>> ubs shares are high er. we have to get out. >> we do. >> jeremy, mike. we want to thank you guys both very much for being with us. we really appreciate your time. >> right now time for "squawk on the street." ♪ ♪ ♪ >> a little charlie parker to kick off international jazz day today. good morning. welcome to squawk on the street. carl quintanilla with jim kramer and david faber live at the new york stock exchange. we have the shiller home price report out and the results are on the screen. david will join us shortly to break down those numbers and another good one this month. futures coming off yesterday's all-time high from the s&p. pfizer, etna, starwood and a two-day fed meeting begins as well and markets are mixed in europe and good earnings out of

ubs and another all-time high on eurozone unemployment. more chatter about an ecb rate cut on thursday. our road map begins with the markets as the rally chugs off and never getting this far in a year without a three-day sell-off. indeed, the s&p's starting off today from yet another record closing high. it's a bitter pill to follow. the drugmaker missing expect aegs and cut its guidance and the bidding war for sprint continues to heat up as one side holds its ground and the other makes an advance. >> we'll start with the markets, a morning after the s&p rose to a record closing high and the index within seven points of 1600. you have the nasdaq closing at a 12 1/2 year high and the blue chips have never gone this far into a new year without losing three consecutive sugzs and of course, there's the tuesday element, too, jim. we'll shoot for number 16 today. >> exactly.

>> has that ever been done, bee the way? >> it's a bull market -- no one is ever allowed to say it's a bull market. it's like a sports illustrated thing, but that's the kind of statistic. >> when i got that from our friend gio, i sent hem an email saying this can't be right. in history, we've never had it? >> 1927 we've had 15 in a row, tuesdays. >> how did that end? >> two years later. >> it was a couple of years. >> in our database. >> i don't know, 16 might be -- >> i think this is amazing. when you have numbers that are all team and you had -- remember we always said that the nasdaq, we had a 12 1/2 year high and that means that we actually have another stock participating which is apple leak microsoft. >> doesn't it feel like the '90s? >> can we talk about microsoft

and google from yesterday. can we do that a little bit? when you add that up they had huge advances yesterday. >> huge. is there something to be taken from that? >> broader than just the performance of those stocks as important as they are. jeremy segal is talking about maybe this move ends with 14, 19 p-e and this move started with microsoft having a 10 p-e. how is that possible that it could be that bad? it still has some growth. there is a great bernstein note today about the cloud business running at 2.5 billion. so, it is, yes, multiple expansion. i know you don't favor multiple expansion. >> this is 1996, '97. that was an era, by the way. >> nothing. jim, i mean, we continue to get

some weak numbers out of corporate america. cummins today we'll talk about. we'll talk about pfizer, but we've got a fed that appears to be very little in terms of policy changes this week. there's a calm neil irwin in "the washington post." >> i love that. you just pronounced it dead. this is a money-printing rally, i know that we don't have the close-up handheld, but i have a tie that's helicopter ben and this is what you get. you get bouncebacks, too. a company reports a bad quarter and initially there's a big hit and then it bounces. have you noticed ibm? take a look at ibm, it has just r levitateded a lot of points and it just gained ten pin thes and no one is thinking weight a second and all of the big downdrafts. listen to this, here are the

ones that disappointed, apple, amazon, ibm, intel, qualcomm, united technologies, united health, think bah of america, goldman sachs, caterpillar, mcdonald's and starbucks all disappointed and now pfizer. >> this is the largest drug -- those all disappointed and we hit an all-time high. isn't this what the s&p is? >> doesn't that mean that i should perhaps be reassessing and say that won't last forever at some point? >> i said it says -- just keep it going. the second half must be getting better. >> is it just momentum and cheap money as carl said? >> the endless, endless faucet. >> listen, mr. negativeivity. >> did you see the household numbers in japan? they were very good last night. >> i believe this is a harbinger that things are getting better. >> it's virtually everybody -- the the largest -- >> we came into the season saying it was an important one

to see how the global economy is and not that great and stocks are going up because the multiple should go higher. >> how about this? i search for answers. i come back with bernanke. i come back with perhaps what with sandy cut ler said last night, what chuck bunch said from ppg, not a small company. things are getting better. europe has bottomed, china's coming back and the united states is getting stronger and this is what they say. you say, well, bernanke, i mean, our man will come down to earth. >> ironman, robert downey, jr., ringing the bell in about 24 minutes. i joked on twitter, i said i hope no one tells iron man what industrial metals have done lately. >> copper has to break out. copper has to look good. these are signs that the economy is not getting good. tio2. there are dichotomies that make

it difficult and i know if you're the fed you can point to unemployment. how many jobs are those companies creating? 0? 0? >> neying of it. >> if they want to report a bad number, what do they have to do? what's the way to get to a good number? >> cutting cost has been a key component of the earnings reports and why they've been able to make the bottom number even if revenues are lacking. >> the bottom number is more than people realize. it was not revenue growth that the investors cared about. they cared about yield. intel had a great yield. pfizer. do you think pfizer will will be down a lot? >> look at yield. let's talk about it, actually. the dow xoefrnt is falling in the pre-market excludeing items that they reported 54 cents a share. revenues also below consensus and a lower than expected sales and a stronger dollar. pfizer also reducing rts full-year outlook and to your

point, jim, do people look at it and say i can buy it down 3% and buy it all day long because everyone comes back in the market. >> bristol-myers did not bounce back after bristol reported. it's entirely possible that people say, you know what? i'll go to others who are better in that segment because i just know pfizer goes down a lot. >> or by biogen. which is one of my absolute favorites. >> none of the pharma guys blue it out and pfizer's forecast and they cut it on yen issues, right? >> it was want great. this group did not report terrific quarter. eli lilly did not report a great number, but the stock held in. look, the great anomaly, of course, is my absolute favorite stock of the moment which is johnson & johnson. this fellow comes in, gorski, how about the diaspora of j & j. did you see that? >> i did.

>> i think it was up over 50% this year if i'm not mistaken. if someone wanted to take it over it would have been a smart move. >> by the old management team they're all out and the chairman at avon. >> i do think they're combinations of yield. i heard barbara ryan won yesterday. she's always fabulous on scott wapner's judges' show. merck is a great company that can restructure and has a lot of things in the pipe. this group is charmed. the stock market is not a hall of justice. it is not a jury that tries to get at the truth. the stock market embases what's hot, it always has. >> you called it a harsh judging machine the other day when it came to apple. >> yes. >> i know many people think it's like law and order and you get in front of a judge and the right thing happens and you're on thin ice. >> it's more what's working now

as mark haines used to say about you. >> they're stocks that you may think are worthy of it, but i see companies and they report numbers and if they're good -- here's a good example and i will start with why it is up. >> we better get ready to start paying more for hotel rooms. revpar, have you renned a car lately? i renned a car for $75, and i said yes to all of the other things and it ended up being $2 hush. >> there are a lot of taxes and fees and it is extraordinary. >> you take a plane which now costs more because we've blessed a lot of mergers and you get to a starwood and it will cost more. is that sage? >> vacations are expense of, yes, they are. they're worth doing if you can afford them. >> if. i'm beginning to hear cheers on the other side of the floor. i wonder if robert downey jr.,

is close. softbank founder says sprint is unlikely to get an improved bid from the japanese company. it is offering $20 billion compared with the $25.5 billion offer, and shares are split. shares have soared 120% in the past 12 months and as shares go, david, this is a good one. >> it is a good one. as you might have expected, softbank is coming out and firing here before earnings and talking about why this is an extraordinaie extraordinary for them and it was a proposal by dish. let's not forget, sprint's board as we reported from a special committee.

they're being advised and whether that has a likelihood of living to a higher proposal. it looks like on paper they have more for 765. we have more leverage for financial flexibility. >> he hasn't paid for financing commitments. >> the differential in terms of the economic value. they're claiming synergies than those of us might have anticipated from the softbank side. it's going to be on for a long time and they will likely raise, this is me speaking, if they need to, but you're not going raise now. you're going to trumpet the value of your own bid at this point. >> i just want to drill down. the people are at home. what the heck are they doing with an honest, even-handed commity, why are they not

signing the leaf that blows in the window? why are they taking it seriously? >> they're taking it seriously because it is soars. a lot of people would doubt hem and that is his own fault because his reputation is difficult to figure out his true motives. >> they're taking him seriously. they have to. they have to. he's bringing in $8 million, $9 million of spectrum. he questioned as to whether they allowed him to do due diligence without having the financial commitment and having the laters that say they're highly confident. why go in there and say i have to get it going. >> you're right. and he has a good currency to bring that. so there are a lot of reasons why you absolutely have to take him seriously and that being said, and wondering what he really wants there and some get that question all of the time. >> does he really want to own this or is it about something else.

right now it's the old poetage stafrm although he did fly to new york and he may be paying barclays a little something. >> to me it's astounding that they're taking it seriously, but it shows you they're an honest, good board. >> if they think it can reasonably lead to a superior proposal and then this thing really gets interesting. >> dan hessy. >> let's just get it done and do a town hall. >> a clay nation death match. >> put a lot of shareholders. >> and we can deal with it. >> i like that. >> we need another hero. >> when we come back the president will hold a news conference at 10:15 eastern time and we'll bring you live co coverage from the white house when that happens. which cities were the biggest winners and losers? david blitzer will join us with

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>> i want to get back out to the key housing data. home prices continue to rise in february. average home prices increased 8.6% for the tent city and 9.3 for the 20-city composite. your first on cnbc is david blitzer, the chairman of the

s&pa 00 index commity. david, welcome back. good morning. >> good morning. it's a pleasure to be here. i think we're looking at the highest -- the best improvement since may of '06 on both the 10 and 20 city and a lot of people are wondering when you will get ready to call a bubble, at least in some markets. >> it is very good. month to month, we had all 20 cities up two months in a row and we haven't seen that since 2005. so it is very strong. it's a solid rebound. i would not call it a bubble and a bubble is one thing that you see, and you won't see it after it burred, and at this point i think it's a rebound, an improving economy and some with better consumer confidence and very, very low interest rates. >> are you hesitant to call it a bubble, david because we're still so far off the highs? >> we're far off the highs. there is a lot of.

the overall economic picture does not look as good as housing. the number that have come out for the broad economy in the last month of april had some mixed numbers. the employment report was a bit disappointing and industrial production was a bit disappointing and this was not an all-time boom and there were a lot of foreclosed houses out there now. this is not 2006 all over again. >> there have been a lot of private equity firms that bought a lot of homes. do those home comes back on the market and do you expect them to stay rentals? this is a conglomeration of homes held by the hedge funds. >> a lot of those will come back on the market. the percentage of homes or families occupying homes versus they're owner occupied and they come down for the last few years

and the rental percentage has come up. upon they reflects the housing situation and the lack of confidence from a lot of consumers and i think that will rebalance going forward. so i don't think it happens and it's not like you wake una year from now and the houses dribble back on to the market gradually as prices continue to creep up and as the private equity firm find use for their money. >> david, good to talk to you. david blitzer at s&p. from one ironman to another, there is robert downey jr., of "iron man 3," ringing the bell. tony stark. a lot of rumors about stark enterprisees. >> i did take it down to a sell, sell, sell when he did that. >> directed by, gwyneth paltrow and don cheadle and downey is the one making the appearance.

