our top story centers on the market today. right now, if you take a look, you'll see the dow futures are down, but only about 17 points. s&p 500 futures are down by 2 and this comes after day when the dow basically had triple digits gains. we saw it giving back half of the gains it had earlier in the session. on monday, again, if you were watching, the dow jumped by just over a hundred points. to close at 16,207. the s&p 500 set an interday record of 1858, joe, breaking through that high close of last year. before pulling back to close at just over 1847. that is a point away from its all-time closing high. and the nasdaq reached a 14-year closing high. david bianco, chief equity strategist from deutsche bank will gives his results. >> quarterly results from home dep depot, earn dollars 73 cents a share for the fourth quarter.

that was two cents above estimates. revenue slightly shy of consensus at about $17.7 billion. the company's projecting same-store sales growth of about 4.6%. for 2014. not 4.5 or 4.7. i don't think they've got that kind of visibility. but probably averaging it out. and it l announced a 21% dividend increase to 47 cents a share. and i know you might ask what is the dividend? what is the yield on home depot right now so i know whether that's a good yield? it's 1.56, had been, and it was yielding 2% at that point. so a little bit over 2%. what's that? >> increasing at 21%. >> could someone give a shot of -- >> so let's call it 2.4% now, then. excellent. excellent. >> 47 cents a share. >> it's interesting, i'm just looking through the release. they don't say anything about weather because that's been one of the huge -- >> you think for them --

>> for all these retailers is what happens with weather, how it impacted -- >> you go to home depot to get stuff to fix your roof and to fix all the stuff that messes up because of the weather. >> they have a conference call coming up at 9 the o'clock a.m. and i'm sure that will be one of the questions that analysts have. >> we've got some other headlines for this morning. jamie dimon has a big day ahead. jpmorgan holding yesterday this morning and there were reports that the banking giant is planning more job cuts. the financial times saying that the cuts are going to be in their mortgage business. could be on top of the 13,000 to 15,000 positions already due to be slashed because of plunging demand for home loans. several thousand more cuts are planned according to people more familiar with the matter. it could be announced as early as today. we will see what news 2 company brings at that investor day. separately, at&t said it is now in talks with netflix about a possible agreement to improve performance for broadband customers to use a video straep

eming service. this comes a day after comcast and netflix announced this deal this weekend. we talked about it yet and what that means to this idea of net knew translate. >> everybody is going to do it. >> then the game becomes very different. >> your analysis of the situation, you mean? >> well, my -- the aurgument fo or against this comcast/time warner deal, if netflix is going to do this with everybody, then you can suggest content companies are not going to be as upset about it. i thought they would be the ones trying to stand in the way of a transaction. >> everything is good. >> i'm just saying. >> good job. >> there's no overlap between the comcast and time warner. there's no overlap. >> for customers. i agree with you. >> so relax. >> i'm -- >> you know what can be saved here just for the industry

overall? that's why malone wanted to do it in the first place. it makes sense. there's no reason in a -- capital is precious and scarce. it's important to do this for humanity. you do recognize there are other sides to this? no, i don't recognize that. >> i'm not suggesting that -- one way or on the other. i'm just guessing that there are other issues at play. here are other news this morning. can you be a bitcoin bug? if you're a bitcoin bug, you're not happy today because the bitcoin exchange mt. gox is now off-line. the site appears to be shut down completely and there are now reports of a bankruptcy. this is actually a big -- i think because of the problems with bitcoin inherently and not problems with mt. gox? >> well, no, the argument that bitcoin bugs will tell you this

is because of rogue cloaks doing. >> other stuff. >> could reports of that -- >> potentially. >> 200,000 or just the number of bit coins reported have been stolen. and i thought the whole point of bitcoin was it couldn't be stolen. >> really bad things have happened. the other flip side of this is that a number of bitcoin exchanges came out yesterday. you remember germany, allayer, a company called circle and a number of these guys have all come out, they put out a big statement saying we're here, we're doing it right, this is one rogue thing. i don't know what to think of any of this. >> it was unassailable and it's already been proven that it's not. >> you know my view on bitcoins. i'm not -- i can't voich for the whole thing yet. >> okay. >> i haven't gotten the chance to talk to you about that. i hit a pothole so hard yesterday i thought i was going to get a flat tire.

>> you know, the roads are so bad that -- >> i know in one area of 10, multiple flats. unbelievable. it's the most sickening feeling in the world because you hit it and you can hear how hard it is. it shakes the frame of the car. and immediately on my car the point goes off and then it shows the tire and it goes minus 10, minus 15, and you're on a -- you're going 80 on. i don't want to talk about -- a nice guy right at a toll booth building. and you're not allowed to leave it there. it's unbelievable. but i made it. here i am. >> penelope? >> now she's half asleep and -- you know, anyway, beat estimates by fourth quarter profit. 43 cents a share. revenues is above estimates. the hospital operator benefited from higher fees per admitted

patient. company's ceo trevor setter will be with us today to talk about if quarter at about 7:40 eastern time. home depot, just out with fourth quarter results. now on a squawk news line, brian nagel. is it weird that they didn't mention weather at all, brian, or would they -- nor wind nor sleet nor dark of night on? why didn't they mention that, do you think? >> i think it's a bit of gamesmanship. i'm digging through the results. the release from home depot today is actually quite good and it's pretty basic. they pretty much hit everything. i'm sure on their conference call, at 9:00 this morning, they will mention weather and i very much believe weather was an issue for them in the quarter. i think what they're saying in this release is despite the weather, we still performed pretty well. >> they'll be talking, look, we are up by two kraents share and

some people will say revenue was a little short, and they will say, well, as well as we operated and executed, whether did matter on the revenue side of things. so they can throw it out there to explain a slight miss in revenue, right? >> i think that's basically the tone. for me, the real key here -- and i was talking on your show a couple days ago about this is we're hopefully through the weather, at least the worst of the weather. as we look to the first quarter for home depot, this weather should be a big positive. you're just talking about potholes. everything that needs to be fixed out there is going to be a big deal. >> it's amazing. it's like half pothole, half road at this point. >> yeah. >> i heard brian williams talking about it the other night and he made a tongue in cheek comment, but none of them on the west side highway. >> 9w is a mess. >> well, on 9w, i've been taking the surface streets just to try to prevent this. and then, you know, the plans and -- >> every road i've taken, yesterday i did the same thing. i turned down a different road.

>> you have a big suv. your tires won't go flat. >> well, no, i've had a flat tire on the way to the newark airport. i turned off to find out if the tire went flat on my way home. >> the biggest publicly traded tiefr company should buy some. >> who is the -- >> buy auto parts as a result of all the bad potholes out there. >> who makes goodyear tires? >> i deal with -- >> chop pierre with the incorporator in the mornings. >> you don't get get involved with that. this is not something you need to concern yourself with. >> with the helicopter, you don't -- you get some chop pierre sometimes. >> what car were you driving? the same car. why does he ask me which car i'm driving? i feel like getting rid of this thing at this point. >> it has to do with how -- >> brian, are you still there? >> yeah, i'm here. >> sorry, brian. have you ever -- 4.6%. how do they know same-store --

what is that, just a rage or something? do they split the range and take the average of 4.6%? i've never seen some granularity in being able to forecast sam same-store sales. >> well, they have a model they look at. look, when i hear that 4.6%, i think home depot is a company that tends to guide conservatively. that's a number they know they can do. we'll probably see that ratcheting up throughout the year. >> do you think like -- are you a frank blake fan? >> i think he's one of the best managers in retail. >> can you point to any -- i go in there and i will admit that i don't walk far before someone asks me what i'm looking for or if i need help. he's definitely ratcheted that up that part of the business, right? >> absolutely. if i think about home depot pre

and post frank blake, i think customer service is one of the big issues. >> because i remember that was one of the problems is that people complained about at sears where it was like a -- years ago when it was first, you know, sort of falling into the problems, you could walk in there and you wouldn't see anyone for 15, 20 minutes. all right. brian nagel, we'll be watching the stock today. it's been a pretty good performer. it's been stuck a little bit lately, but i guess it went up with the housing rebound and we're tapering it probably stalled out a little president anyway, appreciate it, brian. before we go to a break, the conversation was fascinating, but i'm watching twitter. and andrew and i were just talking about "the wall street journal" story on pimco this morning that digs into what happens with bill gross and mohamed el-erian behind the scenes. there was an 11-point tweet laying out thoughts on the story. he said i'm torn over this story. it's clear excellent reporting

from a world class newspaper. on the other hand, the story implication seems to be bill grog gross is an out of control maidan who is going to ruin his firm if left unchecked. i have to say i don't know him, i've never met him, it's a totally different domain. but the behavior is tip y'all of any high functioning organization i've ever seen. this remeendz him of apple, oracle, and business is stressful, there's constant conflict, promotion, even anger. building a company is an intense experience, period. this is the crucible out of which high results emerge. and this is exactly -- >> if you look at the story -- >> there is something true about that. >> i think bill gross is crazy, but i can't go along with that. he is a guy that has a 41-year track record who is the largest bond fund -- >> he's a billionaire. >> he has the largest bond fund in the world even though he lost $411 billion last year, it's

still the largest bond fund in the world. there's something that needs to be said for that. i don't think it's an entirely fair piece. i don't think it took his track record. >> i can tell you that he -- and absolute power and absolute money. in the past, and i mentioned it yesterday, he's not shy about giving, you know, really definitive opinions about stuff, like the stock market going to 5,000. he was so wrong on that. but he will say and he doesn't take it back. he doesn't care that he said it at that time because in his view there were things underlying. eventually it did go to 50,000. >> here is the question, though. his performance, which is over here, and then there's the culture of the firm which i'm going to put over here. we can say the culture of the firm is responsible for the performance, but i think it's true you can have a steve jobs and an apple that has this great performance, and also have essentially a -- employees be completely dysfunctional horrible culture. i have no idea, but i think that the piece is appeared to focus

more on the culture than the performance. maybe that's unfair. >> that's the interested part of it. the culture is certainly the interesting part. to me, the story makes it sound as if bill gross was completely shocked that mohamed el-erian would leave. he would expect that he would stay. >> he's been paid $100 million over the last several years. i would be surprised, too. >> but there are lots of people who i think expect people to -- i believe that was even the story with bill gates in the early days. he expected people to come in and come battle and a lot of times if you have that mentality, you don't understand that other people don't want to come to work and battle every day. and it's just interesting. it sounded like he certainly respects mohammed and wish he was still there. it is an incredibly interesting piece. mark andrews pointed out this certainly makes it sound like pimco is going to collapse if somebody doesn't put the checks on bill gross. that's not necessarily the case.

