cnbc. i'm becky quick along with joe kernen and andrew ross sorkin who is reporting from new york today. andrew, you have a big show coming up. what's on set? >> we are here, becky, at the lowes regency no.

>> well, it -- >> i can't. i have to do another show after this. >> she has to do another show and i have to -- what do i have to do? i do have things to do.

i have to get a haircut. >> there you go. >> i've got to get more clothes for davos. >> it's crazy. i can't -- >> you know, i'm trying -- long underwear today, andrew, and you're not here when i need you. >> you're trying on your long underwear? >> thinking about it. >> i will get you -- you know my favorites. i will give you some tommy john long underwear. i will go and get some today for you. >> if it doesn't fit, can i return the bottoms? do they take those back after you try them on? >> no. >> here is the question. do you wear your long underwear over your other underwear or do you wear it -- >> i don't think you should. i think it's -- >> your other underwear? >> yeah. yeah. >> you're the authority, andrew. do you or don't you wear the tidy whiteys under the tommy john longs? >> i think you're not supposed to. >> yeah. that's why they're called underwear. it's called underwear because -- >> you're at the regency doing power breakfast. how did this happen?

>> useful business news you need to know about adjourn wear this morning. >> it is useful because there are manufacturers of all the ones that you've tried and all the ones that you liked. you tried the best and you got rid of the rest. >> he is an underwear oh fish in additiono. andrew, why don't we get you a couple of the headlines on our market agenda today. we have earnings and economic data coming up. before the bell, we'll hear from general electric and morgan stanley among others. then at 9:15, industrial production and kapt capacity utilization. also worth w567g today, we have january consumer sentiment. equity futures this morning are indicated a little bit higher. it needs to get 20 points back today in order for this week to actually end up. right now, we're down about 20

points. it would be the third week in a row that the dow is down if we don't get those gains today. you can see right now, dow features up by 1.5 points. nasdaq was up yesterday, it closed once again at a 13-year high. >> i'm very pleased, 1846, basically, on the s&p. all of the stats about three weeks or whether it's up, down or otherwise, we are holding on to most of the big gains we saw at the end of the last year. anyway, we have to get back to business and see what the stock market is going to do this year. intel missed the street by a penny and cited weak spending on servers. i haven't bought a server in a while. they don't make the right color servers for me any more. the chipmaker offered a luke

warm forecast for revenue in the current quarter. that stock, you look at a long-term stock, it's been somewhere between 22 and 27 for it just seems like forever. captain one posting lower than expected results. net income fell on both its credit card and consumer banking business. and earnings of american express missed the mark by a penny. customers spent more on the holiday season, though, and worldwide spending on amex cards rose 8% in the forty quarter. that was the biggest jump in four quarters. but american express says it's seem minimal to the data breach at target and has frog controls in place on affected accounts. >> speaking of target, a new report says that the breach appears to be bought of a broader scam that affected several retailers. the information was published bay global cyber intelligence

firm that works with the secret service and with homeland security. this is something we'd be maybe expecting since we heard from both neiman marcus and since there were concerns that several other retailers inside the mall had been affected right about the same time. neiman marcus computers were hacked as far back as swrul. the paper says that the attack was not fully contained until sunday. neiman marcus said it first learned in mid-december of suspicious activity that involves credit card used at its store, but it didn't publicly disclose the information until last friday. so for all the people that were so concerned that target was so late with this, neiman marcus didn't disclose until last week and these other stores we still haven't heard from. >> when are we going to have the parade of people that come and say this happened to me and my identification and showed up on -- >> it happened to me. i think they've had trouble putting two and two together with these things.

i had to get my card renewed just before this outbreak. my card has been compromised again so i'm watching closely. >> what are the percentage of people that have been watching the transactions on their cards after going to target? >> i don't know that there's ban roundup on the whole thing. i know of at least five or six personally that had this happen since the target information. but if you now find out it's other retailers first, i think it's hard to determine who knew what when. . the credit card company knows there was a big problem. yesterday i was at the mall trying to pick up a few things, my credit card got shut down because they said it looked like suspicious activity because i had been to three stores. i went in and -- i don't know if i should tell you this. the one store i was in said that they -- >> why? where were you? >> victoria secret. they said that every -- they said that they have a lot of cards -- that was where my card got rejected. i said wait, i've only been to a couple of stores today. she said no, this happens constantly, their store in

particular. >> max, is your birthday coming up? why were you shopping at -- >> if you really want me to tell you, i need some new things. >> no, you know what? i don't think i do. i don't think i do want you to tell me. >> okay. i needed some things. we're going on a trip. i need things. >> okay. >> that's why i was out at the store. >> is your husband here? quail -- i'm going to message him. does he have requests? >> no. it's -- you can talk about him tommy johnes and i can't talk about what i'm -- >> the issue at hand that i have is are there still people that are clueless and they're going to go use or get a bill or using their cards and they're going to see that there have been other people using their cards? >> yes. target said they will be monitoring for the next year to watch and see what happens with these things. >> i mean, the expectation, what they said was immediately after the target confirmation of what happened, they started seeing 10

to 20 times as many of these credit card information and things that would pop up on websites, where they were phishing and trying to use these sites where they were selling things. but if you're talking about a grander scale, i think everybody needs to be watching their credit cards. this is a common occurrence. i was talking to the clerks yesterday when they rejected my card. oh, yeah, how many jp morgan chase cards have you rejected today? three. i'm not jp morgan chase. all the credit card companies know that they have to shut down cards quickly. and fraudulent activity now is going to three stores in the mall. it is serm something that is picked up. the credit card companies are aware of this and they're trying to be much more vigilant. in there are two other more normal stores where you went? >> bloomingdales. >> it wasn't frederick's and victoria secret and then -- >> you can talk about andrew's underwear left and right all the way through.

>> i don't know. victoria secret, big angel wings and the super molds. do they sell just normal -- >> yes, yes, they sell normal stuff, too. >> okay. i've only been in there once .people look at you when you're in there, at least you feel like people are looking at you when you're in there. and i didn't buy anything. >> i think they do have a much higher rate of fraud that comes through there. i think that's why their store gets flagged so frequently. >> really? >> they said everybody that comes through gets flagged there. >> really? all right. anything will be easier than that. in washington news, president obama is going to give a long awaited speech on surveillance and what he plans to do to overall the nsa program today. the address comes after a six-month review of the country's spying program. the president is expected to extend privacy protection for non-americans, citizens, continuously vault surveillance. the speech is scheduled for an 11:00 a.m. eastern start. and we've seen the different media outlets have portrayed

this story differently. there's a big story yesterday about how -- what happened to our liberal president that went from -- >> he's been criticized. >> yeah. was that in the times? what happens here? >> have you noticed, though, anytime there's news he's going to make a speech, he gets criticized before he even gives the speech. >> there are people that don't like the drone program. they don't like, you know, the strides that have been made against -- i don't think against terrorism. i don't think there is anyone who has criticized the actual bin laden. but there have been some because he can't captured and brought for trial or anything like that and he was -- the president has been pretty -- has been the one area where he's not really separated himself maybe from the other parties. >> no. i think once you get in and you realize exactly what is happening and you know a lot more than we do -- >> that's probably true, too. in other beltway headlines, the senate has approved the $1.1

trillion budget bill, ending the threat of a government shutdown. the president is expected to sign that legislation into law by tomorrow. it's time now for the global markets report. i've been waiting for this for -- actually, then can we -- you have not seen downton abby. >> i have not. but i've seen what you're going to do with it. >> do you know, is the -- the uk, is it the same -- i don't know that. i need to ask ross this. >> the uk is more than just london. isn't that also scotland? >> ross, hey, downton abby, don't you run it over there first? is it the same people, the same actors? don't you run the season before we run it? is that how it works? do you know? >> it might well be. i don't actually know. typically we would run it here first and then you would get it later. >> is maggie smith and everything like that -- because i was watching the other day, and it's a great show.

you don't feel -- for me, i don't feel proud after really enjoying an episode, but i can't -- you know, you sort of -- it's like a guilty pleasure because people get tv disease and people get tv romance and there's always these things that happen for like two episodes. you're totally manipulated. but the guy who was a servant, he was a chauffeur and he married into the family and his name is tom branson, he looks like you. and i pulled out -- his hair looks like -- i'm not kidding. >> i don't think he does. >> he does! >> the irish guy. >> there you go. okay. >> and it's not -- maybe not the -- >> you know what i told him, ross? i said you're better looking. >> this guy is a -- >> thank you, becky. >> and i'm not saying you married up or anything like that, ross. he lost his -- now he's always sad because -- but you're telling me that doesn't look like he's ready to give us the europe -- >> ross has better eyes. >> he what? >> ross has better eyes. >> what's wrong with this guy's

eyes? >> nothing. it looks like him, but i'm just saying that ross has better eyes. >> ross, you don't watch the show, either, ross? >> i watch it. >> oh, you do? >> do you know the success of that show? it's like the best soap except it's in costume. and that's kind of -- >> maggie. the remere got 10 or 11 million viewers, all-time record here. >> i'm going to watch. i have to wait because i can only do one series at a time. i'm going to pick up on that. >> i have to cop to kind of being a star -- is it a star -- >> chaser? >> yes. or a jock. anyway, i saw at the correspondent dinner lady mary, michelle docker, i think she might be a normal person. because i was a little bit -- >> you know, the funny thing is, she comes from -- she basically comes from the east end of london. >> that's why she laughed at me. >> the star she plays is nothing like her upbringing. >> because i saw her and i kind

of went, wow, lady miller, you're so elegant and she snorted and laughed at me like what an idiot you are. i am not that person. i am -- the person she supposedly is, she had a one-night stand with a turkish guy and then the guy dies. >> the first series. >> yeah. anyway -- >> apparently based on a true story. >> is that right? that i did not know. but we digress. without andrew here to bring us back to business news, we're all over the place. >> i don't mind. and becky, i haven't forgotten your comments. thank you very much. >> you're welcome. that's what i said to him. >> tom is really good looking and he did well for himself. >> when he pulled it up, doing the 007 james bond stuff, and that i can see. but i -- i do. >> we could do white tie and tails. i'd better tell you what's going on here briefly as far as

equities are concerned. we're slightly weighted to the upside right now. advancers outpacing decliners by around about 6 to 3, something like that. the if it is ft. yesterday was just down only four points. today, up 0.25%, as you can see. really strong uk sales out of the uk. up 5.3% year on year. that's about double what we were expecting and the fastest pace since october 2004. smaller stores, sales there coming in at three times the pace of the biggest stores. the super market groups have been the ones, the groceriers that have been really hit. the xetra dax up 0.6%. the cac 40 up 0.2% the ftse mib up 0.2%, as well. the big shock profit warning was from shell. they said we're going to have revenues about $1 billion less than we originally thought. they have problems with expiration not coming in, volumes of expiration not coming in at thought and weaker refining margins, as well. royal dutch shell down 1.5%.

hsbc, krorts out of hong kong suggest they have 90 billion in capital hold that lot has taken on board by the rest of the market. back to you. >> ross, thank you. we'll talk to you again on -- i guess we'll talk to you on tuesday. >> we're not here on tuesday, either, are we? >> somebody will talk to ross on tuesday. andrew will be here on tuesday. >> the main guy lost his fortune by putting 100% of his money on a railroad, the guy on downton abby. >> i'm not going to listen to you because you're ruining it. let's get back to andrew. andrew, you have a lot of big guests joaning us coming up. who is next? >> we do. we're at the lowes regency. coming up, lowes cochairman and chairman of lowes hotels. also the treasurerer of the giant. he's going to come to the table and talk business, the super bowl and food. back in a moment.