i just said the death match of the morning will be whether or not our bob pisani can snag him to coming to the mike. it won't be easy. he has a history of running away from our cameras, but i wouldn't put anything past pisani when he wants to get something done. so again, downey's going to ring the opening bell, but you can imagine the scene on the floor. >> very exciting. >> yes. >> when we come back, cramer's going get us ready to bring home some profits. the mad dash is after the bell and we'll take one more look at futures as we kick off a thursday morning. pfizer puts a pall on the market when the opening bell rings in eight and a half minutes. the new blackberry z10 lets you peek in and out of messages

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♪ ♪ ♪ ♪ >> six minutes before the opening bell. time for the mad dash. let's talk banks. i'm puzzling over deutsche bank doing a big offering and everyone going crazy. our banks did not bounce. deutsche bank had 3 billion euro which i thought was a dead currency and barclays had a great number and ubs on squawk this morning, fabulous story. david, these banks, they are bouncing in a way that would indicate something is afoot in

europe because if things are that bad they couldn't bounce. >> maybe true. ubs is a strategy. they have certainly de-emphasized it and focused on wealth management and that has done extremely well so far. >> you don't see morgan stanley going like this? >> morgan stanley has a fixed income issue and they're still suffering from the credit downgrade from way back, but this keeps happening and pressure grows on morgan stanley to do what they did. >> are the u.s. banks in better shape than the european banks? yes, all day long and twice on sunday. that's why i think this is an anomaly. i don't want to chase these and however, it is impressive and there are a lot of european companies including bp that reported a great number this morning. >> all right. >> there isn't a condo issue. i don't want to minimize that. >> condo -- that was a joke. will today be the day of the s&p? it's 1600. everybody is very excited about

robert downey, jr., up there in front of this big poster. ♪

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you are watching cnbc's "squawk on the street" as robert downey jr., gets set to ring the opening bell kicking off "iron man 3" never gone this far without a three-day losing streak on the dow and shooting for our 16th consecutive up tuesday. watching downey, guys, makes you wonder if you have disney options and knowing how well that stock has done, up 26% for the yore. >> when i was in "iron man 1" we didn't expect much from "iron man" we said what with are we going get? she said we're going to get hats. i got a stark industries hat, and i was thrilled and then i saw it made $1 billion and i complained to bob iger. i said what did i do here? he sent me a statue of ironman to make me feel better. they waited two seconds and they made thousands. >> you should have gotten a percentage of the gross. thank you. >> let me represent you next

time. >> and downey, actually in the daily news today, the picture of him made a surprise appearance and a screening for teams in new york city, just appeared in the theater and they went bananas. >> and he's cool, too. >> there's the opening bell. s&p at the top of your screen at the big board, as we said. actor robert downey jr., celebrating the release of "iron man 3," the film will be released on may 3rd. iron man first appeared in 1963 and got his solo comic in 1968. over at the nasdaq, nasdaq services group sanmina corp doing the honors over there. >> data guys, not done by any means. chicago pmi is coming up? 15 minutes and consumer confidence at 10:00. >> there is just so much. >> this is the kind of day when valero does a spin-off. >> carl icahn blows up and there

are things happening underneath in this market that are not actually that positive. but it just doesn't seem to damage it. there are things -- i marvel at the entertainment of this market. >> how is it possible that both downy and iron man are on the same balcony at the same time? >> the double vision that oscar robertson once had 40 points. >> that costume must weigh a ton. >> definitely. >> i'm just guessing here. >> i think it's just plastic. >> and disney, let's understand the greatness of that acquisition of marvel and the star wars acquisition would prove to be brilliant. >> another area where disney will be incredibly aggressive doing a film a year they say for the next few years as they complete that set of three different trilogies. you had buffalo wild wing, by the way, earnings. >> yeah. all over that. >> a lot of street discussion about it, too. >> yeah.

first it was down and then sall smith talked about how april was good and going at 5% and wings cost down and a bunch of analysts said wait a second, this is not as good as we thought. the stock getting hit. people do some homework here, okay? because when you see that back and forth that's just people taking a shot. in reality the stock has had an amazing run and it's due for a pullback. >> that's what happens. >> one stock not pulling back today is apple which is up just over 1% after what was a very strong move yesterday. you have to wonder whether some level was hit around earnings where people just finally said and you mentioned this yesterday, you can't sell anymore. >> how about the level being where so many analysts downgraded and cut their price target? it was the bookend -- >> it was the capitulation when we saw the penguins. which is why we had penguins in the first place as a contrary

indicator for those very occasions. >> it was the for fekt one in 2013. we are seeing money bouncebacks. many stocks that got creamed are making a comeback. >> will cummins make a comeback, it's almost 10%. ? oh, my god, when best buy was 13 they try to the put a buy back together. what happened? >> they could not raise enough equity to get that deal done and the financing was a question perk at 16. >> this also goes to a larger issue which is when with boards or companies say they're not interested in selling and maybe they're right to say that, in a market like we have now with this momentum. look at the stock. >> another man trying to build momentum is our bob pisani on the floor. >> a private collection from my

childhood memories. they changed the outfit and the one you wore. that happened about a year later and so the big thing, this all came out. how does it feel to be iron man? is it incredible. >> it's been a great gig and i'm pleased to be here opening the stock exchange and hanging out with my fellow new yorkers and the whole thing is a blast. >> $195 million worldwide, it hasn't even opened in the united states. a titanic success. >> yeah, and i think having traveled around the world and done a pretty effective press tour you realize no matter how you slice it in the information age people still want to see people and it's nice, you know what i mean? this is more -- this is more interesting than face time. >> think it is and certainly that and here's that first iron man, folks. here he is and this is what it was and this is what it now has become a worldwide franchise and you're a huge part of that. congratulations and thanks for coming down on the floor and saying hello to us. >> robert downey jr.

>> thanks, guys. >> i have -- i have to hold it together here. >> way to go, bob. >> i did not think that was going to happen. >> is it possible to shift from iron man to bonds and the dollar? >> can we show the one clip of you in iron man? >> whatever you want. >> we'll come back. >> you do? just one peek here of jim in the iron man franchise. >> let me show you the new stark industries' business plan! look. that's a weapons company that doesn't make weapons! >> you've done "good wife." you've done your share of feature films, but that had to be a blast. >> i did that without a script and that was my version. look, we didn't know. we didn't know it was going to be big. i thought it was going to be one of those art movies that play in one of those theaters. >> with the tiny little screen. >> and you know what i mean? just a boutique thing and it

goes right to netflix. >> oh, come on! >> good call there, really good call, jim. way to go. >> spotted a winner there. >> that was great stuff. >> thank you. thank you. >> where do we want to go? i don't know if pisani. all right. you want to do pisani and now that he's had time to get his head around the markets and let's head back to you. >> i want to point out what movies have gone for. this is from my childhood comic collection. sales of suspense, '39. this is the first avengers a few months later and iron man looks very, very differently. the point is the value of these movie franchises have driven these comic book prices through the roof. >> a mint copy, these are not near mint copies sold reportedly for $350,000. they were nowhere near that ten years ago. >> good heavens here.

pitney bowes, cummins, pfizer all missed here. cummins missing on the top and bottom line. weakness in europe, weakness in brazil and china. i think your point was very good go about the bottom because cummins like eaton came out in the press release specifically saying we expect the low quarter will mark the low point. and we've heard time and again with the big industrials and companies saying things will will be better in the second half of the year. cummins missed by 50 cents and that's a huge win. they're anticipating that there will be a pickup in the second half of the year and that was my point. a lot of pressure for these companies to perform in the second half. big and concrete aggregates, they miss, but they had a reasonable excuse and the weather with was much, much cooler in the spring than last year and there was simply less outdoor construction work, and they made bullish comments on the overall market.

pitney bowes cut their dividend and cut it in half. they probably had the highest dividend yield and it was over 9%. they're facing a lot of pressure because they're getting the government austerity cuts and big in the mailing business and that's affecting their business overall and it's not a terrible surprise they end up cutting their dividend. bottom line on the fed and what they'll do. the big debate is will they do what the japanese have done? will they buy reits and etfs? almost everybody down here said no. there's already enough conspiracy ideas about what the federal reserve is doing already. they don't need to add any more. they'll stick simply with bonds and treasurys. mortgage bonds. >> guys, back to you. >> now we can shift. i think there's been enough time and to rick santelli, bonds and dollars and the cme group, go ahead, rick. >> all right, jim. what do you call it?

a bubble ishs market or whether you're looking for the central bankers, behind all of the curtains and behind all of t the -- around the world, if you are short stocks you've gotten flattened out pretty good and if you're short treasurys and the conventional wisdom traded at the end of 2012. look at this two-day chart and opening up to december and you see what's going on there and even at 165, lowest yields since december and we're a far cry from the historic yield close and not so good for the boon market. they're getting all lathered up especially after the 12.1% group unemployment rate and that is a record and don't concentrate on that. let's concentrate more on the bushel ishsness of the entire event. those yields getting down to 118 and open that jar up in the summer and they traded their low yield close at 116 and just to show you anything you put a

price tag on has a long line. the hyg, a high yield, the lqd, an investment grade and switch gears to our pals at barclays and their indices. you can see the exact same dynamic going on. everything is getting bought up. even the euro and each though the weak data i referenced and 12.1% unemployment and one would think on thursday it will lower rates and it wouldn't be currency friendly and it seems like even the euro is fiending some buyers this morning. back to you, jim. >> incredible, right? there are buyers for everything, david. check the energy and metals to see if there's buying of those. sharon epperson at the nymex. >> we are looking at oil prices and keep in mind a lot of traders are watching that spread between brent and wti, as well. they're also keeping their eyes on what is coming out of washington in the next hour where the saudi oil minister will give a speech before the

strategic international studies. there he is expected to talk as he has in the past about what is going to happen with the u.s. oil boom if terms of what the saudis will do, in terms of the fact that they believe that with the population growth that we're seeing in asia, there are still ample supplies coming out of the middle east. we'll see if he'll reiterate those comments as he's made in the past speeches. we'll look to see whether or not there will be any indication whetherel that have production cuts and that, of course, will be bullish for oil prices. >> keep your eye on the gold market because there we're looking to see what about reaction and pre-reaction we will see before the bag bank meetings as well as the european central bank meeting. the idea is with the dow situation coming out of the eurozone and unemployment at a record high ask that can pressure marks both in the atlantic and clear. right now gold prices are

hanging pretty stead. >> thanks very much, sharon epperson. what's a day without talking about vodafone and emerson. in the uk, they can't get enough of this potential story because it really isn't -- it's a story, but it isn't a deal certainly at this point, but you've had everybody weighing in from analysts now and other journalists who were speculating on what vodafone might do to sell the 45% of verizon wireless it doesn't own or i should say it owns back to verizon and what it would do, would it try to buy liberty global, for example, that is speculation today, but you know, at this point though, there is still a lack of of two sides talking. >> what is that? >> a sort of senior thing? >> exactly. charlie mccarthy. >> ooh, thank you very much. >> candace bergen's dad, can you

imagine what a duo? >> verizon kind of talking to itself. >> -- >> talking to themselves. >> they are. they're starting to put tore themselves. what do we have to do to get you guys to the table. what do we have to do to get you to the table. victoria, what do we have to do? what can we do? >> theven you have ubs saying i'm going to weigh in here. verizon says it wants to pay 7.5% to 8 times ebitda and shareholders say they do and where do you end up? somewhere in the middle, let's call it so $130 billion for 45% of verizon wireless. what they will tell you is the following, take's look at the bell atlantic and vodafone investment agreement that were both done back in 2000. take a look because this is not a changing control situation that you might think of where you have to pay a huge premium.

