good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen. andrew is off today. our top stories, general motors says that ignition problems with the switches, they dated back to 2001. that is three years earlier than previously disclosed. the automaker says that the problem was seen in preproduction of the saturn ion model. a technician reported observing an ion stall while the car was being driven and the owners had several keys on its key ring in addition to what was driving the car. now gm is urging drivers to avoid weighing down their key rings with anything more than the key and the remote key fob that locks and unlocks the doors. gm is offering $500 towards a new gm vehicle to more than an owners of compact cars. but the owners have to ask in order to get the benefit, so

listen up. if you are someone who has one of these cars, you can get these benefits. you do have to ask. gm recalled 1.6 million cars for faulty ignitions. 12 deaths have been linked to the defect. the company is facing investigations from the justice department and two congressional committees. if you take a look at the stock, the reaction came earlier this week when the news first started getting out and the news about the investigations really ramped up. you can see that stock at this point is at 35.05. we'll have more on this story throughout the show, including updates from phil lebeau. what has been interesting is some of the stories that have risen on usa today and some of the people that profiled these accidents. >> who bought a saturn ion? >> it was a long time ago, but there were a lot of them sold. >> 1.6 million ions? >> 1.6 million cars being recalled. >> i don't know how you can say don't put a heavy key ring on

your ring with a straight face. seriously, that's your answer to this? >> no. they're recalling and exchanging, but in the meantime. >> and this is 2014. >> yes. 15 years. >> don't use a heavy key ring. that's pretty crazy. >> the idea that a technician knew about this and saw this happening and -- >> really? if your key ving heavy, it can turn the car off and the wheel can lock? that's -- you know, that's an issue that i would have liked to have known about before 2014. another twist in the herbalife saga. the federal trade commission has started a civil investigation into the personal supplements into herbalife, but didn't reveal the nature of the investigation. but that news did hit the stock hard might tell mid day, down as much as 15% after being temporarily halted. it's very strange to -- if it's

68, it goes to 60. this is after all the stories about ackman trying to get the word out and then it just -- it just seems like more than a coincidence, suddenly regulators do decide to look into it, it's bizarre. the cover ended the day just down 7%. a source familiar with the investigation tells cnbc that herbalife was surprised by the investigation, but thought it was the best way to combat allegations about the company's business model and accuses video of bill ackman, the activist investor of $1 billion. they laid out several presentations, accusing herbalife of being a pyramid scheme. so far, ackman has declined to comment about the ftc investigation. he and carl icahn have gone head to head over herbalife when ackman first made his claims, the stock soared. a lot has been going on since then. it was kind of -- we had carl icahn on last week when we were

in the city. but it hasn't gone away. i would think that it's just weird. we saw how many different avenues that ackman had taken to get the word out with -- >> even going to china. >> you know, and now here we are. >> although you can imagine that that probably put additional pressure on the agencies to look into this. it doesn't mean necessarily they'll find anything, but the idea is that some of the allegations that have been raised -- >> they say we know exactly what you're trying to do, but you got eight points out of it yesterday. >> it is a big day of economic data. we have a lot on tap to get started at 8:30 a.m. eastern time. jobless claims are out today. they're expectinged to come in at 330,000. retail sales for february are expected to rise by 0.2%. we have import prices out

expected to rise by 0.4%. and at 10:00 a.m. eastern time, we get january business inventories. those are expected to rise by 0.3%. also take a look at the markets this morning. yesterday's mixed market, things barely budged. the dow was down by about 1 1 points. s&p was up by just under a point and the nasdaq was up by about 16 points. nasdaq finally snapped a four-day losing streak, but the dow industrials posted their first three-day losing streak since late january. you can see this morning, futures are indicated higher. dow futures up about by 33 points above fair value. s&p futures up by just over 4 points. and oil prices yesterday fell below $98 for the first time since early february. this morning, they've picked up, but only by 5 cents. 98.04 for wti. if you were taking a look at what's been happening with the ten-year note, at noint, it's yielding 2.73%. we get those jobless numbers today that the markets will be watching closely. and the dollar right now is down across the board.

