welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. who is in washington, d.c. this morning. he's going to be joined by former fed chairman alan greenspan coming up at 7:30 a.m. eastern time. greenspan will be part of our countdown to the jobs report. the labor department will be releasing the jobs report at 8:30 eastern time. economist res expecting nonfarm payrolls to come in at 152,000. the unemployment rate is expected to tick down slightly to 6.5%. as an added bonesus, the january trade deficit numbers are going to be released, as well. that number is expected to come in at $38.4 billion. both those reports will be released at 8:30 a.m. and that jobs number is going to be important. joe, what if we come in at 6.5%? >> that's a key number. we don't believe they're going to do anything there, do we? >> they're talking their way out

of that somehow. it came across the bottom. it says yellen will do all she is capable of. >> i saw that, too. i read into that deeper. apparently that was her swearing in speech. >> she swore as she said it? i will do anything i can do -- during her swearing in? >> the first one i saw that i said, what? and then i said, okay, okay. >> during her swearing in, okay. >> like i promise to up hold the law type of thing. >> this ukraine thing, not getting settled. the crimea unanimous vote to join parliament. this is the same parliament all those guys that didn't have insignias on their uniform. this is the parliament that those guys herded together. >> right. what's going to be interesting is this idea of a referendum taking a vote to the people, which i think is supposed to happen in nine days. although the new ukrainian

government is saying, no way, that's an illegal referendum. you can't just decide to do that. >> but they'll probably vote to -- they kind of are russians, aren't they? anyway, the s&p is actually up now. a definitive amount for 2014. you can see that we're indicated up another 1.57. i don't know what we're going to see based on the jobs number. anything bad is going to be attributed to the weather. and we'll look for a silver lining. but so far, the futures continue to do -- it was an interesting day yesterday as we -- it was -- i was surprised at how strong the market was. >> we just talked about what was it, 139,000? i think that's high given what we've seen this week from adp and the ism. >> under 100, i think people -- yesterday people were saying if you had high double digits, that wouldn't be a surprise.

they're parsing it closely before we even see a number. >> the ten-year is -- what was it, over 2.7% at this point? 2.733 the%. stocks rallied earlier, finished a little off the best levels of the session on thursday. s&p climbed to another all-time high. up another three points to 1877. the dow finished higher, adding 51 points to close at 16,421. the nasdaq, though, lost six points on the day after setting a 14-year high earlier in the session. but just seeing 4352, when we've had -- it's been so long since we hit 5,000. there was a time when i thought that, you know, i was hoping that i'd live long enough to see 5,000 again on the nasdaq. now who knows. can't guarantee it. but we're -- >> i think you will. >> you think i will? >> yes. >> singularity. i may be on -- >> i don't think you'll need the singulairty point. >> i may be on a floppy disk,

which you have to be careful saying. >> right. >> you do. so this guy, if i invented bitcoin -- >> you'd be walking around thumping your chest. >> yeah. thumping my moves. i would. if i was worth $600 million because i thought of -- yeah, but if you had a -- he said he was at six -- >> it was at 400 at different levels. >> but it was over 600 and he has a million of them, right? i'd be happy, but he was very private. >> i feel bad about this. >> that's weird that you feel bad for this guy. >> i do. look, if you want your privacy, i can understand the situation. i don't know that this rises to a level of us necessarily needing to know. but the man outed by newsweek magazine is the creator of bitcoin is now denying that he is the found founder of the digital currency. last week leah goodman debuted her story about tracking him down at his home in temple city, california. hours after that story broke,

reporters were outside his door surrounding his two-story house in southern california. and while walking down the street with cameras following him, he said he is not in bitcoin and he knows nothing about it. the 64-year-old then got into a car with a reporter of the associated press and went to a sushi restaurant before heading downtown to los angeles. he told the news service that he had never heard of bitcoin until his son told him that he had been contacted by a reporter three weeks ago. >> i have nothing to do with bitcoin. i have nothing to do with developing. i was just an engineer doing something else. i just believe that somebody put that fictitious name in there. hitoshi nakamoto and bitcoin. >> he did tell the ap that many were correct including that he once worked for a defense

contractor. but he strongly refutes that he is the face behind bitcoin. the currency's creator has remained a mystery. the person or people bhand its founding have been known as hitoshi nakam. newsweek says there was no confusion whatsoever about the context of our conversation, meaning her conversation with him when she traveled to california and his acknowledgement of his involvement in bitcoin. it was an interesting story. and there's certainly -- and she admitted herself there's no way to know for certain, but she did say she talked to him and he admitted it at that time. >> yeah, but guys, if you read the story, which we all did, he never really acknowledged anything. i mean, i don't know, i -- it's funny because i wanted to believe this story so much, but when you get to the bottom of the story one realize what she actually said to him and what he actually said to her. it was -- it's hard to think

it's nor than -- not even an implicit acknowledgement. and then you look at him and i'm not saying just looking at him wouldn't suggest that's him but, you know -- yes doesn't look like the bitcoin guy? >> he doesn't look like the bitcoin guy. i told you late yesterday we showed a picture of the house. and i said, if you had $400 million, would you still be living in that house? i know i probably offended some viewers when i said that. >> you did. i got some responses saying that house isn't good enough for you, kernen? and i said, no, it's not good for andrew. but if there's a guy here named arm & hammer and there's baking soda called arm & hammer, there are coincidences with names. there's probably thousands nakamotos in tokyo. >> when we spoke with the

reporter yesterday, she said, look, they had used the language analysis people at m.i.t. to help her try and track down some of those things and that's why she felt pretty confident with some of it. they went through some of his writings, some of the postings along with some of his writings, and they used language analysis to try and say the same guy wrote some of these things. so there was a lot of analysis. they went through all kinds of digging and digging and digging. >> be don't you think -- >> they said she had gotten a call from his brother at one point. we asked if she was sure and she said, yeah, we're sure it's the brother. >> don't we think if he's lying -- >> even if it is him, he doesn't want the publicity. and to have a picture of not only of you published in the magazine, but also of your house and then be surrounded by reporters -- >> right.

>> it's weird, andrew, that guys like andreessen and establishment guys embracing the whole technology or the idea at least of a virtual currency down the road, it's weird that it's wrapped so much in -- that no one wants to admit that they invented it. it's not like a normal technology development where you'd say, yeah, i did it. >> but the mind-set of people who say, forget it, i think we need a new currency one that governments don't -- >> but bitcoin and -- are like the -- >> but the type of people who are early adopters of this and the person who probably invented it probably had to have enough of a mind-set that you wouldn't be surprised they want to live a little off the grid. >> given the irs issues right now -- >> i have to imagine, though, that we will know in the next week or two weather he is in or not because now every reporter in the country and the globe is going to try to figure out who he's connected to or not.

>> can you describe what your bitcoin person would look like? can you draw him ar something or put together a composite? he would be younger, more dashing, what would he be, more -- >> for some reason, that guy just didn't -- i could be wrong. save the tape when i'm wrong and we can replay it. >> younger or older? >> it's not an age thing. i don't know. >> smarter, geekier, nerdier, what would -- i don't know what you're looking for him. you've got to give me something. >> hey, joe? >> yeah. >> you'll know it when i say it. i've got mr. harwood next to me and he wants to jump into this conversation. >> joe, you know, the real question about this situation, you talked to that reporter yesterday, is this story going to exacerbate her career or not? >> you know, when they invented exacerbate, someone is mixing that up. people met this up all the time, john.

i haven't talked to you about duke. jabari, will he leave after this year? that's what i hate about college hoops. >> there's a lot of hope that he will decide to play one more year with his buddy, jaleel elkafor. >> one more year. he's a freshman. >> the guy could be the top pick of the draft. >> can you imagine being coach k. where you giant these guys like this and you imagine what he would be like -- >> there are questions about whether college athletes should be better compensated. >> coach k. can't get any breaks. >> did you see how many points the bear cats scored against memphis? >> how many? >> 97. >> whoa. >> and sean, the guy second only to the big "o" scored over 30 points. it was senior night. it was really cool. >> nice. >> yeah. it was great. how did we get to that? i don't know. >> we're all over the place, but we're now going to move to the ukraine because we're going to go over and talk to steve

sedgwick. he just wrapped up a big interview where the prime minister of ukraine. steve. >> yeah. it was very interesting. he came to the press conference with the cabinet offices to talk about the economic situation and how he's wrapped up an initial deal with the eu. but i managed to grab really i think pointed questions, i have to say what everyone is interesting about legitimacy. the russians are not recognizing at the moment. the legitimacy of the referendum vote which is going to be next sunday in the crimea, that cessation from the ukraine. i said look, you're getting no breakthroughs. putin, obama, no break through weapons the russians won't even talk to you. he said look, don't be in such a hurry. it's not as bad as it could have been, not as good as we hoped it will be. i said, look, ethnically, most

of the people in crimea call themselves russian. 60% of the population. and the reality is russian back forces or russian troops are dominating that region and this referendum looks like it's going ahead. he was pretty robust in his response. let's listen. >> there will be no referendum. it is absolutely and entirely -- no one will recognize this referendum, probably except moscow, syria or their ally. and i want to be very clear, crimea was, is and will be an integral part of ukraine. no concessions. >> and he's robust about the legitimacy of his own government. and i put that to him about weather the ousting of yanukovych was unconstitutional. of course, there's no no

elections since. until we get that may 25th presidential election, we only have an intrimt president here, as well. he was very robust about how legitimate he was saying, look, the mps voted in, even members of yanukovych aes only party. it's fascinating stuff. live situation, back to you guys. >> steve in kiev, thank you for that. great get on that sprue. we should know president obama spoke to russian president vladimir putin for about an hour on thursday. the two discussed the need to solve the situation diplomatically. i think that's the word in this case, addressing the need of russia, ukraine and the international community. they discussed direct talks. putin set out his own statement saying russian/u.s. relations should not suffer over ukraine. now let's bring cnbc's chief washington correspondent john harwood into the conversation. you've already been -- we've been talking about duke this morning with you. >> we have. i just want to say as a post

script of that conversation that you mentioned between putin and obama, you are exactly right. the diplomatic was a diplomatic word to use about it because you could see from the summary the white house put out, they said the president told the prime minister x, y and z. it does not indicate that they have any meeting. >> that's what i was going to say. what did the president say and what did putin say back? >> we don't know. but you can draw the conclusion, you know, if it was a conversation where they had a meeting of the minds, they will talk about having been a constructive conversation or we agreed x, y and z. instead, what you had is a statement from the white house saying the president told putin. >> if the crimean people want to go off with russia, what is our position going to be on that, ultimately? >> well, our position is going to be that only ukraine can determine the future of ukraine's boarders and that you cannot have a freestanding decision by a group of people

