cnbc. i'm becky quick with joe kernen and andrew ross sorkin will be joining us from las vegas. kicking things off at 7:00 eastern time, we've got home depot chairman and ceo frank blake. then we will be talking to the ceos of masco and mohawk. then andrew will be grilling with frank webber. >> has anyone spoken to him yet? >> who frank blake? >> no, andrew. is he on a roof, on a mattress? is he in a refrigerator lost where he -- >> no. maybe we should send someone to take some photos. >> this is vegas and this is andrew. has anyone heard from him at all? >> what is it, it's had o'clock on in the morning there right now, right? >> yeah. >> there he is. there he is. >> okay. yeah, you had that ready? am i that predictable?

that is the guy he interviewed yesterday with the baby, right? >> that's andrew's face. >> that's andrew's face and gal gallaphanakas's -- too bad it's not "hangover 2." andrew was -- >> they have it. >> yes, you are that predictable. >> i'm not going to try anything. who did that? >> rob? who was it? >> that's really bad. >> he did it. who came up with all that? who knew he was going to go there? >> that really was not -- that is -- no, but in reality, andrew is -- he's a very good employee.

he just is. and he's very diligent and you know he'll be there, he'll be prepared. and i have no tsh even in vegas. even if he did have some fun, he would make sure that he was did happen -- >> let's get a check on the markets this morning. asian markets down sharply overnight. the nikkei down 2.5%. a lot of worries about china's growth. there is another number coming tomorrow and people are concerned ahead of that number. you can see the nikkei was down by more than 2.5%. the hang seng was off by more than 1.6%. the mining and metals stocks, if you were watching at any of these things, mining and metal sectors took a big hit. copper prices tumbled 5%. there are some indices that measure -- that measure different sectors and some of those are actually looking at this point to be near bear market territory. the china's enterprise index, sank to an eight-month low.

it's now down 19% from a december 2nd high. emerging markets overall, the stocks fell to one-month lows on this. currencies weakened. take a look at what's happening in europe. the cac is down by more than 1.1%. the ftse is down by 0.8%. and the dax in germany off by just over 1%. here in the united states, all of these concerns are adding up to a little bit of concern. red arrows, but no massive declines at this point. dow futures are down, but only by about 27 points. s&p futures are off by about 4 points below fair value. shams of gm fell more than 5% yesterday. that is its worst one-day performance in over two years. of course, there's a report saying that the u.s. attorney's office in new york now is opened a criminal probe of the company and its handling of the ignition switch recall. prosecutors are reportedly examining if gm is criminally liable to properly disclose the problems with the ignition switches. gm sells cnbc it does not

comment on ongoing investigations. and tesla not getting any loving. new jersey, this is something we talked about yesterday, and that is the dealer network versus direct sales. a new jersey motor vehicle commission has voted to ban the direct sale of automobiles like tesla in the garden state, forcing tesla to use dealers, instead. this vote makes new jersey the third state after arizona and texas that will not allow tesla to sell its vehicles directly to customers. >> this is not fair. this is not fair at all. i mean, what makes this not a dealership that you can't come in here and get an oil change? i don't think so. it's a dealership. >> that's the business model. competition ensures that there's a vertical monopoly in the sales process. and it restricts consumer access to very valuable and very important public safety considerations.

mainly warranty and public safety -- >> is there a commission called automotive realtors? i don't know. i can't believe we would mess that up instead of retailers. ♪ one of these states is not like the other one of these states just doesn't belong ♪ >> arizona, texas, new jersey? what -- it's weird. we don't understand what goes on with these. dealers are entrenched. we talked about that yesterday. we got some mail in for people that made a good case for not having dealers, that it's all about money and lobbying and -- >> forcing them to have dealers? that's not a free market, either. they talk about getting up the -- look, and a lot of it is local politics. >> tesla is reportedly going to stop selling cars in new jersey.

i lashed out against governor chris christie. $230. down about $4. it's probably a current nasdaq listing. the prime minister of ukraine is meeting with president obama today at the white house. they'll be talking about the intense situation in crimea as well as u.s. and international support for ukraine. >> i thought that was the guy that -- no, we were saying he looked like the bitcoin guy, he's not really the bitcoin invent inventor. >> did you see the "new york times" did a story yesterday, they called every -- >> i'm worried. >> what's the guy's name again? >> nakamoto, they called every one of them in japan. and there are a lot of them. the point was by looking at that last name, the surname, is the 468th popular name which makes it the equivalent of brian here

in the united states. so there are a lot of these guys out there. >> but "newsweek" had more than just the name, didn't they? >> they've spoken with him and at the time where he spoke with her, he said i am no longer involved with that. acknowledging that he had been at one point. she had used m.i.t.'s language nas sis experts to say this was the guy. but the "new york times" yesterday made a point of it's a fairley common name, particularly in japan. >> but you would think for "newsweek," you would want to be sure. weren't they almost gone a couple of times? >> this is the first print edition that's back on the stands for "newsweek," too. >> missed it by -- >> i'm surprised we haven't heard more definistly. >> we are. we asked her to join us on monday, but her schedule was too

full. president obama in new york city late yesterday, but before leaving for home, he stopped at the gap and had a chance to talk about raising the minimum wage. >> i want to congratulate the gap for doing the right thing. i think that anybody who is out there shopping should be supporting companies like costco and the gap and others doing right by their employees. and these companies understand ultimately it's going to be good for their business because it means greater loyalty from their employees, less turnover, greater productivity and also long-term more customers. so congratulations to gap and i am very pleased with my -- >> i think he's right. and finally, it's good to see him come around and let companies set their own minimum wages with the market, allow -- look at competitors, look at what's going on and pay more, pay what's necessary to get these. thankfully, hopefully he's withdrawing the government control of wages and prices and i commend him on that. did you see the --

>> is that not what he's doing? >> we'll talk to harwood about this, but there is an article here saying obama seeks -- >> all these things are good. >> to require overtime pay for managers, loan officers, computer technicians and others who are currently classified as white collar executive. >> it's nice to agree with him that companies that are able to do this and are in a position to do it are complying. that's good. although he's approval rating, now we're going to go to john harwood. depending on where you sit, you either loved it or hated that zach gallaphanakis thing. i will tell you one thing, we have sent -- you have interviewed the president. we haven't on "squawk box."

and we have sent people that we know that have been to some of the events at the white house have actually gotten a message to him directly that we want him to come on. he said, no, i wouldn't have any reason to come on. that just bothers me a little that he has time to do zach gallaphanakus, but won't come on here and talk about what we just talked about, minimum wage and -- it's all on your shoulders, john harwood. >> do you think you're in the same business as zach gallafanakus? >> you think you're in the -- >> the president is in the sales business. >> it sells better in a serious setting than one where they ask you about north ikea and ask you about -- i don't know, john, i think it would be better spent here than with zach gallaphanakas.

i see some saying a record and others well below estimates early on. it's the way everybody looks at a glass, isn't it? half empty or half full. we had a special election in florida yesterday in a district that had been well held by republicans. democrats had been hoping to carry it and the republican won the special election. a lot of money poured into that. people were trying to look at special elections as signs of the fall. i think this, the special election is less good of a sign of the fall than our poll is.

why does the president have a low job approval? when the ask americans how the economy is doing, 57% in recession. there are some advantages have, which is that they're less unpopular. democrats are under water, 35%, 38%, slightly more people have a negative view of them. but the republican party is viewed negatively by a 2/1 margin. if you look at factors affecting the election, you can look at some of the things that -- >> how is it 2/1? >> 27% favorable, 45% unfacial. >> i thought 27 times two is 54. >> it's in the ballpark.

>> all right. if you take the 45 and turn it into 5 4, it's 2/1. okay. go ahead. >> if you look at the things affecting the vote in the fall, what will make you more likely or less likely to understand the dblt, you can understand the budget deal recently struck to declare a truce of the budget cars. first of all, the thick that makes people most likely to support a candidate is one who can work across member party lines. secondly, you've got people who can bring home federal dollars to their district. and then you talk about the federal minimum wage, we were talking about the time story and the broadening of overtime, 58% of the people say they're for raising the minimum wage. now, they're also things that candidates need to stay away from, some of which are good for republicans. the most unpopular of all the issues that we tested in what

would turn you away from the candidate, cutting medicare and social security and balance the budget deficit. that's why there's no grand bargain. but you also look at people if you're a solid supporter of the obama administration, a strong plurallty says that would make me less likely to support that candidate and that tells us about the landscape that we're looking at, especially since so many of the senate races that will decide whether or not democrats or republicans are going to control the senate are being held in red states that mitt romney carried. >> alex fink has been on the show. and i remember it was a while ago. she held some government office and -- she was the cfo. >> she was the statewide governor in 2010. >> before that. >> she was the chief financial officer. >> we talked to her about back then she didn't want to do any drilling, no matter how far offshore. and we were just making the

point that a lot of people don't fly to florida, they drive to florida. and you want the tourists to come in, but you don't want any domestic of production of oil and gas. and then she had no idea the point we're making, i just remember not being that -- >> he narrowly lost. >> yeah, i know, three points or something. >> but i'm not -- what part of florida was it? was there a reason to think she should have had a really good chance? >> the part that i used to work in and cover at the st. petersburg times -- >> that's not like where gore was trying to harvest his wind, that's not down in -- >> no, but it's a scenario that's become more democratic. >> it used to be the oldest district in the state. old midwesterners, conservatives who had gone down to florida.

but they've got a baseball team now. the city has had a lot of economic development. it's gotten somewhat younger and more democratic. and so obama carried the district twice and the fact that democrats weren't able to win was a disappointment to them. >> you know we're having dan gilbert and warren buffett on about the bracketology and everything. and i know you're emotional about duke, but that loss to wake forest, but then the north carolina -- who are they? how do we know who is going to show up? >> i don't know the answer to that story, joe. so many teams are up and down with the exception of the florida gators. >> i'm more into this. i'm excited about these tournaments right now, starting

today. >> what sort of seed is cincinnati going to get? >> they should be two or three, don't you think? >> sure. i think they should be two or three. >> they almost beat louisville. it was one second left, he threw in and the last time they played, louisville was four or five right now, right? >> two or three depending how will we should do in the tournament. >> oh, you're talking about seat. i'm talking about in the -- >> oh, yeah, in the top five. >> we'll see how these teams are playing right now and in march. >> especially since we've got all these new ringer teams in the acc, bigger and more successful. >> i don't know how far i'm going to take them.

they look like they're getting worse. you can put $150 -- >> is that our office poll? >> dan gilbert at quicken loans is putting up the money to buy the insurance that buffett is providing. marissa mayer and dan gilbert are the ones putting up the money. >> no way. no way. >> i'll write the insurance on that. >> great. all right. you know what? the hollywood liberal connection is one that's really heart warming. that's one thing we can always count on, no doubt in my mind. and the actors are so clued in about how many things. it would ex asperate.

anyway, let me turn it over to bocky squawk. see you later, john. >> see ya. we're going to be talking to andrew in las vegas. when we come back, we're going to have the executive edge. andrew, as we mentioned, checking in from sin city. is he having a hangover moment in morning? we're going to find out in just a little bit. is it that andrew this morning? or how about this? we're going to see him in half appear hour. we can't wait so his what he shows up with. >> where in the united states does the home depot do the most business? sweet us. #hdfunfacts.