dollar/euro, the euro is at 1.3956. the yen is at 102.52. gold prices yesterday settled at a six-month high. it was just over 13.70 for that. right now, it's up to 1,372.5 an ounce. up yesterday about 2% just on the day. china's premier meeting the media last night after the national people's congress session wraps up. eunice yoon has the headlines for it. good day. i'm going to go with good day whenever i have to go as far away as you are. i'm not going even going to attempt to determine -- good day. >> hi. joe, it was a really interesting day at the press conference, the premier basically acknowledged the very tough environment that china is facing saying that the economy is facing severe challenges in 2014. he said that last year the leadership's biggest challenge was the downward pressure that

they faced on the economy. and he said that he believed that this year could become even more complicated. he said that the -- at least he hinted that the leadership would be willing to tolerate a slower level of growth. and this is what he told us about the target earlier today. >> many investors believe that china's growth rate this year could be slower and lower than the official rate of 7.5%. what is the slowest rate of growth that you would find acceptable without stimulating the economy? >> translator: there's no denying that we may encounter a more complex situation this year. we set the gdp growth target for this year at about 7.5%. this quote/unquote about shows there is a level of flexible here. you asked me what's the lowest possible gdp growth we can live with thp the this gdp growth needs to support full employment

and support people's incomes. we want gdp growth that brings real benefit to our people, helps raise the quality of our efficiency and economic development and helps environmental protection. >> and the chinese premier reaffirmed that one of the major reform areas would be in financial services. he actually said that the country was willing to see some individual defaults and that they were unavoidable. though he did, of course, come in and say that the regulators would be monitoring any potential impact that those defaults could have on the system. now, one other area that he said was going to be important and you'd see a lot of competition would be in the health care industry as well as the old age or nursing home industry. basically, industries that are really important to improve the lives of the people here. one more note that was pretty interesting was that he said that the war on pollution, which he declared at this national

people's congress was a war on the -- what he called the inefficient and sustainable growth model and way of life that china has been living. >> all right, eunice. keep us updated on that. every day we're talking about -- and for how long has that been? every day for years. china has -- i don't know, we're all counting on china for the global economy. and, you know, we don't want to put too much pressure on that country. >> your question was the right one. what growth can you live with and it's not just for china. what growth can the rest of the world live with, too. ukraine's prime minister is going to be addressing the united nations general assembly today. he visited president obama at the white house yesterday. the president says the u.s. will stand behind the country's defense of its sovereignty. mean wile, the relations

committee voted 14-3 to pass a bill addressing the monetary fund and sanctions on russians and ukrainians as well as aid and loan guarantees for the new government in kiev. the problem is, it has to go to the full vote. even after that, it has to be reconciled with the bill in the house at this point. committee member senator bob corker expects the full senate to take up this issue when they return from recess on march 24th. it's an interesting situation. yes, we stand behind you, but at this point we're going on vacation for a week. we'll talk to the senator coming up at 7:30 a.m. and coming up, the spring head stake, a dip back into the 20s. windy .is for the east coast supposedly snow, although i haven't seen any yet. i am in denial. >> me, too. >> about snow. >> i could hear the wind this morning. >> i know. you know what? i'm just dish worry about the trees. but there's no leaves on them. so anyway, we'll get the national forecast next. and could a small scale attack

on the power grid cause a blackout nationally that would last? scary. one of the stories that we're buzzing about in today's executive edge. 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. the founder of quicken and owner of the cleveland cavaliers joins us tomorrow to talk about his billion dollar bracket offer. and his breakfasting busting bill heir friend will be with him, warren buffett. "squawk box" tips off at 6:00 a.m. eastern time. a.m. eastern .

right now, it's time for the executive edge. "the wall street journal" has a story outlining the risks of a national blackout from small scale attacks. the u.s. could suffer a coast to coast blackout if saab tors knocked out just nine of the country's 55,000 electric

transmission substations on a scorching summer day. that's ard cording to a previously unreported federal analysis. a study by the federal energy regulatory commission concluded that coordinated attacks on each of the neigh's three separate electric systems could cause the entire power network to collapse. it could mean darkness for weeks if not for months. no federal rules require utility toes provide substations except those at nuclear power stations right now. >> this was the kind of story i wish we wouldn't even run it. >> i thought about that, too. >> it takes a year or so. >> the one in germany they said it took to build and ship here.