within a country backed up by their neighbor, russia, to break off. so that within the ukrainian constitution, ultimately, yes, could what happen? sure. but i think the united states' position is going to be you can't simply declare -- the crimean area can't declare we're going to have a referendum on it and break off. >> so ian puts out this note that says the people should be allowed -- the suggestion is that putin is not coearnsing these people, they're doing what they want to do. what do you think of that? >> well, look, ukraine is a country where there's a lot of division, right.? so in the crimea, there is 60% russian speakers. >> therefore, you would think this may be what they want to do, ultimately. >> right. you talk to rick perry, texas might like to be a separate country, too. you've got the rule of law

within a country and you have to act according to the constitution and make decisions collectively even though you're split or have different factions. >> you don't get to poll only the faction and ask them what they want to do. >> exactly. and it's a key strategic area of ukraine. i was yelling, my mike wasn't on, but texas wants to secede, too. we fought a war over, you know -- >> exactly. >> a horrific war because people wanted to secede. you don't just split off and all of a sudden, you know, have your own country. >> but you will go back and say this is the fall, that vladimir putin was more in fair of not trying to make ukraine decide whether it was going to go with the west or whether it was going to go with russia. he was more willing to come up with a financial solution. but it was the west that said wait a second, ukraine wrb before we start soaking billions

into this that's what -- >> i can't defend putin. >> i'm not trying to defend him, but the west was the one that was pushing that said before we put any money into this -- >> and that's the point in a way that trying to suggest. we have put this on putin. i don't want to be a -- >> but we're saying that before we put money into it, and i understand that, too, we don't want to put money into this and say great, we're going with putin and then you've lost $20 or $25 billion. >> do we have a picture of that ukrainian guy again? andrew, looking at that dude, i think he looks like he could be the guy that did bitcoin. is that what your image of the bitcoin -- >> yeah, that's more in line with the bitcoin creator for me. >> that could be the guy who -- >> bigger, nerdy looking. has anyone asked him whether he -- you know, i mean, if there was going to be one, that's what i think your composite would look like if you got a sketch

artist to do it. harwood, the number four, i don't know. wake forest i know was at home, but have you noticed -- >> i wouldn't rank us number one right now. >> no, but everyone looses, louisville has lost and doesn't look like -- syracuse. >> syracuse is sliding. >> you know who looks really strong, though, is florida, i've got to say. they have not been -- they got that one dude, patrick young, who is the -- man, he is like eight feet tall, he has biceps like this and he moves people out of the way. how do you pick these teams, though, john? it's hard. >> i pick with my heart. i pick duke to win. it's what i'm going to do even though i'm chasing my -- >> coming up, by the way. not very flattering. >> oh, sorkin. >> to hell with william cohan. >> what? >> to hell with him.

>> now duke. >> sorkin, you've got this brotherhood with these journalist res that always tearing things down, goldman, whatever it is. >> by the way, when we come back, the other thing. >> oh, yeah. >> there's a paul ryan story that john is going to talk us through, which will also upset the waters. >> we have to talk later about the goldman sachs elevator guy. >> the elevators go up and they go down. that's what goldman tweeted. coming up, a landmark bond default in china. what could that mean for the economic powerhouse? first, though, more drama for newport beach, california. pimco's bill gross accusing mohamed el-erian of trying to undermine him. oh, come on, guys, as the bond world turns. next on "squawk box." both of them are way too rich to be snippy. check out the futures as we head to break. just waiting to be found. tdd#: 1-888-648-6021 at schwab, we're here to help

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tgif. if you're looking for weekend reading, go to squawk.cnbc.com. the latest squawk blog has the whole entire tript from warren buffett's three-hour appearance this week, plus, carl icahn's epic rant about ebay. stock picks from jamie dinan. all that is on squawken

cnbc.com. i think the whole jumble thing is up in the air, isn't it, becky? we're 1-1. everything is riding on today. no pressure. >> no. >> although today will decide the winner for the week. >> you usually try not to come up for the show on friday. >> we'll do it right here on the set. i have something else to do today, but we'll do it right here on the set. >> you were down 3-1 on friday and i didn't see you on friday. >> what happens when you trash talk, joe? >> sometimes i lose. >> choke. anyway, pimco's co-founder bill gross is accusing mohammed el-erian of seek to go undermine him. he said he had evidence that el-erian wrote the february 24th article in the journal that describe the tensions between the two last year, including a show ondown in front of other pimco employees at the

headquarters. bill told reuters, quote, i'm stick of mohammed trying to undermine me. a pimco spokesman says mr. gross did not make the statement reuters attributes to him. he categorically denied saying the firm ever listened in on mr. el-erian's phone calls or mr. el-erian wrote any previous article. it stirred up things at the "wall street journal" saying that's a ridiculous accusation. >> ridiculous that he wrote the article. the article says by the way that pimco does record all its phone calls or at least monitors them for compliance reasons. so i doubt, actually, that it was mohammed himself behind the piece, but i would imagine there were loyalists to employ hmoham el-erian that reported it. >> sources close to mohamed.

>> look, anytime you have very pape public interactions that are loud, you can imagine there are people watching and taking notes on that stuff. >> it's weird. in a perfect world, neither guy should dare how they're portrayed after -- they should go their separate ways if that's what they decide on. >> yeah. but you understand guys who have built reputations -- >> but it always seems to be out when there's hyper competitive guys. gross is worth over $100 billion. >> mohamed was making a little less than a -- but everybody that we have on our set, or what have you, it doesn't matter how much money you have in your bank account or what title you have on your business card. you have the same emotional feelings that's just about anybody else. >> and the thing is, when you go back to the human level on it, i would hate if somebody was listening to what they say to each other.

>> and they do. >> save me $100 million and i would sign something saying i will never saying about you andrew or becky. i'll never breathe a word. >> for $100 million? >> i won't even saying anything about harwood. >> joe, i'm pretty sure if you and becky split up, the new york post is going on to be right inside that thing. >> they would. but that would be because of the jumble bitterness that becky has for -- >> we do have an incredibly competitive relationship. >> and you are a good hitter in the national league. you're batting about .320. >> for a while, i was doing really well. >> no, he weren't. >> it was more than a week. >> no, never. >> you're just better at it because you're older. you've seen more words. >> that's not very nice. this is a nondisclosure. now, you know what? i'm going to leak something about you now. >> ooh, scary. anyway, the man behind the

satiral twitter account just lost his book deal. since acquiring john leviere's straight to hell, touchstone has decided to cancel the publication of its work in a statement sent to cnbc. andrew, you're the one who unveiled his identity in the "new york times." >> i may be responsible for this, yes. >> what was it, you said he was never an employee of goldman and was never in the building. >> i didn't say he was never in the building. he had gone up and down in the elevator because he had a job offer at goldman sachs. the big question is who was lying? so when i was writing the piece, i went to the publisher and said the guy never worked at goldman. did you know this? they said on the record categorically that they were supportive of the book and that he had been straight with them and told them everything. >> so now they're saying -- >> that might have been a bit of a cover, i wonder. look, if you look at his book

proposal when he went out, he left them this impression on purpose about the fact that he had a job offer. he sort of tells the story of how he got this job offer at goldman and cuts it off the once he got the offer. so the assumption is that he works there. so the question was did he lie to them or did they lie about him potentially lying to them? i don't know. the other thing is, by the way, some people thought there was a parity account to begin with. >> i did. >> i landlords wonder just because he was unveiled or unmasked whether commercially there was a view that this book wasn't going to work, anyway. >> who is going to buy this book? do the occupy wall streeters, do they have libraries to every book that's written about a fassty wall street fat cat or do they just -- is that all they read? didn't that other guy write the book already? >> they're going to they've got

the whole 99% to sell to. >> that's right. just like the ones that we can cut taxes for to get elected. that's right. forgot. >> anyway, yesterday goldman sachs twitter account only had this to say. guess elevators go up and down. >> i like those guys. they have -- you know, for a firm that's -- was pretty uptight, they had a little bit of fun with this. >> when we return, we're going to talk about what you need to know for the jobs report and how the markets could react when the numbers are released. and what about alan greenspan think about blaming the sluggish economy on the weather? he will join us at 7:30 a.m. eastern. your customers. your... sales department built from the ground up. for fast downloads. fast uploads. for a... built for tablets. for laptops. for... this. built for saving money. built for saving time. built for architects. built for... sign up for internet and voice and find out how to get four weeks of internet for free.

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joivening us now is jim o'sullivan and chris rupke, chief financial economist at bank of tokyo mitsubishi. we'll start, jim, with we look forward to these days and we get them once a month. we like that. it seems like everyone is important with the fed, you know, deciding what to do based mainly on this number. today, because of the weather, i -- it could still be a really important number, but i just wish we couldn't attribute everything to weather, whether it's good or bad. >> yeah. i mean, i think there's a limit to how important it is. >> not to our viewers, though. it's maybe more important than any -- >> certainly it's going to be easy to dismiss the weak number because of the weather. we will look at the details and there are parts of the report that help gauge whether there big weather eks.

do you have the job but you were not at work because of bad weather? and when you see a big jump in that, it's typically associated with a big plunge in weather-related payroll jobs. we've seen that in the past. that's something to look for in the details, but it won't be definitive by any means. >> we've had people make the case that the one number that is not weather sensitive is consumer confidence and if there is a bit of a soft spell here, it is weather. >> and claims. not that claims are completely incentive, but we saw a lower number yesterday after a higher number the week before. the four-week average has been stable. to me, that's the most encouraging number out there that the underlying trend hasn't significantly changed. >> so even though yellen says i'll do everything necessary, what are the odds that we have take a break from tapering 10 billion every meeting? >> i think the bar is pretty high to that. i think that's what new york fed president dudley said yesterday and he is on the dovish side.

