, we wouldn't be seeing this. people should know that our country is a commodity taker and not a producer like china and you're going to see the companies begin to report really great numbers because oil is a gigantic part of pepsico and general mills and the raw costs are going down and they won't cut the costs of the end markets and let's remember also the u.s. consumer, we were trying to figure out why the market wasn't saying we were so robust. 40 cents to 50 cents will come

at the price at the pump. i can't come up with negative other than for valero. >> what is the tell here? is it a broader indictment of economic growth worldwide or is it something that's related to more training mechanics than hedge funds? >> i think it's trading mechanics and they hit certain stocks. let's understand that there's a precious metal commodity that was precious metal being used as a currency and i still think that makes sense and it's a freefalling night. then there are these raw materials that have just been pounded and you really feel like let's take oil. we feel that if we looked away from china, we have a glut in this country, and the brent not only sent europe really set by the chinese with the saudis pumping and if oil comes down, i am not going to suddenly read this is negative. i can't. if we close below 1407 that is the first 10% plus decline over

two days in 33 years. >> we've been up for 12 straight years for gold and gold has been the place where everyone says if the central bank has been a place to hide. if you take a look at how gold has done relative to the u.s. economy. if the u.s. economy is really steady there will be people who say i don't want to be in gold. india is a buyer of gold and chinese searle of gold. gold got too high. you could argue, jim, why didn't you say sell it at 1800? gold is an insurance policy? i hope i never have anything happen to me, but i still buy insurance and we can say why doesn't that insurance go down, and the answer is it's because people hope doesn't get paid off. >> you have to remember where you buried it in your various backyards so that could be a problem. >> do you have a map telling you where it's been. >> the underground cavern and the odd job is there in your

hat. >> never put it in your backyard. first of all, there are animals who find it. >> oh, yes, the noted gold mole. >> look. gold has a place for people who are fearful. what we suddenly don't think that the u.s. government will be a surplus. is europe going to be a surplus. >> people will make the point that if you were worried about global investors rejecting government money, this is a good sign, right? >> you know what might happen? i know this will be a shocker and it's entirely possible that the receipts for our government will be much higher than we think and that the deficit will go down. we know it will climb the affordability act and because of medicare, but waps if the government had a windfall from capital gains and the government had a windfall from the mono spent. maybe the receipts will be big.

>> we should start knowing soon because they're all coming in. >> you all remember what day it is today. >> what about anything to take, deflation? >> yes. europe, i think, is incredibly deflationary. if the fed wanted to sell its bonds right now, huge profit. why don't the chinese repatriate the $2 trillion in bonds if they're really in trouble. >> i caution people not to regard all of this as negative. >> we like commodities when they come down. the celgenes and biogens, now we know why they go up. they go up because if commodity inflation is really tame then in 2015,' 16 we value them at a higher level because we fear inflation cutting off the multiple. take a look at these stocks. >> right. look at celgene and biogene. how do they gallop? they gol up because they think out years are suddenly worth more because inflation is not theiren m enemy. >> it helps cash flow when you

can assume inflation is very low and the borrowing costs are low. >> it helps people get credit at low prices. >> so the falling commodities are good for u.s. stocks and that seems to be what i'm hearing you say. >> they own gold and s&p futures and people who own copper and they own s&p futures in order to finance their incredibly wrong gold and copper positions so we get hit. if you're general mill, what is in a box of cereal? grains, the grain complex is going down. the glassine bag, the cardboard and finally, the gasoline that takes it from your place to the store and that's a single part of the gold equation. we cannot salute gasoline going higher, right? we like gasoline going lower. >> isn't that a good thing? >> generally it is a good thing.

>> gasoline say tremendous tax on the american people. >> all right. let's move on to -- well, just a very interesting morning. >> can you explain it to me, will you? >> i wish i could. >> dish network offering to acquire sprint nextel for $25 million in cash and stock. that is $ 7 for sprint. symbol, s. then a deal that's been agreed to by japan sof bank -- they agreed to buy the bank, and he's the controller in dish and the richest man in colorado. he's very -- >> doesn't malone live in colorado? >> yeah. >> doesn't ted turner. >> it's a titanic battle. >> it's a battle for net work. >> where is dan hessy in here? the ceo of sprint?

he's a tall man and the other guy is a man. are you telling me the tall man and the man are now out? >> not necessarily. we have a lot of things. there is a look at dan hesse, the dish offer which have been in the workseses for a long time the people involved in the situation tell me. when dish got approval by the fcc for its ownership of spectrum. there were some waivers that were needed and that was way back last year and it put it in a position to start thinking about what could we possibly do? earn this in spectrum and it's lying there, it's fall low and not being used and you cannot build another wireless company from the ground up even though you have the very valuable spectrum. he's been looking for a partner. he's been trying to figure it out. clearly it goes back to the strategy where one would assume mobile devices are the key. i right now have a company that

brings entertainment to your television, but i need to be in a position to bring all sorts of things to your mobile device, and this, of course, would allow that to happen being the spectrum that he has now being contributed to an overall sprint, potentially clear wire and dish combination. let's take a look at the metrics and you can think about it. i think we brought up the deal points themselves, i'm not sure in terms of the cash and the stock. it's seven bucks a share in cash. i'm sorry $7 a share $4.76 in cash. keep an eye on shares of dish, by the way, today. very important significant part of the currency they would be exchanged in this. he got a highly confident letter from barclays and he hit the debt markets for enormous sums. we didn't know what he would do with the money. he's been borrowing cheaply which is the story of so much of what's gone on and fueling m & a. now we know what he's trying to

do. trying to break apart the sof bank deal. sof bank's bought 20% through a convertible that they did when they announced a deal. they are currently online to buy $12 billion worth, to spend 12 billion to buy 55% of what's out there now at $7.30 a share. i know it gets complicated. >> there is a look at the softbank deal. >> improved customer service has this combination of softbank of tremendous network and all of that goes away and -- does charlie ergin has enough money. >>some. >> if the deal were to take place to their ebitda. that's a lot. it's not impossible, but that's a lot. talking to malone, that's where you generate a lot of cash flow.

an enormous amount. 32% would be controlled by shareholders. he has full control, but here's the thing, there are cost synergies here that they don't have with softbank at all. you are contributing spectrum that doesn't exist right now. you get softbank and sprint together, great. you have a deeper pocketed partner, 30% of the company still trades. with this deal, you have a lot of spectrum and you have a lot of cost synergies. so there's more -- you have to pay it some attention. >> it could be at&t wireless, verizon wireless and dish. >> and dish which would be incredible. >> ergin has a website dedicated to this offer called complete dish solution.com and makes a metaphor that he's used in the past called seinfeld. >> you don't know how they're related until the very end of the show going to your point about why he was buying so much spectrum in the first place. >> and why he was amassing,

hitting the capital markets to raise cash, but it does get back to a science question to a certain extent. malone and i had the conversation last week, he said the physics would not allow you to deliver broadband into the home. meaning you can watch the netflix on moves hdng strained via a wireless connection in your home. ergin may think they can deliver a robust enough package that they can do that. you can replace the cable company. you have dish company again, you can replace your broadband provider. >> something separate than wi-fi. >> wi-fi is wireless within your home, but it's coming in through a cable, a wire. this is no wires at all. could you do it? that's the big question here. i don't know if ergin somehow believes you can or that you will simply be using so many wireless devices in your home that you don't care as much anymore, but you still might need a broadband connection even

with your big dish offering. >> on squawk, becky asked you a fabulous question about the yen. can softbank compete with a weak yen? >> they've got to put up $12 billion. remember, they bought 3.1 billion of warrants or convertible at 5.25. they need 12.1 billion at closing to buy the 55% out there now at $7.30. what's that going cost them? do they hedge it ahead of time. they're borrowing that money. they're buying it back, which is helpful when doing the currency translati translation. great point from becky. softbank, they're scrambling this morning. >> it's a bidding war and it's hostile. >> conceivably could be. >> and softbank has a right to match. there is a $600 million break fee if sprint receives a higher offer. there is a series of rights to match different from the dell deal where silverlake has it when they come back.

>> a lot of complexity. time, value, money, the other deal is close to closing. >> you do not want to sell hess and you do not want to sell sprint. too much is happening. >> those are some of the deals breaking in some form. >> when we come back, jc penney finally trapping that revolver. just how bad is the retailer's crash crunch. plus what a year it's been so far from netflix and it seems to permeate everything we do. btig's rich greenfield has been crunching numbers and he's been all over the story. take one more look at futures. a negative open here, but as jim said a lot of it resulting from what gold has done today. a lot more "squawk on the street" in a moment. just set your start and end price. and let it do its thing. wow, more fan mail.

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citi is out with its quarterly earnings. it earned $1.29 a share. it did beat forecasts. revenue helped in part by improved results in city's capital markets unit. they did release some lost reserves, guys, and the capital ratios looking okay as we work through our financials this quarter. >> i like the quarter for multiple reasons including that the left for dead portfolio has come alive. it's had good revenues and it's down to $149 billion, but it was at one time in the 400ses. loan loss reserve has come down a lot. revenueses up 15% for city and that interest margin was good

too. this is going to be the bank that people are going like because the tangible book no one believes in it, but it's been back to 50. maybe it was something better than we think, but this is a nice quarter and it's good to see because these companies are owned by a lot of the viewers. >> a big week for banks. bank of america, and according to a lot of tech, as well. mcdonald's on friday. in general and we've heard the term uninvestable related target at some banks and you wouldn't put city in this group. upon closer review since the morning. i spent the morning going over wells and j.p. morgan. i was too fixated on the mortgage line. the wells fargo cross-platform businesses they do. the wells fargo fee-based. i will say this, the wachovia deal which a lot of us felt was a bridge too far is a huge win

and this wells fargo is beginning to look like a retailer that makes a lot of money every day. >> right. >> j.p. morgan was good, too, but the wells, look, if you're too fixated on any one line you'll miss the bigger picture and no one liked the mortgage line. they were also saying in the mortgage line, we said it wasn't going to be that good because they're such a good part of the mortgage money. every other line of wells was fabulous. so i went to withdraw any negative feeling i have just because again, this is one of those things, you read the story and you get it wrong. it's the conference call. the conference call was fabulous. i know you interviewed -- >> we did the cfo on "closing bell" of wells fargo and he said the mortgage is only 13% and something overall. that being said it had been an important growth component for the company that is no longer growing. >> that's yet stock didn't go to 40 on the better than expected. i would love to see mortgages do

better and at the same time these companies have become will have able stocks because they're making monemoney. >> and mortgages weren't that good and wachovia. congratulations to wells for having that vision. >> when it comes to making money in the beginning of the week cramer is off to a good start. his mad dash is next. a lot more "squawk on the street" from the nyse straight ahead. but we can still help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary.

