good morning, everybody. welcome to "squawk box" here on cnbc. joe is out today, but first we have today's top stories. january ends with a sharp decline sparked by the recent sell-off in the emerging markets. the dow finished the month with a decline of more than 5%. that's right. more than 5%. in factors it was down more than 1% just last week. the s&p 500 dropped by 3.6% to start the year. the dow and the s&p both having their worst month since may of 2012, and the first january drop since 2010. the nasdaq was down only 1.7%, but that was the biggest drop for that index since october of 2012. and overnight the nikkei officially entering correction territory. that index is now down by 10.3% since the start of 2014. so a rough start no matter how you look at it on the equity

markets. we'll take a quick look at the futures right now. you'll see that at least at this point there are red arrows. forget about being down and bouncing back. the dow futures are down by 35 points below fair value. s&p futures are off by five and the nasdaq down ten. the markets will have a major event later this month with the release of the january employment report. that big number is coming up on friday. also, janet yellen has a week or so to get her thoughts together. her first testimony as fed chief is on february 11th. so a short honeymoon period. over to brian now with today's top corporate stories. brian, good morning. good morning. thank you very much. well, the phone wars are heating up. at&t is cutting prices for those who share wireless data plans to include any customer and small business with up to ten lines. at&t is trying to regain lost ground from t-mobile. and ibm executives are giving up their 2014 bonuses in

response to the lackluster year for ibm. many could have received up to $4 million. and the wall street journal says the department of justice is investigating banks, private equity firms and hedge funds that may have violated anti-bribery laws. all part of dealings with libya's government-run investment fund. some of the funds include goldman sachs, jpmorgan, credit suisse, blackstone group and the hedge fund. >> what do you think happens in libya? when in rome, do as the romans do. we have a little bit of news for you. more chatter over the weekend with the release related to charter communications. they are interested in time warner cable. charter said to be considering a higher bid in the low $140 per share range up from the $132.50 bid it made already. time warner cable says they want

$160 a share. so you move up a couple dollars but i'm not sure that's going to move the needle. becky? let's talk a little bit about the big game. the first ever super bowl in the new york city area brought out the stars, but the game itself was a bit of a blowout. the denver broncos had a first bad play leading to a safety. right over peyton manning's head. back to the end zone, that was the fasters super bowl score on record. it was just 12 seconds into the game. and if you thought the safety would be the first score of the game, you were getting 40:1 odds. it was all downhill for peyton manning. the seattle seahawks dominated the game on defense, on offense and on special teams. seattle led at halftime 22-0. and they went on to win 43-8 in one of the most lopsided super bowl victories in the 48-year history. they came back out and seattle scored again after halftime, too. >> it was ridiculous.

it was terrible. >> it was terrible. >> you said you flipped the channel. >> i did. i left in the fourth quarter and gave in. as i tweeted out, i switched over to "downton abbey." >> i always wanted to go to the super bowl and thought it was going to be good. and you could find the tickets cheap, on a relative basis cheap, cheap, cheap, but then the whole time as the game progressed i then became happier i didn't go. >> i had a friend who flew from seattle who went to the game. >> but they are from seattle. >> three-and-a-half hours in, paid over $1,000 for the ticket. secaucus train station, it was so hot that people were fainting. they jacked the heat up, you couldn't park or tailgate -- yeah. if they are going to do it in new jersey again, they have some work to do. >> i like watching from home. >> i was rooting for peyton

manning only because as you said on twitter, you have to go for the old guy. but when i saw paul allen at the end win, and i was thinking of him as sort of -- maybe i'm projecting, but i think of him as depressive because he looks to be upset about everything that happened in his career at microsoft and elsewhere, he never got the career he deserved, so when he stood up with the trophy, i felt a special sense of something for him. >> seattle is a better team no matter what. they were the better team definitely yesterday. they dominated on every level. you have to hand it to the guys, they were winners. >> it was the first super bowl ever where the winning team scored over 40 and the loser scored less than 10. the safety in the first half, of course, you do the office pool boxes, not for real money, that's illegal, but when you get to the safety, i was explaining to my co-host, man did has never done these boxes before, so i was explaining how they work. you want to get 7, 4 and 0. you never will get a safety. all of a sudden 8, 6, 5 look

good. >> we were having the same conversation with our kids at home. what? >> everybody's office box pool blew up. it was a disaster. >> if you were roger goodell, this is bad news. >> it was bad news for fox. as you and i were talking in the makeup room before, yes, we wear makeup, which is this. are there make goods for fox? i tuned out and turned the channel in the fourth quarter. >> it will be interesting to see what the ratings were like by the fourth quarter. >> you wonder what built-in guarantees were there for advertisers. if i was late in the game and paid in the fourth quarter -- hey, you dropped off. >> every year there's new numbers and they are always the most watched, meaning not just the most watched but more people watched. do you think less people watched this year? >> i think at the end, probably. at the beginning, no, this was the best offense versus the best defense. arguably smaller teams, but the reality is this was highly anticipated. nobody thought it was a walkover

by seattle. >> any time you have -- everybody knew -- forgetting about the score, i would think if you are a media company, if you are the nfl, which is a media company in its own right, you knew if you didn't have a true west coast team on the dock, you're not going to get ratings. >> but you got manning. that was exciting. >> for the first 14 seconds that was exciting. >> you know what's amazing is paul allen. >> he looked disheveled. denver receivers looked nervous dropping the ball. paul allen is the richest sports owner in the united states. what we forget about allen, as rich as he is, he only worked at microsoft for seven years. he left -- he battled nonhodgkins lymphoma, but he only worked at microsoft until -- he left microsoft at 1982. think about that. he did name the company. he did say let's buy the qdos,

but he left in '82. >> i would like to see that old man win it. would have been good -- >> seahawks party on the octopus, baby. >> on the boat. is peyton manning still one of the greatest players of all time? >> you wonder if this impacts his legacy, but at the same time he had a phenomenal year this year and last year. and he's not done. >> it would be harder to exit now. if he had one, he could say thank you for playing. >> is it his fault the defense gave up 43 points? >> no. the special teams were suffering, there was a lot of -- >> think about that. maybe they tried to get too fancy in the beginning with omaha and the guy hikes the ball and he's not expecting to get the safety. there you go. let's talk about the commercials and the halftime show. the early buzz on one of the top commercials was the puppy and the budweiser clydesdale horses forming a bond. we'll talk more about the

commercials with our ad guru mye miles nadal in a moment. the halftime show was good, too. >> we'll talk about "seinfeld" in a moment. >> it was kind of lame. that's where i wanted to go with that. as the world watches to see if the markets stabilize, the turkish finance minister tells cnbc that the count dress' central bank is going to be acting independently. that interview was in london this morning and we are joined now with more. we think that she's going to be joining us in a quick moment. i was throwing it to her, but we're having a couple of technical issues. >> china's news this morning, before we get to michelle, the pmi coming in. >> that was a little shocking. >> it was still above 50. 50 is the level that defines growth. >> you are still up but right at the water. >> everybody is looking at the

yen. it sounds boring, and the viewers are like, what are you talking about the yen for at 6:10 in the morning, but the nikkei, far cry from last year. >> it is miss yellen's first day. i want to show you this. let's go to michelle who is in london. michelle? >> hey, andrew. good to see you this morning. we interviewed the turkish finance minister just a few hours ago here from the london studios. the turkish lira stabilized at 2.26 and 2.27. when pressed on whether higher interest rates could push the economy into a recession, the prime minister who has been so against the interest rate hikes, would they still stand by the credibility or the independence of the central bank? he was not explicit but did suggest that they would, that they realized she had to live with a lower level of growth. and he was not concerned about

the level of growth impacting elections they have in march. turkey has a bigger issue when you talk to international investors. there's a growing perception about concerns with rule of law. ever since a big domestic scandal broke out on december 17th in you are tturkey, there' issues with the government messing with judiciary efforts. and one of the basic elements of rule of law is believing in the judicial system of the country. when i decide finance minister about, this i think he acknowledged for the first time to the news media they do understand that they have an issue about this and that they will address the issue of rule of law. >> unfortunately, we've had a few experiences that doesn't reflect well. and we are aware of that. the prime minister, if you go back a few years ago, i mean, you will see how progressive platform my party has and prime minister is progressive.

i mean, he's in favor of that. he's a reformist leader. unfortunately, the reason here is domestic issues have been taken out of context. and that is reflected negatively on the understanding of where we stand. >> so the turkish prime minister was saying all the right things. remember, he's a trained economist who worked at merrill lynch for a long time. so he knows how to talk to the global market community, international investors. i think the question ultimately is do you believe that the prime minister and he are on the same page? he says that they are, but when the prime minister says things like interest rate hikes lead to inflation, you have to wonder. so i think it still remains to be seen, but at least the finance minister is trying to put the best face forward here as they try to stabilize the currency. >> michelle, thank you. obviously, we're watching the emerging markets closely this morning. we are watching what came out of

china, what's happening in japan, and we'll look at the markets here to figure out what to expect ahead in the week of jobs friday. joining us from new york is maury harris, the chief anyist. phil, it's a messy month as we are down 5%, so what happens next? do you think that this is the beginning of something more to come or is there a turn? >> no, i think it's mostly e.m. >> emerging market. >> thank you. so we get a 1750 target for the end of last year. we ended up the year at 1850. so the last 100 points, i think, was some digestion that we're going through right now. so as we look at the markets right now, there's a lot of questions about whether or not we've got some sort of a global contagen going on. we disagree with the barbell approach right now. we are very positive on domestic u.s., on europe, on japan, but we've got a 4% short in emerging

markets, in global allocation fund. benchmark there is 6% long, so it's a 10% underweight. we are concerned about what's going on in e.m. >> concerned but not concerned that it will come back here to the u.s. >> correct. we are not in the contagen camp. everyone is using russian that, argentina, turkey and south africa. the underlying fundamentals in europe, japan and the united states are pretty good. we've got concerns about what's going on in the third world. and some of the emerging markets. for that reason, this barbell approach to us makes sense. and we think we're going to get through the consolidation. >> you can flip the act wrote name to make it czar. >> you still at 1750 in the s&p 500? >> no. end of this year we are at 2100. >> i was going to say, otherwise you are predicting a decline. >> exactly. the market did 100 points better

at the end of the year than we thought. so this consolidation does concern us. a 5% to 10% pullback from our perspective is healthy. we think we'll end the year in pretty good shape. >> you drop 5%, you need a 10% gape to recoup where you were. where do you see the gapes coming? this is a lousy end to the year. >> additionally, this is 2014, which is a mid-year election year. if you look at the presidential election cycle, the second year this year tends to be the choppiest in terms of the summer. the second issue, we talked about this the last time i was on, january ett janet yellen is today. the first quarter is a honeymoon period. >> this is the honeymoon, we are on day one. >> well, historically there tends to be a first quarter honeymoon when a new fed chairman comes in. second and third quarter tends

to be chopped. and then fourth quarter there tends to be a rally. from our perspective, you pull all this together, concerns about the e.m., federal reserve transition, the midterm election year, we're experiencing that 5% to 10% correction now. we think the back end of the year, fourth quarter, will be pretty strong. >> let's talk more about janet yellin and stepping into this. phil is not concerned about what's happening in the emerging market and coming back here to affect the less, but janet yellin is under pressure from central bankers. already india's central bank is blaming the fed for what's happening right now in some of the markets saying that they shouldn't be pulling out at this point and leaving them to clean up the mess. is that something that has any impact on the new fed chairman? >> i don't think it has much impact because these complaints have been around for some time. the fed is taking these into consideration. and now they've had two announcements of tapering.