you know what really doesn't square a lot of times and we will have to see what yellen says more in the future, but there was a point where she put out research saying she didn't want to raise rates until september 2016. where the committee is saying september 2015. you know, kind of risk getting more inflation. yeah, it's -- she put out some kind of research on it. in some speeches. she was so dovish, she wanted to wait even a year longer. >> 6.5%, like just forget it, that doesn't matter any more? >> i hope it matters. i remember when bernanke told us that when it reaches 7% they would be done with qe. now they just extending, extending. i think it's a mistake. >> do you think that's because they don't believe the number or what happened? why did they -- >> well, when she was standing next to president obama, i mean, there does seem to be some political ideas coming into the fed. i don't want to say they're more like social workers, but they

seem to be very, very concerned or very attune to the plight of the unemployment. and they use that statistic as a measure of slack in the economy. where other things, like industrial production, retail sales, they're all at record highs. business capital spending in the durable goods report, you know, very, very strong. it came off the a little of the latest month. but i mean, it's come completely back to precision levels and yet the fed continues to try and keep these rates so low, which really hurts 145 million people with jobs. >> and then, of course, since that optimal monetary control speech that you were referring to with yellen, the unemployment rate has fallen more than expected. of course the fed has shifted more towards outcome based guidance and calendar guidance. to the extent tun employment rate continues faster than expected, that certainly should, other than result in earlier tightening, as well. obviously, they're not going to tighten in 2014.

but the more unemployment that comes down here, the markets have to start figuring we are getting closer to the point of tightening in 20125. >> i hope you're right. i'd like to push them in that direction, as well. i think short-term rates are zero. i think the important things in today's data may not be just payroll jobs. it could be the number of people working part-time who want full time work. there's 7 million of those people. if it doesn't keep coming down, they may point to that, the fed, and say the labor market conditions are not quite right. >> what if it's at 6.5%? >> unemployment? >> yeah. >> i think they think they've covered that for now. they may ditch that at some stage, but they said you could go a wave below that and still have appropriate policy at zero. >> i think it's pretty clear they're going to probably drop that language at the next meeting in two weeks' time, do what the bank of england has -- >> drop to reset it? >> no. it's going to be more qualitative away from this quantitative. they've already indicated that

they don't expect to tighten until well after you go through 6.5%. it's not going to be a new message, per se, but they clearly have to change the language. >> i haven't asked someone this question, but i've seen the we're conspear toral blogosphere. supposedly, the fed knows something about trying to get out of the qe and they're -- it's going to be some type of issue that could really affect the entire economy. there's supposedly some smoking guns somewhere about the negative affects of qe. when i look at the ten-year, it seems like things are going swimmingly. they've already start and had rates haven't even gone up except for that initial bump back in the spring. do you think there's something looming with trying to get out that we don't know about? >> i think maybe what they're speaking to is how do they unwind. not do they cut the purchases from 85 billion down to zero. it's how do they get the balance sheet down from 4 billion back down to normal?

>> right. they're not going to get rid of that quickly. >> we have to go, but these are the same people who are stocking up on water and ammo because of what supposedly is buying gold. >> yeah, like -- >> german shepherd. i am. but i love them. i do. anyway, thanks, guys. andrew. >> coming up, we've got a lot more coming on for the countdown to the jobs report. we've got those numbers at 8:30 right here from d.c. plus, how the financial landscape is changing in china and what it could mean for the global economy. a lot more coming up on squawk right after the break. so she could take her dream to the next level. so we talked about her options. her valuable assets were staying. and selling her car wouldn't fly. we helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today...and tomorrow. so let's see what we can do about that... remodel. motorcycle. [ female announcer ] some questions take more than a bank. they take a banker.

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coming up this weekend, be sure to join us for "on the money" starring becky quick. do you want me to read this? >> yes, please. >> because you don't want to toot your own horn. >> right. i want you to do it for me. toot away. >> toot my own horn. can the all mighty dollar do what military might and diplomacy can't in ukraine? one of the smartest guys in the room, richard haas, president of the council and former relations is going to be a guest. why he says vladimir putin might want to check his wallet before he moves his troops and the why this conflict could have a positive effect on america's economy. this is a show that if you miss this show -- you've got to watch this. "on the money" sunday at 7:30 eastern on cnbc. check your local listings or you can do it on your -- that thing on the -- b what channel is that on yours? i press a guide. >> i press guide, too. >> so find it. find it and watch it. >> thank you, joe.

i'll take you that five bucks later. when we come back, a major development in china that could mean big changes for the powerhouse. by the way, it's job friday. who is hiring? one industry has a help wanted sign in the window. right now, as we head to a break, take a look at the futures ahead of that number. right now, dow futures are up about 20 points above fair value. s&p futures up just over 2 points. squawk will be right back. there is only one way to celebrate this unique similarity. witness the cheesesteak shuffle. ♪ cheesesteak, cheesesteak ♪ ♪ it's the cheesesteak shuffle! huh! ♪ ♪ every day, all day, cheesesteak, cheesesteak! ♪ ♪ every night, all night cheesesteak, cheesesteak! ♪ ♪ 9 a.m. cheesesteak! ♪ 2 p.m. cheesesteak! ♪ 4 a.m. cheesesteak! ♪ any time (ruh!) >>geico. fifteen minutes could save you fifteen percent or more on car insurance.

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china is suffering its first corporate bond default and it could be a game changer. michelle caruso cabrera and eunice yoon are both on the case. we want to start out with michelle this morning. >> a watershed moment in modern financial chinese history. a corporate bond defaulted. it's not that every single corporation was so profitable, becky, that it could always pay back its investors. it's that in the past when bonds have gotten into trouble, there have been forced bailouts by the government. today, let's show you the basics, chaiorwu solar borrow 1 billion yuan, missed an interest payment today of 14.6 million. the last 24 hours, everybody thought, no, no, the chinese government wag goes to come and bail it out. initial coupon wab 9%. what are the implications here?

believe it or not, when you said suffer -- >> big news? >> oh, my god, investors were cheering. they said god, i hope they let this thing go. in capitalism, some things fail. you can't believe you're always going to get bailed out all the time. however, it means you're going to likely see higher credit costs. that's the way it's supposed to be. there are concerns it might actually lead to a freeze. there's been a lot of issues in china. especially if there are things like the wealth management products that are shadowy. we've seen ten bonds delayed in the last few days. spreads start to widen between aaa and aa, which is how it's supposed to be. >> you get paid for going into riskier things this way. you get paid to do your job this way. >> and it's a much more efficient way to allocate capital to higher quality

companies versus lower quality companies. let's go to eunice yoon with more on the ground in beijing. >> hey, michelle. investors were pretty surprised by the fact that the government wasn't necessarily going to come in and be the white knight. in this situation, the local authorities would come in and try to make the company whole, they want to make the investors whole, because if you're worried about the economic fallout. but in this particular situation, nobody came in to rescue anyone. that's been get rating a lot of talk among investors, people among the solar companies, as well. any we can't make that assumption that the government would come in to bail out these companies. the view has been so far that this might not necessarily be a bad thing for china in the long run. a lot of people have been talking about how it's a signal

on the leadership that they are serious about these reforms and changing way the system runs. now, the danger, of course, is as you had alluded to, as well, that nobody really knows what the trigger could potentially be for unraveling the financial sector. you know, that we're definitely seeing the financial sector modernizing, but at the same time, there are a lot of inexperienced bankers here, there are a lot of inexperienced investors. and that is really what is leading people to investors. that's really what is leading people to worry and one of the reasons why recently in a report you had been talking about as well, people are asking whether or not this could be a bear stearns moment. suddenly you have people thinking differently about risk and could that lead to, you know, as the market starts to reassess-that risk could that

lead to more bankruptcies, and then eventually to panic? and then what kind of implication could that have outside of the borders of this country. >> that's interesting you bring up the idea of these growing pains. i guess we expect that as any economy matures. these are people who will have to learn a whole new way to do business. >> inexperienced financial system. the things we take for granted, the transmission mechanism of monetary policy when they change interest rates doesn't feed through the economy in the same way as we think about it. it's still so new. bottom line, the message is the government is saying we are going to start moving towards focusing more on stability. all right. thanks, michelle. eunice? >> the bull is on a five-year run, it turned out to be the turning point in markets in the wake of the financial crisis. what about the bulls? will they keep charging even for

another five years? and becky said the so-called face of bitcoin will be chased down after the "newsweek" story. he was. he's denying the whole thing. the latest bitcoin plot twist, coming up next.

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five years into the bull run. the financial crisis knocked the market to its knees but since march 9th, 2009, stocks have been off to the races. how much longer can the bulls stay in charge? >> trouble is euphoria and fear. former fed chairman alan greenspan providing his economic wisdom ahead of this morning's jobs report. >> the bitcoin mystery deepens. the so-called face of the virtual currency says it's not him after being chased down by

reporters outside his home. "squawk box" begins right now. good morning and welcome to "squawk box" on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin who is in washington this morning. you just like being there, don't you, andrew? look at the jacket. >> we have the jacket. it's lovely behind me. it's all, you know, but i miss you. because i haven't seen you for two days in the flesh, you know. so to speak. not that you've ever seen me in the flesh. >> apparently you've thought about it a little. you have like a lunch set up with six senators and a couple of cabinet members. that's xushlly what you do when you're doing there. >> i have an acela train ride, that's my appointment, right after this program. >> honestly. all right.

>> i have an appointment with henry and max sorkin a little bit later. >> and alan greenspan. >> and with alan greenspan at 7:30. >> we will say when he's here, just turned 88 years old. >> 88 years young is what we should say. yesterday was his birthday. god bless him. 88. nowadays, that's -- well, we'll see. he's still great, sharp as a tack for another 20 years hopefully. >> that's great. the futures right now, andrew, are still up, even after another good day yesterday. we're up about 1.5%, i figure on the s&p. for the year. >> for the year? >> so if we did -- >> that was two months. >> six times that we'd still be okay. >> yes. >> if you add in dividends. >> you're back to thinking high single digits. >> i want three straight years of 30%. >> i'll take what we can get at this point. >> go in the right direction. >> and 2.7%, although as you saw

in "the journal" today, people that own stocks are the ones that make money in times like this. it does not necessarily help the wealth of everyone but if you had to pick one or the other. >> no one doing better or hopefully -- >> the key is for retail investors sitting at home, if you're a long-term investor, if you hold through on a lot of the volatility, investor after investor, jim my dinan told us this yesterday, we heard this from warren buffett. >> there's a lot more people in it than people that own stocks outright. here are your morning headlines. about 0 minutes away from the erelease of the february employment report. economists look for an additional numbers. the unemployment rate is seeing

a ticking down to really that watershed mark of 6.5%. it's not the watershed is used to be, obviously. no one thinks the fed is going to start doing anything with interest rates. safeway is being bought by a unit of cerberus. that unit already owns albertson's, that supermarket chain. the combined chain together would be nearly as big as cincinnati-based kroger. when i was a kid, we always said let's go krogering. >> in indiana, too. >> in indiana, too. is that where you're from. >> i used to go to kroger with my grandmother. >> i've lived in new jersey longer than anywhere. you can say the same thing. you probably lived here longer than any place. >> that's right. >> pimco co-founder bill gross

is accusing, departing ceo mohammed el-erian of undermining him. he says he has evidence. pimco, however, claims that gross did not make the statement attributed to him by reuters and that -- these guys, he said it, she said it, i didn't, then he called me this. it doesn't make anyone look good. >> no. >> by the way, you have to believe that bill gross did believe that mohammed el-erian wrote that article even though he didn't write the article. >> he didn't mean wrote it. >> when reuters say he never said anything like that to reuters. doesn't make sense. >> let's agree never to do this, andrew. becky? >> you'll send me $100 million, right?