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we're six minutes before the opening bell and time for cramer's "mad dash." isn't it nice to have a deluge of news. >> frantic. >> let's get to one we haven't discussed yet, jc penney. >> piper saying they're burning through all of their cash. they take it to 92 cents and there's tremendous remorse among anybody who is involved in this thing, but steve roth, a man of tremendous honor and perhaps the greatest real estate investor of our era. nothing happened. >> vornado, vno, he says hey, we made a mistake here in jc penney. we sold 43%, of our ownership stake. >> they are more a searle than a buyer and took an $87 million loss on the position.

what also begs the question, though, jim, what might they have done instead of investing in toys "r" us? the ceo recently out. instead of investing in jc penney would they have been better off investing in their own business? >> pimco, don wood, maybe the best shopping center ceo, frt, these guys are hoping that guys go under so that they can release. there is a shortage of maul space because it's hard to build. shortage of shopping centers developing. yeah. investing in your own reits is amazing. >> what about pulling down on the revolver? >> it's been a game of whether he can make it or not. fabulous pieces going on. "the new york post" today. all of these executives being blown out. "wall street journal" tremendous article about the damage done to the culture and i don't know if they can pull out of this tailspin, david. it's been a windfall for anybody else other than them.

incredible moment. incredible moment. that's a $17 billion revenue company under ullman going to 13, maybe to 10. i don't know how you can spy the reverse leverage there, big story. >> they need to re-invest to undo what was done. >> listen, we have four minutes before the opening bell and the bears are sharpening their claws and certainly in commodities, wow! fasten your seat belt, the opening bell coming up next.

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which isn't rocket science. it's just common sense. from td ameritrade. you're watching cnbc "squawk on the street" live from the financial capital of the world and the opening bell set to ring in about a minute. we are still 71 trading sessions into the year without a three-day losing streak, jim, on the dow. that is the longest since '76, the longest period into the year. >> it wasn't so hot. >> it was kind of interesting. i mean, look. we are in this moment where you suddenly realize now i know why kellogg goes up. it's the roller coaster coming down dramatically. 30% higher, multiple higher because of no inflation to speak of and interest rates are slow.

it makes sense. it makeses sense. >> it's nirvana. >> no. that's tractor supply. that was the key, just so you know. >> we are go about to get the opening bell down here at the exchange. [ opening bell ringing ] >> the nyse posting the second annual energy sector roundtable and over at the nasdaq the independent petroleum association holding its annual oil and gas symposium in new york. we covered gold. we covered citi. we covered dish and sprint, and a couple of other things going on and you want to do life and thermo fisher. >> let's talk about one of the bigger deals being overshadowed because bold charlie ergin coming for the bid for sprint, but let's start with tmo. take a look at shares. normally we want to look at life, but we all know an auction has been going on for this company for quite some time.

it was last fall when we found out management was trying to orchestrate the lbo. they put it all up and they got a lot of strategic looking and that's a key move and somewhat surprising although there are a lot of cost saves here potentially and this thing could be accretive very quickly. so you take a look at life which is up a $76 all-cash deal to acquire life by thermo. who has been interested from the very beginning of the formal process when it began and it did have to file this with sigma aldridge. he became a significant bidder here and you have private equity which in speaking to people arne the indication, says the consortium might have been able to come up with $70 a share which is a big number. with strategics and the ability to get accretion, savings are always in a better position.

they'll get an equity offering to pay this off. >> i can speak thermo fisher, one of the great companies. let's think about it. if there are miners, which are the biocompanies and the picks and pans and gene sequencing and a one-stop shop for all of these great companies that you keep reading about doing great things and amgen, a gilead. this is a remarkable company doing a remarkable thing, and i like life. i've had life on the show. they're fabulous. they do have the modern-day gene sequencing equipment that we ned if we ever go to the next level for companies trying to save people's lives. >> smaller and in terms of what it costs. in a doctor's office. right? >> they'll look at your dna when you're a baby and they'll see that you're susceptible to these illnesses and that's the holy

grail. >> the big gainers, sprint is number one, life and thermo, citi, and the next biggest is netflix, jim. on the note from rich green feel, 250 price target. i think people are all kind of clustered around the idea, and i know we'll have rich on, closer to the idea that net flishgs is just becoming a household way to be able to crank into what everyone -- you go to a dinner party and it's downtown abby. where were you on sons of anarchy. how are you doing on "mad men." >> "house of cards." you have no way. netflix is the way. netflix is the de facto winner. reed hastings put out these numbers, the hours of streaming. >> yes. >> it's a brilliant business mod whole they get it right and everyone is always worried that they'll run out of money. i have to tell you, i'm not worried. >> they say they're the earning call, if not the better of any cable network in term of hours

watched. so the most watched cable network is what you would compare it to. >> incredible. out of nowhere. >> with pricing that some say judging by hours watched per month is still a bargain, compared to cable. >> i have to be able to pay more. it's another one of my bills that i don't each notice it. i did suddenly deal with verizon and found out that as a family i was dramatically overpaying, but you just layer on, layer on, layer on and netflix is a relative bargain given how much i'm on it. >> chipotle reports on thursday and you didn't get to cover it on the mad dash. easy compares coming chipotle. you do not forget, this low cost store that you will hear over and over about. the raw cost of commodities are coming down hence why panera had a 52-week high. these companies are a compilation of labor, food

stuff, real estate, and labor is not going up that much and these guys have dealt with the affordable care act already and you know what? chipotle has been in the doghouse for a long time. >> is it ready to come out? >> as they brought down their torrid same-store sales. >> you go from double digit to high single. meanwhile, have you seen mcdonald's, carl? >> we'll see more of them on friday. the value is doing well and the stock has shot up. i know we'll hear numbers friday, but in the meantime, they too, beneficiaries of raw costs, what a juggernaut. >> you said get interested at 85 or 89. >> the betting against thompson? he's got a menu -- a diet menu coming, that will make me feel like if i want to have an energy breakfast without putting on cholesterol you go to mcdonald's. >> there will be menu changes in the next couple of weeks. >> vital. >> the gop is down 5 1/4%. that kind of a violent move over

this short amount of time, you do start to wonder who will get caught in it, not in the gld necessarily, but in the metal itself. >> and that's what happened in 2008 and this incredible dive in commodities and it turned out there were margin clerks everywhere, calling people, put up capital. put up capital. many of these funds, leaver up dramatically in order to be able to have full positions in something that when it declines they don't have capital in it so it's a frantic capital called global. leverage workses great on the way up and it can have deleterious effects on the way down. >> talk about the way up, let's take a look at sprint shares and the 17% gain there and that is above the implied price not only of the softbank deal which is complicated. you own sprint right now, you get 730 for 55% of what you own, but also above the implied price

although let's look at dish shares because i do want to see where they're trading given that as a cash and stock offer. >> is it too hard? >> well, it's hard. it's hard to get a borrow there and hard to set it up from an r perspective. >> did he do that purposely? >> maybe. >> they're so smart. there you look at dish shares, not down that much. by the way, one of our viewers alerted me to the bloomberg story to give credit from some time back indicating that moss hassan had generated from the web. >> a viewer. a viewer. not unlike the viewer that nailed tiger woods. look at how smart the market is. oil coming down. gasoline coming down, walmart going up. how many people shop at walmart each week and they fill up? >> many. >> many. >> i got that from a show that i watched called the age of

walmart, many times. >> i'm glad you remember me. >> believe me. going to wral mart and mcdonald's david and i have you covered. >> strawberry pop tarts, favorite thing in a hurricane, i can tell you that. >> exciting market, carl. this is one of those days when you wake up and say holy cow, i held on to the sprint and i'm making money. i can't believe there are takeovers and netflix, that squeeze is going to continue. it's a squeeze. >> and it's going keep going? >> i think that this company is too cheap if you're a microsoft. too cheap if -- we haven't mentioned it yet, how much is apple down? it's monday so it's not that much. >> $3.47. that's an underperformer on monday. >> yeah. down 17% in the first quarter and something like that. >> you mentioned microsoft, the journal today with a story about how they, too, are working on a touch-enabled watch. >> that's what we want. we want a watch and we want a higher stock price.

apple, i will point out, every day there's someone who says there that the weakness in the numbers is in the stock, and i do think that's true. i do think it's a possibility and how dip is the dipping going to be and he's been pretty good on it. i don't want to short apple, i cannot believe these both are going up. that is a sign that you should make a deal. you should call your banker and make a deal. >> it's's great point, jim, and it is one of those positives as to saying why there could be more merger acquisition activity along with, of course, the incredibly cheap financing is the fact that oftentimes investors send the o choirer stock up. >> it's not as though it will add to the value of the teal where the acquirer was going up, but there are still plenty of

things that mitt ghat terms of regulatory or shareholders who say you're making a mistake. they're reluctant, and if the bankers want to let them know over and over and over again, do a deal, look, look, look. >> if commodity inflation will be nil and pfizer. look at that. we're seeing some of this -- cisco. these are -- ralph lauren, there could be raw cost cotton coming down. the whole complex is going down and in the meantime citi keeps ramping. >> up almost 3% today. >> that's a big move for stay. >> where's vikram pandit? pandit, i don't know, vic, anyone call him vic besides me? >> let's get to bob p/es isani.