vodafone only has two choice fess you want to monetize that stake. it either sells it to verizon or it takes it public and the push lick route and it would be taxable, and you would not get the multiple most likely and at&t not a pure play and so they're simply saying, are you crazy? 130 billion, no way. we're not going to negotiate against ourselves and we're at 100 billion is where they are. right now they don't have a negotiating partner as we watch for vodafone's stocks. >> these numbers aren sane. italy can't borrow that much. 50 billion is 4.5% and verizon can borrow that company. >> how many companies would bob

row more than horizon. >> i don't know about slovenia. >> they just didn't bring it bark. >> who can't? >> dow is done almost 50. let's go to rick santelli in chicago. 49.0, chicago purchasing manager's survey. we haven't breached the 50 level since september of '09 after they did benchmark revisions four months ago. there was actually a stretch, but they all got ramped up so the current row had been the end of last year and december at 50 and obviously we breached that. consumer confidence also one of these feel good indices that we want to watch in about 15 minutes. we want to also pay attention to the slight deterioration in equities and the buying and treasurys after chicago pmi. back to you, carl. >> all right, rick.

>> obviously, that is disappointing. the estimate was for 52.5 and a 49 means we'll see what ism brings us later in the week. the fed doesn't have to worry. they can keep interest rates as low as they want. they can just say pmi? >> forever. it's not forever. is it three iron mens and and we'll bring you live coverage from the white house. the chairman of ultimate poker who is hour away of dealing the real, online poker in the u.s. >> it's that time of year again,

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>> yesterday on "squawk on the street," and at the milken conference maria bartiromo asked marc andreessen about his glass directive partnership making apps for the device. >> this thing has the potential to have the potential and the range of things people will be able to do and just think of every emt and medical professional in the group having videos and diagrams for every medical procedure they can do in

the field at all tiles. it's a really big deal. >> it brings us to this morning's squawk on the tweet. what kind of app would you design for google glass. lance was on the today show. there's me trying them on and matt lauer trying them on. we'll hear more about them, jim. the only question is it a revolution or you have a segway? >> the segway, wow. you have a company that's innovative and we generate things that ye used to hear from apple and it calls people attention to the fact that will google is an inexpensive stock that does cool staff. cool stuff doesn't move the needle itself. it's not an expensive stock and they seem to be at the top of their game. people want to work there so badly, carl, the hardest place on earth to get a job. >> i have some friends who have gotten in. >> really? my 14s have been rejected.

>> high school transcripts and they ask for everything. >> not a surprise, yes, we will be sold to a berkshire and 3go. that deal, we talked about it a number of times bringing the brazilians together with the money from berkshire on what seemed to be a fairly high multiple and consumer stocks made it look somewhat good for the buyers. >> that money that is being contributed by berkshire is now also, the idea of family offices participating in m & a, and deals like this one has taken hold among merger and acquisition professionals. >> not when you need 9 billion, but say you need 500 million for an lbo and instead of having another lbo firm you might call ans on. you get a 7% preferred or something along those plines. >> berkshire meeting this weekend. >> let's save some time for six in 60 after the break. don't go away.

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let's get "six in 60." this is shocking and we have to learn more because this is the speech recognition. i'm not sure about what's going

on here. >> petsesmart. >> raise numbers, and all things well at petsmart, i agree. >> pretty good results at sirius. >> i was chatting with our own david faber about this and sirius is adding a lot of customers and it's working. >> sba communications. >> okay. this is a tower stock. crown castle is also good. amt. amt are cash machines. amt. >> morgan stanley. >> this is not gtls like the cinch -- anyway, it's gas to liquids and it's going higher. >> you're making me laugh here. dominos, another good quarter. >> this is patty doyle just blazing a trail. we were all choking, but i order constantly dominos and they are great with blow-out numbers. >> can't wait for that. what cells on "mad" tonight. >> everyone is saying it's great. i love the app, by the way.

anyone who has used it knows you can set it up and it tells you how far along it is and it's an electric app and it has a no-cheese option for those of us who are vegetarians like my children. i just like this guy. we recommend the stock at 10 when he told me listen our stuff tastes like cardboard, we're fixing it and that was a good call. >> i said it was more like corrugated. it tastes better with a little -- >> cramer tonight. this is good stuff. >> 6:00 and 11:00 eastern time. when we come back the president's news conference in washington. don't go away. [ female announcer ] what if the next big thing, isn't a thing at all? it's lots of things. all waking up. connecting to the global phenomenon we call the internet of everything.

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welcome back to "squawk on the street." rick santelli here. we have the april consumer confidence number out at 68.1, is that correct, gang? 68.1? wow, where chicago disappointed this one is really out of left field. 68.1. granted, in february, we had 68 and in november last year we had 71.5 with the high watermark in october and 73.10 going back to '08, but we've drifted southward with the march read at 59.7, so

this really is a strong number. back to you. >> that is a little weird, rick, but we'll take that and get some market reaction. >> everything is a little weird these days, carl. >> yes, rick. the market's down 56 and that's close to the lows of the session and the chicago pmi did disappoint, but that was strangely positive and the number on consumer confidence and the nasdaq down about 3 3/4. >> thanks, carl, the fomc convening for day one of the policy meeting and that will be a two-day meeting and we have to ask the question how much longer will the fed continue with qe. we've never asked that question before, have we? what is the long-term timeline beginning to look like? steve liesman is the man with the answers and he has the results of an exclusive cnbc fed survey. take it away. >> thanks very much. big news today in our fed survey. wall street now firmly believes quantitative easing will go into

2014. let's take a look at the numbers from the fed survey. economist, strategist money managers. you can see it gradually crept up the average amount of expected qe this year. it's still about $100 billion below where the fed would be if it kept on pace at $85 billion a month. some uncertainty, but look at this, 2014. average respondent, $370 billion of qe in 2014. 40 of our 46 respondents think there will be some qe next yore. now let's take a look at our timeline and see how that's moved. what you have in the upper half here is our march survey and lower half is the april survey. when do they expect tapering to begin. in the old sorry have a, do we have it here guys. it was january and that's moved ahead a month. how do you expect qe to stop and that had been may and move it ahead now to july. two months.

how about when they will ultimately begin to hike the funds rate and it had been the first quarter 2015 phenomenon. let's take a wide view and just go back and what you can see here is from the prior survey to this survey, everything has shifted ahead here. hiking the funds rate, everything. because essentially because of the weak economic data. take a look at the comments that we got when we did the survey here. unfortunately, the economy has not reached the point of a self-sustained recovery. the fed will continue easing well beyond street expectations and maybe those street expectations are catching up. kumar, says edict by policymakers by government or the fed cannot establish value, but do risk distorting them. we'll come up at 11:00 including with the results and the expectations for the market and you can go online and read all

of the results there, simon. >> steve, stay with us, if you would. let's bring in jim donovan with pnc wealth management. good morning to you. >> good morning, simon. >> steve is highlighting probably the most important takeaway from the month of april, i think, and that is the fact that despite the fact that we're four years into this, all of the major central banks around the world are going to be pumping cheap money, possibly more cheap money than we thought, certainly for far, far longer than we thought and even now, if you look at the latest data, inflows into bond funds appear to be now exceeding inflows into equity funds. is that what you're advising your clients to do? >> we wouldn't be adding a lot to the fixed income, but you're right, simon. we continue to be in this oxygen-rich environment of monetary accommodation, and likely according to steve's survey and we will probably

agree we'll see that well into 2014. so it is somewhat of an artificial environment, but at some point the economy will be self-sustaining and we have not seen that yet. although the fed has been successful in raising prices. we have not been able to get a sustained, economic growth we've probably seen that downshifted here in the second quarter. we would stay away from fixed income at this point. >> jim, the fed has been clearly very good at raising asset prices and that's why we're near record highs on the s&p. they have not been able to prevent inflation because the fed's preferred inflation measure, core pci is now 1.1% and that is way below the target 2% again. four years into the battle to prevent deflation. >> hopefully we're starting to see that in the increasing housing prices and i don't think the threat of deflation is off

the radar screen and it's still something that we should consider. in look at monetary accommodation is more afraid of deflation, but we don't consider it a threat here, but certainly something we would still consider to watch. you look at housing prices reported today up 9% over the last year. you're stating to see some pockets of improvement there which will trickle down into the economy at some point in time. >> steve, how do we weigh this? record levels and asset prices, housing beginning to recover, but a lot of america, a lot of the american economy is still crawling along and we see that in probably the jobs data on friday. >> there are two aspects to it, simon and the fed is doing what it can do and it is keeping interest rates as low as it can and keeping stock prices and that should have at least some positive effect on the stock market and the economy overall

but what you have is the push me, pull you, federal government where you have the sequester happening and you have the layoffs at the government level and they subtracted 0.8% of gdp in the first quarter. let's do the math. instead of a 2.5% economy and unemployment outcomes might have been substantially different if you were that far above the economy's potential. so i think one of the reasons why the market is pushing that ahead and you will see this later on and it's because of the drag on the fiscal side. if the fiscal side was neutral, for example, i think you might have been looking at a market that was expecting less qe this year or perhaps next. >> that said, steve, when the president of the boston fed said we've pushed sectors as far as we're able to push them. is there any more appetite for going further? could the fed move into different extraordinary

measures. is that discussed? >> it could. they have discussed it, sielon, i don't think they feel they need to go there. they have a plan right now and they'll execute on that plan which is to keep wide open, targeted to unemployment rate outcomes and you raised an interesting point earlier which has to do with inflation. they are increasingly missing on their inflation target so i expect to hear more rhetoric at how policy is not only aped at the employment rate, but the inflation rate. >> what is the central advice for investors watching you now. we've been fully invested and we wouldn't be aggressive into committing new monies at this level and it's certainly a strong hole here and we look at he quality stocks and consumer discretionary and as i said earlier on the fixed income side

into global fixed think and some of the securities in this environment. >> arguably with the put from the fed, steve, did you just want to come in there? >> simon, just very quickly. i just want to show you how the process is working. as the worst economic data comes out, the whole complex of how much qe and where the expect aegzs are with the heightened funds rate all shifts into the future so there is a dialogue going on. more from your fed survey later. >> jim donovan, thank you for joining us from pnc management. have a great day. >> thank you, simon. >> the president is expected to speak at 10:30 a.m. eastern time. as you know, jobs have been part of his agenda. americans are still unemployed and looking for work. getting a pulse of american enterprise. tom donohue is the president and ceo of the u.s. chamber of commerce and he joins us this morning. >> tom, good to see you again. good morning.