>>ist took just a week to move it so it could be put in. >> and they still have to talk to people that pulled this off in northern california with guns, they got in, they got out, they tried to close it down. you know, it's just -- i'm not a survivalist. i don't have any water in the basement or anything. but this idea that this orderly society that we live in, it got a little bit shaken after sandy because it took three weeks for power to come back. and not having lights -- you don't have heat, either. so if it was the winter and the hotel rooms go, you go to the super market, there's no batteries left. you already see people hoarding stuff. and this is after two or three weeks. so we have this idea that, you know, we got this society, this crude shelter and clothing. we've got it licked and we don't have to worry about it. i don't know what might happen. >> i thought the same thing, oh, my gosh, why are we publishing this, why are we talking about

this? but it's out there. >> do you think they know which -- they'd have to know which nine. >> it may not be that tough to figure out. i mean, they'd have to know which nine, but it might be ones that don't have redundancies or the ones that must move massive amounts of power that you don't have a backup for and don't have a redundancy. >> yeah, well -- >> you said on a scorching summer day because that would be the peak energy used when people are running air-conditioners at full tilt, too. maybe it would have to be perfect conditions. it doesn't make you feel exactly comfortable. >> i don't think -- like my kids, if they tried to recharge their phone and nothing came out of the plug on the wall, they would be like, what's happening here? but no, what's happening? how is this possible? because it's ubiquitous. electricity, we just assume it's cheap, it's abundant and it's always there. but, you know, we take a lot for granted. >> yes, we do. >> get ready.

what else? tuna? >> canned goods. beans. >> but what about your electric can opener? >> i don't have an electric can opener. do people have electric can openers any more? >> of course. we have a really crappy one that's so old, a magnet that's supposed to be on the lid, that's no there so the lid falls in and you -- no. >> i have a hand screw one. >> we don't do a whole lot of stuff out of the can. a lot of cans now open by themselves, tomato soup, green beans. >> that's true. another story for you this morning, the big banks may be moving out of the big cities. over the next decade, wall street banks will be cut in half in terms of the proportion of the sports desk that they have in pricey cities like new york and london. they will be shifting those workers to less expensive cities in the developing world. this is according to a projection by consulting firm johnson associates. today about half of the employees who handle back office functions and operations at investment banks work at high

cost locates. by the year 2024, 20% of those workers will remain in expensive cities. some firms are started this process. goldman sachs has been adding staff to operations in salt lake city and dallas moving to less pricey cities here in the united states, not just in developing worlds. morgan stanley has a large facility in baltimore and part of this is, as the banks have faced pressures on costs and trying to find ways to come up with cost savings, look, if you're moving to the developing world, it's where the businesses and where the futures are going to be -- >> i mean, there's a lot of -- the environment we're in right now, i'm starting to understand that there's this perception that because companies have done well, that they're not sharing it with workers so we need the government to come in and do this. that's obama's idea here. we're going to make sure they can't horde. we're going to -- and, you know, on face value, there are probably people that say it's a

good idea, probably to get a majority of people, so it's an issue that you can use in an election. but it's -- it's really not econ 101. it doesn't make a lot of sense. my idea, and i'm going to propose it to welch when he's here and i'm going send a letter to the president, i've got an idea for full employment that someone sent me yesterday. oh, i know what this is. >> what? >> i heard you laugh when you saw it yesterday. >> lightning boats. >> right. >> i think we need to do this. i do. i think this administration might think, you know what? that's a hell of an idea. do the minimum wage combined with the viking boats. because everybody has got -- you see those boats? >> uh-huh. >> there's rows and rows and rows. and i think we could be at zero unemployment, probably. it just seems to make sense to me that might be something -- >> all right. enough with that. >> you know what? given these idea that's i'm reading on the front page of the "new york times," this is not out of the question for where we are right now.

viking boats. malaysian officials, meanwhile -- i don't -- you know, let's see whether sri has heard this. "the wall street journal" is the one reporting this, right? but isn't it six days now? so many weird things are coming out days after the event. what did they know? when did they know it? >> i understand why rolls-royce may not have been running to the press with this information. this is the idea that rolls-royce, this is a crazy story that rolls-royce was still getting updates because it had its engines sending reports back to rolls-royce to tell them a little bit about it. and as a result, it realizes that that flight may have been in the air much longer than originally suspected. maybe four ours longer. >> sri has more details now from kuala lumpur. sri, you give conspiracy people an idea that the tran responder was deliberately turned off and it flew for another four hours. and i don't know, you can

have -- i mean, you can put together any type of narrative that you want after that point. and people are immediately going to say -- i think sri, we're having problems with the shot. but i don't know whether you heard that, sri, but you put together someone turning off the tr transponder and flying for an additional four hours, in my mind, find an air strip. i don't know what you do with the people. and then you use the plane for some horrific use later? you give the conspiracy theorists something to chew on and they're going to come up with all kinds of stuff. >> look, joe, that is one of the theories and let's face it, theories have been in abundance across this tragedy and across this crisis now as the way that i would describe it, the missing flight mh-370. but what we got earlier today,

