>> good morning everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. kevin o'leary will be our guest host today and ceo of first data frank bisignano and 8:00 a.m. paul ryan will be our special guest and a big morning for data and erarnings. economists expect about 401,000 homes were sold in the month down about 3% from december and more names from the retail sector are checking into earnings central in the next hour we'll hear from target and hopefully be getting more details on the data breach back in december. many analysts say the company could eliminate its $4 billion share buyback plan. 8:30 eastern hearing from abercrombie & fitch and see how the weather impacted its latest sales quarter from last quarter, we know this has been a big issue for a lot of the retailers.

we'll be hearing from tjx companies and after the closing bell jcpenney will be reporting its numbers. it's been a stock to watch for the past year down near $5 a share as of yesterday's close. let's get to andrew with some of today's top corporate stories. >> hey becky. the big one bank of america saying that federal investigators are looking into whether the bank violated certain requirements of a government housing program. the probe centers around compliance with the rules of the federal housing administration's direct endorsement program this coming according to a 10k filing by the banking giant. also this morning, credit suisse under a lot of pressure in europe, it already is under pressure in europe this morning but going to come under pressure more so today because a senate subcommittee is now alleging new misdeeds by the swiss bank and accuse the justice department of dragging its feet. the doj probing 14 swiss banks after admitting to helping u.s. taxpayers hide money from the irs. the panel is chaired by senator

carl levin. you know when he gets going what can happen saying credit suisse held more than 22,000 accounts for u.s. customers with assets aparentally valued between $10 billion and $12 aboutle. the majority of the accounts weren't reported for tax purposes to the irs. and the fed wants more information from troubled bitcoin exchange mt. gox, the "wall street journal" saying mt. gox received a subpoena from federal prosecutors in new york last month to preserve certain documents once the world's biggest bitcoin exchange mt. dpox has gone offline. the business is at a turning point, there's a lot of worry the entire business may be bankrupt and gone forever. the controversy surrounding mt. gox putting a lot of pressure on bitcoin prices, $597.75 is where things are trading now. that was a stock, almost like a stock, it's not a real currency sorry to say, joe. >> now you tell us.

>> now. >> now you tell us. >> i am not a bitcoin fan. i believe electronic currency of some sort may flourish in some way. i don't know if bitcoin is the way. >> i thought you were a bitcoin advocate. if now your' saying -- >> i'm fascinated by the conversation around bitcoin. >> you know i'm needling you because you have talked about it a lot. i hope no one mistook what you were saying for like an endorsement. >> my enthusiasm fort deba the . >> in hindsight that's a good way to characterize your coverage of bitcoin. yesterday, andrew, the mt. gox, which unfortunately rimes with "squawk box," i hope no one, there's no confusion. >> i understand. >> it was down to like 100 bucks on mt. gox and it only was down 1% the currency itself. >> that's what andrew was pointing out look at the trade between the two. if you looked at the spread between. >> they lost $400 million.

it's in the couch, between the cushions of the couch. >> somebody else pointed out later mf global, the clients supposedly got their money back. i don't know if that will happen with mt. gox. >> andrew you're supposed to say now it's the ecosystem, it's a developing thing, bad actors need to be weeded out and it's early on, growing pains and some things are going to -- it's the early days of this. that's how you're supposed to -- >> you've heard this before. >> scary. it's really scary and i'm glad -- i don't -- do we definitely know it's not madoff? >> they don't even know who designed it. that's the whole point. who developed and designed this. >> andrew who do you go to if you lose, is it backed by the full faith and credit of? >> if you lose your bitcoin? >> yes. >> i call up joe kernen. >> that's the point. >> there's nobody to call. >> i call the guy at the "new york times" who has written the

comments. are you backing this? >> i wrote a column in "the times." >> i didn't read it. i should. >> the column was critical. >> very critical of bitcoin at the time. >> when i looked for your column in the "new york times" i end up going past the editorial page and i get bogged down there and i get so frustrated that i can't make it to the business side. let's do lowe's. i think lowe's is below, be-lowe's. 29 cents versus expectations of 31 cents. something with the crazy macy's report yesterday if we need to back something out it would be different with you for next year they're saying they backed 2.60 and the estimate is 2.64, buying back $5 billion worth of stock it says >> what was the estimate? machine is not up. >> total sales up 5% and announcing a $5 billion share repurchase plan, 11.7 billion is above estimates for revenues so

it's supposed to be 11.64. >> two cents you need to add back in. >> same-store sales up 4% so a two-cent charge so that would be in line with expectations. >> asset impairments reduced, it's $32 million which works out to two cents. >> all right. you know, they told me lowe's is coming, lowe's is coming. okay. but it's not like, we'll mention it. >> extreme winter weather arrives late in the quarter our distribution network responded quickly and efficiently to move product where it was most needed. >> this is the home depot situation. maybe it makes a lot of sense. >> you have shovels and the rock ice and the winter ice melt stuff and snow blowers, those are the type of things that sell well. >> let's look at some other stocks that we'll be watching this morning. anheuser-busch inbev earned $1.46 a share for fourth quarter beating estimates of $1.32 and the company expected brazil and mexico beer markets to return to

growth this year because of improved economies as well as the world cup tournament and all the free advertising that anheuser-busch has got because facebook bought what's app, and we played that commercial like a thousand times which hasn't been played in a while. >> what's app! >> yes. i actually went back and showed -- >> kids the commercials? >> yes, because they wondered why we were talking about the what's app what it does and they go what's wrong with you? >> what's app! >> they don't understand the commercial either. i still don't understand the commercial, but there's something about doing it on the phone to your friends that's still funny. >> what's app! >> what's app! >> that's what i would say if i got $19 billion, say it over and over and over again. >> for $19 billion. tre dreamworks animation reported fourth quarter profits up 20 cents a share missing estimates by 12 cents despite a drop in

expenses for the movie studio and that's not going to be a pretty thing to watch today, down three points or 9%. aeropostale is raising capital through a stakes sale at private equity firms and weighing the sale of convertible debt or preferred stock and that's fallen on some rough times recently. >> we get over to barcelona, because the mobile world congress is going strong over there, and jon fortt is there with some highlights. mr. fortt? >> reporter: hey. yes, we're expecting ibm's c ceo ginni roamtti today. overall it will be a big data day. we had john chambers here, joe tucci from emc, lots of the big tech players from the data center behind the scenes trying to make their pitches, to carriers and to others about

exactly what they have to offer in the mobile economy. i expect the ibm keynote to deliver much of the same. i was talking to citrix's general manager of cloud about what some of the opportunities are here. take a listen to what he had to say. >> big data analyzing mining that and figuring out how to monetize that, is really top of the agenda for most telcos these days and in particular the mobile network operators. >> reporter: and particular the mobile network operators in emerging markets and the average revenue that they get per user is down in the single digits because people don't have that much money to spend these days that's being crunched by sms revenue getting taken away by what's app, as you were just talking about, so these big data players want to sell their services to those carriers enticing them if you invest in this you'll get more money out of your customers down the line. we'll see if that works out and

i will be covering roamtti's keynote this afternoon around noontime. tune in, guys. back to you. >> jon, thank you. in the meantime we were talking about lowe's out with fourth quarter results. looks like the company came in, in line with expectations with an adjusted number of 31 cents a share. calling in on the newsline is brian nagel with oppenheimer and company. is there anything that jumps out to you? >> i think the thing that jumps out and i've said it a lot on your show is that when the market looks at lowe's, they always look at lowe's relative to home depot so they did a 3.9% comp. here in the fourth quarter, that was only one percentage point less than what home depot did yesterday, that's the narrowest spread we've seen in quite some time. that's going to be a positive is the markets review in the lowe's results. >> that's going to be a positive, still below what home depot was. if you had to buy one stock what would it be?

>> home depot is the better positioned chain. time and again with weather home depot is a more nimble company and better position to capitalize and stay upon the improving housing environment in the u.s. >> as you pointed out closing the sales gap, if you had two stocks to buy you'd buy both of them? >> i think by the way i position it, both companies are in the right position to benefit from housi housing. home depot is better positioned. >> gross margin 44.6%, is that a number in line with what you were the examining in. >> that's a good number just like with home depot, a lot of disruption with the weather but in both cases the gross margins held up well despite what could have been a negative makeshift in margin products. >> the at the end of the day you look at the weather situation, this is a company that probably helped out by the weather because they were able to respond quickly? >> probably. the way i think about it, it was probably some weather benefit, a lot of snow removal type

products but the real key is going to be as temperatures warm, as the spring finally comes there will be a lot of pent of demand and repair spending at lowe's and home depot and that will be positive for the first quarter results. >> thank you for calling in. take a look at the futures right now, if you were watching yesterday you did see the markets sell off slightly. this morning there are some positive signs, the dow futures are up by about 57 points above fair value, the s&p futures up by just over 7. major averages pushing back and forth in different directions choppy trading. the s&p 500 and the nasdaq alternated between gains and losses over each of the last six sessions. the s&p 500 was short of a record straight close yesterday. look at crude prices first up 37 cents, crude oil prices well above $100 at $102.19. next up let's look at the ten-year note which is yielding

2.719%. the dollar this morning at least at this point looks like it is up against the euro, 1.3737, also upper ha er havthe dollar/ higher. >> it was unchanged whatever it was. >> it was unchanged. if you're looking at gold prices, gold prices yesterday were up for about the 12th time out of the last 14 sessions. settled yesterday at a four-month high and down just slightly by about $2.60, $1,340.10 an ounce. >> you want to talk about pot? >> you know -- >> i think the kids call it weed, that's what i read the other day. >> okay. goes by a lot of different names. >> it is time for some marijuana in america, only 6:13 in the morning. southern colorado county with two recreational marria aal mar stores has become the first in the state to announce tax totals from the new industry. the finance authorities

announced monday its two shops had about $1 million in total sales in january, producing about $56,000 in local sales tax. we're going to talk more with harry smith later this morning. >> why, is he a big pot smoker? >> he is not. he is cnbc's new documentary, done it for us, thrilled to have him on board. "marijuana in america: colorado pot rush" which airs tonight, everybody, and you can watch that at 10:00 p.m. eastern time. coming up, we will talk about maybe some more pot, i don't know, but the business community putting pressure on arizona's governor to veto a controversial bill. we'll jump on that hot topic next. plus back to him opimco's b gross, firing back on yesterday's "wall street journal" article. back in a moment. >> businesses continued to get better and i think it will continue to get better.

...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.

welcome back everybody. time for the "executive edge." a big story buzzing across the country, apple, delta and marriott are putting pressure on arizona's governor to veto a controversial bill that would allow businesses to deny services to customers citing religious beliefs. this bill sparked a national

debate over religious and gay rights and how they're clashing up against each other. senator john mccain the former presidential candidate mitt romney and the nfl are call on governor jan brewer to veto the legislation which would allow a company or a business to deny a customer service because they are gay because they say it would conflict with their religious beliefs. some people say religious beliefs, the other side says hold on a second you can't put up a sign that says we don't serve your kind. >> where is this state? it's one of the 57 states, is it really in the united states? >> there are even republican state senators who have backed in bill who are now saying wait a second we take it back. >> of course. >> you know where i stand. >> gee, andrew, it's nice to know, this a tough one. how'd you come down on that side? atta-boy. you think it might be wrong. no kidding! what possible merit does -- who

introduced this thing? seriously, are we back in is it 1960? are we saying here is your counter at a restaurant versus for gay -- seriously?! >> the thing that's so crazy about it. >> no, it's staggering. >> the idiots denying customers in the if, place. >> you can do whatever you want with your religion. you don't want to marry a man don't marry a man but don't put your hangups, whatever it is you have, you can't put it on other people. even jan brewer there's no way she'll not veto this thing. >> is certainly looks like she'll veto it. >> i want to see the guys that wrote this bill. where are they from? where have they been hiding? >> hold on. i would not paint an entire party with the same brush at all because it's totally, they're totally separate. >> where are you going with this now? >> you know where i'm going with

it. >> with the only people happy about the mixed race commercial were republicans? >> no. >> if you look at the party plank the same points you pointed out to eric cantor, wait a second, why don't you recognize same-sex marriage. >> the far right, they're trying to just like obama cobbled together a coalition of different interests the far right is afraid to go against the deeply religious whatever. >> and democrats were in the same position until the president came out and said that he had changed his mind about it. this is a recent -- >> biden did it first. our buddy joe did it first. >> that has been a recent movement. >> that was for gay marriage. no, no, that of for marriage equality, not for serving someone in a restaurant. >> exactly but that's just it. they are behind with it. the politicians in general are behind with this because -- >> the public opinion has to come first. >> changed so rapidly. >> i'm just glad that you are,

glad that you don't think it's right to deny someone service because of their -- >> thank you. >> that's good. how long were you think being that one? >> i didn't have to think that long. . the other big talker, pimco's bill gross firing back at the "wall street journal" article yesterday on the showdown with former ceo mow head el erian. he called in to "street signs" to defend himself. >> a month or two months before he resigned he told the executive committee he thought it was a good plan, an excellent plan but he wasn't the man to carry it forward. so all of this discourse about from my standpoint conflict between mohammed and myself is overblown. >> gross also said it was unfair to characterize him as a disengaged boss. it may not be the disengaged part but maybe some of the things about autocracy that really were the things that were floating around the most yesterday. >> i'm a huge fan of bill gross.