>> there's one game and that's to figure out if the decline in the commodities will affect the broader market. you would think there would be some because this is related to slower, global growth. you saw the chinese number, 7.7%, a little bit below expectations and not dramatically so, but still notably. slower global outlook is the cause of what's going on here. not surprisingly, precious metals are down, mining stocks are down, the silver etfs are down 9%. the gld is down 5%. the etf for miners and copx is the symbol and down 4.5% and all of the big names and the iron/ore names are down and we have -- bap. [ no audio ] >> so -- i think we lost bob's camera. apologies to bob. a bunch of wireless signals moving around this room. rick santells at the cme in

chicago. hey, rick. >> what an interesting couple of days, huh? if you look at a two-day chart of ten-year note yields. it's kind of interesting and you really get to see how interesting when you open the chart up toward the end of last year and see how important this violation of where we closed the end of last year 176 and where 170 certainly looks like it will be a yield support area and really, all of the action that i see is predicated on april 4th, bank of japan, big bah zhukka. if you look at the ten-year jgb over two days. we've gone from 54 to 64. if you opened this chart a bit you can really see started on the day before the bank of japan meeting and we've basically gone from a 44 to a 64 on that period on the ten-year and what you don't see is on the fourth it actually had an intraday low of

32 basis points. i can't show you a chart of two-year jgbs, but i can talk you through it. on the big day of the bank of japan meeting. where they close today at 14 basis points. when was the last time a twhof year jgb was at 14 basis points? at the end of 2011, 16 months. watch the yield curve in japan it should demystify much of what you see in these commodity positions. back to you. >> rick santelli in chicago. let's get back to pisani. bob, we can bring guests from around the world, but not from 15 feet over there. ? we are literally 15 feet away. carl and i and david. it's amazing to me. anyway, my point today is watch the financials and some of the other stocks. you notice we're holding up even though the commodity markets and the commodity stocks are to the down side and that's a positive sign for rotational play in the market. it's very much a concern, but

look at how the stock market is reacting to that. i've been asked about gold. i did that big special on gold, and i spent a lot of time with gold dealers. this is the perfect storm for gold right now. you have the deflationary concern anies cyprus proposed sale of gold, and what you've got and jim had it right is forced liquidations. you could be as low as 5% on the comex. you will get margin calls and this is forced selling that's going on here and the big question, i would not be surprised to see margins raised on commodities, particularly gold, maybe even as soon as today. i'm not an expert on it, but that would be the logical thing to do. a lot of people messaged me over the night and this was panic justified and european banks and they'll be sellers of gold and this gets a little bit complicated because under the rules of the ecb and what's going on, they can't sell gold

to finance the governments and they can sell gold to finance losses on the central banks and that's what the proposed idea was in cyprus. in theory, european banks could do it if they were financing losses. but i think it's very unlikely to see that happen and by the way, there are agreements between the central banks that limit the amount of gold that can be sold on a yearly basis. i see this all as a little bit unlikely. bottom line is the overall market is holding up very well. >> in the next hour and i've been asked a lot to explain the relationship between the price of gold and how gold etfs act. guys, this is a very interesting question and i'll talk about it in the next hour and show you how that relationship actually works. right now the market is sitting not far from the low down 74 points in the dow. back to you. >> i can't wait to hear that because a lot of people use the gld and they don't use the actual bullion, but i think that will be a terrific discussion.

time now for more on the sell-off in gold. let's go to sharon at the nymex. >> everyone is talking about gold right now. of course, everyone is coming in every market and everyone is interested in where it's going and the gld and the gold etf market is a key to the factor we're seeing here. a lot of the futures are watching gld as well. perception is key and investors, if they don't want to hold gold any longer, they'll see gold tumble and they've been trading all night long and the volatility they say is unprecedented in the last 20, 30, 40 years that many of them have been trading and as bob outlined, many of the key components that are impacting gold and the margin calls are key and with increased volatility we often see the cme group change margins and we're looking at the options market, very, very-y volumes overnight there, as well and then keep

your eye on the technical levels and the fact that we're looking at the tournament prices breaking below that level on the weekly basis and that has also been key for what traders are watching. the impact here is not of course, on the gold market alone and we're seeing across the board selling in the commodities market and oil prices heavily under pressure, as well. the only thing that's a bright spot that investors and consumers want to know, what's happening at the gas pump? >> we're paying millions less for gasoline than a year ago and it's the national average and 30 within a week's time. >> netflix shares have been on a tear, as you know. now btig's greenfield will tell us why the stock is going 250. the president of the royal caribbean international with a new cruise ship and how is he navigating all of the scrutiny that industry is facing. the early movers, the dow down

82 and we're back in a minute. everybody has different investment objectives,

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>> all right. take a look at shares of dish network. we pointed out earlier the stock did not appear to be suffering very much. the overall market has weakened also and it is worth noting that is the key currency in the potential bid or this bid for sprint, but that obviously has the effect of lessening the overall value of the bid given that as part of the currency being used for it. very interesting developments here as we noted many times. softbank, as i said, had hedged the $12 billion it would be spending to acquire 55% of the stock that's currently out there at 7.30 a share, but any increase it would have to do to compete with the likes of charlie ergin, it would be hurt, it would seem, by that falling yen. >> for people at home who may

not know ergin, if this is -- say this is a card game. you would put money on ergin versus softbank. >> i don't know -- he has a strong reputation as a tough guy, and we know he's a man. >> or wants to be one. >> but charlie ergin is a master poker player. very hard to discern his overall am bigs, although here we do get some sense that he also believes he doesn't want to be in the satellite business and now he's trying to figure out a way to use it. i find this very gutsy even though we first heard that he might be involved with hesse and softbank, match made in heaven. wireless networks to compete against verizon and at&t and that was the reason it made a lot of sense. suddenly we have a psychological reason and he wants to become

at&t-verizon ergin and he seems to have the horse sense to pull it off. >> it could be. it's a very, very interesting story that is only evolving and you're the only guy who knows it, and i congratulate you. >> thank you. >> when we come back we'll get "six in 60" with jim in just a moment.

>> let's get "six in 60." net rail with terrific access to mexico. merrill says it's too hot. >> citi, raising a target on gm. they're saying onstar is an advantage. gm is a cheap stock. they do have a lot of exposure. >> bernstein on amx. >> mexico's been pretty hot, but they're saying sell the stock. >> jefferies is saying sandisk. >> these have been the hot ones. they are commodity players where the supply is tight. >> jpm, buy to neutral and baric. >> thank you very much, the gold stocks are in freefall like you wouldn't believe. higher cost to bring down the gold. >> and on that line, citi cutting freeport. >> insult to injury, freeport has been a disaster. remember, this is the stock that fell the hardest in 2008-2009. history is repeating itself.

>> yeah. >> how about tonight. what's going on? >> we can't speak to as many energy companies as you'd like to, because this is a big decline in oil coming and congratulations to dr. ron cohen and a tremendous new drug on stroke. the stock is up 9% and you want to hear more about that. >> a heck of a way to kick off the week. i'm exhausted. is it thursday yet? >> we'll see you at 6:00 and 11:00 eastern, my friend. >> simon hobbs with a look at what's coming up. >> hey! happy monday morning to you. in the next hour of the program we'll go to the gold picks and hear why bullion could fall another 100 from here. and we'll hear why there's an upside on netflix according to btig and mickey ar, lson from carnival and they'll be here to talk cruise lines as congressional inquiries are threatened. stay with us. this is cnbc on a monday morning. ♪

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sell-off across the board. gold and oil being taken to the wood shed again as the latest rod china's economy comes in far lighter than expected. we'll have a trader when to buy the metal coming up, plus what the plunge means for those gold etfs and it's a nice read on citigroup on both the bottom and the top line and we'll read through what the solid quarter could mean for the big banks on tap. >> what a year it's been for netflix and how powerful is the video streaming service and we have the analysts crunching the numbers and just initiating coverage with the buy rating. >> an interview with royal caribbean's president and ceo. how is he navigating the trouble surrounding his industry courtesy of mickey arrelson of carnival. breaking news on the home builder sentiment and let's send it over to diana. >> that's right, simon. home builder sentiment falls two points in april. that's the third consecutive monthly drop and it's a big miss. expectation was for a one-point gain. the national association of

homebuilders monthly sentiment index now stands at 42. 50 is the line between positive and negative sentiment. the chief economist david crow says supply chain for building materials, lots will take time to establish themselveses in a recession and builders are feeling squeezed by higher costs and limited availability issues. current sales fell two points, buyer traffic fell four points and that's not good in the spring and sales expectations, though, rising three points to the highest level since february of 2007. going regionally, the northeast was unchanged and home builder sentiment fell across the rest of the nation. once again, home builder sentiment missing expectations in april falling two points. back to you, carl. >> thank you for that. diana olick in washington today. there's been panic selling in gold, but we have a trader who is still bullish on the metal

long term and thomas joins us from the nymex. >> good morning. down more than $100 and 1397. we did get down to 1384, i believe. what are you waiting for? 1300? >> well, at this point, we look at the retracements in terms of the technicals and we had a 38% retracement from the 681 low to the 1920 high which was 1450. we blew through that which was a 50% retracement so we look to see if it reacts if it's down there. >> any guesses as to how long it would get there? >> at this point it would happen probably wednesday. >> factually. this has been a pretty drastic drop and volatility in the options market has exploded overnight and just a lot of margin calls and people liquidating their positions and a lot of passive longs that were in the market are out. most people that bought gold last year are under water so they have to liquidate their positions. >> beam want to explain it with these big fundamental explanations, thomas.

rosengren with cyprus having to sell their supply. do you think there's anything to do with that or is this a couple of traders that got caught very wrong. >> i agree with the latter. i think it's a convergence of a lot of different factors. there was a lot of negative sentiment. we had goldman coming out with their bearish short call and then we had sock gen and people were getting nervous and the loans liquidate. those sometimes give you some opportunities to maybe catch an overextension and get long and just what happened, and it overextended there and people can get short and faded, basically. a lot of people were bullish at 1800 and they're not doing well right now. everybody's bearish here so maybe you should look for an opportunity. >> is it possible to cut through and say this is what gold failed to do despite all of the hysteria and this is why we are selling now. exactly. the fundamentals are there and

it's not responding in a way you would think it would, so you have to look at that. you can't buck the trend, but right here, how can you be bullish. >> unlike other assets, it doesn't generate dividends, therefore, as it comes down, do you find yourself in uncharted territory or do previous price levels give you a clear map that at what point it is likely to break. once we broke that 1525 level, that was the trpel bottom. so you look at the psychology of the market and try to anticipate, i guess. 1300 is 50% and see how it reacts. >> 52% retracement is 1150. a pretty large decline. >> a lot of our viewers like to have some exposure to gold

either through the outright purchase or through the etf. should your strategy at this point vary depending on which avenue you took? >> no doubt, people can't be too overexposed to it because of the volatility. i think you should always have some exposure to it for currency risk, but you have to keep that exposure to a minimum and be able to weather the storm and when the market goes down you are able to buy more, basically. >> if you're feeling aggressive here and say we get down to 1300 and you want to take a step in, is the etf, you think, the easiest way to go? >> the etf, you can put on options strategies also that give you less exposure to the downside and give you upside exposure, but you need to be careful with the margins because they can really hurt you. >> some people know exactly what you mean on a day like today. thomas, thanks a lot. a huge story. thomas joining us from the nymex. gold's rough day gets us to this morning's squawk on the tweet. gold isn't just losing its luster. it is so bad right now.