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how many agents say wi-fi while flying is key for business travel clients? almost 60%. it took one year and $100 million to 2r6r78 the regency hotel into what we see this morning. we are here at that hotel. theco chairman of the lowes corporation, co-owner of the new york giants and it's great to be here. we're having the squawk power breakfast. >> and welcome. you are here on day two. >> day two. >> you went through the numbers. >> 379 rooms. >> we actually have 379 keys because we have a lot of suites. and the renovation touched every inch of the hotel. rooms, corridors, new lobbies. >> but my favorite fact, you grew up here on the 15th floor. >> i am the male eloise.

>> the decision to do it now and the decision to spend $100 million, first of all, usually when the contractor comes to your house, they say it's half of what it turns out to be. was $100 million what you thought it was going to be? >> when we started planning, it was five years ago. we were just going to do the rooms. that was a $35 million project. it took us some time to find the right design team, the right architects. then my cousin and i sat down and said, look, the hotel has been here 60 years. let's do it right. we were originally going to stay open during the renovation. but then, with super bowl, that was pressing the back end of the schedule. >> because you needed to be finished this week. >> for many reasons, i needed to be finished this week. and being co-owner of the giants and wanting to put up the best space on the property, some commitments we had to the nfl, to the host committee, we needed to be open this week. >> here is a question. yesterday -- >> power breakfast. >> power breakfast, i'm sorry. if you walked in here yesterday,

you had just about every major -- former and current government official. we were talking about how ray kelly was going be here. the former mayor was here. all sorts of business people. blair effron. how do you think you create -- you started this in 1973, the power breakfast here. >> actually started by my father, lou rouden, feelic rouden. cover of the daily news, forbes and new york city dropped dead. that was the era where these business leaders were getting together and said let's find a place to talk and figure out how to save the city. so my father, who lived here, grew up here, said look, i only have to talk the elevator. meet for breakfast at the regency hotel. that is where the term that is now used globally power breakfast started in this room. >> how much do you think it is about --

to see and be seen, it's a large part of it. people want to be in this environment where they know they're going to see their pals, the men and women who are making decisions about the future of new york city, about the future of industry, entertainment, and during the course of the day, there are different businesses that sort of inhabit different time slots. we have a big l.a. clientele. they come in at 9:00 because it's 6:00 a.m. their time. >> what does a hotel room go for. >>? >> we raised our rates. we paid $100 million. now we need a return on investment. >> therefore? >> rooms start at $650. >> is that a big room or -- we're going to davos and were joking about how we're going to be sleeping on cots. >> probably for 650. >> a medium sized room, that's about 350 square feet. the rooms have been totally redone, new windows, they're sound proof, quiet, new technology. >> are you packed literally starting this sunday? i'm assuming once super bowl

comes -- about the week before super bowl. you'll start to see people coming into town. a lot of travel decisions are not made until sunday at about 9:00 p.m. when the fans know if their team is going to the final game. so we expect the phone -- we've got a lot of bookings right now, believe me, but the real final push is going to be sunday night when we know who the two teams are. >> you own a lot of other properties, obviously. the economy right now, where are we? >> we're in pretty good shape. we're feeling there is a touch of stability on capitol hill. and i use the word touch because we never know about our friends down there. but with some agreement on the budget, and ceos need that confidence in government and to see a little bit of strength to make investment decisions. >> but you look at the unemployment numbers we saw last week, did that scare you at all? >> everything scares us, but when you look at the variety of businesses within the lowes corporate umbrella, we can go

against any headwind. >> john, we're going to be here for the next two hours. we have a lot of people we'll be talking about. a lot more football. >> great guests. >> some really great guests. but in the meantime, i'll send it back to hq. becky. >> andrew, thank you. >> free wi-fi? >> oh, you didn't is ask. is there? >> i knew that joe would ask that question, of course. >> no, it's andrew. >> that's one of my favorite questions. >> you're asking for andrew, i get it. >> i always say the chapter the hotel, the freer the wi-fi. >> so there is free wi-fi in the lobby, the vaunt, the rooms. if you need to download a file or a movie, you want to watch a movie on your ipad, you have to pay a few bucks for that. >> joe, we won't go there, but you know what that means. >> that's why i asked. when we come back, what will the dow component tell the street? we'll have ge's quarterly results right after this.

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good morning. welcome back to "squawk box" here. we're going to say welcome back all the time even if it's 24 hours that you've been here. i'm joe kernen with becky quick and andrew ross sorkin reporting from the regency power breakfast. ge is out. >> ge is coming in with earnings of 53 cents a share. that is right in line with specations. revenue looks better than expected, though. >> up from last year. >> yeah. >> up 3%, so revenue growth. organic revenue growth was 5%. margins were better.

ge capital continues to do better. unfortunately they don't have the blockbuster numbers from cnbc. $244 billion is a record and orders in the u.s. were better than other places, except for growth margins, up 13%. but europe up three. and in the u.s., up 8% and that stock is trading higher. >> that's something that ml points to, the chairman and ceo, jeff immelt says they saw conditions and a mixed environment in europe. when you were talking about the industrial segment, the profits there were you 12%. they say seven of seven industrial segments had positive earnings growth. >> the number was $5.4 billion. remember we talked about two other big name companies, both earned $5 million. so the $5 million club continues

here with general electric, now $5.4 billion. and there were a couple on things in here that i guess they're telling us operate earnings at 56.3. but they did to a couple of weird things, you know, with 5 cents here, 3 cents here. a number of investments. the company recorded a 5 cent per share of industrial restructuring and other charges, partially offset by 3 cents a share of industrial gains. so like anything, it's never just a science, it's always kind of an art. but we'll call 53 in line. more recently, people have been more concerned with revenues than sometimes the bottom line. >> they also say that some of these moves will allow the company to increase the plan cost out efforts in 2014 to more than a billion dollars. >> i wonder, also, that because revenues are now going up year over year, i'm wondering if they've got ge capital shrunk to the size where they want. because that was one of the

reasons why revenue was sometimes below because they were shrinking after that financial crisis and do you think that's a good idea or not. 18.2 billion return to shareholders in 2013. the 2014 framework remains unchanged. i don't -- i didn't see anything necessarily that was either -- >> they did say ge capital continued to execute on the strategy of becoming smaller. >> they're continuing to do that. we ask a lot of him, but jack negan, chief investment officer of harvard advisory in boston, when would they -- there was no dividend increase in december, was there? when do you look for something like that, jack? is it time or did they maybe wait until december of this year to do it? >> joe, they did raise on the 13th of december. it was a 16% raise from 76 cents to 88 cents. >> oh, just this past december? how did i miss that? really? >> yeah. it snuck by me, too, joe.

but that they did raise and i think we can expect that december at the director's meeting is going to be the time each year when they're going to adjust now. and i think they've gotten up to about the payout ratio that they would like to be at and we can expect dividend to grow with earnings from this point forward. that was a slight rise in payout ratio. >> i guess maybe, you know, they owned us and they owned 49% of us. but i can't believe that. >> they've dropped you off the e-mail list, joe. >> i guess that's why. i guess that's what happened. did you -- do you like -- what's the most important thing here? is it bottom line now earnings per share or are you looking at revenue growth or order backlog? what's the most important thing to indicate the future for the company? >> joe, i like to look at a couple of things. industrial margins is very important. it seemed whenever industrial margins are rising, the stock does well. backlog is important.

industrial orders, very important. that's the indication of what's happening in their marketplace. and you indicated 8% on industrial orders. that's pretty good. ge, at their meeting in december, talked about organic growth for next year. they reported 5% just this quarter, which is pretty good in this environment. >> yeah. you have a lot of people saying that revenue growth is going to have to take the baton from earnings per share. because companies are lean and they've done a lot of things in terms of trying to get as much the flow to the bottom line. now you'll have to say some revenue growth to keep up any kind of growth at all. so you think 5% organic is not too bad? >> no, not in the environment we're in, joe. and i think you nailed it a minute ago. you talked about the revenue

growth being masked a bit by taken down and ending that investment at ge capital. and at the meeting last month, they talked about ending that investment with 385 at the end of the last quarter. i imagine it's around 375 now. their target for, you know, 2016 and 2017 is around 300 to 350 and there it will stabilize. and then the revenue growth that we look at will be a more true reflection of what's happening in the company's markets. >> all right. 9 billion in acquisitions completed, which is not -- probably mostly small. that's not a lot. i wonder if we can start to assume that immelt is finished messing around with the business mix and have the company positioned with the right mix of assets that he wants now. is there more left to do or is he kind of where he wants it to be at this point? >> joe, he's done the heavy lifting, which was trimming down ge capital.

and he's positioned himself in new areas like oil and gas. but i think he still wants to use some of the capital, allocate some capital to adding to those areas that they really believe are long-term secular trends and oil and gas is one of them. >> yeah, i would imagine that, too, for the revolution that we're predicting here. all right. so it would be a new high of 2809, trading now up a couple of percentage points, i think, or 1.5%. and then the yield, 3.2%. which is -- all right. thanks, jack. we'll see you later. >> thank you, joe. >> okay. andrew. >> coming up next, we're going to mix some politics into the squawk power breakfast. we've got former congressman harold ford jr. he's going to talk to us about the debates and buzz if he's watching right now, including his thoughts about chris christie's bridgegate scandal. mine was earned orbiting the moon in 1971.