>> if you can deposit that in the account, the deal is -- we're done. >> there's three people in the world who would be interested in whether we had a falling out. that's the difference. it's a little different at pimco. >> we have other news, perhaps with bigger implications. president obama speaking to russian president vladimir putin for an hour on thursday. they called this diplomatically addressing the need of russia, ukraine and the international community. they discussed direct talks between ukraine and russia with outside observers. putin put out his own statement saying that russian/u.s. relations should not never over ukraine. ukraine's prime minister speaking out with our own steve sedgwick today about attempts to get crimea to secede from ukraine. >> there have been no referendum. it is absolutely and entirely -- no one will recognize this referendum, probably accept north korea, probably syria

or -- and i want to be very clear. crimea was, is and will be an integral part of ukraine, no concessions. >> steve sedgwick will join us with more of this interview later in the broadcast. becky? >> andrew, thank you. the s&p closed at another record high yesterday. the dow closed less than 1% from a record high. obviously we've come a long way from the market bottom five years ago. how long does this last? mark, let's start with you. mark luschini. is this something we should expect because we fell so far? >> the lows of 2009, the price earnings ratio, the s&p 500 was about ten times.

typically, secular bull market started six to eight times earnings. arguably we didn't go that deep. ten is the new eight. we're five years hence from that. 187% above where we bottomed out in march of 2009, we aren't yet the longest running bull market and we haven't yet achieved the kind of appreciation in a long-running bull market that others have had. i think we're about fourth or fifth in terms of appreciation. so actually all in, we still think we have more to go. granted multiples are full at this juncture. that doesn't necessarily mean the bull market needs to be snuffed out. >> michael, what do you think? >> hi, becky, i broadly agree with that. most bear markets are associated with recessions. not all of them but most of them. so it would stand to reason that this business cycle has at least a few more years to run, that the bull market is not over yet, although i would agree with the point that valuations are full. the rate of assent is probably going to be slower from here.

we're looking at mid single digit gain, not a repeat of last year's 20% to 25% upside. >> what would you be looking for as annanication that things are starting to get pricey? >> we can look at valuation levels, we can look at a whole host for forward indicators. those look totally fine. every single recession in the last century has been triggered by fed tightening with one exception in 1945 where it was a world war ii drawdown. it would be unlikely we slip into a recession without any fed tightening taking place. that's probably a year plus at the earliest. >> as soon as the fed starts tightening, you look for a potential exit? >> well, i don't -- i hopefully not. if the fed is sufficiently behind the curve things shouldn't fall apart right as they begin that process. at least since the mid-1950s, you've had the kbungs of an

inverted yield curve and negative inflation adjusted monetary base growth about a year before a cyclical peak. there are other signs you start to see at least six months in advance. we'll be looking at a whole host of things in terms of when to get more cautious. we're not there yet. >> some of the other things we'll be seeing, just the numbers from the jobs market, what do you expect to see from that? >> we've had a series of numbers so far this year, none of which have largely met expectations. i think there's a couple legitimate factors contributing to that. one of course that i think we're in the midst of an inconvenieve hangover and working out from the stockpiles, the other, of course, is the expiration of the unemployment compensation emergency benefits. that i think is dented economic activity and weather, the clear influence. all in, i'm expecting a number that's less than your consensus, around 150,000. i wouldn't be surprised to see

the unemployment rate kick up a tenth of a percent or so. market participate aerntz will give a hall pass to today's number like they have so many other economic reports so far this year. >> we if we get a really lousy number, 25,000 or less, does the market still give it a hall pass, you think? >> there would probably be an immediate negative reaction but there are still strange weather effects going on in the month of february. we might have to wait until march, april for a really clean set of data. the underlying trend, the 12-month moving average, which is what i look at, is the best approximation for the underlying trend is about 185,000 on nonfarm payroll. we've been way below that in the last two months. the forward indicators of labor market momentum claims the nfib data, all of them hitting cycle highs or continuing to improve gradually. it doesn't look like there's been a labor inflection point in

the labor market. >> if somebody has been sitting on the sidelines and are nervous about what happened five years ago saw the market woes, maybe they sold a lot of their portfolio at that point, if they get back in now, will they be left holding the bag again? are they getting in too late? what would you tell somebody, michael? >> unfortunately, the vast bulk of the bull market in terms of percentage gains are probably in place now, probably 80%. maybe even somewhat more than that. if one has been completely on the sidelines, that's unfortunate. that said, there are things investors -- places investors can go. high yield municipal bonds hit a terrible year last year. they're starting to do better. >> if you look at detroit. >> detroit, puerto rico, the rising long rates. the fundamentals are improving for state and local budgets and those yields are at levels relative to treasuries and on a tax adjusted basis that should mean that sector outperforms --

we think it will outperform the s&p 500 this year. and there are other sectors that investors can look at. emerging markets are priced attractively right now. everybody hates them but the valuations are compelling. there are things to buy out there. >> michael, mark, thank you both for joining us today. >> thank you. >> andrew? coming up, alan greenspan. he'll join us with this jobs friday and his economic wisdom. where are the jobs? we'll go inside an industry where the sky is literally the limit. and the bizarre twist in the story of the so-called face of bitcoin. we have a lot of must-see tv straight ahead on "squawk box" when we return.

the associated press talked to nakamoto for hours. >> i have nothing to do with bitcoin, nothing to do with developing. i was just an engineer doing something else. i just believe that somebody put that fictitious name in there. satoshi nakam 0. and bitcoin.

>> since bitcoin's birth in 2009, the currency's creator has remained a mystery. the person or people behind it have only been known as satoshi nakamoto, which many believed to be a pseudonym. there was no confusion about the context of their conversation and his acknowledgement of bitcoin was something that happened. >> there are a lot of people running after this at this point. >> am i wrong on this detail, the "newsweek" author say yesterday that the son had called her? >> she said the brother. she said the brother had called her, not the son. >> not the son. >> she said the brother called and then it wasn't even an interview. he said a lot of things and hung up on her. are you sure it was the brother.

she said yes. i'm not sure how she was sure about that. i asked why the brother would call and say something like that. she said because there was bad blood between them. there are a lot of weird parts of the whole story. it's probably not surprising that the person or people who have been behind this have wanted to stay private, that they would still want to stay private at this point. >> if you were going to deny it and lie -- he also didn't look like a liar to me. maybe i'm bad at that. >> he did say she said, he set up a time, yes, i was somebody behind it but i've turned it over to other people. she said that's what he told her at the time. >> you'd have to. you'd have the idea and then you'd have a bunch of -- >> you probably can't be the one person to have done it. >> always come back to the code. where do these people come from who know how to do the code? there was no code offered when i went to school, learning it, you know? >> i still don't think he looks

like the guy for some reason i don't know what that means. i'm just saying. >> you want to be right and come back an say you knew that. what does that mean, he doesn't look like the guy. >> that's not a normal -- most un-pc thing. i don't known what that means. >> you're right. >> i don't know. >> he could be -- that's not what i'm suggesting. >> you're digging yourself in deeper. >> take it from me. just take it from me. i'm going to zip it. i'm going to zip it. >> did you know -- i've seen that. >> i heard this today, the unplugging day. >> i don't know what that stands for. >> anyway, did you know that today is the national day of unplugging? >> a day to encourage you to

switch off your cell phone and computers and make real life connections with people around them. i think people could fast for 24 hours. >> you would rather not eat than turn off your cell phone? >> not me. not me. >> it's friday night. >> but it should not include watching "squawk box." >> it's lent, too. >> you know what they say. what the jobs are, how about greensboro, north carolina. high-flying industry that's hiring next. we are connected and we're coming right back. >> i gave up drinking for lent. let's say you pay your guy around 2 percent to manage your money. that's not much, you think except it's 2 percent every year.

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.

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coming up this weekend, be sure to join us for on the money. can the almighty dollar do what military might and diplomacy can't in ukraine? the president of the council on foreign relations, why he says vladimir putin might want to check his wallet before he moves his troops and how this conflict could end up having a positive effect on america's economy. catch that on the money on sunday at 7:30 p.m. eastern

time. that's on cnbc or check your local listings and that, of course, hosted by the one and only becky quick. even as efforts continue to boost employment, many industries say they can't find good workers they need to fill all the jobs they have available. it's part of our continuing series on where the jobs are. mary thompson joins us now from greensburg, north carolina at a look at the approach pimco is taking to prime the runway for future hires. >> the aviation business is booming and timco is part of that boom. each plane must make about 30 days of service. they're brought in, essentially taken apart, all parts are inspected, repaired and

replaced. behind me, this engine will be inspected today, hned that, the tlush reverser. more will have to come here to be service. timco would like to build the hangars to accommodate those planes if it could find the workers. >> more than the hangars. we would need 400 additional technicians and that's the tough part. that's the headwind to our expansion. >> kip blakley is twith timco. they would need to hire 350 workers a year for the next several. they can't just be anyone off the street. these workers need to be trained and certified by the faa before they can touch any out of 737s or 767s or other planes that are

serviced by timco. >> it's a two-year process to go to a community college or aviation school. once they get that certification and come to work, it will still be two to three years before they can be proficient and efficient on aircraft. >> timco is basically priming the employee runway a number of ways. it's going to elementary schools to talk about aviation. it's recruiting at middle schools for four-year program where a senior in high school will come out and be certified by the faa. it's working with a community college on a two-year program and reaching out to unemployed or underemployed adults. getting them in on a 12-week course where they can start working and earn money and work on that certification. >> how much is a worker expected to make in one of these jobs? >> well, if you're an faa certified technician, the first year, they can make up to $30,000 a year with overtime. keep in mind that does include

both health insurance and other benefits like a 401(k). >> that is with overtime. how much does it cost timco to do this? in terms of the training programs and other things? >> i don't have the answer to that. keep in mind, for example, the underemployed adults, the two-year training program is done through a community college the students would pay for. timco helped develop that program. they worked closely at developing a program at an aviation high school here in greensboro. while they won't pay necessarily for that training, they do have input and, again, they are working with them, for example, providing internships to some of the high school students that come in here. they're trying to spark interest, tell people this is a place you can get a job and eventually have a long-term career. >> they may get unionized. do they ever talk about unions there. >> this is not a union shop, no.