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

. more confusion surrounding the flights mh-370. sri now has more details for us. >> thanks, becky. i'm going to try my best to clarify what i learned from the last hour or so at this chaotic

press conference yet again. there was a lot of information and a lot of jargon, quite frankly. but let's try this. the air force chief said that there was a possibility of a turn back. meaning that flight mh-370 we have very well deviated from its course. it could wsh they're couching it in those terms. and he went on to say that a deviation or a turnback in industry parliament remains a possibility until these trails, if you will, these plots are scrutinized by the faa, the ntsb, and also the radar manufacturer. so in my mind, that isn't really going to be the next stage of this inquiry. all those three organizations are here in malaysia on top of that. we also heard that the british air accident investigation will be advising and helping with the

inquiry as will be rolls-royce, the makers of the engine that are in the 777. the air force did tell us the primary military radar last made known contact with the flight at 2:15 local time last saturday. and it was northwest 200 nautical miles, i should say, northwest of an eye last just west of malaysia. really, the bottom lean is they still haven't found the plane. they haven't found any trace of it. and the efforts are continuing both in the waters off the west malaysia and in east -- in the waters of eastern malaysia, as well. it's worth bearing in mind there's a strong u.s. presence

here, as well, becky and joe. there are two destroyers helping with the search. the pinkeny and the uss -- they're scrutinizing the waters off the coast of malaysia towards the western segment, as well. it really is scant consolation for those families to wait in perpetual agony. >> sri has been following this story from the fwining and he will continue to bring us update ps. >> you don't know what to believe. >> you know, all the -- if there are conspiracy theories about everything, and there are, 9/11,

think of the one you could design for this. >> you can't rule out anything at this point. >> is that true about the cell phones, that they're not totally -- >> i wouldn't bet money on just about any of that. >> they don't even know if there's closure in terms -- they're probably still hoping against hope that it was diverted in miami or something, yeah. >> we will continue to get updates as information comes in. right now it's time for the executive edge. right now, ackman says herbalife has said the company makes recruits paying an entry fee.

he says the company is disguising sales to distributor as hourly sales for consulting fees. herbalife says it follows local laws and the presentation reflects ackman's failure to fundamentally understand herbalife's business model. chinese regulators have yet to comment on the matter. >> i'm sure he's trying to understand the business model. >> chinese laws have specific rules and regulations against pyramid schemes. >> i read that and i was thinking chinese laws about a lot of things you -- you know, i'm not sure that the disclosure in regulatory environment is up to par, but what do i know? yeah, that's what they keep

saying. that they have strict laws about pyramid sales. >> he's saying they're calling them consulting fees. >> they purchase their products for self-consumption. 3,000 nutrition clups clubs. i don't know. >> how are the stocks on the s&p? >> there are thousands. no, a famous anchor once said that. but there are over 500 stocks but only 500 companies. >> right. that's the new way that the s&p 500 is going to be dealing with google and its tending stock slip where it's about to become two classes of stock on the indexes. it says it will keep both of those classes in, which will make it 501 stocks in the s&p 500. but as you mentioned, it's only 500 companies that they were --

>> they were going to do it differently, but now they -- >> it means they were going to kick somebody out? >> no. they were going to take only one google class, but they decided they're going to keep both of them. >> it's a trick question. >> when we come back this morning, we're going to set andrew loose on the vegas strip. >> oh, wait, that's him. did you just see him? >> yeah. >> think of a dog with two tales. that works even better than bill clinton. >> that's andrew. >> yeah, it is. >> we didn't make this up this time. >> that's his normal car. he may have driven out there. >> wow. anyway, andrew is in vegas. he is getting ready for home depot's ceo, frank blake. that's coming up at 7:00 eastern time. listen to this, andrew got the chance to sit down with a music superstar.

celine dion is the headliner at caesar's. she's going to tell us why vegas is the place to be. as we head to a break right now, take a look at yesterday's winners and losers. these days, everything your business does is done on the internet. and tomorrow you'll deveno more. that's what comcast business was built for. slow dsl from the phone company was built for stuff like this. sign up for internet and voice and find out how to get four weeks of tomorrow ready internet for free. and you'll be ready for tomorrow too. comcast business. built for business.

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good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick. andrew will be joining us from las vegas in just a couple minutes. this morning, the search for that missing malaysian airlines continues this morning. you realize when this happens how big the world is. they're trying to search 10,000 square miles and it took all day to search 30 square miles. >> these areas have been kwordonned off. each of these areas is about the size of spain. >> and you looked down -- you see muth but the ocean. they made little progress in determining exactly what happened to the jet or the 239 passengers and crew that were on board. the search is now in its fifth day. tesla is no longer going to be allowed to sell its cars in new jersey. a tesla executive calls the

decision disappoint fg not outright outrageous. new jersey joins texas and arizona. and a jump has temporarily frozen the u.s. assets of mark carpellus. mt. gox said that hundreds of millions of dollars worth of bitcoins may have been lost in a hacking attack. however, account holders are claiming instead that they're the victims of massive fraud. either way, they don't have their money. stocks lost ground on more concerns about global economic growth. here with us now, david bianco. and michelle gerard, from rbs. and we sat down and we didn't ask you, like, how are you or anything. >> yeah. we said if china didn't export as much to all these emerging markets that are their biggest

customers, does that mean that they were slowing. that that was going change. is that what happened? >> well, i think that that's what we're watchful of. although, i will say our take in general with the emerging market situation is that it's hard to look at it across the board. in anications, each one is a little bit of a different story, although i think you're exactly right. this is to some extent we look at all these easy money and you see, well, what will ultimately be the cost of it, of this accommodation and that i would argue is almost excessive accommodation. and you wonder. china has been doing some things internally and they're navigating all these huge changes because it's 2014.

and just in terms of the credit bubble they're trying to reign in, internally china was expected to be having a bit of trouble, too. >> i do think it's the china story. >> we're not about to become so much as a rule. but i think china, as you said internally balks some of its issues. at the same time, we're seeing more evidence of money coming out in general. i don't ultimate think it impacts the u.s. i think in terms of her domestic economy is very balanced and

solid. i don't think we're at risk of the expansion being undermined because of this. i believe it's causing a recession, just the u.s. independent economy. >> we just need to be not 3%, right? >> that's right. we could absolutely have a profit recession in the s&p 500 if the emerging economies were to weaken substantially. particularly for it to cause a lot of weakness in the commodity complex. what we keep our eyes are, but most importantly, but we're not going to take that for granted and that's what we're watching. >> so we're set up for 3%.

that's where expectations are. >> would it be a disappointed if it's deflected or would it cause the fed to say they're going to stay loose with money even longer? >> as a house, we think gdp accelerates 4% by the end of the year. >> you're even setting us up for bigger disappointment. >> from an equity perspective, we're trying to find that goldilocks, if you will. >> that way, we've got this continued grind up in profits with low interest rates rising slowly. >> you just told me 4%. we can be worried about things overheating even quicker. do you believe that or not?

>> i think 4% is a number that stays with -- >> i worked closely one year with them and i think it's reasonable. we expect consumption to pick up, we spec investment to pick up. what we need is more of a pick up in investment and boost to earnings as the interest rates are rising. >> they would, though, because they haven't. and one follows the other, consumption and ceo spending. if it's 4% pb they wouldn't pick up. but you believe 4%? what's he smoking. did you fly in from denver? >> i think we probably are stuck in that slower growth, 2.5 % underlying trend case.

yoj it's going to pick up enough to get us -- >> expectations more so than the forecast. and, you know, that's -- i gleaned specations through valuation. and the s&p 500 is now trading 5% its normal -- above this normal valuation. holding down the pe and mega gap stocks, companies had a 10% and 12% premium to history. not outrageous, but the only thing keep that fair valuation as i would describe it is low interest rates. it's low interest rates keeping it there, that's why it's so important that they only go up slowly. >> you're saying 4% growth wouldn't be consistent with it. so to some extent that -- >> we've got a few more corners before we get that. >> michelle, david, thank you for both come in today. up next, we'll get to andrew in sin city. >> "squawk box" will be right

back. back.

welcome back, everybody. you can see that things have taken a turn for the worst. dow futures are now down by about 55 points. s&p futures off by 7.5 points over fair value and the nasdaq down by over 16. part of this is what's been happening in china. a lot of concerns for growth there. there's another number tomorrow. ahead of that number, there was a lot of weakness in asian stocks overnight. we'll be waiting to see what that number is overnight. early trading there.

let's get to andrew. andrew, we've been wondering what you were up to last night. we've seen a lot of pictures. >> it's only 3:45 here until the morning. so we're just really getting started. and, you know, i don't know what's going on. oh, i hear the music. becky, i should say that we have a big squawk headliner coming up for you. celine dion, i had the chance to sit down with the music superstar to talk about her mega career. planting roots in vegas. of course, show business. we also went to the concert. we'll tell you all about that. more from squawk live from sin city when we come back. ♪

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welcome back to "squawk box" this morning. live, we are from las vegas this morning. french canadian superstar celine dion, she rose from humble beginnings to become one of the world's top-selling artists. i had a chance to sit down with the grammy and oscar winner before her sold-out show last night at the coliseum at caesar's palace. take a look. >> many things have changed. vegas has grown tremendously. i can start by saying to you that, i mean, vegas have asked the best chefs in the world to come here now. so don't bother to go to paris. excuse me for that. no, you still can go to paris because it's beautiful. but they're having the best

chefs in the world to come. the restaurants are amazing. hotels are being built. every year there's new hotels. i pass by every day, every night, almost, i drive home and i come back to work, and i'm, like, was that -- that was not there yesterday. it's growing. and the amazing thing is that -- and the shopping. i can't miss the shopping. and you can take my word for that. shopping is amazing. the restaurants. the food is great. the hotels are growing. and water parks. and the big thing is that not only it's growing, it can grow in one direction that doesn't fit everybody. but in the past, i'm not going to tell you when, but i remember coming here with my parents with rene a long time ago, and it was mainly for adults. i can, as a mom, tell you that it's become probably one of the best places to come to have a vacation because it is possible for you who have twins, my friends, to bring your kids to vegas because they're thinking family now, and that i call smart.