>> i don't know how much respect is left by -- >> you and i were having a huge conversation about this before the show started. it's something that a lot of business leaders will be talking about and thinking about. >> pretty big personalities, too. they're great at bonds. i don't on -- at this point -- >> and they struggle with equities. >> and mohamed el-erian gave analyst grief about calling the market three years ago as being the wedge and it shouldn't be here. also i gave him a lot of grief about gross got out of the all the bonds and they moved another -- i don't know how much and they were they said we were in bonds somewhere else where we participated in that move. but it hasn't gone as smoothly with partnershipco in the last couple of years with this weird bond environment that it has the previous 36 years or whatever it was. so there's probably some carpeting and grousing. we like them both. we're friends with both of them. they're both great guys. >> and great investors, too. >> bill is a great vet, a

golfer. >> mohamed, too. >> and he has lousy teams that he loves. >> okay. we will continue this conversation, but when we come back, the identity of the person mind the twitter account gselevator. once thought to be a rogue goldman sachs employee turns out, well, he wasn't really in the building. we'll talk about that when we come back. and jon fortt will be catching up with john chen in barcelona. exclusive details, coming up next.

welcome back, everybody. right now, it's time for the executive edge. for the past three years, goldman sachs has been trying to decide who is bind the twitter account gselevator. now it looks like the identity has been revealed and the kicker is, he never even worked at the firm. it is andrewandrew's story on t cover of the "new york times." i followed this account, too. we've been very interested to try to find out who it was. >> i've been fascinating by it and have been looking into it. i haven't even been looking into it that hard, frankly. about a month ago, somebody mentioned to me they thought they might not who it was. and i found the guy. his name is john lefeve, former citigroup banker, bond trader, worked in new york, london and hong kong. actually had a job offer from

goldman sachs back in 2011. or rather 2010. almost went to work there but had a contract dispute about his previous employer. then in 2011, he had seen this thing called @condenelevator. he couldn't believe people were interested in that and he thought he would start this for fun. >> i'm not entirely surprised that this guy doesn't work there. >> i don't know if it's hilarious or not, but goldman sachs thought that he was working there. because what he would do it, and he said it to me the other day, he would try to insert people's names and things in the news so that they would think that he was actually in the building. and they spent the past couple of years doing these internal inquiry webs checking people's e-mails. i don't know if you saw, i think my favorite line of my own piece, if i daresay, is actually nothing i wrote myself. it was the spokesman at goldman sakes, jake, who said their

statement on the matter, we are pleased to report that the official ban on talking in elevators will be lifted effective immediately. so at least they had a -- >> yeah. >> the last guy you gave so much attention to was that other idiot from goldman sachs, the low level guy who had the definitive answer for how they had lost their way and gone off the rails. >> i was very -- >> he loves gossip. >> it is critical of wall street firms. >> this is why i don't -- >> why wall street doesn't like you. i really don't understand as a founding charter member of the hate wall street hate corporate compensation -- >> don't put me in that box. but one thing that -- >> if the shoe -- >> no, don't go down that path. >> if the shoe fits --

>> just so you know about this guy -- >> yeah. >> i thought this guy was going to occupy wall street. a lot of this stuff is -- >> like you. >> of the industry -- >> you thought you met up with him at a meeting? what's the name of that park? >> but he said, by the way, that he was not trying to make fun or on mock the industry, initially. unusually, he thought it was just funny what happened, what he did. and then all these occupy wall street people started going to his site and he started pandering to them and doing this whole other thing. >> but he aent in the elevator, right? >> he was not in the elevator. >> the whole thing is -- right. it's a paridy account. >> like andrew dice sorkin. >> there is an -- >> this guy sold a book based on the assumption that -- >> did he, really? >> yes. it's going to come out in about a year. >> you guys keep talking about

this amongst yourself. in the meantime, blackberry's ceo john chen making news at the mobile world congress in barcelona. jon fortt joins us right now with the details. jon. >> hey, becky. you might have noticed the stock price on blackberry the past six months has done pretty well. lots over news that he would make. here is what he had to say about the stock price and what's coming. take a listen. >> i think it's a reflection of investor starting to take notice that we have a plan. i mean, i think we have to execute it and we're moving relatively quickly. i'm pleased with what we have done beyond just the words that we use. we have a long ways to go. you know, this is -- as i said the last time, this is a four to six-quarter turn around that we will see tremendous improvement. we have good milestone about cash flow breaking even, you know, profit or low. so stay tuned. we're doing our job to get the company back on financial

strength. >> the best, most important announcement out of chen were the phones, specifically to indonesia. he said that's important strategically in the near term. also, blackberry enterprise serves does have two levels now, silver and gold, trying to make it extra simple for people to manage not just blackberrys, but and resides and iphones in a secure way. so interesting moves here from blackberry, particularly targeting the emerging markets which has been a big theme. mark zuckerberg talked about that yesterday, as well, becky. >> jon, thank you so much. ukraine delays form you a new government until thursday. let's get to michelle caruso cabrera in kiev. michelle. >> this is a significant announcement, becky. they originally said they would be able to form a new government within 24 hours and they expected to announce it today.

instead, the announcement was a delay. we probably shouldn't be surprised. we use journalistic shorthand and say the open on sigz. but the opposition is actually quite divided. so their inability to form a government isn't surprising. now, the ukrainian stock market on this news is now down 1%. so it fell pretty sharply. did rally 16% yesterday. we've seen the currency here weakening to a number of -- and the source of the market saying the central bank has not been defending the currency for three days. it goes as high at 9.875. and there's a question on the currency because there's a belief that the imf with the bailout is the demand with the currency flows. they put that in writing many times that that's what they want. and the country is obsessed with where ousted president viktor

yanukovych. i got a chance to go to his palace this morning, and next hour we'll state of ohio you what it was like. if you're wondering about the music behind me, it's a religious orthodox ceremony behind me. coming up, david bianco. i feel like visiting just to hear that -- >> i'm actually -- >> you feel closer to hech, right? >> i want to know where commercial is headed next. >> yeah. david bianco tells us that the s&p 500 is too high, too low or just right. and it's not just shark tank tuesday, it's also the day of the profit. marcus lemonis is back for another season. he's going to tell us why he's not so hot for tesla. as we head to break, a look at yesterday's winners and losers.

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good morning and welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky

quick and andrew ross sorkin. and the headlines this morning, dow component home depot reported 73 cents a share for the fourth quarter, two cents above estimates. revenue was absolutely below what wall street was looking for, but it was a big number. the bigger it is, tens of millions here and there. so it also announced a dividend increase, home depot did, of 21% and forecast some pretty good comp store sales of 4.6%. we are watching the shares of luxury home builder toll, toll brothers, erped 25 cents a share. 8 cents above estimates. total profit was up more than 10 fold from a year ago. and potential trouble for holders of digital currency, bitcoin mt. gox website which had been the most popular website now off-line. the whereabouts of the company's chief executive, mark carpella

raises the possibility that those who hold bitcoin through mt. gox could lose their money. six other major bitcoin exchanges released a statement saying mt. gox violated the rust of users and this is not a reflection on the value or the resiliency of bitcoin itself. we need to know more. >> remains to be seen, yeah. >> in the meantime, the s&p is just a point away from its all-time closing high. although the futures this morning are indicating below fair value. joining us right now with his thoughts on the market is david bianco, chief u.s. equity strategist at deutsche bank. david, you think that it's right for the market to push back through these higher levels? >> yeah. i think getting back to 1850 is justified, giving that a little bit more than we thought the market would. we were actually calling for a small dip from late last year. but i will tell you, at about 1850, i think the market is essentially done making its major gains for the first half

of the year. and if we do climb -- >> nothing for the first half of the year? >> i think that's about it. if we get to the 1900s orr higher, which has good chances by the end of the year, my official tarlth is 1850. i don't think that happens until september, until january of next year. i think for now, investors are watching what their momentum and top line growth is, to have further pick up in cap ex. >> your year-end target for this year is 1850. so basically this a year of treading water as far as you're concerned. >> that's right. when we said it's a year, it won't happen until the second half. >> and what will drive that advance? is it earnings picking up, kind of getting back to where -- >> there are two things and you can kind of describe it as a bit of a goldie locks scenario. one, you have an acceleration of s&p sales and earnings growth. that needs to be with cap ex driving the way. also interest rates climbing, but climbing slowly and not causing any dislocations. >> how big of a potential

problem is that? just in terms of the fed's behavior, the fed's tapering. do you think that this is something that the markets will react well to? >> over the course of time, yes. so on give it the full year, give it two years, it's all part of the normalizing and healing process of the on economy. that's why we have a 2000 target. that's why we're calling for this to be a year of volatility, which includes a 5% dip and we got one already early in the year. i think we probably have another one. >> so what would you tell people to do? this is a year when they should be going ahead and putting money into this stock funds on the expectations that things will pick up and take off? are you going to be a long-term investor? should you put it out and look for something else to be investing in? >> what i'm advising clients to do is to look for the largest and the lowest stocks in the s&p 500. the s&p is about 15.5% trailing earnings. you can get the market about a point cheaper if he leigh look at the highest market cap. >> what are those names?

>> big cap industrials, big cap financials. >> pick your choice. >> a lot of those where the old tech large names where there's been top line growth challenges, but we think things will improve. rising dividends, buyback, strong balance sheets, and in this case, on demand valuation. >> does apple fall in that? >> it does, but the ones that are enterprise spending and that relates to moderate spending and cap ek towards the end of the year. so towards the larger and low stock markets and don't be afraid to be taxical. >> is there another asset class that you think performs bullishly? >> in emerging markets, we have concerns about that. we think interest rates rise, so be careful on fixed income.

i think the credit space, if you're careful, has probably got some reasonable return prospects. >> where? >> the higher yields. >> thank you very much for coming in today. it's great talking to you. coming up when we come back, the ceo of basf, the world's largest chemical company, they're going to join us live. and later, the turn around king himself will join us. we have a lot more squawk coming right up. >> announcer: get a leg up on the traying day with the morning squawk newsletter. go to our show page, squawk.cnbc.com and sign up now. morning squawk is a snapshot of the day's top stories. (vo) you are a business pro. seeker of the sublime. you can separate runway ridiculousness...

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welcome back, everybody. it's time for your "squawk box" planner. macy's is expected to roll out results. the s&p case-shiller home prices index will be released at 9:00 a.m. eastern time. coming up at 10:00 a.m., the markets will get a read on consumer confidence. the markets will get some fed speak today. daniel turullo is expected to deliver a speech on monetary policy and financial stability at the annual policy conference. that is your squawk planner today. right now, we're going to send it over to andrew. >> porsche roadside assistance.

