>> i am not a keynesian economist. >> i have not been keeping up with "downton abbey." thank you for being here this snowy tuesday. this was a lot of fun. make sure you join us tomorrow. "squawk on the street" begins right now. ♪ 's ♪ good tuesday morning. hope you had a great long weekend. welcome to "squawk on the street," i'm carl quintanilla with sara and simon hobbs, and jim and david are off today. we're coming up with the first two-week win streak of the year and the s&p ten points from break even for 2014 and ipo news and m&a and earnings and the ten-year note yield is 10.73 and we'll get data and fed speak and overnight in japan the nikkei posting its best day since august as the bank of japan extends lending programs.

the market stocks are set to open higher and the spm coming off the best week of the year and we'll tell you if we are in for another green week in wall street. and tesla's ceo elon musk met with the head of m&a at apple earlier last year and as apple sits on the massive tech pile is the tech giant thinking about buying tesla. and activist agreeing to buy forrest labs in a deal worth $25 billion but in the midst of that $25 billion deal why is everyone talking about carl icahn? stocks are coming off their best week of the year and the indices gaining more than 2% and the dow and the s&p posted gains in six oat uut of the last seve trading days. it's eight-day win streak will get your attention. it shaved a lot of the correction off. 1838, not far from the all-time

high of 1850. >> yeah. it's back to sort of climbing the wall of worry. remember all those concerns about emerging markets and china and things seemed to have calm a little bit in japan a 3% move in the nikkei after the bank of japan's lend programs. >> you are taking off nightmare scenarios, it's difficult to play devil's advocate with the bull. what would a big correction be based upon and people are clearly not as scared and if anything the money is coming out of the emerging markets and arguably back to the united states. >> of course, we've got the debt ceiling out of the way. yellen out of the way. "barron's" this weekend and there's an upside bias especially on a tuesday and a wednesday in the words of art cashin. >> and then you read george soros has doubled his bearish bet on the s&p 500 that he went down on the put to the tune of $1.3 billion.

you don't know whether he's still got that on because those filings, of course, date to the end of december and you don't know if it's a hedge for other long positions, but it's nonetheless worth mentioning in a market where there seem to be so many positive voices around. >> you mentioned the word correction, carl, we haven't seen a legitimate correction 10% selloff from the peak since back in 2011 during the european debt crisis, the question is if volatility is back are we going to see a meaningful pullback and would it be a healthy thing. does the market need it? >> we've got huge m&a in the news and then ipos and everyone is talking about the maker of candy crush, spotify looking for someone to do external investor relations and starwood talking. >> starwood -- last week reports that virgin america might be do the same. if the market is going up in this direction, a lot of people will say come on. >> do your kids play that game,

candy crush? >> i've never played it. but 93 million a day did in the month of december. >> and the one thing everyone is pointi ining is zenynga and the botched ipo and how long the games can monetize themselves and stay as public companies? >> right. "the san francisco chronicle" is reporting that elon musk met with apple's head of mergers and acquisitions early last year. the paper said the meeting doesn't necessarily indicate that apple is about to buy tesla anytime soon but it does point to apple's strong interest in getting involved in new product areas and i guess, guys, at a market cap of $24 billion for tesla apple could buy it if it so wished with obviously elon musk's agreement. >> with the change in their couch cushions they could buy it, but would they? >> it's fun to talk about, i don't know how realistic it is. the reports are that, yes, they met, it is unusual.

>> along in spring of last year. >> and think about the last deals that apple's done. they have been sort of mini deals. apple has not done a more than 1 billion deal unlike its competitors google and microsoft has gone after. can you imagine steve jobs and elon musk sharing the spotlight, it seems so not like apple. >> i have a feeling if apple were to talk about this which they probably would not, they would say do you guys have any idea how many meetings we have in the course of a given week with a known number of players. i'm sure this is par for the chors in t course in the valley. >> a lot of them want to be the operating system for the car. did you see "60 minutes" on sunday night? they were looking at the f-35 and they are basically describing it as a flying computer. you have a helmet on. you can see all the way round. you can vishally look as the pilot all the way around and presumably the automotive sector will go like that, it's basically a mobile computer. would apple like a part? i'm sure they would like a

partnership. >> and apple is increasing competition on the mobile front, its growth is slowing, it hasn't introduced a new actual product or category since back in 2010, so a lot of analysts are getting maybe excited about this. in fact, one actually brought it up last year -- >> baronburg not a hugely large german bank. >> and everyone was giving him grief that he wanted attention and now it's been reignited now that the meeting is out there. >> even though the courtship between the highly innovative companies, may not happen, it brings us to the squawk on t n tweet, if they got together, what would the child look like? tweet us and we'll get your responses later on this morning. a big deal in pharma, octavious agreeing to buy a

forest. and carl icahn tweeted his support for the deal said great result for all forest lab shareholders proves again that activism works. what a day for carl. not only is herbalife reporting tonight, got netflix in the news, of course, and now forest labs. somebody said he went ten minutes without winning which is about right. >> at apple he didn't win but he still won and made a lot of money. >> because of the sheer weight that he carries. it's worth pointing out he went in in the summer of last year, 2012 was when he bought into forest at about the low 30s. so, he's -- basically tripled the share price in that period of time and was very explicitly saying as he went on to the board, this is a takeover option, they've got the drugs, they don't perform well enough and don't have the scale or the strategy and salesmanship and he's been proven right. >> he has a track record in pharma and he's had a few wins. if you go back he invested in imclone which was sold to eli

lilly and this is his bread and butter, the pharma companies getting taken out. >> and a bit of a play on the changing landscape of health care. >> and actavius has been active there. and we've got analysts for t people were talking three to four with volume and how disappointing is it from a volume stand point? glif think it's a little disappointing. we were looking for 2 1/2% volume growth.

north america was the big falloff. we're seeing continued weakness.

instead of full cans of soda how that could lead to more inventory in homes and more usage. if you don't have a lug a 24-pack or two liter bottle home, that could help. part of the problem is we haven't seen the product. we don't know which brands. it will have to sell at a pretty decent premium in order to generate increases in the overall profit pool. it could create some more excitement if they can get new brands out there and also get more pantry loading of k-cups. >> all right, john jordan, thanks, guys, we'll talk to you later on. >> thank you. >> when we come back, the nation watched and they binged. "house of cards" season two has arrived at a television near you. will it boost netflix' bottom

line. and will get hotter on the big board. we'll talk to the models gracing the cover of "sports illustrated" 50th anniversary swimsuit edition. >> no wonder you came back. a look at futures. a lot at stake here as we kick off a tuesday morning after a long weekend. "squawk on the street" live from post nine in a moment. 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

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netflix subscribers showed a lot of love for season two of the original program "house of cards" on valentine's day. turns out 16% of subscribers from one cable operator streamed one episode in a seven to ten-hour time period up 2% for season one. no question, guys, this was a hit. it was widely anticipated. i only saw the first episode and i know a lot of people disagree with me particularly in the control room but i thought it was a little disappointing. >> really? >> it seems like a pick-up from last season and not into a new season in terms of the plotline. >> but the thing is you were already a subscriber. >> i was. >> how many new subs did they get from people who weren't subs and said i got to see this show? >> around the world. i am having an e-mail with people in london who are on episode seven or eight or wherever we are. it's a curious launch. it's like a movie around the

world that people can buy into. it's crazy. but it is kind of live. although it's not linear, you could be further along than i am, but that's sort of the environment we are. >> and no advertising involvement either which is peculiar. >> it's subscription and binge viewing and they broke a lot of ground, "orange is the new black" is the other hit show. >> season two debuts june 6th. >> a new trailer actually all your favorite characters. >> jodie foster keeps popping up, who is directing "orange is the new black." >> i think you might be right about that. i'm not entirely sure. i am sure that carl icahn cut his stake as of these 13 -- on friday he's got 2.9 million shares and brings it to 2.7 million, what a home run. >> he would have cut his stake earlier had it not been for his son. and also related there's a

report out there saying a deal between time warner cable and netflix, netflix trying to get itself on the time warner set top boxes is on hold now that comcast is in a bid to buy time warner cable. as you look toward netflix future and what it is, they might say we don't need to be on the cable set top boxes it's a new revenue stream. >> he'd like to be there. >> i didn't. >> i did. but maybe that's my arcane connectivity. >> you need to update your internet. >> i was watching the race of egos between the head of hbo and reed hastings is the great corporate rivalry. >> the trash talking. >> the smack talking is in earnest. >> he's getting his run for the money and it's clearly a bar that reed hastings is trying to exceed and with hits like this. >> it's no hbo. come on. >> i think that's fair. >> you have to watch it. just watch it. it's very dramatic. >> wait until ""game of

thrones." >> "house of cards." >> do you like it? the >> yes. >> i thought you were mistaken about it. >> it wasn't as good as the first season. i don't know. >> it's a high bar. >> it is. >> first on cnbc. >> yes, my favorite program. >> when we come back a wall street veteran with his take on what to expect from today's market action, and the rough start for facebook three months after its ipo with a 42% drop. beginning to get the feeling the shares have been sliding since its debut in november. take one more look at futures on a shortened week but a lot of fed speak, earnings, m&a, ipos, we'll talk about all of it when "squawk on the street" comes back. ♪ come on in and join the party ♪ [ car alarm chirps ] ♪ [ male announcer ] we don't just certify

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♪ all right. futures playing to a higher start after one of the best weeks of the year. let's bring in art cashin director of floor operations at ubs a familiar face at post nine. we were talking about the worries we had back in january. what happened to that anxiety? has the stock market looked past it? the >> lousy weather is what happened to it. i said before the nonfarm payrolls data that the weather might turn out to be the get out of jail free card and we had

lousy payrolls numbers and we had a rally that day and we've had a pretty miserable number since and everybody's excusing it including the fed that it may all be weather related. we have nothing but tainted data. things have quieted down. the emerging markets did not spiral off a cliff, so more money's coming back in. we're getting near the old highs and that will be a critical area. you know, we moved into the minor resistance band at 1838, 1841 and couldn't get through it. today, this morning, we'll try to get through that and if we can, then it will be 1848, 1851. >> is there weather impact on trading? have you seen lighter volume on this rally? >> the volume has been lighter but i wouldn't attribute it to trading even though a lot of the trading desks reported almost skeleton crewsal at some point last week. >> it's busy today. >> in today's electronic trading environment you can almost trade from home. >> it's rare that people are

bearish in public. there was an interview with you over the weekend that was published where you were talking, again, about the fed running out of options and not being true to the american public, a very, very dangerous situation. when everybody seems to be on one side of the fence or other people seem bullish, we would look to people like you with experience to say what normally happens in this situation? can we continue to rally? >> in that interview i was discussing the fact if we had anything, an event, the fed doesn't have any place to go. we're already at zero interest. one reason they're pulling out of qe it's been thoroughly ineffective. they boarded up. i think they feel like they're pushing on a string so they have a problem. and, you know, the other side would be inflation if it started to click in and they couldn't control it. >> that's the thing. the rally can continue it, can it, in the an sense of either

play? >> it can continue to wedge its way through but at some point we're going to lose the weather as an excuse. and then we're going to find out if the economy's really slowing down or not. >> all right. art acashin, good to get your perspective from ubs. >> get ready for the first trading day of the storied market week. the opening bell is coming up next. another

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from td ameritrade. you're watching cnbc "squawk on the street" live from the financial capital of the world. the opening bell set to ring in about 45 seconds of course coming off of a long weekend and our first two-week winning streak of the year. we haven't had three since november, so some pressure on the week. we'll see. certainly coming into even a shortened week with the m&a deal like forest labs. >> we'll see. >> we have massive cable

announcement last week $45 billion deal and as art cashin said, the weather, blame it on the weather for the soft economic data. >> and some news from the nikkei 3% plus, its best day since august 2nd thanks to more accommodation from the bank of japan. all the arguments notwithstanding. >> you have to look at the weaker yen, weaker yen and strong nikkei translates into stronger global stocks we've seen that pattern so many times. >> there's the bell. a look at the s&p at the top of the screen, at the big board, an online provider of foreign exchange trading and over at the nasdaq an organization dedicated to empowering the african-american community. you mentioned the yen. and i just wonder, there's been some discussion today about whether or not the markets deserve to be trading almost entirely on that one metric. whether the yen is stronger or weaker, is it a flimsy argument to base your global market on?