gold is what? tweet us at @squawktweet and tweet thus morning. it's interesting what a powerful topic this is. if they're not into it, they like to talk about it and a lot of them own a lot of it. >> gold has done very well for a long time and if you look at the all-america survey, it is the top asset of choice for most americans. regardless of what you may think of that, that is a fact. >> yeah. >> another story we have been following closely this morning, dish network lau $25.5 billion bid for sprint. $17.3 billion of that would be in cash. $8.2 billion in dish shares. it's worth $7 a share or at least it was when it was announced. given the decline in dish shares that was the case and it was the current deal that sprint has to be largely acquired by softbank

and made a $bell onlast year. the final part of that is softbank buying 55 a share of sprint and that's where you figure out that sprint is already there. ? a combined dish, it has. 32, don't forget charlie ergin with his shares would control the combination. the key for it why it might be a powerful bid is the $11 million in synergies given the spectrum that would be contributed to the overall company as a result of the ownership by dish of a lot of wireless spectrum that it has been purchasing for quite some time. it's also been issuing debt to raise cash and that would be what it is now using for. it would be, however, fairly highly levered at 4.7 times ebitda as is currently the plan with sprint and softbank although clear weir's special

committee has been trying to figure out a bid that was received previously by dish. >> all of it is quite confusing. sprint shares are higher and dish network shares are sharply lower now and softbank will have to figure out what it wants to do if, in fact, this bid is deemed superior by a special committee one would assume by sprint's board of directors. softbank had hedged itself against the $12 million it would be spending to buy that 55% of sprint, right? or when the deal closes, but any increase from there it would be taking on conceivably that weaker yen as a problem. it does have the right to match it as a $600 million break-up fee, but right now we've got to hear from sprint. they have no comment, as you might expect at this point. the combination would be a potentially powerful one and right now it does not have the financing in place for the deal although barclays, the banker for dish, says it is highly

confident and it would raise the $9 billion in debt financing that would be needed and a deal that would not be taking place for some time versus a soft things here and a lot of moving parts and it is interesting to talk about the group of products that they'll be able to offer the consumer and basically your wireless for strong kecks for the devices to download a lot of entertainment and your video into the home. >> not your broadband connection from the -- indicating we're not going to be if a position to bring an enormous amount of xat into the home, but a very interesting deal. >> for sure. >> it will be a critical week for mickey arelson and his carnival cruise empire. today, they put the cast an of the costa concordia on trial for manslaughter causing a shipwreck and abandoning his vessel in

february of last year. they want four other crew members charged over the incident in which 32 people deed. here the chairman of the senate commerce committee is accusing mickey arison of blood suck off the american people for failing to reimburse u.s. taxpayers for the cost of the navy and coast guard rushing to carnival's now 90 marine accidents in the last five years. democrat jay rockefeller may move for congressional hearings and/or changes to legislation which allow carnival to pay a total u.s. tax rate of just 0.6% due to its offshore registrations. with varn cal's annual shareholder meeting looming on wednesday, mickey arison has released this video. >> these incidents have been extremely unfortunate. weir now working very hard in an overall safety review to make sure that we're doing whatever is necessary to make sure that it never happens again. whether it's fire suppression systems, redundancies or other

things, we are absolutely committed to making sure the ships are as absolutely as safe and redundant as possible so we don't have that kind of incident again. >> the interesting question at this stage is whether arison will turn up at the shareholders meeting despite that he's chairman and ceo. >> you saw the president of royal caribbean international will be on the show exclusively in ten minutes' time. >> talk about responding to it in a control environment. >> let's hire a freelance camera crew and show people inside. >> the wall street analysts say netflix yieusers watch as much video per month as hay do on cable networks. we just initiated coverage on the shares with a buy rating a $250 price target. rich greenfield will join us live later on. and we'll continue to fall gold

and oil and we are now $100 to $13.96. back in a couple of minutes.

now to shares of citigroup as you see right there up 2.5% after third quarter earnings were ahead of estimates on both the top and bottom line. jeff clark has a buy rating on citigroup. his target $49 a share. jeff, many are saying a good quarter. i would assume you agree.

>> i do. there are a lot of things to like. there are always things not to like, too, but strength in the capital markets and relative to expectations was good and what stood out to me was credit quality in the north american mortgage portfolio. the delinquencies were down almost 19% sequentially and that's really good news for any bank with a large mortgage portfolio and specifically for citigroup where they've started to release them, and capital building for the next couple of years. >> they're 9.3%. my understanding, though, when you tall actually take in what they're going to take in from the closing of the sale of smith barney, currently a joint venture, that thing can go up to 9.7%. i wonder if you think there will be a potential possibility for them to refile a capital plan with the government and maybe ask for dividends or repurchases. >> i think there is a -- i think they could and maybe should, but i don't think they will. the buyback they got approved

for was pretty light compared to what they could have been approved for. they underpromised and overdelivered and it's a much bigger buyback approval and an increase in next year's and probably not an additional one this year. >> what about the idea that as a global bank, the weakness in europe and potentially some weakness in asia, does that start to hurt or is it already being accounted for? >> you know, europe in general doesn't hurt citigroup disproportionately because in developed europe it's not that big and the places where they are big is that the consumer businesses in the emerging markets and that was one thing i didn't like in the corridor. the international consumer loans were only up 1% and that seems to be slowing down and that's been a nice differentiator for citi and you need to get details as to whether they that can accelerate and still growing better than u.s. loans and that growth rate seems to be slowing

down. >> as we work our way through the earnings season. we've had j.p. morgan and wells fargo. now we had citigroup, and are you re-ranking the attractiveness in your sector? >> i don't think so. i mean, what we've seen so far is the capital markets are holding up better than people thought and that's expected. in my opinion, people underestimate the seasonality for most of our names and these numbers should be good news for goldman sachs and morgan stanley. the credit quality improvement and north american mortgage is that city and good news for bank of america though city did build more reserves on the litigation side which is the private label and mortgage related which is a negative, and citigroup is the stock that i like best in the coverage universe and morgan stanley is a good place to be long, as well. >> how does that impact these big names?

>> i'm assuminga i lot of them have made a lot of commodities over the years. to the extent it helps consumers spend more could be economically good. >> commodities trading is always tough to tell, but generally speak, volatility and a trend is a good thing, to the extent this could be trading activity and make commodity trading better because the first quarter was not so good in commodity trading and there wasn't a lot of volatility for these guys to trade around. >> finally, jeff s it your expectation that it will continue to benefit from lower credit quality and lower credit costs as well? >> i think so. people underestimate how bad things will get in the bad times and how good things get in the good times. we're looking at reserve coverage of loans that probably double the charge-off levels are or more. i think there's still a lot of

room for down side or improvement in charge-offs. so i think credit and especially for the money center banks will be a nice tailwind through this year and into next year and probably more of a tailwind than people generally expect. >> thanks for your time. appreciate it. >> nice to be on. >> jeff hart. dow is off the lowses and down 13484 points. we were in the triple-digit losses earlier in the session and gold continues to slide down 105. it's awfully close to the lows of the session and bill gross of pim dough just tweeted, okay, so i made a bad call at the "barron's" roundtable. the world is reflating although some would look at ecb and say not everybody is on that boat. >> reflating. i guess it depends on your perception. it's been a rough year for the cruise line industry. certainly, it's been a rough year for mickey arison. now the pros pekt pect of

congressional inquiry. what are they planning to do with the design of their ships moving forward? we'll talk through all of that with royal caribbean international's president and ceo next on cnbc. it's as simple as this.

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>> after a string of mishaps, carnival will be back in the spotlight. not only is it offering its annual shareholder meeting -- so through all of the negative headlines associated with carnival, is it an opportunity for carnival's competitors and is it an opportunity for royal caribbean? over the last six months, shares of carnival are down about 9%, royal caribbean is up about 8%. here for a cnbc exclusive is adam goldstein, president and ceo of royal caribbean international. good morning. >> good morning. >> so obviously, we have to talk about mickey arison. we'll talk about the design of the new ships in a moment, but mickey arison is clearly in the headlines. if rockefeller goes ahead with

hearings on capitol hill about the state of the cruise line industry, and the tax that it's paid and the way in which when thery's difficulty at sea, how does that affect your business? are you ready for that? there have been congressional hearings in the past because there are a number of different agencies of the government that oversee our industry. most notably, the u.s. coast guard and senator rockefeller is an important and powerful senator with a point of view and we've been in front of him before as an industry and if he sees the need for hearings obviously, we'll be in front of him again and we'll stress the economic benefit that we bring to the country about 40 billion dollars and jobs traceable to the cruise business. >> we were on rock center a couple of weeks ago that mickey arison only pays 0.6% in taxes. is that common? ior are you paying a similar

taxation in the u.s. >> i can't comment on the taxation. countries don't tax each other's shipping companies in the same way that they would tax companies that are doing most of their business domestically withcome the country. this isn't anything new or different and this has been around decades, maybe even centuries and 400 different ports of call around the world. lots of taxes and different fees and they don't come in the form of taxes. if the ship gets into trouble overseas, is it fair that they have to pay for part of that rescue for reimbursement. the coast guard couldn't accept reimburse am t reimbursement the way it is structured. we are often picking up people and deviating our path in the

ocean especially in the caribbean area, to pick up distressed mariners, people on boats and it's a cooperative arrangement that's been on a long time. this would have to be investigated and it would be a change from the way ing things are done. >> let me talk about what you came here to talk about which is a new generation of ships, the quant quantum. you were excited about this, and an unveiling tomorrow and we can't see the plans yet. why are they different? >> it really is in our company's dna. when we get a chance to make a new generation of ships when she comes in in a year and a half like oasis and allure of the seas two or three years ago. it's a chance to deliver new wow features to the marketplace that are really exciting, that galvanize people's interests and that are good, we think, not only for the brand and the company and also for the industry as a whole. >> can you tell us what some of the factors are?

>> i'll just have to wait until tomorrow morning. i am so sorry. you know how much i would love to stay on air and tell you about the fantastic features and we're known for the surf machines, rock climbing walls and ice skating rinks and we've taken it a few notches up. >> the experience for thes passengers was always everything and it is clearly more than ever, and i believe norwegian is commanding a higher price now. are you in an arms race on technology, and innovation, in which a lot of your fleet which we see here in america is quite old now. >> there's a terrific computation in the business and they take the competition forward. norwegian takes credit for what they've done on their ship and when you see what's on quantum of the seas, it's a close game. >> are you able to tell us anything about what is happening in europe with the prospect of the costa concordia trial actually getting under way now? pricing has been soft, volumes have been soft and for sure,

next year you're only putting eight of your 22 luxury ships into the european routes. is that because of the economy? what is going there? >> we've been pretty transparent about europe going back to a year and a half now, i would say. obviously, the macro economic there is challenged and it affects consumers' discretionary purchasing and we have a wonderful array of product in europe even though it was less than it was last year, as you note. we still have a lot of cruises to people all over europe to take those cruises. >> finally, we are seeing the price of -- >> cruising was invented at a time when oil was very, very cheap. finally, we're seeing the price of oil come down. does that lead to celebrations behind the scenes? wow! this is a game changer. >> celebration would be a strong road. the lower cost of fuel is beneficial to our company's performance, but with the currency and oil prices and interest rates going here and there over time, the important

thing for us is just to perform and satisfy our guests and to be careful with our costs going forward. >> overall, as you bring new ships out, do you retire old ones or does capacity stay constant? is capacity right now bigger or smaller than the industry really needs? >> in general, capacity has gone to a somewhat slower rate for growth than it had been in previous years. one of the nice things about having a company with six brands is that we're able to transfer our ships from brand to brand over time and as a matter of fact, the monarch of the seas to our sister brand for latin america and spain. so we are able to modify our capacity by brand as time goes forward. >> we'll leave it there. kudos to you for answering the difficult questions about the industry at the moment. thank you very much. adam goldstein, president and ceo of royal caribbean international. thank you. >> we have the analyst who says netflix is going to $250 a share. he'll tell us why he thinks the

streaming company will give the big cable providers a run for their money. plus as the sell-off intensifies across the commodities complex, including the gld and we'll take a look at how the big hedge funds are getting hit. we're back in two.