their primary focus is on the u.s. economy. if there's some type of broad-based financial crisis, the so-called contagen moving to the european banking smg, then i think they would be more concerned. if they have to wait to make policy for all of the world to feel like they are in good economic shape, we wouldn't have much of the way in policy. it's got to be mainly u.s. centric. >> what do you think happens on friday with this jobs report? what are you expecting and what would be disastrous? >> well, i think the payrolls probably went up about 200,000. and it is interesting, during the month, it was a very cold month, but in the middle of the month when they took the payroll survey it wasn't -- the weather wasn't as nasty as in the rest of the month. so i think you'll get a decent number there, 200,000. i think the unemployment rate is going to hold on to all of that

decline that you had in december. i think that's going to stick at 6.7%. >> so if the number is worse than expected and people blame the weather, is that not a valid argument when the survey took place and there was not bad weather? >> well, when you get the data, we'll be able to determine what the weather effects are, whether or not it did make that much of a difference. that's easy to determine. once you have the data. >> phil, the number on friday, how important is that to you onshoring up your position? >> i think it is very important. the survey week in january, the weekly claims rolling 330,000. the survey week in december, a terrible month, the claims were 380,000. so we are right with maury, we think the number could be in the 250,000 neighborhood, consensus near 185. so we are expecting that number to get sort of this back to

trend line 200k number. >> does the weather to becky's point give the market an out? if the number comes in lousy, don't people say, oh, well, the weather, let's blow off the number. >> the short answer is yes. we have to go through the data. the adp number on wednesday will be important. another important forward-looking element of that. so we've got to dig through the data and see what the bls has told us in terms of what is going to drive amiss, if there is amiss. most of the data we have seen has been pretty good with the exception of last month's jobs report, which was terrible. but in our view, and i think maury agrees with us, most of the miss was weather-related. >> thank you so much for coming. maury, great to see you, too. as bad as it was this morning, last night may have made the game interesting. coming up, which commercials met the super bowl challenge and how much did it help to have an ad

in the second half? but first, all the nasty weather held off for the big game, but now it's snowing in new york in a big way. we'll get the national forecast from the weather channel this morning. good morning to you. >> good morning. yeah, it's going to be a rough stretch of weather in new york city to start out the morning. and actually some pretty good snow. we'll take a look at the advisories. winter weather advisory in effect and winter storm warning for the new york city area. i said before, i think this is kind of a sneaky storm. not everyone realizing what kind of punch this is packing. but look at the live ray star from new york to d.c. and in between there with deep colors of blue there. that typically indicates the heavy snow. that's been verifying on the ground. we'll zoom in to new york city, a lot of times with the storm just north of the rain/snow line is the heaviest thump. new york right in line. and again, for a lot of people kind of sneaking up on them, five to eight inches of snow easily in the new york city metro area to the north with amounts tapering off. allentown is another spot.

philadelphia trying to changeover from what is a cold rain right now back over to some snow. we think that will happen. here's your predicted snowfall here through the day. so it's a quick-hitting storm. snowing now, snowing heavily through late morning and early afternoon. and then here we are around 1:00, notice the snow starting to taper off. by 4:00 it should be a distant memory. a quick-moving storm, but impactful because of the timing of it and the amount of snow it will drop. also of note is that the snow guys will be the heavy wet kind with temperatures right around freezing. back to you.

the seahawks may have won, but which commercial took home the trophy? the founder and chairman and ceo of mdc partners is here. it's great to have him a day after the big event. >> great to be here. >> help us grade what happened overnight. do you want to give us your favorites? you can't claim your own as your favorites, i want to know what is your favorite ad? >> we'll let you say what is yours and then talk about the other ones. >> well, the most popular ad was one of ours. >> puppy love? >> it was the budweiser one with the clydes dales. >> we showed a clip of that. >> two years in a row the clydesdales took home the awards. the clydesdales have always been popular for ten years.

talk about the economics for one second, $300 million spent, 40% growth, 189 million people watched it. the spot went for $4 million a spot, 30 seconds, up from $3.6 million. 20% of next year's inventory is presold. >> we've been talking about this. this game given how horrific it was basically after the 14-second mark, if you had an ad basically any time after the first/second quarter, is there -- >> puppy love was in the fourth quarter. >> that explains why i didn't see it. >> i went to bed. >> but do you expect -- when we get the final ratings, do you expect it to go straight down? >> there's -- you pay your money and take your chances. >> so there's not a make-good situation. >> unless that's in your contract, but i doubt that would be the case. there's so much -- there's 49 minutes of advertising that was bought. and all inventory was sold two

months in advance. do i think there's going to be decline in viewership? for sure, the game was such a blowout. what's interesting is it's the most tweeted event in history. >> that's the only thing that made it fun for me. i sat there with the ipad the whole time otherwise i would have been bored out of my -- >> there were 30 million tweets that happened during the game. >> that's nice. >> so? >> i was tweeting, it's nice, a bunch of people yell at each other. >> but the new experience. it's not in conversation, but people are -- myself included, by the way. >> in a game like that, i would argue that twitter helped a lot. >> how? i'm a well-known doubter of twitter's power to sell products. >> but you have to go back to what's transpired over the years. now the communication in conversation happens well in

advance of the event, during the event and post the event. for instance, puppy love had 36 million views on youtube in advance of the game. so people are using facebook, they are using twitter, they are doing youtube. >> but does it make you want to go out and buy a budweiser? it's a nice commercial, i love puppies, i'm neutral on horses, they seem nice. >> i want to buy a bud light now because of the new screw-off caps. i kid you not. >> that's what a -- the screw-off cap commercial, miles, was the least -- it was a bottle with a screw-off cap. they gave the most effective ad of radio shack. we are dated, old and boring, and all these stars from the '80s came out. now i want to go into a radio shack and see what the change is all about. at the end of it, here's the commercial, at the end of it, that's what a commercial and ad is supposed to be. it seemed so many of the ads

were nice, we have a, quote, conversation, a bunch of one-liners, but does it make me want to go to the bar? >> i would say the cheerios ad reminded me that i loved these for the kids. it was the little girl negotiating with her dad about the baby brother and has another cheerio and says and a puppy. >> it's one event with and overall spectrum of activity. but if you do have the emotional connection with the brand, you have a higher propensity long-term to be induced to make purchase over time. but it's at a point in time, but there's no question, what we did for domino's, which is what the rad owe shack idea was, be self-deprecating and be completely transparent, it up substance abuses people to s --p deu

induces people. one of the greatest things about the audience is you have three times as many women watching the event than you would have in a normal football game. because half the people are watching the ads, not just the game. there's a very different dynamic and it is rare because everyone's biggest concern is are they going to tivo it or flip through the ads. here the -- this is the economy academy awards of advertising and there's a lot of prestige associated with the advertisers who participant, but brian, those advertisers do great on the ads. >> like after watching that bear, by the way, that was incredibly obese. now i have a desire from chobani yogurt. i didn't until i saw that bear. it was really overweight. >> chobani is not at whole foods anymore because it's not as natural as they say. fyi. we have 100 commercials to talk about. my favorite was the bob dylan

chrysler. the update to the clint eastwood ad. i almost cried at the end of that. >> but that had nothing to do with the commercial. >> nothing is going to replicate the m&m spot from detroit three years ago. >> we'll talk about this with miles as the program continues. when we come back, the microsoft board close to finalizing their new chief executive. we'll talk to yale's management guru right after this. and as we head to break, look at last week's winners and losers. ♪

♪ you walked into the hotel as a "5" but when she saw the room...

you turned into a weird "7". when she saw the roof-top pool... you went to: "11" ♪ you two should probably get a room... oh that's right! you already did. at planet earth's number one accomodation site... booking.com booking.yeah! fifteen minutes could save you fifteen percent or more on car insurance. yeah. everybody knows that. did you know there is an oldest trick in the book? what? trick number one. look-est over there. ha ha. made-est thou look. so end-eth the trick. hey.... yes.... geico. fifteen minutes could save you... well, you know.

good morning, everybody. welcome back to "squawk box." i'm becky quick. joe is off today. after a lousy start to the year in january, you still see red arrows. for the month the dow was down 5%. this morning dow is 20% below. the s&p are off by 2.5 points and the nasdaq is down 7 points. and watching europe, there are red arrows there. part of this is because of the china pmi number that came in

below expectations at 50.5. that still shows some advancement and contraction below 50, but it was below what had been anticipated. you can see the decline. in germany, for instance, down by .60%. oil prices this morning are at this point just down barely by 8 cents for wti crude sitting at 97.40. and the ten-year note which has the yield under pressure for quite a while is still below 2.7%. yield right now is 2.666. the dollar this morning is down at least against both the euro and the yen. the euro is trading at 1.3508. the dollar/yen is at 101.80. and the dollar is up slightly against the pound. and gold prices are up by just over $6. $1,245 an ounce. microsoft is close to announcing their new ceo and

joining us is john zeferelli. this news comes as a surprise to you? >> i think it comes as a surprise to a lot of analysts, a lot of people on the sidelines hoping for some drama. there's almost the cottage industry that's built up and microsoft is watching to see drama for continuing sagas. and this perhaps is less drama than brian's "downton abbey" that he was watching instead of the super bowl fourth quarter. nonetheless, this is the right answer. then the board is not falling victim to that messy complex that somehow there's got to be a savior from the outside. they have a great guy on the inside. >> great guy on the inside. >> he's proven himself. he's taken this servers unit and built it into a cloud business that's just this last quarter, they are up almost 110%. they are about over $20 billion

in sales from what had been the enterprise business and servers is really building this up to a mag fif sent high-growth business. he's an engineers engineer and also charismatic. he's got some experience on the outside from his time with sun and working with eric, but he's also 20 years on the inside. it's kind of nice taking a look at where a third of their workforce is from asia to have an asian-american ceo is great. i think 52% of silicon valley are asian-american now. that's sort of a sidebar feature. it's nice to see a great endorcement at the top there, too. >> i'm baffled by this. >> you can't be baffled by this. >> when we talked about the radio shack commercial, i liked that they knew who they were. this is microsoft saying we know who they are. we focus on their failures, some of the media which is not -- >> do you remember bing? who ran it? >> it's a better search.

who cares. here's my point, the server's business, which is boring, we don't talk about it, it's i.t. september centric has boomed. the stock has done -- up 35% in 12 months. >> and balmer when he leaves goes out on a high. much more like johnny carson and jay leno. he goes out with revenues tri e tripled, his profits tripled. he's given back more cash to people than exxon mobile. he has a proud trajectory. and this is the growth -- >> i wouldn't say jay leno, he's going out on top, too. >> hold on. miles, where are you -- >> that's the nbc family. >> he's a client. we know it well. there is no way they were going

to go outside the organization without exploring all internal candidates. cultural consistency and he's a real microsoft dna kind of guy. i think brian is right, his leadership in the areas he was involved with he did terrifically, and there was no way they were going outside. >> he did more than windows now. >> if you look at who really produced a big turn-around, in american history you have allen malali, they worked with internal teams. look at dell, starbucks and u.p.s., the major transformations, overwhelmingly they came from inside -- >> hewlett-packard was one of the worst disasters in bringing outside people in. >> yeah, hewlett-packard, absolutely. look at jcpenney and motorola that imploded bringing in ed zander. so many times we go for that -- >> while microsoft is a nice cash machine, it's a company that has missed opportunity after opportunity.