>> when you look at the center of the action for qe, it's out of japan. it's not out of the united states because the u.s. is actually scaling back or tapering, so you have the massive liquidity coming from japan and the bank of japan indicating today that it's in action mode. it is prepared to add further and that's the speculation on the street, so when you have that money is borrowed in japanese yen and invested in riskier assets. that's the liquidity trade and right now the u.s. is the center of the action when it comes to the risky trade. united states dividend yields are high. u.s. economy is looking better even with the softness due to the weather and so that is the trade and that's the translation. >> everything looks cool if the yen continues to improve. >> absolutely. we've seen it in the japanese market, it rose 57% last year and you see the massive swings but it is translating into u.s. stocks as well. the correlation is 80% one of the strongest in history. >> coca-cola, of course, one of the weaker components of the s&p, if you missed it by now

they missed on the bottom line but volume only up 1%. and we talked about the developing markets having problems to get the consumer to come back but cash distribution isn't where it used to be, you need to get growth and maybe that's what was behind the green mountain deal. >> the beverage space fighting the nine-year decline of primarily u.s. decline in consumption of soda. what's interesting about coke is it's also dealing with emerging markets and foreign exchange headwinds. the majority of its business is overseas as well. the test will be there's a big consumer analyst show, a big consumer analyst conference, i'll be there tomorrow, in boca, the ceo of coke will be speaking there as well and the green mountain coffee roaster. >> we are higher in techs. this is, of course, on the revelation of the head of m&a for apple did meet with tesla and elon musk in spring of last

year. so, this was some time ago. it has put tesla higher on what, of course, has been a phenomenal run year to date up 35% in just 2014. nobody really suggesting that apple would buy tesla but clearly there is some sort of connection, some sort of potential relationship there. >> enough to get traders excited. >> it would be up more than 3% were they were buying it. >> some analyst coverage today, they say the brand equity remains inact on lululemon even though they admit it's one of the more controversial stocks in all of retail in oppenheimer's moves. >> i think what they are saying is that sportswear is still a growth industry. still looking at growth of 7% a year and lulu only has 2% of that overall, so it's a premium brand in markets but is growing.

a good entry point. they are warning that maybe now might be too soon for the longer term. the price target is 63. >> 63, yeah. have you seen underarmor, almost down 3% as it continues to be a subject of debate whether this suit the mach 39 is what slowed down the speed skaters in sochi. they changed the suit and reverted to an older model and still not medaling. >> did you see them? >> i have not seen the suits but that was the issue supposedly a vent in the back that created some drag, but there's where they train and there's a number of factors that clearly the money they had riding on a good showing if you're a sponsor this is not what you pay for. >> no. >> this is not where the main sales are. they don't sell a lot of -- >> but the problem "the wall street journal" wrote up a good piece on this and that is they are trifeing to bank on international growth and this is the first platform on an international stage riding on the credibility of their

sportswear and the fact that they have this perception that they own this market that they make the most performance enhancing equipment out there. >> if you want to go international, it's about soccer and i'm not sure the boys would be worried about that. >> yes. >> twitter, the one to watch. shares due to unlock, relatively small, less than 2% of the shares outstanding compared to facebook's first unlock was very small, but they'll be some discussion about to what degree. i don't think it's insider as much this time but employees. >> i read that all shares are unlocked in may. all shares unlocked. >> that's the other biggie, yeah. those two to watch. >> 180 days after the ipo as was facebook. >> didn't they say that they wouldn't -- >> correct. that was his own goodwill move. >> we have no idea with twitter. >> we have not seen a declaration by any means. forest labs you can't ignore,

the best performing component on s&p after the buy by actvius, and this is a merger tuesday. >> the star-studded activist carl icahn going out on twitter saying, look, this is the power of activism. but seriously as i mentioned before he's had a pretty nice run at some of these drug companies buying as the consolidation in that industry continues. >> norwegian, have you taken a look at this? >> i did. they beat on the top line of earnings per share. there's discussion amongst the analysts as to whether or not they are soft on the guidance particularly on the yield moving forward. norwegian which is the smallest of the big companies, had a great ipo a year ago. and more recently, they've pulled away on the stock price performance, but look at what they are saying and the caribbean market will be soft

because there's extra capacity this year as opposed to europe where they are rebounding. and there's a problem with on-board spending the past three quarters among the analysts. they didn't expect it to be the case. >> what is the impact of weather i wonder on the cruise lines? are more people booking through it? >> i heard it was the opposite that actually the first week was quite tough because people were disrupted and you have to remember with these guys in particular and it may seem odd to you that most of these or a huge number of cruises are sold by travel agents. they still employ physical travel agents. they're not sold online despite some of the reporting you might hear. >> tesla by the way awfully close to an all-time high. and bob pisansy is on the floor with what's moving there. >> nice to be back. i should leave the country more often.

i left on february 6th, that's the bottom of the market and the day things started moving around. i think the dow was up 1% that day and since then i've been away 10, 11 days and the markets rally s&p 5.8%, something like that. the dow must have rallied 800 points since the teamive been i been away and we see the economic sensitive groups, they've rallied the most. material stocks, techs, consumer discretionary and industrials, they've rallied the most and defensive names have not and health care has done well, it's up today here. the nikkei up 3.1% in japan. best day since back in saturday. remember when mario draghi would do what he could to help the euro, and it appears that japan is doing the same. they ducked toubled the amount

funding and expanding the programs overall. the problem, of course, we keep talking about there isn't a problem with a shortage of cash in japan. as far as i can see u.s./japanese corporations have record amounts of cash on hand just like u.s. corporations do. the problem is lack of demand. and the inability to stimulate that exclusively through the programs the bank of japan is doing. the ggp for japan last quarter 1% despite six, eight months trying to do it still only 1% and that was a real disappointment. the same limits we're facing the japanese are facing. speaking of emerging markets i was in mumbai for 10, 11 days and the papers were filled with the discussions about the slowdown in global markets and particularly the emerging markets and india's gdp only 4%, 4.5%, and that may be good by our standards but they were 7%

or 8% a few years ago. and it's gotten more expensive to import oil and they are one of the biggest oil importers in the world and they were the biggest gold user in the world. i was at the biggest gold bazaar in the world and it's immense, acres and acres of gold dealers and they've been hit hard because gold is expensive. and people aren't buying in gold as much. you can see the fed action rippling through to global economies. taking a look at the earnings report. coke beat, the revenues definitely on the light side. coke is down roughly 3% right now. waste management light on earnings but they narrowed the 2014 eps, they're in the middle of the range, though, i think that was a little bit of disappointment. right now, dow just about flat. guys? good to be back. >> and it's good to have you back. thank you. good to have you both back on this tuesday morning. let's head uptown to sheila and

see what's happening at the nasdaq. >> good morning, simon. the winning streak continues at the nasdaq we are yet again opening at a 13-year high for the nasdaq 100 and also the nasdaq composite, but this is actually the fourth day in a row that the nasdaq has actually hit the multiyear highs and traders tell me this is a very good sign. this is the kind of momentum you want to see, higher highs. and since the february 3rd low, the nasdaq 100 has been leading the way up 6.5% since then, again, a good, bullish sign. it shows you that traders and investors are willing to take risk in the market bodes well for the bulls. got to talk about momentum stuff. tesla, of course, the biggest winner on the index by percentage basis. of course, after reports that elon musk was doing a meet and greet with apple's m&a team. and netflix, there's been so much talk about the "house of cards" debut, and interesting the stock is opening lower today. in fact, it's down a third of a percent despite the report of the blockbuster numbers for

"house of cards." sara, i will have to toss it back to you, i think you're crazy, because i thought the debut episode of "house of cards" is fabulous. >> i know. everybody has been saying that to me. i have a pretty high bar but i'll give it a chance. i'm hooked on the show. >> let's get to the good stuff, bonds and the u.s. dollar with rick santelli at the cme group in chicago. good morning, rick. >> good morning, sara. i know this topic is dear to your heart, i look up at the board, the yen is down and the nikkei is up over 3%. only cost about 35 zillion u.s. as they doubled one of the funding programs. it's not an issue whether you can kind of print your way into having markets move directions that a government or a bank or a central bank would prefer. the key theme that matters. you look at yields today, they're down a couple basis points. maybe it was empire. maybe it wasn't. but as art cashin said, it's all about the weather.

not necessarily an entire excuse but how much of one? time will tell. look at a month to date. yields moving up year to date and still primarily moving down and the down is still winning and foreign exchange is where all the action's at, truly. if you look at what is going on with the dollar index, you can see it's just above 80. where did it settle about last year about exactly where it's trading right now. you look at the euro versus the dollar, you can see where the horsepower's coming from, why the dollar index isn't moving so well, the euro is up on the year and if you look at the dollar/yen, yes, that's where the gains are coming from but not translating very much into the euro-centric dollar index and the euro versus the yen you can see even though all the major currencies are having a good day against the yen the euro seems to be having a bit better one. simon, back to you. >> thank you very much, rick. i want to take you live now to central europe, to eastern

europe, to kiev, violent clashes in the ukraine. it would appear there are anti-government protests under way you may be aware, but this is a state that's basically in play between the european union and russian. the anti-government protesters, tho thousands of them, were out in the streets. they have i believe overtaken now one of the -- one of the ruling parties' headquarter building, so we have a fairly fluid situation there. you can see there was a massive fire and it is said that three people have died according to the opposition groups. obviously we'll keep you updated with events, carl, in the ukraine. >> in the meantime let's check out action on commodities. bertha coombs is at the nymex. hey, bertha. >> hey, carl, welcome back. temperatures are close to what we saw in sochi at the end of the week in the northeast will be in the balmy 40s, however, there is sa foa forecast for co

weather to come back the end of february and the beginning of march and nat gas has been on fire. if you went long nat gas in late december, early january you were up substantially over the first six weeks of the year as nat gas supplies are at a ten-year low. inventories expected to see another record withdrawal this week. we're also seeing some movement as well when it comes to metals. bob talked about china surpassing india. demand in china has driven physical demand for gold and this morning we're seeing it flat after a big three-day rally, for the year gold is up and we are actually starting to see some more demand in terms of investors with funds going long and also some individual investors or other investors coming into the gold etf, simon, back to you. >> if we can get the temperatures that we had in sochi by the end of the week i think a lot of people would be

happy, bertha, at the nymex, thank you. twitter has doubled in price since their ipo but shareholders may be looking to take profits as a massive lockup expires. should you be a seller or a buyer? "squawk on the street" will be right back with twitter. in today's market, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price, maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments.