it's almost impossible to believe there wasn't a conflict or even an overblown conflict with mohammed, simply because if there wasn't such a big conflict he would still probably be working there. it's very possible he could endorse a strategy or suggest i'm okay with that or that's but i don't want to run it because i don't want to work with you. >> the two quotes and i assume you don't make up -- maybe i guess some people could make up quotes but when the one where it said hey, pal, i've got 41 years of stellar results, what do you have, that one got me and another one in there that said i would put all 2 trillion, let myself run all 2 trillion because i'm secretariat and i'm the best horse to bet on. both of those, he has been great and worth $1 billion but absolute power and $1 billion corrupts absolutely i think and he'd be tough to work for although for $100 million a

year, i might be able to listen to some of his flack. >> are you available? >> no, i like where they are in fashion island in newport. >> you don't want to put your hand -- >> the average person was making, senior guys making 20 million but putting up with that stuff, you see the one guy didn't stand up. >> a client came in. >> some big client was in. >> and then they told him he had to give $10,000 to a charity. that guy defended the action. >> he said bill demands the best of people. i know bill as just an acquaintance and like you said i always liked him and i respect him. he was a vietnam vet and everything else, but i think he'd be hard to work for probably but it is good sometimes. >> a lot of major business leaders might be difficult to work for. >> mohammed is not a shrinking violet and when you read about that one interchange and mohammed is probably like i don't need this, at some point.

>> this was happening when the fund was losing more money, it lost $41 billion, people pull out. it's a difficult time trying to defend yourself things that might be okay in the past, you can see clashes in high stress situations. >> the biggest exodus ever of any fund. >> still the largest bond fund in the world even after the exodus. so yes. okay. anyway when we come back we'll talk more about the crisis in the ukraine, former president victorian coovic's palace open to the public. michelle caruso-cabrera showed us some yesterday. the treasury is on the lookout for suspicious transfers by theouted leader. kevin o'leary will be our guest host at 7:00 a.m. eastern time. find out why he is not pressing the "like" button on the what's app deal. as we head to a break look at yesterday's winners and losers.

>> i am familiar with the fact you are going to ignore this particular problem until it swims up and bites you on the -- save you fifteen percent or more on car insurance.ould yep, everybody knows that. well, did you know the ancient pyramids were actually a mistake?

uh-oh. geico. fifteen minutes could save you fifteen percent or more on car insurance. are we still on for tomorrow? tomorrow. tomorrow is full of promise. we can come back tomorrrow. and we promise to keep it that way. csx. how tomorrow moves. what a day. can't wait til tomorrow.

ameriprise asked people a simple question: in retirement, will you outlive your money? uhhh. no, that can't happen. that's the thing, you don't know how long it has to last. everyone has retirement questions. so ameriprise created the exclusive.. confident retirement approach. now you and your ameripise advisor can get the real answers you need. well, knowing gives you confidence. start building your confident retirement today.

to manage your money.r guy around 2 percent that's not much, you think except it's 2 percent every year. go to e*trade and find out how much our advice and guidance costs. spoiler alert. it's low. it's guidance on your terms not ours. e*trade. less for us, more for you. good morning and welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. in the headlines home improvement retailer lowe's earned 31 cents a share, that was in line with expectations,

same-store sales rose 3.9% and, and the company, and the company added $5 billion to its stock repurchase program. oppenheimer analyst brian nagel told us lowe's appears to be making progress in closing the sales gap with rival home depot. four credit suisse executive also testify before a senate panel as the lawmakers investigate the issue of tax dodging through swiss bank accounts. the panel issued a study saying credit suisse opened accounts for more than 22,000 u.s. customers with assets as much as $12 billion. get your seven-second delay because carl levin is running that. >> he did something the last time there was something around where he came down with a reasonable position. i can't remember what it was. and i just remember i was surprised. >> i remember you talking about it. >> because he said something that was not that -- >> backed something that you were in favor of. >> i was in shock. he was reasonable about

something. he said some of his colleagues the true looney left were actually in an intractable position. >> you know today he's taking these people to task. this is going to be some form of theater. >> yes, he likes that. >> and i'm not sure the banks did the right thing. >> exactly. you start out on the wrong side of things. it's been a while since we've been worried about bankers, right? >> yes and swiss bankers. >> you need to keep up and watch them obviously. swiss bankers though, where are you going to go? your bitcoin is screwed. where are you going to hide this money? >> there's that island i told you, not in the caymans, a new island. >> just that you know about this. >> because i read. >> the things that stick with you are just i think telling. anyway, delta is the latest airline to revamp its frequent flyer program. delta sky miles program will

give out points based on the price of a ticket rather than the number of miles flown. i see. the change will be effective next january 15th. delta says the revamp will make it easier to earn free seats and that it rewards frequent business travelers as well as leisure customers who purchase premium fares. if we need a virtual currency this should be the virtual instead of bitcoin. no one knew how valuable sky miles were. >> they can do anything they want with them, take them away at any point. >> that's the problem but the value of those has done nothing but go up. >> can't use them certain days. >> i switched credit cards. >> the value of your miles has gone down. >> but from when they first introduced who needs those. it became something near and dear. >> i use them all the time. >> didn't you get the new credit card for you nighted? >> i don't. >> you didn't? that's where i put all mine on. >> it's hard to get on to use the miles.

that's the problem. >> i've always been frustrated by it. >> but the good part about this -- >> can't you use updagrades? >> it's challenging to use miles. >> i get frustrated. >> finally the airline's actually going to give you the miles based on how much you pay which makes sense because people would go on a coach flight the cheapest human price trying to go from new york to japan, get a million miles and the guy -- >> not actually a million miles to japan. didn't someone tell you? >> no. how many miles? >> how far is it? >> we have a frequent flyer. how many miles do you think it is? >> 7,000? >> 6,000, 7,000 and if you arrive the front of the bus they give you double miles. >> and caesar never lived in caesar's palace. >> hold on the one in vegas he had nothing to do with that? >> let a's go, we have to go to our international --

>> i'm learning. >> michelle caruso-cabrera, the ukraine's central bank is trying to keep the country from going off the financial tracks. michelle is there in kiev. >> reporter: hey there, becky. we have confirmation from an executive from the central bank of ukraine thathas been a change in policy here. they have abandoned peg of the hirivnia to the dollar and you'll see one month that's what's been happening over the last several days for a long time they managed a peg of eight hryvnia to the dollar. today it's at ten. what we didn't know for the last several days as we saw it weaken was this a thought out policy response they were doing on purpose or was this the result of the chaos going on because of the change in government, the ousting of the previous central bank head, et cetera, et cetera. today we have confirmation from

sergei krulich, director of international affairs at the central bank. i started by asking him why is the currency weakening. >> because first crisis, second panic of the people, third we agreed policy of the flexible exchange rate, so it should be flexible, and it will be balanced somewhere when the market will establish it. >> so that's different, you were trying to hold to eight up until last week, right, now it's closer to ten. >> so we changed our policy. so we transfer from the fixed so-called manageable exchange rate to the flexible exchange rate. >> so it's not the most traditional way to announce a policy change but that's exactly what he said. let me be clear he's not the head of the central bank and also not a governor of the central bank. we're trying to reach those folks and reconfirm the situation.

you can see it from the chart. it was getting tough to defend the currency anyways. the way you defended currency, people bring their hryvnia and say we want the euro or the dollar. you defend it and say we'll buy that from you and give you dollars and euros but the problem was they burned through more than $2.5 billion worth of foreign exchange in the last month and they're down to $15 billion. that's really not enough, less than two months' worth of paying for exports. they have to pay for natural gas from russia, et cetera, so they had to start making choices so in some ways they'll be pushed into this regardless, additionally if they're going to get money from the imf, this is going to be one of the preconditions, the imf wants their currency eventually to float and think the currency is too strong for this economy. as a result of what we're seeing, the interest rates are starting to rise because people are getting nervous they'll be able to pay back their debt. it gets harder to pay back dlor

den dollar denominated debt. lady and gents back to you. >> thank you, michelle. we'll see you again in the next hour. we have a diplomatic expert here to shed more light on what's going on over there, the widespread global social unrest going on with us. now bob hormatz, vice chairman of kissinger associates and former vice chairman at goldman sachs and do we say most importantly, state department undersecretary for economic growth, energy and the environment. is that -- >> that's about right. >> the beginning of the conversation about to happen. play out the situation in the ukraine for a moment. >> well the situation they have a governance crisis and they are going to have an economic crisis if these withdrawals continue. they have about $18 billion in reserves, $27 billion, $28 billion in debt. they owe the imf about $3.7

billion, they owe creditors over the course of the next 12 months or so maybe $1.72 billion, in interest, and then there's always the rollover question, people really lost a lot of confidence in their economies. >> but handicap it for us. what is going to happen? what is the role that russia is going to play? where is the -- how does this all end? >> it's very hard to figure out. there's no way of knowing how it's going to end. they've had a lot more violence than they ever anticipated for the russians or the ukrainians themselves, these revolutions in eastern europe really haven't been deadly. now a lot of people have been killed and there's a risk there will be more. i suspect what's going to happen is that the russians and the europeans and the americans are going to try to get together and figure out some way of stabilizing it politically. >> we're going to get together with the russians in truth? >> i think we're going to have to, because there are so many contending parties there and the russians have an interest, they have 17% of the population of the country is russian, and a lot more are russo philes and

some in the west pro-european. >> does that suggest a split of the country? >> i don't think the russians want to bring troops in or split the country either but my worry is they have to find some consensus. ukrainians have to do it but other countries can be helpful. economically they have a big problem. they're a big exporter of grain and other things including aerospace industries but the economy is just deteriorating badly and what's going to happen is they're not going to get money from the imf unless they allow the currency to fluctuate and take off the energy subsidies. the big $15 billion thing they want from the fund or money from the u.s. or money is not happening. >> what should we advise the government? you might be secretly advising the government? >> i'm not advising, ours or theirs. the ukrainians have to figure out a solution among themselves. foreigners are not able to do it. they can exacerbate or help the

problem. >> we have to split the costs of this. the cold war is over. right? we deal with russia, with them on different situations. they don't have to, it doesn't have to be a satellite state of russia for putin. they need to deal with the west and the east. >> absolutely that's the only answer. >> we should be able to do that. >> politically and economically. i totally agree with that. >> same with the lunch counters deciding. >> after blood shed it's time to get two sides to come together to find a compromise. >> russia is not going to prop up the guy with the mansion and the golf course. >> they don't want to either. >> and the eu shouldn't have to come one $50 billion. >> first of all no one's going to come up with it. >> they're going to need help from both sides. >> but the fact is, unless they get their economic policies in order, that money is just going to be frittered away. >> they need a new currency

name, there are too many consonants in that thing. >> take on the bitcoin. someone needs to back that up. >> the hryvnia. >> no one there is going to run for office. >> too many consonants. >> saying they're going to do austerity, they're going to cut back on energy subsidies. >> not going to be popular and very painful. if you want the money it will be very painful. >> what you may have to do to improve political stability, get a few leaders in there who can govern, will probably work against the kind of economic solutions because the people who want to become political leaders are not going to advocate eliminating or reducing energy subsidies or having the currency deteriorate which it has to do to become more competitive. >> we haven't talked about venezuela, a brewing situation for quite a while. how bad are things there? >> it's very hard to say. they're certainly not getting any better. the government has really

undertaken some ludicrous economic policies and the energy sector accounts for 95% of budget revenues in the country, they neglected the energy sector, it's going very badly. there's some russian and chinese companies that are still in there but a lot of companies, petro vietnam is leaving, one of the big russian companies is leaving, gas prom is pulling out, not gasprom but lukoil is pulling out, gasprom is still there. number of other companies from eastern europe and china that are part of it but even they are beginning to feel uncomfortable because of the policy environment, they have currency controls, they have a lot of other things. so they're going to get support from china and from russia, but their energy sector is in such disrepair and the politics are falling apart. >> bob, thank you for coming in this morning. bring henry with you next time. >> maybe he'll come. >> strange bedfellows. you know he was a republican,

right? >> yes, i worked for the republican administration. >> i know you did. >> including nixon, ford and reagan. >> you've steadily moved. >> i'm a pragmatist. i'm a pro-market pragmatist. >> i just read something the president had a chance to consult with kissinger on something and didn't. why would you not talk to henry kissinger about important global issues? >> he's still at 90 the wisest guy i know on foreign policy. >> if you knew everything you wouldn't need to kissinger. >> i suppose if you thought that way you probably wouldn't. >> that was the point. >> thanks, bob. >> thanks for having me. up next it has been 155 years since the california gold rush of 1849 but a couple in northern california has struck it rich. finding some buried treasure. this is for real. the new guy is loaded with protein!