>> not yet. if they're successful. >> we'll see. but not right now. >> thank you for that report. we appreciate it. >> sure. >> we should tell you, we are an hour away from the february jobs report. we get that at 8:30 eastern time. helping us with the countdown, the one and only alan greenspan. he is in the blame the weather camp when it comes to economic growth. find out next what he's thinking. let's take a look before we do that at the futures right now, we do have green arrows, of course, all that could change when we see the number at 8:30. back in a moment. get a leg up on the trading day with the morning "squawk" newsletter. go to squawk.cnbc.com and sign up now. ♪ ♪

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welcome back to "squawk box," everybody. in the headlines this morning, the labor department will release the february employment report. that's coming up at 8:30 eastern time. the economy is expecting nonfarm payroll to come in at 152,000. although we've got lousy early reads this week from other job numbers. the unemployment rate is expected to tick down slightly to 6.5%. that's the level that's so important for the fed. average hourly wages are expected to rise by 0.2%. cerberus is buying safeway for $9.4 billion in cash and stock. the private equity join the will pay $40 a share for the grocery store. and an agreement is being signed

with shanghai group and disney. superhero film "iron man iii" debuted in china and included a chinese actress. alan greenspan former federal reserve chairman and president of greenspan associates, he is also the author of the recent book "the map and the territory." risk, human nature and the future of forecasting. we need to wish you a happy birthday a day late. you are 88 years young. so wow. if we could all do that, we'd be very happy. there's a picture of you from yesterday. did you see that? you had a cupcake at the office there. >> that's typically what i do. >> happy berth day.

we have a lot to talk about. ukraine and all sorts of issues going on in the economy. because it's jobs friday, let me ask you this. a lot of questions about the weather and whether we should care so much about the weather. do you? >> of course, because you have to basically look at anything which can affect the numbers. but you have to be careful interpreting these numbers. we, for example, in our office keep a weekly seasonal adjusted production index but associate it with inventory and consumption of industrial products. once what that has shown, up until the very last week it was drifting down as inventory liquidation took hold because there's an excess of inventories earlier on. last week it's turned back up. >> right. >> now, you can't read the weather data in those numbers because you probably could get the inventory and liquidation in any event, which is

extraordinarily high. the weather probably had some effect. you'd be able to tell better by looking at household data. >> are you a believer that good news is good news and bad news is good news as well? >> the stock market you mean. >> there's a sense if it's good news, that's good news and if it's bad news, we'll take it that the fed will slow down and that will be good news. >> those types of views rarely, if ever, turn out to be accurate. i'm not going to commit myself one way or another. >> i don't know if you saw this, keith hall says the weather effects, he thinks, have been way overstated. in part because if you look at hours worked rather than level of payroll, the average weekly hours have not changed little and that would be a signal. >> he's correct. it's one of the signals.

we don't know what happened last week. >> we will know in just about a half hour. let's talk about ukraine. you have a take on what's going to happen. how does it play out? >> it's not so much a take on what's going to happen but the fact that diplomacy is far less important than the stock movements within russia. in short, we've reached other confrontations with the soviet union, there was no such thing as the stock market. now it has a major effect on the russian economy, which you know is not doing well. and the ruble has been deteriorating and it's been deteriorating in a way in which it's clearly tied to potential problems within ukraine. i don't think -- i think those indicators are far more useful to me in determining how this

particular diplomatic issue is going to come out from anything that is talked about by people who are doing the diplomacy. >> what do you think is going to happen? >> i'm pessimistic, if you want to put it that way. i think what will happen eventually, let's face it, one of the great disasters of the 20th century was the demise of the soviet union. and it's very obvious that he's trying to work its way back and maintain something similar to that sort of institution. >> right. >> and i don't see that we have the capability of preventing it, except if we can affect their financial systems which creates major deterioration in russia, in which case there will be a response. but only in that case as far as

i'm concerned. >> last time we talked to you, we talked about inequality. there was a report just yesterday about, frankly, if you own stocks you did well over the past couple of years. if you didn't, you did less so. how much do you think we should worry about this issue or not? is it overstated or understated? >> no, it is not understated. i think the issue of income inequality is one of the major social problems we have in society. basically you cannot run a market economy effectively if there is a real pull within the social system. i take income inequality as a very serious -- >> is it income inequality or -- do you need to compress the top down or bring the bottom up or do you have to do both? >> it doesn't matter.

for example, i've been arguing the issue of getting h1b. >> immigration reform. >> opened up so that in effect we could get the people like you and me who are being subsidized by the fact that they're not letting our competition into the country. we're doing a lot better than we should be. if we have h1bs open up very significantly, there would be more competition at the upper echelons of the income strata. that in itself will push that down. as far as i can tell, there is no difference from a political or social or any other noneconomic way you want to look at it between weather or not we take the top down or bring the bottom up. remember, 50 years ago -- 100 years ago, the top had a real

standard of living which would be at the poverty level today by far. >> okay. we'll take a quick break, send it back to joe and we'll come back and continue this conversation. thank you, doctor, appreciate it. joe? we'll have more with alan greenspan after the break. if you're looking for weekend reading go to squawk.cnbc.com, the blog has the whole week in review. the entire interview with warren buffett, hedge picks by jamie dinan. check out the blog, squawk.cnbc.com. we'll be right back.

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have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter.com/offer2. welcome back, everybody. let's take a look at the futures. we are awaiting the jobs number to could bepling out. it's less than 50 minutes away. the dow futures are up 22 points, s&p up by 2.5. we've had a fairly strong week for the markets. we'll see what happens at 8:30 for the numbers. the estimate is 13 ,000 jobs. we'll see if that happens, given the weakness we've seen in other jobs numbers. the ten-year note is yielding

2.73%. joining us is alan greenspan, former federal reserve chairman and president of greenspan associates. looking at some of your comments that we glean from you already, i'm fascinated by your take on bubbles, how bubbles are inflated and whether we can either use the fed to try to, you know, try to not allow bubbles to be formed or to somehow let the air slowly out of them. i guess in your view, the fed is not the place to look for either inflating bubbles or dealing with bubbles or anticipating bubbles. >> i agree with that statement, whoever may have made that. >> i think it might have been you. >> that's a reliable source. look, what we say at the federal

reserve, frankly, is that a necessary condition for the existence of members, is a period of long-term economic stability with inflation at a minimum. the reason we considered that a problem at the fed was that inevitably leads to bubbles. you cannot avoid it. you can try to defuse it, you'll fail as we did. in 1994 we tried to defuse what is what we called bubbles back then and we failed for reasons i have discussed in my current book. but you can't break -- unless you break the back of the actual euphoria that generates the bubbles, you're bound to fail. and the result of that is something that is outside the hands of the fed and of issues i

discuss in the book, there are other things we can and should do. >> well, right now, we all think that -- you know, i think the people in the fed right now feel like the onus is on them for every aspect of our life. i think that's incorrect at this point. they certainly think they're capable of running things and defusing bubbles. i think they think they're capable of not causing bubbles. i don't know if they have a firm grasp on any of this. >> i'm not in a position to answer that question. >> chairman, do you read the minutes that came out from 2008 around the financial crisis? >> yes. >> what's your take on that? >> i don't comment on such issues. >> chairman greenspan, it is five years since the market lows. you're the person who first talked about irrachelleal exuberance way back then. given how far we've come, do you worry we're getting into that

territory again. >> as far as the stock market is concerned, no. that's not to say we may not be near highs but you don't get the buoyancy, the type of movements and what i would call the equity premium that characterizes a bubble or euphoria. it's no the that many years ago. two or three years ago, we were at the highest level of equity premium, a rate of return on equity that the markets require. we had had the highest equity premium in 50 years. it's come down a bit. >> andrew, andrew, hold on. let me talk to him for a second. so you said there's other things that can be done then, you're not counting on the fed to defuse or to manage the bubbles. some of the other stuff you told us is about dodd frank, for all

that it was intended to do, it could have been done much easier by just raising capital at most of the banks. is that the remedy -- if the fed can't help us, is that the remedy that can help us, making sure our financial institutions are well capitalized the next time something inadvertent happens? >> there's nothing superior to that. the issue here is that dodd frank, as a concept, in my judgment, didn't do as required for a regular initiative. you have to first diagnose what the problem is. having diagnosed the problem, then you determine what essentially needs to be done to correct it. and i think that coming from what's in dodd frank, the diagnosis is basically wrong, as i've put it in my book and i'll be discussing this issue in

further editions of the book, we're getting into a situation where the problem is wholly in the capital era, because i don't know of a single thing that went wrong in the most recent boom and bust, an issue of the tightening of freud statutes, which i might add is a critical issue for the functioning of the financial market because a free market requires trust. and trust and fraud are interrelated. just as important, if not significantly more so, is adequate capital and collateral requirements. we went into lehman brothers, wall street days with lehman holding 3% tangible capital, you can't function that way and that capital candice appear in a matter of hours and it did.