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welcome back to "squawk box." basf reporting fourth quarter results today, beating analyst forecasts. joining us now to talk more about the business, can chairman of basf, also the chief financial officer. i was looking through your earnings report. you did beat, but then you say in the statement this morning, we do not expect strong tailwind these year. what should we expect? >> i think we expect pretty much an environment like we've experienced in the year 2013, which was challenging. global economy is not not growing at the pace we've seen it growing in 2012.

we think growth will be gdp growth globally will be stronger than in '13. we also believe we will be facing the situation as we've experienced it last year because, clearly, characterized by currency volatility, by an increasing euro. keep in mind if you compare the u.s. with the euro, we are currently in the range of 1.37 to the euro where we were at roughly 1.30 in the year 2012. and that clearly, for a company reporting its earnings in euros has an impact. >> i wanted to talk briefly just about the politics and its impact on business. for you in europe and germany specifically, there is this eu probe. and that continues on the subsidies that germany provides to companies in the country including basf. i know angela merkel has been fighting some of this probe.

where does the probe stand? and what's your position? >> yes, that's right. the eu had started to look into the subsidies of basf, are we affected by that in a significant way? no. why not? because we produce our own utilities, our own power, our own steam in particular at the big sight that we have in germany. and this part, the eu does not look into. in the end, very simple, you produce your own power. subsidies that you receive from the government, so nothing that the eu is really interested in. but there are currently plans in germany, .that may have an impact, obviously, on a company like basf to change the system and change it in a way that even

on the power and the steam that you produce in your own plants a certain levy maybe you may have to pay that. >> quick mergers and acquisition question around your strategy. there has -- there was a report last month that reuters reported that you guys had made a tentative bid for rw's gae unit looking for almost $5 billion. can you give us an update on where that stands and where that plays in terms of your m&a strategy this year? >> as a matter of policy, we don't comment on any type of market rumors out there. it was worth a try. thank you for joining us this morning. congratulations and we look forward to talking to you again. >> a three-second delay. thank you, andrew. a new season of cnbc's -- >> or not.

>> thanks for nothing, sorkin. anyway, the profit, "the profit" is going to premier tonight. here is a quick preview. >> do you like it? >> i agree. >> why did you take my name off? >> because that's the new name of the business. >> that's bull [ bleep ]. you didn't even ask me. >> is it about seeing your name on the building or is it about selli selling. >> i have a great name in chicago. everybody knows who i am. that's why they come here. >> really? >> really. >> you actually believe that? >> i actually believe that. >> nobody gives a [ bleep ] about your name. >> nobody gives a [ bleep ] about your name. >> i don't have my name on the building. automatch usa is the new name of the business and i need to know everybody that came here before knows this was a new day. when they came here before, there were no cars. >> i don't have cars, but i have a good business. >> if you don't have cars, you

have no business. >> don't argue with [ bleep ]. >> was your problem? >> you know what? i didn't agree to all these changes. now you're just going to change everything. it's going to be a dictatorship. this ain't no i didn't agree to this. the deal's off. >> star of the show, the turnaround king himself joins us now, marcus lemonis. marcus invests his own money trying to make struggling businesses to make a comeback. did he know you were at autonation for four years. >> he kept saying what does this guy know about the car business? it was interesting. >> yes, it's not wayne's or mike's auto nation. it has a nice ring to it. i see what you're saying. it has a name makes it look hokie, like it's not grand, like it's not a nationwide firm when it's just some guy's -- what was

his name, does he have a good name? >> pete athens. athens motors. we did an interview with a local restaurant and the guy thought it was a greek restaurant. >> or you think like a car from ancient greek times, like a fred flintstone mobile. >> i love the beeps and everything. people love conflict. >> we could use some beeps around here. >> it's great when people get angry for shows like this. but he had no cars, right? there's a reason that you were called into this, right? he'd rather have his name than have a viable business? >> joe, when 'plied to the show he actually called me at my office and said, look, i'd like you to come down. my business is losing almost $2 million a year. i have no idea what i'm doing. once we got there and the cameras turned on, i actually think he had amnesia. he just literally did not

remember anything. >> how much can you -- you don't want to tell us too much about this. so is your money in this? does there ever come a point where you say, this is your problem, i'm out of here if you're going to talk to me like this? or do you like the conflict? >> i don't like the conflict. there are episodes where that does happen. this one actually is a big investment for me. i'll give you that little tease. it's a $3.5 million investment for me. >> i like the idea, too. what kind of -- these are nice cars, right? upscale cars that he's selling used, right? >> so what's happened is the used car market has gotten stronger. there will be almost 16 million used cars sold in this country this year. obviously that's following the trend of the new car market. what's driving it is credit is pretty available and the supply of cars is pretty decent. there's kind of an inverse effect when the economy is really good, the whole car market rises. and there's a great supply of used cars and the car business seems to be back pretty robust

again. >> i gather you have a beef with tesla? >> i do, actually. >> what's that about? >> so i like the car itself. i don't even want to challenge kind of the technology behind it but the beef i have is that i believe in the auto dealer market. i'm an rv dealer myself. i grew up as an auto dealer. there are boat dealers, motorcycle dealers. a lot of people believe -- tesla believes they want to keep the middleman out of the process. when that customer needs service or they need to talk to somebody about their tire or buy a warranty or they need whatever it is they need, this country needs people like auto dealers. when auto nation was established in 1996 as a consolidation, it was established to provide a better service. >> marcus, you look at apple, they like to do the software, the hardware, the service, the whole nine yards. >> the store. >> the store. why can't it be done by one company? why do you need to farm it out? >> i don't want to make a correlation between a cell phone or radio or an automobile. an automobile has a longer shelf

life and it obviously needs more service. what i want to focus on is what's going to happen after the sale? are auto dealers the backbone of this country? i don't know if they're the backbone but they're an integral part of making sure cars are on the road. states will be heavily challenging this process. >> marcus, sales gets a bad name. some people say if you can sell, you can do anything. the whole world is about sales. we had people in here about obamacare saying this is not going to work because insurance needs to be sold. if someone needs to call up and find this, it's never going to happen. you need insurance -- cars need to be sold a lot of times. and people -- tesla, at this point, they're lucky and people want them, there's so much hype surrounding them. there could come a day where things need to be sold and it's better for -- there's a lot of

jobs that you're talking about, too, in the dealer network, too. >> joe, one thing that tesla has to be careful of is that the used car market thwill establis the future of these cars. if the dealer community isn't happy with what's happening, the value that people put on these trades is somewhat compromised or challenged. i think there's a little bit bigger picture here. i'm hoping it changes. >> it sounds great, right on the surface. what do you need a middleman for? let's go direct to this. there's knewan a there's newance here. >> i'm on the "today" show in a few minutes. >> well then. >> you know what you'll be running into there. this is the type of people you'll be talking to on the "daily news." >> no, no, no, it will be fine. >> they didn't wear make-up yesterday.

>> marcus -- >> guys, you know when i'm there i see joe in hair and make-up. i'm not going to get hair and make-up today. >> we had a debate about this yesterday. we decided we would not. >> they barely touch me. i go in there, 0 secon30 second marcus. you know why? it doesn't help that much. i don't need make-up, i need a surgeon. >> thank you. did you hear that? they have spackle. >> marcus, thanks. >> good luck on the big show. >> season two premiere, tonight, "the profit." . later, phil lebeau will tell us why buying cars at costco could be a win/win for dealers and dealerships. inside. stay tuned for our exclusive

interview with colony capital founder and ceo tom barrack. his firm has about $31 billion in assets under management. he's big in real estate and looking at europe and the media landscape. big money advice for you for free. so stick around. because when it comes to feeling safe behind the wheel, going the distance and saving at the pump you want it all. get our multi-point inspection with a a synthetic blend oil change, tire rotation, brake inspection and more for $29.95 or less. get a complete vehicle checkup. only at your ford dealer.

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a budget battle headed for capitol hill. harold ford jr. will tell us why wall street should be watching this fight. and the uaw pointing fingers at bob corker. he talks to us about being called out over a vote in tennessee. the health care sector is hot. trevor fetter talks to us first about the company's latest results.

"squawk box" begins right now. ♪ he's the one they call dr. feel good ♪ ♪ he's the one that makes you feel all right ♪ good morning, everybody. welcome back to "squawk box." i'm becky quick along with joe kernen and andrew ross sorkin. we've been watching the futures this morning. after yesterday's big gains with the dow up triple digits, a little bit of a give back this morning. s&p 500 is off by 2.5 points. in our headlines this morning, home depot, the dow component out with quarterly profit of 73 cents a share, 2 cents better than the street was expecting. revenue fell shy of estimates but global and u.s. comp store sales were essentially in line for the quarter. that is what's important to the street. home depot increasing its quarterly dividend by 21%. that stock is indicated up by 1.6%. another retail earnings report, we'll get the latest from macy's. that should be out at 8:00 eastern time. macy's is expected to report

fourth quarter profit of $2.17 a share. revenue is expected to come in at $9.3 billion. the december case-schiller report will be released. also out today the consumer confidence index, out at 10:00 eastern. it's expected to come in at 79. 8, down from 80.7 in january. mcdonald's is examining the idea of extending its breakfast hours. the head of mcdonald's u.s. told the associated press many customers want to get breakfast after 10:30, especially on weekends. >> absolutely. >> the problem for mcdonald's has been logistics in shifting from breakfast to lunch in a timely manner. this comes as rival taco bell prepares to roll out a new breakfast menu in late march. i've had the reverse problem at

mcdonald's. and that is that the fries aren't available until breakfast is over. >> that is true. because they just have the hash browns. >> it's 10:30. >> 100%. >> in l.a., it's still 10:30 in l.a. >> what if you've just flown in. >> on the red eye. >> no. it's 1:30. it's 1:30 back here. >> 1:30 your time. >> basically you got off the airplane -- >> not for me. not for me. for scott and my son. >> he likes french fries. i got it. there's a comedian that said we have a lot to thank mcdonald's about. how else would we know when breakfast is over if it wasn't for mcdonald's? >> i will admit having run there and really wanted the pancakes or something. >> you have this problem. i have the other problem. the other stuff isn't ready until this stuff is gone. >> you want burgers at 0:30 in the morning? >> that breakfast stuff i feel

even more guilty about eating that stuff. >> the oatmeal is good. >> i eat a sausage egg mcmuffin with cheese. >> full monty for you. >> that's the way to go. when you tell someone you ate at mcdonald's and they go, oh, i didn't know i was better than you. he has so many funny jokes. you see someone you know in mcdonald's, he says i'm not here for food, i'm meeting a hooker here. >> you just said the same thing. it's not for me, it's for scott, my son. >> i can get copyrighted. >> tim gaffigan. watch it. go to his website and watch it. >> that's the biggest problem mcdonald's has right now. >> i did it. we all do it. he talks about the bonus fry that's always in the bottom of the bag. where did you come from? the last one is always a long