i'll believe it when i -- [ both ] oooooh... [ female announcer ] as you get older, protein is an important part of staying active and strong.

ensure high protein... fifty percent of your daily value of protein. low fat and five grams of sugars. [ major nutrition ] ensure. nutrition in charge! like carpools... polly wants to know if we can pick her up. yeah, we can make room. yeah. [ male announcer ] ...office space. yes, we're loving this communal seating. oh, it's great. yeah. [ male announcer ] the best thing to share? a data plan. ♪ 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. ♪

welcome back everybody. u.s. equity futures this morning are indicated higher after the markets closed down yesterday. the dow futures at this point are up by 61 points above fair value. s&p futures up by.5. a northern california couple out walking their dog on their property stumbled across a modern day buried treasure. $10e million in rare gold coins. nearly all of it of the more than 1,400 coins dated back from 1847 to 1894, in mint condition although the face value of the gold pieces only adds up to

about $27,000. some of them are so rare the coin experts say they could fetch nearly $1 million apiece. >> i think it's a lot more than $10 million. >> you think it's been sitting there since 1894 with the latest -- it's just been sitting there for over 100 years. >> not just the gold. i kept coins in those little things when i was a kid, and you get the ones uncirculated in mint condition and so neat and these are all never been touched or rubbed or smeared. >> i wear gloves. >> i want those. coming up next, ace hardware's business is booming, salt sales up more than 200% this winter. people just wanted salty snacks apparently. talk to the ceo, in cold weather, how much the money is coming from, oh, i see. salt of the road, caused all the potholes making it impossible for me to get to work with the polar vortex and later kevin o'leary accepts in our shark tank. the star of the cnbc prime time

show will join us at the top of the hour, get an entrepreneurial free markets treatise from him. i love him. stay tuned.

predicting the future is a pretty difficult thing to do. but, manufacturing in the united states means advanced technology. we learned that technology allows us to be craft oriented. no one's losing their job. there's no beer robot that has suddenly chased them out. the technology is actually creating new jobs.

siemens designed and built the right tools and resources to get the job done. humans -- even when we cross our "t's" and dot our "i's," we still run into problems. that's why liberty mutual insurance offers accident forgiveness with our auto policies. if you qualify, your rates won't go up due to your first accident. because making mistakes is only human, and so are we. we also offer new car replacement, so if you total your new car, we give you the money for a new one. call liberty mutual insurance at... and ask us all about our auto features, like guaranteed repairs, where if you get into an accident and use one of our certified repair shops, your repairs are guaranteed for life. so call... to talk with an insurance expert about everything that comes standard

with our base auto policy. and if you switch, you could save up to $423. liberty mutual insurance. responsibility. what's your policy? we want to plug the thing in now. >> of course, you want to make sure the trigger switch is not

locked in the on position. >> any idiot knows that, al. >> ace hardware is making a killing this winter. sales of its top 20 winter-related products are up 135% year to date. that's for things like salt and snowblowers and shovels and heaters. plus for the first time, the company outperformed its operating plan last year. so will 2014 be even better? it's been a good start to winter. now, john, i know it's louie s oosthazen. >> not even close, but appreciate the effort. i can't even pronounce it, so don't worry about it. >> you can't even pronounce your name. >> say it for us, john. >> good morning. how should we say it? >> good morning. thanks for having us. john venhuizen. you're welcome to do it however you want. >> and i've prepared some hard-hitting questions for you, too. i want to start off with is ace

still the place for the helpful hardware man? >> that is the toughest question i've had in a long time. let me tell you this. i carry $5 gift cards around in my briefcase because every time i get on a plane with an ace shirt, somebody sings me the song. they fire up the jingle, they get 5 bucks. >> i thought it was so damn original, and now you just said every time -- so he carries things around for shmucks. >> like you. >> no, no. we don't call you shmucks. you're loyalists. >> loyalists. i love hardware stores, by the way. i don't know what any of the stuff does, really, but i see the guys that come in that use the stuff. anyway. how much salt -- 235%, up in terms of salt. is that material to your earnings? it probably is, isn't it, almost? >> you know, it's a fraction of our business, quite frankly. you know, our stores sell about $12 billion to the consumer. so it's a fraction of our business. but in this time of year, it's a really big deal. not so much for the revenue. we're not making a lot of money on salt. it's a commodity, but when

there's a crisis, usually a weather crisis, there's just no one who goes after it harder than the local ace store. these are all locally owned and operated stores. and they live in the same communities and neighborhoods as their customers. being out of stock on salt when it's polar vortex is not acceptable to these guys. so we go after it pretty hard. they're not making a lot of money on salt, but the halo effect of serving their neighbors, which is what they want to do, is a very big deal longer term. >> should we view how well you're doing as a business -- is it akin to a home depot or a lowe's? i imagine there's some competition there with those places, but also, you probably sell stuff that you use with the lumber that you buy at those places, you can use ace hardware to do the job of whatever you're doing, right? >> yeah. you know, listen, those two companies are great companies, and you'll never catch me saying anything bad about them. we could learn a lot about them, but in the consumer's mind, we're very different. home depot and lowe's in the consumer's mind would be a lot about home renovation, major projects, redoing your whole

kitchen, marble countertops. ace is more known for home preservation. paint, lawn and garden, fix, repair, replace. and that's been a very good spot for us to be lately. yeah, we compete. but they're highly respected retailers in our view, and we can learn a lot from them. we're fortunate enough to be about service, convenience and quality. >> you could do better in a bad-weather year with home preservation than with home renovation, i would think. because every one of your winter categories is up. you've more than doubled on every single thing that you do for winter weather, right? >> that's exactly it. listen, as a customer or person that lives in the states, where polar vortex have been hit, i hate it, too, but it has been very good for our business. and again, our stores really do think of their customers not as customers but as neighbors, and it's just not acceptable not to have what they need. so they go after it hard where some of the bigger boxes, just kind of their operational plan, they get out of that stuff a little earlier.

>> the consumer, have you seen it -- have you seen -- has she -- i guess with you, we have to call the consumer a he, sort of. not necessarily. >> yeah. >> maybe more than -- >> if you're going to call the macy's customers -- >> she, but not necessarily. how do you rank the consumer? six or a seven in terms of how they feel? >> this is the way we think about it. very humbly stating this. we just want our seventh j.d. powers award out of seven years for best customer service against all of the home improvement retailers. but yet in that very year we launched a global initiative called helpful 101 which is all about all of us getting back to the basics of serving our neighbors. and that's what we're about. service, convenience and quality. and if we're not winning the hearts and minds of our consumers but out serving competitors, we're falling short, frankly. yeah. the consumer's a pretty big deal. when that's not just somebody you don't know, but the guy you're sitting next to in church, right? >> yep.

you're not acme, but ace is -- in the yellow pages, and don't get rid of that slogan. why would you do that after all these years? it's like got milk is getting rid of got milk. they've got some other thing. i don't know if it's going to work. i think you stick with that slogan. >> we actually do. we relaunched it and we're going to stick with it as long as i've got anything to do with it. >> i'm going to sing that as we go to break. maybe. >> please don't butcher it. >> all right. i won't. send me my gift certificate. ♪ ace is the place ♪ the helpful hardware ♪ send me my gift certificate. >> we both just butchered it. i'll give you 5 bucks not to butcher it. >> thank you, john. when we come back, kevin o'leary gets into the "squawk tank." he's got issues with mark zuckerberg's decision. and the future landscape after comcast a big deal with netflix. more "squawk" after this. hey, kevin. i have low testosterone. there, i said it.

see, i knew testosterone could affect sex drive, but not energy or even my mood. that's when i talked with my doctor. he gave me some blood tests... showed it was low t. that's it. it was a number. [ male announcer ] today, men with low t have androgel 1.62% testosterone gel. the #1 prescribed topical testosterone replacement therapy increases testosterone when used daily. women and children should avoid contact with application sites. discontinue androgel and call your doctor if you see unexpected signs of early puberty in a child, or signs in a woman, which may include changes in body hair or a large increase in acne, possibly due to accidental exposure. men with breast cancer or who have or might have prostate cancer, and women who are or may become pregnant or are breast-feeding, should not use androgel. serious side effects include worsening of an enlarged prostate, possible increased risk of prostate cancer, lower sperm count, swelling of ankles, feet, or body, enlarged or painful breasts, problems breathing during sleep, and blood clots in the legs. tell your doctor about your medical conditions

and medications, especially insulin, corticosteroids, or medicines to decrease blood clotting. in a clinical study, over 80% of treated men had their t levels restored to normal. talk to your doctor about all your symptoms. get the blood tests. change your number. turn it up. androgel 1.62%. get the blood tests. change your number. turn it up. can you start tomorrow? tomorrow we're booked solid. we close on the house tomorrow. tomorrow we go live... it's a day full of promise. and often, that day arrives by train. big day today? even bigger one tomorrow. csx. how tomorrow moves.

welcome to "squawk box." counting down to target's quarterly results. how much did the december breach impact the bottom line? the numbers and the instant reaction are on the way. "shark tank" tuesday leads to "shark tank" wednesday. kevin o'leary gets fired up to guest host. he's seeing what's up with mark zuckerberg and facebook's deal for whatsapp. plus, marijuana in america. the colorado pot rush. harry smith goes inside this industry that is leaps and bounds. "squawk box" begins right now. ♪ rocky mountain way ♪ couldn't get much higher good morning, everybody.

welcome back to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. after yesterday's slight decline, you do see green arrows up. the dow up. s&p futures up by about 7 points. also, in our headlines today, take a look at what's been happening first with the ten-year note. yield at this point is 2.71%. we're also watching for earnings from retailer target today. those numbers are expected in just about 30 minutes. analysts are looking for fourth quarter profit of 79 cents a share, revenue of $21.5 billion. investors also closely on the lookout for any comments about the massive data breach and how much it's costing the company and if customers are coming back. there's going to be confusion here because we know the weather has impacted just about every retailer. so it's going to be hard to try and figure out what was weather related and what was data breach related here, but we will be getting those numbers in just about half an hour. home improvement retailer lowe's already out with its numbers. it matched estimates for the fourth quarter of earnings of 31

cents a share on an adjusted basis. revenue also in line. lowe's added $5 billion in its stock buyback program. you see that stock is up by almost 5%. housing is in focus today with the loan government economic report. the government has the janou home sales report coming out at 10:00 eastern time. it's expected to show a drop of 3.1% to an annual rate of 401,000 units. that comes on top of a 7% drop in december. if you missed "shark tank" tuesday on cnbc last night, fear not. we've got mr. wonderful right here for the next two hours. joining us now is kevin o'leary, chairman of o'leary funds and cohost of "shark tank." he is also author of the new book "cold hard truth on men, women and money."

to me, the entrepreneurial spirit and the way that markets work and the opportunity to start small and end up big, i don't want to lose that in america. and just kudos to making it mainstream because it doesn't seem like it's mainstream. everybody's sitting around saying you can't go -- neathere no mobility and i can't make it and there's no opportunity. and i hate hearing that because it's depressing. and it's not that way. you can still do it. >> the american dream is alive, joe. all over america. there's 24 million small businesses. you capsulate their desires because they want to make it and they work very hard. and obviously, what's gone awry is that the environment that they work in has changed over the last decade. and if you talk to these people, because now i get a chance to speak to them every day. i have investments in every sector in multiple states.

and their message is not heard. it's not heard by politicians. i think last year alone, we hit them with 2,800 new federal regulations. you can imagine that there are many small business owners that actually don't know if they're compliant or not. they have no idea. >> that's before you get into the municipal laws and state laws, too. >> sure. so a business that, you know, one that i'm dealing with in california right now has hired two lawyers, one interimly full time and another externally. just to fill out forms and comply. they're estimating that cost is about $90,000 a year. that's something they didn't have to do ten years ago. now, you can debate the merits of forcing that amount of regulation on top of a business. but it can't help create jobs. so i ask everybody when they talk about what's good for america to simply ask, if we implement that policy, if we put that procedure in place, if we put that regulation in, does that create the incremental job or not? that should be the only test. >> right. kevin, right now, not only are all those regulations in place, but it seems like we're always

getting ready for another election. okay. so now 2014 is coming up. so the wedge issue that president obama and the democrats have decided to drive between the voting population is minimum wage. now, you're talking about these small businesses. what would be better? doubling the number of small businesses that you have right now and how many people they employ, or going up whatever it is, $1 or $2 on the minimum wage, making it harder for some of these businesses to exist. but instead of looking long term at how to make it easier for entrepreneurs to start things and to flourish, this is purely being done, i think, to drive a wedge and to try and help with the 2014 -- these politicians do not do things. >> they're not. let me speak on behalf of small business now because i feel like a conduit to them. if you talk about the minimum wage, let's be pragmatic. it's a populist idea. it gets folks -- >> we know exactly what they're doing.