this is a company that had -- remember that living room of a future, all the stuff that nest and google just bought, everything they used to have -- they have had that for ten years. for ten years they have been talking about that. and this guy -- >> i also say they were shaken to their soul of the abuse of the anti-trust policy they went through. it gave them cost in acquisition strategy just at a time when they should have been buying, but as a great global technology bohemuth they were, they were running into problems with regulators. >> jeff, you nailed it. i was going to bring that up. miles, chime into it. here's my thing on microsoft, i'm not defending the company. they have a -- they were beaten like a rented mule by u.s. -- they were sued, europe got them, u.s. got them, the d.o.v. went after them. i wonder how much of this is scarring because they are nervous to take a big risk to

fight these for so many years they have become too safe for their own good. >> i look at this more of like -- >> they are under their weight. >> because they are timid and beaten up by the federal government. >> no, if you talked to some of the leaders, they missed pieces of it. they missed mobile. >> my buddy who i referenced earlier today from seattle in town today, a fairly high-level guy at microsoft, he said we're scared to do anything big. >> does it matter that part of what we have heard about this is bill gates potentially stepping down as chairman, still saying on the board but not being chairman? because there was talk that a new ceo didn't feel like -- some of the candidates who were being considered for ceo didn't feel like they would be able to really run the place if they were still reporting to a chairman who built the entire place from the ground up. >> i think -- >> it is very inspirational, but not frightening effect here. bill gates would not have a chilling effect. he had a lot to do with bringing in a great technologist that

really didn't pull off the founder of lotus notes and things. he knows he's not necessarily on the cutting edge of the frontier. he's interested in it, but to -- >> is that just a side show for him as the chairman? >> it would be great to have the lead director who has been on the board since 2012, he did a spectacular job before. he was a very serious airing of candidates. steve wozniak used to say never trust a computer you can't throw out the window. now they have stuff up in the sky that you can't see. look at google writing down $10 billion on what department work out for motorola. >> i think they were late to the game on mobile, but if you look, they went from a pc company, now they are a mobile device and

service business. i think mark penn being brought on as chief marketing officer is a big positive for them and they are making good headway. i think to brian's point and jeff's point, they made huge headway. and it's reflected in the stock. up 30% for the year. i think they've done very, very well. i think they made great mo men tim lately. >> miles, stay where you are. jeff, thank you for being with us. fascinating conversation. we'll have another version of this conversation later in the program. coming up at the top of the hour, we'll shift our focus to washington where republicans agree to lift the country's borrowing limit without pushback. former senator judd gregg and form earlyman's director, erkine bowles is joining us in the 7:00 a.m. hour. we are back in a moment.

opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities.

we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

welcome back. it's a new month of trading and the u.s. equities are turning things around. the dow futures now showing a gain just above -- whatever, they are sitting at the flat line. this is better than earlier this morning when you were looking at down 20 points or so below fair value. we'll see what happens closer into the trading day, but there are concerns of china pmi. if you start looking at what happened the last month, the dow down 5% and the nikkei in japan officially in correction territory down by just over 10%. since the super bowl was a super blowout, what does it mean for the commercials? how does youtube play into the super bowl ad game? we'll dive in deeper and get more on the markets. we have a lot more to do. plus, if you are in this area, be careful. the roads are already nasty.

we are back after this. if you're living with moderate to severe crohn's disease, and it feels like your life revolves around your symptoms, ask your gastroenterologist about humira adalimumab. humira has been proven to work for adults who have tried other medications but still experience the symptoms of moderate to severe crohn's disease. in clinical studies, the majority of patients on humira saw significant symptom relief, and many achieved remission. humira can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. blood, liver and nervous system problems, serious allergic reactions, and new or worsening heart failure have occurred. before starting humira, your doctor should test you for tb. ask your doctor if you live in or have been to a region where certain fungal infections are common. tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. you should not start humira if you have any kind of infection. ask your gastroenterologist about humira today.

remission is possible. afghanistan, in 2009. orbiting the moon in 1971. [ 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.

when you order the works you want everything. an expert ford technician knows your car's health depends on a full, complete checkup. the works. because when it comes to feeling safe behind the wheel, going the distance and saving at the pump you want it all. get our multi-point inspection with a a synthetic blend oil change, tire rotation, brake inspection and more for $29.95 or less. get a complete vehicle checkup. only at your ford dealer.

welcome back, everybody, i'm brian sullivan in for joe this morning. my apologies early. how did viewers stay social at the super bowl? joining us is founder and ceo, mdc partners. big ad firm, knows from what he speaks.

the ads get all at tension because the game as so bad, especially this time. i keep going back to radio shack. i hate to be a one trick pony. i love the self-awareness of the company. the other trend i saw, is it only old people watching the game? everybody ad seemed to be nostalg nostalgic. >> 70% of the viewers, 45 to 49. >> that five-year span made up 70% of the viewers. >> only 25% is 25 to 29. >> 50% women. >> what does that say about the game. >> 100% of the people were 25 to 49? >> probably 80% and then there's beyond that. i'm talking about the principle target audience was 45 to 49, 75%. 25 to 29.

the overall event was more popular on social media than even the election. >> i have a question about using youtube and social media. we were talking about the bud light ad with ian, the supposedly guy off the street. he was not a guy off the street. he was paid to come there for a focus group. he knew he wasn't just at the bar hanging out and arnold schwarzenegger -- >> the guy with the ping-pong, the limo. >> they ran a long version on youtube before the super bowl ever began. so last night, my wife, they showed just the first 0 seconds. i said this is the best commercial. we went online, during the game i showed her the whole thing. that to me is sort of the future of how this works. >> that is a big part of this. previewing ads. if you previewed an ad on youtube, you had 3.4 times as many viewers of your ad on super bowl than if you didn't preview.

>> that guy ian in your business he sells ads for outdoor advertising. the big billboards. >> you weren't upset about it. you thought you had been duped but you loved the ad. >> when you watch it, he's not an actor, everybody else is an actor. >> the pretty girl is not going to come up to the guy wearing a t-shirt with a napkin as the pocket square. >> you don't wear a pocket square, do you. >> carl quintanilla has a way to get the thing perfectly across. everything you see here, this is all natural, no cardboard. >> hard to believe. >> i liked the audi commercial. >> both of you gave me feedback over yesterday. talk about the ones you liked.

>> i liked the dober-uaua. >> do you like doritos. >> which one. >> the time machine one. >> the cowboy one when they wrestle away the doritos -- >> i didn't see that one. >> must have been in the fourth quarter. >> i liked the heinz 57 one but they were hitting it on the bottom. you're supposed to hit it on the 57. >> how about bob dylan? >> get your watches from switzerland but buy your car from detroit. >> people thought he might have sold out. that is not what you'd expect of bob dylan. >> bob dylan is actually from duluth, mun min. i know we pictured the counterculture west village guy, he's from duluth, money min, a blue collar background.

i give him credit for doing this ad. >> i like the rah-rah detroit. >> my most favorite ad of all time, i can say this objectively, because we didn't do it, was the m & m spot three years ago, imported from detroit, made in the usa. i don't think anything will ever replicate that. >> a great moment. >> we have to run. how much does bob dylan get paid for an ad like that? >> that's a good question. i would say $500,000, maybe $1 million. >> if only the jeep cherokee was as good looking as the ad. >> i'm a jeep driver. >> what did you do to the cherokee? >> we have a lot more coming up. we'll hear more from miles in the next hour. coming up, erskine bowles wants to fix the debt literally. our favorite budget buster says we're writing checks that our children and grandchildren can't cash. what we have to do to change

that problem and change it fast. that's coming up. we'll be right back.

good morning and welcome back to "squawk box" right here on cnbc, i'm andrew ross sorkin along with becky quick. joe kernen has the day off. see how things are setting themselves up the day after the super bowl. doug cass says there's a super bowl ohman on this whole situation. because the seahawks won, it's a little confusing, it looks like

we could have a bullish year. the ten-year, take a look at what's going on there, 2.669, that's the number to watch. and then let's get you through some of the other morning headlines. "the wall street journal" saying that the department of justice is investigating banks, private equity firms and hedge funds that may have violated anti-bribery laws in their dealings with libya's government-run investment fund. jpmorgan, socgen is on the list. the separately, charter said to be considering a higher bid for time warner cable in the low $140 range from $132.50 range that it had bid before that. time warner cable at least hinting so far that it wants

$160 per share before it makes a move on a deal. at&t cutting its prices for customers, that share large wireless data plans, this includes any customers and includes small businesses with up to ten lines. at&t trying to regain lost ground from verizon. we talked about some of the ads, t-mobile ad went straight at them over speeds yesterday. from the first play of the super bowl, it was all seattle. the seahawks crushing the denver broncos 43-8 and of course we'll be talking about the commercial impact throughout this hour and the next one. >> this friday, marks yet debt ceiling deadline. congress has agree there's no threat of a government shutdown this time around. joining us now, judd gregg, our guest host. former governor of new hampshire and united states senator. joining us is also erskine bowles.

both gentlemen also serve on the campaign to fix the debt. ing to both of you and as we sit here, facing down yet another debt deadline, i just wonder how much of the problem is going to fix itself? the lead story "new york times" in the today talks about how there are budget surpluses looming in lots of states because money is finally starting to come back in. what do you think? is this something that puts some of the issues on the back burner? how much is fixed and how much will still come and bite us. >> it doesn't fix itself. it does go down. our deficits are going down. but because of the demographic situation we cannot fix this problem until we fix the entitlement issues and reform tax laws. we may have pushed the problem off by having the deficits go down but as a simple fact, we're headed toward the situation, our debt-to-gdp ratios aren't sustainable. so if we don't step into this problem now and start to resolve it, our children will get stuck

with it and it's going to be a very significant problem for them and our standard of living will drop. the window, i don't know what erskine's view on the window is, the window is no more than five years. >> what is the window? you're a numbers guy. lay out some of the numbers for us. >> i am a numbers guy. i tell you, it crushed me to watch denver lose last night. >> me, too. >> john fox is like the greatest guy in the world. that really crushed me. >> i was going for peyton manning in a big way. >> i was with denver until about the second quarter. >> then you went to sleep. >> denver the first 14 seconds. >> denver hit the debt ceiling. >> yes, they hit something. that's for sure. >> becky, you missed the best ad, too, by far the best ad was the bob dylan ad. >> that's the one andrew liked. >> that little kid riding the dog, the lasso and the fritos.