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let's get back to the big news this morning. the almost freefall we've had in gold so far and specifically what it could mean for the big hedge funds that hold large amounts of bullion. kate kelly is joining us from hq. i imagine we'll be speaking about paulson quite a lot. >> there has certainly been speculation about what paulson is doing with his gold position given that paulson and company owns more than 5% of outstanding interest in the gld. definitively based on my reporting, he is not selling right now. paulson offers investors in his funds the right to put their money in what he calls gold shares, an alternative currency tote u.s. dollar that has historically provided greater yield to those investors. john paulson himself invests in gold shares and has seen a sizeable haircut in recent days as have other gold share investors who make up a third of the fund's $18 billion in aum.

but paulson investors can only move from gold into dollars on an annual basis so that rotation, if it occurs, won't start until the end of the quarter and is not responsible for what we're seeing in recent days. paulson and other hedge funds who hold gold are feeling pains today. paulson owns substantial stakes in the miners including anglogold, freeport and detour. it has seen huge reversals of late with the gold fund down nearly 30% through march of this year alone. paulson is not the only one who may be getting hurt. david einhorn's green light capital, blue mountain capital and third point all reportedly have gld or gold miner exposure, as well. as the 2013 f filings start to trickle in, we'll see if they're still active there and the hedge funds holding gold or if they've started to bail out as the rest of the market has right now.

>> kate kelly back at hq. sticking with gold, what does the sell-off in bullion mean for the gold etfs? our bob pisani is here at post 9. >> there's the relationship with gold etfs is not always perfect. let me just show you how it actually works and i'll simplify what is going on here. >> there are brokerage firms that cream and reduce shares on demand. you own shares in a fund that is backed by gold. very important legal restriction. the purpose of these fund, for the most part the big ones like the gld is to reflect the price of gold bullion, you are charged an expense ratio per year. you get the reation and redemption process. the gold etfs and the custodian who manages, the custodian is hsbc so the gold would move into the hsbc vault so the question is what happens there when you get this redemption process?

the custodian can hold on to the gold or turn around and sell it. it's their decision. people asked me about this. it is not bad. it's pretty good for me. put up gold for me and now put up the price of the gld and the gold.st of the etfs against you'll notice it matches almost perfectly. on a daily basis you can get mismatches and what happens is you get arbitrage or it's coming. so if the price of the gld is high, so you would buy the gld. buy low, sell high and it's the other way around and just reverse it, gold arbitraging, one of the problems we've had this year is there's been redemptions in some of these big, bold etfs, let me show you general numbers and what's been going here. a total of etfs and there were 89 million ounces.

this is according to hard asset investors. that's 8 1/2% of the gold in the vault of the etfs have been redeemed now. that's significant selling pressure and that's a factor in the declining gold that we've seen recently. here's the big issue. who will be the marginal buyer of gold. the indians are jewelry buyers, that will be long-term investors, that might be a problem. at some point it will fiend natural buyers whether it's 1300 or 1200, nobody knows. here are the gold stocks and obviously at new lows and question is the follow through on the commodity names and this is a global slowdown story. it's not a china, it's not a gold story overall here. if you look at the commodity names they're under significant pressure and you have this perfect storm, guys, where you have the situation with the china slowdown on top of this cyprus issue that's really putting pressure the gold stocks as well as other commodity names. >> back to you.

>> thank you very much, bob. we should note that the energy complex in light of that is down quite heavily. we've clear low broken below $90 a barrel on west texas crude. prices over the e tension xl pipeline which will carry one of the dertiest fulls from alberta to texas. so what imact on alberta, ann thompson takes a deeper look. >> am go, sime on orn. no question that the keystone pipeline is having an impact. we spent a week up there and i can tell you that both shell and sonovis were quick to point out the environmental improvement they've made and the technology they've centered, it in and the gas fueling climate change. shell which mines oil sands hopes to have the ability to capture carbon emissions at its

upgrader facility and store them underground and they take this crude which is just too heavy to flow through pipelines so they can partially refine it for transport. at sonovis they drill for oil. they inject steam into the ground to melt the oil from the stand to make the steam. that creates carbon dioxide emissions and it's found that making less steam is tilly good for the environment and its bottom line. >> if we lower our steam to oil ratio which is our key, economic and environmental metric, we are actually lowering our input costs and lowering our costs of lifting and we are also lowering the effect that we have on the environment. >> now in its environmental assessment of the proposed keystone pipeline, the department found it puts more greenhouse gasses into the atmosphere than conventional drilling that we are familiar

with in this country. if the industry adds another 650,000 barrels of production, that's the amount of canadian crude that keystone would carry it would be like putting another 6.4 million cars on the road when it comes to carbon dioxide emissions. back to you. >> unbelievable statistic. our ann thompson joining us from new york. got a mover in the construction space and we want to send it over to josh lipton. >> check out vulcan materials and the producers, asphalt and cement. this is annes it and home builder sentiment that was disappointing and vulcan materials down 5.5% right now. david, back to you. >> thank you very much, josh lipton. after the break, the wall street analyst who says netflix users now watch as much video per month as they do on the largest

cable networks. an average bonus, he just initiated coverage with a buy rating. rich greenfield from btig joins us live next. plus as gold plunges over $100, are the technicals pointing to another leg lower? oui beec whichi checking the ch straight ahead. [ male announcer ] there are people who find their own path.

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concept of bundling has been foundational in the media business and flaws in the system are becoming apparent as it comes under attack by broadband connections and companies such as netflix. i sat down with liberty media's john malone and here's what he had to say about it. >> i can conceive of reed coming to the cable industry and saying why don't we have a wholesale retail relationship as opposed to being adversaries, right? and so the cable guy see the revenue's gone up over here. maybe it's a bundle of netflix

with cable, right? with video or with broadband. >> all right. we are now joined by btig media analyst rich greenfield. you see malone and right off the bat would come greenfield, i think, rich. >> i appreciate that. >> yes. you initiated coverage of netflix with a buy. a $250 price target. malone and i talked about bundling. first, reading your piece. 22.5 times, 2014 ebitda and earnings per share and that's nose bleed territory, isn't it? >> that ebitda multiple of 22 times and you have to bear in mind that that includes no value whatsoever for their international business and that's a business that if it doesn't turn a profit they'll shut it down. the reality is they have 6 million subscribers and they're moving market by market with profitability and they end the year with over 10 million subscribers and hard to call that business worthless even though it is generating a loss.

if you put some value on international and the multiple that the sky high number which almost looks ridiculous and the reality is that's got a full tag of international losses and that's very unfair and this is a bit more art than science and the reality is that what convinced us to go to a buy was those comments that you're hearing out of john malone and other people in the multi-channel isp industry which is that netflix is now an asset and we can use netflix to drive higher speed, higher priced broadband and that's a very different tone than you heard out of this industry just 12, 18 months ago. >> no doubt. give me your reaction to comments that you just heard from malone that at some point you even get netflix bundled in some sort of broadband offering from your cable company. >> right. so think about it. right now a cable operator calls it $70 is the average u.s. household. $70 is what yoi pay for video service on average for the u.s.

you only pay 40 to $45 for broadband. that video is a very competitive business, and not terribly profitable given the programming cost. if they can get you to spend instead of the $40 a broadband band that you're spending and trade up to the $90 a month, time warner cable in new york, comcast. they have $90, $100 tiers where they're delivering 50-plus megabytes downstream for the consumer. imagine if bundled with that tier for $90, $80, $90, whatever the dollar price is, imagine if it just came with netflix. this is the best way to subscribe to netflix. you get it for a year promotion like you would get hbo for a year promotional. i was watching the ncaa turn at and right through the middle of it there was a cablevision commercial talking about netflix as the best place to get netflix is if you have optimum online. so i think you will see these kind of bundles with netflix

evolve whether they're synthetic or working directly with netflix. you will see a lot of people promoting and marketing netflix itself and that was a key catalyst for why we put it on the stock today. >> you talk about netflix convincing you. how do we know there's not some weirdo quickster, and how do we know investors won't react as violently to that as we did to quickster. >> hopefully, there will be no teal blue shirts ever again that he shoots on a weekend afternoon and look, the reality is we cited it, p.r. missteps are one of the biggest challenges here. this is a consumer brand. unlike like a lot of media, you talk to malone last week and when you talk to him, this is still the business where there's this wholesale, retail relationship where the programmers are dealing with the distributors and netflix is still going direct to the consumer and it's brand and the perception of the brand is absolutely critical.

they've worked very hard to pick themselves up after the pr debacle of 18 months ago. they've been notably improved and the value of a netflix subscription and look at the content they've added and not to mention original programming for the first time and a couple of years out we have disney coming on from an output standing. [ engine revving ]

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take a look at an intraday look at gold. every time you think it's stabilized it's down $1135. lost $30 in the past two minutes. rick santelli watching this incredible intraday action this morning.

hey, rick. >> hi, carl. first of all, and i don't mean to surround like a know it all in anyway. i'm looking at a lot of stories. i've been looking at gold for 40 years and i don't see anything like it. i disagree. there was a period of time in early 1980 where the futures market in chicago, before they owned the contract. it was a chicago mercantile exchange. and that contract had volatility much bigger than this considering its price was half of what the current price is. all right. set that aside. let's consider this. some of the numbers -- and believe me, listeners, we are talking in generalalities. it's very difficult to pull in all the bullion, the over the counter, the etfs, but it seems to me that one large wire house in particular seems to have been rumored to have had a sell order early friday that was anywhere

from, well, 3 1/2 to 4 million ounces. now, i can't tell you it's totally true but looking at the price, i suspect it is, that's anywhere from 100 to 125 tons. that is rumored to be just how much move on the opening. but it almost doesn't really matter what the number is. let's think about some things and try to draw some generalalities. first of all, we know a lot of these markets are further insight and the 4th of april when the bank of japan pulled out even bigger than ours considering the size of their economy, which is things like quantitate tive ea quantitative easing. their two-year note today is hov verge around 14 basis points. what was it the day before the bank of japan met? six basis points. that same day, the 4th, we saw a 32-basis point low on the tenure which closed at 65 today. first question, do you think central banks work in a vacuum?