>> okay. let's take a business that has seven employees currently. a real one right now, a real business. >> an actual business. >> a real business. they want to hire three more people. this is a business i'm dealing with actually in massachusetts. they can't do that until they know with certainty whether they're paying them $10 or $14 an hour. so by just keeping this debate alive, we are actually compressing job growth. we are forcing people -- >> would it make a difference if it was 14? >> first of all, 14's insane. that's a 39% increase that you put on your already existing base of employees, so that changes your business model in perpetuity. then it retards you from the incremental new job. i don't know why people are debating this issue. this is sheer insanity. it's sheer insanity. there is no metric that makes sense in this. >> let me ask you -- and by the way, i don't disagree that the uncertainty this conversation has created is probably preventing businesses from hiring right now. i don't disagree with that. i wonder whether there is a

larger question, though, maybe it's a philosophical one, a moral one, i don't know, about what -- you know, whether it's worth having -- not more people employed, if you believe the 500,000 number the cbo had, or not, but is there some baseline at which you say, you know what? if people are going to work in this day and age, they should be able to work and not be in poverty. whatever that means. i know it's a loaded question. >> no, it's a fair question. let me push back this way. let's say we had never implemented a minimum wage ever. and we started -- we reboot america 2.0 with no minimum wage. do you think a company like apple, which is a phenomenal success by market cap by every measure, which has about 10,000 jobs in america, give or take a few thousand, and 2 million abroad, how many of those 2 million jobs that left america would have stayed here had we let the market decide what the wage should have been to manufacture their product? maybe? >> yeah, but here's the issue.

a lot of those -- at least a portion of those 2 million jobs are workers who are literally working, i don't know, 12, 14, 16 hours, and they're living in these, you know, bunk beds where they go for, you know, six months at a shot to go to these factories. i don't want to make a judgment about that except to suggest there are people -- >> except there are americans at home without a job, with no income which basically comes into your basket where we have to support them through basically a social net. instead of them employed at all. >> yeah, but kevin, there are jobs here that some americans won't take. there are a lot of service sector jobs. >> becky, let the market decide. in other words, if a company wants to move its workers offshore because there's a more competitive opportunity versus what the minimum wage should or never would have been in america, the market would have -- >> jobs left not because of minimum wage. those are jobs that left because they were in union areas where they were paying something like $40 an hour with a lot of benefits. they weren't paying minimum wage. >> you're not willing to

contemplate my definition of the universe without -- >> look, i'm happy to participate in the thought experiment. i agree with you in many respects. i'm just saying we have decided in this country, for better or worse, that there should be a sort of minimum standard of living. i don't know if you -- the question, i guess, is do you agree with that use of it or not? because what we're doing here is different than what, for example, is going on in some of these other countries. >> you're creating a whole army of 18 to 25-year-old people that are unemployed and can't get employed because employers don't want to pay them $14 an hour. maybe they'd be willing to pay them $8 or $7 or $6. i don't know. the market can't tell me because we have this false bottom. we've basically forced employers to say, if you want an incremental employee, you've got to do it at maybe $14. you know the test we should do is simply take a state and remove minimum wage for 12 months and see what happens. why can't we do that? what would be wrong with that? >> you're going to end up on the huffington post today. >> what would be wrong with that?

>> i'm not willing to connect the dots about what would be right. i just know that empathy, i cannot agree to letting you do that. >> i'm telling you -- >> i feel for people. >> because this is not my opinion. >> they don't connect dots. >> i'm voicing for you the thought of thousands of small business owners -- >> good luck. what's your e-mail? what's your twitter address? you got a twitter address? >> yes. >> it's kevino'learytv, and i will defend this thought. >> don't do it. >> i am ready to fight this thing till the cows come home. >> kevin o'leary. >> i don't know why we understand, wow, we saw nixon with wage price controls. we know exactly how it dislocates the market and it doesn't work. but then we make exceptions. here we can do it, and it won't matter. >> we will continue this conversation. coming up after the break, blackrock's chief investment strategist is going to join us. russ will give us his forecast for the bulls right after that break. and then later, we'll be talking about the business of pot. actually family business of pot. you'll meet one family that sits

around the kitchen table rolling doobies together and selling them. doobies, yes. >> in the prompter? >> we're coming back in a moment. a little bit of weed. when you order the works you want everything. an expert ford technician knows your car's health depends on a full, complete checkup. the works. because when it comes to feeling safe behind the wheel, going the distance and saving at the pump you want it all. get our multi-point inspection with a a synthetic blend oil change, tire rotation, brake inspection and more for $29.95 or less.

get a complete vehicle checkup. only at your ford dealer.

welcome back, everybody. we've been watching the futures this morning. and after a down day yesterday, the futures have picked up this morning. the dow futures are up by about 55 points above fair value. s&p futures up by close to 7 points. and the nasdaq is up by just

over 15 points. with three days of trading left in the month, major averages remain on track for solid february gains. joining us with his outlook on the markets, russ costrich who is the global chief investment strategist at blackrock. how do you feel about things now that we've been testing new highs? >> i think the market has recovered on the fact that, you know, a lot of what we had back in january was about emerging markets. thankfully, things have calmed down there. and you've seen enough evidence that the weak economic data we've been dealing with since the start of the year is mostly attributable to weather. that's given investors more confidence that the u.s. economy is not slipping back so much. you just had this very unusual winter. and that's really hurting a lot of economic activity. >> so your thought is if you missed this last opportunity to buy, you're not necessarily going to get another one any time soon? >> well, no, i think the market is going to be volatile this year. and again, not necessarily -- we're not talking 2008 volatility, but i think what's important this year is that we're going back into an environment where monetary policy is not going to repress volatility.

the way it was in 2012 and 2013. >> is it going to create volatility? when you talk about the taper? >> well, i don't know if it's going to create it, but what's happening is you're going back to a more normal environment. you know, seeing the vix at 20 or 21 the way it was back earlier in the month, that's normal. that's the way things typically are. and that's the environment i think we're going back to. >> okay. so russ, you think we're going back to that environment. if we have shaken off concerns about the economy at this point, what is the next thing that causes pressure? is it something internally in the united states? or you think it's external pressures like those emerging markets? >> i think a couple things. emerging markets are one issue. i think there, while it's going to occasionally scare investors, we're not that worried about a transition from emerging markets to developed markets in terms of actual economics. i think the bigger issue is going to be what happens to u.s. rates. if we remain in an environment in which the backup in rates is be benign, which is our assumption, i think that the growth we're going to see this year will help u.s. stocks move higher by the

end of the year. >> how come you think oil prices are so high at this point? this is venezuela, it's what's happening in ukraine, even though they're not oil producers. >> no, i think it's something else. this is a really good point. people focus on the surge in u.s. production. and that's a real story. it's a great story. what gets left out is all of the production that's come offline in the middle east and north africa. you think about places like nigeria, libya, south sudan, these are all large oil producers that have seen hundreds of thousands of barrels of production come off over the last 12 to 18 months. so even though production is surging in north america, this is a global market. and to the extent production comes offline in the middle east and north africa, there's more of a supply/demand balance than people assumed. >> what the heck is going on with natural gas? those prices are down 17% just in two days. >> natural gas obviously has been very weather driven over the last several months. and it's probably going to continue to be weather driven. obviously, the good, longer-term

story is the u.s. is very well supplied with natural gas. so i don't think this is a problem. but the volt tiatility is clear function of weather. >> the volatility on prices for so long has been keeping investors from doing more. i mean, russ, what happens? when do you actually see these prices come back? you've got guys like boone pickens say they've expected higher prices for a while. >> in terms of natural gas? >> yeah. >> i think natural gas is still at a level where it is productive to be cultivating, you know, the various shale formations that we've seen happen over the last five years. so i don't think the pullback is going to hurt production. you think about where nat gas is today versus where it was 18 to 24 months ago, this has still been a very big move to the up side. >> russ, you know, we hit 18 -- i call it 18.50. that was the high in 2013. this entire year we've been below that. on the s&p. maybe, i don't know, it's going

to be march soon. if we don't do it in march, that would be a whole quarter where we're just sort of churning around. we did the 5.8% pullback, and now we're just sort of treading water. but no one's been able to buy anything cheaper. and that just makes me think it might be bullish, not bearish. i think maybe we get through today, becky, because we've been testing 18.50 a couple times, and maybe today is when we go up. so it would help to get above that december 31st high to where you can really start making an advance again. and people have gotten sort of bored with the market again. it only took two months for people to start getting bored with the market again. >> well, that might have been a function of unrealistic expectations. we spoke about this back a month ago. you know, the reality is you had a big move last year. that move was largely driven by multiple expansion. the pe on the s&p 500 last year was up 22%. that was the biggest advance since 1998. the fact that we've had two months where the markets digested those gains and the

worst that's sahappened is a 5% pullback, to me that's not that bad. >> are you working with a bunch of egomaniacs at blackrock? is larry fink -- what's it like there? are you making $100 million a year? which questions do you want to answer? >> it's a little below that, joe. just a bit. >> is it crazy there? are people with whips? >> no. >> no? >> there are no whips. >> yesterday they were at a party. >> i have yet to see a whip in my nine years with the firm. >> your personal life might be a different -- kidding. coming up, target's first quarterly results since the massive security breach. how much did it impact the bottom line? we'll find out at 7:30 a.m. eastern. first, though, michelle is in kiev. have you tried the chicken yet, michelle? >> i had chicken kiev for dinner last night, yes, in fact. and i liked it. it was good. so listen. goldman sachs has very few investments in ukraine, but we found one of them. the ceo of that company up next and the latest from ukraine.

see you after the break. [ intercom ] drivers, to your marks. go! [ male announcer ] it's chaos out there. but the m-class sees in your blind spot... ♪ pulls you back into your lane... ♪ even brakes all by itself. it's almost like it couldn't crash... even if it tried. the 2014 m-class. see your authorized dealer for exceptional offers through mercedes-benz financial services.

mayo? corn dogs? you are so outta here! aah! [ female announcer ] the complete balanced nutrition of great-tasting ensure. 24 vitamins and minerals, antioxidants, and 9 grams of protein. [ bottle ] ensure®. nutrition in charge™. [ bottle ] ensure®. to manage your money.r guy around 2 percent that's not much, you think except it's 2 percent every year. go to e*trade and find out how much our advice and guidance costs. spoiler alert. it's low. it's guidance on your terms not ours. e*trade. less for us, more for you. welcome back. ukraine struggling to build its government. how about rebuilding investor confidence? we're going to go over and see michelle caruso-cabrera who

joins us now from kiev, after talking about her chicken before. joe was asking about the chicken. michelle. >> reporter: hey there, guys. good morning. standing here next to me is thomas fiala, the ceo of dragon capital. first i want to highlight the news we broke last hour, that an executive from the central bank of ukraine has confirmed there's been a change in policy here. take a listen to sergei kruglich. >> so we changed our policy. so we transfer from the fixed so-called manageable exchange rate to the flexible exchange rate. >> reporter: he is the director of international affairs. he's not the central bankhe hea he's not a governor. we have seen the currency weakening. . here with me, good to have you here. >> hello. >> reporter: are you supportive of this move by the central bank to allow the currency to weaken? >> it's been long overdue.

most of our neighbors have done it, and the ukraine currency has remained overvalued despite an account deficit. >> reporter: the debt of the country has been falling, though, as a result, yields have been rising. they're not worried you're not going to be able to reservice it. are you worried about a restructuring? >> we are not worried, but ukraine needs external help for the next year or two. i think with sensible economic policies and with international support from the imf, u.s. and the eu, we can return to the market back within six months, maximum. >> reporter: if you listen to a discussion about ukraine and the united states, it's all about this is the eu or russia, a forced choice, some kind of big monumental decision for ukraine. do you see it so divided, choosing between eu and russia? >> ukrainians would not want to make it look like this. it wants help from all of its neighbors including russia and on the other side, but the majority of the population definitely supports european standards of business, democracy, free market economy.