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welcome back, everybody. take a look at the u.s. equity futures. right now, dow futures up 20 points. that's the line that decides whether this is a winning or losing week for the dow. if you are down by -- or if you're not up by at least 20 points today, it will be the third week in a row that the dow has lost ground. that would be the first time that's happened since august. the nasdaq has been hanging in there. it's been up three days in a row and indicated slightly higher this morning. s&p futures up close to two points, as well. nintendo says sales of its wiiu consoles flopped. nintendo is flashing its global wiiu sales forecast for the year that end on march 311th by almost 70%. wow.

let's get back to andrew in new york city. andrew. >> hey, becky. we've got a friend of the program here. we are at the lowe he s regency the very first power breakfast. they just reopened. our next guest is ready to start a lot about politics and business. former united states congress mapp, currently a managing director and senior client relationship manager for morgan stanley's wealth management business. who do you technically work for? do you work for our former colleague at cnbc? >> gary is one of my senior bosses. >> is he a boss or colleague? where is that -- >> it's a hybrid. we all report to gary now at morgan stanley. greg fleming and cylan keller, gary is right there in the mix. >> let's talk politics. this, by the way, is the place where all sorts of politics -- you've been coming here for a long time? >> i have. the tiscrs are great friends.

it's where so much happens in the morning in new york. >> let's talk about chris christie. he's the topic, i think. is he still the topic in this city right now? >> i think it's forced a bit. i think if he is telling the truth, which i don't have any reason reason, any evidence to suggest he's not. but if they're holding the story, if there's anything that is not altogether true, he'll have some -- >> how long did it play out for him? >> it looks like these investigations are going to go on. >> everyone is coming out of the woodwork. >> it seems like there are one or two people, maybe three people these xhp committees want to hear from. one may be the deputy chief of staff. the other may be the appointees that the government made over the port authority. i think one those two people talk, i think we'll have a sense of how long this thing will go on. >> and in terms of the republican support for him and money from wall street, the guys who eat here, do you think it's solid? >> well, i think if you look at his base of support in new york

in this area, probably won't change very much. the real question is what happens with activists and donors and others in some of the key states, iowa and south carolina in particular. i think people will watch closely over the next few weeks and see again what the key witnesses and participants in all this, what they have to say. >> i want to hit two other issues with you. one is immigration reform and is whether we get it at all. the topic keeps coming up. the other, though, is minimum wage. and right. >> you are a supporter of the minimum wage. sdmriem a supporter of the increase of the minimum wage. with increasing shares of heads of household, herbing minimum wage, i think you have to look at some tiered approach, the $10 to $12 mp number is something more reasonable. i don't believe you go taxing people to solve the problem. i think you have to figure out how we grow. but if you kept the minimum wage at a rate where it would have grown over the last 20, po 3

years, it would be higher than it is now. >> and you don't believe that would mean less jobs? >> we have something called evidence now that suggests that's not true. the raise on minute amonesotimu this country in the past has not had that effect. you can to make sure people can pay their light bills, their phone bill. >> i'm channeling joe now, wouldn't it be better to have a free market in all this? >> but sometimes all the rules don't work everywhere. you can take the free market to urban areas from memphis, to nashville, atlanta, parts of new york city. sure, it would work, but it doesn't always work that way. we have to find ways in which government can help ensure that there's fairness. now, i don't believe that, again, we have to overtax people or overregulate. but we have to find ways in which we create that balance.

i'm hoping we can. >> imm immigration reform i don think happens before june because you have largely too much republicans facing primaries against tea partiers against the senate in the house. as much as i'm for immigration reform, i don't imagine you will win a republican primary. >> do you support deblasio? >> i want the mayor to do well. concern about the heated rhetoric. but i'm interested in hearing the mayor talk a little more about growth. nothing wrong with talking about progressive. show me and demonstrate how we grow the job base, how we grow incomes, the incomes here in this city and how you keep this city safe. ensure that we educate the nation -- >> do you think this conversation about inequality makes sense or not? >> i think it makes -- >> and is it about inequality or inequality of opportunity? >> both. if we don't find ways to ensure

the kids -- i think the mayor is right on point talking about finding ways that kids from birth to 5 shows what happens is critical, what happens afterwards. we have to find programs that works and anyone who believes we shouldn't invest in that i think is not understanding of how you equally equalize that. two, you have to make sure when kids get to elementary and high school they're being challenged and we find way toes make sure not only are they get to go college, but we'll find way to support their job and family. >> thank you. >> we all should root for the mayor. >> and we'll be talking with ray kelly. i want to hear what he says to say about that. harold ford. joe, i'm surprised you didn't jump in. i thought i was going to create a little bit of a debate. but apparently not. in the mean time -- >> harold is, you know -- we are -- we're one. we're one, right, harold? great minds. >> we are. >> i don't think i'd disagree with anything he's really said there. >> higher minimum wage?

>> you're talking about 2.5% of the people and half of those people are between 16 and 22 years old. and i don't on -- i don't feel strongly one way or the other. i just don't think it helps that much. i wish we could come up with some much bigger answers to equal opportunity, andrew. >> but you're not completely opposed to the idea if it's something that gets things moving and some momentum on something else. >> i'm almost agnostic to it. i don't think it would hurt that which and i can make the case, i'd made it for you, andrew, is that the shares holders of companies that pay a lot of minimum wage have done well. i don't think that's the right way to do it, normally, but if regulations make it pass through to workers is one way. i wish we could -- >> look, i think of it wins good will. >> what if they combine passing the keystone pipeline and tax raises? >> exactly. i don't think there's any

problem with it. >> right. >> anyway, thank you, guys. harold, it's great to see you. andrew, we'll get back to you in just a minute. when he come back, we'll have a live report from beijing as the iphone gols goes on sale tow china mobile network. the talking squawk blog is out to help you get through the weekend. we're back next week from davos. go to squawk.cnbc.com to read about e-mails, trash, and a second chance to conquer the morning. i have low testosterone. there, i said it.

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welcome back to "squawk box." you're looking at our coffee. day two of the relaunch of power breakfast here at the lowe's regionen en regency hotel. this is the partner of the bar and grill and founder and partner of st. ambrose. thanks for being here with mr. tisch. >> our new partner in food and beverage. >> i didn't realize this just until we got on. you have a power breakfast spot in the city. >> that's correct. >> how are you going to work this? >> well, you know, i'm hoping to have -- to share the customer base. >> we're going to create new customers and new demand.

it's about 12 blocks south of here. >> when you think of the power breakfast, who do you compete with. >> we invented it. the term started here. there are great places to have breakfast in new york city, other hotels, restaurants, certainly casalever. you create new markets. the fact that our location is on the border of the central business district with the upper east side, people stop here, have breakfast and head south to their office. there are different markets, different clienteles for each of the power breakfasts. >> how much are you calling pals to get people in? how do you build it from day one. >> it's one customer at a time, really. we come in, give them product, great hospitality and we make sure, especially in the morning, we have a nice smile on our faces. we start the days well. >> it's more than breakfast. we'll have a robust lunch and dinner business.

we have chef dan silverman in the kitchen. >> we had the owner of michael's on recently. >> they do breakfast. >> more power lunch kind of place. he lowered his prices about a year an and a half ago. used to be you'd go in, couldn't get out for less than 200 bucks. >> right. >> where are you on price in the city right now? >> where are we on price? we are price sensitive. obviously we want to be cost conscious but we have a great product. it's a beautiful property. i think we have to position ourself in the high-end market. >> look at our location. look at the fixed costs we have, this is a hotel that operates 24 hours a day, 365 days a year. there are costs and we're going through the pricing structure now. we also do competitive surveys. i can tell you what the other hotels are charging for breakfast and lunch. >> is it true that room service is not the most profitable business in town? i always thought room service because it's often very expensive is a profitable business. i was recently reading it's not

a profitable business at all. >> once again you have fixed costs that go into room service, especially when you offer 24-hour room service. we're a luxury product, a 4 1/2 star, 5 star hotel. you've got people in the kitchen. you have to have a wait staff. that's a good question, andrew. you are starting to see a shift in the industry. last summer, the big hilton on 7th avenue announced they're cutting room service and you're getting grab and goes that are being built in lobbies. our hotel in coronado, we stopped having room service overnight and our grab and go is open 24 hours a day. >> thank you. really appreciate it. you'll be sticking around. >> i am. we have football to talk about. >> in the meantime, coming up in the next hour, former new york city police commissioner ray kelly is getting made up right over there. we have new york jets owner woody johnson. joe, back to you. >> you got the giants and the jets there. >> yep. >> i'm wondering how they -- whether the interleague stuff,

does jonathan hate the nfc teams? he probably doesn't mind the patriots. woody i'm sure doesn't like the patriots at all. you have to get to the bottom of that, andrew. >> i will endeavor to do so. >> who does jonathan like? >> i look the giants. >> now you're just making -- now i feel bad for bringing it up. that was the point, jonathan. >> i love doing that to you, joe. >> with the people who are left who do you like? with the teams that are left, who do you like? >> this weekend, who do you like? >> probably seattle. i like seattle. i love the energy. i love the fan base. >> russell. >> yes. >> okay. we'll talk more about that. coming up, morgan stanley is next in line to report numbers. we'll have that in the next half hour. and the iphone is now on sale in china. we'll check out the apple mania as it is gripping beijing. "squawk box" will be right back in a minute. tdd#: 1-888-648-6021 there are trading opportunities

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welcome back to "squawk box." tracking the markets, equities on a wild ride in january. how will the economic data and earnings impact the trading day? the hot hand. the chief investment officer at raymond james will have stocks to watch for 2014. and breakfast is the most important meal of the day. >> he likes it, hey, mikey. >> "squawk's" power breakfast is even more important. this hour, woody johnson, owner of the new york jets and former new york city police commissioner, ray kelly. conquer the breakfast, conquer the morning. "squawk box" begins right now. ♪ i'm in a new york state of mind ♪

>> welcome back, everybody. good morning. i'm becky quick along with joe kernen and andrew ross sorkin who is in new york city today. andrew, we've been eating our breakfast all through the morning. what's on the menu this hour? >> we have been -- we are here at the lowe's regency hotel in new york city, for the first ever "squawk" power house breakfast. we have a huge lineup, woody johnson will be joining us, ray kel kelly, nfl commissioner roger goodell will be joining us and we have alan patricof later in the 8:00 hour. we'll be talking right here from park avenue and 61st strooeet. >> we want to tell people about what's been happening with the markets. the dow and the s&p 500 close to break even for the week ahead of the friday session. this morning, the futures look like they are indicated higher.

the dow futures have picked up some ground. up by about 27 points above fair value, coming after general electric, a dow component came out with better than expected numbers. the s&p futures are up by close to 2.5. the nasdaq which has been up for three days running is indicated slightly higher as well. the ten-year note this morning is -- wow, yielding 2.847%. that's unchanged and still well below 3%. in our headlines today as we were talking about general electric came in with fourth quarter profit of 53 cents a share, in limit with estimates. revenue came in better than expected and jeff immelt says he's pleased with the performance. intel shares under pressure. they missed by a penny with quarterly profit of 51 cents a share. intel gave a flat revenue forecast for the current fiscal year. december was not a banner month for the video game industry. despite new versions of the xbox and play station, sales of new games at retailers fell 17% from

a year earlier. that's according to the mpd group which says fewer new games were released and some of the new offerings haven't performed all that well. nintendo is forecasting an annual loss on extremely weak sales of it's wii you console. it's official, apple is launching its iphone on china's vast mobil network. the deal opens the door to the carrier's 763 million subscribers. did you hear that number? >> uh-huh. >> it gives apple china sales a jolt. >> 1.2 billion people. >> that just is like a number that does not compute. what do we have, 300 million people here total in this country? eunice yoon joins from us beijing. the numbers are so easy to say, you just have to sometimes take a step back and think about what you just said. over 700 million, just for that company. >> i know.

>> unbelievable. >> it is. double the population of the entire united states. that's one of the reasons why apple was so keen to really finalize this deal and a lot of people are hoping it's going to boost apple stock as well as the whole business in sales. a lot of people were pretty excited today at china mobile. we saw this deal, it's been six years in the making and finally china mobile is selling iphones at the stores today. tim cook, the ceo of apple, was here celebrating it by going to one of the china mobile stores in beijing with the company chairman of china mobile and they were passing out autographed iphones, both the 5s and 5c to a couple lucky customer. overall, again, what people are saying is that apple are facing stiffer competition in china, that they've needed to close this deal and this is what tim cook had to say at the launch.