earlier this morning was some compelling leads. we had china release some satellite images of what could be floating objects in the south china sea. now, malaysia and vietnam did scramble some planes to go and verify whether that was the case. now we are hearing from the transport minister that those reports were released, those images were released in error. which is absolutely astonishing. and it begs the question, what is going on here in terms of the cooperation between all the -- all the parties and the stakeholders involved here. and then on top of that, we had these reports also, as you quite rightly mentioned, that the plane was still airborne four or five hours after it disappeared off the radar. transport minister said those reports were inaccurate. so we're really back to square

one. once between, we have this situation where we almost have a deadly occurrence of leads of information or theories only for them to be refuted. and you could imagine the frustration here was absolutely palpable amongst the press corp.. you can imagine how the families of those passengers are feeling at the moment. if there is anything positive to take out of this, it's that the transport minister said, look, nls until we find any lost vestiges or anything resembling wreckage, we're going to keep looking and we're going to keep expanding the search area. remember, this is one of the biggest challenges, the search area already is huge. this is a monumentally challenging task. from what i gather, just one of the search areas is the size of spain. so you can imagine the effort that has to be put into this. let me tell you this, no effort

is being spared. there's now a multi national coalition of navys looking for this plane, including some major super powers, the u.s., japan, china, for example. and yet nothing. despite all the 21st century technology. it really is quite staggering. >> just back up a minute because you're right, it's been so confusing. reports get put out there almost immediately shot down. but just to back this up a little bit, what you just heard from this press conference is those images the chinese satellite images were put out mistakenly by who and i guess does that mean it's definitely not the case that they suspect that that was wreckage? and second of all, this story about rolls-royce, the malaysian government is saying it was not in the air for hours, does that mean the story about rolls-royce is completely untrue? >> well, that's what he said pretty much on the record of the release of the china satellite

imagery, yes. it was official. it was released by the -- what i believe to be the equivalent of nasa in china. now, it did quite clearly show what could have been large pieces of wreckage floating objects, between 21 and 24 meters. conceivably, they could have come from a plane. nothing was found. later on today, they did say that those images were released in error. what they were, exactly, wasn't really disclosed. we don't know that. so that's another mystery. but it really calls into question the examinesy of a l s competency of this government and a lot of people are saying look, this has turned out to away botched job. >> do we believe the malaysian authorities at this point? do we believe these reports? >> last night, the gentleman that were the experts said that very unlikely because there would be a huge field of debris

and that it was so tightly packed, he basically said there's no way. >> the idea, though, that the story -- >> okay. let me say this. let me say this. to be fair, the closest analogy and parallel that a lot of aviation experts that we've been speaking to is air france that went down over the atlantic in 2009. now, it took up to a week to find the small debris field and it took almost two years to find the main debris field, which included the main body of the aircraft which incidentally had sunk to very deep water levels. now, if that is the case, then our -- it could be a very similar situation. but the flip side to all of this is that the south china sea, the

malacca strait, is not the atlantic ocean. it's a smaller mass of water. it's less deep. so bear that in mind. having said that, as i said, these are large expansive tracts of water. >> but the final word, and i'm asking again just to make sure that we should stop repeating this. the final word is that the rolls-royce was receiving updates from the engines of that plane for an additional four hours, the malaysian authorities are saying that is incorrect? >> that's correct. this is what we had on the record from the ceo. >> obviously, there's a lot of difficulties trying to get these shots back. it's changing constantly. but they're saying yes, that is not the case. this is a story that was widely circulated yesterday and rumored this morning. it's in the "wall street journal" that rolls-royce was receiving updates on this. but as we just heard center sri who is in kuala lumpur, malaysian authorities saying no,

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good morning and welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick. andrew was last seen at a craps table at casear's blowing on some woman's dice. it didn't say that here. it says that he lost his shirt. i don't know whether efs blowing on the dice -- i don't know how he's dressed at this point, but he's off today. >> or if he's dressed. >> or if he's -- you know, he could be on the mattress like in the first -- >> vegas is a dangerous place. >> it is. plenty of economic data for investors to digest today, including jobless claims, retail sales and import prices. joining us now to talk about the economy is lindsay piegsa. chief economist at stern ag.