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we've got i.t. group director and senior analyst at s & p capital iq. welcome to the program. >> nice to be here, simon. >> the stock is higher at this moment in time at the margins positive, because if they'd been able to sell this morning you might have seen greater pressure. >> i guess that's perhaps the case, simon. the way we think about this and the way we've been thinking about twitter for the last couple of weeks and perhaps months is all about supply and demand, right? so, november, december, there was a lot of demand seemingly and not so much supply. now we're seeing indications that supply, ie, more shares are being made available and as you guys were talking about around 9:30, the key isn't this lockup expiration which is really small, only 10 million shares still 470 million shares outstanding it's really what is coming in may which is everything will be available for

sale at that point. >> that said we have no idea whether those insiders are going to sell. they may be able to sell and some may have to sell because of where they are in the life cycle, they want to pay the mortgage or whatever they need to do, but it could be that people hang in there. >> that's true. we don't know exactly what is going to happen but i think it's really important for people to understand that there are fundamental differences between the way that twitter executed on its ipo and facebook did and there's the obvious how the stocks performed at and immediately following the offering. but also remember in the facebook ipo you had a lot of insiders selling stock currently. twitter no one has been able to sell but for today and you're going to be able to see insiders and everyone else be able to sell in early may. very, very different. >> so, when i see here that you're quite clear as far as you're concerned this is a sell recommendation and a $43 price target is that based on the lockups or the underlying state

of the business? >> it's more the latter, although to be frank the lockup expirations are not positives as far as we're concerned. look, the reality here is that twitter on a number of different levels is a very appealing company, a very appealing platform, but clearly there's some work to do and the stock reflects a lot of achieved and anticipated steps that are no done deals at this point. >> good to see you, scott. thank you for kicking your week off with us. have a good week. >> you, too. when we come back, the business of beer. we'll talk about it with the ceo of sab miller and we're live at the toy fair. keep it right here. [ male announcer ] there is no substitute for experience.

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toy fair 2014 kicks off today in new york city, tech bringing back old toys like paper airplanes, jon fortt is looking at the top trending toys and this is right in your wheel house, because there's 3-d printing toys out there. >> $22 billion annual industry domestic toy industry at last count. this is one i'd been checking out before toy fair on

kick-starter. the powerup 3.0. it's basically this part is the toy. this. it goes inside a paper airplane and then you can guide it using your smartphone instead of, like, a ten-second paper airplane flight you can measure the length of time in flight, pretty cool. then down here these things, i'll pick them up, the 3-d printer. and just this model here is that peacemaker is the maker of this, you pay an annual fee if you are a small business and you can print out things on the spot. if you have a time machine, you can go back 20 or 30 years and actually print out guns for gi joe figures that were lost behind the couch, you can make a killing. those are still as popular. action figure sales are down year over year, i think around 5% from 2011 to 2012 but you can print out leggo heads, things like that, carl, back to you. >> i am trying to get over the

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getting breaking news hitting the wires on housing let's get to diane inle washington. >> consumer sentiment down 10% in february the largest drop since last may. the national association of home builders monthly index dropped from 56 to 46. this is the first time we are in the negative because 50 is the line between positive and negative. first time we're in the negative since last may and that is the largest single month drop in the history of this survey which started in 2006. you'd think the builders would be blaming it all on this weather. part of it they are, but they also say that builders have

concerns about meeting ongoing and future demand due to a shortage of labor and lots. again, it's a supply-chain issue. breaking down the components of the index, current sales expectations, current sales down 11 points to 51. future sales expectations down six points to 54. buyer traffic down nine points to 31. regionally speaking in the northwest the sentiment index slipped four points in the midwest down one point despite the weather. in south down three points and out west unchanged so, again, the builders are blaming part of this enormous drop on the weather but also on supply chain issues. buyer traffic really being hit hard. we visited the presidents' day open house over the weekend and they said it's been back and forth. the traffic has been up some days and down some days and they say sales aren't that different from last year so they're not blaming it entirely on the

weather and we've had bad weather around here, too, but supply chain issues for the huge ten-point drop the largest in the history of this survey, back to you, guys. >> interesting, diana. some bears will argue this is a sign the growth in the market is slowing. do you see anything in the report that suggests that? >> well, absolutely because when we see buyer traffic down, sales expectations is not down as much as everything else but the buyer traffic is down. we've seen home sales down in december and january. and the talk is not so much about the weather, in fact, there's another report out today from trulia saying that weather really isn't that different than it has been in previous, you know, sort of rough winters but, again, it's people not being able to get a mortgage, again, larger down payment and tighter lending and also lack of confidence in the market and the home builders really jacked up prices. so, again, there's that buying power, is it there, isn't it. we are seeing a weaker winter so far. >> all right, diana thank you for that. >> even the federal is talking

about a housing slowdown but this is a time when mortgage rates have actually fallen. it should have taken the edge off. >> hard to sort out the supply chain issues. on to the big talk of the morning the "san francisco chronicle" is reporting that tesla ceo elon musk met with apple's head of m&a early last year, more on what that may mean let's get to josh lipton. >> apple is exploring new product categories but could the tech titan be looking to cars? reports suggesting that apple executives met with tesla's ceo elon musk last spring. investors, analysts now trying to figure out what that meeting could have been about. analysts telling me there isn't much reason to believe that apple would be interested in buying tesla. yes, of course, apple has the war chest of some $160 billion in cash. but it's hard to believe that apple would be curious buying a carmaker and competing with ford and gm. that isn't apple's core

competency. it is possible analysts say, though, that apple wants to integrate its operating system in tesla's cars. this is a big push for automakers in general, there are a number of issues under way to integrate the ios and android in vehicles, and in the entertainment system, engine control, driver diagnostics tell you how well you are driving or apps that could tell you where the next charging station is located, for example. doing so could be potentially good news for apple an easy way to introduce consumers to apple's products and services and tesla would make sense as a brand that apple would want to partner with, a company that is known for its spirit of create yavet a creativity and prograerhaps it what apple could learn from tesla and tesla has its own showrooms and perhaps musk wanted to learn the tricks of

the retail trade. back to you. >> let's move to chicago now and see what it would mean for the auto industry, phil lebeau covers that for cnbc. phil, what are you making of this report? >> my read is similar to what josh was just talking about. i do not think that elon musk is looking to sell tesla to apple. i do think that elon musk meets not only with executives like the head of m&a from apple but others who are leaders in the tech industry. he also meets on a regular pbass with other ceos in the auto industry. i think more likely the genesis of this meeting wax either the apple m. & a expert getting together with elon musk and when you look at tesla and how much the stock has gone up over the

last year about their plans not only for the model x but future models, they'll be building a factory relatively soon, his focus at least for tesla in the foreseeable future is building tesla continuing to build it as an automaker and independent automaker not selling the company. >> phil, does elon musk have access to cheap capital? i mean, does he have all the cash that he needs or could he conceivably need to bring in some cash in some form and have a deal or a stake? does he have limitless cash? >> he doesn't have unlimited cash. i think he can access more. he certainly has what he needs right now. remember, they have plenty of capacity at their factory in fremont, california. and when you look within the auto space in terms of why you would raise more capital, the main reason would be to expand production. and that expansion when it happens for tesla and i don't think it's going to happen anytime soon, i would look for it to happen in asia, likely in

china, and then followed by europe. and i don't see that happening anytime soon, so i don't see them needing more capital in the foreseeable future. >> phil lebeau, thanks very much for that perspective on the auto industry. we'll stick with it and see how an apple/tesla deal perhaps could impact the stock. with us is the managing director at jeffries and he's joining us over the phone to break down the immillcations, covers tesla for jeffries. the stock is up right now, how much stock do you put into the potential of a merger, a deal, a collaboration between tesla and apple? >> i would putzier put zero chance of a merger but perhaps an acquisition. apple is looking at the entertainment inside the vehicle. we think that if you look at the ios kernel updates there's a lot of ability to add functionality

and capability in the rear seat entertainment and if you look at the model x, the suv they are rolling out soon, it could be an interesting collaboration for games and apps, et cetera. >> assuming they do a collaboration deal as you speak of, how much of that would cause a catalyst for the stock from here? >> for apple it's probably, you know, a nice little incremental catalyst. the bigger issue for investors is they get into a new category, whether it's i-watch, whether it's more in-vehicle entertainment, whether it's updating the apple tv set-top box, investors are hungry to see apple get into a new category to try to restart growth. >> peter, elon musk is one of those people that arguably, i mean, he may be one of the most exciting entrepreneurs that we have in this country at the moment. we know that tim cook is looking for talent because he took burbury's ceo. do you think he'd like to have elon musk on board to help drive the company and the steve jobs

legacy potentially after cook? >> it would be an interesting collaboration. elon is one of those geniuses that we have in america right now. steve was obviously a preeminent amongst the folks we had. his departure has left a big, gaping hole even now with all the talent they have at apple, so they would certainly look to collaborations and musk certainly fits that bill. >> all right, peter, thank you very much. joining us from jeffries actually covers apple for us. i find that interesting, not a merger and acquisition but he says a collaboration could be quite likely. >> sometimes you take over a company in order to get its ceo. >> talent a big part of it. it's hard to imagine back in the steve jobs days, i know he's obviously no longer there, but him sharing the spotlight with someone like elon. >> if i said to you or if carl icahn was sitting here and i said, i tell you what, they will swap the ceo from tim cook to

elon musk, i think a lot of people would say yes, because he has the cachet. >> the shares of coca-cola, that was a big earnings report of the morning. coke under some pressure after it reported the bottom line pretty much on par with what analysts are expecting but top-line revenue growth was not there. a few theems whew themes when i coca-cola. foreign exchanges will be a headwind, and kurcurrencies and north america, the home market and it's not just coke, it's pepsi, it's some of the other guys as well. sales volumes are declining negative 1% in north america. people aren't drinking soda like they used to. brands like power-ade and vitamin water but not enough to offset the weakness in the core business of soda decline. that's one.

they are in cost-cutting mode and they expanded the cost cutting. they are trying to save a billion dollars. you are seeing the same kind of strategy with pepsi. the question is that going to preserve earnings power for the rest of 2014 and looking for new sources of growth and hence the deal with green mountain coffee roasters. 10% stake in that company and perhaps a new stream of sales in an otherwise declining category of sodas right now. >> and no snacks to offset the weakness. absolutely. >> good point. up next on the program, the changing world of toys, the ceo of hasbro will join us here at post nine to tell us how the company is dealing with the online games technology and the real big movie releases that are coming over the next two years that they will certainly profit from. and then to a whole other kind of toy, jane wells is looking at the toys that will get us to change. good morning. >> yes, you talk about elon musk he has a space company.

we're here at the mojave spaceport, rockets that can get you up there. where will you live? we'll take a look at one example where you might live after the break. [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ [ car alarm chirps ] ♪ [ male announcer ] we don't just certify our pre-owned vehicles. we inspect, analyze, and recondition each one, until it's nothing short of a genuine certified pre-owned mercedes-benz for the next new owner. [ car alarm chirps ] hurry in to the mercedes-benz certified pre-owned sales event.