one. >> i'm glad we have this moment together. stocks rallying monday with the nasdaq reaching a nearly 14-year high. joining us now is michael tyler. in studio, ed keon. ed, what do you think? we are right back where we ended the year. >> it's tough to follow mcdonald's fries but i'll do my best. >> it's impossible. nothing better. >> i think this is going to turn out to be another good year not as great as we had last year. i think the economy is gaining traction. it's obviously tough to know what to make of the latest data because of the weather issues. i think we'll start to grow much more rapidly this year than we have the last several years. it will be a good year when all is said and done. >> what finally kicks in? we talked for years about the chicken and egg scenario. >> i think all things starting

to come together. spenders haven't spent as much because demand hasn't been there. as they go into this year with a little bit faster sales growth once we pass this weather issue, then that's going to help hiring, capital spending. kred credit availability is better. there's pent-up demand. you'll see at the fiscal drag has been a big factor the last couple years. that's fading. this year is the first year we'll see a breakout of the growth rate. that will mean higher corporate profits and stock prices in my opinion. >> you have higher taxes that finally kicked in last year. people who are just starting to do their taxes are getting a look at what it means this year for them. >> the biggest part of the tax cuts came at the beginning of last year. the more recent tax increases, the especially the obamacare tax increases are small, they're important but they're small in comparison to the big tax

increase of last year. that did not drive us into recession, which a lot of people predicted. i think we can handle the smaller tax increase and still power ahead this year. >> michael, i know we had problems with your shot. i'm not sure if you heard our conversation that we'd been having with ed. in terms of where we stand with the markets be, it's amazing. we're right back where we ended the year. is this the high water mark? or did you think this is the situation where the market pushes through? >> no. i think what happened in january was very much short term relate. partly because of tax issues and partly because of the weather. as far as we can tell, we're looking at significant pent up demand for a lot of capital goods. if you look the aa trailing five-year number, for example, we really haven't recovered from the recession from a long time ago. we're expecting that where last year, maybe three-quarters of the advance was because of the price people would pay rather than the earnings. this year, we think there's a

significant advance coming from earnings. not just from price. so yes, i think the mark set poised to go higher here. >> do you think this is for real? we're not going to fall into some of the malaise we've hit the last four years around this time? >> no. it really depends on whether the economy can bounce back from a nasty winter so far. all indications that we've seen is that it will. >> okay. as a result, where are the points you really like in the market? are there specific sectors, specific stocks? >> oh, yes. when earnings are growing and when the economy is really hitting the full stride of its growth, which is where we think we are right now, we saw it in the past couple of years how housing was the first major driver. that pulled a lot of other companies along. now we're looking for capital goods, not just things that go into houses which is obvious to me. plan the equipment, automobiles and trucks, certainly. we're looking at the oldest average age of fleet in american history in terms of cars and trucks.

there's a tremendous replacement cycle going on there. we like companies, like ford, ge, we still like home depot, which reported good numbers this morning. or even some banking companies like sun trust and jpmorgan that are affected as well. >> i like that thesis, ed. how about you? >> we look on a global base is. our favorite places to invest are stocks rather than bonds, especially developed markets rather than emerging markets. we're tempted by emerging markets but not ready to make the move to an overweight there. the united states economy is going to be in great shape. i think you get a good value for your money in europe. those are the two most attractive places in the world to invest right now. >> ed, thank you for coming in. michael, thank you for joining us. >> pleasure to be here. coming up when we come back, how worried should the markets be about a budget battle? we have former congressman harold ford jr. joining us after the break. we have a big lineup, including senator bob corker.

we have tenet ceo trevor fetter and tom barrack as well.

welcome back to "squawk box" this morning. take a look at futures right now. see how the market is setting itself up for the day. things not looking brilliant just yet. the s&p 500 would open off about two points. president obama is expected to call an end to an era ofo austerity in his 2015 budget request. we have more on the upcoming budget battle. great to see you, harold. >> good morning. >> your expectation, nothing is going to happen. i don't want to put words in your mouth but i think that's where you're going with this. >> few yound democrats trying to

appeal to big bases and republicans doing the same. the only glimmer, andrew would be, since they're both starting early and digging in, there could be developments over the next few weeks. ron wyden, the new chair of the finance committee saying there's a chance for tax reform, pro-growth reform. listen to republicans still talk about particularly tea partiers and the need to raise the minimum wage. you could find a possibility for agreement around some of those issues. i think it's hard to see a path to that today. >> let me see if i'm getting this right. you think there's a chance of something around the minimum wage on a federal level? >> i do. i think democrats will stick to this issue. if you look at the national polling. even amongst the most conservative republicans, including members of the tea party wing of the party, there seems to be a desire to see that happen. don't get me wrong, i don't think it's an easy thing to do but i think there's a chance

that something around these issues could come to fruition. >> i thought the tea party was a hands off party. >> if you look at the polling with be they are big supporters of raising the minimum wage. it may run counter to our thinking of them. i'm not going to sit here and try to psycho analyze that wing of the party. tea partiers who earn under $50,000 a year are in support of it. and those who earn over $50,000 a year are less inclined to be supportive. >> and you don't think then that the cvo report last week which depending on how you want to characterize it, the prospect potentially of losing 500,000 jobs as a result, if you believe that number, i know there are people who have issues with it, did not deal a death nell to any type of legislation? >> i think it dealt a blow but you and i both saw the cbo suggested early on some numbers around, even the health care plan the president was able to get past that it might have a negative impact and the bill passed anyway.

again, i only say this, andrew, if we were in july or august, you saw both parties hunker down, i'd say it's unlikely, if not impossible that things get done. six months ago, democrats thought they would sail to victory. the way the shutdown was handled by rains. the affordable care act had its problems with the health exchange, should say the technology component and things shifted toward the republican side. here we are march 1 with a lot of foreign policy challenges in front of us. we have a lot of economic data obviously that will come forward in the next several months. it's hard to say if anything can happen. if something does happen, democrats will not give up on a minimum wage increase. increasingly, you'll see conservative republicans coming that way as well, particularly those from states that you have income levels below $30,000 to $40,000 a year when a majority of people are earning that. >> you're usually middle of the road or even maybe fiscally a

little bit right. you saw the cvo report. >> i did. >> you know, you raise a certain amount of people, a little bit and out of poverty. but then as many as 500,000, even a million people might have zero dollars per hour because they lose jobs. sperling hung his hat on, well, they did say there would be a $2 billion net increase in revenue or something. on a $17 trillion economy. here we are with a wedge issue that your party is using to once again separate, you know, the haves from the have notes, make everyone angry at everyone else. it's for $2 billion, purely a wedge issue, something to be used for 2014, when you know how many important things we need to do, from education, job training, tax policy, regulations, all these things that would do something to

funmentally help the jobs picture. yet we're going to spend all this time and effort on something that really is just at the margin. half these people, they're young kids living at home and not even in poverty. i'm surprised you don't have more where you'd say let's do something real. >> andrew didn't ask that question, joe. if i win congress i support the keystone pipeline, i'd support changing some of the health care regs to ensure that small businesses and even big businesses don't suffer. >> can't you call it what it is, a wedge issue? >> here's where we differ. i think all the data supports -- when i was in congress and the minimum wage was increased right before i got there and even before, people argued the points you're making, jobs would be lost. >> the cbo said it. >> here's the thing. i have great respect for the cbo's numbers but that's theory. when the minimum wage has been increased, the data shows none of the things we predict normally happens with the minimum wage increase happen. unemployment went down and wages went up. >> i guess the jury is out.

>> but i think much more needs to be done. if we're talking about -- we're talking about numbers here. i think the minimum wage should be removed from politics. we should index it to inflation and let it go forward. you and i both know if you took the minimum wage and indexed from the day it was introduced it would be $10.40. >> i don't know how to work that. i'm thinking of the other things we need to do. >> he asked what could be done. >> are you getting any sleep. >> she's 9 weeks old. i'm loving every minute of it. >> congratulations. ♪ little girls grow up in the most exciting way ♪ >> thank you for that, joe. >> you have two girls at home. >> i have my wife, my daughter and two dogs. they're both girls, too. all four of them. >> oh, man. you've got it rough. you need some of that -- what is that stuff? >> it's called prayer. >> all right. see you later. >> my brother and sister-in-law just delivered their baby. the last two minutes.

>> he's here. he's in good shape. >> congratulations. >> robert carl quick v. >> that's a tv segue to talk about babies. please make sure to join us tomorrow at 8:10 eastern time because we have the man of the hour, paul ryan. we'll speak with the howe house budget chairman then. ukraine is trying to get its government together but the real buzz is inside the presidential palace. michelle is going to give us a grand tour of that when we return. the works. because when it comes to feeling safe behind the wheel, going the distance and saving at the pump you want it all. get our multi-point inspection with a a synthetic blend oil change, tire rotation, brake inspection and more for $29.95 or less. get a complete vehicle checkup. only at your ford dealer.

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welcome back, everybody. ukraine is struggling to get its government back on track. but the real buzz is behind the walls of the presidential palace. it looks like the protesters made their way right in, michelle caruso-cabrera. >> yes. it's pretty unbelievable, becky. one of the big stories everyone here is talking about is they couldn't believe what the ousted president, viktor yanukovych, what his palace looked like. i would call it a swiss

chalet/west europe baroque. 18 to 23-year-olds are there as guards to prevent looting. those kids are the ones that showed us around. >> the volunteer guards tell us that this is the most grand room in the palace. look at the intricate inlaid pad floor, the furniture with gold guilding. and then this white baby grand piano, a steinway. this is the balcony of the president's former palace. take a look at the floor, granite and marble. look over the banister here. many, many tourists have come to see how viktor yanukovych lived. they can't believe the immense amount of wealth displayed here.

and then the river, where he tried to dump documents before he fled. even the shower stall is ornate. inlaid mosaic tile and a brass shower head. this is one of many bedrooms, quite large with a fireplace and sitting area. this is the biggest coat closet i have ever seen. most of the stuff has been removed but still, they left behind many coats. these are clearly all made of cashmere. and the brand names you would all recognize, cuccinelli, et cetera, et cetera. the other thing i wanted to show you, the ostrich farm. i said is that the zoo? no, no, no. that's the ostrich farm because he liked to eat ostrich meat.

we didn't get a chance to walk to the zoo or the garage. he had over 100 cars. the grounds are so enormous. later on in the day, we'll show you more of the documents found in that river by the way. >> in a situation where protesters break in, that you would see more looting. you wouldn't see cashmere coats that were left there. that's different than what we'd see in iraq and other places. why is it different here? >> that is a good question. i'm not sure. but almost immediately they set up guards. the same way they've done this here in maiden square. there were volunteers there to make sure that the place was protected. i think also they wanted people to see everything. and they are letting people in on the grounds. it's become a tourist atrack. the traffic to get there is immense. outside the gates, are coffee stands like crazy because there's so many people arriving. >> wow. that's amazing that you got in to see all that stuff.