and on the markets, david joy, chief market strategist at ameri is prise financial. lindsay, are you at 3 and have you wafrd at all? >> actually, i'm lower than 3%. i'm looking for more of the same as the economy is stuck in this 2%, 2.5% range throughout all of 2014 carrying into 2015. so even a little more pessimistic than some of those economists looking for 3% growth. >> yeah. because we decided that that was -- that the market has 3% built into its expectations. so you think it would be disappointing if you're right that most people are above you, aren't they? >> i think i am one of the more pessimistic on the street. but given the fact that the fundamentals really haven't changed, it's hard to justify it above 2%, 2.5% gdp forecasts and it would be much easier to talk

about 3% or 4% gdp. but given the fact that the consumer is still so constrained and it still counts for the vast majority of our economy, again, it's very hard to justify an above trend gdp forecast. >> what is constraining a consumer? housing has improved. the jobs picture has improved so people are less worried about losing their jobs, probably. there's a lot of things that these people are more optimistic. they do point to things that have changed. why don't you think things have changed? >> well, when you see the employment picture has improved, we have been seeing positive job creation for years now. that is a net deposit for the economy, but the quality of the jobs that we're creating is very minimal. what i mean by that is 40% of the jobs created have been b in the low wage sectors. so we're not seeing that impetus for wage growth right now. and, again, although we have been seeing positive employment, it hasn't been enough. when we've been losing momentum down from a pace of near 200,000

from the start of last year, down to about 175 now, so despite the t fact that we're 12 months further into this proefr, employers recovering at a slower pace than last year. if we want to look at the economy through the glass half full or glass half empty, but i'm seeing a loss of momentum in nearly every sector of the economy. still positive, but it's that second derivative decline or that loss of momentum. >> david, we have heard from many of the people that come on that it's a one off from the weather. they don't really -- most of them don't say what -- don't have lindsay's day on things. what about you? >> well, i agree that it's most likely been the weather and, however, i also agree that at least the hard data hasn't shown the data. i expect we'll get to a 3% growth rate. but we haven't seen it yet.

i think the only thing we can point to is that the jobs report is better than expected. once we get into april and we see march data that's not weather impacted, it better be good because this market is priced for a 3% growth rate. >> so is the market, if we get three, then the market is not overpriced? >> no, i don't think so. we need to get it. valuations are more evaluated, credit spreads are exceptionally tight. you're seeing activity in the ipo market that suggests that there was some smart sellers out there rather than buyers. sentiment is rising. so this market needs what's

covered. and take it higher if it's going to go higher. i think it is at least in the interim. >> what would you do to address your concerns that these are low wage jobs? would you do the minimum wage? would you do executive action to make certain overtime mandatory for people that aren't getting it now? is that the the way you'd approach it? >> no, actually, i would approach it from the exact opposite way, remove from that regulation and owners restrictions on the private market. i've been talking to a lot of small businesses and right now they say if they are poised to invest grow in terms of taking on that new office space, taking on new employees, but they're hesitate right now because they're not sure of the rules of the game, in terms of taxes, regulation, minimum wage, health care costs, all of which is really restraining that credit cycle from taking hold and growing the employment base.

>> we have the white house and one house of congress that the things that they're actually most interested in are probably dill tierus to companies being able to operate better. it's very weird to me right now that all the things -- whether it's the epa, whether it's staying up all night about ways of -- for climate -- whatever it is, it looks like these are things that are actually hurting the possibility of job creation. am i wrong on that, lindsay? >> no. i would certainly agree. we've heard benefits come out and point to washington saying look, we're doing everything we can in terms of monetary policy. we now need fiscal policy to come and get the economy back on track. >> what's that shot behind you? where are you? >> i'm actually over in texas today. >> okay. well, you're in texas. you might have a better grasp of things. anyway, thanks, lindsay. david joy, thank you. we'll see you. >> thanks very much. still to come this morning,

ksh -- >> viking boats. >> viking boats. >> have you ever seen how many -- >> a lot of people. >> a lot of people.. >> a lot of work. >> yeah, but they're working. we could get to zero -- that made a lot of sense to me. if obama hears this, seriously. president obama. sorry. when we come back, the eye popping odds of you actually winning the quicken loans billion dollar bracket challenge. we have a mathematics professor to break it all down for us in the next hour. and ukraine and russia fight the war of words, but moscow could be rapping all the way to the bank. the bank. announcer: where can an investor