>> when banks say that if you raise our capital requirements, it's going to reduce lending, is that a real concern of yours? >> i frankly think not. and that the reason is the experience we had in the 19th century. remember that capital requirements before the civil war are more than 50%. they were moving bound throughout the latter part of the 19th century. yet the rate of return on equity, net income as a percent of equity was flat in the range of 5% to 10%, which is another way of saying that the ratio of income to assets offset that. i should think we're looking at precisely the opposite pattern. i wouldn't be surprised to find that we're going to get a significant capital

requirements, that it's going to be offset in large part by an increase in the rate of return on assets. >> right. >> the bubble related question that joe was talking about. you lived through the dotcom bubble. do you look at what's going on in silicon valley, facebook, y buying whatsapp, is there a buying bubble there? >> bubbles are not the problem. bubbles, by definition, will deflate. it's the institution which holds the toxic aoxic asset which is critical issue. for example, let's go back to the dotcom boom. we had a collapse in stock prices. huge losses. but it was essentially in those types of institutions which were not leveraged. at the time, households, they weren't.

other pension funds, mutual funds, they took a huge hit. but to get a crisis, you need serial default. we did not get serial default in that period. if you look at the affect on the gdp, it was virtually negligible. the same thing happened in 1987. in a more recent boom, it was a highly leveraged set pri ed sub market. >> you wrote the book on "too big to fail." from that crisis we got dodd frank. i want you to be part of this. i think he just said, andrew, not only did it not address the problem with capital not being high enough, but i think he's saying it's actually counterproductive in certain aspects, too? i mean, i would think you'd either agree with that or disagree. overall you think dodd frank was

a positive, do you not? >> i said wholly positive on the margins. i argued that the most important thing that's happened has been the increase in capital requirements. you could argue they're not enough. >> is dodd frank holding us back and hurting gdp both, dr. greenspan? >> i think so. i think that -- the difficulty is, when i was at the fed we had a few rulings a year. those rulings were extended because you had to go through all sorts of loops and circles of discussing with your colleagues and regulatory area. and we managed to do that. we've had many, many multiples of requirements in dodd frank. i don't think there's enough time to do it. and i don't think it's going to work. in fact, i wrote an op-ed piece immediately after dodd frank carried on, i said this isn't going to work.

and it hasn't. >> before we let you go, we've been talking all morning about the unmasking of the potential founder of bitcoin. i don't remember you being committal one way or another. do you see a day when electronic currency becomes a mainstream piece of the currency world. >> i'm sufficiently -- with the notion of the behavior of economics these days to say that -- what fundamentally attracts money, people to hold it as a transaction currency is that it has intrinsic value, like gold and silver, or it is convertible, essentially into that. the dollar, for example, is the means by which everyone settles in a crisis, why? we have the most gold. >> okay.

alan greenspan, thank you for being here this morning. >> my pleasure. >> appreciate it very, very much. i'll send it back to you, becky. >> you know we can stir things up when we get dr. greenspan to say he doesn't like dodd frank. you know the huffington post would love to write something like that. doesn't like dodd frank. you know how that works. >> i do. you're very clever at drawing that out, joe. >> i was trying to get you to do it, though. >> andrew, thank you. dr. greenspan, thank you. great talking to him. we'll be back with andrew in just a minute. when we come back, it is all about jobs. we're counting down to the february employment report where some of the best in the business. white, bernstein, wieting and patterson will join us at the top of the hour. "squawk box" will be right back. ♪

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its bond buying program? what would investors take away from the data? our expert panel is here to make you make sound investment decisions and get you ready for the opening bell on wall street. it's jobs friday and the final hour of "squawk box" begins right now. >> working for a living. ♪ working for a living ♪ i'm taking what they're givin' because i'm workin' for a livin' ♪ >> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin who is in washington today. futures, 30 points away from the jobs report, up about 17 points. they've been up over 20. they've been up single digits. at this point, we're waiting, watching after a pretty good week. andrew? thank you. safeway being bought by cerberus, the unit of the owner

rival chain albertson's, the deal worth $9.4 billion in cash and stock or about $40 a share. also this morning, ford's ceo alan mulally has award ee eed $ million in performance bonuses, which is restricted stocks. it will change to common stock in two years. the change in policy will affect new stock awards not ones that have already been granted. becky, you have the story of the morning. this is the one we've been talking about today. the man outed by "newsweek" magazine as the creator of bitcoin is denying that he is the founder of the digital currency. yesterday on "squawk box," "newsweek" reporter lea mcgrath goodman debuted her story about

tracking down satoshi nakamoto at his home. hours after that story broke, news reporters were at his door, surrounding his house in california. he was walking down the street with cameras following him. he said he's not in bitcoin and knows nothing about it. he got into a car with the associated press. they went to a nearby sushi restaurant before heading to ap offices in downtown los angeles. the press talked to nakamoto for two hours. he told the news service he never heard of bitcoin until his son told him he'd been contacted by a reporter three weeks ago. >> i have nothing to do with bitcoin, nothing to do with developing it. i was just an engineer doing something else. i just believe that somebody put that fictitious name in there. satoshi nakamoto and bitcoin. >> he did tell the associated press that many of the details

in the "newsweek" report were correct, including that he once worked for a defense contractor but he strongly disputes the magazine's assertion that he is the face behind bitcoin. since bitcoin's birth in 2009, the currency's creator has remained a mystery. the person or people behind its founding have been only known as satoshi nakamoto. which observers believe to be a pseudonym. mcgrath goodman says there was no confusion about the context of their conversation. she says his acknowledgement of his involvement in bitcoin, she says she is very sure of that. again, guys, we have been talking about this quite a bit. >> you know about washington. you know how these -- you know how they are when their lips are moving. can you judge who's lying. >> the nakamoto story? >> he's convincing to me that he had nothing to do with it. >> he is? >> i have no idea whether he is or not. i get the sense -- >> were you watching earlier?

>> sorkin said he doesn't look like bitcoin. i don't know what that means. >> what does a bitcoin guy look like? >> i don't know. he's treading and dangerous. >> he's not what i expected. i can't tell you what the guy is supposed to look like. i can tell you that was not it. >> the ukrainian guy said he looks like him. >> i expected somebody that looked more like andrew, frankly. i don't know if it's him or not. it could be that "newsweek" tracked down a guy with the same name who was an engineer. >> how much satoshi nakamotos are there? >> not that many in the u.s. could be he was an engineer who sounded like somebody who invented bitcoin. it's a fascinating story. i have no idea. >> if you search your google glasses right now, tokyo phone book, how many satoshi nakamotos -- probably a fairly common name. >> there are a number of them.

>> are you looking? >> are you still looking at becky? >> i'm working hard here. >> what if he changes glasses? that whole bit will be gone. >> it's so funny. >> never gets old. >> that and my weight. >> you're looking good. >> thank you. >> working hard. >> the markets -- but have you lost height? >> no. >> the markets will be focused on the job report this morning. steven wieting is global chief investment strategist at citi private bank. jared bernstein is a senior fellow at the center on budget and policy priority. in washington. and a cnbc contributor. jared, how are you doing? >> i'm well. it's been a while. >> nice to hear you. >> how you doing? i'm doin' good. >> you're in jersey, forget

about it. >> get out of here. >> ben white is here also. rebecca patterson, from bessemer trust. are we on track for 3% if we take out the weather? nothing worse going on here than weather? or something -- >> i think we do better than 3% in the second quarter. you look at the home builders index. we have the worst decline in february in 35 years. worse than 2008, 2009, the peak of the housing market. it was december through february. maybe caught in this statistic, maybe not. >> we all said that economic growth had been ratcheted up for 2014. we're expecting these good things to happen. we're on course, we're okay? >> i think a good deal that was priced in the markets, 32% return last year anticipates the

future. i care about 2015 and setting the course in markets this year. >> how is that going to be? is it going to be like 2014? is it going to be 3% in '14 and '15? >> i think we can do that. everywhere i go around the world -- >> you're talking about the market. i'm talking about the economy. >> the economy can come close to that. just be clear we are digging deeper into our resources. it's been a period where we stubbornly have zero labor force growth and keep lowering the unemployment rate. you know, i could have a couple years of this and you're at a 5% unemployment rate where the economy on average has peaked since world war ii. i think there's more slack potentially out there but we can't take that for granted. >> bernstein, i have backup since i haven't seen you in a while. >> we have a lot to cover. >> we do. i saw a report the other night, these crappy looking public schools. they're falling apart.

i understand this infrastructure thing. we agreed to the murray ryan budget and then when it comes out, you want to go 56 billion over. but we need to do something but isn't there anywhere that we can do it under the agreed upon number and put more towards infrastructure? aren't we blowing money somewhere? >> yes. >> you want to keep spending and spending and spending? >> i'd like to try to rearrange some things. that's politically very challenging. by the way, i'm still interested in that you're focusing on the public school infrastructure. i have a plan, f.a.s.t., fix america's schools today. i'm not just saying i just made this up. it's a bill in the senate and in the house. it's not going anywhere but what is, but it's precisely that idea. we have a deteriorating stock of public schools across this country, a one-time slug of infrastructure spending could help them become more energy efficient and save resources in

that regard and put a lot of people to work in the meantime. >> interest rates are low. >> exactly. exactly. >> i don't know what's coming over me. maybe it's because i haven't seen you in a while. it just sounds reasonable. it's the larry summers idea that rates are low. >> you have to let the building crumble to the ground before you do anything? >> this used to be a -- this was never a real partisan argument about for frr. about infrastructure. >> you're blowing money somewhere. i no he that. we're spending too much. i'm not giving you a blank check. >> all i'm saying is that it didn't used to be an argument between democrats and republicans where we had to be stewards. business folks tell me all the time it's actually important to have decent roads and communication systems and water systems and schools. >> rebecca, can you help?

>> can i help on schools, infrastructure, the economy or markets, joe, where do you want to go? >> i guess we better stick to your knitting. i was trying to fix the world for a second there. you can just tell us whether -- is there anything other than weather which has you questioning whether we did have an uptick in economic growth expected this year? are we on course for that? >> i'm still pretty constructive for the year overall. i think the united states can see gdp growth close to 3, maybe even above 3 if we get a bounce back this spring. but i think right now it's foggy. no one has a lot of clear -- i mean figuratively, not literally, you just don't have a lot of clarity. it probably will be a month or two. if you look at the leading indicators we've had recently, new orders out of business sentiment continues to go higher.

mortgage refis picked up again with mortgage rates going down. inflation is still low. there's a lot of building blocks that make me think we can come out of this softness in q1. europe keeps trending better. a lot of s&p multinationals, their biggest exposure is to europe. >> just one question, joe. that is have we never had winter before? i feel like we've had a lot of winters in the past. >> there's been predictions that the winters will start changing permanently, right? >> there have been a lot of people who said snow will become a thing of the past. it has not. >> the point is if you look at the hours worked, andrew pointed out earlier, they haven't changed that much. there's not an indication that the last two job reports were that hit by weather. >> a 0.1% difference in employment is 130,000 jobs. when you have some of the

country without heating, places like atlanta unable to move things from place to place. >> did you walk outside today? i thought it was 45 degrees. it was 29. i was like, wow. finally, spring is here. and before, 42 on the way in to this winter, 42 i thought, i can't get through this. >> toughened us all up a little. >> andrew? we'll continue the jobs conversation. about 18 minutes before we get the number. coming up, the prime minister of ukraine speaking to cnbc this morning. ukraine says it's ready for talks with russia but not until putin withdraws his troops. as we head to a break, check out the "squawk box" market indicator, all of which could change in about 18 minutes when we get the jobs number. work hisp from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest.