>> it is fantastic for apple to be launching with china mobile today. we have long wanted and waited for this day to come. i'm so happy that it's come today. today we're bringing the best smartphone to the fastest network and the largest network in the world. >> and both companies did say, again, that the orders are over a million. so it's looking relatively encouraging, although the big question mark is, you know, whether or not this partnership is going to be short lived, is it going to be the catalyst that apple really needs to maintain the iconic status that it really does have here in china for the long term. guys? >> i'm still thinking about what you brought to us earlier this week, i think it was like tim cook said something like 57% of all searches right now in china are done on ios, which is

stunning they didn't have the ability to bring the iphone to that massive carrier. >> reporter: yes, that's absolutely right. it was a stunning number. and a lot of people have been talking about that and about how, you know, apple at this stage will have to really try to get more apps here, get people more excited. there are so many people excited, even though companies like samsung and other local players have been making some headway. apple, tim cook had said he's really not so worried about some of that competition because he does want to stay in the more premium side of the market. >> all right. eunice, thank you. that's eunice yoon standing by in beijing. we've been watching the markets here in the united states. allison deenz ans is a cnbc contributor. we've still been trying to

figure out what's happening at the beginning part of the year. maybe it's give back from the big gains we saw at the end of last year, maybe we're waiting to see more from the earnings front. >> i think it's a combination of both. last year was a fantastic year. the prior year wasn't so bad in the markets. because most people still remember the 2008 market correction, i think they're skittish. until they see consistently good information, they're probably going to be quick to pull the trigger and lighten some of their positions and take some profits. >> general electric was out with earnings this morning and met expectations in terms of the earnings per share, i thought it was interesting what jeff inlet said growth and condition, strength in the u.s. and europe. >> if anything, my sense is later this year, europe might become less mixed and consistently positive. i think this year is the first year in over six years we might see japan, europe and the united states showing positive economic trends which would body well for

positive revenue surprises. which will help the market. >> we have larry fink on this week. he said his biggest concern is that europe could weaken, that he has not been seeing a lot of great things come out of it. he's concerned still because the banks haven't cleaned up their balance sheets. also concerned because in places like germany, angela merkel has had to do things to move more to the left, bring in things that he thinks are not necessarily positive, make concessions to labor unions where you can retire at an earlier age, raise the minimum wage. he thinks things like that will slow down some of the economies. you're not concerned about that? >> no. my sense is that the banks in europe, their improvements are happening gradually. they're not as drastic. weren't done as aggressive as the united states. but they're heading in the right direction. i think european banks are an interesting place to have money right now. >> really? >> as far as some of the more left leaning policies, i think it's offset by a lot of countries that were very left leaning, coming more central. >> like france with hollande?

>> yes. >> that's a good point, too? where's the best performer for the stock markets as you look around? >> i still would stick with the united states and europe. i also think it's time to start tiptoeing back into the emerging markets. they were down considerly last year. usually after a bad year they start to do well. if other parts of the world start doing better economically and some of the concerns we've had start to stabilize, those markets could have a turnaround. i would be more global this year. >> even if the federal -- even if the central banks start to tighten things up, maybe that's not going to happen in japan but certainly here, if we start to pull back the quantitative easing, the central bank does that. maybe that has implications for some of the growth markets. >> that, although i do think the federal reserve tapering is actually a good sign for corporate profit growth, top line growth and could be decent for the market here as well. i think part of it is that the market -- the u.s. market is less attractively valued. it's fairly valued.

you now need earnings momentum. some of these other markets have attractive valuations. there will be fewer negative prices coming out of them. it's a shift in valuations. >> what kind of growth to do you expect for the u.s. market. >> i could see it going up 8% to 10%. >> thank you for coming in today. >> thank you. coming up, call me ray or you can call me james. you can call me raymond james. we've been wanting this guy for a while. he has the secret sauce that -- this is the guy that picks these stocks, becky, over the last 18 years, last 18 years, s&p average return 11.8%. >> this guy's picks? >> 31.5%. >> wow. >> raymond james. whenever you look -- because i said that. that's the list where you expect goldman or jp. raymond james is up there a lot

of the time. >> last year. >> no, no, no. 18 years. do the rule of 72 on 31%. i think money doubles every 2 1/2 years or something. anyway, i'll be talking to him. find out what the internet giant plans to do with contact lenses. they just make them so they don't rip. [ male announcer ] this is the story of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. ...and the little room above the strip mall off roble avenue. ♪ this magic moment it is the story of where every great idea begins. and of those who believed they had the power to do more.

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>> everybody is somebody. >> we've never done it all together. "squawk box" is the show that gets to do it with eric schmidt, gets to do it with eric schmidt,

futures up 20 points or so. i want the s&p at 1850. that's my wish list for today. and you want more than 20 on the dow to get us to a positive week. >> yes, yes. i don't think you want to see three down weeks in a row. >> i want the s&p at 1850. tell me about these contacts. what are these things. >> it's kind of cool. >> really? >> it is. these contacts -- >> they're like the google glasses. >> no. it's something different.

there's a medical reason for using these. >> oh, okay. >> google is coming out with a contact lens that monitors your glucose levels in tears. it could help millions of diabetics who currently have to jab their fingers to draw their blood as many as ten times a day. this does it. it checks every single second and constantly monitors. it's unobtrusive. even though you can see the lines on it, you can't see it in your eye. this is being designed by companies to make glucose monitoring more convenient, less intrusive. the device will take five years to reach consumers. >> doing that with the -- checking, must be horrible. ten times a day? >> imagine just having your finger -- >> just to actually draw blood. >> yes, yes. >> you want to mention this? >> i'm just looking very quickly. >> at morgan stanley? >> yes. >> i haven't seen it yet. what's andrew -- he's just

taking us to break or what is he doing down there? anyway, let me quickly look at morgan stanley. we have revenue $7.8 billion. what was the number? >> 8 billion was the number. >> continuing ops was 7 cents. that doesn't make sense compared to the 45 cents. >> that's why i want to look through the release. >> we have to look and see how that plays out. >> 50 cents x item. >> that's above. revenue 7.8 billion. the estimate was 8 billion. for andrew, the compensation expense -- they kept it like a sale at a store, 3.99 billion. they didn't take out 4 billion in compensation. >> the big hit, earnings per share amounts to the included legal fees of 1.2 billion, 40 cents a share. they're taking a big hit on legal costs. we'll take a look at this when we go through a break. >> moving into 2014 with

strength and momentum. they actually added 1.2 billion to their legal reserve as you said for the quarter. >> yes. they're continuing to address many of the legal issues from the financial crisis, trying to clean things up. >> it was above expectation, 8.2 billion versus estimates of 8, e-dva. >> which would make sense for the 50 cents adjusted. >> the people will look at these other numbers, investment banking revenue was 1.56 billion. institutional securities revenue, 3.33 billion, asset net management revenue 2.5 billion, fixed income kpodty sales and trading, $694 million. and sales and trading net revenue 1.6 billion. people that are following very closely have numbers they're looking for in all those. so they were in a position to say whether these are good or bad numbers. but they did site strong investment banking performance.

the stock is not doing anything right now. so a lot of people are looking at it to try and figure out whether to buy or sell it at this point. 32 bid, 32.25. the last trade was 32.01. >> let's get back to andrew in new york. >> i'm very excited about this hour. coming up, the super bowl security blanket, new york and new jersey hosting the big game. a logistical challenge for the big apple. we have new york city former police commissioner ray kelly. we'll talk about new york as well. "squawk box" coming back right after this. time now for today's aflac trivia question. how much bacteria per square inch does an average smartphone have? the answer when cnbc "squawk box" continues. yeah, he's clean, boss. now listen to me, duck. i have an associate that met with, uh, an unfortunate accident.

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>> aflac. welcome back to "squawk box." there will be super security effort this year at the super bowl, new jersey, new york and federal agencies will be coordinating to secure the football -- the biggest game in football, of course. ray kelly is the former new york city commissioner. he's now a distinguished visiting fellow at the council on foreign relations. we're here at the lowe's regency, joe tisch. ray kelly, thank you for being here. before we go on super bowl, we have a new mayor, a new commissioner. do you feel we are going to be as safe as we were before? >> i have no reason to think that we're not going to be as safe. we put a lot of program strategies, tactics that have worked that reduced crime to record lows in new york. a record low number of murders.

hopefully those programs will continue. so far they have continued and crime remains down. >> let's talk about the super bowl. you've been planning this for two years. what goes into it and how secure is it? >> we've seen an unprecedented level of cooperation between law enforcement agencies, about 100 of them in new jersey, in new york, federal agencies. as john said, the committee was put together 2 1/2 years ago. so literally, the planning has gone forward for the last 2 1/2 years. >> what worries you? >> well, any big event that you have in this country, in the post-9/11 world you have to be concerned about some sort of terrorist event, terrorist effort. but i don't think there's any metropolitan area in the world better protected than new york, new jersey. >> in this case it's not just about what's beginning on at the stadium but also you're shutting down between times square and harold's square. the streets are going to be -- >> working with ray's people, we were able to institute super

bowl boulevard, that starts the wednesday before the game. we are closing broadway from 34th street to 48th street. and the men and women who work for nypd have been very involved in planning. you're closing down a major thoroughfare. it's going to bring so much excitement and show how great this game is. people from the region, new york, new jersey are going to be able to come and enjoy this. >> are you going to be continued to be involved over the next two weeks. >> i'll be an avid spectator. >> not at the game. >> i will not be at the game. >> i have big security issue questions. one is the olympics are coming up, sochi. do you have a view on the security there? would you go to the olympics? >> i want to have a more in-depth view of the security they put in place. obviously there's concerns. the chechen rebels have done several things. in the last two months we've had two major attacks. there has to be some concerns.

i think it's more likely, if anything happens, it will happen away from the olympics location. >> right. >> because there will be so much security there. clearly it's a possibility of something happening at another location. >> okay. becky quick, hq has a question for you. >> commissioner kelly, i've been reading the tabloids, been reading the newspapers and there is a certain element, a certain perspective that under de blasio things are going to erode in the city when it comes to feeling safe, some of the progress that's been made against crime could return if he's not focused on the same things. do you worry about that yourself? and how precarious of a situation is it for new york to continue fighting crime and being a very safe place to live? how quickly could that erode? >> we haven't seen backing off from the tactics and strategies that have worked during the last 12 years. it remains to be seen. i certainly hope it doesn't happen. we have programs that

particularly focus on gang crime. i think that's been very successful for us. that's one of the primary reasons why murders are at record lows. to the best of my knowledge, there's been no diminution of those issues. it's too early to say at this time. >> when you hear brad say, he's eradicated stop and frisk, what do you think? >> it's pretty early in a two-week period of time. i'm not certain what he means. i think we need to give him a little time. let's see what happens here. >> right. >> two weeks is a pretty short period to make pronouncements. let's see what happens. >> you're a special adviser to andrew cuomo at the moment. >> yes. >> though there was a campaign i was reading about this morning by some people in the city to try to get him to cut you loose. have you seen this. >> no, no. >> some kind of petition they're working on. >> you know, that's life in the big city. this is always going to take

place. the whole stop and frisk issue was made a very important component of the political campaign of mayor de blasio. so i think that's going to continue for a while. i would submit that we've saved an awful lot of lives under mayor bloomberg's mayorship, over 9,000 reduction in murders over the last 12 years. >> it's obvious to note we as new yorkers want to be safe. one of the reasons the tourism numbers are so strong, the tourists who come to continue view this as a safe destination. >> did you worry about it, as someone who has a big business here in new york? >> we've always had a big business here. a lot of the people, the men and women who worked for him are there. >> a lot of people under the mayor are leaving. >> if you're leaving your hometown you want to know if you

come to new york city, whether you stay in manhattan or the other four boroughs you want to know you'll be safe. >> what's the next step? there was a report out you might go to jpmorgan. what are you going to do? >> i'm at the council of foreign relations. treating me very well. it's a great experience. i look forward to being there for a while. >> ray kelly, thank you for everything you've done for the city. appreciate it. guys, i'll send it back to you. thanks, andrew. coming up, we'll have the stocks that are being recommend for 2014. the list came out a little over a month ago. they're up almost 6%. we heard about this list. we tried to get it on the web. but you can't get it unless you're a raymond james client. we called to try and get it. they said we can give it to you but we'll have to kill you. they weren't serious. we'll have the lists up from this guy, the names, try and get through all of them from raymond james that have averaged 31%

versus the s&p's 18%. this is over the last -- how many years did i say? >> 28 years. >> i forgot. >> you said it. i think it was 28. ♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪ [ male announcer ] the beautifully practical and practically beautiful cadillac srx. lease this 2014 cadillac srx for around $319 a month with premium care maintenance included. ♪ check for more! well, i guess i can double check... my watch! [ male announcer ] it pays to double check, with state farm.