>> i missed some of those. i was not around by the fourth quarter. i went to bed. >> notice how erskine is trying to change the topic. >> you always give me a hard topic. you heard the president talk about the need for growth, the need for investment, the need for mobility, the need to make work pay. i agree with all of those. we have to have it within the context of long-term fiscal responsibility and reform. if you think through that, if you just don't look from "a" to "b" but "a" to "f" or "a" to "c." we have to invest in education. if we don't have enough revenue or resources on the other side of a scale by making the cuts with he have to make in the entitlement programs, the growth

in the entitlement programs will consume every dollar we'd invest in training, skills, research, infrastructure. so it just makes sense we have to tackle these tough problems. >> let's talk about interest rates, because interest rates have not gone up yet. we keep thinking this is going to be the time they do. i've been stunned to see the ten-year still below 2.7% at this point. if interest rates ticked up to, let's say, 4%, 4.5%, which i don't think is unlikely over the next couple of years, what happens then to our payments and how does it squeeze us. >> just think about it, becky. we're spending $230 billion a year on interest. that's more, just to put it on a relative basis that we spend in the department of commerce, education, energy, homeland security, interior, justice, state and the court system combined. that's at today's artificially low rates. if interest rates were at the

median level in the 1990s, we'd be spending not $230 billion a year but $650 billion a year. and for people who are listening who are parents, that is -- that's $650 billion we can't give back to the taxpayers. but worse, it's $650 billion we can't spend on education, on infrastructure, on high value added research on college campuses like mine. and when you think about it, it is $650 billion that will be spent principally in those countries that we're borrowing money from to educate their kids, to do the infrastructure, do the value added research on their college campuses. the next big thing is created over there, not here. that's crazy. >> you'll be borrowing in order to pay interest. you can't catch your tail when you're doing that. >> looking at the story on the front page, the lead story "new york times" in the today, talking about budget sure plauss

coming back into a number of states with be that will start happening on a federal level, too, when you see tax dollars going up. does it make it that much tougher? this is a tough message to get out there in difficult times. when people start feeling more flush, how do you get that message across in washington, erskine? >> i think you just deal with the facts. you know, we will have cut the deficit in half over the last several years. that's coming from an all-time high. the debt-to-gdp ratio will still be above 70. when i left washington in president clinton's administration, the debt-to-gdp ratio was 35%. do nothing, stick our heads in the sand it will be right above 100%. that's not sustainable. >> let's take the income side here. joe's out today. he would probably have a heart attack if he heard me say this. >> i'm sure he's listening. >> forget about cutting spending. 60% of the budget is basically untouchable because of entitlement programs.

people don't get elected telling people what they're not going to get. they get elected telling people what they're going to receive. right? you know that better than anybody. let's assume that's untouchable. according to the irvings brookings tax center, which is nonpartisan, the average family in america pays 5% tax. lowest in 40 years. >> first off, i don't accept the premise. the simple fact is you cannot address this problem unless you address entitlement issues. you have to specifically address medicare. we have $60 trillion unfunded liability in medicare alone. so until you get our health care costs under control and do it in the medicare accounts, you're not going to solve this problem. on the tax side, it's not that we're an undertaxed nation, it's that we're -- we have a tax system which erskine said, is perverted. it's essentially undermining our capacity to grow. instead of having a tax system

which incentivizes people, we have a tax system which incentivizes people to invest for the purpose of avoiding taxes. >> the fastest group of those paying no taxes after deductions, kids, home, home office, 500,000 homes that make over 100 grand a year. p pay zero after deductions. >> we have an extremely progressive system. what we have is a system that doesn't encourage the top 20% to invest efficiently. it encourages them to invest to avoid taxes. maybe the next 20% and the next qu quadrenial, quintonial should have to pay tax. you significantly reduce

exemptions. then you end up with a tax system which allocates based on people's incomes versus how people avoid taxes through deductions. >> if you do that, get rid of all the exemptions and lower the rates -- >> the majority. >> im50 going to end up paying less in taxes. to brian's point -- >> you maintain as a progressive system. >> if i'm paying 28%, i'm paying less in taxes because i'm paying at 33%. >> you're one of the few people not taking advantage of the deductions. >> i'm not saying raise taxes on the middle class. if you're going to have -- if you're going to have a certain level of spending in the government, i agree, spending is the problem. i know with have to go. but there also has to be revenue. >> absolutely there has to be revenue. you get revenue through economic growth. you don't get revenue by raising taxes. that reduces revenue because people avoid taxes through investment. >> one question on the same issue -- we have to go. the question is, how do you --

i'm hear erskine's view on the tax front. the question becomes what do you do about the effective tax rate? ultimately it's about what is the average effective tax rate? the question is, if you go to that rate and take everything out, does it actually work? i'm not sure the answer is yes. erskine. >> it does work. you have to remember, 27% of the people itemize. they're not taking advantage of deductions. we have to broaden the base, simplify the code, get rid of the back door spending, reduce rates and become more competitive globally. >> we should have listened to him longer. >> erskine, thank you. always a pleasure talking to you. >> enjoyed it. >> judd gregg will be with us for the rest the program. he's our guest host today. still to come on this snowy morning, a closer look into microsoft's almost official, maybe possibly new ceo. the big question around this

guy, who is this guy? if you own microsoft stock, what should you think about this reported hiring? later this hour, more of the hits and maybe some of the major misses from this year's crop of super bowl ads. there were moments, some real duds. there were entirely missed ads in the fourth quarter which we wonder did anybody actually still watch? stay tuned. after your company's gone public? and the capital's been invested? or when your company's bought another? is it over after you've given back? you never stop achieving. that's why, at barclays, our ambition is to always realize yours. i nethat's my geico digital insurance id card - gots all my pertinents on it and such. works for me. turn to the camera. ah, actually i think my eyes might ha... next!

digital insurance id cards. just a tap away on the geico app. could save you fifteen percent or more on car insurance. everybody knows that. well, did you know that when a tree falls in the forest and no one's around, it does make a sound? ohhh...ugh. geico. little help here.

good morning. 6:15 in chicago. we've seen positive momentum the last hour or so, s&p indicating maybe a slightly higher open but very, very slight. one of the big stories out there this morning, the nikkei dropping again overnight. now officially in correction territory. it's down more than so% from its recent high, down 10.3%, since the beginning of the year, the nikkei down 25% overnight tonight. coming up, he owns the nhl washington capitals, the chairman of groupon, and "squawk box" is apparently his favorite show. is that a fact? >> it is. >> "street signs," pretty fine program. ted leonsis, just minutes away. is this a bump in the road or a warning sign for investors? we'll dig into maybe what is

just hype and what you need to be worried about. snowy monday, stay tuned. "squawk box," the second best show on cnbc will be back. >> the first. time now for today's aflac trivia question. how much did advertisers spend on a 30-second commercial during last night's super bowl? 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. while he's been incapacitated, somebody's been paying him cash. now, is this your doing? aflac? now, if i met with some such accident, would aflac pay me? ♪ nice. this is your stop. [ male announcer ] find out what aflac can do for you and your family... aflac? [ male announcer ] ...at aflac.com.

for you and your family... aflac? sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities.

now the answer to today's aflac trivia question. how much did advertisers spend on a 30-second commercial during last night's super bowl? the answer, $4 million. >> aflac. welcome back to "squawk box." veteran microsoft executive -- what does it mean for silicon valley? joining us now is simon young. we have a rock star in person. kara swisher is here. we have a content sharing

partnership. welcome to being here in person. are you happy about this? we've been debating. >> i don't think anybody cares what i think. >> is this the right guy? >> it's good they made a selection, six months. >> that's not a great endorsement. >> i was comparing him to bob iger the other day, the quiet executive who looked more passive than he was. >> >> is this new blood. >> i don't know that new blood would have changed anything. someone who knows the company might be better, especially if they're allowed to do the things they want to do. >> where are you on this, norman? >> short term for the stock, i think this is probably a positive. it removes a lot of the uncertainty, both in the investor community and more importantly inside the company. i think there was doubt and

uncertainty about what was going to happen. the good part here he's an insider. he should be able to it had had the ground running. >> for those who endo the know norman, maybe help us with the things he's done. he's put them in the cloud. >> that's what he recently did. >> that's what he's gotten a lot of credit for doing. >> yes, indeed. >> he also is responsible for bing. >> yes, that's where i got to know him. >> is that the pro or con category. >> it was awful. i think bing is good considering they're going up against google. >> what i said earlier, andrew. better than google. >> it was too late. it was too late. microsoft and apple in the old days. people were using microsoft. it was a subpar product. >> norman, i've argued this is a fantastic american company that is basically a toll booth, however, it punches below its weight. is norman going to change that?

>> probably not. >> i'm sorry, norman. >> maybe you will change that. >> i don't think they're giving me much power here. i doubt as an insider he's going to make a lot of revolutionary changes. he does have the opportunity, he's going to have a mandate to do big things but i suspect bringing him in because, lack, they just did a re-organization starting last july. they probably need to stay the course. like kara said, this is a guy who's been in charge of what is arguably been the growth and profit driver for microsoft. >> beiingo. >> this whole idea that he may not be the chairman? is that right, is that not right. >> he's a busy man. he's not a very good chairman. he doesn't like the wall street aspect, the investor part of it. he doesn't care, for most of his career he hasn't cared about that. >> he cares about the stock because he's trying to give the money away. >> yes, he does. >> you're saying the operational side. >> he's more interested in

helping the technological issues. the question is has he been away too long? but he is bill gates. he gets people excited within the company. he's the founder. him helping nadella is a nice fit, i think, in terms of as long as he doesn't meddle too much. >> has he been meddling this whole time? >> he's the chairman. it's not meddling if you're the chairman. you're supposed to meddle. >> with steve ballmer, i would say he was m.i.a. on purpose. >> he was there for quite a bit of time in the initial years. >> is there a need for a revolutionary change or is this something where you keep doing what you're doing. >> it's something the media loves. let's make a big change. this is a massive company. i do think leadership is important but this is such a complicated company, to make these changes you have to have a lot of leaders at microsoft.

they're little countries. >> i was going to say, kara, norman, this is to you, i've been to countries that were smaller to microsoft physically, the place is massive. norman, the thing i mentioned earlier that i like about this pick if it happens, to me it's an acknowledgement that microsoft knows what they are. we focus on the failures of the media, it's true. bing, it's not working. microsoft stunks. guess what? revenues in 2009 fiscal year 58 billion, revenues this fiscal year, probably 85 billion. if that's failing, microsoft's actually doing quite a good job at failing. they've increased revenue quietly. enterprise is doing well. >> it's not just the media. it's the stock market, too. >> it's the celebrity ceo. >> 35% gain the last 12 months f. you look back over the last 12 years it's been a much rockier road. >> they don't need a celebrity ceo. that's what we'd all like to

see, an allen an mulally. >> is this a good guy to keep peace within that world. >> better than the other choices, i think. >> a question for kara, would you break up this company? >> possibly, the consumer stuff. they're not going to. >> norman, final word to you. >> yes, again, possible. bing has lost collectively $16 billion since 2009. satya nadella doesn't have much experience on the consumer side. >> we have to go. norman, kara, thank you for joining us. we'll talk to you soon. thank you for coming in. >> great to see you. >> up next, a closer look at some of the emerging markets and currency markets this morning. it's been all the rage so far in 2014. it feels like chaos but sometimes chaos could mean opportunity for you. we'll hit some of those

opportunities and give you an update on how those markets are trading when "squawk box" returns. ace of mind is importann you're running a business. century link provides reliable it services like multi-layered security solution to keep your information safe & secure. century link. your link with what's next. afghanistan, in 2009. orbiting the moon in 1971. [ 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.

. time to take care of business with century link's global broadband network and cloud infrastructure. we constantly evolve to meet your needs every day of the week.

. ♪ i lost her in the cold >> welcome back to "squawk box," everybody. our headlines, it is jobs week. on wednesday we'll be getting the adp private payroll numbers. analysts are expecting to see 193,000 private sector jobs added in the month of january. on thursday, we get the weekly jobless claims expected to come in at 338,000. the biggie comes friday. forecasters say they are looking for nonfarm payrolls for january to come in at 183,000. this would be after that incredibly disappointing 74,000 number for december. the unemployment rate is expected to tick down by a tenth of 1% to 6.6%. i'm looking at the markets this morning and after a lousy month of january, for any of the bulls out there, well, things are barely budging this morning. we did see weakness earlier this morning but at this point it looks like everybody is right around the flat line.

dow futures are up by three points, s&p futures are flat lining. nasdaq is flat line, too. we'll see what happens as we get into this new trading. >> we're keeping a close watch on the asian markets. nikkei is now in correction mode, down 10.3% since the beginning of 2014. the hang seng and the shanghai composite are closed for the chinese new year. the nikkei down by about 2% overnight. in europe right now, the early trading there is looking at sames aour futures. the dax in germany was down by 0.6%, now it's down by 0.2%. >> corporate news, at&t cutting prices for customers that share large wireless data plans. this could be good for our family. any customer and small business with up to ten lines. at&t is the number two u.s. provider. it is working to regain some lost ground from market leader verizon. in case you missed this overthe weekend, this is shameful, i

think, i'll explain what i mean in a second. "the wall street journal" reporting that clothing retailer joseph a. banks is in talks to buy eddie bauer from golden gate capital. no details of the talks were revealed. men's warehouse last week said it was opening to sweetening its buyout offer for joseph a. banks under certain conditions. both these companies have tried to bid for each other and now joseph a. banks is trying to pretend their interested in eddie bauer. the whole thing is disgusting. by the way, they're all not the best companies to begin with. it's like merge all three failing companies together? >> you buy one boot and get seven boots for free. >> and you'll like the way you look when it's all over. >> are you wearing a little men's warehouse. >> i like the way i look right now. >> you do? >> mildly. from the waist up. leave that to the imagination. >> you're a humble man.