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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. president obama spoke to russian president vladimir putin for about an hour yesterday. the two discussed the need to solve the situation in ukraine diplomatically, they say. they discussed direct talks between ukraine and russia with outside observers. steve sedgwick talked to

ukraine's prime minister and joins us with more of that interview. steve? >> we were talking about economic policy. we want to speak about legitimacy. that's the issue here. the government doesn't recognize the regional assembly government in crimea. the crimean region have called for a referendum for next sunday, march 16th, where they could effectively seed from ukraine and join the russian federation. the president today, who's acting president for this country, says he doesn't recognize it in the first place. i put it to the prime minister, mr. yatsenyuk. there's ethnics in the majority to except the situation and move on and try and get a greater piece with this as part of it. he was adamant that's not the case. let's listen in. >> there will be no referendum. it is absolutely and entirely -- no one will recognize this referendum except north korea,

probably syria. and i want to be very clear, crimea was, is and will be an integral part of ukraine, no concessions. >> the real problem for him is that he's not having direct face-to-face talks with no diplomacy. moscow will not recognize this government, saying it's unconstitutional as well. i said, look, lavrov and kerry, obama and putin is not happening. diplomacy is failing. he wasn't that pessimistic. listen. >> we started this process. >> there is progress, sir. >> there is no negative implications, i will say, not as bad as we expect. not as good as we need to do.

>> at the moment, offensively, becky, it seems for us outside as we can't see progress at all on this one as well. is there something going on behind the scenes? he said let's be patient and let's see what happens. it's not as good as it could be but not as bad as some people think it could be. >> a continuing situation that we'll keep monitoring. when we come back with the jobs number just minutes away, what should you be doing with bank share this morning? we'll take a look at this sector and how you should be adjusting your portfolio. jobs report about 12 minutes away. "squawk box" will be right back. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities.

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it's time to play detect the payrolls. here's your host, becky quick! >> welcome, everybody, to predict the payrolls. i'm becky quick and i'll be your host for our game show this morning. right now we introduce today's contestants. steve wieting, citi private bank. ben white, chief economic correspondent at politico, jared

bernstein, senior fellow. rebecca patterson, chief investment officer at bessemer trust. the man who has the trader's ears, rick santelli and last but certainly not least, steve liesman. welcome, everybody and let's play. steve. >> 135. >> 135. ding, ding, ding. ben white? what are you thinking? >> 115. no change in the unemployment rate. >> jared bernstein, your predictions? >> 138 on the payrolls, unemployment ticks up a tenth to 6.7%. >> rebecca patterson, how about you. >> 130 on the payrolls, unchanged inemployment rate at 6.6. >> rick santelli, your guess? >> 120,000 on jobs and i'll take the fifth on the unemployment rate. i definitely don't want to be viewed as acknowledging it has any significance. >> steve liesman, your thoughts?

>> 84. >> one more time. 84? >> 84. i have a crazy motto about the private sector. i don't think they'll add much to it. >> without going over? >> the price is right rules. it's got to be "price is right" rules. >> one job. that's my prediction. >> i will wonder, half of your brought down your numbers given the numbers we've seen this week. steve, 84,000, you adjusted that. >> manufacturing employment, other employment was really week. they're both components in the model. when the government shutdown, it ended up being closer than 20. i probably should have stopped while i was ahead. within 20, a couple months and it was okay. i've been having fun with it.

i probably should have deleted it but it's there now and it spits out 84. >> invest on it, folks. >> quickly on the seasonal last month, around this month, i'm told they're less difficult so we could get a bit of a bump from the seasonal adjustment february. that would tend to push it to the upside of the consensus. >> do you have a model you plug things into as well? how does it work. >> i have a model that's mostly based on lag payroll data. it also includes uninsurance claim and the adp. the weak adp brought me down below consensus. consensus is higher than pretty much all of us, even given the weather. >> claims have been a lousy indicator of jobs, right? that's a big part of your survey. it can't really happen. >> it's a small part of my survey. what i wait mostly, i've actually been doing pretty well.

you can check. i put the forecast on my blog the night before. i've been doing well. my model has been extensive. the recent trend in payroll. the downshift you see over the past few months, i could pick that up. i happen to think weather is a small part of the equation. that's why i've been below consensus for the past few months. >> it's not my conscience but i have an angel and devil here. the devil wrote in, the fed shouldn't be spending any money on public school infrastructure, local communities and municipalities and states should be doing it. if they can forget teachers unions and all the overfunded public pension employees problems they have. >> quick shift in gears back to the earlier discussion about public school infrastructure, i absolutely agree with the writer in terms of the ongoing upkeep of those buildings. what i'm talking about is a

one-time plug to take the infrastructure from really lousy to better. and then get out of the way. >> whose idea was the nine box? who forgot we banned that? greco? no, no, i don't like it. what time is it, 3:00? >> around the horn. >> around the horn is back. >> there you go. >> there's no need for a nine box. >> drop him out, we'll have an eight box. >> get me out of there. >> let's take a look at u.s. equity futures quickly. the futures have been relatively flat. up 17 right now. "squawk" will be right back. there's this kid.

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welcome back, everybody. we are just seconds away from the employment report. the panel is here. we've all been waiting. we've gotten the numbers or at least their expectations of what to think. the broader consensus is for 139,000 job gains. given the weakness we've seen, including adp which came in worse than expected and the employment section of ism, all those numbers were weaker than expected.

that's why some people have brought their numbers down ahead of that. steve liesman coming in with the low on our panel, 84,000. >> repeat that several times. >> we'll see. if you're right you'll thank me. the dow newts afutures up by 24, the s&p futures up by over 2 points. >> up 175,000. february nonfarm payroll increased by 175,000 jobs, 6.7% is the unemployment rate. average hourly earnings increase 0.4%. private sector job growth an increase of 162,000. revisions to december and january, net increase of an additional 25,000 jobs than previously reported for those two months. job gains in february, plus 79,000 professional and business services, 25,000 up in leisure and hospitality. construction increased by 15,000. on the negative side, retail

losing 4,000 jobs. the information industry losing about 16,000 jobs. weather impacts on the february numbers. in february, according to the bls, 6.855 million people worked part time instead of full time. that compares to 692,000 in january and that number by the way, that 639855 million is the biggest since january of 1996 as far as the weather impact. in addition to that, an additional 601,000 people didn't work at all. versus 262,000 in january. we got to that 6.7% unemployment rate, basically the number of unemployed persons increased by 223,000 while the number of employed increased by just 42,000. slight uptick in the long-term unemployment, increase of 203,000 to 3.8 million, 37% is

the rate for long-term unemployment. back to you guys. >> hampton. definitely sounds like -- i asked not to be -- i do not want to be part of this nine box. okay. thank you. i'm going to keep talking. >> the press box, that's hot. >> that's not bad. >> wieting, 3%, on track. >> this is a good number. >> really good. >> labor force growth and stronger employment. eventually we would have got the unemployment. labor force growth is really important. it's the potential to grow more in the future. i like these numbers and i think it's good for the market today in the united states. >> liesman, did you use the climate guy's model for your 84 group? >> i predicted the warm winter which we didn't have.

>> because of climate change. it's really behind everything. >> you did see a little bit of weather in here. construction 15 which is off the trend, joe. retail minus 4.1. 4,000. transportation minus 3. information which shouldn't be all that weather affected. minus 16. we don't see a whole lot of weather in this number. >> you do the prior two months, being down 100,000 on average. usually you can get a rebound right away. we probably haven't seen a full recovery as we would have. >> bernstein, you still have friends in the government, apparently. you nailed it, right? >> i didn't get the payroll right. >> where were you on payroll? >> 138 on payroll. i was low on payroll. i did expect the unemployment rate to tick up a tenth. >> you are the highest, though. you're at 140 without going

over. don't you know how this works. >> oh, great. i want a t-shirt or something. one thing here we haven't mentioned. the 4% on average hourly earnings has not to be one of the higher increases we've seen in recent months. if that sticks, that's a good sign. this is a report that's reminiscent of the kind of reports we were getting four months ago before thedown shift in growth. this is much more on trend with the 175, 180,000 we were getting before the recent slowing. if this sticks, one month does not a new trend make. one thing that's worrying me about the economy is weak paycheck growth. weak income growth, weak disposable income growth. this could help on the consuling side if it sticks. >> anyone notice that the stock market seems to go up and we used to say it was the fed. and it gets to a certain point, it can't go any higher and something like this comes out, a total surprise. does the stock market have an idea that they're still on

track? >> there has been something besides the fed here. can we talk about the politics of this for a second? this is obviously a good report. >> it's good on the numbers and the labor force. it's a sigh of relief. going into midterm elections where they'll probably lose seats anyway, they would lose a lot more if the economy was really tanking. >> two things to point out, we saw the ten-year, yielding 2.8% and the dow futures are up by about 75 points above fair value. >> they immediately took off. >> 2.8 is a high yield. i'm terribly worried. >> it's been crazy to see the pressure on yields to this point. you might have expected the yield would be moving up faster. >> you have a better number in bernstein, the better numbers for the election in 2014. if you like the plan you can keep it in 2014. >> here are many months. there are a number of job reports between now and then.

and let's not get too far off. >> rick, this is lucky speaking here, i don't know whether you know the chihuahua. what do you have on this number? do you believe it or do you figure that guy was asleep again and didn't check places he was supposed to check for employment? >> probably the head of the census and the white house probably was working diligently this time around. i don't know. i would probably say the 6 1/2 week high that we jumped to at a 2.81 yield, that would have been on a closing basis is already coming down. 2.81, now 2.79. no surprise, knee-jerk reaction was a bit of a flood gate of selling against the strategic 2.75. which side is 2.75 we close on will be very key. i think this number does underscore the notion that weather probably had an effect in a lot of areas but not nearly

as large as many would say. it's supposed to be a good thing for stock, which will probably rally for a good chunk of today. in the bigger picture, it's not a good thing for stocks. they got a bit ahead of themselves, handicapping the weather spread too wide. >> obviously a good number today. one thing i've been looking at on the shorter term basis recently is how revision for u.s. q1 gdp has come down. the beginning of the year they were 2.5 for the quarter, now they're 2.1%. people have lowered the bar. this sort of number today helps start fuel sentiment towards growth going forward and that change in people's expectations for growth, i think, is a bigger factor for equities than the absolute level of growth itself. i think this is good for equities going forward. >> everything is good for equities. >> before we miss the weather, steven, what about this tick down in hours?