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welcome back to "squawk on the street." we want to call your attention to shares of under armour which are back to even for the session, maybe slightly down. under armour the reason we are focusing is the ceo scott blackman has issued a statement

with regard to under armour is the speed skating controversy regarding the suits. given our history, we are disappointed not to have a podium finish to date in sochi. after the games we will work side by side with u.s. speed skating to understand how we might better support our athletes. he goes on to say we are grateful to under armour and lock heed martin for the support of the national federation whale we will leave no stone unturned when we analyze the results, based on current information, we do not believe, again, do not believe the suits were the problem. we believe in innovation and it's only through the generosity of u.s. speed skating partners like under armour and lockheed martin that a sport like speed skating can innovate. they do not believe at this time the suits were the problem, so we'll keep an eye on any new developments on that story but until then, know that the

usoc ceo is saying they don't believe at this point the suits by under armour and lockheed martin, simon, were the problem. >> thank you, don chu there. nostalgia is the key and let's find out why old favorites are still in the hands of children today. brian goldman joins us, the president and ceo of hasbro it is toy fair week in new york. welcome. >> thank you for having us. >> the introducti notwithstandi captain america, superman ii, transformers iv and then some. >> we've got a number of movies, "transformers 4" comes in june, where we introduce a whole new line of bots and we've got great magic in our products but our franchise brands grew last year 15%. and so we are getting franchise

brand growth. we got emerging market growth, so we've got the biggest footprint we've had, we grew emerging market 25%. it's the year of entertainment for the biggest footprint we've ever had to go into the emerging markets behind entertainment and drive business. >> i didn't understand it was the first year anniversary for "transformers." >> it is, can you believe. >> obviously that shifts the merchandise. what is the future for you guys in working with content be it on television or in film. are you where you want to be? >> we've developed over a number of years hasbro studios. we have tv shows "my little pony" and "transformers" on the air in 140 countries in the world. we've known that entertainment and content drives our business. we've seen it in the trends. we launched the first "transformers" movie in 2007. in the three "transformers"

movies they've done $3 billion in the box office and we've sold in those movie years $1.6 billion of merchandise, toys and games and the robust licensing business in both areas. >> they'll look in particular at the way that i think you've said the -- and switching to electronics in particular, you know, because then you've got the king which makes -- the candy crush game made ipo here on the new york stock exchange. do you look with envy at those disrupters, those new guys? >> no, in fact, last year we made a 70% investment in backlit studios. if you play their games -- >> yeah. >> unbelievable. >> we made a 70% investment, we believe in giving people the chance to play our toys and

games anyplace, and we set out a blueprint to do it, we have great digital games coming out a lot of our brands and we've got mobile games on my little pony and it's everywhere. >> you talk about walmart, costco just swallowing up huge bits of share in the toy business. will you ever have true pricing power the way you did back in the day? >> the gross margins have maintained relatively strong, 59% gross margin because we price with innovation and people will pay for innovation and good content and we see that around the world and we're also growing outside the u.s. our emerging market business growth at 25%, you know, brazil, russia, china, korea, colombia, all growing for us. >> i have to ask, this is sort of away from your business. but what everybody is talking about in the toy business is your competitor mattel putting

barbies in "sports illustrated." do you think it's a bad message for little girls? >> what do you think? >> i'm asking you. >> look at barbie has done quarter over quarter over quarter. they'll have to do something new, right? i know they are not here to talk about the competition. >> you should ask the competition. as a father, i have a daughter who is 18 years old going off to college, she aspires to be a lot of things and i would give her the opportunity to become any one of those things she wants to become. >> hey, brian, it's good to see you. brian goldman is joining us, the president and ceo of hasbro, have a good fair. from kid toys to space toys. turns out richard branson is announcing that paying customers will start flying virgin galactic later this year as nasa is getting more funding. jane wells is live at mojave spaceport with what is turning out to be a big year for space. big business here, jane. >> reporter: it is. and there's a lot of elements coming together.

at the mojave space sport, virgin galactic did a third power test of the craft that will take the paying passengers to the edge of the atmosphere, but the private craft, rockets, crew carriers are being built to help nasa avoid paying the russians to get to the space station, the goal of the private companies is get to the moon. but once there, where do you live? enter robert bigelow. we've got a rare peek inside the aerospace company in las vegas where he's building inflatable habitats for low earth orbit, one is going to the space station next year and eventual he's planning on selling a lunar business hop filed paperwork asking the government to amend a space treaty that nobody who gets to the moon has private property considerations. >> there's already a policy that

declares that if you have a habitable system in space that there's a standoff zone of 200 miles. we're asking for that same kimed of consideration on the moon. landings can occur but not in your own backyard. >> reporter: let me ask you if i may how much money have you put into this? >> i stopped counting at $250 million. >> reporter: well, it's been seven years since cnbc was with bigelow in russia, since he put in two test habitats. but timing is everything. you don't want to be too far ahead spending too much money on habitats without taxis and you don't want to spend too much money on rockets and transport vehicles without someplace to live on the other end and they believe it will come together in 2017. and this year he's trying to hire six astronauts because, of course, the nasa astronaut program has gotten smaller so there are candidates out there. back to you. >> after all the coverage you've done on this business, i know,

jane, you will be the first business journalist in space. i know it. >> reporter: yes. and i will report live from the -- what would you call that the moon stock exchange. on rare minerals. >> yes. jane, thanks a lot. when we come back, it's been an exciting past few days to the winter games we'll take you live to sochi with the latest right after this break. [ bagpipes play ] make it happen with fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. to prove to you that aleve is the better choice for him,

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it has been a history-making few days at the winter games. our chief international correspondent michelle caruso cabrera is live in sochi with the latest and history making golds, right? >> reporter: absolutely right, charlie white and meryl davis made history last night. they won a gold medal in ice dancing, the first time americans have taken the top spot, nearly every olympic event is about getting there faster and first but ice dancing is

about elegance and beauty and they had it last night with the highest overall score in the event, when they finished the look on charlie white's face told the world he knew he nailed it. are you seeing it there? i think you will. it was a terrific moment. i asked h i asked him if he knew at that moment they'd won the gold medal. >> i was so proud of the way we skated. we do it every day in practice but under the immense pressure you really want to make it count and we were able to do it and do it together. i was proud of our efforts and it was minutes later when i started thinking about the scores. >> reporter: americans have never gotten a gold in this event. you made history last night. tell us how joyful it feels. >> it was incredible. we've had such an incredible amount of support from the federation from our fellow competitors in the u.s., our families and we couldn't have done it without all of their support. >> reporter: a lot of the figure skaters are into training and there's a lot of russian coaches

there. how did detroit become such a powerhouse for skating? >> we have such wonderful facilities, and the world class coaches have come to the detroit area, but it's true, if you want to be a world class ice dancer these days, it's detroit. >> reporter: we cover detroit a lot and not for good reasons as you know. the economic ills of the city, did it ever impact you in any way psychologically, economically to see the suffering? >> detroit despite its suffering has a great attitude and it's always looking forward and i think that's something that having grown up around was impactful in our careers and looking the right direction and always trying to better ourselves. >> reporter: and they do have terrific attitudes. all right, here's the medal count. five gold medals for the united states they got one last night and russia in the lead with 19 and norway has 18, netherlands 17 and canada 16. guys, back to you. >> all right. michelle, thanks very much. i saw that performance, it was

wonderful to watch. straight ahead on the show, korm former congressman barney frank weighs in on the stimulus five years later and what he thinks about larry summers saying the u.s. faces a "downton abbey" economy. like this: dozens of tax free zones across new york state. move here. expand here. or start a new business here... and pay no taxes for 10 years. with new jobs, new opportunities and a new tax free plan. there's only one way for your business to go. up. find out if your business can qualify at start-upny.com (announcer) scottrade knows our 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.