>> as an artist, has it changed? do you want your audience to listen to a whole album? do you care whether they listen to one song? the economics have made it that actually now most artists now have to go out and tour because the money's not in the songs themselves? >> well, i don't want to sound pretentious, but that's why i love to come here because i can sing a whole show. i don't have to sing a whole album. i can sing a whole show. we're going through a journey. and if they want to go my album or just buy one song is one thing. you know what? recording is sometimes a journey that you would like your fans to listen from "a" to "z," but very rarely you do so. because you do three songs with one producer, two with another producer, one with another producer. so it's not a show that you're building up. the way the technology is going, i think it's important.

we have to go with it. >> right. >> you have to take the best of it. but you cannot just let yourself sink in all that. nothing will replace a journey of a live show. >> tell us about the decision-making process between deciding that i'm going to go on tour or i'm going to go into a residency and do this at a set venue. >> i think when you have children, you have to -- it doesn't mean that we'll never tour again, but to make a world tour, it's a big deal. especially when you have children. and i don't want to make my -- i don't want to rush and push my kids around. >> you've had some real estate -- amazing real estate investments over the years. some of them have been in the headlines. do you think of real estate as an investment, or do you think of it as a home that you live in? >> i think it's great if you have an opportunity to buy land. buying land for me is like playing monopoly. it's just money. but an investment on buying land, i think it's a great

investment. but it's very important for you if you're about to just have an investment, buying land that you're going to sell later or not care for. it's just a good investment. or it's an investment that you want to live in. your heart is where you live. you make your home where your heart is. i know there's an expression that's better said than that. but what i'm saying is that the investment that you do, it doesn't mean this is where you're going to put your heart. it's two different things. >> guys, i've got to tell you, i've always been a little bit of a celine dion fan, but we went to this concert last night. jeff, our stage manager, and lori ann, we all went. and it was off the charts. i mean, her voice, it's like an out-of-this-world, out-of-body experience. we should say an artist, she probably wouldn't like me saying, an artist as she is an entrepreneur because she has

perfume lines and restaurants and books and everything that she does. when we're talking about real estate, she's in the process of selling a $72 million property in florida. and then i should tell you about her $2 million humidifier. so all of the rooms that she's in backstage and then on stage, she has this very special humidifying system. and you can actually feel it in the air. sort of a remarkable thing. >> is that for her voice? >> it's for the voice. >> because she's performing every night? >> your skin. >> go ahead. >> your skin looked really moist and supple in the interview from the humidifier. >> yeah. it's because of the humidifier. >> well, you're out in the desert. >> it's an amazing thing. so she does. but by the way, this is an amazing business. she does 70 nights a year at caesar's. then shania twain jumps in for about 60 nights a year. elton john comes on for some of the other nights. and then there's rod stewart.

and then you have jerry seinfeld who comes in. so they use the stage all the time. she makes -- i think she makes more a year than they actually bring in revenue. i was doing the math last night. probably about $35 million a year in revenue. she does four nights a week. and, of course, they pay, i believe, even more than that because what she's doing, of course, is bringing 5,000 new people a night into caesar's. >> big income. >> crazy business. >> big income inequality issue there, andrew. i don't know whether we can get congress on this or not. but you know -- who was that person that was throwing the craps that you blew? who was that? >> my imaginary girlfriend, probably. >> why didn't you throw the dice, just have her blow on your hand instead of you blowing on her -- >> right. >> i mean, you know how to -- >> we were shooting that and we had lots of conversations about who was going to blow on the

dice. there you have it. >> so to speak. >> anyway, coming up, we've got a lot of real things beyond the fun going on out here in vegas. the real reason i'm here, home depot is rallying the troops and its suppliers ahead of the spring thaw. we've got a big exclusive interview this morning with the chairman and ceo of home improvement giant, frank blake will join us next when we return.

so our business can be on at&t's network for $175 a month? yup. all 5 of you for $175.

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. what about expansion potential? add a line, anytime, for $15 a month. low dues, great terms. let's close! new at&t mobile share value plans our best value plans ever for business.

the global markets getting roughed up. more worries about china's growth as mining and metal companies take a big hit, will wall street see more profit taking? automakers under pressure. gm reportedly facing a criminal investigation.

and tesla gets lost in the swamps of jersey. phil lebeau has an update on the potholes facing the two automakers. we're in vegas for the home depot conference. we're hoping to get a little bit lucky. >> "squawk box" begins right now. ♪ a little less conversation ♪ a little more action please ♪ all this aggravation ain't satisfaction in me ♪ good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin who is live in las vegas this morning. good morning, andrew. >> good morning. we're having a lot of fun here in vegas. >> 4:00 a.m. in vegas. still up. >> what happens in vegas -- >> yeah, what happens should stay in vegas unless you're tweeting about it. let's look at the futures. there has been pressure on stocks as there's continuing concern about growth in china. there's another big economic number tomorrow ahead of that.

asian stocks traded down. that, in turn, has brought down european stocks in the early trading. right now dow futures are down 53 points below fair value. people wondering about the emerging markets in general. those questions that have been dogging us since january. they faded for some time but do pop up from time to time. you see the s&p futures are down by 7.5 points below fair value. ten-year note is yielding 2.746%. and the price of gold is also in our morning headlines. take a look at what's been happening with gold. it has touched a 5 1/2-month high. it's up another $11 today. 1357 is where it stands right now. 1357 an ounce. dennis gartman pointed out it was pushing through some resistance levels yesterday. yesterday. again, up anhe traders are citing both the tensions in ukraine as well as uncertainty over global economic growth. silver has also been rising in this morning's trade. and get ready to start tracking the s&p's 501. well, not exactly. there's going to be 500 stocks in the popular index within the

next few months when google splits its stock into two separate classes. both classes will be included in the s&p 500. s&p reversed an earlier decision to include only one of the stocks, although the index will still represent 500 companies. and king digital says that it expects to price its u.s. initial public offering at somewhere between $21 and $24 a share. the company is best known for its candy crush saga mobile game. it would have a value of nearly $7.6 billion if it prices at the top end of that range. wow! that's big for one game. popular game, though. >> yeah. i'm looking at it right there. >> you play it? >> no, i've never seen it. play it on your iphone? >> iphone, ipad, any of those things. i know a lot of people who are addicted. >> really? >> but it's one game. >> what are you supposed to do? >> you line them up and they disappear. what was the one that used to drop the bricks that you could move them around. tetris. i think it's kind of like a tetris where you line them up. >> a what? >> remember tetris?

did you ever play that one? >> no. >> if you like brick breaker, you would like this. >> i don't play brick breaker anymore. >> do you play bejeweled? it's like that. three of them disappear and so you keep moving the blocks around. >> all these games you just -- do you just play with yourself when you're playing all these games? >> usually. >> okay. all right. let's get an update on the search -- actually, moving to malaysia airlines flight 370. again, we have more details. we never get any real details on just more questions from kuala lumpur. hello again. >> reporter: that's a very cynical way of putting it, joe, but i think you're on spot there. and this press conference just wrapped up about half an hour or so ago. there were top officers from the malaysian armed forces. the chief of the navy, the civil

aviation authority as well director general was there and the acting minister of transport. and they were absolutely bombarded with questions from the press here about, number one, whether it deviated off course, and if so, how far off path did it go? we didn't get any clear answers. in fact, the whole tone of this news conference, very defensive on behalf of these officials. but this is what we do know. the malaysian armed forces chief told reporters that primary radar contact was last made -- and i believe this is military radar -- with the plane at 2:15 local time last saturday. some 200 miles northwest of panang, on the western side of the peninsula of malaysia. that's what we know. they are not saying definitively that this was the last known location of 370. what they are saying is this. there is a possibility that it turned back.

that turnback remains a possibility until it has been reaffirmed by the ntsb, the faa and the radar manufacturers. in terms of those agencies, all of those agencies are here in malaysia. they've sent technical teams here, as has boeing as well. so in my mind, that is the next stage of this inquiry. that we are focused on at the moment. also, worth pointing out, we learned the british air accident investigators are here as well. as are representatives of rolls royce that manufacture the engines that go into the boeing 777. so no real answers yet. the search does continue, and it is being focused in the areas off the western coast and the eastern coast of peninsula malaysia, south china see in the straits. but so far not a shred of evidence of the last vestiges of 370 which is scant consolation to put it bluntly for the

relatives and the families of those on board who must be going through what i can only describe as pure agony right now. >> yeah. definitely. and maybe still glimmers of hope, no matter how crazy it sounds. anyone in that position would be hoping that they're -- >> reporter: the search does continue. >> yes. all right. >> reporter: the search does continue. and i do want to say, from the perspective of the u.s., the 7th fleet is strongly represented there. there are two destroyers that are searching the gulf of thailand. >> all right, sri, thanks. let's now get back to andrew in las vegas. we'll get to you with your special guest. we ran that again, andrew. and i'm trying to think, did you not want to be seen gambling throwing dice? did that go into the thinking? then i thought, you know, if that woman was blowing on your dice, that would have been probably -- i mean, what went into the thinking of you blowing on the dice that she was

tossing? how did you finally decide that that was the best way to do it? >> she -- she asked me to blow on her dice, joe. >> okay. who was she? she was just -- huh? >> you know, we -- you know, i shouldn't say i picked her up -- >> you shouldn't say that. you really shouldn't say that. was she a pro? i mean, a professional dice player, andrew? >> she was a pro. and in vegas, you don't want to say pro. >> that's what i meant. >> she's a dancer in jubilee. >> she is? okay. awesome. >> she is. >> did she crap out -- did you give her luck? was that a good toss? do you remember? >> i think she had a 6. you should know, we have it on tape. my first throw was a 7. that was pretty good. >> oh, was it good? i don't even know how to play.

>> no, it was good. >> your first one? >> my first throw. anyway, let me get to our very special guest this morning and why we're here in las vegas because this spring millions of americans will be fixing up their homes and gardens after what all we can agree was a brutal winter. and that means big money for home depot, the world's largest home improvement retailer is kicking off the do-it-yourself season today here in las vegas. and we are thrilled to have him here. frank blake, chairman and ceo of home depot. he joins us for the next half hour in an exclusive interview. we should apologize to joe in advance. whenever we show your picture, you are wearing the apron. and i know there's no -- >> went more formal this morning. >> you went more formal this morning. thank you for being here. let's just set the table for everybody in terms of what is going on here. i don't know if we can get a shot of -- i mean, it's just remarkable, what we have behind us. you have 3,100 people? >> we have 3,100 people, store managers, district managers, all of our merchants, 700 vendors.

we set up -- this is what we call our product walk this is several hundred thousand square feet to get our store managers aware of the new product that's going to be hitting their stores in the spring. >> how many years have you been doing this for? >> we've been doing this for eight years now. >> and every store manager gets to come -- this is not a reward. >> every store manager comes, yep. >> let's just talk about the economy and retail at large. the weather is the conversation we have every single morning. you guys seem to have done better than most through this weather. what's it been like? >> the spring has been a challenging spring because it's been so delayed. and we've got a lot of snow still up north. four our fourth quarter, we said that definitely had an impact on us. it's not like we just were indifferent to it. it hit us by about $100 million. we had our earnings call just a couple of weeks ago. and we also called out about $100 million up until that point in february. so definitely the cold weather has an impact on us.

we need spring to come. but we think about our spring business in terms of half a year, not a quarter. >> but you did benefit at some level, i imagine people are coming in to get shovels and all sorts of other equipment that they needed during this period. >> right. one of our departments that's what we call our garden department, its best-selling product was a snow thrower. that is not what we want. we would prefer people to be buying at this point more outdoor garden products. >> what's your sense just broadly the economy and the buyer in terms of the price point, what they're actually spending on. does it feel like it's getting better? what you think of housing? >> so we think that there has been continuing modest improvement in the economy. and for housing specifically, 2013 was a great year for us. we had our best year since 1999. that's because in part of the housing recovery, we think the housing recovery is going to continue into '14. but probably at a bit slower pace than we saw in '13.