>> no, i'm not, not at all. >> i know that you're being sarcastic. >> no comment. let's get a check on the energy and currency markets. we have director of fx strategy, cnbc contributor. kevin be i want to start with you. the emerging markets are getting attention, japan and china are getting attention. you know what else got my attention, almost fell on the floor when i opened the family heating bill. everybody i've talked to has seen a massive spike in their heating bill. natural gas prices way up. is this going to be a big problem for the economy? >> it depends on whether you're talking about the short term or long term. short term, the pain in terms of propane and natural gas prices. it's been tough on families that is going to have a direct economic impact on households, coming in dozens of percent above projections. january 14th is the first true

test. it was up a lot on percentage basis at the henry hub. we saw prices getting to 5 and $6 before going back to the 4s. maybe the gas is associated with oil production, in other words, it's gas that's effectively going to come out anyway. maybe when they start drilling again, the price won't be rising back to the old levels. maybe this gives you comfort if you're a natural gas bearer. >> do you think this will then put more rigs and wells back online that have been taken offline as prices fell? >> the rigs that went offline went to oil and they're never coming back. they're doing the most profitable thing they can. you have a period of latency. you have to build the rigs, train the crews and deploy. that's probably a one-year to one and a half year cycle. this was probably the signal that said, hello, gas, it's time to come back to market. >> on the currency side, focus

on the dollar yen. i know it's obtuse, a little bit weird. what does that matter for u.s. stocks? it just does. do you think it's just a matter of time before the bank of japan takes action? >> they are quite comfortable with the current level of dollar yen. yes, it's fallen quite a bit since its 1.05 peak. now the economic data out of japan is still relatively healthy. i think they want to conserve their bullets for the consumption tax which will happen in april. they could take a preemptive move. but if they do, i don't think it's going to come until late march, right before the april consumption tax hike. right now, data is still supporting a continuing of coverage. it's a matter of how much of a catastrophe higher taxes will have on consumer demand. >> what's the best currency trade right now. >> i like buying dollar yen on dips. this is a support level for dollar yen. i love the new zealand dollar.

it's been beaten down significantly last week and even though the rbnz came out and said we'll be raising interest rates. i think there are opportunities to pick up bargains. >> thank you very much. have a great day. >> thanks for having us. coming up, finding the next big tech investment. ted leonsis is always on the prowl. he'll tell us what he's looking at right now. plus, some of his predictions for 2014. and if it wasn't a great first month on wall street, the nikkei is in correction territory now. the currency markets are all over the place. what the heck is the average investor supposed to do? we'll get a few suggestions in the 8:00 a.m. hour eastern time. then find "squawk box" online and mobile, too. follow us on twitter. @squawkbox. or visit us on quack.cnbc.com. (announcer) scottrade knows our clients trade

and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) ranked highest in investor satisfaction with self-directed services by j.d. power and associates. but with less energy, moodiness, and a low sex drive, i had to do something. i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur.

report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer, worsening prostate symptoms, decreased sperm count, ankle, feet or body swelling, enlarged or painful breasts, problems breathing while sleeping and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. ask your doctor about axiron.

there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title. and a raise? management couldn't make that happen. [ male announcer ] introducing fedex one rate. simple, flat rate shipping with the reliability of fedex. welcome back, everybody. we've been watching the futures this morning. so far, it looks like things have turned around a little bit.

nasdaq futures also up by about two points and the s&p up by less than a point. the ten-year note, has been actually the yield's been increasing slightly there, too. the yield at this point is 2.673%. earlier this morning it was 2.666%. >> quickly, can i just jump in with herbal life. >> please. >> it's up 4% in the premarket. they're issuing a billion dollars in convertible notes. it came out an hour ago. it's now up 4%. a billion in converts. the battle for herbal life heats up again. >> if you're bill ackman waking up, you threw up your cheerios. >> or you buy the converts. hedge your bets. >> at this point, i think it's too far gone. let's talk to tech investor ted leonsis. he's never bashful on offering his outlook on what's the next big thing. today is no different. he unveiled his predictions for

2013. he nailed ten of them. today he has 14 predictions for 2014. with us now is ted leonsis, revolution growth fund co-founder washington capitals owner, chairman of groupon. you don't have enough things to do? and he's the vice chairman emeritus of aol. good morning. >> good morning to you. >> how awful did you think the super bowl was last night. >> well, microsoft, good for paul allen. i'm happy for him. i'm sure the ratings were sliding down as the blowout occurred. i thought it was -- >> we were all happy for paul allen. he was one of the guys that never got the credit he deserved. you raised microsoft, i should ask. what do you think of the new guy? he's not the new guy yet, but satya? >> for a board, planning is job number one. if that's the pick, i think they did a deliberate job.

i know they were interviewing and considering about 100 people when the list was first created. >> you have too much on your plate, i assume? >> they probably made a safe decision although i thought your conversation and kara swisher's observations on the complexity of this company and that i think what the message will be is we are an enterprise company and that the recurring revenues from big companies and enterprise is really the way this company will go. and i do think that the company should consider some kind of carving out or cleaving to the side the consumer business. because when you look over the last dozen years, they kind of lost the online web wars and they've certainly been losing the mobile wars. and mobile and mobility and this internet of things, those are two of the major trends for this year. and they're all about the

consumer, so you just have to wonder how microsoft will be able to manage this core enterprise kind of business while still being able to reach the 2.5 billion people around the world that are connected via mobile. >> ted, i want to get your predictions but you sparked a question for me. there was a rumor going around as to whether microsoft should try to merge its consumer business with yahoo!. we haven't talked in a while. where are you on yahoo! these days? >> i think yahoo! is a media company. i don't think it's any longer a web services kind of company and still drives lots of traffic through traditional means. i think they've been adding these new brands but it's not a company that is central to the ecology of the internet. when you look, amazon certainly has morphed and become an infrastructure, big audience kind of company. >> right.

>> facebook is doing that, google certainly is in the lead, apple and microsoft. those are really the five big ecologies right now. and i think microsoft and what it's signaling right now is saying while those other companies, those other four ecology companies are moving more and more into the consumer and global space, they want to really double down on the enterprise. >> ted, let's go to your predictions. i want to go out of order for a second. number three is this idea of personalization for 2014, sort of a big theme. you talk about 3-d printing as sort of a big mover. what do you actually see haing? people have been talking about the potential for 3-d printing for a long time but we haven't seen it really come to fruition yet. >> i think manufacturing is right for some kind of transformation. i think we're seeing more and more consumer clothing companies. you know, the nikes of the world, the under armours of the

world, they want to get more and more personalized. that everyone is a designer. everyone's making their own movies. everyone is expressing themselves. so personalization and the companies that can move that way quickly are the ones that are able to get that relationship, an ongoing relationship with consumers. we talk about internet of things, which is one of the trends. i think that's a part of this 3-d presenting movement, to be able to create things that generate data, you know, right now when someone gets pregnant, that conception of birth is starting to develop data. and once a child is born, really, all of the data that is being created is going into the cloud. and these devices, whether they be watches or jewelry, heart

monitors, ped ometers, your phone, it will be capturing and generating data. the more data that's out there, the more companies can deliver, be it media, be it products, be it environments that are personal and relevant to you. >> ted? >> yes. >> it's brian sullivan. thanks for joining us. >> sure. >> at what point do we see a push back -- maybe we don't -- against this data. about a month ago i but a nest product at an apple store which i suspect will no longer be sold there, i'm just guessing on that one. i've not installed this yet. now i'm sincerely questioning whether or not install it. to be frank, who cares what the heat of my house is. i do worry we're getting to a point where there's too much data intrusion into our lives. and i'm finding myself making decisions to cut back. ie, shutting gps off in cars, et cetera. >> really? >> am i weird?

>> infamous words of bill gates about a decade ago, it's like oxygen, you may get used to it. i think it's a generational thing. short of financial information, i think young adults are living their life on the net. this new generation understands it's living its life in a fish bowl and it can deal with it and it understands that the benefits of generating the data maybe outweigh the creepyness around safety and security. i do think, though, that like what happened in december with target and with neiman marcus, that that's a wakeup call. the kind of fighting that's going on in big financial service companies to protect the financial assets of the companies. and also right around the corner here, what we have to look at from a government perspective, these are the next generation wars.

>> right. >> protecting our data, protecting our servers and the like. >> ted, real quick. one of your final predictions is m & a is beginning to be big this year. we were predicting m & a for a long time. you say this is the year. why? >> i think it's time. i think big companies have been realizing they've been playing defense, shedding jobs, not investing in r & d. there's been so much venture capital going into these young companies. acc krx accu hires will be big. i'd look at acquisitions and next generation teams i could bring in. >> thank you for being on the program. >> thanks. up next, we have more winners and losers in the ad war. andrew liked the bob dylan chrysler ad. brian was into the radio shack ad, i like the cheerios

campaign. check out the futures this morning. we'll see at least right now, the green arrows continue, dow futures up by 13 points. s&p up by half a point. "squawk box" will be right back.

welcome back, everybody. joining us again to talk about the super bowl ads, myles nadal.

this is one we were watching. i wonder how successful it is? >> by the way, you were there, too. why didn't you get the interview? >> you know. >> i wonder how successful this was. >> i don't have the empirical information after the fact. he's a brilliant branding guy. he's done a genius job and everything he touches, he's got like that midas touch. i don't know the empirical information after the fact. it didn't seem to resonate in the ad pages. >> he is so uniquely committed to this issue. he used to come by and see me regularly in the senate. >> bono would come by and see

you. >> he's incredible in his commitment. >> they've raise over a quarter billion dollars to fight aids overseas. >> his ability to network, there's a picture of him with the pope and the pope's wearing his glasses. he just is transformational and, you know, transcends all walks of life in terms of his ability to network. >> who else do you put in that category? >> branson. >> branson but he's very commercial. >> richard. >> i'd say paul mccartney. >> if you use his name, everywhere he goes, everywhere he goes, everyone relates to him in a pretty amazing way. bono works hard at it. he goes to the conferences, he's at davos. he's everywhere. >> how about bill clinton? >> how about bill clinton? >> i'd pull him in that category. >> i actually would. >> hillary has gotten aggressive on the twitter last night.