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and good morning, if you are just joining us over an hour in

to trading and here's the stories we're squawking about. home builder sentiment sliding to a nine-month low, the nahb said the housing market index for february fell 10 points to 46. they say that winter weather across most of the country curtailed the demand for new homes. and forest labs is soaring 29% after the drugmaker agreed to be acquired by actavius for $25 billion in cash and stock. and the ceo will be a guest on "closing bell" this afternoon at 4:00 p.m. eastern. and google hitting an all-time high today, the internet giant now up 52% over the past 12 months. wow. 52%. >> yeah. it is a five-year anniversary of the president's stimulus plan and are we living in a "downton abbey" economy? plus, the obama administration moving to allow banks to do business with licensed marijuana companies. lots to cover today with former u.s. congressman from

massachusetts barney frank a cnbc contributor. congressman, good to have you back. good morning. >> good morning. >> five years. have you heard, have you seen all the tweets out there saying where's the beef essentially five years later? >> no. and i wouldn't pay much attention to it, i don't think in 140 characters you can have a serious economic discussion. this is a difficult situation. when you are making public policy particularly in the economic area, the key question is not is it -- the situation good or bad but is it better or worse than it would otherwise have been. and it is clear that two things about the stimulus which we -- first of all, the recovery. first of all, the economy is better by far than it would have been had we not done it. secondly, it is not nearly as good as it could be if we had done it better and specifically, you know, people said obama should have done more, there were three republican senators at the time, snowe and collins

and specter who insisted it be cut back some. in the last jobs report it wasn't as good as we'd hoped to by far, there was a loss of 29,000 public sector jobs. the private sector jobs performed as you hoped they would at this stage. and the problem has been that you have this very conservative view that keeps chopping away at government and it means less public service. there was an article in the "new york times" the other day about how expensive this winter is going to be for community in repairing roads, et cetera, et cetera, and they'll have to c cannibalize accounts because they have to, and we've done better than the european countries who preferred austerity, but it could have been better if we'd had the strength to do more. >> to make government bigger, you mean? >> yes. and instead of saying make government bigger, i would like to tell people what that means, it means more police officers

and more firefighters and it means more fbi agents, it means more people supervising whether or not drugs that are made are made well, it means more cleanup of environmental sites, it means more highways and more bridge construction. yeah, i think those would be good both economically and for the public quality of life. >> when you say that we -- that we're better off than we would have been had it not happened at all. how is that substantiated in any kind of fact other than just your own opinion? >> oh, first of all, you look comparatively at how much better america has done since the crash than those countries which have chosen austerity as a model. we have done much better than europe in terms of growth and in reducing our unemployment. secondly, you measure and i think a wide consensus among economists that that has been the case and, again, i would look specifically at the job picture. we have not had the kind of employment growth that i would

like, although we've started to have some. but the problem has been, as i said, it's been cutbacks in the public sector. we have fewer people performing public services of which we need -- i know people say, well, we don't want too much government, let the private sector do it. private sector isn't much use in the face of the terrible weather we're having and that's great strain on municipal and county budgets right now because of the extraordinary need to deal with the storms and the private sector isn't going to do that. that's the problem of needing more government revenue, but the answer is if government jobs had just held steady, just held the same, we would have been even better. and what the stimulus did and that's why it's relevant to your question, the stimulus kept the reduction in public sector jobs being from even greater than it was. >> we got the summers' op-ed where we talks about the "downton abbey" type of economy. i'm not sure if you watch the show, do you? >> no. >> you obviously know what it's about -- >> i know what it's about. >> a long time ago. are we headed to a period where

we have families with enormous wealth and estates and all the servants underneath them who serve them? >> we are closer to to that than we should be. it's not just being headed there. look, you see an example of it. i was appalled to see volkswagen a very good company wanted to have a union in tennessee and the republican officials in tennessee basically said, no, we don't want you to have a union as you, the company, want because if that happens their wages may go up and if tennessee is a place where wages aren't depressed, won't be able to get industry to leave other places and come here. and at the same time there's a story in the paper about how chattanooga where senator corker, a leading union buster was the mayor, is using all these federal funds to boost their economy, so, yeah, public policy is making the situation worse. and it's by the way not just a social issue, it's an economic issue. we have a lack of the kind of consumption power we should have because the compression of the

economies of some of these people. >> well, whether it's, i mean, looking solutions for the income inequality, raising the minimum wage or reforming the tax code, is there anything immediately congress could do to help the situation? >> yes. it may be counterintuitive. they could tell the president to stop begging karzai to let us spend another $100 billion there over the next 10 years. america is vastly overcommitted internationally. there is this notion that america's going to resolve all the problems in the world many of which are insoluble particularly from the outside. we should be substantially reducing the military budget much of which is spent outside the country. be there when we need to be because there are serious issues but we're way extended beyond that. bring some of that money home and use it on programs that will, "a," enhance the quality of life. if we tackle the problem of our inadequate infrastructure, and started repairing bridges and roads and rail, if we began to add public safety officials

where we could use them, you would both be providing good jobs and reasonable wages and could do that in a way that would overall reduce the deficit because we could save so much from this overall expenditure on the military. >> we're sending you some copies of "downton abbey," congressman. good to talk to you. >> thank you. >> barney frank joining us from washington. all right, up next, the maker of your favorite happy hour beers everything from blew moons to coors light, we'll talk to sab miller about the consumer and the way the company is changing marketing its brands. we'll be right back. [ male announcer ] whether it takes 200,000 parts,

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welcome back to "squawk on the street." it's cold outside but forest labs stock is eheating up on nes actavius is buying them for cash and stock and valuing the deal at $48.49 a share and they are currently trading above $92.32, and it's higher in trading and let's not forget about carl icahn in this whole thing forest labs has been the second biggest shareholder and he's got 11.2% stake and he waged two proxy battles and threatens a third to change the company's leadership and strategy. in a programming note, actavius

will be on "the closing bell" at 4:00 p.m. eastern. a big interview about a big drug making deal. >> thanks, dom. to the beer industry, we've been seeing big consolidation in this industry with inbev buying back oriental brewers, what is next for the big brewing companies and allen clark joining us from boca conference kicking off today. i'll be joining you tomorrow. on the consumer, a mixed picture especially from the big consumer companies like coca-cola like some of the food companies right now. you have a good global grasp. how would you describe the state of the consumer right now? >> it's quite a check when you compare the developed world and the united states and you europe with the developing world, and

in the beginnings of a resurgence of growth in those environments where in the emerging markets we've seen ongoing and continued good growth for many years and expect it going forward. >> it's interesting that you expect it to continue and i know of the major brewers you have the largest exposure to emerging markets. are you not seeing headwinds from the currency gyrations and some of the softness of growth? >> there is some of it. you correct 75% of our footprint, operating footprint, is in emerging markets and 75% of our profits come from emerging markets. but to us it's much more specific about which emerging markets are operating in, and while currencies are a headwind we believe it will even out over time. and you have a young growing population and strong economic growth overall in the economies and therefore growth in beer will follow those economies as they develop over the coming decades. >> you know, in general beer consumption the trend hasn't

exactly been your friend. in other words, dee clining consums fco declining consumption for beer. what will it mean for mass market produced beer? >> it's something we'll see, again, in the developed world, i would highlight, of course, the united states where it is perhaps in its most extreme form but including europe, australia, economies like that where you're seeing a slowdown in the core lager, and miller lite is in our portfolio as an example of that and as economies develop consumers are looking for more variety and a different way to consume on different occasions and the craft operation is part of a broader development in premium beer across these developed economies and that will continue. so, the future of beer growth in these environments is not about the absolute levels of consumption but it's the occasions in which people consume and the premium they are willing to pay for a variety of

beer styles and flavors which will expand over time. >> as you look at that innovation, mr. clark, what most excites you? is there a new product category, some form of innovation that you can do that may be a must-have and could be transformative from what otherwise seems to be a very cyclical business? >> i would say, yes, there are some products which are not a core beer or lager as i recognize it but i wouldn't undermine the opportunity itself. important to keep in mind over the past couple of decades if i used the united states as an example, there is very strong growth in core lager but it's very often bound quite distinctly about occasion and price and it's quite often about a group of young men and the mainstream price band, and the premium is an exciting development because it gives us an opportunity to talk about the wide range of styles and flavors available to beer and the fact that we can tackle on other alcoholic categories, spirits,

wines, the variety of styles and flavors of beers and you have the exciting new development opportunity and together there are the adjacencies. >> it's interesting to note that you are increasingly going to look at women. it seems to many people late in the day to wake up the fact that women aren't drinking as much beer as they might drink particularly after we went through the '80s and the experiences we all had then. why now would you turn to women with such force? >> i think that's a fair criticism, that if you are talking about the way women have been marketed to in the beer environment, they've often been if you like a side factor the way beer has been marketed and that's been a mistake. i think it's something the world's brewers including my company have woken up to and started to understand how we can move new varieties and flavors into the occasion and target the female within the occasion and products that are close to beer in the united states, an apple

ale we've launched and we've come later but certainly we are on to it now. >> i started with consolidation in this industry if you look towards acquisitions what sort of pieces are you looking for to fill the puzzle? is it a geographic location or marching into the u.s. or a product category exposure? >> for ourselves it would be all of the above if you like. we never talk specifically about merger and acquisition activity but we come in two forms. one would be geography, clearly with ourselves favoring emerging market exposure, we've seen the major growth where our force has been as an organization and the success has come from and that will be a strong focus in asia, for example, we would want to get into further m & a, and product opportunities in the united states, for example, the acquisition and partnership of chrisin and others that we've done in the past while and it could be a brand that we try to enter to extend our area of opportunity.

>> all right. changing winds in the industry. always good to talk to you. allen clark, the ceo of sab miller joining us from the florida conference.meantime, a buzz expression. did you get that? a mixed gender occasion. >> no. >> a mixed gender occasion. >> gist need some alcohol. >> where is this alcohol? >> that's the difficulty. they don't know what to give you on the mixed gender occasion. >> i'm a cocktail girl. i've never been a big beer drinker. >> on the show, the "sports illustrated" cover models will p be here. yes, all three of them. >> better than alcohol, right, carl? >> joining us live in a little less than half an hour. you want to see disruption on a trading floor? stay tuned. >> i hope they're wearing jackets. ask me what it's like

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welcome back to "squawk on the street." tuesday's edition of the santelli exchange. a lot to talk about japan. why are we talking about japan? let's go to the action before we go to the reaction. recently released gdp figures. they fell far short of expectations. quarter over quarter growth

about half what they were looking for at 0.3. but may be better on an annualized basis, much lower. 1% was the number. they were expecting it closer to 3%. remember, it was only 25 years ago that the nikkei would hit close to 40,000 levels. now it's at 148 after a big 3% jump. scottie, we need more power. governor has been quoted in the papers with the following line. let's show it on the screen. we have sharply increased the power, more power, scottie, the power of our engine through quantitative and qualitative easing program. we just put on better tires to make the most of this engine. well, any car guy will tell you throw a little nitris in a four cylinder, it might go faster but it really takes the toll. you need a bigger engine and better transmission. but we also had mr. frank on, barney frank on today. and a couple of the points he talked about we can tie in

because japan is his kind of country. he talked about are we better or worse? he didn't talk about the key. the key. the key to better or worse is the time frame that we are discussing. you know, maybe we were better to have a worse year after the crash and be four years of healing. we'd can't tell. but maybe we can. maybe we can because japan is doing it bigger and comfort that this was worth it is europe. this is what our comp is in the united states now? keeping up with europe? that's where we've gotten after my grandparents came from europe to the united states. oh, i'm not sure i get that one. bigger, he said we needed to go bigger. japan is going bigger. their current program didn't end until march and never reached the maxed out levels but they're doing another one, a monster one. a monster. $35 billion. so bigger is better? mr. frank, what about housing? how did bigger government work without with that?

finally, real quickly, vw, he talked about everything except for one thing. he didn't talk about the workers and their vote. why? because they're smarter than the workers, right? i don't know. i think the jury is still out on that. carl, back to you. >> thank you so much. rick santelli. breaking news on boeing. phil lebeau has details on that. phil? >> carl, good morning. boeing has decided that it will be building a new composite wing facility that will be building the composite wings for the 777x. it will be in everett, washington, just to the north of the current plant where boeing builds the 777 and 787. this was expected to be the location for a composite wing when boeing finally picked an exact location. now we have it. everett, washington, right next to the current boeing facility. that's where they will build the new composite wings for the 777x. it goes into series around 2020. back to you. thank you very much for the breaking news.