great to be here. we have small business owners watching the show. oui seen a lot of summit comes and go. what's different about this one? this is a meeting of small business leaders from around the nation who are here to do three things, number one, celebrate the accomplish ams of people that have brought great innovation and success to the small business area. second, to learn from each other and from experts that we're bringing in from all walks of life and third, to go up on the hill and to let the members of the congress that are here and their staffs know exactly what's happening in the small business community where 27 million small companies operate and they need the government to take some steps, to loosen up capital and to get out of the way on the regulatory side.

i know you're bringing in jim coke of boston beer, and it seems the emphasis will be on rolling back some regulations and you're on the record on our air saying that dodd frank was written in anger and that the fact that two-thirds of the rules need to be written because it gives us some time to massage the actual policy. what can we do other than rolling back things that are already in the books? >> well, we can do some of that, but it's very interesting to think about all of this capital market regulation. you go back to the 1930s and we have regulation on top of regulation, on top of regulation, and there's nobody that can figure out what's going to happen when you finish the next 70% of the 400 regulations that are in dodd frank. any bank, a regional bank has 6, 8, 10 regulators that are telling them conflicting things.

look, we believe there are smart regulations that we need and they're clear and we need risk and we need to put cash into the market and we need to let small businesses operate and large companies are sitting on $2 trillion of cash and understand what will happen with dodd frank and what will happen in obama care and what will will happen on the environmental side and very much so and what will happen on who they can hire because of the rules that you expect to see on hiring and what's going to happen very, very important on the immigration bill. >> it's funny you mentioned that, tom. big piece today on usa today looking at the amount of money that american companies are putting into efforts to bring some reform to immigration. >> i just wonder if the framework that's been put out there by senator rubio looks anything like what you think will become law if that happens.

>> this is a great, vent because in both houses of the congress we have bipartisan groups putting together what they think is best. in the senate we've got a bill that is going to be marked up in the next few weeks. we have abagreement between management and labor. we have agreement on the high-end side of the people we educate in order to keep here and on the low end side when we need work as badly as we have in this economy, we have an agreement on protecting our borders and knowing who are the right people to hire and we have an agreement on how to take people out of the showers -- shadow, excuse me. then you go to the house and they have different views and their views are different among the margin. they believe that those fundamental issues have to be addressed, and i believe for the first time in many years we have a great chance at getting this bill. there are more people behind it than there are opposing it.

i think this bill will get 70 votes in the senate and let's see what happens next. >> tom on the subject of costing u.s. jobs, this is david faber, by the way. >> big corporations have been watching their intellectual property being stolen by the chinese, and if i remember correctionally the u.s. chamber has been a victim, to a certain extent, of some hacking and those things. my understanding is you guys oppose congress' efforts that the point to try to create some sort of cooperation to fight what is a significant foe being the chinese. >> well, first let's talk about cyber security. we have opposed for some time the bill that had been suggested in the senate or out of the white house because it was based on rules and regulations that could never keep up with technology. what we need is immediate

coordination between the private sector and government and the legal will protection for the private sector to give government what they need to know. i think we're there. if you look at what we've seen coming out of the white house over the weekend, the progress that the senator is making up on the hill, i think we're moving. the question about dealing with china is you don't have a choice whether you're going to deal with china or not. 1.3 million people. we have to deal with india, more people than that, and in both instances we have to bring them in to a world that we're comfortable with and protecting intellectual property and protectioning our companies and protecting contracts and the rule of law, and i would say we're a lot closer to that than we were ten years ago and we're getting closer all of the time although there were a lot of bumps in the road and that market is so big, we need to make sure it works. >> i look forward to hearing more about what the summit brings us and thanks for your

time today. >> thank you very much. look forward to seeing you guys soon. >> tom donohue, u.s. chamber of commerce. >> the revenge of old tech. >> pent-up demand. shares of microsoft, if you haven't noticed are up about 15% so far this month alone. so we're getting a full upgrade mode coming on msft. is it time to jump into old tech? big time. also ahead, david faber has your inside scoop on the market appetite for deal making in the new quarter with morgan stanley's global head of m & a. stick around. a busy moshing with the dow down 67. ♪ (train horn)

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>> blackberry, a company known for its signature keyboard initially launched the new line of phone with the z10, the keyless model with with the release of the q10 going back to the hard key design, which will customers prefer? >> mark sue is an analyst with rbc capital markets has an $18 price target. mark, good to see you again. >> good to see you again, carl. >> you brought estimates up on the hopes of this cue. the longstanding notion has been those who love blackberry want the physical keyboard. is it going to be any different? >> you would be sur pried. people love those little buttons and we're seeing good demand and pent-up demand for the z10. it was revolution ear and it had

to compete with a competitive market, but the q10 will res fate with the die hards who like tapping away at the physical keyboard and we took the estimates higher this week. >> we'll talk about the q more in a second, but what's the report card been so far for the z? >> the z is a decent device, but if you look at the new devices coming out from apple or samsung, the bar continues to be raised and i think it's very competitive. if we look at the z10, we saw the initial spur and it slowed down a little bit and right now it's selling into other regions and it's decent, but in a very crowd environment at the moment. >> say that the response from the consumers on the q is as good as you expect it's going to be. there have been issues on the timing as quickly as consumers expect or at least as the street expect and there are supply issues and can they work around those land mines? >> yes.

consumer demand, supply issues and more importantly, i think it is also the enterprise customers. remember, there is a subscriber base of almost 78 million blackberry users around the world. >> if they can execute and install that, that's quite a bit of opportunity for black behr toe carve out a niche for themselves. they need to have the carrier supported and they need to advertise quite a bit because where we are seeing the q owe continue is the older demographics and it's the young folks out there. >> you see there's a trade here and you're calling the stock up to $18. beyond that, is there a longer term investment. what happens, do you think? >> it's the most heavily shorted tech stock that we know of, and investors are not betting that it will work for them. >> we think a stock trades her

with the high interest. longer term beyond een and beyond that, she'll get sustainable and we don't have that forecasted for a couple of years. i have to make a limited window, if it starts coming to market. samsung is launching, the galaxy s owe 4. i think they'll spend as close to toyota in pushing their electronics around the world. so that's a tough battle to fight and look at apple. they have a new device coming out in the fall, as well. it's a short time window and they've got to get the devices out and they have to execute. >> interesting call, mark. certainly a name everybody loves to talk about both on the bear and the bull front. thanks a lot. >> thank you. >> mark at rbc. >> all right.

sticking with old textures, a microsoft up more than 20% this year alone and the last week and a half has been an incredible rally. is old tech becoming the hot new investment opportunity? brent hill is analyst at ubs and he has a buy on microsoft with a $33 price target. brent, let me start off with the idea that i was exploring last week when value act took a large stake in the company. their emphasize is in the enterprise business. they forget windows. that's where it's growing and that's where profitability would grow at all times. >> do you report that thesis, this is a very, stuff, and you look at the deferred revenue growth. this company has seen much stronger enterprise demand. all of the attention's on the consumer and we've been asking

investors to relook at the earn prize business again. three-year contract terms, and companies like yours and mine will probably not move off of them any time in the near-term. wall street runs more code in excel than they do in any application in software. so that's been the focus. we continue to believe the stock had warned of a slightly higher multiple. if it holds the multiple that it has today woe think out year numbers they could go to 330 and 340 in earnings. you have support of the stock with the 33 dividend yield. >> essentially you've got a very high ebitda margin, as well. you are arguing that deserves a higher multiple. give me some sense as to value then, as you watch the growth of that business. >> when you think about it, there are five businesses at microsoft, right? three of the businesses have margins that are incredible,

right? ranging from 60% operating margins. when you tie into that a high-recurring revenue element, we think earnings will actually accelerate next year given that recurring refer new and we also believe when you look at the consumer side, you know, they're not turning their back to this. so they're working on it. it's not where they want it, but the enterprise continues to hit. so what happens if the consumer business actually starts to pick up? what's coming this holiday? a brand new xbock, is microsoft focussed on the phone market? yes, they are. and they'll got it over a long time and they're happening behind the scenes and the strength of the enterprise is coming back into focus now given the train wreck we've seen in software in the first quarter. we've had 15 companies miss in software and only five have made and so it's been a safety parking lot as well that's helped the stock in the

near-term. >> brent, i'm interested that you kind of skated over elements of the consumer product side. you had breakfast, did you not? with the co-head of windows and not only was there an admission that they got windows 8 wrong, but there was this recommitment to the mobile operation and were they not able to convince you that change would come soon enough? you're right, we did meet with the co-head of the client business and we believe that they're addressing the downfalls of windows 8 in a very aggressive manner. windows 8 didn't come out of the gate the way we would have liked to have seen. i don't think the way microsoft would have liked to have seen, but we think they're focused on this and we think it's a good product. the problem today is less than 15% of pcs are touch enabled and that will change by the pholida and they're anticipating 50% of pcs will have touch. and how it ties into the mobile strategy, we do believe there is

a tighter bond and i think you go back to the bear thesis that this is just a pc play. pcs were down double digits and their client business was flat, so if you look at that business they've shown an ability to diversify away from just the pc market and i think they will continue to focus that. >> we will as well, brent. thanks for your time. appreciate it. >> thank you. >> ahead on the program, the markets are in negative territory as we reached the record high on the s&p yesterday upon. we'll talk about some of the other heavy hitters that are coming through with their earnings and of course, the jobs report up friday. plus david faber has your inside scoop on the market appetite for deal making in the new quarter with morgan stanley's global head of m & a. that's right after this break.