>> i like that. >> i didn't see that. >> zing. >> she had 50,000 retweets of that. going back to clinton, unquestionably when you're in the room with him, you feel like you are the single most important person when he's commute indicating with you. he's larger than life. >> he asaid, he came up to me ad said nice tie. that was all he said. then two years later, he saw me, nice tie. >> were you wearing the same tie? >> i was wearing the same tie. >> when i saw him last, you're canada? i love canada. >> one of the other ads, the tebow ad for t-mobile. >> i thought that was terrific. >> it made the point he doesn't have a contract. here's what you can do without a contract. that plays into t-mobile saying

they'll buy out your contract. >> people want honesty and transparency and self-depprication works well. that scored very, very well amongst consumers. >> what did you think of it? >> to your point, miles, about radio shack, being honest about who you are and what you are. one of criticisms i have of jcpenney, everybody in the leaflet is 28. the guys are hipsters with beards. everybody has 2% body fat. i look at these ads and think with all due respect to jcpenney, i was just in one, i hope they cover. >> you were in the ad or the store. >> i couldn't find anybody to check me out. i wanted to buy some luggage. couldn't get help. i left the store without buying anything. >> did you see the jcp tweet that seemed to get controversy? >> no. >> the mittens. remember the commercial with the mittens? they were tweeting with their

mittens on. it had a lot of spelling errors. >> what was your favorite? >> bob dylan, chrysler. also the axe peace ad. >> the one i remember is the chevrolet ad about cancer. >> that was a great ad. >> i actually remember that ad. >> also the veterans ad with budweiser was a great one, too. >> what was your favorite. >> i had the chevrolet cancer one. it's hard to pick out my absolute favorite. that was the best serious ad. >> people like ads where there's a cause. it resonates emotionally in the minds of the consumer, has lasting recall. >> miles, thank you very much. >> pleasure. >> we'll be back in just a little bill. ron wyden, i believe you know him. >> i do. >> he'll be coming up on "squawk box." hope you will be, too. back right after this. e others .

tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading. cozy or cool "meow" or "woof"? exactly the way you want it ... until boom! your mattress a battleground

of thwarted desire. enter the sleep number bed. an innovative design that lets couples sleep together in individualized comfort. he's the softy: his sleep number setting is 35. you're the rock, at 60. as your needs change, you can adjust your sleep number bed, so you can sleep better together. the ultimate sleep number event is on now only at a sleep number store. with queen mattresses as low as $599.99 know better sleep with sleep number. so ally bank really has no hthat's right, no hidden fees.s? it's just that i'm worried about, you know, "hidden things." ok, why's that? well uhhh... surprise!!! um... well, it's true. at ally there are no hidden fees. not one. that's nice. no hidden fees, no worries. ally bank. your money needs an ally.

♪ listen what i say oh ♪ i got your

welcome back to "squawk box," right here on cnbc, first in business worldwide, andrew ross sorkin along with becky quick. brian sullivan is here for joe kernen. he's taken the day off. let's get you through some of the morning headlines. it is the first trading day of february. the dow finished january with a decline of more than 5%. it was down 1% just last week alone. the s&p 500 was down by 3.6% to start the year. the dow and the s&p both having their worst month since may of 2012. the first january drop since 2010. the nasdaq was only down by 1.7%. that was still the biggest decline for that index since october of 2012. and get this, if you haven't seen it already, overnight, the nikkei officially entering a correction territory. that index is down by 10.3% since the beginning of 2014. wanted to take a quick look at the futures this morning.

they've been picking up ever since steadily. the dow futures, up 40% above fair value. the nasdaq is up by almost 10, the s&p by 5. on wednesday we'll be getting the adp private payrolls. on thursday, the weekly jobless claims. on friday, the labor department's latest read on jobs. they are looking for nonfarm payrolls to come in at 183,000. we talked to some economists that are looking for higher numbers. this is coming after the 74,000 number for december. people are blaming weather for that. we'll see what happens this month. the unemployment rate is expected to tick down to 6.6%. it's the beginning of a new era for the federal reserve. today, janet yellen will be sworn in as chair. she'll have about a week or so to get her thoughts together. her first testimony will be on

february 11th. steve liesman will join us at 8:30 this morning to talk more about the immediate challenges that chairman yellen will encounter. >> look at my tie. this is for janet yellen. when else can you wear a tie with janet yellen on it? >> what is that saying about us, man, honestly? >> we have corporate headlines for you. more chatter over the weekend on charter communications and time warner cable. charter said to be considering a higher bid in the low $140 change, up from its $132.50 range or shares before. by the way, still way too low compared to what the time warner cable says it wants. they claim they want $160 a

share. that's what they're hinting. if they were at that $140 range, the value of the nation's second largest cable operator would be just over $37 billion. >> i want a pony. >> you want a pony, too? >> yes. we work for come cascast. >> comcast we should note wants some pieces of time warner cable, sort of back door. >> my question to you, sir, being the media mogul that you are is this, does the recent ruling on net neutrality increase the value of cable systems. >> i think it will get switched around. >> it should. >> the whole net neutrality -- >> you think that's temporary. >> temporary move. >> a femoral. >> femoral. that's where i'd go with that. also on the super bowl, the seattle seahawks are the new super bowl champions. the games with a blowout, if you missed it. the first play for the denver broncos was a bad snap that led

to a safety that set a record for a score in a super bowl. it was all downhill after that. the final score, seahawks 43. broncos 8. congratulations to paul allen. we will talk more about the super bowl commercials later this hour with our favorite ad guru, miles nadal who's here. major indices coming off a volatile week as we mentioned. the emerging markets, the turmoil, that's a big question whether that will continue to drive trading. joining us on set is ed keon, portfolio manager with quantitative management associates, a unit of prudential financial. joining us from new york, rashir sharma. he's author of "breakout nations." ruchar, i'd like to start with

you. >> i think emerging markets are a much bigger share of the global gdp than they've ever been. china has more than 10% of global gdp. a further slowdown in emerging markets from here. if china's growth rate really does come down to 4% to 5%, i think you'll continue to see ripple effects of this in the developed world. that's something which i think is a story being ignored till now because there was some positive effects of the emerging market slowdown. i think any further decline will continue to weigh on u.s. markets as well. >> ed, did you agree with that? >> i do to a certain extent. i do think at the end of the day, as important as emerging markets are in the global economy, we are seeing a shift. now the united states economy i think is reasserting its leadership. they must have thought last week with the market being down because of drops in turkish lira

or in argentinean peso that the tail is wagging the dog. at the end of the day, it's the dog that wags the tail. the united states is the big dog of the global economy now. >> can i jump in for a second? i was asked to make a chart. it's a ten-year chart of the nikkei versus the s&p 500. i did it in seahawks colors, light blue and lime green. they track together. whom is leading whom? is the nikkei leading us or are we leading japan? if the nikkei is leading us, given the recent trends, we could be in trouble. >> the nikkei has had some change in policy which has had a big affect on their market over the past year or so. we've been relatively conservative. >> that is bernanke on steroids. >> yes. the united states is reasserting its leadership. japan is a developing market,

not an emerging market. the key will be the performance of the united states offer the next several years, which i i think will be strong. >> we can talk about argentina, turkey or south africa, but it's china and the emerging markets that we haven't paid enough attention to and the debt could be a big problem? >> i think so. in china, over the last five years they've been sustaining the growth model by accumulating record amounts of debt. one simple statistic is this, five years ago, it took just over a dollar of debt to create a dollar of gdp growth. over the past year, it's taking nearly $4 of debt to create a dollar of gdp growth. when you get such a powerful increase in debt, it almost always leads to some sort of trouble, either of financial crisis or a major economic slowdown. i think that china really is facing this incredible challenge over the next couple of years. while i agree with the analysis that the u.s. is really reasserting itself and even in

the book i've been optimistic on the u.s., i do feel if china does slow down quite a bit from here, that will be hard to shake for the global economy. >> the entire market cap of ever publicly traded stock in argentina, every stock, is less than that of yahoo!. that's it. it is a tiny market. >> right. >> do you believe that a full-blown crisis in argentina, which if we're not in one yet, we could be very soon, let's hope not but it's close, will that shake us? >> no. i don't think argentina is the big deal here. i don't think venezuela or even turkey really is going to matter that much out here. therefore, i think for the developed world and particularly for the u.s., what really matters is china. china is the big risk out there. these other markets don't matter to the u.s. this is short-term noise. >> what about the fact that china has massive reserves and can actually fund its debt more effectively than, say, the united states? >> the foreign exchange reserves of china is 40% of gdp.

the total debt in china is 230% of gdp. yes, i think that they have a large amount of foreign exchange reserves and that's good enough for them to sort of withstand currency crisis or run of the currency. that's not what i'm talking about. as far as the debt problem is concerned, that is much bigger and that's a separate problem compared to the foreign exchange issue. i'm not bearish on the chinese currency. i think it will be just fine. it really is what the impact of this incredible debt will be on its economic growth going forward. i think these growth rates are much% to 8% that they've gotten used to are behind us no you in china and it will be hard for china to grow at those rates now. >> ed, are you concerned by how we started the year off with the dow down by over 5% in the month of january? >> we're always concerned, worried that things could turn bad. i think corrections are a normal and natural part of market behavior. we had a 30% move up last year with hardly a ripple, in a sense, normal for the market to

pull back and the fact that the excuse happened to be what's happening in emerging markets and also china was going to be something that would cause a pullback. even with that, the s&p hasn't had a 5% collection on a closing basis. i think we're still in a bull market. we'll have corrections along the way. that's normal. but i still think the place to be is to be overweight stocks and i think stocks will outperform bonds handily when this year it over. >> i'll ask you this, judd, ruchir may get slammed for answering this. do you believe the data in china. >> no. especially the banking data. it almost doesn't matter because you have a central government that doesn't function the way our government functions. therefore, it can take actions which are totally arbitrary and outside the realm of what we would consider to be logical or even legal to protect their banks. they can do that by simply putting money in them.

which we couldn't do here in a way that would allow us to do that. >> how do we know what to believe because we are so sensitive to china data? >> the share point is extraordinary, the fact that their debt-to-gdp ratio is so high, even their banks can't cover it. they have capital adequacy. they're lending over a 40% capital adequacy basis, is what it sounds like. they've got room to move, i suspect. but they have to grow so fast. you know, they basically have to add a 25 million jobs a year in order to stay ahead of their people's needs. they're not autocratic governments. they have the risk of significant social disruption in my opinion. >> that is a concern. it's something we're watching. judd gregg is our guest host. he'll be with us for the rest of the morning. thank you for making your way in this morning.

ruchir, thank you for your time. we appreciate talking to you. is it possible for elected lawmakers to work together? that's the question. is the word compromise dead forever? we'll talk to senator ron wyden. he's the man expected to be the next chair of the senate finance committee. he has views on all this. auto sales news to tell you about, chrysler reporting u.s. sales in january of 127,000 units. that's the best january for chrysler group since 2008. the jeep ram -- you don't like the jeep by the way, ram and fiat brand all saw sales of 8%. >> the jeep wave, if you have a wrangler, not the commander. the new jeep cherokee, i'm sorry, is ugly, awful, hideous. >> i have to agree with you.

>> it's a pontiac aztec. >> we're back in a moment. century link. your link with what's next. ok, here's the way the system works. let's say you pay your guy around 2 percent to manage your money. that's not much, you think except it's 2 percent every year. does that make a difference? search "cost of financial advisors" ouch! over time it really adds up. then go to e*trade and find out how much our advice costs.

spoiler alert. it's low. really? yes, really. e*trade offers investment advice and guidance from dedicated professional financial consultants. it's guidance on your terms not ours that's how our system works. e*trade. less for us, more for you. . time to take care of business with century link's global broadband network and cloud infrastructure. we constantly evolve to meet your needs every day of the week.

. ♪ oh, yeah yeah yeah yeah

♪ oh, yeah yeah ♪ oh, yeah yeah >> that was bruno mars. >> he was -- bruno mars was spectacular. >> he was. he's a great performer. >> i liked him better when he was with the police. >> you're right. it does sound like it came off -- >> i learned last night that that song, i didn't know that was him. i thought it was a police song i never heard of before. he was spectacular. >> the energy they brought, i was kind of blown away. they were great. >> good dancing and music. >> the drums at the beginning. >> i miss janet jackson and justin timberlake and the whole wardrobe malfunction. >> you are a smooth criminal. you know, it happens. >> did michael -- michael jackson once played the super bowl. >> it was not cool what happened to him in the leadup.