tweet time. "the chronicle" report that tesla elon musk. we are asking you to put on your creative hat and tell us if apple and tesla did get together, what would their child look like? creative and tweet us at squawk street.

don't miss our conversation tomorrow with brian kelley, the ceo for green mountain coffee. coca-cola took a 10% stake in the company saying the partnership with them to make cold drink pick-ups. >> that's a great chart. >> did you see that? >> yes. >> wow. >> thanks, guys. if you're just joining us this morning, here's what you missed. >> welcome to "squawk on the street." here's what's happened so far. >> ladies and gentlemen, we have a deal. maybe we should roll a little news alert. this deal happening. this is the forest labs transaction just crossing the tape as we're talking. >> i think more people are good with the idea that some of the soft data may be weather related and finally i think credit has

been acting great and stocks usually follow credit. >> and then ipos, everyone is talking about king.com, maker of candy crush, reportedly looking for someone to do external investor relations and starwood also talking. >> of course we had reports of virgin america might be doing the same. if the market the going up in this direction, a lot of people are going to say, come on. >> homebuilder sentiment down ten points in february. a huge drop to the lowest we've seen since last may. >> about how much stock do you put into the potential of a merger, a deal, a collaboration between tesla and apple? >> i would put zero chance of a merger but i would put a lot of chance in collaboration. >> our franchise brands grew last year 15%. and so we are getting franchise brand growth. we got emerging market growth. we have the biggest footprint that we've had.

welcome back to post 89. got breaking news for you. steve liesman is at headquarters with details. >> the take away from the new york household debt and consumers survey report for the fourth quarter, borrowing is back, carl. the paraphrase, debt is good. it surged $241 billion in the fourth quarter. the biggest increase since 2007. we had a huge increase in mortgage debt. at least the balance of debt because there weren't so many foreclosures. that sets the fourth of 2007. student auto credit card debt all rise. home equity loan, however, fell. the percent of debt in the 90-day plus delinquencies in the fourth quarter falling for all credit except for student loans. bankruptcy and foreclosures fell for a third straight quarter. this is the first year over year increase we've had in overall debt since late 2008. carl, i exaggerate a little bit.

we're not back to the levels we were before but we are showing some growth and it looks like we stopped the decline and now we have an increase, carl. >> steve liesman back at headquarters. road map this hour starts with lrumors of gigantic tech deal. the head of m&a at apple met with none other than the ceo of tesla, e lon musk, last year. is apple actually considering buying tesla? we'll talk about that. plus, from mobile february knowledge nonto creator, king, ipo up to $500 million. since 78% of its revenue comes from just one game, should you be worried about a buying that stock? "sports illustrated" celebrating the 50th anniversary of the swimsuit issue but putting not one but three models on the cover. now those models are moving from the page right here to post 9. nina agdal, chrissy teigen, lily aldridge will join us here at the nyse in a few minutes, john

steinberg, buzzfeed president and cnbc contributor. john, let's start with this story out of the san francisco chronicle today. the head of mae from apple meeting with musk a long time ago. how big a deal is this? >> m&a executives send to be deal executives, too. you know they might have been talking about a partnership. three tiers of possibility. at the lowest they're going to integrate siri and ios into the car. the console of the car already looks a bit like the ipad. they're building a big ga factory at tesla that would develop lithium ion batteries. that's the second polkt. big investment area. and the third would be acquisition, which i think is so out of the realm of possibility. my gut is that it's about the battery technology. >> we talked to an analyst at jeffries today who said zero chance this is about a merger. >> even if it were, why would you buy a 200 when you could have bought a 50? >> $25 billion for a company that has $150 billion in cash. i think it would be so outside

the sweet spot for a company that generally doesn't do big acquisitions and the batteries make sense. a cold venture to develop much locker lasting batteries makes sense for apple, especially as form factor for the iphone 6 is supposed to be thinner. >> do you think it's more about that than, say, putting technology into the car? there aren't that many cars. >> i think so because this executive's name is adrian, a west point graduate, former army intelligence agency, a former goldman sachs banker. sending him over to a to talk about putting siri siri in the car seems low level for him. it's a little too hot, too cold. just right is probably this battery thing. >> the story almost raised more questions than it answered. but i'm sure we'll talk more about it over the coming months. in the meantime, switching gears, king, the maker of candy crush, file for ipo of $500 million at the nyse. >> before we get negative i want to point out what is so spectacular positive.

$630 million in revenue in this quarter as compared to $71 million in revenue the prior quarter. that really is magic, to have that much revenue fwroet. 78% of the revenue does come from candy crush. actually in the past quarter the number of people who were playing and paying went from 12 million to 13 million. -- 13 million to 12 million. it went down by a million. they're seeing declining engagement so there are soes issues but it's a gigantic t idea. >> why is this game so popular? >> i think these games have a flavor of addiction to them. you look at flap py bird, shot o the top of the ranks, the developer felt guilty about the addictive quality he pulled it. there are psychological elements to the games you can't stop playing them. a game like candy crush hits on that. other games, the numbers are a fraction, a tenth compared to what candy crush does. you look at a studio methodology here where they have to have a system and a training program and a whole mentality in place

where they can develop hits again and again like a disney, like a dream works. whether or not that's this company, we don't know. >> some people's question this morning on twitter. why do public now. you've already got this great cash flow. let that run for a while. milk it. then when you've got real scale. >> feels like facebook going public during the mobile transition. when everybody doubted whether or not they crossed the chasm. i think it's a good opportunity for investors. >> to buy the stock. >> to buy the stock. they're going to get whacked out of the gate if they do ipo because people will say there's not enough growth. if you study the math of this company and you study the studios around you think they are capable of another hit in the next year, it could be a good buying opportunity. >> interesting. structural issue, any game maker real really. >> any industry really. how many industries are hit driven in a world you have to continually reinvent yourself. look at apple, samsung, the qsr players. everybody in this world today needs to keep disrupting and

reinventing themselves. like a netflix, talk about why "house of cards" today because it was built in $100 in the past month and a half. it was already built? >> does this feed to you the notion that we're in some heady time? >> i don't think so. i think we're in a time where people basically buy and price these companies so there's zero margin of error. if they don't deliver the growth they get whacked down. >> certainly a talker. i mean, you wake up this morning and your feet is all about candy crush. no doubt about it. >> also. if you look at the pharma merger, too. that's about market power. it's like the comcast/time warner merger. it's all about keeping prices high and the generic drugs. we're seeing two pressures here. reinventing yourself and market power. those are the forces happening in february. >> speaking of market power. when quo come back this morning the moment we've all been wait for. we're going to talk to all three cover models from the new "sports illustrated" swimsuit

issue here on post 9. plus, rick santelli, what are you watching today? >> we are going to talk about the labor market and a number of ways we're going to talk about why men of a certain age find it very, very difficult to get jobs. op-ed in the "wall street journal" not long ago about more men and trying working ages don't have jobs. i want to dig down deep and discuss this issue. structural versus cyclical. this could have implications for fed policy. of course. tune in, bottom of the hour.

welcome back to "squawk on the street." health care is leading the sectors in the s&p 500 over all and it's being led by a huge blockbuster deal. $25 billion one. activist is paying for forest labs. that's how much they're playing mi milan labs. humana on the insurance side, another big winner this morning. all in all, a very good day. you can see for the health care stocks. sure, when you have forest labs, carl, driving all of the action here it's the single best performer on the s&p 500 today. back over to you. >> there that is action there. very nice. here with john steinberg at post 9 we were talking about the reports that spotify has tried to do external relations, something you probably wouldn't need unless you were planning on going public. >> that posted it on linkedin and it goes to show that nothing stays quiet in the world of social media, especially when

you're putting up a job listing. really that's no surprise. everybody has known it's one of the likely ipo candidates for the year. the big issue that will come up there is the user base size, 24 million users as compared to pandora 73 million. >> killer name. >> but they don't have the compulsory license structure, the radio license payment structure that pandora has. spotify can negotiate the contracts on their own. a big article over the weekend about the relationship between the publishing houses that manage the radio rights and a player like pandora or apple itunes. i think when it comes out it will be impressed with spotify's rate structure. can they get beyond that 20 some odd million. >> and netflix, of course, subscribers showed a lot of love for season two of "house of cards" which debuted on valentine's day. 16% from one cable operator streamed and leaked one episode in a seven to ten-hour time period, up from 2% to season

one. that's major growth. >> actually i had a study last week, 60% of netflix users consumed the entirety of one original series. i'm glad the stock is where it is today. i thought it would suffer a little bit coming off the weekend because basically no new story that could live up to the excitement going into it. my wife and my consumed the entire second season over the weekend. we could not stop. a lot of friends on social media did the same as well. it does t not disappoint from the beginning, the first episode, a shocker, which i think they did to get the social media buzz. >> don't say anything. >> it's enough of a shocker i think to get everybody engaged and the ending is really something worth watching the whole season. >> is there a statute of limitations on spoilers? in other words, should you be free to talk about what happened in episode one in 48 hours? >> i think there is no statue of limitations. i think that with the binggi style you released this on you could get yourself in trouble if you do a spiller alert on social

media. maybe after a year. there are people who no v. not watched season one that are going back hearing at the excitement of the first episode. i think everything they've done to maximize subscription growth and getting people to go back and consume the first year was brilliant. >> bottom line, how many subs do you think they can get out of this? >> you call it 40 some odd million subs right now. >> domestic. >> i wouldn't be surprised if they, you know, had significant growth over the prior quarter. maybe 3 or 4 million in this quarter. >> wow. and managing to finish the season already, john. >> i know. >> impressive. when we come back later this hour, all three cover models from the 50th anniversary of "sports illustrated" swimsuit issue live right here at post 9. plus, an historic finish for the u.s. in the men's bobsled at the winter olympics. we will go live to sochi and the controversy over the under armour speed uniforms in just a moment. tdd#: 1-888-648-6021 there are trading opportunities

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welcome back to "squawk on the street." check out shares of safeway moving higher by 2 1/2%. today's trade, citing the low visibility says it might be exploring strategic alternatives. the firm has an out perform rating of 40 bucks a share. right now the stock is up, like i said, 2 1/2%. but still, safeway, one of the bigger grocery store names, carl, in the mix today. back over the you. >> dom, thank you. big weekend for team usa at soically including the historic run for the bobsled team. brian sullivan has made his way safely to sochi. what do you think so far, brian? >> hey, i think it's fantastic, carl. i think everyone has done a terrific job. sochi misses you. like you said, big day for the bobsled team of the steves. holcomb and langton.