>> one of the big issues in the news this morning, president obama planning to push employers to spend more for overtime, for example. obviously the minimum wage has been a huge issue as well. you have over 300,000 employees? >> we have 325,000 associates, and we actually get more than that in the springtime season as we hire up. >> when you see proposals like this both on minimum wage and now on this overtime issue, and i don't know how many employees of yours participate in overtime and whether they're classified as, quote, professionals which is sort of the group he's trying to push into get overtime, how this will affect you. what do you think? >> haven't really had a chance to look at what the proposal is on -- i think it's under the fair labor standards act. haven't had a chance to look at that. what i would say for us, as you said, we employ over 300,000 associates. the most important thing for us is their opportunities within the home depot. not the wage they start at, and we don't pay minimum wage. we pay above that.

but really what are the opportunities we create within the business. of the store managers here, three-quarters of them started as hourly associates. of our division presidents, the folks that are in charge of all of our stores in the u.s., our three division presidents, each one of them started as an hourly associate. so our job is really to create economic opportunity for all of the associates who work at home depot. >> so i think joe's got a question for you back at home base. >> let me follow up on that. and then you want to just follow up on that and then i'll ask a different question. >> frank, i've read through what the president is proposing right now in terms of trying to force companies to pay more overtime. and i think what he's looking at are people who are considered white-collar who aren't necessarily in white-collar jobs. if you're a store manager and you're working those hours, is that somebody who should be paid overtime, or do you consider them a salaried worker? >> our store managers are clearly salaried associates, as are our assistant store managers. >> okay. >> i mean, again, i haven't had

a chance to look at what's being proposed here. but we have always considered and treated them as salaried associates. they get a significant bonus. our assistant store managers, we do something that no other retailer in the country does. our assistant store managers get stock grants, a significant part of their income is based on the bonus and how the stores perform. so we treat them very much as -- >> that sounds like a different scenario. i do know that part of this -- again, the details haven't all come out yet. but part of what he's targeting is managers of fast food restaurants. i'm guessing they don't get stock options and some of the things you just detailed. maybe that's the difference. maybe we have to hear more about this first. >> yeah. i honestly don't know. >> how much do you worry -- go ahead, joe. >> i didn't have my question yet. thanks. frank, number one, i do go in, and i'm lost, as anyone is, in home depot. it's so big. and i'm approached now within probably 10, 15 seconds.

it wasn't like that five years ago. and i know langone, i don't know, he's got an ax to grind with some former people pain, but he speaks very highly of how everything is operating now. kudos on that because i've experienced it firsthand because it's an intimidating place. i don't know. i'm not usually referred to as handy. my question, though, had to do with fannie and freddie. there's news today about a way to wind those down. i'm just wondering, does that go into your thinking or planning? do we need to probably be careful how we do this because housing -- is there anything more important than the housing market? and it's such a huge part of it. do you think we can manage this correctly to extricate ourselves from how much we depended on those two government-sponsored enterprises? >> well, joe, first, thank you for the comment on our service in the stores. i'm glad to hear that it continues to improve. and ken has been a huge support.

he was lead director when i first got this job and is just a huge help. on the -- on how we think about the development of -- i'm sorry, i lost the train of thought on your question. >> fannie and freddie. >> fannie and freddie. i apologize. >> yeah, it looks like they've got a way to wind these things down. we're not going to spend much time doing it. it looks like it could happen fairly quickly if it were to work this way. >> well, we do -- i'd agree with you. we have to be very careful on that, and the law of unintended consequences always applies. and the big issue now that we see in housing is the difficulty that first-time homebuyers have qualifying for mortgages and getting homes. so, yeah. this is something that has to be approached very carefully. >> frank, we're going to slip in a quick break. we're going to come back and continue this conversation. we have a lot more coming up with frank blake coming up in just a few minutes.

more live from las vegas. we're back in a moment. i must begin my journey,

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frank blake, chairman and ceo of home depot, is with us this morning. this, of course, your big conference with all of your store managers. one of the big issues we haven't talked about yet is online and being an electronic retailer as well as in the store. i think of you as an in-store place. but during the break, we're talking about how amazon is something that you actually consider seriously. how big is your business online right now? >> so our online business right now is almost $3 billion. last year is grew at a 3% clip. still in context of the company, it's a little over 3%. >> there's a big debate going on in washington which i know your company is involved a little bit on the lobbying side relative to taxes and sales tax in particular. you stand where? >> we think clearly there ought to be taxes on the internet sales. >> so you're going -- >> we pay a tax on it. we think it's only fair that all of the internet sellers pay a tax. >> amazon has switched gears. they used to be against the sales tax.

and now they've said okay, in part because i think they're starting to build more facilities -- >> they've got more physical presence. >> ebay is on the other side of the debate. how much do you care about amazon? do you think a lot of these types of products -- i mean, we have big products behind us, heavy stuff. do you see a day where people are buying that online and it's really getting delivered to your home? >> we do very well in our product categories versus strictly online get tors for exactly some of the reasons you say. it's big, bulky products. there's a huge convenience. we have in having over 2,000 convenient locations throughout the country. for people to come in and buy online and pick up in store, buy online, return to store. but still, we're very conscious that online sales provide a convenience for our customers. and we want to be the most convenient retailer. >> how much of it people show up at the store having spent a day or two online beforehand? >> for some of our products, we know that our customers are researching extensively online before they come into the store. if you think like a major

purchase of appliances, things like that, people are doing a lot of online research. >> so i also see -- because i was just looking through some of the stuff that's around here. in terms of the price points, where do you see people going? it seems like it's splitting maybe like the country. there's some really high-end stuff, and that seems to be a huge business for you now. but also people buying much lower -- some of the lower-end stuff, too. how do you even direct what home depot is supposed to be? >> so actually through 2013, we saw pretty even growth across each price point. our entire line structure was growing through 2013 as the housing market recovered. there was improvement on the upper end and the lower end, as you said, but really all of our product categories and alliance structure was growing. >> you'll be seeing these 3,000 store managers in just a couple hours. what are you going to tell them? >> the big thing is the growth in front of us, the excitement of the innovative products we're bringing into the store for the

spring and really trying to top 2013 which was a great year and have an even greater year in 2014. >> becky's got a question for you back at hq. >> frank, shareholders love you. you have done wonderful things for them and their stock. i know you don't have plans to leave any time soon. the company also recently promoted craig minier to the president of u.s. retail. that has many wondering whether he would be the main person in line as your successor. >> we have just a great, great group of executives at the home depot. and very pleased to promote craig because he's done an excellent job over the last several years leading some of our biggest initiatives on supply chain and merchandising and feel very, very confident he's going to do a great job in his new role. i haven't set any time for leaving, but i was in a store recently, walking around, and someone didn't recognize me and afterwards they said, you know, i thought it was you in the store, but we have so many

senior citizens in our store. and you all sort of look alike. >> oh, man. >> that was a sign. >> i don't know. you've still got a lot of time left, i think, frank. >> we appreciate your time this morning. thank you so much for having us. we hope you're at home depot for a very long time. in the meantime, i'll send it back to becky in the studio. we do have more coming from las vegas. we'll be back right after a break. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities.

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still to come this morning, a market strategist will tell us why the bulls have a few more years to run. and andrew returns in the next half hour from home depot's official spring kickoff in vegas. (announcer) scottrade knows our clients trade

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which will cause me to miss the end of the game. the x1 entertainment operating system lets your watch live tv anywhere. can i watch it in butterfly valley? sure. can i watch it in glimmering lake? yep. here, too. what about the dark castle? you call that defense?!

come on! [ female announcer ] watch live tv anywhere. the x1 entertainment operating system, only from xfinity. welcome back to "squawk box." i'm joe kernen along with becky quick. andrew is in las vegas this morning. in the headlines, other than what we've been covering all week, amazon.com is trying to finalize plans to offer a music streaming service to customers of its amazon prime program. "the wall street journal" says that amazon held negotiations with record companies and music publishers on seeking the license or music for the service, but no deal has yet been reached. the music service is one of several new features that amazon may add as it raises the price of prime, what it's called. i don't have that.

>> i don't think i'd keep it for $119. >> they were going to raise it maybe to $119 a year. customers currently face $79 for unlimited two-day shipping and access to a video streaming service that's similar to netflix. >> i don't use the streaming service. >> why? you use netflix. >> we don't even have netflix. i don't have anything running right now because we get everything -- we have on demand. we watch a lot of that. we watch a lot of other stuff that we still have the old dvds on. but $79, i would keep prime. $119, i don't think i would because i'm not using the new stuff. >> all right. we've got xfinity. >> so much content on it. >> i mean, we own all of these movies. but they're in the drawer. and you have to find them. >> i know. >> so we don't. so i watch these kids just go, it's only -- and it's, like, okay, but it's comcast, go ahead and do it, but it's, like, we own these movies. why are we -- and i think a lot

of people -- >> it's easier to download. >> it's just a button. i think a lot of people are doing that. a u.s. judge has temporarily frozen the u.s. mt. gox chief mark karpeles to demand evidence now of what they claim is a massive fraud. not just that the site was hacked. the market for the digital currency was rocked last month when basically all operations ceased at mt. gox. it filed for bankruptcy and then said it lost or was hacked for 750,000 bitcoins, and that's worth hundreds of millions of dollars. they're saying it was a hacking attack. others just think it was fraud. and "the new york times" says that president obama will seek to force businesses to pay more overtime to millions of workers. it's the latest move by his administration to confront corporations that have had soaring profits, it says here, even as wages have stagnated.