>> reporter: thanks so much for joining us, mr. fiala. we really appreciate it. tomas fiala, ceo of dragon capital. back to you. >> thank you very much. again, michelle caruso-cabrera. we have been talking around the table about the minimum wage. we've been talking about it since you first joined us, kevin. we've been talking about it off camera a little bit since then. >> no death threats? >> i simply asked a question. does increasing the minimum wage actually help someone get a job in america? and the answer is no. >> the answer is no. the question is, it's the quality of life. do we believe in the minimum wage so that people can get by on a more sustainable way? >> looking at the quality of life -- you're looking for the total -- you're looking for the total quality of life. i don't understand that question. >> i think we're asking the wrong question because you're telling me that the dna of a business in america is to solve social problems, or is it to return capital to shareholders? >> what about henry ford who said he wanted to pay his workers a higher level because he wanted to make people buy

cars. >> and he has the right to do that, and his competitors may have decided that was a good or a bad idea. >> can i suggest to you -- we've got to go, but when we come back, i want to continue this conversation. >> all right. "squawk box" will be back. we're waiting on target's results. stick around. ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry, but you worry. what happens when your paychecks stop?

because everyone has retirement questions. ameriprise created the exclusive confident retirement approach. to get the real answers you need. start building your confident retirement today. coach calls her a team player. she's kind of special. she makes the whole team better. he's the kind of player that puts the puck, horsehide, bullet. right where it needs to be. coach calls it logistics. he's a great passer. dependable. a winning team has to have one. somebody you can count on. somebody like my dad. this is my dad. somebody like my mom. my grandfather. i'm very pround of him. her. them.

welcome back to "squawk box" this morning on cnbc, first in business worldwide. we've got a couple of corporate headlines we're following. the big one, bank of america says that federal investigators are now looking into whether the bank violated certain requirements of a government housing program. the probe centers around compliance with the rules of federal housing administration's direct endorsement program. this according to a 10k filing by the banking giant. i think we've got earnings on target, right? >> we do. let's talk about some of these target numbers that are just coming out. there are a lot of moving pieces here. remember, we've been waiting for this number -- $1.30, but then you've got to look. that is the -- >> we usually use adjusted. >> we usually use adjusted. >> what's the estimate? >> 79 cents is the estimate.

there are a lot of moving pieces in this one. 81 cents is probably where you're going to get at. they beat estimates no matter how you cut it. it probably is an 81 to 79 cent beat. revenue did beat the consensus. there's a lot of information we've been waiting for. and some of this is regarding comments and costs related to the recent data breach we saw back in december. the company talked a little bit about this. it said it shaved 2 cents off the quarter. it said it is not able to estimate expenses related to the brae breach, but target incurred $61 million in total expenses, but they were offset by $44 million in insurance receivable. at this time, they say they can't estimate what the future is going to be. in the release -- >> they're warning on first quarter, i think, 60 to 65 versus estimates of 85. that's probably not good. and they did say results softened meaningfully after news of the breach. but prior to the breach, they were doing better. >> they were doing above

expectations until, i think, december 18th. they told us before that it softened meaningfully. they say in the last few weeks, things have been a little bit better. when you look at the first quarter, it reflects operating results not only in the u.s., also in the canadian segment. i think the key is going to be just how much better they've been doing in recent weeks, whether the consumer has really been coming back in force. and it's going to be hard to figure out if that was weather related -- how much was weather related and how much was data breach related. remember even macy's yesterday said they have been struggling for january and february. they expect that the trend from the consumer will pick back up in the spring, but they've been surprised by the bad weather. >> same-store sales saw 2.5%, but same-store transactions fell 5.5%. but the average amount per transaction rose 3.2%. that's weird. >> say that again? >> same-store sales fell 2.5%, but the transaction, same-store transactions fell 5.5%, but the average amount that people spent

during the transaction rose 3.2%. >> rose. which i would have thought it would have been the opposite. >> some people -- the people that stayed spent more. >> spent more. >> maybe it was people stealing -- people that had their credit cards. >> they also said that red card -- let me see that -- they talked about the red card numbers. and red card was a big part of the question. the fourth quarter penetration was 20.9%. that was actually up 5.4 percentage points from a year ago. analysts have been looking at that because that's a key number for them, too. they say the rate of increase slowed down after the data breach. but year-over-year penetration continued to grow hundreds of basis points throughout the end of the quarter. that was a big question analysts had, about whether people would stick around with the red cards and continue to use them. >> but the u.s. segment ebit down 22.4%. in the fourth quarter in the u.s. segment. >> i do think you'll hear more from the company on their conference call just about how much trends have improved in recent weeks. and you're probably right, it's the guidance. >> the stock's down.

>> down 1.79% at this point, but again, says this is the early read. this is going to take some time to go through the whole thing. we'll see what happens as they talk a little bit later and as people get a chance to really digest this. okay. speaking of data breaches, what an unbelievable segue we have here. speaking of data breaches, the u.s. may be one step closer to credit cards with the security chips in them. first data is announcing a new partnership with visa. and first here on cnbc, have you been here since you left the other firm that will remain nameless? >> who are you? >> one of the greats. >> i wanted you to say the name. >> yes, i've known him for a while. how are you? >> i'm well, thank you. >> have you been on the show? >> i have been on "squawk box." >> tell us about this partnership. >> this is a great partnership. i think it shows the collaboration that we want to work in the industry on. and coming together with visa, alstar network, which is a debit

network, both being durbin compliant, a very good partnership -- >> what does the partnership look like in practice? >> the partnership looks like that both -- that under the durbin amendment, you need to have two networks on a card. and these two networks, the star network and the visa network on the debit card, will be collaborative. we work together. and it allows the client to be able to have an emv, a chip in the p.i.n. >> that's pretty important. >> which is very, very important. >> so every card will have a chip that runs on your -- through this partnership? >> every card, yeah. as the new cards are issued. we did something in july with a company called oberthur. this gets back to us being a grand collaborator. it's an interesting company, one that really has 6.2 million merchants, 700 million-plus

credit cards. we sit at the nexus of all networks and 4,000 financial institutions. so for us, it's very important to be a collaborator. so we did a deal with a company called oberthur, which is the chipmaker. and we are partners with the ability to put the chip on the card to secure it. on the other side, we have, on the pos side -- >> right, for the retailer. >> transarmor, which is a product that will encrypt and secure the data. >> the big question with this, there has been a huge push for the chip cards because of what happened with target and neiman marcus and other retailers over the holidays. the question is when will the retailers actually be ready to use these? because they're the ones that will have to spend the money to put the new point of service -- >> that's one of the things why we become so integral in the process. not only do we have a debit network, but we do have globally 6.2 million merchants at the point of sale. >> can i ask a question as a user? i have credit cards in europe, canada and here in the states.

the europeans and the canadians seem to be well advanced. they all have these p.i.n.s and chips and i have to put a code in every time i use the card. however, when i want to use it stateside, right here in new york for dinner last night, i can't use my european or canadian card anymore. it just goes error. we don't have a system here that reads this. so i'm losing some flexibility, am i not? as an international investor and traveler? >> i think this is a pinnacle move towards changing that. >> but are the retailers going to invest money? restaurants? >> i think they will and we're prepared to invest money as first data enabling them. >> what is the cost for the retailer? >> well, the cost for the retailer is to be able to get their systems -- >> no, so each point of sale? >> how much is it? >> each point of sale machine, if i'm a small business that has to have a cash register that has to accept these new cards, what's it cost me? >> say we have a new point of sale solution called clover. 5,000 of them out in the market. it's a tabletlike product.

and that product will be, say, in the $1,000-plus price range for the merchant. >> why would i pay you as a merchant? why don't you eat it? you're getting a fee off me every time i do a transaction. >> but you as a consumer get to use your card there. >> is it more secure or not? that's the question. >> i think that's a great question. and i think it gets to the heart of security is everyone's responsibility. security is, in our belief, in the system's belief, the responsibility of the merchant, the responsibility of the processor, the responsibility of the issuer, and the responsibility of the network. >> but he's hitting the exact heart of the question. who pays what percentage on it? does the retailer pay 100% of the point of service machine? >> none of my businesses are. you're going to eat it. if you want to come in and

change my pos, you're going to eat it for sure. >> you don't have any money left because of the minimum wage increase. >> i'm just saying a business owner should not have to pay for the system that he is paying a tithe on between 1.5% and 2%. >> the target situation might argue opposite. that they're going to step this up -- >> if i were target with the buying power i have of pos systems, you would be eating it also. >> well, i think you really have to look at what the system brings and why they need it. >> it reduces fraud so the credit card companies' costs go down. the card company is actually extracting the tithe, the financial click charge, should pay. it's that simple. >> what is a pos? >> a point of sale. >> oh, oh. >> point of sale. >> now i know. >> never mind. piece of -- yeah. i know where you're going with this. thank you. >> spend $100 million on card technology. target itself is stepping up. >> why are they doing that? >> because they lost business. they said themselves. >> you're just mad at him.

>> when you say it's $1,000 for this tablet system, is that for a small business that would use that? if i go to target, how much do you think each point of sale system -- >> i think target's point of sale system will be their own point of sale system. right? they will -- they will use their internal system, right? what we will do will be a processor. we can bring technology -- >> but everyone's going to have to swap out whatever their reader is, right? and in the future when i go to a restaurant, instead of handing over the credit card, they're going to come to me with this little thing, and i'm going to do my -- >> you can also -- you also can buy an encryption product, right? so i think at the heart of the discussion, that you have taken a very strong point on, which i appreciate. i appreciate it. i like it. >> i'm a shareholder in all the credit card companies because i love their business model. >> do governments subsidize it or something? how do they -- this is

embarrassing with the way they conduct business over there. >> the credit card companies in the canadian/european market sent their users a chip card. everybody switched over. they said you pay for my pos. and now the cost of fraud is reduced by, like, 80%. so it all came through the system. >> how much does it cost visa, real quick? do you know? >> i don't know. >> per card? >> i don't know. >> for the bank. >> it's not that expensive. >> it's not material. it's not material if it reduces fraud. >> all the card issuance piece will be done by the issuance. that's not passed on to the consumer. >> the card is not expensive. >> thank you. fantastic. come on back. >> thank you. >> we should do this more often. >> shrinkage or leakage? >> theft. >> theft is shrinkage. when we come back, street reaction to target earnings and what was said about the company's security breach. first, the colorado pot rush. nearly 19 million in america used pot in the last month. a new documentary will air tonight on cnbc.

we'll get a preview and talk pot profits when "squawk" comes right back. are you stumped by today's markets? want to hear from a billionaire before you put your money to work? well, here's your chance. monday is ask warren day on "squawk box." send your questions for warren buffett to askwarren@cnbc.com. or tweet them with th the #askwarren. then tune in on monday at 6:00 a.m. eastern. we'll bring you three hours with the oracle of omaha. don't miss it. [ park sounds, sound of spray paint ] ♪ we asked people a question, how much money do you think you'll need when you retire? $500,000. maybe half-million. say a million dollars. [ dan ] then we gave each person a ribbon to show how many years that amount might last.