welcome back to "squawk box," everybody. our headlines this morning, this is the busiest day of the week for economic numbers. on the docket, december housing starts at 8:30 eastern time. followed by industrial production at 9:15 and consumer sentiment numbers at 9:55. and the labor department will be out with its so-called jolts report. that is on job opportunities and labor turnover. president obama will give details for an overhaul for the controversial nsa surveillance program. he's scheduled to give a speech at 11:00 eastern time. target officials will be headed to capitol hill in just a few weeks. the retailer has agreed to testify before congress on the massive data breach that affected millions of customers. a house commerce subcommittee will hear testimony from one or more target officials sometime in early february. at this point it looks like it is a much broader issue affecting other retailers, too. we're all waiting to get more

information on that. we're also keeping an eye on shares of morgan stanley this morning. fourth quarter profit came in on 50 cents a share on an adjusted basis, 5 cents better than the street was expecting. >> raymond james releasing its annual list of best stock picks. way back in 1996, 18 years ago, the average s&p return for 55-week period was 11.8. for raymond james it's 31.5%. we heard of a man by the name of mr. hemwood. david, thank you for finally coming on here. jeffrey won't say anything about the picks or how they're made or anything. we're excited to have you. >> it's a pleasure to be on. >> you do things a little bit differently. one thing you emphasize, you get these picks, you get them from your analysts but it's

voluntary. what do most firms do, they make an analyst come up with something. what do you do? an analyst has to voluntarily come up with something. >> yes, to identify the best performing analysts and then to select from their best ideas, we think is enhanced if the analyst has high confidence and passion in the idea on this particular name. >> do you have anything to do with it, do you have anything to do with which of these are picked? or does the analyst come to you with high confidence and you put it on the list. >> we have a system of procedures to evaluate the analyst's performance and to evaluate whether the stock has

enough liquidity, it trades enough. we don't put on stocks that are rated high risk for suitability or venture risk for suitability. we pick solid names that are marketable that we think will have dependable performance over an extended period of time. these are names that should be good for two or three years, but will outperform on a 12-month basis. >> they're alphabetical. some of them i noticed, i've always said stocks that hit new highs keep hitting new highs, a lot of people try and pick value and they pick stocks that are hitting new lows. here are some, advanced auto tears, antero, apple is on your list. in the oil field, cameron. there's a pick, comcast, up in the last couple years from the low 20s to the mid-50s. yet it makes your list.

copa, ctrip. it was down. i guess it was on the list last year. you make a point it didn't work out last year but it's still well positioned. we have the rest. jpmorgan which is trading at a new high. newell, praxair. i like -- i've heard people call it quintiles. quintiles transnational. that is the list. how many are on there, 12 or 13. >> 13 names. i want to correct you on one point. ctrip which you said was on there last year. >> it went up 175% while being on the list last year. that was our stellar performer. >> you still like it and it made

it again. what do they do? >> this is a -- actually a chinese company. based in shanghai. they have internet-based services and online services for travel. airline reservations, hotel reservations. >> in china? >> in china. >> interesting. >> they are dominating this market, which is becoming -- you have people becoming wealthier in china. they have 800 million people. it's a very big growth opportunity market. and that's why, you know, the analysts stuck with it. of course, what they announced, they announced that they were going to spend more money on developing their market. in 2014, which had the effect, of course, of lowering earnings expectations for this year and price targets dropped. but the symptom since being hit

has been stabilizing. >> yes. >> and it's a name that probably if you own over the next let's say five years -- >> you'll do okay. >> you'll make a lot of money. we had a name back in 199 called cmgi information services. it went up, it was on list, it went up 1,400% in one year. >> i remember that stock. that was david weatherall. the internet incubator. went down 1,400%, too. >> we were gone by that time. >> it's impossible to do but somehow it did go down 1,400%. i'm looking at aap, advanced auto parts. a lot of these stocks have been good performers already. which makes sense. if they're good at what they do, their they're in a good business and are well managed, they

should do well at what they do. it makes a lot of sense with these. >>y he. >> how do you make sure -- are these the same -- you've had a bunch of different analysts over the past 18 years. how do you make sure you have analysts that know what you're talking about? >> well, that's -- all our analysts know what they're talking about. the question is, which are the ones that have the investment acumen to pick a name that will clearly deliver the goods. and that's what we -- for instance, we have 55 analysts. 38 of the analysts qualified to submit a strong buy one name for picks. 13 of them actually did it. one out of three. that says that the others either were disqualified because they didn't have any strong buys or

they, you know, didn't have the strong commitment to the name as being something that would deliver the goods. >> we know some of these guys, david. anthony comes on a lot. and bud comes on, anthony picked jpmorgan, bud picked newell rubbermaid. we got them. i was at merrill lynch. you don't change these. you have to keep these. we used to do unit investment trusts and they'd pick 20 stocks, put it in a uit, it would last one year and it would be finished. there was no active management on it. i think that's what we'll do here. it will be fun to watch. we have all of them down here. thanks for coming on, david. i appreciate your time this morning. >> it was a pleas yaur to be with you. >> see you later. >> that was great. when we come back, we'll have more of the squawk power breakfast, business leaders and top executives meeting at the regency hotel in new york, which has just hopped. we speak with new york jets owner, woody johnson right after

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the dow. up fractionally on the s&p. making headlines, roche says a temporary shortage in the united states of one of the leading flu medicines used to treat children with a sometimes deadly form of the virus has been resolved. the company had experienced a shortage of supplies of the liquid version of tamiflu. it's an oral version of tamiflu. there was high demand in packaging delays. there was a bit of a shortage. all right. back to -- the super bowl, it's in -- i know these people there are going to say it's in new york. it's not, andrew. i know you'd like to say it's in new york but it's not. it's in new jersey. >> yes. >> deal with it. >> well, we will try, the traffic in fort lee might be tough, though. >> oh, man. >> i'm not getting any laughs on that. the countdown to the super bowl xlviii at met life stadium has begun here in new york or new jersey, depending on how you

want to think about it. just 16 days until the big game. woody johnson is the co-chairman of the super bowl host committee, owner of the new york jets and chairman and ceo of johnson & company. mr. tisch is here because we are here at the regency. great to be here. >> thank you for being here. >> this is the first time new york or new jersey -- how do you think about this? >> new jersey and new york. >> has had the super bowl ever. >> right. >> you guys went and campaigned to do this about three years ago. >> correct. >> what do you -- we're almost here. what are you worried about? >> i don't know if we're worried about anything. we're going through our list of things we have to accomplish in the next two weeks. i think we're methodically going through with kelly and his staff, the group that runs all the operating elements from our standpoint. the game itself is run by the league. >> right. >> we do a lot of the other surrounding stuff. i'm not worried really. i think everything is pretty much in order.

>> there's cold weather idea, is there any chance that the game could ever be called off for weather? what's the threshold there? >> well, i think there's always a chance. if we get ten feet of snow, which has never happened in history, i guess you'd call it off. we have contingency plans in place for weather. >> tell us about the contingency plans. >> i think if we absolutely have to, we have 5,000 people with shovels. and we've got -- the one thing we know how to do in new york and new jersey is deal with snow and ice and all that. we know how to do that. we're the best. so it's hard for me to believe that there really would ever be a time when you'd use a contingency. >> the nfl has had conversations with broadcast partners about moving the game a day earlier or a day later. that would have to be pretty dramatic but we now can predict weather a week in advance. those conversations have taken place.

the commissioner has talked about it. we can ask him in a few minutes. we've been doing this 2 1/2 years how. we're ready for everything. >> joe has a question back in new jersey. joe? >> woody or john, i think about it and if there was a dome on met life stadium, this should be the permanent home for the super bowl, the way i think about it. shouldn't it be in new york or the new york area? people come here, they get to experience manhattan, they get to do all that. i mean, nothing against florida or san diego or something like that. but it should be here, i think. it's a super bowl. it should be in the super city. >> you have a good point. we elected not to put a roof on, joe, because of the cost. you're right. there's nothing like new york, new jersey. we have, you know, huge population where the center of finance and entertainment and restaurants and broadway. and so, yes. >> what are the estimates on revenue to new york city and perhaps to the new jersey area?

and also costs, though, because this cannot be cheap to do. >> we estimate that some 400,000 people are going to come to the region, new york, new jersey, in support of the game. 82,000 people at the stadium itself. and the economic benefit to the region is between $550 million and $600 million. that's a big boost to the economy. >> right. >> in a time when tourism is down. business in new york has been great. we're going to run 85% occupancy when we finish the numbers for 2013. january is always the slowest month. we're bringing these people in to spend money at a time where the hotels, the occupancy goes down, broadway is down, it will be a huge boost for the economy. >> you know, these guys have these lists of surprises for the year. many people don't know i have one. my list was that -- was it woody johnson was going to be able to stick his chest out about his quarterback more than the giants and john tisch. that would have been the biggest

surprise in the -- i guess i'm addressing this to john tisch. what the hell happened? is he seasoned enough to come in here and do what's necessary in terms of play calling to get the giants offense moving again? >> joe, you and i have talked about the season. it was a very disappointing year. i have total confidence in tom coughlin. he has put together a great team. ma macadoo is going to come in, eli will be back. you take each season one at a time, you prepare, these guys all work really hard. they all want to win. you get ready for the next season, pick yourself up and do it again. >> woody, you've got some type of corporate governance going. now it's pay for performance with rex. what does very to do to be here two or three years from now? how many games does he have to win? how does he earn a higher compensation? what are the type of things you

put into the contract? >> joe, we obviously aren't going to talk about contract. we're happy with the coach and, as has been reported, we told him before the game that he would be coming back. and then after the game we told the players. i think the players love playing for rex. and the fans like it. so we're glad to have him back. >> we just have to get their picks. they're telling us to wrap. do you dislike the patriots so much that you're hoping for denver, woody? and who do you like? john, you like seattle. we already asked you. where are you on this, woody? >> i think seattle's got that stadium and the noise. it's hard to play there. i've played there. they would have a little bit of an edge, i think, because of the 130 decibels they have. this is -- the afc game will be interesting for the fans, because you have probably two of

the best quarterback ever to have played the game going against each other. i'm looking forward to it like everybody else. >> one last quick question for you both. >> yes. >> it's a new jersey question. chris christie. chris christie. what do you make of what's begun on the past week? you have to do business with him. >> yes. you know, in politics and in sports, you get this kind of -- >> full contact. >> full contact. it's a blood sport. and you know, it wasn't surprising to him and same thing happened in sports. this is part of the deal. >> okay. woody johnson, thank you. john will be sticking around. we have roger goodell we should tell everybody about in just a little bit. >> thanks, andrew. >> guys, i'll send it back to you. i'm not going to send it back to you. within we come back, we'll have an earnings recap, talk about this morning's big movers next. before we do that, we'll check out the futures at this hour. you can see dow up about 12 points, nasdaq off 3 points and the s&p, almost even.