we heard about it. ostrich, i don't know. >> i've had it before. >> really? >> yes. i don't think i'd keep ostriches around on a farm for it. tastes like chicken. >> ostrich tacos at this place in l.a. next, the uaw taking shots at senator bob corker after their vote fails in the home state of tennessee. he'll talk to us about that, plus, what he wants to hear from janet yellen later this week. ♪ new at&t mobile share value plans for business. our best value plans ever. for example, you can get 10 gigs of data to share. and 5 lines would be $175 a month. plus you can add a line anytime for $15 a month. sharing's never been better for business. ♪

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welcome back to "squawk box." in our headlines, home depot shares are on the rise following the company's latest earnings report. comp store sales were essentially in line and the home improvement retailer announced a 21% dividend hike. that stock is up by 2.6%. blooming brands, the parent of chains like outback steakhouse and bonefish grill, it beat estimates by a penny with quarterly profits of 21 cents a share. crackle barrel old country missed estimates by a penny with sales falling short.

the company said winter weather significantly impacted its result. cracker barrel is so prominent in the midwest where a lot of that bad weather existed this year. some trouble for users of bitco bitcoin. the exchange has gone offline and there's no word on what happened or if anyone who held bitcoin will be able to get their money back. mark andreasen is weighing in on defense of bitcoin despite the problems that mr. experienced by mt. gox. we talked about this earlier this morning. mark andariese was listening. i thought you couldn't count counterfeit it. it can't be used for identity card fraud and theft. different issues, i'll give him that. >> maybe. i was looking this up. apparently this exchange had 744,000 bitcoins and they're missing due to malability

related theft. there's a document floating around the internet saying that mt. gox had 174 million in liabilities against 32.75 in assets. >> yes. he's not defending mt. gox by the way. this is what he said about mt. gox. he said this is a bad exchange. the comment from him this morning is mt. gox is obviously broken -- has been obviously broken and possibly outright crooked for months. he's coming out swiping at mt. gox. as seen in trading spreads, that kind of proves it. this is like mf global, not a huge breakdown of the underlying technology or exchanges. bitcoin protocol is unchanged and other bitcoin exchanges and companies are doing just fine. that doesn't give a whole lot of faith, at least at this point to the people who are looking at bitcoin that dropped from $1,000 in september to $500. >> i thought if i bought a boit

coboi boitcoin that there would be an identifier. i don't think that's the case now. >> that was my understanding. maybe this is a situation where it's like buying stock in some cases. i don't quite understand the technology. we went back and forth this morning a lot of times. i've been trying to get him to come on since he was tweeting about pimco. i wanted to talk to him about carl icahn. he claimed he was going to sleep and couldn't do it. >> if he's still awake, give us a call. >> he said half an hour ago he was going to sleep. i think he was dodging me for a while. >> where is he? >> california. >> it's probably 4:00 in the morning there. >> it's time to go to bed. those engineers, those dotcom guys are up late. >> thinking. >> thinking or drinking? >> thinking. uaw appealing the loss of a volkswagen plan the in chattanoo

chattanooga. they accuse republican politicians like senator bob corker of interfering in the vote. the union appeal says senator corker's conduct was shameful and undertaken with utter disregard for the rights of the citizens of tennessee. obviously i read in places like "the wall street journal" so people would say that's somehow slammed. but apparently there were a lot of things going for the uaw down here. you had a lot of things in germany for whatever reason. they have things going on over there where it was kind of in their best interest to not stand in the way of this. they let the uaw use their facilities. didn't challenge the vote at all. correct? this should have -- if it was going to be what the workers wanted, they had a lot of going for them, didn't they? >> yes. >> they did. look, i'm thrilled for the men and women who work at this outstanding plant. i think they knew that uaw was

simply looking at them as a dollar bill that this detroit based entity was looking out for survival and trying to extract resources from them. they had nothing to offer them. they were making more wages, better wages than people like tenured at other companies. the community obviously was very concerned because we knew we were going to have tremendous difficulties with economic development down the road if the uaw got a foothold there. look, you're right. i mean, the uaw has been there for two years, inside the plant. the company sign a neutrality agreement that only allowed them to be there. and management couldn't even speak up about their concerns. we fortunately -- they tried to do it by card check, believe it or not. fortunately, we urged the company to go to secret ballot. many people did that. look, the employees prevailed. it was an outstanding thing for our community and the employees and for our state candidly and

the company over time. but the uaw obviously a hit dog hollers and they're trying to make waves about something that certainly they shouldn't be doing. >> senator, who wanted them to go card check? >> no, no, no. the uaw attempted -- >> card check. who said no? the company? >> the company ended up saying no after a lot of urging from a lot of folks. the company said no, we'll go secret ballot. >> you reportedly said, you didn't sight sources but did you give assurances that if they voted it down, more work would be coming to the plan the that they wouldn't have gotten if they voted for unionization? and did you have sources for that? >> yes, look, i think you all know as mayor of chattanooga, i built the industrial site with our county mayor that they're on. got the interchange in.

i think you know as united states senator, much of the discussions around volkswagen coming to chattanooga took place around my dining room table. one of the few times i missed votes was to go home and make that happen. we know people up and down the ranks at volkswagen, all kinds of consultants, dealing with site locations and those kinds of things. one of the things that hasn't been reported is that inside the plan the, again, only the uaw there, they were spreading rumors rampantly that the only way the plan the was going to be expanded was if the union won the vote. so in that context with us having to come over the transom, we wanted people to know that chattanooga was the first location and if they did vote the union out, chattanooga was still going to be the place that the company expected to expand. again, you know, that part of the story has never been said.

>> right. >> also, the president weighed in. >> in the journal it was told, the other side was saying if you go union we'll get more work. i saw that. >> that's right. that's right. >> the other side was actually saying you'll get more work if you do unionize. >> that's right. >> you look at private unions and public unions, who knows what happened there. you saw the piece on wisconsin "new york times" in the over the weekend. there are other states considering that, too. public unions are the place they're still string. private unions have deinclooed and are continuing to decline. >> right. >> the national labor relations board, the supreme court isn't even sure that these recess appointments are going to stand up. unions have had everything with this administration going their way and it still seems to be hard. i think it's because people point to detroit in tennessee and say look what happened there. we don't want that to happen here. >> look, bob king who heads the uaw, look, i think you all remember, let's go back. i was very involved in the auto

crisis and cried foul on the uaw and what they were doing at the big three. as you know, had a lot to do candidly with the administration causing them to be more competitive with companies like volkswagen and others. the uaw has -- i'm not their favorite person and haven't been for a long, long time. obviously you know, we got very involved in this. and they called me an outsider, obviously this detroit entity, coming into chattanooga to poach from our employees, called me an outsider, somebody who had been very involved since day one. let me say this, now this is going to the national labor relations board. this is something that the president controls. and the question will be, will they try to muzzle or keep a united states senator, a governor, state legislator from being able to express their views? will they try to do that? the fact is, if i cannot weigh in on things that i know to be true, if i cannot weigh in on

the experiences that i've had with the uaw and their path of job destruction in our community when something like this is being discussed, what can i do? so it's going to be an interesting debate over the next period of time as to whether the national labor relations board holds to what it's done for 50 years, that people like me can weigh in or whether they try to muzzle people like me that are looking after our community. >> there's no third party. precedent for a third party challenge is not likely. read that. with this nlrb, i wouldn't count on anything, corker. you want to talk? >> i always want to talk to him. i was being told that we -- >> ten seconds. >> i have ten seconds to talk to him. hi, bob, great to see you. >> hello, andrew, hello, becky. hello, joe. >> hi, senator. >> i thank you. >> we'll be watching. we appreciate it. thanks. >> thank you. when we do come back, the ceo of tenet health care on the company's latest quarterly

results and how they're positioning for obamacare. and then the state of the small investor. td ameritrade ceo will stop by with his thoughts on the markets and a lot more. "squawk box" returns in just 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.

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tenet health care reporting profit of 33 cents a share when you exclude certain items. that beat the street estimates by 9 cents. joining us now is trevor fetter, tenet health care's ceo. thanks for being here. the loss, is that because of a higher interest expense with

regard to the vanguard purchase. >> it is. we made a large acquisition at the beginning of the fourth quarter. it was a strong finish for the quarter. >> what happened, what are you seeing? i know there's been consolidation in the industry, especially ahead of the aca. >> we're seeing a few trends. for us at least the inpatient volume put a headwind in the year. that abated throughout the year. our performance improved every quarter sequentially. as for the affordable care act, it got off to a slow start with all of those problems with the federal website. there were encouraging signs in states like california where they had much better rules in the enrollment. so we're optimistic. we're getting off to a slower start with the aca than we thought we would for the year. they're optimistic this will be a benefit for us. >> part of the whole point behind the affordable care act, aca, would be that people would

be insured and the hospitals wouldn't be stuck paying for the people that came out without insurance. is that the case? do you have more insured people coming in the doors and fewer uninsured people. >> we expect to have that. one of the real shocks was when the supreme court allowed states to opt out. so, for example, in texas, medicaid will not be expanded and somebody who works in a minimum wage job, 40 hours awe week, 52 weeks a year, will not earn enough to qualify for the federal incentives to purchase insurance but earns too much to qualify for medicaid and the state. we're not going to get the number of covered people we had originally expected but we do expect some of the insured to convert to -- uninsured to convert to insured status. >> how many end up on the list with texas where there are fewer? >> unfortunately, most of the southern and southeastern states will fall into that category. then there are some of the middle, michigan is a big state

for us. it's a republican governor in michigan, very pro-business. and they have found a way to expand medicaid. arizona, it's somewhat endowed at the moment. it falls into that category. you have three categories there. we operate heavily in texas and florida. those are two states that won't be expanding. california is doing very well. >> when do you think you'll be able to have a better handle on how things are shaking out? is it a year from now? >> probably in the second half of this year. if you were going to sign up for insurance under these exchanges, you really had to do it around now, five weeks left in order to sign up. we'll know who's insured and we've positioned our hospitals very effectively in those exchanges. we have contracts with insurance companies that are participating in all of the metal ranges. we're concentrated on the silver

plans, that's where 60% of the people are insigning up. >> you mentioned that inpatient admissions were a head wind. the admissions were down 2.3% last year, down 0.5% on an adjusted bases. does this tell you anything about the economy overall? >> we've all speculated as to why this is happening. it's not as though there's an epidemic of wellness sweeping the nation. you really have to look to economics and people have been hit with bigger co-pays, bigger deductibles and i think ever since 2009 we've seen a consumer that is much more engage, making smarter decisions. they're also choosing to constrain their consumption of care because they're paying for more of it. we believe our hospitals are pretty well positioned. we have high quality. costs are reasonable compared to our competitors. >> i know that hospitals overall had a rough four years or so as we started put something of the beginning parts of the aca into

effect. it wasn't until this year that the insurance kicked in. but the thinking behind it, the logic at the time was that hospitals would have tough years in the beginning but then they would be made good in the last half of the decade. is that what you think would happen? overall would you say the aca has been good or bad for you? >> well, that's a very hard question. you know, go got tt the cuts be the coverage. this year will be a net benefit. we're projecting in our guidance that we'll have a lift from the aca between about 50 million today's $100 million for the year. and that's offset to some extent by cuts, new cuts that have been put in that are about $50 million. but that's a lift. in future years that should grow stronger as more people gain insurance coverage. >> over the course of the decade you're not sure which way it watchesous? >> over the course of the decade it was always intended to be a wash.

those were the projections for the industry as a whole. our company, stands to fair a little better that than average because we're exposed to texas, california and florida that have had large numbers of uninsured patients. our starting point was more disadvantaged. we gained more of an advantage as the coverage kicks in. >> trevor, thank you so much for joining us today. >> thanks, becky, nice to be here. >> when we come back, the ceo of td ameritrade talks investor confidence and the state of markets. later, jamie dimon getting ready to speak at the annual investor day. we'll preview that meeting in just a bit. "squawk box" will be right back.