>> i don't remember now. >> pepsi, the show, open flame. >> that wasn't at the super bowl. wasn't it in practice? >> i thought that was a pepsi commercial 30 years ago. >> it was the commercial? >> they were taping a commercial. >> either way. >> let's move on. i don't know what i'm talking about. >> welcome back to "squawk box," everybody. send us your thoughts on that. here are your futures. they have increased strength all morning long, the s&p, nasdaq, indicating higher open. this morning, they were down, lots of concerns about china, pmi, still above the 50 level which indicates growth or contraction. there you go. overnight in japan, this is a growing story. the nikkei 225 fell again about 2%. that's only meaningful because now the nikkei is down 10.3% from its high which means the nikkei in japan is officially in a correction, moving 10% from its high. now at a 2.5 month low. those are the big stories from a

market perspective. coming up, we have oregon senator ron wyden on how to make washington work again. plus, more on the emerging markets, more on japan, and more bruno mars. back right after this.

when you order the works you want everything. an expert ford technician knows your car's health depends on a full, complete checkup. the works. because when it comes to feeling safe behind the wheel, going the distance and saving at the pump you want it all. get our multi-point inspection with a a synthetic blend oil change, tire rotation, brake inspection and more for $29.95 or less. get a complete vehicle checkup. only at your ford dealer.

welcome back to "squawk box." he's being talked about as the next senate finance committee. he's pushing a tax reform agenda that he says will start with working together from both sides of the aisle. joining us now is state senator ron wyden. good morning. >> thanks for having me. >> the question is whether both parties -- whether both parties are bipartisan enough to actually push them through. when it comes to the debt, what do you think is really going to happen. >> i do think we'll get a clean debt ceiling bill. i just think people understand the consequences for the economy would just be so serious if that wasn't the case. what we have to do is build on the kind of work that you saw patty murray and paul ryan do recently on the budget. that's what senator greg and i and senator coats and senator bagich have done with tax

reform. that is what's important this morning. we saw another story on the front page of the paper saying how middle class is getting hammered, the fancy refrigerators, dishwashers and ovens are selling but the middle class is having trouble buying vehicles, homes and the kind of purchases that make our economy. >> what does your tax reform package look like. >> it updates what a big group of democrats and ronald reagan did in the middle '80s. we clean out scores and scores of the special interest tax breaks to hold down rates for everybody and keep progressivity. apropos with the middle class. we decided to triple the standard deduction for the middle class folks that are hurting. if you're making something like $60,000, we're taking $30,000 off limits. that's going to bring middle class folks back into the economy. >> ron, you've been the classic

case for going across the aisle. you've done it with paul ryan. you're doing it with dan coats. very impressive, obviously. those are the two issues we have to address, entitlement and tax reform. where do you see the finance committee going on those types of issues relative to your thought process? >> judd, i think we had another breakthrough a couple weeks ago. you and i have talked often about medicare over the years. folks, the reality is you can't be serious in terms of the long-term budget challenge without dealing with medicare. last week, senator johnny isakson, eric paulson, peelter welsh and i introduced a bill that we think is going to protect. it offers more choices and more efficiency. i think that's going to be the future of medicare. >> so you're going to be right at the center of this should you become chairman of the committee.

i certainly hope you do become chairman. i like that. max baucus, i can understand him going to china. will be good for the country. >> he'll be an excellent choice. >> he will be. can you bring the white house along on these major bipartisan initiatives and can my friends on my side of the aisle join in? >> i'm hopeful. i think we saw some of that in the state of the union address this past week. two big areas, job training, which is so important in terms of what our businesses need, an opportunity for workers to get higher paying jobs and immigration reform, those two, i think the president really zeroed in on. >> senator, there's an article that i was looking at over the weekend from the hill that says democrats are leery of wild card wyden. that's you. they quote somebody anonymously saying ron will have to tone down his self-loving love of being different. you can't do stuff like this if you're chairman and you don't want to because you're conscious

of being a chairman and you want to be fair. this is a democratic lawmaker supposedly on your side of the aisle. what do you make of that. >> i'm not exactly spending a lot of time with anonymous quotes. i now chair a major committee, the energy and natural resources committee. you can talk to my colleagues. i spend a lot of time trying to find common ground. we've been able to do that on a number of major issues, legislation has been signed into law by the president. i think we can do it again. >> do you think sections of the tax reform effort will go forward as versus an entire bill this year? in other words, might we get corporate tax reform? might we get international tax reform? >> judd, as you know, at the end of the year, what's called the tax extender, about 50 provisions expired. i think the challenge is to make sure that we deal with those so that we don't have horrendous economic consequences with investment tapering off and use them as a bridge to broader tax

reform. >> senators brian sullivan. here's the thing i would like to see from congress. either party would be fine. the middle class has been struggling, income gains have been nonexistent. but, federal effective tax rates have come down, they're at historic lows. in the 80s, they paid about 12%. now they're about 5%. we're not talking about medicare, social security. at what point do we say if you want to fund defense, the fda, education, veterans benefits, we may have to work on the for example tax code, yes, for you middle class families, simply because that's where the people are. >> i think we want a tax code that gives everybody in america the opportunity to get ahead. that's what judd and i and dan coats and mark have done.

if we could get the growth rate up to 4% in our country, last week we got reports that it was around 3.2% for the quarter. that would make a huge difference. i think we ought to focus on tax policies that expand the winner's circle, that give everybody in our country the chance to get ahead. >> like what for example? i know with have to go. i'll give you an example of what i'm talking about. our viewers know my mother dropped out of high school and got her ged at 23. no silver spoons here. the average car is now well over $30,000. at what point do we have to adjust some of the things for consumption purposes? if we're going to fund veterans benefits, the fda and education, somebody has to pay. >> let's focus on what's really happening to the middle class. their median income now is under $52,000. it's pretty close to flat. let's give them an opportunity to get ahead. of course we need to find ways

to promote savings. we ought to pass the energy efficiency bill which sends an important message of discipline and decrate jobs. those are the kinds of approaches i'll focus on. >> senator, thank you for joining us this morning. >> thank you for having me. for the first time, janet yellen is about to sit in the captain's chair on the starship enterprise, only thing is, she's surrounded by klingon war ships and there's an enormous black hole. >> what? >> steve liesman will be here to show you the star charts you should be watching for this. and we'll talk to an international fund manager that wants to explore the universe, searching for profits where no investors have gone before. right now as we take a break, take a look at the u.s. equity futures. "squawk box" will be right back. at schwab, we're here to help 1 tdd#: 1-888-648-6021 bring what inspires you

tdd#: 1-888-648-6021 out there... in here. tdd#: 1-888-648-6021 out there, tdd#: 1-888-648-6021 there are stocks on the move. tdd#: 1-888-648-6021 in here, streetsmart edge has tdd#: 1-888-648-6021 chart pattern recognition tdd#: 1-888-648-6021 which shows you which ones are bullish or bearish. tdd#: 1-888-648-6021 now, earn 300 commission-free online trades. tdd#: 1-888-648-6021 call 1-888-648-6021 tdd#: 1-888-648-6021 or go to schwab.com/trading to learn how. tdd#: 1-888-648-6021 our trading specialists can tdd#: 1-888-648-6021 help you set up your platform. tdd#: 1-888-648-6021 because when your tools look the way you want tdd#: 1-888-648-6021 and work the way you think, you can trade at your best. tdd#: 1-888-648-6021 get it all with no trade minimum. tdd#: 1-888-648-6021 and only $8.95 a trade. tdd#: 1-888-648-6021 open an account and earn 300 commission-free online trades. tdd#: 1-888-648-6021 call 1-888-648-6021 to learn more. tdd#: 1-888-648-6021 so you can take charge tdd#: 1-888-648-6021 of your trading. can you start tomorrow? tomorrow we're booked solid. we close on the house tomorrow. tomorrow we go live... it's a day full of promise.

and often, that day arrives by train. big day today? even bigger one tomorrow. csx. how tomorrow moves.

welcome back to "squawk box" this morning. take a look at equity futures at this hour, ahead of the market open. green arrows, dow looks to open 25 points higher, nasdaq up 6 points and the s&p 500 would open up 3 points higher as well.

in case you are just tuning in, we've been talking about japan's nikkei. that index is in correction mode in a big way, down 10.3% since the start of 2014. the hang seng and shanghai composite is closed for the chinese new year today. and some foreign policy news this morning, u.s. secretary of state john kerry, he met with iran's foreign minister on the sidelines of a security conference in germany, spokesman for the state department said the meeting happened in munich on sunday morning. details of the talks were not disclosed, at least not yet. the next round of talks over the nuclear situation will take place in vienna on february 18th. take a look at the price of crude before we get to the next issue. you can see that 97.55. janet yellen set to be sworn in today as the new chair of the federal reserve. senior economics reporter steve liesman joins us with a look at how the fed under yellen could be different than her

predecessor, ben bernanke. >> the talk is more about how the fed will not be so very different under janet yellen as she takes the helm, the first woman to sit in the chair seat. here's the reason. ben bernanke had considerable help by yellen herself. many of those rules govern communications and yellen herself chaired the communications commit that suggested a lot of the rules. for example, press conferences, the fed chair will face the press now with the only question being does yellen actually increase the number of press conferences to every meeting rather than quarterly? >> you think she will. >> i think it's a possibility because of the idea that people seem to target policy changes to when they're having press conferences. >> the fed would have more flexibility. >> it's deeper than that even. >> why is that? >> there's so much antipathy from the right and the left that basically the fed has to sell itself as to why it's a

legitimate organization amongst the congress which has historically been there for it and is not there for it now. >> interesting. the inflation target, the fed will have this 2% inflation target. my guess is, it's not something they end up changing. there are quarterly economic forecasts. of course now the fed relying a lot on forward guidance. all those things, yellen will pick it up. there's some differences in the background. yellen, bernanke. both received economic ph.d.s from ivy league universities. they spent considerable time in academia. they come from a school of economics. there's a fairly close relationship between the slack in the economy and inflation. they do not see an inflation threat right now because of high unemployment. yellen spent more time with the fed than bernanke before coming chair serving say stint as fed governor in the '90s and fed president in the 2000s before

becoming vice chair in 2010. stanley fischer nominated to be yellen's number two was bernanke's thesis advisory. >> they like him a lot. >> there's one area wall street may not like yellen. could yellen be quicker than bernanke to use monetary policy to pop bubbles? here's what she said about the issue in a november confirmation hearing. >> i think it's important for the fed, hard as it is, to attempt to detect asset bubbles when they're forming. an environment of low interest rates can induce risky behavior. i would not rule out monetary policy conceivably having to play a role. >> whatever the similarities, the challenges will come as well.

that hands to yellen a $4 trillion task of unwinding the fed's balance sheet while sustaining economic growth. not spooking markets, that she is moving too fast or too slow. >> can i ask a question. >> yes. >> ben white, this is about you -- >> me. >> not you personally. ben white says that yellen now that she has the job has to hunker down, get ready to field questions from a ravenous fed corps, that's you, who are eager to trick the newly installed head of the most powerful financial institution on earth into making it a market melting gaffe. do you think that will happen? the next week. >> i do in the following sense. everybody comes into a job like this and makes a mistake. there will be a mistake. bernanke made a mistake. greenspan's made a mistake. >> i'm thinking back to the mistakes. >> treasury secretaries make mistakes. time geithner made a mistake. there will be a mistake.