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stocks to watch include general electric, which is now indicated lower. the company reported 53 cents a share in line with expectations. revenue slightly above where the street was as well. >> i wonder why. wonder if they're saying something. >> people with commentary that it was helped by oil and gas. it was driven by that business, also aviation and cost cuts boosted the results. i can't -- i don't know why it

was up about 30 cents, now it's down 30 cents. elsewhere, morgan stanley reported 50 cents a share. and that was above expectations by a nickel. that stock is now up. firm said its results reflect strong investment banking performance. and schlumberger, raised dividend by 28 to $1.60 per share. >> that was the one you corrected me on. >> oh, really? >> i called it schlumberger. this was 12 years ago t. must have been on the air. >> it was. i was down at the stock exchange. >> i didn't do it in a horrifically nasty way. >> no but i remember it. >> that's a judgment call between colleagues. there are people, most people at home knew it was wrong. >> i'm glad you did. i learned and i've never mispronounced it since. >> some people might say let's wait till --

>> i've never forgotten that. >> i can see that. it was okay? you don't hold it against me. >> i think it's good. let me know. i corrected myself. in break we were trying to figure out words -- there were a couple names he corrected me on. >> this one is pronounced goodell. >> that one i know. when we come back, nfl commissioner roger goodell and capital venturist, alan patricof. we'll also have housing starts and building permits. that's coming up in just a little bit. did you know auctioneers make bad grocery store clerks? that'll be $23.50. now .75, 23.75, hold 'em. hey now do i hear 23.75? 24! hey 24 dollar, 24 and a quarter, quarter, now half, 24 and a half and .75! 25! now a quarter, hey 26 and a quarter, do you wanna pay now, you wanna do it, 25 and a quarter - sold to the man in the khaki jacket! geico. fifteen minutes could save you... well, you know. she loves a lot of it's what you love about her.

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the ticket to davos is the number one ticket in the world. >> where everybody is somebody. >> we've never done it all together. >> "squawk box" is it. >> it's the show that gets to do it. >> i'm excited to go. >> the world economic forum at davos, start wednesday at cnbc. >> the markets hitting some head winds, the two-day rally stopped by disappointing earnings but is it enough to pull the plug on equities? t our guest is here to tell us why stocks is still the place to be. >> a read on the state of housing. economic data that will tell us if the sector is on firm footing. housing starts just ahead. >> it's the "squawk" power breakfast. nfl commissioner roger goodell pulls up a seat and greycroft's alan patricof will join us as

well. "squawk box" continues right now. ♪ ♪ because everyone's a millionaire ♪ >> welcome back to "squawk box." here on cnbc, first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin who is reporting from the regency in new york. ever been? >> i have. not since i started doing "squawk." it's a breakfast place. >> unless you do the show we really can't do a power breakfast. >> i have been there. >> let's check on some of the high profile earnings coming in. revenue slightly above, jeff immelt, the ceo says he's pleased with the company's performance in 2013 in a mixed economic environment. morgan stanley earned 50 cents a share for the fourth quarter. that was up on an adjusted basis. it beat by 5 cents. its results were driven in part by strong investment banking performance. let's get a check on the overall

markets with u.s. equity futures indicated just slightly higher. we're around the flat line for 2014. we have the s&p would be called up 3. that would put it right about where it closed on december 31st. we have to get to, i think, 1848. we close at 1845. depends on what happens today, will determine if we're up or down for the year in 2014. overseas in asia, not much happening except in the hang seng. over in europe, we are looking at mixed numbers, too, all up but just fractionally. in technology news, it is official, apple is launching its iphone on china mobile's vast network today. the deal opens the door to the carrier's 763 million subscribers and gives apple's china sales a jolt. ceo tim cook in an interview

earlier this week. >> it's a watershed day for apple. it's a huge announcement. i'm so honored to be doing business with chairman chi and china mobile. they have the largest network. we're incredibly impressed with them. we have deep respect for them and have had from the very first discussion we've had together. we see this as bringing the world's best smartphone to the very largest and now the fastest network in chin. >> eunice yoon was there for the launch today. nintendo says sales flopped pushing the company to a third consecutive annual loss. nintendo is slashing its global wii-u sales to march 31st to almost 70%. a two-day rally after disappointing quarterly results.

joining us right now is jack apple, the executive vice president and chief investment officer at a private bank in chicago. when it comes to the s&p, the prices have gotten a little bit ahead of where they should be based on the sales at this point? >> yes. i like to look at price to sales just because it's a consistent ratio over time. prices are always positive, sales are always positive. if you look at the current price-to-sales ratio of the market, it is trading about 20 percentage points above its median level. doesn't necessarily mean that the market has to drop 20%. what it means is we'd like to see revenue grow to catch up with some of the expectation built into the market. >> we did get general electric today. its sales were ahead of what the street had been anticipating. similar story if you look at morgan stanley. is that enough for you? or do you need to see even more revenue growth? >> i'd like to see a couple things happen, becky. certainly revenue growth is key. and that is going to drive up

prices this year. in fact, we don't need that much revenue growth. we just need maybe 3% or 4% revenue growth to get our market up 10 percentage points for the year. we're not asking for much. what i'm looking for, though, particularly in a company like ibm or a ge, is that our business businesses starting to spend money? are you spending money to expand, buying inventory, hiring people and maybe even cap ex. >> maybe that's the point. with washington looking like they've at least agreed to a truce, if nothing else, maybe that will leave corporate leaders feeling more confident. >> that's just it. i like to look at ceo confidence but the nfib, the national federation of independent businesses is a good read on what small businesses are doing. i will tell you, we have a lot

of small business customers. and the constant refrain i heard from even last june was they're having difficulty finding qualified workers. now, you know what, that's not such a bad problem to have. i'm hopeful they'll hire these people, perhaps train some of these people and start to expand maybe this year. >> you're still overweight equities. is that the in the u.s. market or other areas you are focused. >> we are overweight equities, particularly in the u.s., although we have taken money, some out of the emerging markets and put it into developed international. here we think the european market and others are trading at roughly a 15% discount to the u.s. we're starting to get a little momentum. and as long as you hedge those currencies back to the u.s. dollar, which we're doing, i think you'll see nice gains. >> a lot of strategists who have come on have told us that industrials is one of their favorite sectors. that doesn't make your list. why is that? >> believe me, i'd love to have industrials as one of our

favorite sectors. i think you're right. to me, that would be a dominant theme for 2014. i'm just not seeing it yet. the sectors that i like are generally cheap and they're moving in the right direction. i will say the exception to that rule is consumer discretionary. we found some momentum there back in 2009 and we've been on that train since then. consumer discretionary shares are probably trading at a 50% discount to their peers. i'm just waiting for the momentum to peter off. i'm hopeful we can find another sector, maybe industrials to take their place. >> but you also like financials, health care and consumer staples? >> right. we still like those. again, it's mostly just for valuation reasons and momentum. the fact is they're cheap and moving in the right direction. that works pretty well for us. >> jack, thanks for he everything. good talking to you. >> thank you. >> okay. let's get back to andrew. he is in new york at the "squawk" power breakfast this morning. coming up, nfl commissioner

roger goodell. he's right next to us, previewing this weekend's games, super bowl preparations and a lot more. then we have more coming from the regency hotel in new york, "squawk box" coming back right after this. and guaranteed one-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and e-trade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. call or click to open your fidelity account today. ♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪ [ male announcer ] the beautifully practical and practically beautiful cadillac srx.

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take a look at the futures, everybody. you can see right now they have taken a turn. the dow futures are indicated down by about 20 points. we've been watching them up by 30 points earlier this morning. the nasdaq is off by 9.5 points. it was another great week on "squawk box," though. the talking "squawk" blog is helping you to get through the long weekend until we're back on air from davos next week. you can go to squawk.cnbc.com. it's your second chance to conquer the morning. let's get back down to andrew who is in new york with great guests. andrew? >> thank you, becky. this weekend, millions of football fans tuning in to watch the two conference championship games. the business of football is more than just about the game on the field. we have nfl commissioner roger goodell joining us along with host jonathan tisch, owner of the giants as well. we have a big weekend. here's the big question.

there is a view in the business world in the ratings advertising world that you can't let the patriots lose, because you need an east coast team in the super bowl. is that right? >> no. you know, i think we have four great teams, teams that all deserve to be there. they all have national followings. i think that's the great thing about the nfl. it's a national sport. >> you don't sit around from a business perspective and say, that -- this is not wwe wrestling. but you don't sit around and think there's certain combinations that will do better on tv than others? >> there might be but the reality of it is, our sport is national. and you know, we would like to see the best teams win. the games that are most competitive draw the most viewers. the best teams playing each other will likely draw the best ratings. >> he wants seattle to win. you're going to seattle this weekend. >> yes. joe pressed me. i am agnostic. i want whoever will bring more

people into town and take hotel rooms. >> what is the answer to that? >> it's great they're both from the west coast. people aren't going to come overnight. they're going to come for three or four days, if they're flying across the country they'll stay, use hotel rooms and spend money. >> when you go do a game like that this weekend do you secretly root for somebody? you can't bring yourself -- what do you do. >> i let you in on a secret. i always root for the team that's behind. we love the close games. we're always looking to say, how can that game continue to be competitive coming down the stretch? >> right. >> that's what makes the game so fun. this season has been so unpredictable, competitive. it's showing in our ratings. >> right. joe, you have a question for the commissioner? >> i do. how are you doing, roger? >> good, joe. >> the four best teams are left. you must just -- that's what i think, you're probably going, yes, thank you. it's just amazing the way it finally works out. it's crazy.