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welcome back. time to take the pulse of the retailer investment. here now is fred tomczik. our question is are they back or coming back? and sort of where they are. what inning are we in? >> we're in the 7th or 8th inning here. >> that's not a good sign necessarily. >> not sure i totally agree with

that. if you welcome at any metric, log-ins, new accounts, trade volumes, investor movement index, all of them you're seeing a broader and deeper engagement by the retail investor and creepishly bullish. >> when people say an entire generation of people have been lost in the post-financial crisis, you don't buy that? >> i don't buy that. i think what you've got going on right now here, it's been a very difficult recession for five years. but you get one year of where the market goes up 30%. people take notice. and people start to pay more attention. the market is flat so far this year. that up 30% last year and where interest rates are, my money has to go somewhere and people have to do something. >> your klein the allocation breakdown, 54% of your clients are in equities. are they in individual equities? what percentage earn individual stocks versus mutual funds? i think that's also a major shift in the sort of post-crisis world, if you will.

>> i actually don't know the numbers off the top of my head. i could certainly find those numbers out. our client, because we're very much self-directed and a lot of active traders, you'll see more into stocks than you would see in the average retail investment. we see a big mutual fund in etf customer base. >> the etf, that's the other piece of it. >> yes. >> what percentage do you think is etfs? i assume you're counting that in the equity piece. >> our customer base tends to be more equity, more option. one of the things you may find surprising for td ameritrade's clients, 40% of our trade volumes right now are options and futures. >> what were you going to say, joe? >> i was thinking about coastal carolina, actually. >> we're offseason. >> we are offseason. you're still chairman. >> still chairman, yes. still chairman of the board.

>> done pretty well down there, hasn't he? >> he's had two very strong years. right now i believe they're in heavy recruiting season. >> whenever he talked about how he ran td ameritrade, blocking and tackling. blocking and tackling. you have to do the important things during the day, blocking and tackling. now he's at a place where he's saying you know what's important, guys, blocking and tackling. we get that. it's a football team. >> you said options. 40%. >> 40% between options and futures. about a third of our trade volume is options. >> that sort of suggests that maybe -- not the day trader is back but a new mentality is back. right? >> it's been a secular trend going on in our business and in the online brokerage business now for probably five or six years, if not seven or eight years. the increased use of options. most people in our client base may have a long portfolio but then they use options to protect

it or generate income off it. when the vix was up in the 35%, 40% range, it was a good way to generate income. >> thank you for coming in. have fun in ithaca. >> thank you. >> good place. coming up, we'll welcome our guest host real estate investor self-made billionaire thomas barrack of colony capital. "squawk box" will be right back.

the colony has come to "squawk box." thomas barrack is our special guest host for the next hour. >> sending america back to school. craig barrett on his efforts to revitalize the nation's education system. we talk comcast, facebook and blackberry. a new no-hassle place to buy a car. costco. why they're jumping into auto sales. ♪ we've got a thing that's called radar love ♪ ♪ we've got a wave in the air ♪ radar love >> yes. >> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. the futures right now, we see it

held on to the gains yesterday. we were above 1849, wherever we need to get for a new closing high. versus december 31st. we didn't do it. we're indicated down about three points on the s&p and 20 points on the dow this morning. we were waiting for macy's. >> macy's numbers are out, just shy of wall street's expectations. for the fourth quarter, earnings per share, $2.16. a penny below what the street had been anticipating. the sales numbers, $9.2 billion. >> we have ex items. >> same-store sales up. they were looking for comps of 2.5%. just digging through the release right now. yes. the revenue number was just below expectations, 9.2 versus 9.27. same-store sales were below as well. again, the estimate for that

was -- it was 1.4% versus 2.5%. >> 2.5 was expected. >> yes. comments from the chairman, terry lundgren said macy's had a strong year in 2013. they're proud of the continued improvement when it comes to macy's and bloomingdale's. as previously announced our company's comp sales together with the comp sales from departments licensed to third parties rose by 3.4% in november, december, the holiday shopping period. while we had expected a sales decline in january because of the calendar shift, the month was down further than expected and we are disappointed but sales performance in january. in part, poor january sales were due to the unusually harsh winter weather across much of the country. at one time or another, during january, 244 macy's and bloomingdale's stores were closed because of the weather. business remained sluggish until valentine's day. we believe customers will return to a more normalized pattern of

shopping. but based on our experience in january and early february, we are watching business trends closely. >> back next year. stocks are down a little bit. >> i think it's a miss, 2.16 versus 2.17. >> i don't know where we're getting the ex-items number. >> obviously these comments for january which was one of the three months in the quarter, it was not up to it. >> they're making excuses. >> they're blaming the weather, saying it was the weather for the reasons behind this. they hope for spring, it is a return to normalized patterns. but they're saying based on february, it's leaving something to be desired here. >> why did we decide home depot is an outlier? >> i found myself in a home depot a couple of times -- >> during the snow? >> during the bad weather you show up at a home depot, not a macy's.

>> i thought you would have bought a coat. >> i had a coat from november. i haven't been to a clothing store all this year, that's partly due to the weather. jamie dimon is holding investor day in new york. kayla tauche joins us from new york. >> it was a year where the bank posted its first loss in nearly a decade. jamie dimon's chairmanship was questioned. the stock is up 19%. it has performed well. today is the day when the heads of the bank's units will need to convince investors where the bank is ready to grow and fire on all cylinders. they lay a pretty in-depth presentation this morning. it has several pages about the new regulatory reality and how jpmorgan will reach some of these new capital levels that are put in place by regulators, both here in the u.s. and

abroad. that is one of the huge, if not the main, focuses of the bank at this point. they also talk about reducing expenses. they'll be bringing the branch count in a little bit. but they also will be going through what the presentation says will be about 5,000 net layoffs. they'll be cutting about 8,000 jobs in 2014 from the consumer bank, both on the mortgage origin origination side. in all, they'll be add something elsewhere, like in the investment bank. 5,000 net job cuts. that's on top of nearly 13,000 job cuts just in the last year. finally, investors will want an update on ongoing litigation. the bank has of course paid upwards of $20 billion in legal settlements in just the last year. and they are still in the middle of some of these ongoing investigations. they have announced that they're closing about 12 lines of business, as they seek to temper

some of those issues. but, of course, investors really want to know, are we at the end? is there a light at thend of the tunnel and what sort of cost will we see from that in this current year? we'll be reporting live all day here from jpmorgan chase. for now, that's what we know. >> thank you. shares of dow component home depot rising in premarket trading and are well above where they were after earnings were first released two hours ago. home depot came in a couple centses better than expected. the comp store sales were in line with estimates and they raised their dividend by 21%. another dow component, walt disney in the news this morning. it is partnering with apple. announcing a new movie service for ios devices. the new app will let consumers search or buy movies from disney and pixar. he's a self-made billionaire. runs more than $31 billion in

real estate and media assets. tom barrack is chairman, founder and ceo of colony capital. labels, we don't like labels. >> hate them. where does it come from. >> i would like to be introduce as a billionaire someday, it would have to be in pesos or yen, well, not even that. how is business? >> business is good, because liquidity is way ahead of fundamentals. right? we've been to this movie before. and i think in our businesses, everybody's looking for a proxy, right? no one's quite sure what transparency is in the future. so real estate hard assets hold value. everybody is in search of yield which means you probably shouldn't be there. you should be looking for residual rather than yield. and in media, which is

intellectual property, it's the same basic elements of what's transpired over centuries in the real estate business. it's an exciting time. it's frightening because there's so much money in the system. >> were you implying that -- allaiare you talking about this based on liquidity? you believe the underlying fundamentals warrant as good as things feel right now. >> i'm not sure whether it does or not. he's brilliant. >> he was talking about equities, i think, more the stock market. >> in real estate, nothing new has been built for eight years. right? you have physical financial obsolescence. the predictability of cap rates contracting and yields contracting is anticipating that revenues are going to grow and obsolescence will deteriorate,

new product will catch up with the marketplace. i don't think it's out of whack. i think this liquidity phase, which now the banks have jumped in. we're seeing the liquidity coming from the banks in the last six months. >> what sparked it? why are the banks finally yielding? they have been getting penalized for keeping money at the federal reserve. >> they woke up and said we actually have to earn profit. animal spirits finally awakening. >> and big time. the originators, if you look at the conduits, on the street, they're on fire. everybody's refinanced. everybody's originating. securitization is back. values and loans, if you look at lbo loans -- >> right. >> the covenant light in nature of lbo loan is more prolific than it was -- >> how worried should we be about that? >> i don't think you should be that worried. corporations cured their balance sheet. everybody reduced costs

immensely. they got assets and liabilities to match. the only thing they couldn't do was grow the revenue line very well. >> do you remember sort of during the boom 2006-2007, there were all these things and people thought it was awful. that it would be turn out to be a mess. it almost saved a lot of these companies in terms of the firms that were lbos. no? >> 100%. if you look at what happen, the ability to just hang in there, for that two-year period, private equity has probably never had a better year, right? i think in the paper there was an article this morning. the resurgence, if you can hold on or restructure, over a very short period of time, over 18 to 20 months was better than it was in 2006. i think the retrenching, repositioning, everything's changing. we're talking about macy's and terry's one of the best ceos in

retail. my house looks like amazon.com logistics. >> i ordered from macy's.com and bloomingdales.com as well. >> the netflix/comcast news is gigantic. it's the future. everybody wants what they want, when they want it. >> you said tv is king. what do you mean, tv is king? did you actually say that? >> yes. >> we're worried. we're in the tv business. what do you mean tv is king? i want to believe you so much. >> if you just look at media numbers, right? so if we took film, which is driven by theatrical exhibition and kind of this antiquated view, you take ultimates and value them and you have veils. it goes to theater and

airplanes, hotels, then eventually gets to dvd and eventually it gets to the resurgence of cable. but what everybody wants right now is new product, direct from cable. so if you have house of cards, house of cards value for making an episodic tv series is actually much better profit motivation than making a $245 million movie. comcast owns universal. universal owns a whole series of silos of what it delivers that product to. the delivery of that film as it's being made goes into those silos. everybody has the same thing. now you have hbo go. right? you go to your pda and you get hbo go and you watch in one setting every episodic tv series you want to see.