it's not like you want them to make that mistake but it is your jo be to probe and sea if there's weakness. >> in her case it will be a language mistake, not a substance mistake. she has very little room to move. to get $4 trillion out of our system and do it in an orderly way and when you start to do it, there's not a lot of flexibility here for her. her pathway is pretty well defined just like bernanke's would have been defined had he stayed on. substantively, they're locked into a pathway. i think it will be more language than substance. >> communication with the markets. >> right. communication will be critical. >> the real question will be if the economy seriously disappoints, what options she chooses. would she feel bold enough to reverse course on the taper? i think that's an interesting question. what i'm hearing the fed say, i'm pretty sure yellen signed up for this idea, that if we get

into a situation at this point of economic numbers, we'd continue the taper but lean more on forward guidance, in other words, extend the period we'd keep rates low. they want to get out of this qe business, it seems like to me. in an extreme situation they may not taper or extend the time period for quantitative easing. >> what's the situation that's likely? clearly we have problems in turk you can. those aren't going to convert to an international problem. the extreme situation will be that somebody loses confidence in the american dollar. right? >> there's a lot of talk about that. i think that talk for six years has not borne out to be true. i think what's happened -- you can't say for sure that will always be the case. >> we're talking extreme situations. what's the other potential extreme situation. >> it just strikes me we remain in a world where in extreme situations people run to the dollar. >> yes. >> people run to dollar base --

>> what's the next extreme situation. >> i'm thinking about an economic downturn. >> is that a new suit. >> it's a new suit. it's a flannel suit that's too late for the polar vortex. >> let me jump in on that as well. i do agree with you in principle, when you look at the data, it's terrifying. >> why is it terrifying? >> i'm actually agreeing with you. >> i don't agree with you on that. >> with regard to currency, as you know, they're traded against other currencies. when you look at the debt profile of europe, it looks bad. the debt profile of japan looks even worse. so king dollar has remained fairly steady, not because we don't have problems but at least our problems are less than the ear major trading currencies. >> according to our prior guest, erskine bowles, we're the best one in the glue factory. right now, the potential for

another bubble, unlikely, i think. >> precipitous rise in interest rates would be something that would be difficult for the federal reserve. >> that would be an issue of confidence in the dollar. >> an issue of confidence in the dollar. i agree that's a potential black swan or tail risk that's out there. >> i don't see it as changing course in the near future. >> let's bring rick santelli in. >> i think we're so far past the run to phase, run to the dollar, run to this market, run to that market, we're now in a run from stage. i think that's obvious by watching how the globes traded the last week or so. in terms of fed policy, the fed will always be quick and very pro-active on applying the salve of stimulus and easy money. it will always be too gradual in removing it. i don't see these things changes. in terms of janet yellen, it's not about the message. it's about how we say the

message. we're back to marketing. whose detergents make your laundry whiter? i think it's a silly argument. as far as the press corps and interaction with them, my guess is it will be kid gloves and her big issue in her first term will be dealing with cds, the collateral damage of $4 trillion balance sheet and all central banks on the same page to try to avoid for the u.s. what japan ended up with. that was a long period of growth without highs and lows. i see the same future potentially for the u.s. economy. >> i disagree with almost everything he said but the music's playing. >> he gets the last word. >> he runs to the dollar. >> it's at the same place as it was the end of 2012. >> the dollar remains the safe haven. they've driven down yields. >> how do you know? all heroin addicts start out drunking milk. >> yields are down.

>> you don't know the cause and effect. that's where fed watchers make grandiose -- >> you deny what's in front of you. >> no, i didn't. what's working now, our next guest runs a highly rated international fund. his attention is laser focus on luxury goods makers. we'll get the names he thinks are worth considering when "squawk box" comes back. we'll also talk more super bowl commercials. we asked people a question, how much money do you think you'll need when you retire? $500,000. maybe half-million. say a million dollars. [ dan ] then we gave each person a ribbon to show how many years that amount might last. ♪ i was trying to like pull it a little further. you know, i was trying to stretch it a little bit more. [ woman ] got me to 70 years old. i'm going to have to rethink this thing. [ man ] i looked around at everybody else and i was like, "are you kidding me?" [ dan ] it's just human nature to focus on the here and now. so it's hard to imagine how much we'll need for a retirement that could last 30 years or more.

so maybe we need to approach things differently, if we want to be ready for a longer retirement. ♪ ♪ ♪ in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. some brokerage firms are but way too many aren't. why? because selling their funds makes them more money. which makes you wonder. isn't that a conflict? search "proprietary mutual funds".

yikes!! then go to e*trade. we've got over 8,000 mutual funds and not one of them has our name on it. we're in the business of finding the right investments for you. e*trade. less for us, more for you. the fund's prospectus contains its investment objectives, risks, charges, expenses and other important information and should be read and considered carefully before investing. for a current prospectus visit www.etrade.com/mutualfunds.

will the emerging markets make a come back? here to give us insight, one of my favorite people in the investing world. david herro, he's a man that honors his football bets and debts. david, so glad to see you on a monday morning. >> what a pleasant surprise to see you on this monday morning. >> you're also a good liar, which we do appreciate as well. no, david, thank you so much. you were getten beat up a bit a few years ago when europe was sliding. you stuck to your guns saying i believe in certain european banks and certain parts of asia, people said maybe herro has lost his touch. you have not. what are you investing in right now? >> right now what we've seen as a result of some of these emerging market fears is a lot of these global consumer stocks, staples and some of the consumer discretionary names have really come off. all of a sudden there's been a pariah if you sell into the emerging markets.

we think in the median and long term, these economies will just be fine. it was never supposed to be a straight line up. now you can buy good businesses at low prices. as a result of this fear, of this turnaround. what used to be a good thing for a company, emerging market exposure has turned into a negative. >> you said good companies you're buying. that's verye esoteric, david. >> diageo, the drunks company, last i checked people still like to consume alcoholic beverages and it's happening globally. this is a good business, good footprint, great cash flow characteristics. they have em exposure. as a result of weakness in em, the stock got hit pretty hard. in the last six months it hasn't performed well. for us, this has been a good time to really increase our exposure to companies like diageo.

good business, well managed with good balance footprints and where they sell their goods. >> who else do you like? david, do you tend to stay away from companies that are based in countries that are subject to volatile and wide currency swings? >> well, taking that second question first, if the price is right, we'll invest just about everywhere. we will incorporate that volatility of the business into the price which we think the business is worth, but we won't avoid it if there's a good risk return tradeoff for us. but other companies we like kind of are the same european-based businesses that have kind of been hit to some degree as a result of the emerging market slowdown, pernot in france, daimler, bmw, even more of the staples companies that just have

good businesses, good cash flows. because of the em exposure, people have fled from them. i will also note we're about to go into a slight uplift in global gdp growth. this ultimately should be good for corporate earnings and for consumer spending. >> david, before we go, i have to ask you for a prediction for 2014 just because you're here. we don't get to talk to you very much. you give us two good companies. what do you think will happen with japan? will the nikkei continue sliding or will it turn around and be a buy? >> eventually japan will find a bottom. i guess it's in a market phase. this is a market that bounced 80% from the bottom. prices advanced much faster than valuation. you need a breather, time for markets to adjust to this. i think if they're serious about structural reform and can accomplish some of this, this

will hopefully provide a second leg. there are still japanese companies selling at attractive prices, though the market is not as cheap as it was, we're starring to see values opening up again as now prices have been sliding. >> david, always a pleasure to have you on cnbc. take care, buddy. >> all right, brian, take care. coming up, jim cramer and what's on his checklist and radar screen. "squawk box" coming back right after this. rylink as your trustd partner, our visionary cloud infrastructure and global broadband network free you to focus on what matters. with custom communications solutions and responsive, dedicated support, we constantly evolve to meet your needs. every day of the week. centurylink® your link to what's next. sometimes they just drop in. always obvious.

cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

defense can't stop anyone. it was over. >> do you have a favorite commercial? >> you only see a couple, the bud dog ad, doritos ad. when you come back, you do it on youtube. everyone is crazy about radio shack. the stock in the '80s was higher.

they bring back that stock, i'm all in favor of it. >> you were there? >> yes. give us more color then. >> the tailgate party ahead of time was a huge ceofest. more than i've been to at any other tailgate party. people were looking at the screen at commercials. there wasn't enough action. the most important thing is when sherman went down. there was a hush. a total seahawk crowd. >> the giant fans weren't nearly as loud as the seattle fans there were there.

>> sitting next to kravis. >> no, i was zbrsh t. >> trying to get away from the whole barbarian things. i was tweeting, caption contest, maybe they were trying to plan lbo of the nfl. not for -- anyway, we've got to go. jim, we'll talk you in a minute. >> when we come back, talk about the dangers of compromise. next, a super bowl commercial showing you best of both worlds isn't always a good thing. we'll get one more look at the super bowl ads with miles, from seinfeld to arnold playing ping-pong. which was the big winner? stick around.

i need proof of insurance. that's my geico digital insurance id card - gots all my pertinents on it and such. works for me. turn to the camera. ah, actually i think my eyes might ha... next! digital insurance id cards. just a tap away on the geico app. could save you fifteen percent or more on car insurance. everybody knows that. well, did you know that when a tree falls in the forest and no one's around, it does make a sound? ohhh...ugh. geico. little help here. customizable charts, powerful screening tools, 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. so ally bank has a raise your rate cd that won't trap me in a rate. that's correct. cause i'm really nervous about getting trapped. 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. don't feel trapped with the ally raise your rate cd. ally bank. your money needs an ally. that was the ad for the audi a-3, stresses dangers of compromise. claiming this is one of our favorite ads, i think. i don't know if that's our compromise.

final discussion with niles, founder, chairman, ceo of mdc partners. of all of the commercials you've seen this year, compared to the past decade, are they getting better or worse? if you follow twitter, everybody's negative. >> i don't think this year was an iconic year at all. i think -- i don't think you can generalize over a trend. i think it's getting tougher because i think the audience is getting more discriminating. we, as consumers, really have an opinion and participate and we're being polled and asked to participate in the conversation. but the interesting things, though, the perceived value, though, of mass audience destinations, where people participate, is so rare, so that's why super bowl advertising will continue to increase in its importance and pricing will continue to increase. next year, will it be more expensive than this in year. >> one of the things i was looking forring i was on twitter, thinking advertisers not on the air who are going to

show up on my twitter feed doing something crazy that would steal the attention from the broadcaster. >> well, it's hard to steal the attention just with social media. it's usually a compliment to what's going on in mainstream media. but, it was just really -- what that's also going to continue to increase, the value of social media and its impact of messaging will continue. >> doesn't it in some ways hurt the messaging, they're terrified something negative made spin out of control quickly? >> depends if you're a challenger brand or incumbent. if you're the incumbent -- >> a few had some relatively bad experiences on social media late if you're pepsi. if you're sodastream, you're willing to do something slightly crazy probably. >> the challengers who are boldest are ones that get attention. >> right. willing to do just about anything. that guy's going to break into at&t's party. >> absolutely. >> are they the fast -- they said over and over they're the fastest network.

i didn't know -- >> it's like those presentations by investment banks, everybody's number one in capability. >> miles, thank you for coming in and spending the morning with us. >> great to be here. >> jud, thank you. >> see you back later in the week? >> i hope so. if not, send help. join us tomorrow. time for "squawk on the street." ♪ >> seattle anthem for seattle seahawks, world champs, after a demolishing denver broncos in super bowl xlviii. welcome to "squawk on the street." carl quintanilla with jim cramer. you stayed until the end? >> it's the super bowl. i happen to be a huge seahawks fan pipe didn't think they were going to kill them this bad. game was over