you know about "sunday night football." why don't we have a tuesday night, wednesday night, thursday night, friday night, why don't we have an extra wild card game? are you thinking about all these things? i guess there's a law of diminishing returns at some point but we haven't hit it yet. >> you don't want to hit that point either, joe. that's one of the things we work very hard at, trying to give the fans more. every time we give them more football, they say give me more. but we don't want to reach the point of saturation where people say it's not special anymore. one of the things that makes the nfl so special is that every one of our events is special and unique. we're putting a lot more emphasis on thursday night to create of this of this and along with "sunday night football, "monday night football," these are taking hold with our fans. >> the thursday night package is up for grabs. there's a view this could be the first time a digital player look a google, youtube or a netflix comes in. do you think they have enough of a market in terms of addressable

audience that they are a real competitor, not just in terms of dollars they can bring the nfl but in terms of what they can do for the presence of the week? that's the big issue, i assume. >> some of the digital opportunities really do have the capability of doing this now. we are in active discussions. there are possibilities. but what we believe is our most successful business model is being on free television to the broadest possible audience. that's where we've made our mark. we're the only league to have all of our games on broadcast television in the local market. we think that's really valuable to us. we want to be able to the widest spectrum of audience and most importantly, the casual fans. they know where to get us at all times. >> we have to talk about the concussion settlement which was not approved. the league and you have said you think it will be approved. what has to happen between now and then? is there going to be wiggle room in terms of the negotiatings? >> we respect judge brody's

decision. she made a ruling at the time, that was her words, at this time. we have to convince her that the agreement that we reached with the plaintiffs, there's sufficient funding there to meet the needs. >> this doesn't open it up all over again? >> we think there is sufficient funding. that's why we reached the agreement we did. the plaintiffs are standing behind it, we are standing behind it. we have to convince the judge there are sufficient funds to meet the demands going forward. >> we've been talking about the cold weather all morning. it's no the that cold today. you were at the 92nd street "y" and were asked if you'd ever allow another super bowl to take place in a cold weather place. now, you didn't really say yes or no but i watched and it sounded like you were saying, hell no, never again. >> i didn't say that and didn't mean to imply it if i did. what makes this unique, we have the number one market, new york, new jersey region. we have two teams here and we have a great new stadium.

that's really special. we want to see how this works, andrew. and if it's successful we'll certainly look at other alternatives. >> roger was very much a part of the push to encourage us to make a presentation to the other 30 teams. saying this is an idea whose time is come, let's explore it. the support of the nfl to encourage us when we presented in dallas almost three years ago. >> in terms of ad dollars, revenue and other attention it brings to the sport, how do you compare this to last year or any other year? >> the energy and the excitement around this game has had a longer runup. if you look at the advertising dollars, specifically in the broadcast of the game, they were off the charts. never been higher. never been more demand. so i think the interest in this game is clearly coming through probably beyond the expectations when they made their bid. and the owners accept it. >> what is your expectation this year? every year over the past three or four years, more and more people have gone to social media, watched the game with

twitter, yet ratings have gone up. there's always been anxiety that one day ratings would not. you made a deal with twitter now so you can see clips and things like that. what is the expectation for this year? >> that the ratings will go up. we believe this will be the most viewed show in television history, which is what we've done the last few years. >> right. >> i think it's all a part of the buildup to the season, using other forms of media and other platforms. that is what is created this fan engagement. they all come together on super bowl sunday and say, wow, we have what is going to be a great matchup. >> if you're in the stadium and you want to tweet and you have gloves on, it becomes complicated. >> we'll give you special gloves in the stadium so you can do that. >> are you kidding. >> no, i'm not kidding. they are special gloves that will allow you to wear the gloves and be able to use your phone and other devices. >> it won't be mittens. >> joe, jump in. >> we have those. they're old. we got them from discovery.

they have little things on the tips. >> the tips of them. i just got some for davos. >> you didn't answer me about the wild card. will there be an extra wild card game? you might as well. then international expansion would be probably good for you. i mean, do you see that in -- while you're commissioner and don't you feel bad for europe that they don't have -- they call soccer football. just in terms of being a good guy, don't you think you ought to let them have a team over there? >> well, joe, let me answer your first question because you're right. i failed to answer you the first time. we are thinking about whether we would add two more wild card teams, one in each conference. we believe the league is so competitive now that we could do that in a credible way and it would be good for the fans and it would be good for the competitiveness of the league. on your second issue, the fans in europe have been extraordinary. they love the game. when we bring it to them, we have three games for the first

time in london this year. ticket sales are ahead of the pace they were last year. we're confident we'll sell all three of those games out. they're earning the interest in football over there. their fans are passionate and if they ever do get a franchise, it's because they earn it. >> i have a different question. we've had a lot of gaming people on recently. we talked about sports game be, gambling on sports. and a number of states that are starting to think about it. what does the league think about that issue? >> we've been opposed to it. we opposed it here in new jersey also. and won it after a very long legal battle. we oppose any kind of point spreads and sports gambling. >> you like fantasy. >> it's a different issue for us. we see families getting together. it's not about wagering. they are competing against one another. it's a fun form for our fans to engage in the game. >> right. it's a different sport completely but i was curious what your views on what's

happening with alex rodriguez in the past week. >> i'm a big believer in making sure you have policies, they have a very important policy, which is the performance-enhancing drug program, just as we do. >> does the punishment fit the crime? >> that's not my decision to make. from what i've read, there are multiple violations and the judgment of commissioner selig, he said he had not seen anything like this. the arbitrator seemed to agree with him. >> would you let a guy like that play that has yet to admit publicly what he did? >> it sounds like he's not going to now. >> right. >> the experience when we have these high profile cases is the player zrcht o eer doesn't oftet unless they're boxed in, they don't really admit to it. >> roger goodell, thank you. we'll be watching over the next couple weeks. this is prime time, this is

broadway. thank you, john. we've got more from the regency hotel, including venture capitalist alan patricof and a read on real estate and housing permits, out in just a minutes. "squawk box" returns after this short break. [ male announcer ] this is the story of the little room

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box," making headlines. ibm plans to invest more than $1.2 billion to build up to 15 new data centers across five continents. the company want today's expand its cloud services and reach new clients and markets. google is unveiling a contact lens that monitors glucose levels in tears. it could help millions of diabetics who currently have to jab their finger to draw blood as many as ten times a day. google says advice will take to five years before it could reach consume. in washington news, president obama will be giving a long-awaited speech on surveillance and overhauling the nsa today. this address comes after a six-month review of the spying programs. the speech is scheduled for 11:00 a.m. eastern. up next on "squawk box," we have housing starts and building

permits. and then he was an early investor in apple. office depot and other business successes. alan patricof talks venture capital, live from the "squawk" power breakfast sat the regency hotel. as we go to a break, things have turned down this morning. s&p futures off by one. mine was earned orbiting the moon in 1971. afghanistan, in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.

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welcome back, everybody. we've been taking a look at what to expect next week. one thing you can do is take a look back at the week it was. the talking squawk blog is out to help you get through the weekend until we're back on the air from davos next week. also more talking squawk is at squawk.cnbc.com. it also gives you a preview of what to expect when we're in davos. >> i don't think i ever metaphor i didn't like. >> metaphor you didn't like. >> earlier we said we'll pull the plug.

it's pulle bubble, isn't it? don't you pop the plug? >> you pull the plug. >> you're right. >> we're a few seconds away from december housing starts and building permits. rick santelli is standing by at the cme in chicago, steve liesman is in studio with us. rick, we seasoned it over to you. we've been watching this for some evidence of what's happening in housing. >> the buzzer sounds, the number is out. it's close to expectations. 999 -- no, i'm not herman cain. that's december. that's the capstone for the year. last month was revised from 1.09 million to 1.107. that's interesting, because these continue to count back to early '08. let's look at the permit side. we see that with the big revision, we actually see close to a 10% drop month over month. but if you look at permits, the drop is about one-third of that. it's down about 3%.

986,000 and that is definitely way light of what we are expecting. if we look at the last number, it had a slight revision also, very subtle, 1.007 to 10017. we still have industrial production to go. suffice it to say, interest rates have been moderating. what would you rather have, 80 basis points more on the spanish ten year or u.s. ten year. think about cheap and expensive from that vantage point. back to you. >> rick, stick around. let's get more reaction from jim at the cme and steve liesman who is on set with us. steve, last month, the housing starting was that incredible number that came through. everybody thought it was a fake number and we couldn't believe it. maybe not a surprise. >> it's been revised up a little bit. 1.1 million. the reason why they expected a

falloff, the permits have surged ahead. the permits fell a little bit, the housing starts fell even more to get back in line with where the permits are. december, there was weather there. i think it's fair to think about the housing numbers in the 950 to 1.1 million range, i don't think that's out of line. here's context. we can argue over 2%, 3%, 5% up or down. in the height of the boom, you don't remember what the number was? 2 million. now we're arguing is it 999 or 1.1? >> that's healthy. >> i was looking at that. i don't know if we have hst in the back guys. >> 2 million was not a healthy number. >> i think 1.6 is about the right. and also by the way, getting the mix right is also very significant. one thing we know, the rise in single parent families creates a completely different need for housing from the kind of housing

that's out there. >> smaller housing. >> smaller housing, bigger apartments, smaller houses. so you have this adjustment going on which is significant. there's a lot of investment, a lot of capital gravitating towards the new demographic that's out there in terms of the housing that they need. you have multifamily this time, 376 and single 610. that was actually down. that is where the decline came. you didn't see the decline in mul multifamily. that's not soming to will show up on a month-to-month basis. the other thing is getting the financing right. you keep hearing about the banks. and the loan-to-deposit ratios seem low. and when are they going to feel like they can open up the spigot a little bit? >> the bankers will push back. they say it's not about them opening up the spigots. they would like to be making loans and getting higher money in. >> quick question. >> rick, before you trash that idea, if they are keeping money at the federal reserve and getting a quarter basis point, i

mean, if they're getting a quarter percentage point for what they're keeping at the federal reserve, that is not great. they would like to make more money on it. >> this is a lot like the argument for unemployment benefits. we know there's banks that are lending. we know people need some unemployment benefits. but there is a magic point you cross over where it isn't really for the greater good. >> right. >> it's the same with these loans. we have created an avenue for banks to be rewarded without doing what they're really set up to do. what they're really set up to do is never going to be as profitable as the hedge fund mentality they came from. these are all issues we still have to be more honest about. >> they talked about making them even pay to keep money at the federal reserve as a way of forcing them to push that money back out. >> why doesn't the federal reserve get rid of the whole program and once again, with why don't we get back to a normalized banking environment? >> guys, we are talking about playing with dynamite here when we're talking about the fed charging money to keep the money. if that money all comes out at

the same time -- >> i agree, jim. >> the fed wants inflation but that will be too much too quickly. >> unintended consequences of a dumb rule to continue a dumb rule because getting back to sanity is too scary. is that what you're saying? >> so many times they institute a dumb rule to a point where they can no longer extricate themselves. >> they have to do something. >> i think you're both barking up the wrong tree. >> of course you do. >> it's not monetary policy. i think the tree, part of it is regulatory policy. >> steve -- >> jim, let me finish my point. >> the fed doesn't want a regulatory rule, do they. >> maybe, i'm hoping that now that some of the rules as onerous as they may be, now that some are clarified that maybe the banks will feel freer to begin lending. rick makes an excellent point which is why it is that the banks find profit in other areas more so than they do in traditional lending areas. i don't know why that's true. but certainly when you look at the stories out there about

jpmorgan's loan-to-deposit ratio, overall it's down in the industry and how we can get back to a point. becky's right also. it's not one answer. it's loan demand, credit quality but it's also the willingness to lend on top of the regulatory situation. >> isn't the answer is that banks are so good at taking the system that's given to them and finding ways to make money. that's the problem that happened between 1995 and 2005. there was a system that existed out there. the banks are like, wow this is where we can exploit that. >> i don't disagree. >> that's what they do. >> i have to talk about u.p.s. >> hang on, guys. >> we have earnings coming in. >> it's a forecast, but the stock is reacting to it. it's down significantly. u.p.s. is down to 97 after closing over 100. they are talking about the situation where they weren't prepared for the huge delivery day. they say that the delivery day was 7.5% higher than planned in terms of how many packages they