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getting some news out of filing semasema modi is at the nasdaq. a six-part bond sale, now sources are telling cnbc, carl, that this apple bond sale is on track to be the largest ever for a non-financial company.

apple's debt sale likely to total $15 billion to $18 billion. avi which spun off with the debt sale of doll$14.7 billion. early indication shows this apple bond could be well received by the street. >> thank you very much, seema. >> it does seem to be broken up into a number of parts, different durations of debt and of course, goldman and deutsch leading the charge on this. >> absolutely. it seems like a six-part bond sale and you is also have the ten-year note and that's what investors and the street want to see how that apple ten-year note compares to the ten-year treasury. that will be the way to really compare apple's bond versus its tech peers. >> it does raise sort of a larger existential question, simon, about whether or not you think apple will be around in 30 years. not to say it won't be, but technology moves so fast these

days and it raises that sort of question. >> the ten-year yield on the treasury has now hit a low of 1.635 which is extraordinary. that rally that you've seen into the bond market and into fixed income with the point we're making earlier about deflation. you saw the podium there and we'll get to that press conference. for now i want to talk m and a, and rates for borrowing money with all-time lows and they had a prospect of meaningful revenue growth and why aren't there more deals and vice chairman and global head out of m & a. >> i asked the questions and we would think there would be an avalanche of deals, why aren't there? >> historically when markets have been up m & a has been up and more to the point, the market loves m & a.

if you look at what happened to thermo fisher, the stock went up. i remember when ice announced its deal for the new york stock exchange, the stock went up. given that the markets love m & a. >> give me a reason. come on, you talk to these guys. why is the reason there are -- there must be mitigating factors here. >> i think there was so much uncertainty last year all leading into the election and all leading into europe and there weren't conversations going at end of the year and early this year, so i think we'll have a better back end and i can't come up with a good explanation for it other than ceos not being confident enough. >> it comes back to many, many times and i can think of a number of other reasons and one, activists get into deals in a way that might not have been in the past. it's also names you might not think about, dell is selling too cheap or. pcs, you're doing something you shouldn't be doing. is that another mitigating factor for the ceo? why am i doing this?

>> there are basically a couple of issues and there have been a lot of deals for regulatory reasons or delayed. in europe it's been going on for years that deals didn't happen because institutions objected to them, but now you see the case in metro pcs with t-mobile having to redo the deal and who knows what's going to happen with dell given that you have some very large shareholders against them. >> you had a client in dell a little bit in blackstone. >> we did. >> what happened there? >> it was straightforward and they didn't have an opportunity to do due diligence before it was just not there to do a competing yield. >> were you surprised they earned the fray at all given the concerns that were in the proxy itself about the board and what the special committee had gone through. wow! we're watching cash flow off the cliff. >> if you see what happened to the time that it dropped there was a significant change.

>> agrium is one you followed and i had barry rosenstein and janna, lost all five board seats and they were looking for. he called you a mercenary. >> that's a compliment if you're a banker or at least an oxymoron or one of those two things. he's made money on cf. he pic that deal, he didn't have the right thesis for that deal, but what's really interesting about that deal is that people ignored iss and that's happening more and more, but iss comes out with recommendations and shareholders are just saying, you know what? we're going to make our own decision and that's a good thing. wouldn't it be a good thing? so much time in the proxy fights and correct me if i'm wrong is spent on lobbying, iss and 40%, 50% of the time from management is just spent on that. iss has had a tremendous influence and it has been waning. i think they have less

credibility the more time they support the dissidents and then the dissidents lose. they were wrong on other things and they were wrong on air gas. for $70 a share and the stock's at 100. >> waun it another reason why i shouldn't do a deal there, you played defense there to see no all along. >> so if i'm a cle now, what's my reason for wanting to sell? >> your reasons for wanting to sell it depends on the size company that you are. small cap companies have a big issue because people are looking for reasons not to buy stock now. so if you're a small cap company you may get a lot more in the private market either from a strategic or financial player. if you're a large company it's more complicated as to why you should sell now, but premiums are there. if i'm a strategic buyer now, i should be out there trying to make deals because i can't get growth of my own. >> you can borrow

extraordinarily cheaply and the stock may well go up if you do a deal which is accretive back to my original part. you might be saying the second half of this year would be better and you could have said this same thing last year. >> that's true. that's true. >> now you're positive and i don't get it. >> two years ago there was tremendous volatility in the market and people weren't doing anything. last year there was all of this uncertainty in europe and the u.s. election. i thought there would be more activities this year and i've been wrong, looking forward with the firms are selling businesses now united states that can get a lot in this market. >> oh, man, come on. make it happen. >> vice chairman, head of global

m & a at morgan stanley. >> back to you. >> got some news on ibm this morning. 12% div hike, that will get your attention as we try to get the market off of the lows and also adding 5 billion to the stock buyback plan. the current plan is 6.2 so almost doubling the authorization for the buyback. tenth year, by the way, ibm has increased its dividend by double digits and it's coming off the lows and almost back to the flat line at 198. >> and that's what you have to do like tim cook and he raised the dividend which came off the 19th. >> spent a lot of news with the leaked memo to the employees the other day. when we come back, the president expected to speak in just a few moments. when that happens, we'll bring it to you live. we'll be right back. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪

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now a waiting room is just a room. [ telephone ringing ] [ static warbles ] [ beeping ] red or blue?

>> we're waiting to take you life to the white house. president obama getting set to start at 10:00 eastern. do we know what the president is likely to say? i don't know of any particular announcement he's going to open the press conference with, but he's preparing to go to mexico on a trip. he's ended the hundred days of his second term. the first hundred days although that doesn't mean very much in the success term and the president is simply kind of taking this moment to try to seize the initiative in

washington having gotten past the flight delay issue last week, gotten congress to -- or congress decided itself to resolve that issue without resolving the rest of the sequester and i expect one thing he might do, simon is to press the case that there are many, many other effects of the sequester beyond flight delays that are of concern to poor americans and people benefitting from government services, headstart, meals on wheels and that sort of thing to get the republicans into negotiation to put the sequester aside and look for a budget deal. >> it is a news conference and therefore the press corps will be able to ask him questions and what is the burning issue for them at the moment? >> i don't think there is a burning issue at the moment except whether or not we are going get back into a grand bargain discussion. to some degree, immigration, although that republican/democrat negotiation appears to be on track because both parties an interest on

poloing through. the gun issue is a bit on pause now because of the defeat of the background check proposal by joe manchin and pat toomey. the democratic and republican senators although i talked to toomey over the weekend at the white house correspondence dinner and they're preparing a new push to get the no votes turned into yes and remember they fell five votes short of getting the 60 they needed to put that bill on the senate floor and they haven't given up yet and i expect the president to talk about that and talk about syria, the red line and the administration is edging up toward acknowledging that the assad regime has crossed there and talk about the aftermath of the boston bombings. >> it is happening as the fed starts a two-day meeting across town and i wonder if somebody thinks to ask him about where he thinks on his successor to bernanke and maybe one of the more burning questions a business audience might have. >> yes, although that kind of question at this point, before

we've even acknowledged that there's going to be a transition is leakly to yield a goose egg in terms of a presidential answer. i can tell you from having talked to a lot of people as our colleague patty dunn and others that janet yellin is one name that's often mentioned and larry summers is another, but again, we don't have public confirmation from ben bernanke that he doesn't want a success term although it is widely believed in washington and within that building behind me that he does not want another term. >> yeah. people are remembering the last press conference, john, march 1st when we were nknee-deep in the sequestration debate at one point saying what else do you think i should do? i have to think that the heat has been turned down a little bit from back then. >> well, not if you're a democrat who doesn't like they is quester and wants an alternative, but republicans are

winning this argument right now. the question is can they keep winning it? and you mentioned the testiness. the president is still feeling on that, you saw from one of the jokes at the correspondent dinner. they're calling for me to have a beer with mitch mcconnell. seriously? you have a beer with mitch mcconnell because he doesn't think it's been productive and so far he's justified and it's not over yet. >> is there's a big column in "the washington post" today by neil irwin about how the age of austerity is coming to a close and we're expecting the ecb to change their stance on thursday. in japan, obanomics and they're starting to pay debt for the first time in six years. is there any chance he takes somewhat of a -- not a victory

lap and saying that my policies are beginning to pay some fruit. unless republicans come to the table, deficit reduction is now done for the presidency and he can say, you can make me live for the sequester and i don't like the nature of the sequester, but there will not be entitlement reform or deficit reduction unless you come up with revenue and he will challenge republicans and dare republicans to try to force his hand by not raising the debt limit, the white house is confident that having put away that weapon, they're not going to bring it back out. >> here is the president of the united states. >> i am here to answer questions in honor of ed henry as he wraps up his tenure as president of the white house correspondents association. ed, because of that, you get the

first question. >> thank you, sir, i appreciate that. i hope we can go back to business and being mad at each other a little bit. >> you may be mad at me. >> i'm not. a couple of questions on national security. on syria, you said that the red line was not just about chemical weapons being spread and there was a game changer and it seemed cut and dry and now your administration seemed to be suggesting that that line is not clear. do you risk u.s. credibility if you don't take military action, and then on benghazi, there are some survivors of that terror attack who say they want to come forward and testify. some in your state department say they've been blocked. will you allow them to testify? >> well, first of all on syria, i think it's important to understand that for several years now what we've been seeing is a slowly unfielding disaster for the syrian people and this is not a situation in which we've been simply bystanders to

what's been happening. my policy from the beginning has been that president assad had lost credibility, that he attacked his own people, has killed his own people, unleashed a military against innocent civilians and that the only way to bring stability and peace to syria is going to be for assad to step down and to move forward on a political transition. in pursuit of that strategy, we've organized the international community. we are the largest humanitarian donor. we have worked to strengthen the opposition. we have provided non-lethal assistance to the opposition. we have applied sanctions on syria, so there are a whole host of steps that we've been taking precisely because even separate from the chemical weapons issue, what's happening in syria is a blemish on the international

community and we have to do everything we can to protect the syrian people. in that context what i've also said is that the use of chemical weapons would be a game changer. not simply for the united states, but for the international community and the reason for that is that we have established international law and international norms that say when you use these kinds of weapons you have the potential of killing mass numbers of people in the most unhumane way possible and it is so significant that we don't want th that genie out of the bottle. when i said that was a game changer that wasn't a position unique to the united states and it shouldn't have been a surprise. and what we now have is evidence that chemical weapons have been used inside of syria, but we don't know how they were used,

when they were used who used them and we don't have a chain of custody that establishes what exactly happened, and when i am making decisions about america's national security and when i am making decisions about america's national security and the potential for taking additional action in response to chemical weapon use, i have to make sure i have the facts. that's what the american people would expect. and if we end up rushing to judgment without hard, effective evidence we could find ourselves in the position where we can't support what we do. there may be obss even among some people in the region who are sympathetic to the opposition if we take action. so it's important to do this.