there is your launch. they got a great start, a great run. the russians ran away with it, by the way, winning .7 of a second. bronze is good. earlier today we interviewed the steves and i asked them, hey, what was different this time to end a more than six-decade drought? >> it's just kind of came together. we have phenomenal push athletes. i'm more experienced now. 16 years of experience driving. we also have the vmw bobsled they came out with this year. it's been an incredible tool we've been able to use. one of the fastest one on the hill, hands down. we've been able to work with it this last season and dial it in. when all of that comes together is when you win. >> so basically, bobsled, carl, is going better than speed skating unfortunately. the controversy is still out there. listen, you had scott blackman coming out in a pretty strong statement saying it is not the suits. they thank under armour at lockheed armor for their speed

skating saying without the partners it could not exist in the united states. they're going to look t at everything when the winter olympics is over. we have not had a speed skater placing better than six. a lot of question there's ranging from did they train at too high an altitude at italy, should they have trained outside, were the conditions differently where they could not adapt to it here? still a couple more chances. by the way, carl, an hour ago, the russia and united states were tied in the top of the medal board with 19 each. but an hour ago the netherlands going 1-2-3 in another speed straighting event. look at that. they went from 17 medals to 20. so little netherlands, the little country that could now with 20 total medals. germany leads the gold with 8. netherlands, very proud of speed skating. i'm sure you how the holland house, all the bikes you side. they've got a little swagger to

their step outside with those bikes. you know what i'm talking about? >> i do. you soon will do when you look at the parties at night, which i assume are going to get more rowdy as we get closer and closer to closing ceremony. >> yeah. of course, as you know right now it's, what, 11:00 -- 8:20 at night. we're going to go on the air until midnight. hopefully, you hope they're still open. by the way, i do need to send a thank you to you. you laid great groundwork, fantastic job. thank you for not putting me on after the s.i. swimsuit models because america would never forgive you. >> the viewership will be large, brian. we'll see you soon. brian sullivan who has made his way to sochi. by the way, textbook case today of trouble for a former yahoo! executive took his company public and, since then, it has had this price. did he take his company public too early? we'll talk to ceo dan rosenswig.

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there's a look at chegg. the company reported earnings last week that revealed that print revenues were disappointed and the shares trading at half of the ipo price. to get more on the textbook industry dan row rosensweig is

here. you knew this was part of the deal. how do you handle it? >> you handle it by working every day. the good news is that all the revenue lines are up. the business has grown quite nicely. better than anticipated. the employees are happy. we are lowering the cost of education, improving outcomes of people's lives. so every day you get up and you recognize it's part of the deal. and it not what we wanted to have happen. but we feel very good about the prospects of the business. and actually, like i said, all the business lines are growing faster than we anticipated napts good news. >> what is prohibiting it from accelerating to the point where the street would accept it? >> yeah, you know, one of the lessons that you learn in life is that businesses that seem a little bit more complicated are hard for people to value. we have a legacy business which is the traditional textbook business and that business is one where it costs cash to run. one of the reasons we went public is to get that capital. the new digital businesses which three years ago were zero and in

2013, 53 million and look like they're going to grow, you know, another 70, 80%, 90%, they would like those to be a bigger part of the business. so, you know, we've seen this movie before with netflix and other people and we've got to keep executing and people will see the value. >> i'm intrigued by chegg study. how does the flywheel work? does e-textbooks drive it or how does the revenue work between the two products? >> the overall textbook business helps drive that business which is why it seems such meteoric growth. to you question about e textbooks though. as the world goes more e-tek books the annual rate is twice that of a print book. so the more daily engagement we get the more information we get the more -- if we know exactly where you're stuck inside your textbook, we can immediately bring you a check study. that's a subscription business, you're right.

>> walk me through some of the metrics on members on inquiries. are those tracking the way you thought they would? >> better. so we have nearly over 7 million members. all we mean by members is students that are registered for chegg. we have their name, your school, high school, could be college. we can communicate with you regularly and you're active in the net work. you don't only have to rent or get a chegg study product. so that's ahead. that was ahead of our plan. we're going the announce in 2014 the growth rates for the textbook rental business actually are accelerating. as amazon entered the market, one of the big overhangs that people are worried about, we're not worried about it because we can compete with them quite effectively. we've seen accelerated growth in the business. we're ahead on members. we're ahead on paying customers. we're ahead on chegg study subscribers. our digital business did $2 million better in the fourth quarter than we anticipated.

so we love the business. we love where it's going. it's just going to take time for the transition to digital to play its way out and but all systems are go. >> how much does that investment -- is it going to cost you in the next year or beyond? and what impact on cash? >> what we said was that we were going to run the company overall, give or take, a cash flow break even. so, you know, two years ago you crossed $60 million to run the company. this year we expect to be cash flow break even. you can begin to see the leverage is getting pretty significant in the he textbook business is as the prices continue to come down even though we're more efficient in delivering the book, cost to customer acquisition dropped 40%. we get all the data. at buzzfeed you know all the value of the data. with me know your college, your class, your major, classmate, that's what accelerates the digital businesses. so we can ramp that business up or slow it down at any time. but the commitment we made is to try to run the overall business and on or around cash flow break even so we have plenty of capital is ch is one of the reasons we went public.

$140 million in cash. borrow up to $70 million low cost debt we've lined up. we're significantly capitalized compared to anything we've ever seen before. >> has dealing with the street, you're no stranger to it obviously. but has this go around been different than you thought it was going to be just in terms of relation. >> you know, it's -- it's not the way we would have liked to have gotten out of the box. you know, i don't think there's any denying that. we're disappointed. obviously investors are disappointed. we're on a mini road show now. it's the first chance we've gotten to talk about the company since it's gone public because we've had all the windows close and had to wait for first quarter earnings. we're going to see 30 investors on this trip. those who have bought in many have doubled down because they see it like a netflix where if you own a big market and you're the biggest player in the space and you can launch new things on top of it, new things are bigger, going to grow faster, have higher margins that they buy into the story. but it's my job to go out there,

communicate, make it crystal clear, create as much transparency as we can and get people to appreciate this is a trillion dollar market. we're going after three multibillion dollar areas within pit. we're the number one player t in the space. we believe we're going to create a huge amount of value over time. >> it is a long game, as you know, dan. >> it is a marathon as you know. feels a little bit like the halfpipe on different days. >> sometimes the snow is with you, sometimes it's not. >> that's right. >> dan, thanks for coming in. let's bring in simon hobbs counting down to the close which happened about a minute ago. >> europe is flatter. also slightly higher. still a big debate in europe whether the ecb be erm bark on qe, if it embark on qe and if it ends up buying too many german bonds will the whole thing backfi backfire? for the moment the market is responsive to what is happening in the earnings. for the record, germany investor confidence has dipped again. for a second month running from

seven-year high. let me show you the stocks in negative territory. intercontinental hotels are not returning cash to share holder as they want. the possibility the government might goat involved. ubs says self century care for much the same reason. you will see a number of optimisticed a lines about automotive sales around europe "play of the day" the jpmorgan put out a note that says if you seasonally adjust they're down by 9%. other stocks moving to the upside. casino reported above expectations. delhalze has an upgrade today. all kind of individual stock stories really. the big one, of course, is what's happening in italy. renzi, the 39-year-old, continues to call the former politicians to coalition government after yesterday laying out his 100-day agenda

will include some changes to the labor market and some tax changes as well, if he can get it passed the institutions. but the message is clear. he is a man for chiange. we will see how far he can pedal. >> amazing political story in italy right now. let's goet to bob pisani. >> we're all waiting for the lovely ladies and standing over here to my right to talk to you, carl. and i might even talk to them myself. the economic news is disappointing. the numbers are shockingly poor. i've been watching for for 20 years and i'm amazed at how much we missed them. look at the s&p 500, despite all that we did drop at 10:00 disappointing number came out but we see we came back rather noticeably. sitting at the highs of the day. the closing high, s&p, 1848? back in the middle of january. bottom line is, less than 1%. six points away from historic high in the s&p 500. nahb housing numbers, 46.

we were expecting 56. you're right, 58, a high back a few months ago. bottom line is the weather is definitely impacting things. this was a really shocking number. you see the effect on the homebuilders. all of them down 1%. transports are underperforming as was jpmorgan downgrade of kansas city southern. bottom line is this has been a terrible performer all year but very specific concerns jpmorgan had that mexican legislation that might be impacting them. this is a bit of an outlying stock in the transport group. be aware of that. union pacific is not nearly performing as much as kansas city. natgas is up 30% so far this year. 30%. nobody would have predicted that. nobody predicted the weather like this. by the way, the natural gas etf, ung, the volume has gone through the week -- through the reroof,e me, near historic bond. remember, this does not exact li track the natural gas because you're buying futures contracts and you're always constantly

paying up to that futures contract. a lot of concerns about that. but that -- you've got to be aware of that. i've gotten a lot of inquiries about that. some of the utilities in light of what the natural gas moving to the upside. aes, ppl, all the utility stocks moving to the upside. we are waiting for talk to the lovely ladies from sports illustrated. back to you, carl. >> bob, thanks so much. got some rough numbers on jobs from the government according to new data. one in six men between 2 ages of 25 to 54 are unemployed. and that trend has been build for decades. rick has more on that. hey, rick. >> absolutely. what an interesting topic. it was based on a very interesting op-ed in the journal. more men in primary working ages don't have jobs. one of the experts, of course, that was quoted in this was job hopkins university's robert who happens to be my best today. robert, thanks for taking time. >> glad to be here. >> listen, you know, i guess what jumped out at me is first of all as an expert you're surprised by this dynamic.

but yet, it's chronicled as being chronic, going on for a long time. can you explain what exactly is going on and why you are surprises? >> well, i'm surprised is that the employment rate, as we call it, the number of men and women employed, has simply not been part of the recovery. we've experienced since the bottom of the session in june 2009. ordinarily more employment rises after the bottom of the recovery. but in this case, even though gdp has resumed its growth for the past four years the employment rate, the percentage of men and women who are actually have jobs has not risen at all since 2009, when it was bottomed out at 58% of all men and women working, it's still at about 59%. hardly changed at all. very unusual. never happen nedney previous recession. >> well, robert, being an expert, let me ask you a very

simple question. if i came to you and said, listen, i'm trying to fix this problem. i'm from the government. i'm here to help. if i target the unemployment rate as the number that will tell me if i'm successful in whatever programs i'm pursuing, do you think, based on your expertise, that that's a good idea? >> no. in fact, the unemployment rate in this case is not a good indicator of the health of the labor market. the unemployment rate has been steadily falling, which is good news. we would like to see it falling. last month it fell to 6.6%, which is good news. however, the problem is that the reason the unemployment rate is falling is that fewer people are looking for jobs. they're dropping out of the labor force. it's not because they're obtaining jobs. the percentage of people actually with jobs -- >> let me interrupt you. the reason i ask is because we live in a time where smart people that are associated with government say something. we're all supposed to consider it a fact and not kick the tires. so whether it's, you know, climate change. the president says it's settled.

or health care, period. or in this instance, the federal reserve. i don't know if you are aware of the programs. one of the big reasons they're doing a lot of what they're doing like quantitative easing is because they're trying to maximize employment. why is it that studies like yours and your expertise are never brought to the table and nobody seems to be worried that this chronic problem isn't getting resolved or looked another through the correct lenses? >> it's just not -- you're correct. it's not in the sublick eye. the positive indicators are the ones that the current administration is talking about the most. these other are a very difficult problem. in fact, no one quite understands why we've had such a jobless recovery with employment not growing the same rate gdp is p with investment and other indicators coming back. employment is not. it's a jobless recovery. unfortunately we don't really know why. we suspect this is part of a long run trend, a long run trend away from manufacturing, away from the numbers -- >> i'm going to have to put the brakes there. i'd like to have you back.

maybe when you come back in about a month you can have three things that you might suggest to the federal reserve or the government that they could do to actually make a real difference in how many people are working. >> i'll be happy to come back. thank you. >> thank you. carl, back to you. >> thank you. rick santelli in chicago. yes, they are finally here. the models of this year's "sports illustrated" swimsuit issue are at the new york stock exchange. we will talk to them in just a moment. take a closer look at your fidelity green line and you'll see just how much it has to offer, especially if you're thinking of moving an old 401(k) to a fidelity ira. it gives you a wide range of investment options... and the free help you need to make sure your investments fit your goals -- and what you're really investing for. tap into the full power of your fidelity green line. call today and we'll make it easy to move that old 401(k) to a fidelity rollover ira.