it's in the eye of the beholder. tomorrow the president will direct the labor department to revamp its regulations to require overtime pay for several million additional fast food managers, loan officers, computer technicians and many businesses currently classified those and others as executive or professional employees to avoid paying them overtime. the decision to use executive authority to change the nation's overtime rules is likely to be seen as a challenge to republicans in congress. >> i read up a little more on it. right now if you make more than $455 a week, the company can declare you a white-dollar worker. they say you're a manager. and they don't have to pay you overtime. a lot of states already have higher levels. california and new york. this would be something where he would raise that level significantly. so you'd be looking at much more than $455 a week in order to classify someone as white-collar work so they don't get paid overtime. >> we're going to talk to

charles campbell. i know a lot of these corporations, the profits that they're making are -- i mean, they're huge. they're outsized. they're just large. and the corporations, of course, they're known to be greedy. and they do seek profits. that's one thing they will not deny, that they are seeking profits almost at all times in all of their activities, charles. you've seen this, haven't you? you can -- can you not attest to this thing that these corporations do seem to do almost constantly, seeking profits? >> profit maximumization and profit seeking is not necessarily a bad thing. milton friedman once said greed is actually a good thing. and i would submit -- >> do i need to say that i was just setting up a ridiculous argument? i think i need to say that because people will run that somewhere, and it will look like i'm actually -- yeah. the profit incentive, since 1776, at least, i think has been something that sets prices and allocates appe s capital more

efficiently. >> and more they decide the minimum wage should be raised or what should be set as the bar for overtime will distort the allocation of capital and labor. and if there was a national level that was set by market-clearing prices, the individual employees or prospective employees could, in fact, decide for themselves where they wish to work. >> the question is do you think that the president and his people know that there are unintended consequences to some of these things? i mean, they're very idealistic about redistribution and income inequality. so i understand this. and you can make the case -- there are economists that will make the case that for everyone to succeed, you need a vibrant middle class to buy the products of all the corporations. so there's a way you can logically say it makes sense to try to do this. but i wonder sometimes if they actually understand the consequences of it, that it might not be great, but they

know that november is coming up, and they just don't care sometimes, i think. >> i think every administration comes into office with predisposed opinions and views about what they think is the appropriate social policy. and i think there is a limitation and a modest amount that each administration, this one no exception, will modify or incorporate new data to revise -- >> look at de blasio. he's not going to change in terms of what -- did you see that he was on "morning joe," and i guess they kind of grilled him on a lot of things. and the answers were -- i don't think there are answers. >> but charles, it's not just this administration. we talked to john harwood this morning. and the new nbc poll that's out that just took a measure of all of this indicates that americans overwhelmingly think that the minimum wage should be increased. i mean, if it's something that 60%-plus of the people polled say they're in favor of, it becomes a very strong argument politically. >> well, one could take that

view. i would counter that to construct or design policy based on what is popular can be a very misleading and perhaps even dangerous -- >> although the -- >> we'd all like everyone to make more money. >> we would. look, i believe there are a lot of unintended consequences that would come along with it, but you can ask economists, and different economists will come up with different opinions. the cbo came out and said it would probably cost 500,000 jobs if you raised minimum wage between now and 2016. however, the margin of error was it could be a million jobs, it could be zero jobs. >> right. and the other thing i think that the cbo study did not incorporate was that it does not reflect the amount of jobs that are lost that would have been created, had the minimum wage not be -- >> and then the other thing we always point out is that the cbo also said there would be a net positive of $2 billion worth of revenue.

but it's on a $17 trillion economy. so you're working on the margin of -- so all this talk, all this time he goes in front of, you know, has the people nodding behind him. all this stuff for $2 billion instead of -- think of the things we could do. income. earned income. training. >> 600,000 people that would be moved out of poverty. the problem is -- >> but $2 billion net benefit. instead of having certain people making over $10 an hour, you'd have 500,000 people making $0 an hour. >> and the popularity of the notion of raising minimum wages, i think, really reflects the real income level over the last several years of the average american household. i think that's what it's a commentary about. >> can we ask you also what you think of the emerging markets at this point? because markets are indicated a little lower this morning. there were concerns in china earlier this week. there's another number coming out tomorrow. >> right. >> and china's growth is

something markets are keying off of right now. are you concerned? >> it's something you have to watch closely, whether you're an investor there or an investor elsewhere. historically, you know, copper has been a major product for the housing business. the united states for many, many years with the largest consumer of copper. now it's china which consumes about 40% of copper. chile provides about 30% to 35% of the world's supply of copper. and what we're seeing right now in china is a combination of questions by investors of the duration of the slowdown, economic slowdown, in part because of the export number that came out a few days ago that was much weaker than expected. down 18 plus percent. the weakest reading in several years, four years. also, a reflection of a shadow banking system which is using copper as collateral to go out to financial institutions in the shadow banking market are trying to offer loans to get higher yields. so we have a couple of things going on there.

stockpiles in china of copper are up 65% year to date. corporate leverage for nonfinancial institutions in china is up over 50% in the last six years. so a number of things are taking place right now in china that make this a cause for concern for many people. >> charles is our guest host. he'll be with us for the rest of the show. when we come back, they are two of home depot's largest suppliers from paint for your walls to tiles for your floor. masco and mohawk industries help keep your local home depot stocked with everything you need. their ceos will join andrew right after this. ♪ >> and we'll be right back with "squawk box." and thank you. thank you very much. ♪ well, it's one for the money ♪ two for the show ♪ three to get ready ♪ now thank you. thank you very much. k you very .

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♪ because i love you too much, baby ♪ ♪ welcome back to squawk box in las vegas ♪ ♪ oh, yeah >> ladies and gentlemen, and here's your host, andrew ross sorkin. ladies and gentlemen, thank you. thank you very much. ♪ because i love you too much, baby ♪

♪ baby thank you, elvis, for that kind introduction. we are live in las vegas at home depot's spring season kickoff. this morning joining me now for an exclusive is the ceo of masco and the ceo of mohawk industries. you guys are, i would say, one of the great signals, indicators of where the housing market is, given all of the business that you do. so tell us, where do you see housing right now? >> i see the housing market -- we think it's in the second stage of the recovery for us. we went through a huge -- >> second stage, is that second inning of a nine-inning -- or a second stage -- give us a little bit of perspective here. >> i don't know, maybe about the third inning. we went through a huge recession which our industry in flooring was down 35% or more. so we've been coming out of it. the thing that came out of it first was the new housing business and the commercial part of it. the thing that lagged was the remodeling part of the business which is unusual for coming out

of recessions. it's usually the other way around. >> so now we're into remodeling. and we'll talk about some of the flooring going on. are you seeing the same thing? >> we're seeing demand building clearly in construction where we've been underbuilding for years. also importantly for us in the repair and remodeling space. where the consumer, as we see it, is not only showing up but is moving from being a shopper to being a doer, despite lack of real significant wage and job growth. we think that's driven by a couple things. >> so you have a huge portfolio of businesses. baer is what everybody knows in terms of paint but cabinets and faucets. what is the big business for you right now? >> when you think about masco, you think about a portfolio of stellar brands across both repair and remodeling. be behr is one of the leaders in do-it-yourself coatings. delta faucets is also a big brand for us. >> what's the highest margin product you guys sell? >> the margin for us varies by

category, and it depends really across price points and some of the types of products we sell, but they tend to equalize about the same area. >> we're at this big depot event. i was asking during the break, how big -- how important is home depot to you as an outlet? how big is the business for you? >> home depot is the largest flooring retailer in the united states. they're our largest customer, but we have a very diversified portfolio, and they're less than 10% of the total. >> 30% of your business is international. and they have a bit of an international business. you think their business will get bigger international? >> we do business with them in canada and mexico. >> how big is the business for you? >> home depot is our largest customer, around 25% of our business. >> so you have to care what they say. zmoo we care very much what they say. and we are their largest noncommodity supplier. so it's been a great partnership for a long time. >> we were just talking to frank earlier. he was talking about how he cares a lot about amazon, about e-commerce in terms of people

buying a lot of these products. how much of your products come -- are sold online? >> a very limited part are actually sold. most people research what they do, learn about them and then go somewhere because they have to get help installing most of ours. >> right. and most of your stuff -- so we've got carpeting. we have wood. and we were talking about ceramic. >> right. >> what's the biggest piece of it? >> our business is about 40% carpet, about 40% ceramic and about 20% laminate and wood. >> and what's the big -- what's your highest margin product? >> the margins are based on the differentiation of the products. so the more differentiated they are, the higher margins we get for them and the more commoditized they are, the less we get. >> is carpet a higher margin business than wood? wood prices have gone up remarkably. have you been able to hold the margin on that product? >> the raw materials have gone up so rapidly, it's been difficult to raise prices fast enough. the categories are laminate and ceramic business is probably the highest margins. >> we care a lot about the

weather. everyone's worried about what the weather has actually meant for employment, what it's meant for retail. what have you guys seen? >> you live in new york. i live in the midwest. so we don't have to talk about how rough this winter's been. and it's affected demand, no doubt. but interestingly, when you look at nonaffected regions, we're seeing favorable comparatives. statistically, when you look at these outlier winters that have been so brutal, it's usually followed by a strong spring. so it's important for us working with the home depot, for example, to ensure that we have our inventories and our capacities in the right positions to support the surge. >> frank talks a lot about innovation. and you know, when you think about construction, it doesn't feel like the moes innovative industry, but you guys are doing innovative stuff. what's the coolest thing you have for sale? you'll be here promoting your products, trying to tell these store managers about it. what's the coolest thing you have cooking right now? >> in each of our categories we have to have innovation. and in carpet, ultra-soft carpets is what everyone is

buying. they love the soft touch and lay on them. in our ceramic business, we have wood planks that are long and they look like real wood and they don't scratch and are easy to maintain. >> do you have anything cool? >> we have a lot cool. our behr marquee interior paint, guaranteed one coat, stain-blocking capability. we have a new shower technology from delta faucet that digitally shows the user the temperature in realtime that the consumer is really gravitating towards. >> that's what i want. thank you for being here this morning. >> thank you very much. i enjoyed it. >> it's early here. so enjoy the rest of your day. we've got a lot more to come from las vegas this morning with new technology and products hitting home depot around the country, the ceo of weber is going to join us to discuss the upcoming grilling season. he's got some pretty cool products, too. and then more of our interview with celine dion. how apple's itunes is changing the way artists do business. but up next, phil lebeau is going to talk autos. tesla and gm specifically. "squawk box's" on the strip

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dealership to sell cars in the garden state. that could mean -- >> that is crazy. >> -- the closing of tesla showrooms. >> they opened a big one here in the last year. elon musk was out here for the opening of it. >> i see him all the time. i see him coming now. the front is very distinctive, too. phil lebeau has more for us this morning. can't you go -- in new jersey, what would you do now? how would you do it? >> you would go across maybe to pennsylvania or go up to new york to buy one. or what you do when you're in texas or arizona where it is now allowed, you order it through tesla, but it goes to a third party in another state. they then deliver it to you. but there are a lot of restrictions and rules there. here is what happened yesterday in new jersey. new jersey became the third state in the country to ban the direct sale of automobiles. basically this is all targeted at tesla. tesla will stop selling cars in new jersey on april 1st. there was a hearing yesterday for the new jersey motor

vehicles commission. the tesla supporters are baffled by this move by the commission. >> what you guys have done today, is without the shadow of a doubt un-american. you have stifled progress and innovation in the state of new jersey. >> and just because you say i can't buy a car in new jersey doesn't mean i'm not crossing the great river to new york to buy my tesla. >> there are more than a few people stunned by this move by the new jersey motor vehicle commission. tesla shares up 54% year-to-date. but now new jersey, texas and arizona banning the direct sales of automobiles, basically banning direct sales of tesla. here is what's highways of the motor vehicle association in new jersey had to say about the reason behind this move.