what i've said is we have to do everything we can to investigate and establish with some certainty what happens in syria, what is happening in syria. we will use all the assets and resources at our disposal. we'll work with neighboring countries to see if we can establish a clear baseline. and we've called on the united nations to investigate. but the important point i want to make here is that we already are deeply engaged in trying to bring about a solution in syria. it is a difficult problem but even if chemical weapons were not being used in syria, we would still be thinking about tens of thousands of people, innocent civilians, women, children, who have been killed by a regime more concerned ab power. so we are already deeply

invested in trying to find a solution here. what is true is if i can establish in a way that not only the united states but also the international community feel confident is the use of chemical weapons by the regime is a game changer because what that portends is more devastating attacks on civilians and it raises the possibility that those chemical weapons can fall into the wrong hands and get disseminated in a way that would threat threaten the u.s. or our allies. by game changer i mean we would have to rethink the range of options available to us. we are already invested in

trying to bring about a solution inside of syria. obviously there are options available to me on the shelf right now. a spectrum of options. as early as last year i asked the pentagon, our military, our intelligence officials to prepare for what options might be available. i won't go into details of what those options might be. but clearly that would be an escalation in our view of the threat that to the security of the international community, our allies, and the united states, and that means that there's some options we may not otherwise exercise that we would strongly advise. >> i know pieces of the story have been litigated and you have asked about it.

there are people saying they have been blocked going forward, they have survived the attack. will you help them going forward? >> i'm not familiar with the notion that anybody is blocked from testifying. so what i will do is find out what exactly this is referring to. what i have been very clear about from the start is that our job with respect to benghazi is to find out exactly what happened. to make sure that u.s. embassies, not just in the middle east, but around the world, are safe and secure and bring those who carried it out to justice. but i'll find out. [ inaudible question ] >> i'm not familiar with it. jessica? >> mr. president, there's a report that your director of national intelligence has ordered a broad review -- this is in regards to the boston marathon, that your dni ordered

a broad review of all the intelligence acquired prior to the attack. tl also lindsay graham who alleged in all the years after 9/11 there wasn't enough shared after the attack. now he says ben gauz and boston are of the u.s. going back after national security. is he right? and did our intelligence miss something? >> no, mr. graham is not right on this issue. i think that what we saw in boston was state, local, federal officials, every agency rallying around the city that had been attacked. identifying the perpetrators just hours after the scene had

been examined. we now have one individual deceased. one in custody. charges have been brought. i think all our law enforcement officials performed in exemplary action. they should be proud of all the work. as we are proud of all the medical personnel who helped save lives. we also know the russian intelligence services alerted the u.s. intelligence about the older brother as well as the mother, indicating they may be sympathizers to extremists. the fbi investigator, that older brother, it's not as if the fbi did nothing. they not only investigated the older brother, they interviewed the older brother.

they concluded tlerp no signs he was engaging in extremist activity. is there something that triggered cad ralization and a brother to engage in the attack zsh the tragic attack we saw in boston. what they are doing is standard procedure around here. which is when an event like this happens, we want to review every step of the statement. we want to leave no stone unturned. is there protocols and procedures to be put in place that would improve or enhance

our ability to detect a potential attack. and we won't know until that review is complete. we won't know that until the investigation of the crime is fully complete. and that's still ongoing. based on what ef seen so far, the fbi performed its duties, department of homeland security did what it was supposed to be doing. but this is hard stuff. and i have said for quite some time that because of the pressure that we put on al qaeda. because of the pressure that we put on these networks that are well financed and more sophisticated and can engage and project in the national threats against the united states, one of the dangers that we now face

are self radicalized individual who is are already here in the united states. in some cases may not be part of any kind of network. but because of whatever warped, twisted, ideas they may have, may decide to carry out an attack. and those are in some ways more difficult to prevent. and so what i have done for months now is to indicate to our entire county terrorism team what more can we do on that prep that is looming on the horizon? are there more things we can do, whether engaging with communities where there's a potential for self radicalization of this sort? is there work that can be be

done in terms of protection? all this has to be done under due process. so part of this is going to be to see if we can determine any lessons learned from what happened. >> are you getting all the intelligence and information you need from the russians, and should americans be worried when they go to this big public events now? >> the russians have been very cooperative with us since the boston bombing. obviously old habits die hard. there's still suspicions between the law enforcement agencies that date back 10, 20, 30 years, back to the cold war. but they're continuing to improve. i'm spoken to president putin directly. he's committed to working with me to make sure those who report to us cooperate fully.

not only in this investigate, but counter terrorism issues generally. in terms of what the response of the american people, i think everybody can take a cue from boston. if you don't get a sense that anybody is intimidated when they go to fenway park a couple of days after the bombing. there are joggers right now i guarantee throughout boston, cambridge and watertown. and i think one of the things that i've been most proud of in washingtoning the country's response to the terrible tragedy there is a sense of resillans and toughness, and we're not going to be intimidated. we are going to live our livesful people understand that we have to do everything we can to prevent these attacks for

taking place. people also understand, the a same way after a shooting in aurora or newtown or virginia tech of after the foiled attempts in times square or in detroit that we're not going to stop living our lives because warped and twisted individuals try to intimidate us. we're going to go to work, raise our kids, go to ball games, run in marathons and we're going to make sure everybody is cooperating and vigilant and doing everything we can without being naive to try to prevent these attacks for happening in the future. jonathan karl? >> mr. president, you are 100 days into your second term. on the gun bill it seems you put everything into it to try to get it passed. congress ignored the events to try to undo the sequester cuts.

there was a bill that you tried to veto that got 92 democrats in the house voting yes. my question to you is do you still have the juice to get the rest of the agenda for your congress? >> if you put it that way, jonathan, maybe i should pack up and go home. golly. you know, i think it's a little -- as mark twain said, rumors of my demise make media a little exaggerated at this point. look, we understand we're in a divided government right now. republicans control the house of representatives. in the senate, this habit of requiring 60 votes for even the most modest piece of legislation has gummed up the works there. and i think it comes to no surprise, not even the american people, but members of congress

themselves that right now things are dysfunctional on capitol hill. i feel confident the bipartisan work done on immigration reform will result in a bill that passes the senate, passes the house, and gets on my desk. that's going to be a historic achievement. i've been complimentary of the efforts of the republicans and the democrats in those efforts. it is true that the sequester is in place right now. it's damaging the economy. it's hurting our people. what's clear is the only way to lift it is if we do a bigger deal that meets the test of lowering our deficit and dproeing our economy at the the same time. and that's going to require some compromises on the parts of democrats and republicans.

i've had good conversations with democrats so far. those conversations are continuing. there's a general desire to move past not only sequester but washington dysfunction. whether we can get it done or not, you know, we'll see. but the sequester is a good example. or this recent faa issue is a good example. you'll recall that as recently as my campaign the republicans were saying this is terrible. it's going to ruin the military. it's going to be a disaster for the economy. we have to do something about it. then when it was determined that doing something about it may mean that we close tax loopholes

suddenly we will take the sequester. the notion is we exaggerated the effects of the sequester. the president is crying wolf. he's chicken little. the sequester, no problem. then in rapid succession, white house tourists, this is terrible. we have to fix that. and what are we going to do about potential delays at airports? so despite the fact that a lot of members of congress were suggesting the sequester was a victory and this wouldn't hurt the economy we now know what i warned earlier, what i stood up and warned repeatedly is happening. it's stunted our growth, it's resulted in people being thrown out of work and it's hurting folks all across the country. and the fact that congress responded to the short-term

problem of flight delays by giving us the option of shifting money that's designed to repair and improve airports over the long term to fix the short-term problem, well, that's not a solution. essentially what we have done is in order to avoid delays this summer we're going to ensure delays for two or three decades. >> why did you go along with it? >> hold on a second. >> so the alternative, of course, is either to go ahead and impose delays on passengers now, which also does not fix the problem, or the third alternative is to actually fix the problem by coming up with a broader, larger deal. but jonathan, you seem to suggest that somehow these folks over there have no

responsibilities and they my job is to somehow get them to behave. that's their job. they're elected. members of congress are elected in order to do what's right for their constituencies and for the american people. so if, in fact, they are seriously concerned about passenger convenience and safety, then they shouldn't just be thinking about tomorrow or next week or the week after that. they should be thinking about five years from now, ten years from now. 15 years from now. the only way for them to do that is to engage with me oncoming up with a broader deal. and that's exactly what i'm trying to do is to continue to talk to them about are there ways for them to fix this? frankly i don't think that if i were to veto this faa bill that would somehow lead to the broader fix.

it just means there would be pain now. which they would try to blame on me. either way the problem is not getting fixed. the only way the problem gets fixed is if both parties sit down and say how are we reducing the deficit efficiently? how are we rebuilding the airports and roads and bridges and all the basic research, all the things to help us grow, and that's what the american people want. just one interesting statistic when it comes to airports. there was a recent survey of the top airports in the country -- in the world. and there was not a single u.s. airport that came in the top 25. not one. not one u.s. airport was considered by the experts and

consumers who use these airports to be in the top 25 in the world. i think cincinnati airport came in around 30th. what does that say about our long-term competitiveness and future? when folks say there was money in the faa to deal with furloughs, yeah, the money is the pool of funds that is supposed to try to upour airports so we don't rank in the bottom of industrialized countries when it comes to our infrastructure. and that's what we're doing. we're using this short-term. the only reason we're doing it is because right now we have folks who are unwilling to make simple changes to our tax code, for example, to close loopholes that aren't adding the to our competitiveness and aren't helping middle-class families. so i'm -- that's a long way of answering your question but the point is that there are common sense solutions to our problems

right now. i cannot force republicans to embrace those monosense solutions. i can urge them to. i can put pressure on them. i can rally the american people around those common sense solutions, but ultimately they themselves are going to have to say we want to do the right thing. and there are members in the senate right now and i suspect in the house as well who understand that. their base thinks to compromise with me is a betrayal. i understand all of that. we're going to do everything we can to create a permission structure for them to do what is best for the country. it's going to take some time.