got. you add the weather into that and the company says fourth quarter net now looks like 1.25 and the street is up at 1.43. for the year, the analysts were at $4.75. and the company is now talking about $4.57. it's going to be most of that in the fourth quarter. it was a crush of last-minute orders. six days later than they had expected it to be. >> the crush was six days later? >> yes. when they really got hit. as a result they had higher costs driven by the weather and by the surge in shipments that they didn't expect. >> they also took extraordinary efforts to try and keep up with the demand for it. they deployed an additional equipment and people, the company utilized 85,000 temporary employees which was 30,000 more than they had expected. >> all cost money. >> yes. >> too much business. >> too much business they weren't expecting. remember they were doing all of those things for days for a couple of days afterwards trying

to catch up with that. >> they had snow, too. >> weather events in december weighed on results, too. >> unexpectedly, there was a bunch of snow in december and january. >> on december 23rd u.p.s. delivered more than 31 million packages. that was the most ever and 13% over the prior year peak day. december 23rd is really late. it used to be december 18th, you couldn't get stuff shipped after that. >> the climate is ink chaing constantly. it's almost like there are four seasons that happen every year. >> you mean fall and fall again. >> it gets warm in the summer and cold -- climate is constantly changing. it seems like it's changing a lot. >> it is true all the data gets re-adjusted mostly because of winter, that there's weather and people are surprised. >> it changes a lot. >> see you in davos. >> we'll be there. >> very excited. we have good guests coming up next week, at least on tuesday when you guys are gone. >> here? >> we're have the fifth rolling stone. >> i mao enyou said his name. i had to get up and i spelled it

wrong. >> he plays piano for the rolling stones. he's going to be here. >> who's that? >> chuck lavell. >> he plays guitar. >> he plays piano. >> going to be cool. >> going to be cool. >> thanks to rick and jim as well. >> we were cool with matt damon and goldie hawn. >> when is that. >> wednesday. >> that's cooler than me. >> blankfein. >> schwartzman. we can even go through it. >> did you ever see "laugh in"? you remember gold did i. >>. >> we're going to try to get her to do that. >> sock it to me. >> this is a first squawk power breakfast. you never know who is going to drop by. we're joined by bill ruden of ruden management who happened to be having breakfast here this morning. we saw you on the reservation list this morning.

>> i heard you mention my name at 6:00 in the morning. i got here a little early to join you. >> your fathers started the quote, unquote power breakfast here. 1973. >> john talked about before, back in the early '70s when new york was heading towards bankruptcy, they all got together, bob lived upstairs and they came down here and started to figure out how to solve the city's problems and work together with the government and the unions and the business community to do this public/private partnership that helped save the city. >> new york city -- new york city economy you see it through the prism of real estate. we talked to harold ford earlier about taxes and all sorts of things. i want to talk about the new mayor. what do you think that means for the economy in new york, given the rhetoric which some people would argue is anti-business? >> i think -- harold talked about it before. in terms of we have to continue to move the economy forward, how do we create jobs?

i think you'll start seeing the mayor's appointment so far have been very good. bill bratton, the police commissioner, former police commissioner, i think really set a positive tone, particularly into the business community. and also they will continue to focus on crime. then you have the new deputy mayor for economic development and housing. >> if i had asked you three weeks ago whether you were anxious about the new mayor, what would you have said? are you in a better place now. >> i think whenever you have i atransition, there's always people concerned about the direction. >> he's very smooth. >> we talk about this all the time. the business community will press on. and they will find ways to work with the new mayor. as long as the city stays safe, as long as it's a magnet for people wanting to invest in real estate and -- >> you've got, just today you had time warner announcing their going into hudson yards. you have investment going on in lower manhattan with the trade center. you have things going on in brooklyn, all the boroughs, up in the bronx, in queens.

it's incredible. we have a project that we just opened, started selling and we're at 80 apartments out of 200. 40% in eight weeks with most of the new york buyers. >> thank you for stopping by. we should do this in a more organized fashion next time. we appreciate it. coming up, why the investing environment for young companies has never been better. we're going to have alan patricof. the xb "squawk box" power breakt live from the regency hotel, coming back after this short break. why's that? uh, mark? go get help! i have my reasons. look, you don't have to feel trapped with our raise your rate cd. if our rate on this cd goes up, yours can too. oh that sounds nice.

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welcome back to "squawk box." we with live at the inaugural "squawk" power breakfast at the loews regency hotel. alan patricof joins us on the disrupting technologies that his firm is investing in. you are a regular here. for the past year you've had to find another spot to have breakfast. >> exactly. it's been very difficult. big problem. >> do you think there's a bubble? people always say this, in the technology venture capital world right now? >> i don't want to say there's been a bubble but we've had a very unusual, i've never seen it before, a trend in the last 18 to 24 months where the startup field is going crazy. not just new york, it's california, indianapolis,

chicago, there is a wave of young people that are just want to go out and start something on their own, whether they leave college or graduate and go out and do it. >> is this going to end like 1999 or is this 1996 where it will end better or well. >> there will be a lot of startups, a lot of companies that will survive, a lot of new technologies, exciting, young companies starting up. expect to see a lot of new names in the next several years. >> i want to talk about some things you're investing in. the first is a 3-d technology. tell us what it is. >> it's extremely exciting. i just was -- i saw another demo from one of my real estate friends the other day. think of google maps inside. it takes you through any building. it can simulate the 92nd floor of any building. >> when you say simulate.

how does it do it? >> it works from plans, obviously. it creates a 3-d environment. >> then you see it digitally. >> you can see it digitally and you can see it -- they have a huge inventory of pre-existing items so that an architect can put items into it and you can walk through. they have a great demo of walking through the louvre, believe me, the louvre didn't take out everything just to let them walk into it. it's very, very exciting. >> this one is for joe. i don't know if they do this for women. you have a stake in a company called the trunk club. >> that's for women -- excuse me, for men. >> you said for becky. >> for joe. you don't do it for women yet. >> trunk club is out of chicago. trunk club is a way for people like you who are so busy to order online and be able to get delivery of a box that is preselected by a stylist who

knows something that you're 6 feet and that you're handsome and that you work on camera every day. >> thank you. thank you very much. >> you wear a handkerchief in your lapel. they know what kind of person you are. they style a box, send it to you, open it up, try it on and keep what you want and send back if you don't want anything. hopefully you'll want something and you get a -- your credit card gets charged and you don't get charged for shipping either way. >> how much money are they going to do this year. >> a lot. >> you don't want to say. the real reel. >> that's for becky. that's becky. the real reel is out of san francisco. it's a company that's very exciting that does -- i don't want to say used. it's every woman, including your wife and my wife buys a lot of dresses, suits, keeps them in the closet for the next five or ten years and forgets all about them. some of them she buys and never takes the tags off because she

didn't like them after she bought them. the real reel gives you the ability to send them in on consignment. the real reel, it's amazing. the growth between real reel and the trunk club have been similar, multiple digits in a short period of time. you can sell on consignment and buy on consignment. >> the real reel for you, becky and the trunk club for you, joe. i'll send it back to joe. >> i don't like shopping. it would be nice if it would come to my home. i could use the other thing, too. i have things that i get from the company that i haven't worn. coming up, jim cramer wraps up the week with us, gives us his predictions for championship weekend as well. we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket.

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let's get down to the new york stock exchange, jim cramer joins us now. you already picked seattle, didn't you? >> yeah. it's looking to me like it's going to be seattle/broncos. a lot of money switched in the last 48 hours to the broncos. the big money just went that way and it's pretty amazing to see the surge. >> who do you think between peyton and brady? >> well, i mean, i think it's going to be -- i think the

broncos can stop blount. i'm a little worried about ridley. but i think it will be a peyton night. peyton game. it's a peyton game. >> woody and john tisch were both on. i just felt like i needed to be kind of nice to both of them. i don't know. just here they are, you know, super bowl's coming up. it's in new york. they're kind of like -- or new jersey. they're kind of like watching, but i don't know -- >> i thought the coverage was great. i'm kind of riveted to anything nfl and i just think that, yeah, these guys deserve a level of -- look, they deserve a level of respect about what they've accomplished and the money they've been given. in the end they are sightseers in a game they both wish they were in. rex ryan ended up with a contract. >> i don't know. what about ge? do you know it's down now. >> ge is in a transition period, therefore they get a pass, but they are trying to get out of finance and moving aggressively. the line items in each is fine, oil is fine, power and water is really good.

aerospace is really good. but this is not the period that they will knock your socks off, they have to finish the transition out of finance and that's i think it's a buy. >> u.p.s., why are the numbers down on u.p.s.? >> go to the december 16th press room for u.p.s. and you'll see they picked the exact wrong dates. december 16th through 20th is our peak week. december 17th is our peak day. they were talking about right then of having to hire -- really not a lot of people in terms of what the last-minute surge would be. they just got the week wrong. they like everybody else in this country did not understand this shortened period between thanksgiving and christmas and they really didn't understand by the way that amazon is the place that people shop. >> and that people were still -- the retailers like amazon were still promising you could get it in time. there was a lack of communication between them. >> you really had to hire a lot of overtime workers. look, it's a high-quality problem, maybe they've learned that the -- that the idea of the december 16th to the 20th now peak is no longer the case.

they just got the calendar wrong entirely. it's kind of interesting to go back and read off u.p.s. kicks off peak week analysis, they put out a release december 16th, 2013, and they literally did not expect anything to happen that much between the surge in buy and they've always had the 16th and 20th. the models are being thrown out, whether it be mall traffic or u.p.s., the models just didn't work this quarter. >> jim, thank you, we'll see you in a few minute. we'll have more on the morning from u.p.s. knocking down the stock now. "squawk" will be right back. [ male announcer ] this is the story

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stock of the day is u.p.s. it's down about almost 4% after the company said that the

weather and the additional costs for that higher-than-expected demand all those packages, it kind of hit on a day it wasn't necessarily expecting it. as a result it sees both fourth quarter and full-year results below where analysts were. >> shares of ge take a look at this, it was trading higher just after the earnings came out and it showed that earnings were in line and that the revenue was better than expected. the company is now seeing a little bit of pressure down 2.75 points and analysts are saying that the company made the number because of cost cutting. solaris asset management said. said that cost cuts will run out. and the revenue growth was reflecting very much a gdp-type of growth rate and nothing above that, so maybe some of those comments have been affecting it. we'll see how it trades through the rest of the day. and make sure you check out the "squawk" blog this weekend, larry fink talks bonds and we've got an update on the battle between joe and me and go and

check it out and keep in touch. that does it for us today, make sure you join us on tuesday we've got economics professor ken rogoff joining us live from davos and chuck lovelle will be here on set. that does it for us. we'll see you. have a great weekend. "squawk on the street" starts right now. ♪ good friday morning ahead of a long weekend. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. we'll close out the week with a bang as far as news goes. u.p.s. just warned on the quarter a moment ago. and, of course, we have earnings from ge, morgan stanley, intel, and more. the ten-year yield take a look, we'll get industrial production and michigan sentiment this morning and then europe has some mild gains. 97% of the german dax by the way trading above the 200-day average. the roadmap thisor