>> i watch all of it at one time. >> all in one fail swing over the last two weeks, habits are changing and the economics of how that's attributed is changing. >> are you suggesting that it's getting better or worse? >> better. much better. we're going through a repricing episode at the moment. >> content will matter still. >> totally. king. king. >> real quick, i look at newspapers, you saw what happened for the pricing there. you look at radio, you'd even argue the pricing there. you look at music, same thing. the second you get into this sort of a la carte pricing strategy, long term for some of the big established folks, it becomes much tougher. is that right or wrong? >> look at les moonves, what happened. everybody said cnbs is over. he continues to engineer himself into profitability, profitability, profitability.

content, what you do, taking these jewels and seamlessly stream them together in a story -- >> god bless you. >> it's true. the more people it can be distributed to and the moravecs that use it, it will be better for everybody. >> thank you for that. coming up, macy's reporting just moments ago. we'll talk about how the weather affected those numbers with an analyst who covers the stock. coming up next, cnbc's top 25 contender's list is being whittled down to 100. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge

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welcome back to "squawk box." that was a live shot at the white house with a little bit of snow coming down in washington. cnbc's list of the 25 most influential people. tyler mathisen joins us with who made the cut and a few twists. >> that's right. what we did was we started with that list of 200. it was not a perfect process at all.

i mean, there were people who should have been on it who weren't. we turned to viewers and asked you who did we leave out? you got back to us and you listen. there are the seven new additions who weren't on our original 200 but are now on our list of the 100 most influential people in business and commerce over the past 25 years. obviously tied to the 25th anniversary or birthday of cnbc. let's go through the ones that we added. tim berners-lee, inventor of the world wide web. obviously success has a million fathers. he was one of them, perhaps the seminole figure. >> 1990. >> that was 1990 that he did that. >> he still counts within the 25 years? >> he was. >> there are close calls. michael milkin, sometimes reviled, sometimes revered.

a lot of it's had early work predated 1990 or 1989. let's move on to aliko dangote, a nigerian billionaire african entrepreneur. he created a company built around soft commodities, flour, sugar. wayne huizenga, former owner of three professional sports teams. brought six companies to the new york stock exchange. he revolutionized waste management most especially would say there. george mitchell, not the senator, not the guy that was the mitchell report on drugs in baseball. he was the first fracing billionaire. not necessarily the guy who invented fracing per se but he was one of the founding fathers of fracing and a pioneer of the economic extraction of shale

gas. he sold mitchell energy to devon, i believe, for $30 billion. howard stern, should we include him for changing the face of radio or maybe the voice of radio? the self-described king of all media. really put sirius xm way back on the map way back when. another entrepreneur, lynn tilt 0. n. lynn tilton. self-made near-billionaire financier. and bob wright, he turned nbc into a global media group. he was a broadcasting executive that saw that the future was narrow casting on cable. he was there at the start and put together the deal that created cnbc, msnbc, then he saw the value in all of the different cable channels that could be built through a deal with universal. the intellectual property and i

think most importantly, change the way autism is viewed in this country and that may well be his lasting legacy. >> through autism speaks. >> that was good. >> we had to drop some people off. why did you drop sara blakley off? the founder of spanx. you kept anna wintore on. this is a lady that doesn't even need spanx. >> i would argue against that. >> that's the whole point of it. >> does that mean we can't vote for sara blakley anymore? >> you can write in comments and so forth but chances are she probably won't make it -- >> i love her. >> to the final. >> so do i. to the final 25. but at any rate, go on our website, cnbc.com and cast your vote. >> we were talking about auto nation, too. >> it was huge. >> blockbuster. >> on and on and on. >> it's huge. not a perfect process. we obviously did our best with that first 200.

some people got left off. it just wasn't good enough. >> i'll start a write-in campaign for sara blakley. >> the only one on that list i would vote for is howard stern. of that group. >> i'd vote for george mitchell among the top 25. >> that changed an industry. >> maybe i'd do george and howard. >> who else? >> tim bernersly. he was one of two guys. >> and sara blakley. >> created 300, 400,000 jobs. >> she tripicked out the name sx which i know you like. >> he's been telling his clients not to worry so much about the weather. later, forget survival of the fittest. what about survival of the

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up next on "squawk box," the former ceo of intel going against the grain on new education standards in your kids schools. craig barrett will join us live. take a look at the u.s. equity futures as we go to a break.

macy's talked about disappointing sales trends over the months of january and february right now. the dow futures down by about 17 points below fair value. "squawk box" will be right back. ...return on investment wall isn't a street... isn't the only return i'm looking forward to... for some, every dollar is earned with sweat, sacrifice, courage. which is why usaa is honored to help our members with everything from investing for retirement to saving for college. our commitment to current and former military members and their families is without equal.

zom knows pizza reporting fourth quarter profit of 78 cents a share. dominos raised its quarterly dividend by 5 cents a share. also, zulily, the company offers daily clothing deals for women, kids and toddlers, reporting a fourth quarter profit of 10 cents a share, 6 cents above estimates. we've been watching shares of the business networking site linked in. that company has launched a chinese language version of the site as it tries to gain a foothold in the world's largest internet market. >> the only people lunging in to one another. >> on linked in you can see who is viewing your page. >> no. >> on linked in. >> you can see who is viewing

your page. i only realized this because i was talking to the gs elevator guy and he ended up scrubbing his page because he saw that goldman sachs people were frequently viewing his page. he thought, my goodness, maybe they're going to fine him. >> what would they do, fire him? oh, wait, he doesn't work there. matthew boss from jpmorgan joins us now. matt, this is some confusing numbers. they're saying the adjusted number is 2.31. is that the number we should compare? the sales trends for january and february were lousy. >> the number is 2.31 versus the number of 2.17. the beat is on the margins. the gross margins came in substantially better which is a rarity in retail today. and the sg & a, the expenses came in better. it's a significant margin beat. >> they did an amazing job of controlling costs even in a period where we were all watching this so closely, it

would have been a huge beat if it weren't for the weather downturn in january. >> we got off the phone with the cfo. what i think is that impressive, these guys came in with a game plan and executed to it. they didn't deviate from it despite what took place in the month of january. and look, by our work, i think that the last ten days of business here have actually improved. >> why is the stock down, man? >> stock is trading down at 51.80. >> the math on january here would imply a down high single to almost low double digit month. i think the commentary they put in the release about watching trends closely, clearly i think all of retail becomes a wait and see. and you know, you have perry ellis out over night. there's a lot of fear in retail right now. is it more than weather? i think that's where our work points to some improved trends in february. but it's going to take time to shake out here. >> matt, this is important. what you're saying is in terms

of performance, they are doing much, much better than had been anticipated. the gross margins were well above what you might have anticipated otherwise. you'd be telling people on this dip to buy? >> absolutely. i mean, i think if you believe that the underpinnings of the consumer are stable, which we do, i mean, i think that you've had a lot of weather disruption. look, macy's put up a 3 to 4 comp in the months of november, december combined. you look at january that's down high singles, they said in the release, a third of the store base was actually closed. as you piece this together, i don't think that the consumer here is really running at a negative trend like that. again, our work points to improvement over the last couple weeks now that weather has passed to an extent. it's not going to be a snap back overnight but -- >> you're not just talking about macy's? >> no. >> you said people are wondering whether the weather is something worse and whether there's something more going on here. just in general you don't think there's more going on here in

general. >> the consumer remains on fragile footing, no question about it. i think as time passes, i think there's a lot of shifts taking place, whether it's spending on durables versus spending on apparel. as we move forward, i think that what you're going to learn is that the consumer continues to be on an upward trajectory. >> is this for everybody or would you say macy's is performing much better than its peers and you'd buy that one ahead of the others? >> you'd want to stick with the winners. i put macy's, nike, foot locker in athletic footwear and apparel. i put vf corps in there. i think you want to stick with the best names and those that can deliver despite the choppy backdrop. >> you just changed my opinion of the whole story. we'd been telling people not to use that 2.31 beat over the 2.17 beat. i was wrong. he's talking about the gross margins being way better than expected.

listen to what matt boss is saying. thanks for joining us today. >> thanks for having me. >> it pays to be paranoid in the tech game. former intel ceo craig barrett. why don't we start out talking about what you're doing with education right now, because you believe that we need to be increasing the standard of -- core common standards that are out there. that's a hot button topic. the people on the far right don't like it. why do you? >> i like it because i look at the results of our kids today, average american kid ranks pretty low compared to the oecd counterparts around the world in math, science, problem solving. we need to raise our expectations of what our kids know when they graduate from high school so they can go forward and be productive members of society, go on to college, pursue a professional career. our expectations today are just too low.