>> p president, as you're probably aware there's a growing hunger strike. is it any surprise they would prefer death to have no end in sight to their confinement? >> well, it is not a sur friz to me that we have problems in guantanamo, which is why when i was campaigning in 2007 and 2008 and when i was elected in 2008 i said we need to close guantanamo. i continue to believe that we've got to close guantanamo. i think -- well, i think it is critical for us to understand guantanamo is not necessary to keep america safe. it is expensive. it is inefficient. it hurts us in terms of our international standing.

it lessens cooperation with our allies. it is a recruitment tool for extremists. it needs to be closed. now congress determined they would not let us close it. despite the fact that a number of folks are currently in guan to guantanamo who the courts say could be returned to their country or a third country, i'm going to go back at this. i've asked them to review everything currently done at guantanamo and i'm going to try to make this the case that this is not in the best interest of the american people. and it's not sustainable. the notion we're going to continue to keep over 100

individuals in a no man's land in perpetuity, even at a time when we are winding down the war in iraq. we are winding down in afghanistan. we have kept the pressure on all these transnational terrorist networks. when we have transferred our detention authority in afghanistan, the idea that we would still maintain forever a group of individuals who have not been tried, that is contrary to who we are. it is contrary to our interests, and it needs to stop. now it's a hard case to make because for a lot of americans the notion is out of sight, out of mind. it's easy to demagogue the issue. that's what happened the first time this came up.

i'm going to continue to come at it. i don't want these individuals to die. obviously the pentagon is trying to manage the situation as best as they can. but i think all of us should reflect on why exactly are we doing this. why are we doing this? we have a whole bunch of individuals who have been tried who are currently in maximum security prisons around the country. nothing's happened to them. justice has been served. it's been done in a way that's consistent with our constitution, consistent with due process, consistent with our traditions. but the individual who attempted to bomb times square, in prison, serving a life sentence. individual who tried to bomb a plane in detroit, in prison, serving a life sentence. somali, who we captured, in

prison. so we can handle this. and i understand that in the immediate aftermath of 9/11 with the traumas that had taken place why for a lot of americans the notion was somehow that we had to create a special facility like guantanamo and we couldn't handle this in a normal conventional fashion, i understand the reaction. but we are now over a decade out. we should be wiser. we should have more experience in how we prosecute terrorists. and this is a lingering problem that is not going to get better. it's going to get worse. it's going to fester. as i said before, we're going to examine every option that we

have administratively to try to deal with the issue, but ultimately we're going to need help from congress. i'm going to ask some folks over there who care about fighting terrorism but also care about who we are as a people to step up and help me on it. chuck todd? >> mr. president, thank you. max baucus, democratic senator, referred to the implementation of your health care law as a potential train wreck. and had other democrats been whispering nervousness about the implementation and self centered a little bit, the impact it may have on the home political campaign. just curious, why does senator baucus, somebody who extensively helped write your bill believe this is going to bloody the law?

>> i think any time you're implementing something big, there are going to be people nervous and anxious about is it going to get done until it's actually done let's step back and make sure the american people know what we're doing. the affordable care act, obama care has now been with us for three years, it's gone through supreme court tests. it's gone through efforts to repeal. a huge chunk of it has already been implemented. for the 85% to 95% of americans who already have health insurance, they're already experiencing most of the benefits of the affordable care act, even if they don't know it. their insurance is more secure. insurance companies can't drop them for bad reasons. their kids are table to stay on

their health insurance until their 26 years old. so there's a whole host of benefits, for the average american out there, the 89% to 90% of americans who already have health insurance, this thing has already happened. and their only impact is their insurance is stronger, better, more secure than it was before. full stop. that's it. they don't have to worry about anything else. the implementation issues come in for those who don't have health insurance. maybe because they have a preexisting condition and the only way to get health insurance is to go out on the individual mark and they're paying 50% to 100% more than those of us lucky enough to have group plans. people to poor to get health insurance or the employers don't offer them. maybe they work for a small business and the small business

can't afford to provide health insurance. so all the implementation issues that are coming up are implementation issues related to that small group of people, 10% to 15% of americans. that's still 30 million americans, but relatively narrow group who don't have health insurance right now or are on the individual market and are paying exorbitant amounts for coverage that isn't a that great. and what we're doing is setting up a pool so they can all pool together and get a better deal from insurance companies. and those who can't afford it, we're going to provide them with sub substance. that's it. that's what's left to implement. the other stuff has been implemented and it's working fine. the challenge is that setting up a market based system, basically an online marketplace where you can go on and sign up and figure

out what kind of insurance you can afford and figuring out how to get the subsidies, that's still a big complicated piece of business. and when you're doing it nationwide, relatively fast and you have half of congress determined to try to block implementation, then you have a number of members or governors, republican governors, who know that it's bad politics for them to try to implement this effectively and some who decide to implement and then really controlled state legislatures say don't implement and pass enabling legislation. when you have that kind of situation, that makes it harder. but having said all that, we have a great team in place.

we are pushing very hard to make sure that we're hitting all the deadlines and benchmarks. i'll give you a recent example. we put together initially an application form for signing up for participation of the excheane exchanges that initially 21 pages long. everyone sat around the table and said, well, this is too long. especially in the age of the internet. people don't have patience to sit there for hours on end. let's streamline this thing. so we cut what was a 21-page form down to a form that's about three pages for an individual. more than that for the family. well below the industry average. but the main message i want to give to the american people,

despite all the sky is falling predictions about this stuff if you already have health insurance, that part of obama care is already in place. that is about 85% of the country. what is left to be implemented is those provisions to help the 10% to 15% of the american public that is ub lick i can enough that they don't have health insurance and by the way, some of you who have health insurance may at some point lose your health insurance. this structure will make sure that you are not left vulnerable. but it's still a big undertaking. we're making sure that every single day we are constantly trying to hit our marks so it is in place. even if we do everything perfectly, there will still be

glitches and bumps and there will be stories that can be written that says, oh, look this thing is not working the way it's supposed to and this happened and that happened. and that's pretty much true of every government program that's ever been set up. but if we stay with it and we understand what the long-term objective is, which is making sure that in a country as wealthy as ours nobody should go bankrupt if they get sick and we would rather have people getting reck checkups than going to this the emergency room because they don't have health care, if we keep that in mind we can drive down costs. we can improve efficiencies in the system. we can see people benefit from better health care. that will save the country money in the long term. >> -- cooperation of a handful of governments, particularly large states like texas? >> i think it's harder, there's no doubt about it.

we will implement it. there will be -- we have a backup federal exchange if states aren't cooperating we set up a federal exchange to people can access the federal exchange. yes, it puts more of a burden on us. it's ironic since the folks believe in empowering stays but they're going to end up having the federal government do something that we would prefer the states to do if they were properly cooperating. let's see how we're doing on time. last question. where's anthony? there you are. tell those big guys to get out of your way. -- [ inaudible question ] >> it seems to be a more

conservative proposal. is there room for a more stiff proposal for the one presented in the senate? yesterday the mexican government said all of law enforcement will no go through a single door. is this change good for the u.s. relationship with mexico? do you think the security and cooperation can be maintained? >> on immigration reform i've been impressed with the work done in the senate. the bill that they produced is not the bill that i would have written. there are elements of it that i would change. but i do think that it meets the basic criteria that i've lowed out from the start, which is that we have to have more

effective border security. although it should build on the great improvements that have been made over the last four to five years. we should make sure that we are cracking down on employers that are gaining the system. we should make the legal immigration system work more effectively so the weights are not as burdensome. the bureaucracy is not as complicated so we can continue to track the best and brightest from around the world to our shores in a legal fashion. and we want to make sure we have a pathway to citizenship that is tough but allows people to earn over time their legal status here in this country.

and the senate bill meets those criteria. in some cases not in the way that i would. it's a testament to the senators that were involved that it made tough choices and made tough compromises in order to hammer out that bill. now i haven't seen what members of the house are yet proposing. and maybe they think that they can answer some of those questions differently or better. and i think we to be open minded in seeing what they come up with. the bottom line is they have to meet those basic criteria. is it makes the border safer? are they working to make sure people are not taking advantage of or taking advantage of the

system? are we improving the legal immigration system, and are we creating a pathway for citizenship for the 11 million or so who are undocumented in this country? if they meet those criteria, then we should be able to come up with an appropriate compromise. if it doesn't meet those try year ya. when it comes to mexico, i'm very much looking forward to meeting with him. this will be an opportunity for his minister as my cabinet members to really hammer out some of these issues. a lot of the focus will be on

economic issues. we spent so much time on security issues between the united states and mexico that we forget this is a massive trading partner responsible for huge amounts of commerce and huge amounts of jobs on both sides of the border. we want to see how we can beat them, how we can improve and maintain that economic dialogue over a long period of time. that doesn't mean that we're not going to be talking about security. i think that in my first conversation with the president he indicated he very much is concerned about how we deal with the drug cartels. we have made great strides in the coordination and cooperation of our government in the last few years. by my suspicion is these can be improved. some of the suspicions really have to do with refinements and improvements in terms of how the

mexican authorities work with each other. how they coordinate more effectively. it has less to do with how they're dealing with us, per se. so i'm not going to yet judge how this will alter the relationship between the united states and mexico until i hear from them to see what they are trying to accomplish. overall what i can say is that my impression is that the new president is serious about reform. i think he's going to make more that will improve the economy and secure the the mexican citizens and that will improve bilateral relationships as well. also the presidents of central american countries, many of whom are struggling with economic

issues and security issues but are important partners for us. the vision here is we want to make sure that our hemisphere is more effectively integrated to improve the economy and the security of all people. that's good for the united states. that can improve our energy independence. are a whole range of opportunities. and that is going to be the purpose of this trip. i'm sure those of you who travel with me will have a chance to discussion this. i'll say something about jason collins. i had the chance to talk with him yesterday. he seems like a triskt young man. i told him i could not be prouder. one of the extraordinary measures of progress we have

seen in this country has been the recognition that the lgbt community deserves full equality. not just partial equality. not just tolerance but a recognition that they're fully a part of the american family and given the importance of sports in our society for an individual who has excelled at the highest levels in one of the major sports to go ahead and say this is who i am. i am proud of it i am still a great competitor. i'm still 7'0" and can deliver a hard foul and, you know, for a lot of young people out there who are gay or lesbian or

struggling with these issues to see a role model like that who is unafraid, i think it's a great thing. america should be proud that this is just one more step in this ongoing recognition that we treat everybody fairly. and everybody is part of a family. and we judge people on the basis of their character and their performance. and not their sexual orientat n orientation. so i'm very proud of him. all right. >> there's an encore there for the president, taking one last question on jason collins. his first press conference with the media since march, covering a range of issues. syria and the range of chemical weapons used, saying i have to have the facts before any policy changes. the fbi's performance in washington. the sequester, saying it's not

his job to make congress behave, in his words. a new push to close guantanamo bay and daugs on obama care saying for those who have health insurance, a lot of the policy has already been implemented. searching for a lead. a little bit thin there. >> yes. it's like we expected going into the news conference. there wasn't a particular point to this. he was trying for the president after some events of recent days to try to take control a little bit of the story. say i'm still here. i'm still relevant. you had that money moment when john carl said do you still have juice to get that agenda through? he said, maybe i should just pack up and go home. reports of my demise are exaggerated. he talked about immigration. he expressed frustration and

patience with the congress on sequester and budget issues saying i can't force them to do what i think is the right thing. i can try to press them and make the case. on the the faa, for example, he said we didn't really solve the problem. we took money to avert furloughs of air traffic controllers and flight delays but that money comes away from future airport improvements that will prevent delays later on. so he is trying to make the argument for what he calls common sense approach to the budget, which will involve more revenues. entitlement reform, a grand bargain. but he has a ways to go before he can make that happen. >> market went into the press conference down. they've erased more than half of their losses from when the president began speaking. they came off of the lows, as he talked about syria, saying his comment about game changing shouldn't have been a surprise. says they have no chain of custody, as he put it.