♪ i was trying to like pull it a little further. you know, i was trying to stretch it a little bit more. [ woman ] got me to 70 years old. i'm going to have to rethink this thing. [ man ] i looked around at everybody else and i was like, "are you kidding me?" [ dan ] it's just human nature to focus on the here and now. so it's hard to imagine how much we'll need for a retirement that could last 30 years or more. so maybe we need to approach things differently, if we want to be ready for a longer retirement. ♪ ♪

[ car alarm chirps ] ♪ [ male announcer ] we don't just certify our pre-owned vehicles. we inspect, analyze, and recondition each one, until it's nothing short of a genuine certified pre-owned mercedes-benz for the next new owner. [ car alarm chirps ] hurry in to the mercedes-benz certified pre-owned sales event. visit today for exceptional offers. ♪

♪ i'm down to see no one is down to see the stems again, i don't think. let's talk pot, two weed shops in pueblo. pueblo. colorado. >> thank you. >> you're welcome. >> thank you. brought it. >> peeblo. brought in about $1 million in total sales just in january. those sales produced about $56,000 in local sales taxes. and nbc news correspondent harry smith just filed a documentary on the pot business. it airs tonight at 10:00 p.m. eastern on cnbc.

harry, we went after you to bring you over to nbc, and suddenly you're doing all these pot -- i mean, was there -- did we go after you just for this beat or something? coincidence, isn't it? i mean, you don't know a lot about this. >> no coincidence whatsoever. this is my power alley. >> this is your sweet spot, more or less, i think. >> listen, we spent five days out there shooting in january, and i've got to say, every single day we went out to shoot, it was an eye-popping experience. just take a look at this. >> reporter: for this part of colorado, is garden city sort of potopia? >> yeah, i guess you could say that. garden city is known for its vices. >> reporter: with 45 workers, rotherham is garden city's largest employer. it's a family enterprise. where mom, dad, aunt judy and uncle elmer all gather to trim bud. welcome to the heartland. ten years ago if somebody had

said you're going to be in the marijuana business, what would you have told them? >> i wouldn't have believed them. it's really surprising to hear your mother say, boy, we have really nice buds today. >> reporter: and now these guys who are on the ground floor of this business feel like they've won the lottery. and i've got to tell you, the guys who have some business acumen, they are making a killing. the old stoners, they're going to be left by the side of the road. >> you've got to be -- you've got to be a businessperson and know what you're doing. harry, do you know -- i mean, i have a lot of questions here. i kind of agree with the president, not on a lot of things, but when he said alcohol and pot, you know, alcohol's not great. and we have a prohibition already. you know, you drive faster. people that smoke pot are you know, they may get hit going 15 eating a twinkie or something, right? that's their problem. but then i think about your lungs. and we just know that smoking in the lungs, that's what worries me. can you eat -- >> joe, here's the thing. we're these provincial people who live back east. we're not around the medical

marijuana, which is de facto legalization anyway. we don't know anything about it. we go out there, what we find out is 40% of the pot that's sold comes from edibles. comes from things like vape pens, e-cigarettes that are filled with hash oil. that's 40% of the business. the smoke is getting smaller and smaller. it's the alternative products that are growing like wildfire. >> that's very interesting. >> your point about you need to be a businessperson to be in this is a great one. but our guest host today is kevin o'leary from "shark tank." and he's looked at some of these deals. and you have some concerns, right, kevin? >> first of all, i would say for me as an investor, this is like getting an opportunity to get into alcohol after the prohibition just ended. this is going to be a massive multibillion-dollar business, regulated and taxed by the government. i would very much like to invest in it. my lawyers tell me a different story right now because we don't have a federal mandate to legalize marijuana yet. we have state initiatives. so if i were to invest, as i have been looking at two deals in colorado right now, i could run into jurisdictional problems

as an investor in another state where it's illegal. i would never make an investment that would breach my right to be free. in other words, i could be indicted, or i could be thrown in jail. i need to be told by the government federally that it's okay to support this industry. and i really like the margins in this business. it is phenomenal. >> yeah. one of the guys we talked to, talking about these margins, his business is literally expanding exponentially. and i said, so where do you go for money? where do you go -- you know, is there -- who do you call to get cash to help you groh he this business? he says, we don't need to call anyone. they're making so much money, they just plow it back in the business, and they doubled the number of employees in a single year. but you make a very good point. a lot of these businesses, what they do, if they have a proprietary process, for instance, they license it state to state to state. because until these federal regulations roll along, which could be years and years and years in the making, the way

that -- that's the way to play it. you've got to be able to play with somebody who's smart enough that they can sell, license out their deals state to state because it's going to be years before this is -- there's any kind of national regulation. >> think about the funding opportunity for state governments that are desperate for cash. >> all right, stop. before you do that, though, think back to prohibition which joe was talking about. prohibition ends, and as a people, we say, part of our social contract is we're going to accept the cost of alcoholism, alcohol abuse, people who become aggressive because of their behavior, driving while drunk. we said we're going to accept that as part of this social contract back in 1933. now what we don't know, with the legalization in colorado, what the governor there calls this great social experiment, is what's the down side? we don't know. we don't really understand what the other half of that contract is yet. >> but you said earlier, these people were smoking it anyways. what's the difference? now we're just taxing it. >> and now they're smoking it

like crazy. that's the thing is the blanket's come off. and people from all walks of life are walking into these places and saying, i'm going to smoke now. >> i'm going to put -- i'm thinking here, like kevin, i'm going to put together a business plan for you where you eat some pot, right? and then you get the munchies. and then you have pot in the twinkies that you're craving. and then that makes you want more. and then, i mean, you'll never stop. >> they would have never went bankrupt. >> ding dongs, reese's peanut butter cups. >> one of the other cultural advantages for the pot industry out there is -- zloo cook >> cookies. >> when they're bringing in new employees, they don't have to drug test. >> you're absolutely right. harry, thanks for doing this special -- you obviously -- it is very compelling and interesting. and you can tell that you're into it. we're going to watch tonight. at 10:00 p.m.

>> harry, thank you. when we come back, small business and the state of the economy. "shark tank" host kevin o'leary sounds off. right now as we head to a break, take a look at futures. you'll see the dow futures up 58 points. s&p futures up by almost 7 points. "squawk box" will be right back. still to come, budget committee chairman congressman paul ryan. we talk politics, the economy and a possible run for the white house in 2016. that interview and much more is just ahead. right here on "squawk box." when you order the works you want everything. an expert ford technician knows

your car's health depends on a full, complete checkup. the works. because when it comes to feeling safe behind the wheel, going the distance and saving at the pump you want it all. get our multi-point inspection with a a synthetic blend oil change, tire rotation, brake inspection and more for $29.95 or less. get a complete vehicle checkup. only at your ford dealer. could save you fifteen percent or more on car insurance.s everybody knows that. well, did you know that when a tree falls in the forest and no one's around, it does make a sound? ohhh...ugh. geico. little help here. i need>>that's my geico digital insurance id card - gots all my pertinents on it and such. works for me. turn to the camera. >>ah, actually i think my eyes might ha... next! digital insurance id cards. just a tap away on the geico app.

what is this place? where are we? this is where we bring together the fastest internet and the best in entertainment. we call it the x1 entertainment operating system. it looks like the future! we must have encountered a temporal vortex. further analytics are necessary. beam us up. ♪ that's my phone. hey. [ female announcer ] the x1 entertainment operating system, only from xfinity. tv and internet together like never before.

stocks backing off a record close. and then -- what are you looking at? >> never saw a guy named o'shaughnessy. >> congressman paul ryan has been on the road raising money and sharing his message on how to get the economy going. paul ryan will join us. "squawk box" returns right after this. low testosterone, not age. we talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair

or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer, worsening prostate symptoms, decreased sperm count, ankle, feet or body swelling, enlarged or painful breasts, problems breathing while sleeping and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. ask your doctor about axiron. [ car alarm chirps ] ♪ [ male announcer ] we don't just certify our pre-owned vehicles. we inspect, analyze, and recondition each one, until it's nothing short of a genuine certified pre-owned mercedes-benz for the next new owner. [ car alarm chirps ] hurry in to the mercedes-benz certified pre-owned sales event. visit today for exceptional offers. ♪

visit today for exceptional offers. sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

from washington to wall street, a squawk news making interview with congressman paul ryan from his plan on getting the economy going to possible presidential run in 2016. investors focus on target. the company reporting in the last hour and making comments about the massive data breach we will get wall street reaction. plus kevin o'leary host of "shark tank" here to tell us

when it is safe to get back into investing waters. >> you are going to need a bigger boat. >> as the final hour of "squawk box" begins right now. ♪ come sail away with me . welcome back to "squawk box." the future at this hour are higher. i have my moneys on today might be the day. i want the s&p to close at a new high for 2014 because it hasn't been above december 31. so we have been below this entire -- you know how they say the first week of january and so goes the year. i think january and february is okay. >> and march. >> however long it takes. i don't think any of these things are set in stone. >> unless it is in your way.

>> i want prosperity to rise. i'm sorry. i have a big morning on "squawk box." we will talk budget, the economy and jobs with him. budget committee chairman congressman paul ryan keeping his options open as he has told us for 2016. first andrew has this morning's headline. >> earnings taking center stage. this morning target earned 81 cents per share for the fourth quarter. the december data breach costing the company two cents pper share but says it cannot estimate how much going forward. the nongap earnings came in at $1.30 per share. we will be speaking to a target analyst in the next half hour. we are also talking about lowe's which matched estimates with profit up 31 cents per share.

investors are encouraged by improved sales growth. we will get new home sales numbers for january coming at 10:00 a.m. eastern time. economists expecting a 3% drop. that decline would be on top of a 7% drop in december. >> the bit coin currency expected to show more volatility today. the exchange abruptly stopped trading yesterday and the website with disappeared for the little while. the ceo said the business was at a turning point. there are rumors that someone stole the coins from them. it is like $400 million. i don't know how this works. but then, you know, the futur t futurests and people that love bit coin say it is an ecosystem that needs to find its legs. it is going to be something that is here to stay. >> the question i have now -- i

have been lookingt at this as an investor for about a year. >> as an investor in bit coin or using the currency at some of the the -- >> i was starting to think of it as a virtual goal. the new question that i have that will stop me from taking a position in it is if they breach the ability to code and hack and create coins outside of the system -- which i don't know the answer to that yet. >> mark andrews yesterday compared it to the global situation where you had a bro r brokerage that somehow did bad things with the client. >> i get that. brokerages go under all the time. what i understand the debate occurring now amongest

constituents is there may be a situation where you can hack and create your own coin. which we have been told as investors can't happen. apparently, it might have happened. we don't know why this company is bankrupt. you have to answer that question to me. if i thought for one nanosecond that a hacker could create a coin i would never invest in this platform. >> sound advice. stocks losing a little ground tuesday still on track for solid gains for the month. with us is james o'shaughnessy, chairman and chief executive officer of o'shaughnessy investment management. let's talk about what joe was just saying. with the s&p getting back to a level where it maybe finally pushes through the high that it ended the year last year with. does it make you nervous? do you like it? >> i think that u.s. stocks over the next five to ten years are going to rehamain the asset cla

of choice. i think getting there is going to be a little more interesting had it been in march of '09. i think there is going to be a lot of bumps in the road. when we compare them to the alternatives with the exception of international stocks which we find a 50% cheaper on the schiller p.e. ratio, there is a lot of value in europe right now and a lot of u.s. investors have very little exposure there. we think follow the cheap stocks with high dividend yields, good financial strength, et cetera. right now they are leading to europe. >> are there certain countries within europe that you think are better positioned? >> we have a diverse portfolio so we tend to be in virtually all european countries. uk has excellent candidates.

dividend yield exceeding 4%. very, very cheap, cheaper than 90% of the stocks in our universe. same can be said for canon in japan and for china mobile which is actually 95% cheaper than the stocks that we are looking at. so cheapness married to good fundamentals, good dividend yields or good momentum seems to work very, very well in europe, even better, actually, than it does here in the united states. >> can i ask you a question as an account investor? does it bother you at all that the ten year bond right here doesn't have a three handle in front of it? i have been investing for decades this is troubling me now. >> it's huge. kevin, we published a paper in august saying that this was a

generational selling opportunity for the long u.s. bond. we think that long bonds have enjoyed a 35-year bull market. when i was 21 in 1981 they hit their highs on terms of interest rates. if it weren't for what the fed was doing my expectitation would be that it would certainly be at a three handle and probably more. >> how can you have an advance from here? we are back from december highs and have the bond stay where it is? it would be very trouble to have the disconnect continue and makes me think about --f. >> this is a condition that has persisted for the last little while. and i think that really the fed is attempting to push all of us risk investors into the riskiest asset class. i think that is why you have seen the expansion that you have

seen in u.s. accounts. granted, in march of '09 u.s. accounts cheaper than they had been since 1982. we were wildly bullish on u.s. accounts there. now we think they are not going to go into another bear market in our expectation but you are not going to see the kind of double digitt returns that you have seen over the previous three years. that's why we are pounding the table a bit on equities outside of north america, specifically advanced international markets. >> thank you for joining us. when we come back we will get reaction to the target's quarterly result. the company making comments about the holiday breach. we get reaction from an analyst who covers the stock. check out the "squawk box" market indicator.