>> the tesla business model crushes competition. it ensures that there's a vertical monopoly in the sales process, and it restricts consumer access to very valuable and very important public safety considerations, mainly warranty and safety recall services. all about the dealers throwing their political muscle around. and so today, tesla is no longer going to on be sold in new jersey starting april 1st. that's one big story in the auto industry. the other one involving general motors. this one is a very serious development over the last 24 hours. the department of justice is now launch ago criminal investigation into how general motors handled the recall of 1.6 million vehicles. remember, this recall involved whether or not general motors took too long to alert owners about a faulty ignition key that led to 13 deaths, 31 accidents. but a lot of people are focusing on these recall investigations. let's talk about the recall itself. 1.6 million cars. we're talking about 2003 to

20307 models. 13 deaths, 31 accidents, and these incidents started back in 2004. and when you look at why people are saying, why is it coming up now? if it started back in 2004, guys, why did we only have the recall this year, ten years later, well after many of these incidents were reported. general motors sales yesterday, down more than 5%. really, we've seen this over the last couple of days, joe and becky, where there are congressional hearings now. we have two congressional hearings, the midst of the national highway traffic safety administration and now you have the doj. so these problems continue to mount. >> that explains the pressure on the stock yesterday. phil, i wish we had more time to talk to you about both of these stories. please come back soon because these are stories that aren't going away. >> that lady was emotional. >> i wonder if she worked at the tesla showroom because i can't imagine getting that worked up about not being able to buy the car.

i think it's stoop what they've done, but she must have worked at tesla or something. >> i don't know. both sides have reasons. >> i am coming down more and more on the side of -- >> i need to know more before i decide. >> we're going to have phil back again to talk more about this very soon. coming up in the next hour of "squawk box," the search continues. an update on the missing malaysian airline flight from kuala lumpur. from vegas, celine dion and the top in the country. in the c. that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ my mom works at ge.

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. >> announcer: this hour, where are the best performing home depot stores in america? the answer may surprise you. and more of our special interview with singer celine dion. >> do you think about digital and ipod? >> it's wonderful that there's different options for fans. >> what squawks in vegas stays in vegas. >> "squawk box" begins right now.

welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick. andrew is in las vegas at the home depot manager's meeting where suppliers, managers and executives gather to talk about the company's future. i guess a lot of this applies. i thought warren bought mohawk. he bought shaw, right? >> right. >> he loves that. he loved shaw when he bought it and it's a great business. he has a lot of things like that. bricks. >> acme bricks. >> and shaw. and he has other stuff, too. >> benjamin moore. >> benjamin moore paint. so there's something to this housing industry. >> he has a realtor company, they're now changing it over to berkshire hathway.

let's get to our headlines this morning. mortgage applications, up 2.1% last week. applications for both new home purchases and refinancing fell. the average 30-year mortgage rate rose slightly to 4.52%. the markets reflecting concern this morning over the situation in ukraine and several areas. the price of gold actually rising to a 5 1/2 month high with traders citing ukraine as the primary reason. the price of russian default swaps at their highest level in nearly two years. that brought up concerns over possible western sanctions. we'll be keeping an eye on shares of general motors today coming after the biggest one-day drop of more than two years. that follows reports that a criminal probe has been opened regarding gm's handling of an ignition switch recall. phil was just talking about this, the boj gdoj getting invo. >> here is why jim appleton, the president of the new jersey

retailers of cars, this is why you need a dealership. i'm going to give it to you now as relates to this recall. it says they should have never been allowed to sell cars in the first place in new jersey without a franchise, without a dealership, because there's a public benefit to promoting a separation between automakers and auto sellers. because if there's a warranty issue or a recall notice, dealers see it as a chance to help their customers where is the manufacturer sees it as an expense just to get around. bingo. in your face. in your face. in your face. i got you. >> no. this is the first time you ever ever argued in favor of government regulation. >> i like these guys to have jobs in the dealers. and he says the jig is up. now you know, these people, a lot have their dealers who represent -- >> they love when there's a recall because they get to charge -- did it work in this gm

situation? >> they're representing their customers from nasty manufacturers that don't do recalls. you see how long it took gm. the dealers would have recalled pp -- >> i think you should allow consumers to have a choice. you say you like going and taking your car into the dealership. i get that. is this a jig or a gig? >> the jig is it up says here. i was looking, i was thinking he was going to give me the reason why we need dealers. that's -- >> this has been an argument we've been having since -- >> i'll see if i can take it -- you know, mike jackson, he comes on and has all these dealers. >> the idea that they're now pushing tesla showrooms out of -- >> why, i wonder whether -- >> texas in particular i think has powerful dealers. >> and you remember when during the restructuring of gm and congress was going -- >> the government got involved and -- that had -- i had a much better understanding of that.

if you're a dealership and you have spent your life savings and now they're going to shut you down, that to make makes a lot more sense that -- >> you can go straight to the manufacturer. you're on your own. you've got no one helping you. if that's the way you want it, fine. >> we're going to continue this conversation. >> oh, more questions than answers. at this point, still, regarding the search for the malaysian airlines flight 370. sri joins us again from kuala lumpur with all the details that happened in the last 24 hours and all of them still frustrating probably to the families. >> joe, you're quite right. we heard from the malaysian authorities, the air force chief and the civil aviation authority, as well. a lot of information was given

out by them, but nothing really concrete in terms of locating the final moments and the geographical location of mh-370. this is what we know. the air force chief of malaysia said this, the primary military radar made contact with the flight at 2:15 in the morning local time last saturday. but they couched it in terms of a possible sighting, a possibly radar signature and it could have possibly deviated from its course. the data from the radar needs to be analyzed. the ntsb and the radio manufacturers are going to do that to give us more clarity and to narrow down exactly why this search should be located. here and now, the search operations do continue. back to you now. >> all right, sri, we appreciate your report and our hearts still go out to anyone that has no

idea, you know, what the future holds for, you know, the search. stocks, we'll get to that in a second. people are going crazy on this. tesla had a recall sort of and they kim right to my house to fix it. we do not need dealers. but not everyone is saying tesla. other people say, i hope you're kidding, joe, about the dealers, but now i remember why you don't like dealers. because they want -- because you were in shopping for a car and it was for you and they kept saying we don't want to talk to you, little lady, we need to talk to the decisionmaker, your husband. >> yes, i will admit as a woman going shopping, it's been frustrating. i don't think they have to necessarily treat customers the same because -- >> the funniest thing about that is they actually were calling quayle the decisionmaker instead of you. if they had any idea how funny that is -- >> i'm friends with the guy at the dealership that i bought it

from, but -- >> but you wrote a piece in "fortune" about that, didn't you? >> i did. i got it off my chest. >> you know what? now i understand where you're coming from this o this and i won't argue with you because you have a personal vested sort of a thing here. joining us now in the markets is quincy crosby, a market strategist for prudential financial and with us still ross campbell, executive director at mkm partners. are you doing anything based on what's happening in emerging markets in your portfolio here? >> no. we will be watching it. it has to drop a bit more. >> emerging markets? >> yes. >> what about the u.s. market? >> the u.s. market looks tired. >> it does? >> it does look tired. >> do you think by tend of the year we are able to hold the -- some people say we want to hold on to where we are. >> you know what? we need a really good pullback. you're not going to get the buyers to come in as this market goes up. you'll get a nice pullback.

that 5%, 6% correction we had actually felt normal. we need some more of that. and all the signs are that this market right now, this is where we are right now, it's tired. you see the leadership starting to pullback. you've got the fed now involved in asset management. biotech is wubl of the troubled areas. but the point is, most of our clients, they're nervous. the retail client doesn't want to feel like a fool coming in at the top of the market and knowing that the smart money has pulled back. so i think, you know, having some normal corrections during the year may give us a better close in the year. but certainly not if we don't pull back. >> in the past, i've loved when people feel uncomfortable and they're not in. because then it keeps going. and they finally do get in. but it's so frustrating seeing the train leaving the station. there's a lot of people in that position. >> yeah. we used to call it the drug --

when i worked on the trading floor side. that's a parabolic move. all of a sudden, the brother-in-law is making a lot of money in 2000 on the tech stocks and all of a sudden they start pouring in and pouring in and pouring in. and it's a great time to be in. it's pair boll in. we know what happens towards the end. >> do you agree with this, that it would be good? sometimes it is healthy to have a correction. >> it's been a long time, several years since we've had a 10% pullback. we had, what, 5% or 6% a few weeks ago and we quickly reversed it in 22 trading session. so the retail investor, unfortunately, has a reputation for getting enthusiastic at precisely the wrong time and getting in as the market tops. i don't think that will happen this time, but we're not quite there yet. >> 30%. i mean, last year, were you totally committed? were you 100% invested in that? when did you first decide we needed a pullback?

>> all through last year, but the fact is -- >> all through last year what? >> all through last year, we knew we needed a pullback. but when you have the fed so engaged, and you can't fight the fed, but you can't fight every central bank around the world. the liquidity is being pumped in. you can't fight it. and so what are you going to do? you're going to hedge it. you're going to make sure that there's not a credit issue that pulls the market back. you're going to go with it, but you're going to go with it with your fingers crossed. and the biggest shock we had was ben bernanke may 22nd telling us the taper is coming. but then at the june meeting, he lays it out. markets went crazy. and it took central banks around the world to staunch the selling, staunch the bleeding. it wasn't that the earnings were any better, it was central banks saying, we're in forever. we're low. there's something -- we've gotten used to that. we have to get unused to that. we have to get used to the way markets are supposed to

function. >> so you're just making a case that a lot of this has been -- >> well b no one knows. it's equilibrium. i think the market is trying to find out now, how much was the fed, how much was fundamentals? it's not a science. too many people think it's a science. it isn't. the market has to feel its way through. how much is the fed? how much is lick kwi tid? how much are companies doing? ultimately, the market will find the right prices. the discovery will take place in the market. >> appreciate it. thank you. i'm going to head back out to andrew. you know what? the best impersonator is awful. i want that. but where did you find this dude? he looks like cosmo cramer pretending to be elvis. >> that was elvis, swroe. that was elvis. he had come back and that was him. >> you know, i don't want to -- i heard this story where we had to go to get him.

but all right, we meet an elvis -- but next year, i want you to do that, just yourself. >> i may try. >> i've seen you swivel, andrew. >> you should have seen what was going on last night. so -- well, no, we won't go there. come up with the dice lady, the swiveling part. >> we're going to talk about grilling and whether you're hungry for grilling because we've got the ceo of weber. how does he like his burgers? he has the answer right after the break. and later, more from my interview with superstar celine dion. we're going to hear what she has to say about doing business with apple when we come back. ♪