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coming up at the top of the hour, is the emerging market turmoil over? is the u.s. correction over? everyone is searching for the best place to put their money. we're going to have 60 a strategist from jpmorgan. a mysterious meeting from tesla and apple. the deal of the day, $25 million. carl icahn getting a big payday. we'll find out what the next big activist deal will be. i tried to read that tease as fast as possible for obvious reason. >> we've within waiting for this all hour long. the highly anticipated 50th anniversary "sports illustrated" swimsuit magazine is out gracing the cover this year. three models. nina agdal, chrissy teigen, and lily aldridge. i wish people could get a since

of how you stopped all activity on trading. trading volume is about to drop. >> you just couldn't decide? i guess i understand why. >> well, every year you try to give the consumer more. so this year why not give the consumer three models instead of one. >> what was your reaction when you first heard it was going to be an ensemble and you would be part of out? >> i was so honored and so shocked. it's my rookie year and it's not very common for the rookies to be on the cover so it was a complete surprise. i love these girls so much. we are having so much fun. >> you're the first rookie on the cover since plume in '96, is that right? >> yes. >> chrissy, i think you said you were overcome with happiness. i think you said it was cray-cray on twiter? >> yes. >> the officer term? >> i just went ahh, all caps. what else can you sayn't it? it's so massive. i actually talked about on the cover for a long time. i just love it. it's the sexiest shot. it's very like attention grabbing. and the fact that it's with these two is pretty remarkable. and the 50th anniversary.

>> yes, big deal. >> talk to me, nina, about that shot and what was going through your head as that shot was being taken. >> i remember having a special moment with these two amazing ladies. everything was there. the light was there. the mood was there. it was a great energy. we were all -- the smile is real. it's a real moment. >> we love each other. >> for people who do this for a living you know when that moment is captured. >> yes. >> and when it's not? >> it was magical. >> m.j. was like, stop, don't move, smile, have fun with it. that's when you know there was something. >> perfect. >> i took a picture of the per picture and sent it to my husband. immediately i said i really hope this is it. i just can't believe that it all happened. it was -- it just happened so fast. >> it was it. >> i can't believe it. >> is there an extra paycheck for a cover shot? how does that work? >> i think there's plenty of history that shows to be on the cover allows these women to go on and build amazing brands for themselves. >> we should make that point. the cover is not just a big deal for "time," it is a big deal in

tub publishing in general. what does this edition mean to business? >> this is a celebration of publishing. it starts with a cover but it builds from that to digital to licensing to global. this is incredibly big, big part o. "sports illustrated" revenue stream and to the beautiful models. it allows them to continue to build their brand. >> i know social has changed a lot of it, too. you're my twitter idol, by the way. you set the standard, chrissy. it's not even funny. >> i get in a little trouble sometimes. >> how does that change the model, the business model of this particular piece of -- >> social is an incredible -- large part of our business and growing. you know, swim overall, to start this early in the year, if you don't get swim right you can't have a successful year. we're excited about the success of swim this year. >> i read you reached more 18 to 34-year-olds than the super bowl, is that right? >> that is true. swim is "sports illustrated's"

super bowl. >> amaze ppg what does this mean for your career, lily. you're already this accomplished model. to have this, where does it take your career next? >> i think my stocks are going to be going up. >> good. >> thank you. >> it's huge. it's such a launching pad for model's career. it makes you a household name. you can become a brand. you know, tyra banks, heidi klum, christie brinkley, these women are icons. we're going to follow in their foot steps. it's incredible. >> chrissy, you got a bit of a head start on that mogul front. >> i'm trying. >> tv personality, multiple platforms. what does this do? >> every day. what else am i doing. >> have fun with this. >> no, i mean, this is -- obviously helped to expand. it's going to be -- i told tyra on twitter, i hope to just tip toe through your footsteps. everything you've laid out. she was like, girl, stomp through it. make this happen. everything that's happened so far is already fantastic. it's only going to get bigger for all of us and i'm excited. >> yes. >> i assume you as well, nina?

you're going to feel this not just in america but in every city you visit around the world? >> i'm from denmark and everyone is talk about this new issue that came out today. it's an exciting thing to be a part of. i feel like it's such a great platform, where you can develop so many other things from it. you can create a brand, like you can do all these things with it and this is just a start. i'm just so thankful for that opportunity. lucky. >> yes, thank you. >> ad sales, how disthis one track? >> i'm proud to say this is the largest issue of sports illustrated since the '80s. video content, produced four hours of video content that consumers can go to si swim daily and check out online. >> congratulations oncoming into the job. i know it's only been a few weeks. >> absolutely. >> but certainly get baptism by fire. >> welcome to the family. >> yeah. >> thank you very much. >> chrissy has responded to cnbc tweets in the past. there was one about carl icahn when icahn got named to the

chesapeake board, you wrote, i cannot explain how hardy just fell asleep. >> i'm sorry. >> honesty, babe. >> that is the best thing about her tweets. they're so honest. >> i love that you found that. >> how long ago was that? >> that was a while ago. >> wow. >> you said someone digged that up. you're going to meet every single trader on your way out. >> i'm so excited to be here right now. i used to live across the street. and i was -- i can't even believe they let me in, honestly. >> lily aldridge, chrissy teague gwen, nina agdal, congratulations. thank you for coming down. much appreciated. when we come back, these aren't your dad's toys. the toy industry continues to evolve going from action figures and board games to something more high tech. jon fortt live at the annual toy fair to explain. hey, jon. >> hey, carl. well, we got a little tech, too. i know how much you like plush toys from your days in sochi. so here we've got one that keeps on giving. it's e. coli.

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kicked off in new york city and continuing a trend we've seen in recent years the toys on display are are becoming more and more high tech. our jon fortt explains live at the toy fair. hey, jon. >> hey, carl. we're going to start low tech and then move up in tech. here we're going to start with lego, childhood favorite. this from the movie is benny's space ship, space ship, benny on the front here. 940 pieces. 100 bucks out in june. and then here we've got e. coli and e. coli's friends leprosy, mad cow, common cold. this isn't just some twisted joke here. there's actually information inside about these microbes that come from giant microbes. ten bucks each. really important. there's a trend in educational toys happening right now. things that you can't just make

an app about but you can actually touch and feel. and then over here we have nip the robot. precariously carrying a can of coca-cola. you can get your beverage of choice on the tray. you can actually program the robot with your hands to move in the direction that you would like. i guess he also makes some little noises. let's see if i can get them to crash. maybe that wouldn't be a good idea. $22 billion domestic toy industry. certain categories doing a little better than others. action figures haven't been doing that well as of 2012 at least. maybe that has to do with the cyclical movie thing. categories doing well include infant toys and also building and construction. sounds to me like things that you do with your hands, that you really can't replicate so easily in an app. the entire industry trying to deal with that. lots of high tech stuff, stuff that you can program, but also educational stuff in your hands.

back to you. >> jon, question for you. how many of the toys are tied to media franchises? the lego one, my kid saw the movie this weekend and loved it. "frozen," "my little pony." >> you actually quite a mix here. a lot of toys are not tied to brands. they don't want to go through your toys "r" us as your walmarts, targets. they like to focus on specialty retailers because they want to keep their margins as strong as possible. they're going through their e-commerce folks lower margins. going to sell a lot of stuff through amazon. interesting conversations i'm having here with the entrepreneurs and small businesses who are trying to stay profitable and stay afloat despite these larger trends. >> yeah. that's one of the interesting things about the toy fair is you realize it's still too large a cottage industry because there are so many manufacturers of toys. it's not all hasbro and mattel. great set, jon.

jon fortt at the center in new york city. tweet time. the san francisco chronicle's reporting the tesla's ceo e lon musk met with apple's head of m&a. we ask you to put on our creative cap. if apple and tesla got together, what would their kid look like? tweet us and we'll get to your answer after a short break. latte or au lait? 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. visit one of our 425 stores for the the largest closeout event of the year with 50% savings on innovation

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tuesday. "the chronicle" reporting tesla ceo elon musk met with apple last year. they say the meeting isn't necessarily because tesla is about to buy apple but involved in other areas. if apple and tesla got to the, what would their child look like? someone writes, tesla would be keyless, fearless. i hate to see what happens when a car gets -- and just like wally but the occasionally catches on fire. i mean, the fire thing is gone to haunt them, right or wrong.

>> i think it's so unfair. basically off -- walked away. >> we had the s.i. swimsuit cover models here. we talked to lily and nina and asked about chrissy's tweet when she replied to cnbc. listen. >> chrissy has responded to cnbc tweets in the past. there was something about carl icahn, when he got named at chesapeake board, you wrote, i cannot explain how hardy just fell asleep. >> i'm sorry. >> it was very honest. >> you're so honest. >> had a great time with them. very sweet girls. >> that is a huge maker in dollars. created in 1987. 35 million in advertising revenue. 7% of sports illustrated's

revenues. it's a media machine. >> coming at a time when it's going to stand alone on its own. we'll see how well it sells as it goes online today. john, thanks for being here. >> thanks for being here. >> that does it for us here on "squawk on the street" as we hit our time. now it's time nor "money halfti halfti halftime." >> carl, thanks so much. really up to is mysterious -- phil lebeau. calls of the day and the street making big and bold moves today. traders decide whether it's a buy. make it go with underperforming in the earnings. stock headed for rock bottom. we're going to look at that just ahead.