>> critics will also say when you wind up the tough tests, you keep raising the standards and teachers spend an inordinate amount of time teaching kids to pass that test. what do you say to that? >> we have two of the top five high schools in the united states. i'm ceo of a charter school here. our teachers teach to the subject matter. they don't teach to tests. if you can teach kids to think and understand the basics, they can solve problems. that's the issue. >> i agree with that but how do you test for being able to think? that's the tough part, right? finding a standardized test that can tell if somebody is being taught ato think properly. >> there are great international tests, the pisa test tests whether kids can solve problems. that's not an issue.

people hide behind every aspect of this teaching to the test, the teachers have to learn new material. kids shouldn't have to do home work. you basically have to realize education is tough work on both sides. tough for the teachers and administrators, tough for the kids. if you want to compete in the 21 c 21st century, you have to do it. you don't get there without the hard work. >> let's talk more about what you think needs to happen, this idea of standards. how do we get something like that pushed in with tougher common core standards? >> the common core standards were created by 45 states. the governors, the chief state school, operating officers ratified by the state boards of education. the local school districts still have control over curriculum. but now there's a set of expectations for the kids in english, math, soon to be science. that set of expectations raises a standard. it's going to make it tougher

but we have to do a better job educating our kids if we want to compete. american kid has to compete against european kids, asian kids, south american kids in the 21 c 21st century. we have to have an education system that allows them to do that. >> let's talk about this huge acquisition of whatsapp by facebook. i know social media isn't exactly your fortforte. what is your take on it? >> it's a stock deal. they're not wasting a lot of cash on it. they needed a communications play, a text play. whatsapp announced they're going to the voice business to compete with skype and microsoft and other communication companies. you know in social media, the whole issue is the number of subscribers, the number of customers you have. whatsapp has 450 million, adding

1 million a day. you can't sneeze at that. and lastly, i applaud zuckerberg for following what my old boss andy grove used to preach from the valley, only the paranoid survive. he's looking at the future saying, hey, facebook is great but i have to do other stuff to stay head of the game. i'm losing some of my younger followers. what can i do next? and he made a big bet. i applaud that. >> i like it. >> craig, you've been talking about another deal, you've long been an advocate of faster internet service in this country. curious your thoughts on the netflix -- both the netflix deal with comcast over the weekend and maybe the larger comcast/time warner cable deal and what you think it means from both an innovation perspective and competitive perspective. >> i've long been a fan for better internet communication capability, faster bandwidth, et cetera.

when the whole issue of net neutrality came out several years ago about the internet should be free and open to everybody and you shouldn't have faster pipes for some customers, i really couldn't understand that. i came from a business where we sold microprocessors at intel. we sold higher speed microprocessors for more money. i think you ought to be able to sell higher bandwidth for more money. that's really what people are talking about. customer service, netflix wants to get their material downloaded to customers without any cueing, without buffering. realtime delivery. they want to pay a little bit more for that, fine, that's the way capitalism should work. >> all right. craig, i want to thank you very much for being here today. the next time you're around in the new york area, we'd love to have you on set with us here. >> better than getting up at 5:00 in arizona, i guess. >> when you're out here, it's much more easy wakeup.

>> i'd rather be in arizona at 5:00 with you than what we've been experiencing back here for about three months, craig. set the alarm clock. >> it's going to be 80 degrees today, gentle wind, the palm trees are blowing gently. >> boo-hoo. go back to bed. >> i intend to. >> you do? >> coming up, thanks. coming up, investing ideas in the real estate market. we speak to guest host tom barrack. and later, the next time you are picking up a giant barrel of pickles at costco, you might want to shop for a car. phil lebeau has that story in just a bit.

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welcome back to "squawk box." let's get back to our guest host, tom barrack. today is jpmorgan's investor day. we heard they're going to be slashing jobs by 13,000, 15,000 in the mortgage business. what does that mean to the

larger housing world? does that signal anything to you. >> i don't think it's relevant to new housing. number one, jamie dimon has to be one of the best executives in the world to handle everything that he handles and all the problems that he's dealt with, mostly came from bear stearns and washington mutual which was dumped on him by the government. in housing, the first wave of refinancing was low-hanging fruit. everybody who was trapped with a loan value that exceeded market value, when it dropped, they were in the money again. the first three years of housing loans going to the residential mortgage backed security market was mostly refinance. we have 1.5 million new households being formed every year. we're undercapacity with housing in every level. we're in single family rental housing. >> right. >> people look at home builders and i've never understood it, right, they trade at two times

book. why? because of the value of the real estate they have on their books, not the manufacturing process and deferred taxes. >> you're in single family home rentals? >> yes. >> that's something you got in the past five years. >> we started about 3 1/2 years ago at the bottom. >> black stone has done this as well as others? >> yes, four big operations are trying to turn this into an asset class, in the a flip. >> are you still putting money into that, though? there have been questions i've seen in the last few weeks about whether investors are pulling back and whether that's part of the reason we've seen the slowdown. we've seen a slowdown beyond states that have been hit by weather. >> yes, everybody has slowed down because they're proving up the numbers. you're all too young to remember what happened. it's exactly the same thing. nobody believed that multifamily was an asset class. it was buying a bunch of syndicated real estate sponsors and thinking it was real estate

value. so we all bought it at 50 cents on the dollar. what happened is that income stream, once you start proving up rental rates and occupancy, which is happening in the single family business, everybody stopped buying prolifically because the reits were formed, wayne hughes, when he performed a public reit, there are two others, waypoint, which is a great company. everybody said we have to prove up to the market and get to occupancy and create reits. >> you stopped buying more new houses. >> stopped prolifically buying now surgically. >> rates have come up up by better than 10%, 12%. does that mean we need to sit for a while and watch -- can those higher prices be maintained in the big investors are the guys who are pulling back? can the individual buyers themselves prop that up? or are we going to see a pullback in housing prices.

>> the problem in secondary housing is prices. you cannot get readily available financing if you want to buy 10 houses or 15 houses with be that financing isn't available. >> is your view, do you have any anxiety that you're ending up propping up the market? meaning that these four big firms are keeping the market artificially high and if you dropped out, there wouldn't be enough buyers to pick up the pieces? >> it's ridiculous, right? you have 100 million housing units. if you look at all of us put together, take all the big guys put together, maybe you have 100,000 houses. >> are you all in the same market or different markets? >> mostly in the same. you take coast in the south. if you look at the pool, right, you had 6 million foreclosed and 6 million defaults. let's say you have 14 million defunct housing. 14 million. you already had moms and pops owning thousands and thousands

of these recycled houses. all these four groups have done is propped up the market say there's a business, renovate neighborhoods and areas, give people an alternative. >> maybe things even off for a while, at least in the markets where you are headed. >> i think the opposite. >> really? >> yes. if you look at what's happened, the way to look at housing is what is the price, the future delivery of land? the manufacturing process of a house is simple. it's a 5% margin business, which is nothing. when companies get value because they have big land inventories. the price of land has tripled in front of you. every municipality is broke. they can't put in streets, gutters, roads. how do you do it? developers. when they deliver that lot it's going to be twice as much. >> costco is looking to put some of its 45 million members behind the wheel of a new or preowned car. phil lebeau will have that story. up next, jim cramer johns us

from the new york stock exchange. we'll talk stock stories and also about harold. we'll be right back. lemme just get this out of here. to go. unlike some places, we don't just change your oil. our oil offer comes with a four-tire rotation and a 27-point inspection. and everything looked great. actually, could you leave those in? sure. want me to run him through the car wash for you, too? no, no, i can't. and right now get acdelco professional durastop brake pads installed for only $99.95 or less per axle. chevy certified service.

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let's get down to the new york stock exchange. it is been three hours, jim, i

look at "usa today," harold ramus and "the washington post" immediately brought up i like to drink to world peace. you are talking groundhog day, animal house, stripes, caddyshack. we had to mention him. >> you had to, theems are the movies, how many times have we watched the movies and throw hem in tonight, you'll watch them again. how many lines do people know from "caddyshack" and "wall street "when i look at the body of work of this guy this is what i've been laughing at for 30 years. >> he might have been on our list, jim, do you know what i mean? should have been on the 200 anyway now that we -- he had to die for us to really think about -- really think about in retrospect huge influence, huge influence on us. >> every one of those movie -- >> "cousin eddie." >> this is like carson, he was carson. >> "cousin eddie" i want to get

you something real nice, clark, the white shoes that he gets. and i got a plate in my head, you know, when he's on the -- anyway, let's talk stocks. we got through 1850 on the s&p and we obviously had a horrible disea disease, ramis, and sympathies to his family. we'll get through it eventually and new highs for 2014. >> i think we're fine. there's a little bit too much heat of in some of these nasdaq stocks. but the idea that you have a long-term housing play, that's good, not bad. i thought the interview that you guys did with the macy's analyst. it's very rare i've seen a stock u-turn but the last ten days, the idea of the gross margins, these are good things, not bad. i don't want to see too much overheated. tasla is up on a morgan stanley piece. netflix, let's say they paid double to fios, we going to take

the stock up another 10%. there are some issues i have with overheating but it's not in housing or banking or most of tech. i think we're okay. not great. not bad. >> jimbo, we got to run. >> he thinks we ought to put trump on the list for building brands. >> building brands and -- >> and the landscape in new york city. think about the west side highway and all those buildings. >> hear more about it in a minute. we should tell you that today on "squawk on the street" robert shiller will be breaking down the case-shiller index. and gene sperling will be dropping by that show so you don't want to miss that. we're back in a moment. joe, i know you like to visit costco for your daily purchase of toilet paper. 1,200 sheets, i'm not going to ask any questions, but did you know that costco has a booming business when it comes to selling new cars that story next on "squawk box." we route your order to up to 75 market centers

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welcome back to "squawk box," i'm phil lebeau live outside a costco in carlsbad, california, why am i here? because costco is part of a growing trend in the auto

industry where consumers are buying new cars and trucks through a third party like costco and in the process saving time and money. look at the sales of automobiles through costco over the last seven years and see how much they've grown. they'll be up 10% this year to more than 375,000 that's the estimate. one of those examples is a customer buying a vehicle through costco she bought her new volkswagen passat tdi, saw what she wanted and they contacted a local vw dealer and for her it was a matter of saving time. >> yes, i saved so much time. in the past i would hop from dealership to dealership taking several weekends, you know, combing the lots, you know, trying to get a deal, trying to bargain but this was so much easier. >> reporter: 22% of the vehicles sold through costco are luxury models, that's a much higher percentage than overall percentage of vehicle sales for the industry here in the united states. costco estimates that buyers pay

about $1,000 less going through them and working with a selected dealer in a particular area than they would if they were driving around to different dealers trying to work out their own deal. >> that's obviously what most people are trying to do is save time and save money because time is money. >> reporter: and ultimately it's all about convenience. we're seeing more and more of this, becky, where people are going to costco and they're saying this is the model i want. this is the price that i'm looking for. costco doesn't negotiate that price but they will put them in touch with a dealer and the dealers we talked with say they like the program and they have done the research in advance and again we are seeing more and more of this in the auto industry where people don't want to go to the dealers negotiate, they want everything set up ahead of time. >> phil, thank you very much. phil lebeau, thank you to tom barrack for being with us.

can you make a quick point for donald trump? >> there's no one who has transformed the skyline of new york from the very beginning or really defined reality tv and created a clean brand all over the world. anywhere you go in the world when you say trump, you know what it is. >> thank you very, very much. right now it's time for "squawk on the street." ♪ good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. got a report card on the housing market, case-shiller index at the bottom of your screen we'll talk about them with robert schiller in a few moments. a bunch of pots boiling, home deem poe earnings, macy's big analyst move on tesla. take a look at futures, ten yearsad