do you think the bank of japan never talked to the fed that never talks to the ecb? i'm not buying it. now, we also know that one of the instigators for the sell-off in gold was rumored to be what the cypriot national bank could do. mar mar mario draghi was very careful to say we can't tell the central bank what to do. but i can't believe if they're all talking about quantitative easing central bank, the large holders of gold, that there isn't some communication there. do you think it makes the central bank look bad when gold is 1800 or 1900? i think so. what does it mean now? back to you. >> rick, before we let you go, having major trading a long time ago, when does it get concerning? when does your eyes really get opened? >> well, first of all, anybody who takes the bottom is going to probably get carried out. even if they pick it correctly, to me, it's a dangerous day.

remember, those highs made in early 1980, adjusted for inflation, about 2300 an ounce, we haven't even gotten there adjusted for inflation. to say those highs in 1980 marked the end of gold for a long time to the upside. >> it tends to move in long, long trends. that's true, rick. we'll come back to you later on. thanks. falling moments ago below 1363. so we're asking you to fill in the blanks. gold is losing its luster, it's so bad right now gold is blank. tweet us at squawk street. thank you orville and wilbur... ...amelia... neil and buzz:

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"squawk on the street." here's what's happening so far. >> dish is offering for $25.5 billion. that's got include debt because they're offering $7 a share. >> citi group out with first group results. citi came in with earnings at $1.29 a share. >> gold got too high, but i like gold forever so i know you could

argue, jim, why didn't you say sell it at 1800? i gist think that gold is an insurance policy. i hope that i never have anything happen to me, but i still buy insurance. >> different in the dell deal where silver lake has flagstone comes back. a lot of complexity here. this deal will take a lot longer. the other deal is almost close to closing. >> you do not want to sell sprint. not with this happening. >> just like it happened when we got up to 1920. people went short and stayed it, basically. a lot of people were bullish today. not doing well right now. so everybody is bearish here. maybe an opportunity. >> there's a terrific competition in the business. new ship basically takes the competition for washed. norwegian deserves credit for what they've done with their ship. you will see we are up for the game.

good morvnday morning. there is so much going on today. selling off a bit on the dow. that's a piece hanging in there relatively well, about ten handles, to 1578. gold is the big story. commodities are taking a hit. gold especially getting crushed. down $134. that is close -- actually that's the lows for the session. we were at 1384 earlier on. silver, platinum, crude continue to take it on the chin. crude is down about 3 1/2%. meanwhile, citi today trading higher after reporting the profit rose 30% on the quarter. that did beat expectations. ceo saying the results show citi has made progress toward more stable earnings. gold has seen the worst two days in more than 30 years. we will get the latest on the free-fall and talk to the gold fund manager about how he's navigating this. tax day is upon us.

we will reveal the area where's most tax cheats call home and what they do for a living. best of the best of the hedge fund world. what fund managers made the most money last year and how they did it. big moves in commodities. in metals today, sharon especialepperson is live with what's going on. >> there is a lot going on. when you look at the perfect storm of etfs selling, data out of china, we are looking at gold prices that continue to tumble dramatically. of course, last week goldman sachs last wednesday was talking about shorting gold and saying that gold could fall. there's 1270 by the end of 2014. it looks like this way we could get there by the end of the week. we are looking at prices at the lowest we have seen since february of 2011 for gold and the sell-off is across the board in the commodities sector. with silver seeing the biggest tumble we're seeing. we're seeing a big decline in copper, in oil, as well. but let's get to the gold story

because gold looking just in the last two days, as you mentioned, the biggest collapse we've seen in gold since 1983. and, of course, we're continuing to look at what the dollar decline is here. it's the largest since 1974. what is accounting for all of this? some of the reason we're looking at gold at the lowest level since february of 2011 has to do with what's happening with margins. the initial margin for coal futures here at the nymex, at the division is $5,950. just under $6,000. that's for speculators. that's for nonmembers. members, it's $5400. look at the drop today in gold. nearly $140. 100 ounces of bullion. we're talking about $14,000 right now. we're talking about a loss when you look at that just prior to now of nearly double what the real maintenance is now. the fact that they may raise margins, is another reason why a lot of traders are looking at the potential for selling now

ahead of that move. back to you. >> sharon, definitely louder where you are today than most days. >> absolutely. >> sharon, thank you for that. for more of the gold sell-off, want to bring in david greene berg, with director of the nymex from 2000 and 2007. welcome back. >> how are you today? >> okay. watching this market, you see the real key to what's happening here is the speed with which everything is happening, right? >> yes. i've since you had the electronic market along with these new efts, the gold market in general, the comex gold market is 100 ounce contract. it's not a large market. you're seeing an overflow of monday know hitting this market and the speed of the sell-off is really amazing. >> i assume the difference between this sell-off and 30 years ago is is the degree to which electronic trading has come to dominate, right? >> absolutely. 30 years ago what would happen in a selloff like this, it would come off and there would be players that would come back into the market. i'd like to talk about my classes. 30 years ago everybody had an

opinion. now they are basically written the same way. once the algo kicks into the sell side or buy side, there's no opinions, nothing to stop this market. you just see a gap as you see today. add it to that for the second leg down today, last $30, really caught everybody by surprise. >> we were just mentioning that a few moments ago. santelli said this morch that just for inflation and not quite as volatile as it once was. do you see that changing? do you agree with that framework, at least? >> i agree with it 100%. the percentage move itself, if you look back even to silver thursday with the hunt, i remember when my father came home that day, that dropped $40 in value in one day. this 100% basis is large. it hurts. if you're long, it's not a fun place to be. but it's by no means a catastrophe. >> so i mean, i'm afraid to ask you for a forecast but where do you think this pain entsds for

those who are rong long? >> no market goes straight up or straight down. i think around within the next $50 you will see the market calm down. people will step aside. the margins will come back into line and you will just see kind of a channel for the market for a while. i can't see this market rallying heavy unless a worldwide events happens a causes us to rally. besides that, the head winds to rally in this new gold market is going to be extraordinary with the amount of week longs that are still in this market. >> yeah. yeah. a quick word here, david, on crude. you know, this morning we were trying to take all the positives and negatives to a sell-off of this magnitude and it seems like it is a net gain for the global economy, right? >> yeah, everyone gets a kick out of when a lot of people on tv, even friday, terrible day in the crude market. i'm sorry. a terrible day in the crude market, it's a great day for the world economy. it is an immediate tax cut for everybody, for every business, for everybody for every

different wealth level. crude going back down to $75, $85 a barrel where i think it should be will be a good thing for the boost of the economy and the world economy. >> that said, you would be cautious about going home with a short position on crude, right? any, what, any complication around the world, north korea, something like that? >> absolutely. the problem that you have with electronic trading now, and this is a severe problem, as much as i would love to be short crude, everybody knows me knows i love being short crude, if something should happen in the middle east, if a saudi pipeline should get bombed, something happen in north korea, you could see a gap happen in this market due to electronic trading. that's never been seen. you have to be careful about that. >> david, appreciate the insight on both crude and gold is officially down over $200 in two days. come back soon. thanks again. >> see you soon. meantime, david faber is back here with more insight on sprint. david, what's going on? >> we have shares now down

fairly sharply. earlier in the session, dish made a $7 a share offer in cash at its own shares but to acquire sprint had not been down sparp sharply. that decline of almost 7%. and it has effected the overall value of the deal. this is an offer from dish led by charlie ergen, controlling shareholder. not at this point financed but does bring a number of important things to the table, including great deal of spectrum and the prospect of as much as $11 been in cost synergies and some people telling me they believe those are actually conservative estimates. that would be versus the soft bank deal that has already been approved of course by sprint and by shareholder of both of which are not far away and conceivably would close in the not too distant future. that is worth at this point you're going to get 55% of what you hold.

you're going to get $7.30 a share from soft bank. $12 billion coming from them. overall -- own overall 70% of sprint and you will have that 30% of the company continuing to trade. >> there's been a great deal of speculation about it, what exactly it is that charlie ergen, the man who runs dish, is up to. i discussed it last week in my interview with john malone, asking him, what do you think ergen is going to do with all that spectrum and all the cash he has raised recently. we got to the wireless business and here's what malone had to say about perhaps entry by ergen into that business. >> the u.s. is a wonderful space for verizon and at&t. you go to europe where you've got four and five players, it's terrible. it's terrible business. so why you would want to take a very successful industry and add two or three more quackers and

make eight terrible industry and spend a lot of money doing it. >> john malone, carl, but it does appear mr. ergen is going to offer consumers a package of services including a video from differ and very robust wireless services that would service so many of your devices, whether out of the home or in the home, and enable you to download so much of the content that is becoming am. not to compete with that broadband connection in the home but certainly to compete with the likes of verizon and at&t. >> and for all those viewers out there who own some sprint, you believe the ergen bid is credible financing, a credible competitive bid to softbank? >> at first when you look at it, and especially given charlie ergen's history of making a bid that might not seem all there, you might question it. in this market you can get to roughly $9 billion in financing he needs done. and the cinergys are real. so, yeah, you had to pin me down

i would say, carl, it is a credible bid. >> for those who are not familiar with the name, they're getting familiar really quickly here. charlie ergen, that is. great reporting, always, david, thank you. when we come back, it is tax day, of course, in united states. we are looking at which parts of the country house the most tax cheaters. is your city one of them? plus, former senator hutchison weighs in on the budget regulation and talk about commodities as well. but first, rick santelli is going to talk a little retirement late own with something you're far from, rick, just beware. are you kidding? i'll be working with a walker when i'm 90, okay? listen, line graph. we have an expert on pensions and retirement because even though the president's budget most likely isn't going to be law, there's a lot of balloons in there. one is the retirement cap. who does it affect? does it unfairly affect small business? is this something we're going to see sooner or later?