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♪ because i love you so much, baby ♪ ♪ welcome back to "squawk box" here's your host, andrew ross sorkin ♪ ♪ ladies and gentlemen, thank you. thank you very much.

because i love you too much baby ♪ >> thank you again, elvis. if you are a grill master, our next guest is a staple perhaps in your backyard. the ceo of wewor joins us now. it's great to see you. we've been talking all morning. a lot of fun. i should tell you, i should not be the person to do this interview, which you know about because i live in new york city. i have a george foreman grill, a hibachi out the window. that's as far as it goes. let's talk about these grills. let's talk about the consumer right now in terms of what you're seeing. because some of these grills cost a lot of money these days. >> they do. they're worth it. but we see the consumer coming back. we have an interesting company. when the recession came around, the nesting effect hit and a lot of people went to their backyards and that was pretty good for us. but we see a pick up now. we're a discretionary product,

as you said. we see a comeback happening in the tail end of the economy. >> tell us about the price point in terms of the type of consumer. this pin, that's the old school kettle, right? do people buy that any more? >> sure they do. >> some of these are massive. we saw one you can make pancakes and pizza. >> we'll talk about a gourmet barbecue system in a minute. but we have a $29 smoking joe kettle up to a $2,5 00 grill. >> most of your stuff is manufactured in the u.s. >> we make almost 90% of it in chicago. we make 23,000 grills today. >> but 50% of the business is outside the country? >> yes, correct. >> how long is that going to last? that's one of the big questions in america about manufacturing. >> yeah. no,ite going to last for a long time. we're looking at bringing some products back. we look at manufacturing things around the world closer to where our consumers are buying it, but

today, we like what we do in chicago. we ship to australia, russian china. >> joe is back at hq. joe, do you have a webber in the backyard? >> i have a viking. but you know where -- >> oh, joe. >> i'm sorry. >> he's going to walk off the set. >> we have a family program. i've got to get you on. >> it's a built in -- viking is good, weber is good. andrew, do i have to ask for you about -- we know you're a city dweller and you have a fire escape. and i don't know what you've got out there, probably one of those plug in like electric hibachi type things. >> that's what i was telling him. >> you're not going ask him what he has for you? how do you cook the tofu burgers? how do you grill those at this point? do you have something for andrew to put on the balcony or the fire escape? >> yeah, we do. we've got a couple options, joe, and we can teach him how to cook tofu on his grill. it's not that tough. he could be a project, i have to

admit. it could be a long journey. >> go ahead, andrew. >> i was going to say, you would appreciate this. i don't know if you know his history. he's been the ceo of the company for the past year. before that, joe, the and maybe the guys in video if they're really fast on their feet, he used to run jacuzzi. you know where i'm going with this, joe, because you've sat in a jacuzzi before. >> i have. >> and i was thinking maybe the video -- you remember that day where we had you in the jacuzzi? >> oh, that's right, on the ship. that's right. you can't have a jacuzzi, either, andrew, on the fire escape. i keep trying to talk you into jersey living, but you won't do it. >> yeah. i've been saying to him he should have a jacuzzi -- there's synergy between the brands because you could be in the jacuzzi and flip the burgers. >> i'm not sure we would recommend that, but they are both about backyard fun. we sell fun at weber every day.

>> this is a family-run company that was then sold. byron trot owns 80% of the company? >> 80%. >> what's that been like the past year for you? >> it's been fantastic. i'm the first non-steven person to run the company. jim steven is the chairman of the board and still my boss. they've been great. you have to know that you're part of a family. and byron, as he invested in a family, that's what he does. his funds are made up of on family money from around the world. >> we plan on running the company forever. >> tell us about some of these things, if we know. what's the coolest thing you are selling right now? the gourmet barbecue system. ip vision your grill, whether it's a charcoal grill, a round gas grill.

>> do you do charcoal versus gas? >> i do both. if you're in a hurry, the gas is quicker. but you can do both. this barbecue system has an insert in the middle, a round circle that you can palm out of the grate and it turns your grill into a pizza oven, into a danish pancakemaker. >> what's the price point on that? >> the price point varies based on the grill. the insert system goes from $39 to $79. >> but what's the whole thing cost? >> you can get set up for $499. >> what's the most expensive one you sell? >> we sell a summit for about $2,500. >> is and what about the little kettle? >> $29. >> tom, thank you for joining us this morning. >> thanks, appeared rue. >> have fun here in vegas. guys, back to you. >> andrew, john, thank you both. >> we have to get andrew in on

the dealership. i realized my other reason why i really think we need dealerships. >> because? >> because we're creating jobs, that's why. because we're creating jobs for dealers and all the salesmen and all the people would work there. are you going to come down against -- >> andrew, i don't even know how to argue with him. i can't believe i'm on the opposite side of him. >> now i'm on your side. now that's an obama administration argument. you keep dealers because there's jobs there. i'm with you on this, i think, but i could argue those are jobs that you're going to be getting rid of because you don't have -- >> but i'm not talking about getting rid of. we're talking about whether you would be forced to sell through a middleman or not. >> right. but you would create these jobs through the middleman. still to come, more from andrew with celine dion. stick around, we'll be right back. back.

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coming up, we have more from celine dion, plus apple's push for more exclusive deals with music artists. and then where in the u.s. are the top two selling home depot stores? tweet us your guesses. @squawkcnbc.

we'll have the managers of both interviewed by andrew. rew.y gree "squawk box" will be right back. moving an old 401(k) to a fidelity ira. it gives you a wide range of investment options... and the free help you need to make sure your investments fit your goals -- and what you're really investing for. tap into the full power of your fidelity green line. call today and we'll make it easy to move that old 401(k) to a fidelity rollover ira.

welcome back to "squawk box," everybody. let's take a look at the stocks and the news if today's trading. etl oil and gas is being bought by exxi for $100 million in cash and stock. it will create the largest publicly traded oil and gas producer. epl was formerly known as energy partners. retailer express missed estimates with fourth kwarer profits avenue 50 cents a share. express has pointed to deep discounting and a bigger than expected drop in customer traffic. you can see that stock is getting hit hard, down by about 12.5%. goldman sachs upgraded rite aid from a buy to neutral. the store is remodeling to give rite aid more potential in a run up in that stock since september. it's up about 2.8% today. becky, we have pretty interesting story about apple

this morning. apple is going on the offensive in the music business. the company is now start to go pressure major company and a artists to offer releases exclusively through itunes. i got a chance to sit down with celine dion last night.. we talked about the music industry. a very tricky relationship with apple. >> when you look at how the music industry has changed, you think about ipods and all of this kind of thing -- >> are you talking to me about technology now? >> i hear you don't have a cell phone. is this true? >> i barely can open the door of my house. i can't even open the television. it's not that i want to stay away from it, because the thing is i don't have to do it. i have other people doing it for me. and i am certainly glad. but the thing is, i have to recognize the fact that music is in everybody's life. and it's wonderful that there's different options for fans. because what we do is we want to sing. there's different ways to buy a

song. you don't have to buy a whole album, for example, if you don't like the songs. let's say you like two songs. you can buy those two songs. the idea is to give opportunities for the fans to get to them in as easy a way as possible and you want to reach them. you want them to reach to you, as well. but nothing, no technology, whether you caught it the ipod, ipad, i tech, whatever you call it, nothing will ever take away the live performances of when i go on and i see them in front of me. what a -- we are so -- it's a team work. >> you know, it's funny because she doesn't use technology. she's clearly aware of the technology and what it means. i get the sense that in a perfect world for her, she would still records on the album. you get the full thing. that's why she says she loves to be in concert here, because she gets to play the entire thing.

you don't listen to it one by one by one. and it was kind of funny to hear that she doesn't even use this technology. i tried to ask her what's on her iphone or her ipod. she doesn't have anything on it because she doesn't have one. >> there it is. >> if we had protected all of the record stores, we would still have all those jobs and the record stores. if we had protected all of the films, the fotomat people, too, we would still have those jobs. but you -- becky does not want to protect the auto dealers. what do you make -- we've got to get to brian. let's talk about this later, andrew, because i'm sort of taking it to the -- >> to the extreme. >> to the extreme. >> he told me off camera he wants me to know what it's like to argue with an idiot. >> no. i wanted her to know what it's like to argue with a liberal. >> he brought up when i was arguing last week about taxes. >> someone said that, joe, i get

what you're doing now. >> i ad-libbed the idiot part. >> we have brian here to talk apple, but i know, appeared rue, i'm sure you think you should be able to buy directly from tesla, right? but i'm trying to figure out, what was new jersey -- what is their rationale? >> i do. >> is it purely money? >> no. >> the guy who is if heads of the auto retailers division in new jersey says these laws were put on the books to protect consumers. and then he goes on to add, oh, by the way, tesla crushes the competition. that's the other thing this is about is protecting companies that are -- >> it's protectionism. >> right. >> but andrew, many times we have argued it would be a job destroyer if there were no auto dealerships, right? and that's the first thing you would hear from this administration, oh, we should have these fake jobs so

middlemen just to have them. they constantly want to do stuff like this. >> joe, on this issue we agree. we agree 100%. >> wait a second, you agree with him? he's arguing in favor of -- >> no, no, he thinks i'm -- >> no, he's not really. he's not really in favor of protecting the dealerships, is he? >> he's making a convincing argument. >> i can take either side of any argument. >> i know. >> psycho path. >> andrew, we'll be back in just a minute. joining us now with more on apple's big push for exclusivity, the global head of software research at cantor first gerald. what do we think about what apple is trying to do? >> all apple wants to do is sell more hardware. the way you sell more hardware is obviously make great products and have a compelling ecosystem.