up next, congressman paul ryan on the state of the nation's economy. what washington needs to do to keep america growing and where he thinks lawmakers will come down on next year's budget. "squawk box" is back after a quick break. hat's next. tdd# 1-888-628-2419 at schwab, we can help turn inspiration into action tdd# 1-888-628-2419 boost your trading iq with the help of tdd# 1-888-628-2419 our live online workshops tdd# 1-888-628-2419 like identifying market trends. tdd# 1-888-628-2419 now, earn 300 commission-free online trades. call 1-888-628-2419 or go to schwab.com/trading to learn how. tdd# 1-888-628-2419 sharpen your instincts with market insight from schwab tdd# 1-888-628-2419 experts like liz ann sonders and randy frederick. tdd# 1-888-628-2419 get support and talk through your ideas with our tdd# 1-888-628-2419 trading specialists. tdd# 1-888-628-2419 all with no trade minimum. and only $8.95 a trade. d# 1-888-628-2419 open an account and earn 300 commission-free online trades. call 1-888-628-2419 to learn more.

tdd# 1-888-628-2419 so you can take charge of your trading. ♪ aflac, aflac, aflac! ♪ [ both sigh ] ♪ ugh! ♪ you told me he was good, dude. yeah he stinks at golf. but he was great at getting my claim paid fast. how fast? mine got paid in 4 days. wow. that's awesome. is that legal? big fat no. [ male announcer ] find out how fast aflac can pay you at aflac.com.

president obama is set to deliver his 2015 budget request to congress next week. congressman paul ryan chairman of the budget committee joins us with more. so much to talk about. we are going to call you chairman. i don't know what you might be in the future. you are never willing to tell us what your plans are. let's do chairman today. >> i actually prefer paul. how does that sound? >> then my journalistic integrity would be like we are friends. >> you are just now beginning to worry about that. >> exactly. chairman ryan, dave camp, something i want to talk about. in a perfect world no way that happens with the current president. he will go down from 39.6 to 25. why introduce that? why do it? >> because we should offer

ideas. just because we have a progressive president and senate doesn't mean we should do nothing. by the way, good morning becky and andrew, as well. >> good morning. >> we should be offering solutions to create economic growth and create jobs. just because we have this little president that we don't think will do anything constructive doesn't mean we shouldn't offer ideas. we are the party of ideas. we want to bring solutions. we have an analysis from the joint committee on taxation that shows this creates nearly 2 million new jobs, faster economic growth, more take home pay and higher wages. that is what we need to do in this country. and, yes, lowering tax rates, making it clear, simpler, fairer is clearly one of the best things we can do to create growth and jobs in this economy. just because we have a president that we don't think will be warm

to this idea doesn't mean we shouldn't be proposing these ideas. >> the other thing that was out yesterday was the journal i think was false hope. saying since one democrat now thinks maybe you can grow revenues from doing business friendly things instead of just raising tax rates, if you make it easier for business to operate, revenue might go up. now this is like something like a seed that could make its way to president obama. that's never happening. when he says revenue he means raise taxes. he will never agree to that type of proposal. do you agree with that? >> i think ron widen is one of the best democrats in the senate. he does acknowledge reality which is when you lower tax rates you produce more economic growth. just because we have this kind of a president that does what

you say, and i agree with that, doesn't mean we shouldn't be offering these ideas. we are trying to put ideas on the table and get economic growth and job creation. this is a slow growing anemic economy. we just lost $1.2 trillion in deficit reduction from last year's baseline to this year's baseline because of slower growth projections. we need to start getting people back to work. this tax reform, lowering tax rates one of the best ideas. just because we have a president that believes in tax redistribution and class warfare doesn't mean we shouldn't say what we think is the right way to go. >> let me ask you as an investor and capitalist and entrepreneur in this country about an idea that i think your party floated that i am really concerned about. you want to tax me 10% surcharge on my income over 450,000 and apply common income taxation to capital gains.

that i can ensure you is a bad idea. i speak on behalf of everybody that puts capital in harms way to create businesses. bad idea. i hope you are not going to push that forward. >> i don't want to do things like this but when we are dealing with the code we have and trying to replace it with revenue neutral code we have to do broadening. we are talking about lowering rates across the board. i think you are talking about private equity. the key is we are bringing the rates on ordinary income down to 25% and a few down to 35%. effective top tax rate on individual income is 44.6%. corporations are paying 35%. pass throughs as high as 45.6%. we are trying to find a way of getting all tax rates down

across the board and trying to get a tax on capital down across the board. if you look at how capital gains is treated for the vast majority of americans lower capital gains taxes. let me just say something. you can't make it perfect when you are dealing with the kind of perimeters we are dealing with right now. >> punishing me for achieving success and wanting to put capital in harms way and build jobs in america. i feel like i'm getting punished. >> that's the last thing we want to do. >> that's how i feel. >> we had eric cantor on. i said because we don't usually do social issues. i said is the republican party always behind the curve with marriage equality. now we have this arizona thing. are you willing to say that -- who wrote this bill? >> i don't know all of the details. >> where you can turn someone -- have a different counter in a

restaurant if someone was gay. you can't just dismiss this and tell us right here that -- >> i haven't read the bill. i have been a little busy right now. >> let me describe it to you. if a restaurant owner doesn't want to serve someone because they might look gay to them they don't have to serve them. >> that sounds ridiculous. >> you would denounce that? >> what you said? >> that businesses could discriminate based on sexual orientation you would denounce that. >> i voited for the employment nondiscrimination act. >> this one, paul, obviously, you may not have read the bill. just in terms of whether you are protecting religious rights for people who say this goes against

it and i don't want to be someone doing flowers for a gay wedding versus someone saying you are a business. >> i'm not going to comment on a bill i don't know the details on. >> how about this next one? we have been talking about minimum wage here. i don't know whether you have seen but the president's approval rating was i think down into the low 40s. it bounced. it was back up to 46% almost as if this minimum wage and income disparity is having traction. how do you say as a republican that the minimum wage, that raising it is a bad idea and not expect that to hurt you politicly? >> if we think something that can cost us hundreds of thousands of jobs, if we think that is going to cost us jobs why would we want to do that?

point two, we want to make it easier for people to enter the workforce. we have 35-year low labor force participation rates. i started off at a minimum wage job at mcdonald's. it was the beginning of my life and not the end of my career. we want to get people into these jobs to work their way up. we it is not enough to say we don't like the slow growth ideas. we are offering pro growth solutions to create jobs and opportunity. we need economic growth. >> how about stream lining regulatory environment? >> that can be useful. >> debt reduction, tax reform, energy, all of these things are growth things we need to do. >> on the minimum wage issue, do you have concern that ewe are living in an environment where there are people working full time where it is not a ladder to the next place and yet are still

in poverty? >> i am going to be saying a lot about this later on this year. i think we need to have education reform and challenge the political monopolies preventing parents from choosing schools for children. we need to have the act which stream lines job training reforms. >> to the extent that there are people who are going to workt at mcdonald's for all of their life -- >> we don't want them -- >> we want them to go where they want to go with their lives and we want an economy where we have upper mobility restored. that means raising minimum wage and getting people in an economy to get better jobs and better skills. that is a faster growing economy with more wages and better job growth. that is better education so people can get skills and life long learning.

that is not things that we think will hurt job creation like minimum wage. >> you saw the president said i'm not doing anything on chain cpi now. i have offered these olive branches and compromises to the republicans and haven't taken any of them so i'm going to do it on my own now. should we be optimistict that anything gets done between now in 2014 through 2016? >> i don't anticipate new budget agreement. we have one in place right thou. i think the president is moving farther to the left. look what he did to the defense department. >> john kerry seems like he is preparing a way to say no. >> you can argue that both ways. i can't imagine that he will say eno. even the study that they put out paves the way for keystone.

my guess is yes to keystone and come out with regulations on existing power plants later in the year. >> if you want to look at the most politicly expedient answer. chairman -- >> sorry i missed you last week, i got snowed in. >> we hope to see you again soon. who knows what we will be calling you in the future. >> paul. coming up it's 1849 all over again. why gold prospectors are dancing. we have details after the break. check out gold prices right now. "squawk box" coming right back after this short break. i love gold! ♪ coming up, the investors' bulls eye on target. we speak to an analyst for reaction to the numbers and the

company comments. "squawk box" on cnbc, profit from it. on your own... or with a fidelity investment professional, helping you find new ways to plan for retirement and save on taxes where you can so you can invest in the life that you want today. tap into the full power of your fidelity green line. call or come in today for a free one-on-one review.

welcome back to "squawk box." gold prospectors in southern california have been heading to the hills. the severe drought exposing gold in the little creek area. water levels have dropped so much that it has left gold

exposed and easy to find. only a handful have gotten rich. a couple in northern california stumbled upon decaying cans under a tree in their yard. in those cans they found more than $10 million in gold coins from the late 1880s. the gold rush back in southern california is about to end. two major storms expected to bring the most rainfall since the spring of 2011. that will cover up the gold again. hurry up and get out there. up next reaction from target. is earned with sweat,r 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. who found a magic seashell. it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade. you want everything.orkss right in your trading platform an expert ford technician knows your car's health depends on a full, complete checkup. the works. because when it comes to feeling safe behind the wheel, going the distance and saving at the pump you want it all. get our multi-point inspection with a a synthetic blend oil change, tire rotation, brake inspection and more for $29.95 or less.

get a complete vehicle checkup. only at your ford dealer.

welcome back to "squawk box." retailers dominating stocks. check out target. it beat estimates for the fourth quarter although the data breach did shave $2 per share in profits. future quarters in net a meaningful drop in sales in weeks right after. lowe's matching estimates with

fourth quarter profit. it add aed $5 billion to the stock buyback program. oppenheimer analyst said he is encouraged by the progress. also, discount retailer dollar tree missed estimates by three cents. the guidance for 2014 falling below wall street forecast. abercrombie and fitch reported $1.34 per share beat estimates of $1.03. also announcing acceleration of its stock buyback program. let's get more information on the target earnings. we dig into the earnings with chris korvers from jp morgan. >> i think you have to dig into

the numbers. on the face of it it is not that shocking. the minus 2.5% comp. there are scary things in there. they reported a 4% gross margin in canada, lost a billion dollars in canada for the year. originally expected to lose about a third of that. what we don't know as you look forward is they guided to the street. it is very back half weighted guidance. they guided by about 10%. mathematically that suggests they are banking on a big rebound next year in the fourth quarter. they didn't tell us how much they expect to lose in canada. i think that is an important data point on the conference call that we need to get and how they think about the u.s. business currently. clearly as you know most retailers weather has been very bad and a slow start to the year. you could have negative catalysts hanging out for the conference call.

>> from your perspective the stock comes under pressure you think more because of what has been happening with the canadian stores versus what happened with the data breach? you think they pushed past the data breach or waiting to hear more information from them? >> they baked in some estimates into their numbers for the year. what they don't know is any potential fraud related to third party credit card processors. they did bake in a number. i think if you look at it prior to the data breach traffic had missed same store sales driven by missing traffic for the past four quarters. i think the data breach makes it tougher because you have to rebuild the confidence. you have to rebuild the brand. just as they are starting to make traffic in canada everyone in toronto is reading about the head lines about what happened in the u.s. they dug the hole deeper. it is going to take some time. >> nis sounds like a stock you

would steer clear of at this point? >> yeah. i think you have to stay away from it. you have back half weighted guidance which creates risk predicated on a rebound in the fourth quarter. it has an attractive dividend yield of around 3% which should form down side protection in the stock. but the reality is the brand doesn't turn on a dime after what was a series of misses to sales in the data breach which is undermining confidence in the brand in the consumer. >> regarding canadian situation shouldn't that be part of an upside potential story. this company basically got the product mix wrong in regions like quebec and ontario. in the next year why couldn't they fix that? instead of losing a billion maybe make a billion in canada? why isn't that a potential story for these guys? >> if you think about what

happened in canada, their expectations weren't grounded very well. they expected the consumer to come in and shop the discretionary side of the store. they did. they under estimated the consumable side of the store. they didn't execute the plan very well there. they made it supply chain difficulties and information technology difficulties. you didn't get it right out of the gate. you are going back to try to rebuild the infrastructure and then rebuild the price and competitive and brand position in the mind of the consumer. so i think over the long term something happens, either they figure it out, maybe they back track on it. maybe there are management change. it is unclear how it plays out in the near term. >> thank you very much. great talking to you.