not knowing who used what kinds of weapons and where, i wonder if it takes any geo political risk, or at least removes it from the table as far as investors are concerned. >> that is precisely why the president did a little tap dancing on that issue. he is trying to go very slowly and cautiously, realizing that if you say, okay, dpam changer, the game has now changed, what is the difference of the game? the problem is u.s. credibility is on the line. so he is going to have to do something different, but he has to take his time before he spells out what that is. interesting, john. a lot of the press talking more about that not a single print outlet was asked than the policy. >> cry me a river! >> thanks, john. john harwood at the white house. let's get to rick santelli in chicago. take a look at fed policy as the fed kicks off their meeting.

hey, rick. >> yes, and i have a special guest. back in september our guest john taylor along with mr. graham wrote what i have framed in my office is one of my favorite op-eds. the hidden cost of monetary easy. maybe you can refamiliarize our viewing and listening audience to the key points in your paper regarding how the exit isn't going to be easy and that the grand experiment has little precedent. >> yeah, we have never seen anything like this before. the massive expansion of the balance sheet and the the zero rates dfor many years. it's always hard to undo easy policy. this one was more difficult. we wrote about the dangers, if you like. and we're still concerned. this is not behind us. the more the fed continues to purchase, which i suspect they will be doing for a while, the

more difficulty the unwinding is going to be. >> mr. taylor, educate me. we have a debate every day. the new phrase again is we are deflating. so my guess is that's a green light for the fed and it will probably be discussed in tomorrow's statement. but when you pump things up that go up and you stop pumping and they come down, is it really deflation in a monetary sense or is it deleveraging? are there any distinctions here, sir? >> well, i wouldn't say it's deflation or anything like that. not even close to it. i think when you pump up you have to pump down. that's what senator graham and i were worried about. still am. and it's already creating issues in the economy. the economy is not doing well. it's the worst recovery we've had from a recession like this. it's gone on for four years.

growth is around 2.5%. those tr the downsides that we are already seeing from this. i think the policy is not working. i hope the fed at some point takes the opportunity to begin to unwind it in a smooth way that is not disruptive. >> mr. taylor. it's really gotten smashed lately. countries don't like to implement austerity because it's actually a medicine that may work. if it's implied properly, do you believe the central theme that an economy saddled with debt over a period of time will underperform it's own bogey? do you agree tw the original premise of that paper, sir? >> do i agree with the premise that too much debt is dangerous and our projections were going to go a lot more. i mean, it's much more than 90%

if we don't make a correction. the sensible thing would be to reduce spending gradually. try to get the budget in balance gradually. we're talking about to getting back to where we were before the mess began in 2007. i think that mess is important to talk a spread sheet error trivializes the whole thing. >> well, my final question. we're almost out of time. if you raise rates and look at capital as a commodity, there's many businesses and savers and businesses where if capital was more in tune with risk there would be more activity, not less. is there any truth to that? >> i think there is. this is such an unusual set of policies. how do you price bonds? how do you price securities? what do you b do when a central

bank is dominating? a return to normalcy like we had in good times until the '80s and '90s would be healthy for the markets and overall economy. >> thank you, mr. taylor. it's been a pleasure having you on the show. >> carl, back to you. >> that's a news making interview right there. a lot more "squawk on the street" after the break. [ indistinct shouting ] ♪ [ 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. ♪ all on thinkorswim from td ameritrade. ♪ i work for 47 different companies. well, technically i work for one. that company, the united states postal service® works for thousands of home businesses. because at usps.com® you can pay, print and have your packages picked up for free. i can even drop off free boxes. i wear a lot of hats. well, technically i wear one. the u.s. postal service®, no business too small.

welcome to the earnings squad where we dissect the stories everybody is talking about. i'm melissa lee along with my partner. first, let's get to that score card. 69% beat their targets. 20% have come dm below forecast. the dow component also cutting the full year outlook. shares of avon products up. the cosmetics company was helped by cost cuts as well as improved sales in brazil and russia. and nuance communications down 18% after missing the top and bottom line. we'll have more during the halftime report. the analyst call is under way.

we had to tear you away from the desk to come up here. >> the president is talking about how great the growth is. the one thing i would point out is the growth may be strong, but it is slowing. it is slowing in terms of revenue. it is slowing in terms of volume. it is slowing in terms of sales leader growth. i also want to point out something the company also said. they said the volume would have been higher had a big distributor not left, taking his downline with him. that's something you want to pay attention to. the company also said, and this is significant, that they are going to prohibit the use of buying sales leads by their distributors going forward. so it's just something to pay attention to. it's been a controversial area. >> and just as you were leaving your desk, you were noting the session is just starting. if you could get on that call and ask one question to michael johnson ceo, what would you ask? >> i'm stumped because here because i would -- i want want

to know theoretically about changing the culture of the company. they talked about it on the call. they're going to give more information in 30 days. >> there's a whole different dpi namic for the company. it will be interesting to see if they address that. >> yeah, they're going to give more. i don't know if they can give -- i don't know. i'm not convinced they can make a major difference there right now because it has something more to do tw the general underlying aspects of the business. let's move on. >> okay, weaker demand for mail is impacting the resolve. who mails anything? that's the problem with the post office. that's the problem with this. >> and they're trying to transform the company. the key is they cut the dividend in half. a lot of people are getting burned here. it's still up 26% year to date.

the options activity was huge. some people went long and got burned pretty bad. >> 26% year to date is little so solis for the people who were in it. and that is a chart versus ups. this is just for example because you can see that ups is up 18%. this as commerce is gaining steam and people are mailing less frequently. e-mails replacing mail. >> and pbi is an ice melting dif dent at this point. >> it's true. and i tweeted this. yes, i'm on twitter! i tweeted this. stamps.com had great quarter compared to expectations. so this is a real disappointment. >> all the businesses, can they make the transition?

>> yeah. want to also talk about 3d systems. they had an 81% increase in unit sales for printers. this is why we're talking about the stock. this stock has been hot, hot, hot. it was mentioned in the president's state of the union address that sent the sector soaring up 629%. a lot of great little nuggets here out of the call and the earnings release. positive sales. specifically citing increased demand from manufacturing activities. >> if you look at it overall, sales growth again, i feel like a broken record. it is slowing. >> there's a balance out there. one average thinks that 20% for the foreseeable future. that's huge numbers. >> well, it's an interesting stock to talk about. that's it for us this morning. if you want to join the conversation, tweet us at #earningssquad. i'm on twitter now as well. that's new. back with more during "street signs." meantime coming up next on "squawk on the street," an

exclusive with the ceo of dr. peppe peppe pepper-snapple. everyone's retirement dream is different; how we get there is not. we're americans. we work. we plan. ameriprise advisors can help you like they've helped millions of others. to help you retire your way, with confidence. ♪ that's what ameriprise financial does. that's what they can do with you. let's get to work.

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dr. pepper snapple beating the street but selling fewer of its drinks. so what is the company working on to offset that trend? our jane wells is live in texas with the story.

>> reporter: trust me. i am a doctor, i have to wear this coat. look, americans are drinking less soda, so when you are a much smaller number three, you have your work cut out for you. >> every day is like the super bowl. it's like being in a sport. >> reporter: he started out driving a pepsi truck. he was here five years ago when dr. pepper snapple group went public. since then they have really outperformed coca-cola and pepsi. all three report lower volumes in soda. so dps is spending money to market locw calorie soda. the products are already providing more than 10% of carbonated sales.

the company shows neilson says people are coming back. >> here's another version of steve yeah. this is one that we put together. and it should be a little cleaner at the end. >> reporter: he is working on a special steve yeah, which he thinks will taste better than the one coke is using. the ceo claims they are gaining ground. >> we couldn't have went public at a worst time. may of 2008, that was disastrous. at that time, when most companies were retrenching, we said no. we're not going to figure out who to survive. we're going to figure out how to thrive. they talk about us being small compared to coke and pepsi, but i've seen a lot of fleas make a

bulldog bite their butt. >> are any bulldogs biting their butt? >> well, we're still gaining. >> reporter: they're also the company's biggest customers. they bottle and distribute most of the product for dr. pepper in the u.s. coming up, i'm going to show you this video. behind this door is the secret recipe, all 23 ingredients. no, they wouldn't tell me what it is. >> i have a feeling, though, jane, you're going to find out at least some more about that. we watched some video of you trying, sipping different drinks. anything that stood out to you, good or bad? >> you know what really was surprising to me? i did a regular blind taste test of regular dr. pepper and dr. pepper 10. and i did pick which was which, but they were really close. it wasn't leak a diet drink at all.

i was surprised. >> we know you have a discerning palate. thanks a lot. keep those tweets coming. we gave you a first hand look at google glass with that man right there. several companies already working on some apps now for the gadget, including twitter and we're asking you what kind of app would you design for google glass. tweet us @squawk street. [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ge has wired their medical hardware with innovative software to be in many places at the same time. using data to connect patients to software, to nurses to the right people and machines.

♪ helping hospitals treat people even better, while dramatically reducing waiting time. now a waiting room is just a room. [ telephone ringing ] [ static warbles ] [ beeping ] red or blue? ♪

oh, boy. [ groans ] ♪ ♪ [ engine revs ] ♪

we gave you a first hand look at google glass yesterday. and we asked about the glass collective partnership that will start apps for that device. >> this is a platform as big as the smart phone. just think of every emt and medical professional in the world having live diagrams for every possible thing they could do. nanl in every category of human activity. >> we asked you what you would

design. brian rights how about an app that makes you look like less of a nerd while wearing those silly things. i think google's probably working on that too. keep an eye on that. let's get back to headquarters, scott and the fast money halftime. carl, thanks. welcome to the halftime show. four hours to go until the close. and right there on the wall is where we currently stand. the dow is trying to go positive. still negative by about 7 points. s&p and nasdaq are still in the green. one well-known hedge fund manager tells you where he's finding the green. with apple breaking suld you be getting in? one trader says yes. the other one