it's not exclusive forever, but for a window, i think it adds to the attractiveness of what apple is doing. >> it was a big deal when beyonce came out and sold this exclusively on itunes first. but i wonder, taking the competition analogy further, could they get into a position of being accused of monolistic behavior if they push back too hard against some of the record companies on this? >> it's always possible, but i think what they really want the with this is to make the digital purchases on plat formers in a kind of a window. not just platforms. they may argue for itunes, but i think they would be open for any platform, you know, that allows these digital pure chase before they go free on streaming services. you look at the movie industry, a hot movie comes out and then there's a lag and comes a video and there's a lag before it hits the network. music industry, a hot song comes out and -- >> although, remember, walmart

was upset that they were getting -- walmart and target, they were getting one upped by having the sales coming out on itunes first rather than having -- because in the past, it would be an exclusive thing that they remember offering, you can get the cd first if we put it in all of our chains. >> apple has a lot of power. last night, they kicked off the itunes festival. if you are into the apple ecosystem, you could stream that live the next 30 nights and cold play, imagine dragon, they love music. it's a phenomenal experience for the users. that's what they want to give you. >> pandora and some of the our cloud based competitors, their businesses are soaring. downloads of itunes declined last year for the first time in history. itunes used to be the formidable source in electronic music. what's the stop and how will

apple combat the ongoing, underlying process? >> i think part of why they want to do this is exactly what you said. digital downloads in total actually fell in 2013, not just for apple, for the industry and they obviously dominate the industry. but they do have itunes radio, which just took the number three spot music streaming service in the u.s. you know, i think apple could probably do whatever they want with itunes radio. and potentially becoming number one. all they want to do is give people a good ecosystem. they don't need to be number one in music streaming. part of that is giving exclusive access to certain albums. beyonce was one, but they also did taylor swift. there's been a few others that they've done, as well. >> brian, i want to thank you very much for coming in today. it's great seeing you. by the way, i want to go back to the headlines that we just read a little bitting on. epl is being bought by energy

xxi, which is really energy xxi i think is how you say that. it's roman numerals. >> this is fascinating with all this stuff that we're getting. now this guy says becky and andrew both favor businesses that expand mostly union jobs and auto dealerships are not union jobs. auto dealer ships are -- i thought of something else. if you ask people, 90% would say new jersey is wrong here. how can they do it? >> 90% of the people -- >> no, how can they do it when you know it should be -- it seems like they're protecting just blatantly protecting. but think about the -- >> i pack to what happened with gm. when gm was going through and closing down dealerships, i was on the side of the dealers at that point. >> look at the other stuff. look at the ethanol lobby. why do we still center that?

look at farm subsidies. look at teachers' unions. look how entrenched teachers unions are where we can't make any progress for our own kids because they're entrenched. coming up, tesla, should there be dealerships? and back to home depot managers. andrew talks to some of the top selling stores. selling stores. >> ladies and gentlemen, we'll be right back with "squawk box." thank you very much. ♪

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andrew, are you with me, my friend? >> i'm with you. >> let me -- >> i'm not -- >> let me set this up again. all right. the reason that i started taking that side was because i would say there's probably a 95% consensus that it's ridiculous to keep dealers. i would say that that is -- >> i'm trying to take the other side and figure out what they're thinking. now, here is my question to you. if it truly is a dealer network, how is it that it's still the status quo across the board, akrod cross the country in almost every town you're going to buy a car, you don't buy it direct? why is it still the status quo if it should have fallen by the wayside? it seems like it would have fallen by the wayside if it should have.

>> for the same reason that you just said before we went to commercial break. >> but they're gone. record -- >> but that's what tesla is about to do. >> disrupt -- >> if they can show that this model works, then you can go direct to the customer and they can still service the car and do all the things that the deepership -- >> is this pure cronyism in new jersey? >> are you pals with de blasio now? are you going to the other side? >> no. i see a lot of on things that are entrenched and make no sense. i mentioned teachers unions being so entrenched that we can't do anything. we have no bothing room in trying to improve things for our kids. so how does it get -- it's pure cronyism in new jersey in your view that they decided to do this? why else did they come to this -- >> to prevent tesla from doing this, yes. the question is longer term, does gm or ford -- >> we could have mike on from auto nation to talk about this.

there are benefits, obviously, for the auto dealerships. but the automobile companies because of the economics of it. but at least there have been. the question is long-term, are they there? and would tesla, if they're allowed to do this, prove to the other guys that the whole business is -- >> i think it's fun to argue. i guess that's why we're in this business. but i think it's fascinating to try to figure this out. and i like being on the opposite side of you even when i know that suddenly i'm a de blasio lover. it's bizarre. >> amazing. >> we said it earlier with becky or you. it's kind of the same thing, right? >> arguing with either one of us? say it. this is what he's been telling me off air. >> i never used the "i" word ever. >> no, you didn't call me an idiot. i can read between the lines. >> i was talking about what someone wrote last week. someone said to stop scratching my rug, too. >> let me tell you guys very quickly, there is news, joe is coming from berkshire hathaway

and graham holdings after the company that is left of "the washington post" after they sold "the washington post." we had heard about this from the filing already that they had been talking about potentially swapping some assets or the sale of things. this is what they have said. they have reached an agreement in principal for berkshire to acquire wplg, which is a miami based television station owned by graham holdings. they would get a number of berkshire shares currently held by graham holdings and an amount of cash in exchange for the 1.6 million shares of graham holdings common stock that is currently owned by berkshire. they say a specific number of shares in each company the amount of cash determined on a closing date base odd certain factors. buffett says i am sure there's a mutually beneficial transaction for both companies. our admin ragz for the company is undiminished. buffett's 40-year association with the company has been

extremely good for our shareholders. naturally, the deal we put together is one that would be good for both companies. since these are assets being swapped, this is beneficial from a tax perspective for both of these companies. we have warren buffett coming on friday and we can ask him about there. >> okay. last but not least, andrew, we're going to go to break. are you still there, andrew? >> here is what i would posit. i would posit that protecting auto dealers is similar or the same to setting minimum wages and to trying to dictate overtime by the government. it's trying to protect certain ways of -- >> and that's what -- >> and thinking you can do things with jobs and centrally plan parts of the economy so that there's benefits. that doesn't work. and i would say that protecting auto dealers is similar to the things that are getting proposed right now by obama. >> i'm not saying that they're identical, but i'm take your point. >> good. >> there's no question. i'll take your point.

>> you see, i set up all this false stuff just to get back -- >> it's been fun, i will say. coming up, cramer is back from his oil rig experience. there he is. i love that. i love watching him. i loved watching him do that. kind of looks like that guy from dora the explorer a little bit. boots? what's his name? we'll have marcus and more live from post nine. >> announcer: dan gilbert knows a thing or two about basketball. he also knows a thing or two about business. and he knows a thing or two about warren buffett. quicken founder and owner of the cleveland cavaliers joins us friday to talk about his billion dollar bracket offer. and his bracket busting billionaire is friends. warren buffett, it's a special interview you can't afford to miss. "squawk box" tips off at 6:00 a.m. eastern time. profit from it. profit from it.

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let's get down to the new york stock exchange. jim cramer lives in new jersey with me. joins us now. do you know what else we got in jersey, jimmy? we got no self-serve gas, someone's being protected there, too, aren't they? >> that's right. i never understood that. go to pennsylvania you can serve. it doesn't seem that dangerous. i love the tesla store in the short hills mall, joe.

it's fun. get the equipment stuff. get the shirts. try sitting in the cars. i guess that's going away. maybe they open up something else. >> what can new jersey -- how does new jersey explain this move other than pure cronyism or how does it work? can you -- can you -- can you help me? >> no, i can't. i mean, for the life of me. look, you go in, you look at the car. you go on the website and you buy it. i didn't know that was something you wanted to ban. i thought it was a terrific way. obviously the state initial gave them a permit so this one's a very hard one to understand. >> i took the other side just because i figured there must be a reason. and all i got was that the dealer will protect you from -- and do warranties and recalls when the deal -- when the manufacturer itself really views that as an expense and so they won't be in your -- you know, on your side on that. >> well, fascinating story. was tesla really taking it to

them? no. this is a very small cap -- well, it's not a small cap stock anymore but it's a small number of cars that are sold. i didn't really regard this as the great threat to the industry. >> we didn't need it after the dove armpit stuff, it's a great place and we don't need any more negative, bridgegate. >> i like pumping my own gas, by the way. i top it off i do it exactly the way it should be. >> you nor the supposed to do that. i do that, though, and i make them top it off. >> i do, too. >> see you in a couple minutes. i do the the know why. i don't know why. >> it's obsessive compulsive disorder that's why. where in the u.s. are the top selling home depots we'll reveal them and speak to the managers about their stores' success. and donald trump jr. executive vice president of development of acquisitions at the trump organizations, he'll talk real estate and the economy and more with jim and the gang.

"squawk box" will be right back. . that are powered by the moon. . she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪

welcome back to "squawk box." this morning the battle for the orange apron sales supremacy. if you are a home depot store manager you always have sales on the brain. you want your store to be the top seller for the world's

largest home improvement chain and the competition is tough, joining us now the managers of the two top-selling stores and most people we did on twitter did not know where they would be. mike cunningham runs the marina del rey store and then we have keoni from the honolulu store. i apologize, we were talking about your name earlier and then i screwed it up again. you guys, i want to talk just about being at a store and the mobility in the store because one of the things that's so interesting you got to this company 20 years ago. >> correct. >> and you became a store manager about eight years in. >> about eight years in, correct. >> you started, you came from walmart. >> 15 years ago. >> 15 years ago and now store manager. >> yes. >> what's the opportunity for most people who come to go work at a home depot. >> endless opportunities. great opportunities for hourly associates to actually progress into their own careers as we did. >> right. >> what are you holding there? can i ask? >> this is for you.

part of our tradition and culture of home depot, we like to individualize our stores so -- >> pick it up higher so people can see what's going on here. >> here you go. >> does everybody have an individualized ones at your store? >> just the special ones. one of my paint associates in honolulu did this and we want to kind of give it to you. >> thank you very much. frank wasn't wearing his before, i would put mine on but i don't know how well i'll look in this. holster the consumer in your market, what are you seeing? >> i think the pulse is good. i think we've seen a lift in sales and they are confident in building their houses up. >> what's the big product being sold? >> right now we're going into seasons so you got a lot of patio and barbecues. >> what's going on in hawaii? >> appliances as well. we've seen positive growth the last couple of years and we're encouraged by appliances. >> is yours a seasonal business because your weather is not so seasonal? >> it's not. but we're consistent pretty much 12 months out of the year.

for example, we can sell outdoor products like barbecues and lawnmowers 12 months out of the year. we can sell air conditioners 12 months out of the year. >> craziest request, what do people come in and say they want? >> a lot of crazy requests. right now we have a lady that wants to hold a birthday party for a 4-year-old grandson with 30 kid. >> i also hear -- they want something else, too. >> all right. so loyola marymount is up the street and they want bong tools. >> do you help them with that? >> get them the tools. >> what about the other? >> don't carry that. >> congratulations and thank you for coming in. thank you very much. send it back to becky. it's been a great show today and we loved having you from vegas. >> becky mentioned 6:00 a.m. that we got to watch you with the name. at 6:00 a.m. look at this name. >> it's still early here.

>> thank you for being here. and andrew, we'll see you back here soon and we'll see you tomorrow. right now it's time for "squawk on the street." ♪ blue blue you can do anything but lay off of my blue shade shoes ♪ >> ladies and gentlemen, andrew has left the building. ♪ and we have to follow elvis. good wednesday morning welcome to "squawk on the street," i'm carl quintanilla with jim cramer back from the bayou and david faber. looking at a weak market for the third day in a row, the fifth day on the nasdaq. a lot of international data is weak. and the ten-year yield has crept down to 274 after hitting 281 last friday and then europe is in the red led by france as industrial production there contracted and missed estimates. the roadmap