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welcome back to "squawk on the street." i'm josh lipton. on a down day, have a look at ch chipotle. the streets view doesn't reflect the anticipated gain it could enjoy from this year's roll out of a catering offering. ubs raises it to a buy.

the analysts here at oz, remember, jeff of double eye last week said chipotle is a good short. carl, back to you. >> all right, josh, thank you very much. josh lipton back at hq. the president recently proposed his budget and here to weigh in is cnbc contributor, former senator, hutchison. just released her new book "unflinching courage". senator, we were just talking about during the break. trying to draw some lessons from some amazing women in history. just want to give us a brief summary? >> yes, carl. it's about 19 century texas women and wanted to really settle the wilds of texas and yet they did it with a positive attitude and the robust spirit that is still alive today. and i think it's a great book for anyone young that is facing obstacles to know that if you just have as positive attitude you can do anything. >> for anybody who knows you, can understand why you would be drawn to that topic of of all

the topics you could have been chosen, why this one? >> because i think the women's role in building our country and our state is has not been told. biographies have been written about those great men but the women did so much to allow them to be successful and to contribute in their own way. and so i have written three book to s on women who have broken barriers in america and what they have given to make american exceptionalism is remarkable and i wanted to write about it. >> you clearly have done your part to further exceptionalism in this country. to the president now. is this enough of an olive branch to republicans to make necessary the outrage, so to speak, from the far left? >> let me say that the president has put something on the table. that's a first and it is to be

commended. going forward, i think what the republicans are looking for, carl, is entitlement reform. we want those entitlements to be there for long term. you can do it on this trajectory. and i think that having the modest improve ms now will say those mentions and also start bridging our deficits and debt more in line with what we can afford. >> same locust of all of this debate is a good step but it's just not a deep enough trajectory, is that what you're saying? >> cpi is a very good step but it's very, very small incrementally. i think you're going to have to look at retirement age at a very gradual age as well, for social security, for sure. and looking at medicare it's a little bit different, but i think that's where you got to really get the republicans before you're going to get to anything that's going to be a grand bargain. >> it's going to be an interesting couple of weeks here

before we watch that debate. >> carl, you know, talking about guns, talking about immigration reform, you see republicans and democrats talking together now and seeing where there are areas of agreement that they might move forward without everything having to be solved all at once. >> it's new. >> it's new in the last couple of months and it's very, very productive, i think. >> before i let you go, we're watching a sell-off on things like commodities, crude, that people are saying portends great things for the economy. i wonder if you think it's long lasting, what we're seeing with the oil here. >> i think fracking, the new technology that has really begun to take old now is going to revolutionize energy in our country. we're going to be energy self sufficient probably in five years, we're going to be exporting natural gas and oil from this country if we take advantage of that great opportunity of technology and

advancements. it will make our manufacturing more affordable, it will make small businesses have really a more efficient energy production. it's a great find. >> that's a game changer. >> it is. >> nice to have you on board as contributor. hope you will come down to the exchange as much as you can. >> i would love to. so happy to be part of the family. >> senator kay bailey hutchison, thank you. >> thank you, carl. it is tax day, as you know. americans all over the country are rushing to get their returns filed before midnight tonight. with all those tax returns there's bound to be a few cheats in there. robert frank has a look at what parts of the country house the most tax cheats. robert, good morning. >> good morning. most americans do not cheat on their taxes but every year the irs loses hundreds of billions of dollars to returns. it turns out the cheaters tend to live in a lot of the same places. the national tax fair advocate found a lot of tax cheats live in california, especially in wealthier towns. beverly hills, newport beach

ranked high, so did san francisco. outside of california, the cheating capitals are houston, texas, atlanta, and washington, d.c. northeast and midwest had among the fewest cheaters. the study found that small businesses tended to cheat the most with real estate and construction businesses having the worst record if irs is now tar getting these areas and business toes find false returns. the agency audits 100,000 returns every year but the wealthy are about 12 times as likely to be audited. where should you live if you don't want to be audited. the allusion islands in alaska, indiana and monthaven neighborhood in the bronx. back to you. >> interesting. when you say the wealthier 12 times as likely, wealthy meaning what, robert? >> $1 million or more in incoming every year, around 12% of them get audited. that's compared to about 1% for the overall population. >> a lot of viewers might take

interest in that statistic. thank a lot. as you probably know by now gold falling more than 13% in the past two days. the worst two-day drop since 1980. we're going to find out how one gold fund manager is navigating the sell-off. [ male announcer ] you are a business pro. omnipotent of opportunity. you know how to mix business... with business. and you...rent from national. because only national lets you choose any car in the aisle. and go. you can even take a full-size or above. and still pay the mid-size price. i could get used to this. [ male announcer ] yes, you could business pro. yes, you could. go national. go like a pro. yes, you could. are you still sleeping? just wanted to check and make sure that we were on schedule.

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welcome back. rick santelli here. you know, the president's budget was flat last week. i don't think it's going to pass. i will tell you there's issues, caps, retirement caps. i would have never guessed it. i would have thought in the end irss and status would have been something the government may have used to try to draw people to buy into more treasuries when quantitative easing ended. our next line graph is an expert on pensions and retirement, welcome, bryan. >> hi. glad to be with you. >> all right. first of all, tell us your

impression if these caps were to somehow find their way into the legislative caps, what does it mean and what does this also mean that deferred compensation, is that included? clear us up. >> sure, rick. it's really a terrible proposal. it punishes the small business for doing the right thing all of the way alook. small business owners and retirement plans as you know are subject to very strict contribution limits as subject to very complicated, nondiscrimination rules that require the small business owner to make contributions on behalf of their workers like magic contributions and other contributions in order for the small business owner, for himself or herself, to get mi a benefit out of the plan. the proposal says, okay, you've been playing by the rules and complying with the limits and complying with the nondiscrimination rule, sorry, you're a successful investor, you're out of luck, you can't save anymore once you hit this

cap. the real policy problem is that small businesses owners are going to say, to heck with this, i'm going shut this plan down around what that means is these small business workers are going to lose out on having a plan. what we know is that people make between $30,000 and $50,000. when they're covered by a plan, 70% of them save for retirement. when they don't have a plan at work, less than 5% of them save. 15 times more likely to save when they have that plan at work. and if you take the incentive for the owners to have it the plan goes away. >> all right. now, real quickly in about 40 seconds, tell me what decentered compensation is for our viewers and that it is exempt and who uses those plans the most, is it politicians, is it billionaires, you tell me. >> rick, you know, you're exactly right to bring that up because that's what is so arbitrary about this proposal. applieses to regular plans that people, you know, average mainstream folks have, when they go to work. it doesn't apply to executive

deferred compensation plans that krrks ceos and t presidents of fortune 500 companies have. those plans are exempt from this proposal. you've got ceo of walmart has over $60 million in deferred comp program. that $3 million cap doesn't apply to them. the president's own pension is exempt from this proposal. that's worth about $5 million. so, you know, these exec plans are not touched, for whatever reason, but they go after the mainstream plan that everyone participates in and, in fact, benefits more workers than anything else. 80% of -- >> brian, we're kind of out of time here. i'm going to bring you back. it really is -- it goes right back to quick theme, and that is the reason, in my opinion, our economy has always been the best is that there's general guidelines everybody follows that don't change. this, along with many things since the crisis, discome bobble

lays a lot of issues. thanks for being our guest. >> thank you. >> carl, back to you. >> rick, thanks so much for that. rick santelli. look at the european close when we come back right back. it's as simple as this. at bny mellon, our business is investments. managing them, moving them, making them work. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing. bringing the power of investments to people's lives. invested in the world. bny mellon.

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the arrows on the comment today. hobbs brings us up to speed on the trade data, miners, so much. >> so much going on. the economic situation remains poor. the ceo of a big german consumer

products manufacturer, makes personal deoderants, say they think the eurozone situation will get worse. the economic situation before it gets better. mario draghi today suggested that the eurozone's economic problems still loom very large. now, clearly the sell-off that we've had in commodities has ricocheted right through the european markets as you see them here in the united states. big global miners, listed in london, has been hit badly during the course of the session. chilly in copper mine. anglo americans, look at the losses that you've had there. smallest second or third line miners that are exposed to places. for example, this russian gold miner in london has lost market capitalization. citi coming through with a recommendation there. the rotation continue out into other areas in the market today.

despite the fact you're down overall, drug makers are doing particularly well and some of the utilities as people seek safety here. up almost 4% in response to what is going on elsewhere in the market. something is going on in greece at the moment. i can't tell you exactly why. the greek banks are doing so badly and what remains of their market capitalization. i can tell you that the politicians have done a deal with the creditors. they will be citing another 15,000 people to meet their deficit target. my assumption is they scrabble around to try and balance the book, they will extrap more of what will remain of these shareholder on the bank of capitalization that you know is in question and one of the big mergers there. certainly the price action, carl, is not simple. back to you. >> simon hobbs. want to get another check on energy and commodities. the story of the day. big sell-off in gold. sharon especialpperson in a noix

but her voice is holding up. >> it's really noisy, volatile here. behind me, over the past two sessions as gold as dropped over $2 $200. he talked about margin calls and the impact that is having on the margin call. text tf market is having an impact as well. largest etf in the gold market. glb is holding at the lowest levels we've seen since april of 2010. so there's been a lot of selling in the etf market as well. to selling continues across the board in the commodities complex and energy prices are sharply lower, as well. oil as well as diesel as well as gasoline. in fact, something we perhaps missed this morning in gold. man sa goldman sachs, brent crude is closing. they are now saying they are looking at perhaps further weakness, further downside risk in the brent market.

so that is the silver lining that consumers are seeing. we're seeing prices at the bump at $3.53 a gallon. down almost 40 cents. and that means consumers are paying about $170 million less per day for gasoline than a year ago, carl. back to you. >> sharon epperson working hard today. want to bring in bob pisani looking at what's moving at the big board and talking about who the margin alibier of gold is here. >> i i don't normally do a lot of gold talk but even the guys on the floor are asking me about it. nothing else matters except where is the price going to find a floor and what that means is, who is going to buy it? who is the buyer of gold at this point? let me run down some observations based on a long-time work i did on gold so many years ago. who is likely there? the chinese are investors themselves but they've probably been burned by this as well. they may hold off a little while. how about small buyers, gold bars and coins. they're t not big enough to make a big difference.

how about the etf people, people who want to buy etfs with the price down? it's possible but i'm not sure they're big enough, believe it or not. i'll tell you what i think. this is just me talking. let me give you three possibilities that i think are the likely buyers. the indians are buyers of jewelry. they watch the price of this thing like a hawk. when the price comes down this could attack their at democratic national convention. and they've got enough firepower, the women of india, the largest buyers of gold in the world, they matter. secondly, central banks. they have stepped in before to buy gold. i know everybody is freaked out the european banks may sell. you may be surprised. may sell this gold to europeans, central banks. there could be a private transfer of money. they are likely buyers. how about investment funds? how about private sovereign wealth funds? how about any of the templeton funds? how about anybody b who thinks that gold is cheap out there? private investment funds, these are the three likely buyers to step in. is it going to be $1300 or

$1200? i don't know. but there's your likely group. bear in mind this is about a global economic slowdown. it's not about gold. it's just a sideshow going on here. watch the multiindustry names. these are names i love. nerdy company who make all the stuff in the world. 2%, 3%, 4% decline. this tells you it's about a global slowdown. the commodity names and this was mentioned before here, look at this, 50% decline. freeport, nothing else here has to do with gold. commodity rich countries. look. watch the etfs. south african etf, 4%. peruvian etf, 3%. canada, australia, commodity rich countries all day much more than the overall market. look at the sectors. strange market today. bifurcated here in the u.s. energy materials but health care, holding up.

guess what else is holding up, financials. i said this morning at 9:30, watch the big bank names today. there you go, folks. see? they're on the upside. citigroup by the earnings, we can't go through that but but that's a very good sign for people who we think is still a rotation in the market that just prevent everything gr going south. i don't know about how but 67 points dow n on the dow? good heavens, if that's not a victory for the bulls, i don't know what it is. >> bob pisani. as bob said, gold extending the plunge in the bear market territory. metals had a barbaric trade for some. berkshire hathaway had choice words for gold just last year. >> so why people don't buy gold, they invest in other businesses. >> otherwise people don't gold. joining us this morning, frank holmes, whether civilized people should be buying gold here on the dip. frank, welcome back.