>> thank you. up next we jump into the shark tank with our guest host kevin oleery. >> everybody has enough to cause everybody else a problem. i think the pecking order is different cuban has the most money. >> i'm talking about our guy on the profit. more money than you? >> i don't know. >> how much you got? >> i never say. that is just inviting another audit. >> and you are canadian. >> and irish. >> my son is born in boston and has three pass ports, irish, canadian and american. find out what kevin has been investing in and how some past investments have erred. martin sass, his pick last time

he was on is up 50% on the investment. we have new names for investors to look at. "squawk box" will be right back. no one's losing their job. there's no beer robot that has suddenly chased them out. the technology is actually creating new jobs. siemens designed and built the right tools and resources to get the job done. [ chainsaw whirring ] humans -- sometimes life trips us up. sometimes we trip ourselves up. and although the mistakes may seem to just keep coming at you, so do the solutions. like multi-policy discounts from liberty mutual insurance. save up to 10% just for combining your auto and home insurance. call liberty mutual insurance at...

[ thump ] to speak with an insurance expert and ask about all the personalized savings available for when you get married, move into a new house, or add a car to your policy. personalized coverage and savings. all the things humans need to make our world a little less imperfect. call... and ask about all the ways you could save. liberty mutual insurance. responsibility. what's your policy?

welcome back to "squawk box." take a look at futures. you can see what is going on on the screen there. dow looks like it will open up about 56 points higher. s&p looking higher, as well. nasdaq up close to 18 points. in the meantime let's get more

thoughts from kevin o'leary, chairman of o'leary funds and cohost of "shark tank." we are talking about taxes and canada in this case. >> taxes in canada are lower than here? >> i'm an investor so i care about the businesses i buy. i own businesses in canada, europe and united states. and the trend in europe, even -- joe loves to talkt about france. i don't invest in anything in france. in the canadian market particularly in provinces like alberta they have been steadily reducing corporate taxes. it is one of the lowest in north america today. if you set up a company in alberta you are doing better than the majority of the u.s. states. >> i have a personal tax issue for you. >> how do you feel about carried business? >> you feel it is fair to be

taxed at a lower rate based on the moneyt that you make than somebody else? i have an income. i have a salary. you're not in this case. but it's not your money. >> your decision is -- you can make it personal or for the whole market. do you want me to take my wealth and reinvest it in america. >> it is not your wealth. >> i made it. it is mine. >> capital gains. >> i have a private equity firm created with my own money. >> if you invest your own money you should get capital gains treatment on that. >> thank you. >> my question is whether you should get capital gains treatment on other people's money which is effectively what carried interest is. >> the trouble is you are not making the commencert risk

adjustment. when i put my money to work i am taking risks. >> other people's money. >> i am leveraging mine. are you suggesting taking less risk than i am? we are all taking risks. >> you are taking risks with your money. i'm saying with your money take capital gains. on my money -- >> the only reason you are giving me money is because you think i can give you a return. why are you not willing to pay me for that? >> why is your risk different than any real estate broker who calls you for the next three years and takes the risk of trying to be your friend and working with you and doesn't sell and get the commission? nobody is giving them anything special for the risk they took to work with you on selling a home or investment banker who does it. jobs where people take some form of a risk but it is their job.

>> do you think i do an important thing in this economy to take broken companies, invest them and create jobs. >> teachers do important things in our economy. >> when i invest my capital as a private equity firm, why do you want to punish me for that? why do you want to make it harder for me to do that? how does it help america create jobs when you make it more difficult for me to raise more capital? >> i don't want to punish you. >> you said you want to raise my taxes and pick on me. >> all i think is that you might want them all to be commenc commencerate. >> let me tell you what would work for all of us. how about no corporate taxes? the amount of capital that would come into this country to start new companies and create jobs and then tax people who work there with user fees. then i could personally decide

do i want to buy that car and use that service and pay the vat tax on top of that. >> we are not getting lower taxes. >> if we had zero corporate tax we had tremendous capital here. then people like me and you can choose what you want to buy. >> we would pay taxes and pay vat on top of that. >> everyone has a vat tax and it works. >> it is a vat on top of two and three and other taxes. >> lower -- if you don't like that at least lower the bar in corporate taxes down to 20%. >> by the way, i don't take an issue with that at all. >> i'm just trying to level the playing field. this theme of let's pick on rich people because they are successful i don't like it. >> i don't like it either. i don't want to argue to you that it is about hurting rich people or poor people. all i'm saying is when people look at the landscape and think does the system feel rigged or

are we on a level playing field it doesn't always feel that way. >> let's make everybody pay 25% regardless of income. done it here. terrific. >> we should probably have a progressive tax code. i favor that. i pay 39.6%. >> why do you want to punish people for success? >> a progressive tax code makes sense to me. >> i think it is fine to have a tax code. i think progressive makes sense to me. >> right now the average tax -- >> i pay 39.6%. 8.9% to new jersey and 0.9% for added medicare tax. i understand about paying taxes. i think taxes should come down. i understand the progressive tax code would have me paying more. i'm okay with that. >> i want to see why am i paying almost 40% in the 1% and middle class only playing 12%?

why am i taking the burden and paying it myself? >> i think these are good problems to have. not bad. >> it would be much better if we levelled the playing field so that many people not in the 1% can get there. >> i clawed my way up, too. i get it. there are people who need to be helped from the bottom up. i don't have a problem with progressive tax code. i think taxes should be lowered. a progressive tax code i don't have problems with. >> i was born in an orphanage. there. jim cramer on wal-mart earnings. shares of actavis. up. find out what martin sass is looking at now when he joins us in a little bit. i was 12 when i finally left the fortunage. -- tdd#: 1-800-345-2550 trading inspires your life.

tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading.

like carpools... polly wants to know if we can pick her up. yeah, we can make room. yeah. [ male announcer ] ...office space. yes, we're loving this communal seating. oh, it's great. yeah. [ male announcer ] the best thing to share? a data plan. ♪ 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. ♪

let's take a look at shares at retailer tjx, the parent company of tj max. the earnings forecast also falling below consensus. the company did announce a 3 cent increase. let's get to the new york stock exchange. jim cramer joins us. we will have marty sass on. do you follow how great that firm has done? >> they bought value and made a lot of money with it. it is kind of like the old days. i don't know how much tesla they have down here. that has not been their style. >> he is going to be on after us.

quickly, i can say to you 30-0 for the shockers. first team since the running rebels in 1990. >> i took such heat by win it all. let's just call them the favorite these days. honestly, i said something that was literally, syracuse/duke, it's the shockers and they are not shocking anymore, they are unshocking. >> i didn't watch the second half of florida. florida. that one guy is amazing. patrick whatever his name is, he's incredible. anyway, what else? so, you saw lowe's and you saw target, anything jump out at you? >> well, i think that target expectations were low and they did expectations. it's a funny world when minus 0.25 is supposed to be good when you are supposed to do minus 2.5. we're giving everybody a pass. lowe's was good and it was up

yesterday, and it goes up again today. i'm not sure whether that's great but i do know that people feel the retail stocks are way behind the market and are playing catch-up. >> i want the day to be 1850 or above on the s&p, jim, because we've been waiting, you know, we've consolidated and went down a little bit, we consolidated. it's time to move on here and not be stuck in 2013 with the high. >> we're going to need the financials to go higher. i think they've been a big problem. got the highest growth stocks doing their thing, but do you know what if we don't start seeing some of this tech that is just kind of just not doing that much and we don't start seeing the banks go up, i looked at jpmorgan, i was thrilled with what they said. i felt i was the only person who was thrilled. >> thrilled with jpmorgan. all right, what do you got going? a lot of stuff today, i know, i saw in the rundown. it's awesome, right? >> well, look, you know, we've got to go every single -- we've got to go over why is it that a dollar tree does badly when the

economy is not so good and we've got a company, you know, we've got abercrombie & fitch going up when that quarter was terrible? i got to make some sense of this stuff, and i got to tell you it's not coming through yet. what comes up is linkedin up, tesla up, why isn't netflix up? they didn't do anything, why isn't net up? >> we'll see you at 8:59:59. >> exactly. coming up why stock pickers reign supreme in this market. marty sass will give us his best ideas in health, airlines and broadcasting. you don't want to miss it because he's making a lot of the audience money. and check out what is coming up on st., noelle pikus-pace is coming up and tim boyle, all coming up on "squawk on the street."

♪ i want it all ♪ i want it all a lot of people are saying, you know, we had the easy games and now it's going to be a mark of you need to know what you are doing and betting on the right companies that's what our next guest has been doing his whole

career, marty sass, he also is m.d. sass and you are more than a portfolio manager at that company. last time you were on, i remember it, activus and it's up 50%, so we still own it? or can we sell it and buy something else? >> i would still own it, joe. activus announced since i was on your program, in fact, just last week they announced another deal which i think will be another leap forward for the company. they announced the acquisition for roughly $25 billion of forest laboratories. >> yep. >> which should be very accretive to earnings. i think sinnynergies are going far exceed management's estimates they've always been conservative in their forecasts and i think they'll beat estimates from the street. if you look at activus even though the stock is up 50% since we spoke last, the earnings are exploding. we're looking for about $16 in earnings for '14, about $18.80

for '15. this company which organically is growing in double digits is still selling at a discount to the market multiple, so i think it's still attractive. >> you also like mckesson and cvs you told us that last time. for airlines i remember you likeded, you were with delta and united and you have a third one that is not just a commercial airline. air cap. >> my favorites are american and delta. >> american and delta. >> all right. >> with american my number one, delta number two. and the new name as you said is air cap which most people haven't heard of, but they're going to hear about it. air cap symbol aer is acquiring the ilfc division of aig which quadruples its fleet and will make it the largest aircraft company in the world, slightly ahead of ge in that business. so, it's a transformative acquisition in an industry as

you know that i like very much. >> all right. we see there on your -- on our disclosure that sinclair broadcasting and cbs were both things that you like. are those new or have you talked about it before? >> i talked about broadcasting and sinclair before but i haven't talked about cbs, that is a newer holding. as you know, joe, the broadcasting industry is consolidating. the retransmission fees are going to grow tremendously. les moonves just last week on an earnings call said their transmission -- retransmission fees are going to go up to $2 billion at cbs by 2020. that's up from what we estimate to be less than $500 million now, so it shows you the tremendous surge, the value of content is increasing. the whole broadcasting industry i think is undervalued. sinclair is trading at a 15% free cash flow yield. >> marty, thanks.

going to get some final comments from our guest host but we appreciate having you on. we'll see you again soon for a little bit longer segment and we can talk about these in more detail. thanks. >> great, joe, thank you. i want to thank kevin, we could get some thoughts from him but also thank him for being here and the real debate going on here. >> it's real important and we should all be having it in america regardless of what side you are on. we started this and maybe the segue to sum it up the real decision we've got to make as a country is do we burden our companies, our private sector, the creation of wealth since the beginning of this country with social responsibilities now to pay for those as you suggested were less fortunate. do you make a company's ceo decide that he's going to spend a portion of his earnings to take care of social issues and contort what the dna of the business was originally to make money for shareholders. i think that's the real debate america's having. >> you will be on huffington

post because he should be saying this. >> if we change that model, we're going into darkness, we don't know what will happen and i'm very much against that. >> thank you for being here. come on back. "shark tank" is the show on cnbc. we're thrilled to have you. make sure you join us. "squawk on the street" begins a little early, right now. ♪ work hard play hard work hard play hard ♪ good wednesday morning welcome to "squawk on the street" i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. take a look at futures on a very big day for retail. we've already got at least half a dozen earnings out including target. we're going to walk you through all of it. bonds may react to new home sales when those hit the tape in about an hour, in the meantime, here's a look at the ten-year yield, europe is struggling and asia the yuan continues its losing stree