went from 34.3 to 34.2. >> yes. >> is that a place where, "a," it shows up when the weather shows up and less gdp. >> it's shown in a variety of terciary indicators. i believe this has been a disrupted period compared to a typical winter. >> the bump in part-time work that the bls told us about, those fingerprints are all over that hours number. i think that will change. that's a weather function, i think. >> the economy doesn't care if one guy shows up and works 40 hours or two guys show up and work 20 hours from a gdp standpoint. gerald, people are making more. that's important. when you shift down from 33.5

hours to 33.3, how big a deal is that? >> it's a big deal if it's fixed. there's an index in there of aggregate hours. i've always looked at that to get a beat on where the aggregates are going in gdp. i take the point that someone made earlier that that could actually put some downward pressure on q1 gdp rates. i don't think it will stick. i think that's probably a weather fingerprint. >> i'm sorry to report the government added workers this time around. >> my prediction, let's say we have workers every month until the election. the unemployment rate goes up over 7%. i want to see janet yellen and the federal reserve point to fact that, well, hey, it's going up. it really is good news unlike they did when it was going down and it wasn't at the last election. >> it is true, maybe ben wants to talk about this, the fed is at a loss for explaining.

what is that now? what is it, joe? the fed is at a loss for sending slack to the market. it believes there's slack out there but can't provide us with a numerical gauge for what that slack is. >> they simply don't really seem to know. obviously i don't think this number changes the fed plan at all. they'll keep tapering. i have a question for you, though, that is the increase in wages, does that change the fed discussion at all about inflation in the wings, waiting for it, change the timing of a rate hike? >> labor costs yesterday? >> it was all state government that had workers. the federal conspiracy doesn't work there. sorry. the federal decline. >> those state workers and local workers will keep coming back. revenues to a lot of states are picking up nicely now. there's a lot of political pressure to bring workers back. i think that's going to be a net positive for the next several months at least.

>> if it stays at a surplus. >> i think janet yellen believes that wages have a ways to run. >> yes. >> i think she feels there's catch-up in there, whether or not the market will let her get that catch up is an interesting question. you start seeing a situation where unit labor costs are not falling anymore, wages are rising strongly. she would argue there's a lot of catch up with the productivity that's been out there that has not gone as compensation to workers. >> labor costs are not supposed to fall outright all of the time. incomes are supposed to rise. it's supposed to be recycled back into the economy and fuel more growth and more investment. look, it may not be the time where corporate profits get to leap relative to the rest of the economy for the next couple of years but i don't think we've actually needed that. >> i know we have to wrap but one other data, just so we're not forgetting this problem that's out there, people who are unemployed for more than 27 weeks or longer ticking up to 3.8 million from 3.6 million.

>> that's an important point. >> remember, steve, unfortunately, this is after we've allowed extended unemployment benefits to expire, which is a tough call for those folks. >> our thanks to -- oh, look, look who i am. two nuts walked into central park. one was assaulted. oh, okay. >> any crimea jokes? >> too early. >> thanks to becky -- this is easy. thanks to becky, andrew, jeff, steven, jared bernstein, rebecca patterson, rick santelli and ed asner? oh, i'm sorry. steve liesman. >> next. >> there we go. thank you. we appreciate you joining us this morning. still to come, we head down to the new york stock exchange to find out how cramer's feeling about the jobs data.

also a programming note, join becky for "on the money" this weekend. can the almighty dollar do what military might and diplomacy can't in ukraine? he talked to richard haass. why he says vladimir putin might want to check his wallet before he movies his troops and how this conflict could have a positive effect on america's economy. that's sunday at 7:30 p.m. eastern on cnbc. "squawk box" coming right back after this. tall the building is,

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welcome back to "squawk box" this morning. take a look at futures after that jobs number seemed like a good one and the markets are taking it that way. the dow looks like it would open up 93 points higher, the s&p close to 11 points higher and the nasdaq close to 20 points higher. big lots reporting quarterly profit of $1.45 per share, beating estimates by 5 cents with revenue also beating forecasts. big lots is in the midst of a restructuring that it's seeing exit the canadian market. take a look at gap, its same-store sales dropped by 7% last month. that surprises some analysts who had been predicting an increase of nearly 1%. gap citing the weather as the factor. the gap noting that the winter storms forced all of its stores to close down for one day but it added that sales began to

improve as the month ended. h & r block reporting a wider than expected loss for its latest quarter and revenue shortfall. the tax preparation service cited a later opening to tax preparation by the irs. $277 million in revenue will be recognized in the current quarter. finally, foot locker reporting fourth quarter profit of 82 cents per share, 6 cents above estimates, same-store sales rose a better than expected 5.3%. becky, over to you. thank you. when we return, jobs, the fed and the taper program. how will the banking sector react to today's numbers? and what could it mean for interest rates? we'll find out if names like wells fargo and citi should be in your portfolio. "squawk box" will be right back. that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ]

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let's get down to the new york stock exchange and jim cramer joins us now. i don't think carl is there, we had lucky on, carl would say -- he is a good boy, jim. just so you know. lucky is a very good boy. okay. so i've got that out of the way. so, that was a good number, wasn't it? >> yes. rebecca patterson had the best, straightforward, this is good news, you know, she didn't waiver, she didn't caveat it.

i really like it. you shouldn't waver or caveat. >> i just wonder, jim, i tied something to, if you notice in the last 18 months or so, sometimes i think the market is over its skis and saying nothing can happen that will happen and something weird happens, why didn't i assume nothing would happen. i was thinking we haven't lowered it enough because of the weather. >> others around you were saying that. i think this is why the market has been rallying, people are thinking the last two numbers were false tells. this is why the s&p's been going higher. does the market sell off because the s&p's been going higher and this is what they really want. anything is possible. that's certainly possible. now we know why we were going to record highs. thingers are better and march will probably be even better than this number and that's why it's been happening. >> in a little bit of growth, you know, we're already seeing some of the deficit issues become sort of less pressing.

i think we still got a lot of work to do with entitlements, jim, what does instead of 2.75 what does it do for our options and everything we need to try to do? it makes a huge difference for everything we try to do. >> of course. that's why i don't like the look-through numbers and i don't like to asterisk and say this is because of the fed or the weather because when we get a good one. this was not weather aided or subtracted. it does make you feel like if you get construction jobs doing better, residential and, of course, if you get commercial because that would be the biggest job generator. you talked about the government coming back. look, this is why we've been going up and we discovered it and we should say, okay, now i get it. it wasn't all done with smoke and mirrors. >> is that the bitcoin guy, jim? >> gee, i don't know. that denial was so strong. i defer to andrew ross sorkin on everything. >> andrew says he doesn't look like the bitcoin guy.

>> well, if andrew says that who am i to argue. >> we think the ukraine guy looks like the bitcoin guy. >> i really want to send my kids to the ukraine to fight for that. that's a terrific thing to fight for. does anyone ever think about that, do you want your kid to fight in ukraine? for what? ukraine was on the wrong side of history a lot if you want to talk about the side of had estry. >> all right, andrew. thanks, jim. now i'm going to andrew. anyway. >> see you, jim. >> let him talk! let andrew talk! coming up next, should you be banking on financials? we'll take a closer look at that sector and the names that should be in your portfolio. and make sure you stay tuned to "squawk on the street" because on the opening bell and market reaction they'll give you the reaction to jobs date and plus labor secretary tom perez on a first on cnbc interview. l . our clients need a lot of attention. there's unlimited talk and text. we're working deals all day. you get 10 gigabytes of data to share.

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welcome back, everybody. the fed using the jobs report as a tool to adjust its bond-buying program and with that comes a focus on interest rates that leads back to one of the most important sectors in our economy, the financials, let's find out what names should be in your portfolio. joining us is marty mosby and you saw better than expected jobs number.

does that make you think higher interest rates come sooner rather than later? >> well, we're looking at in the bank sector is a long recovery of profitability. the first half was about getting the loss column behind them and now we need to see the returns improve and the profitability. the economic growth and the rise in interest rates is one of the two things that really is the next catalyst. the better employment number definitely starts to accelerate that and that's good for banks and the earnings catalyst we're waiting on right now. >> let's talk about your favorite names, wells fargo and suntrust and citigroup and key corp, what do the banks have in common? >> what they have is rate sensitivity, and they can definitely benefit as rates go higher, but they have short-term catalysts while we're waiting on on that to happen, if it doesn't show up immediately that the feds fund rate will be going higher which we don't think is the case. we want to have some efficiencies. we want to have undervalued things in the business mix that we think can show some

improvement over the next year. >> you also -- >> on the other hand, we have some names that are more rate sensitive lidge regions or northern trust when the rate rise does come, those are the ones you'll be looking at there. >> why are those two more sensitive to interest rates? >> if you look at regions, for instance, they've got about 80% of their assets in the tactical pool which reprices in less than a year. and nornl trust has trust fees they've been waiving as well as the duration on the balance sheet is less than a year and a half and they reprice the securities portfolio in less than a year and a half as the short-term rates go up, they get the benefit. >> we've been talking to strategists today that say we could have seen a lot of the bull market maybe something closer to 80% for the gains for the major averages. when you look at these stocks, what kind of growth do you expect from here. >> you put this in context and the banks lost over 85% of their shareholder value in the financial crisis and the

recession. we've only made back a little bit more than half of that. so, as we've seen the overburden from regulatory pressures. we've derisked the balance sheets and increased capital, this will be a much longer recovery in banks. probably a full decade before we get back to the full value. we think with interest rate rise and increase in economic growth as well as eventually getting to, like, we see in every year, more deployment of excess capital, those things bode well for the banks and we think we could see 15% upside over the next three to five years. >> very quick answer, ten seconds or so, are there any stocks in the financials that concern you? do you think overall the group is in decent shape? >> there's only two categories there. one, too much rate sensitivity so that's all they have in the short run is the rate rise. and then others are some of the higher-quality banks have run in to some stalling out because they don't have much recovery left in them. >> marty, thank you so much for joining us today. really appreciate it. >> from memphis. >> that's right.

>> memphis scored 84 points last night and lost by 13. >> ouch. >> sorry, marty. well, that does it for us this week. we have a lot going on. andrew, you have a safe trip back here we'll see you on monday. >> i'll see you in las vegas next week. >> oh, my gosh. vegas-bound. time for "squawk on the street." good-bye. >> on a bender. 175,000. better than expected on this jobs friday. good morning, welcome to "squawk on the street" i'm carl quintanilla and david faber and jim cramer. futures extending gains after the jobs number. the dow begins 1% away from an all-time intraday high. in the meantime, the jobs number better than expected despite some worries about the weather the unemployment rate edges up to 6.7 and average hourly earnings up 2.2% and that slightly outpaces the last inflation read, jim, most of those internals look