>> i know a lot of civilized people buy gold. talking about india. i think what we're looking at is a price decline is very substantial in a short period of time and this has happened less than 1% of the time. the odds favor some type of capitulation. what's important, carl, is that europeans, the slowdown in europe has i pacted china because china sells more to europe than they do america. that data that came out today i'm showing the quarterly numbers of gdp slowed down in china and, in particular, incomes. gdp per snk growth, love trade. that's a factor that one has to consider. and the other one was a sur tax in india of 6%. that's dramatically saw gold consumption drop 24% on a year over year basis. >> right. frank, do you think the action that we're watching today has anything to do with fundamentals anywhere or is this more about a

few select traders on the very wrong side of a trade? >> well, i could be. there's no doubt now they're going to be around margin. but i think that put in context is that apple has fallen more than all the dollars in the gdp in the past year and facebook is still down more percentage wise than gold has fallen in the past year. in the past four years gold is up almost 100%. in the context of a short period sell-off, one has to take a look at is it an opportunity. i think many gold producers are coming down to marginal costs and see supply shrink from supply of gold mines. no more expansion. >> what is your strategy here, frank? you talk about capitulation. have you seen that yet? this is not as dramatic as certainly some of the big swings in the '80s. >> no, it's not but it's still -- there is a capitulation because we get the number of calls that are calling in. investors have a 5% waiting in

bullions and 5% in gold stocks and you will get these incredible moves and when they run and up 100% in a year on gold stocks and bullion up 30%, you've got a realize profits in a balanced portfolio. >> it is a comment, in fact, one of the words -- circulated around the street this morning is gold in florida, meaning those who were against government policy wanted to reject government money are having to eat a little crow today, frank. i wonder if you think there's a larger picture as to how investors view currency around the world. >> well, if you're spending too many etf plans into money for currency plays now, so that's very risky, i think. fear now is that they're going to have to sell their gold to pay down their debts. i think that's something that's important for investors to look at. however, mexico was a buyer of gold. many of the countries in the

middle east and thailand and vietnam and china, et cetera, and in addition to india, have been consuming gold. so i think there is a big shift in central banks will continue to increase their relationship with gold and love it when they get these corrections. >> this is that. no doubt about that. frank, in the past few days. always good to hear from you, frank. talk to you soon. >> thank you. >> frank holmes watching gold which, of course, is down $127 today. when we come back, how you can profit from the big earnings coming up this week, later, find out how much money head fund giants made last year and just how they did it. "squawk on the street" will be right back. oh, he's a fighter alright.

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♪ [ male announcer ] see what's happening behind the scenes at ducktherapy.com. live from cnbc's headquarters. everyone is talking about helping trade the stories you may have missed. i'm melissa along with carl and joined by cnbc banking reporter. let's kick it off here with the scoreca scorecard. what where do you stand right now? 65% beat their targets. 9% have met us in this 26% of reports have come in below forecast. so two big companies are reporting this morning before the bell. citigroup beating wall street estimates on the top and bottom lines, by improved capital markets. the other one we're watching is charles schwab. revenue for the quarter rising 8% of the company concentrates on growing its business.

so the analyst call is getting under way right now. what are some of the headlines here? >> two big issues to watch here. first is this continued supply in upside for investment banking. you look at citigroup, net income up in the investment bank. 81% in their securities and banking division from a year ago. jpmorgan reporting on friday, that net income was up 28%. even wells fargo, not really known as having a traditionally powerful investment bank, revenues don't break out in net income but revenues were up 37%. all for a different reason but it's because corporations are really taking advantage of low interest rates. they continue to in the first quarter as well. there is a disconnect and that's the second thing i want to bring up between corporate clients and the consumer. that was apparent at citigroup. consumer loans were flat. corporate loans ruled by 9%. and the cfo made some interesting points in this morning's slide. i want to take this quote. at consumer spending, quote, somewhat of a mixed bag. certain amount of deleveraging.

it hasn't worked its way all of the way through yet. not a real confident consumer in this state. we're still moving side ways. >> if you just look at what is being said about consumers in terms of deleveraging as mortgages and mortgage originations, there are concerns that maybe this mortgage tidal wave is poming out here as the consumer overall is reducing debt levels curb. what do you think about this? >> i think that what you said and what citi said about the consumer is perhaps one of the most important trends that we could see in the earning season because that's what you're going to have to pay attention to. they're talking about the consumer not being quite there. are we going to see the trend continue over the next few weeks? are we going to see it in tearn of the companies in. >> jpmorgan said the same thing on friday. whether consumers can spend there. >> by the way, and by the way, citi used the "c" word, the challenging word. when a company uses it it's

telling me they're not out of the woods. then again, when we start seeing oh we what i didn't see in the fourth quarter, when we see companies increasingly saying, you know, in their commentary challenge, we're a little -- >> no, no. >> because they can't. >> no. last quarter i didn't hear it or feel the same way. but now they've got an offering. they've got citi telling them they've got morgan saying, wells fargo, they can do this. and so i think when you look at this and i look at the disconnect, by the way. >> right. >> this is important. when companies are -- i care about 3450e9 meeting or beating but i will tell you when i look at the company and i look at the street calendar and look at a company that maybe beat out earnings, haven't beat on revenue. i want to start looking at that disconnect because to me what's really going on with the revenue, what's the real revenue growth, what's really happening here, what's the spin, what's the nonsense. let's get beyond that. >> we still have a lot of

financials, particularly this week. but goldman sachs, morgan stanley, those will be key in terms of citi and jpmorgan. >> right. when you look at the boost in investment banking we share, that's going to bed well for goldman sachs and morgan stan y stanley. bank of america on wednesday could be a different story. they started a big push into mortgages. they are probably at the end of the cycle and could see the numbers come up. a big consumer play. >> you've been watching charles schwab which also dovetails tlis r nicely into theand confidence in the investor. >> you know what's fascinating about them is what they said about trading. here you have this market, going crazy, but they talk about the lack of trading, muted trading affecting their results. here's the situation. retail investor is not there. charles swachwab is not playing the game the big guys are playing. zero in on there that stood out at me that said, you know, again, we're looking for disconnects. that's a disconnect. the market we just saw, the

retail guy wasn't involved in that. >> that's something the majority of this business. >> 20%. >> you can see that it's hitting the stock today down nearly 2% because that doesn't bode well for anybody. >> they called it off in their commentary in the press release. >> right. all right. things to watch going forward by the earnings. that's that for this morning. if you want to join in on this conversation tweet us. we will be back with more updates as well as earnings. much more "squawk on the street" coming up next. [ indistinct sh] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪

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coming up on "the half," the well-known hedge. you'll hear from the fund manager live coming up. plus an exclusive with mark fisher, one of the biggest oil traders in the business. he'll give us the read on what's happening in the commodities. we're also calling out one of our own over a losing trade. all of that at the top of the hour. we'll see new about ten minutes. >> all right. keeping it real. thanks a lot, scott. meantime, institutional investors listed top earners in the hedge funds. who's at the top of the heap? hey there, mary. >> david tepper returns to the rich list with a vengeance.

after falling off in 2011, he tops the 2012 list, having earned $2.2 billion. aagainst the global equity moments, he profited from citi and u.s. air. he is one that earned over a billion, and collectively, they earned $14.1 billion, a little less than the top earners earned collectively in 2011. it includes fees including gainings on their own kamt to calculate the final numbers. allen earn eed half of what he learned in 2011. steve cohen snagging third place, earning $1.4 billion, with gains in apparel and consumer goods. cohen was near the top with the legal spotlight, intent on his firm.

simons never runs technology, but his wealth is tied up there. that's one reason he's fourth on the list, pulling down $1.1 billion. his medallion fund returned 20%, easily outpacing the gains. and city dale's came in fifth. his flagship, kensington & wellington firms earning just over 25%. a few other notables, icahn fell off the list returning all outside money to investors. and bill ackman, with whom icahn disputed over herbalife here on cnbc, he came in at number 13, earning $333 million. back to you. >> not a bad paycheck for someone who's taken his lumps. >> not at all. >> thank you, mary. we want to check the records. we were trying to claw our way back from the lows. dow has lost some steam, down once again triple digits. the s&p, i think that's the low of the session at 1,573. down 15 points.

the nasdaq is underperforming all of them, down more than a percent. keep the tweets coming. commodities getting crushed. gold is one of the biggest losers. we'll asking you to fill in the blampgs. gold isn't losing its luster, it's so bad right now it's blank. tweet us. ♪ ♪ here we are, me and you ♪ on the road

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commodities obviously getting crushed today. gold being one of the biggest losers. we haven't seen a couple days like this, in about 30 years or so. taking a look at the commodity now. down $126. starting to get used to declines like this. now at 1,374. brings us to the "squawk on the street." gold isn't losing its luster. it's so bad, it's blank. so bad that king midas is using coin. taking a two-stroke penalty. a reference to the masters if you watched over the weekend. and bret writes gold is the new blackberry. looking at the nasdaq today. one of the more interesting charts is we lost some ground in the early session, tried to make it back about an hour in. and now, taking another leg down. that's 1.25%