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welcome back, everyone. we have a busy squawk planner for this thursday. jobless claims retail sales and import prices all on the economic calendar. the markets get those reports out at 8:30 a.m. eastern time. on the earnings front, discount retailer dollar general before the opening bell. and ukraine's prime minister is expected to speak to the u.n. general assembly later today. that's your squawk plan her. joe, i'll send it back over to you. >> thanks, becky. turning to the crisis in ukraine, ukraine's prime minister was at the white house meeting with president obama. but we have a story you may not have heard yet about ukraine and russia. a debt deal worth $3 billion. michelle caruso cabrera is here with the details. >> this is about the potential transfer of u.s. and european taxpayer money directly to russia if we give ukraine a bailout. back in december, russia gave a loan to ukraine of $3 billion. this is supposed to be part of a larger package of $15 billion.

this was to thank them for turning their back on the eu and instead of aligning themselves with russia. this is back when yanukovych was still in power. here with the deals of the first installment of that loan. it was $3 billion. it was issued in dollars. it was issued on december 24th. the coupon was 5%. that was generous financing. maturity was 2015 and these bonds were governed by the uk law and the uk court. here is the thing. in this particular bond, there's a covenant or a clause that you rarely see. take a look. it says if ukraine's debt to gdp during the duration of this loan rises above 60%, then russia has the right to call the loan and be repaid immediately. so the implications are this. if ukraine gets a loan or a bailout from the west, and it will, there will be lots of hemming and howing and white

knuckles, but when all is said and done, we're going to give them the money. $2 billion can theoretically go directly to the russian government. so that's take away number one, which is pretty incredible. and they were pretty incredible to put the clause in. >> and uk law? >> those are my next two points, right? russia issues a u.s. dollar bond in a uk court. why do you issue a bond either in a new york court or in a uk court? >> because you want it upheld. >> exactly, because you want to get paid back, exactly. we see this over and over again. you know this whooper of a debt deal that puerto rico just did? >> yes. >> all this debt had been done under puerto rico law. but this new deal was done under new york law. >> i think rand paul brought this up yesterday because his question on the senate committee that was talking about whether they should go ahead and do this, his question was would anyone in this room actually bayou cranan debt at this point?

because it's rated ccc. so if you didn't use your money to do it, why would you be using u.s. taxpayer dollars to do it? >> this is what the loan structure is right now. if they pay it back, the u.s. taxpayers are on the -- >> they go for it. >> it still made it out of that committee with a 14-3 vote in favor of doing it. the question is do you leave them there hanging there otherwise. >> they'll turn to russia. >> right. >> thanks. >> the obesity problem, everybody would be in shape. >> oh, right, right. >> what about the painting parts a different color every day. >> that doesn't have to do with obesity. but where would people sit? it would be wet all the time. >> just thinking of ways to get to zero up employment. >> i'm sure they'll appreciate your suggestions. >> painting park benches different colors. it would be nice. parks are beautiful. when we come back, carl icahn, bill ackman and dan loeb. but one name you may not know,

teresa barger. thooel thooel she'll be with us right after this break. later, jack welch joins us for two hours on squawk. you don't want to miss this. nt . ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry, but you worry. what happens when your paychecks stop? because everyone has retirement questions. ameriprise created the exclusive confident retirement approach. to get the real answers you need. start building your confident retirement today.

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welcome back, everybody. it is a classic david and goliath story and it's playing out in the largest bank deal in

latin america since 2008. cartica is challenging corpbanca. joining us is teresa barger, co-founder and senior managing director of cartica capital. thank you for being here today. >> thank you for having me. i appreciate it. >> tell us about what you first spotted here and why you think this deal is unfair. >> in any business combination there's an opportunity for self-dealing. in this case, the board of corpbanca voted for a sweetheart deal. >> your raising this issue, has it changed things? do you have other shareholders on your side? what has the company done to respond. >> the company has done very little to respond. we like to work behind the

scenes collaboratively with our portfolio companies that's what we do. we generally don't go welcome public. when this deal was announced on january 29th in a 6k where we had one page of information about a deal that gave a slew of private benefits to alverio seyah. then of course we had to go to the board of directors because they were the ones with the fiduciary duty to all shareholders just as in the united states. they have a fiduciary duty. the facts would show that something must have gone wrong, to give such a sweetheart deal to alvaro and his family.

>> activist investors have had a good run over the last several years. they seemed to gain traction. how does that happen in latin america? >> really all over the emerging markets we think of activism very differently. in our strategy itself, we -- there's a reason we work cooperatively behind the scenes. that is that in the emerging markets 85% of all listed companies are controlled by either a founder or a family or by a state-owned enterprise. only 15% of the shares are widely held. control is not in the market. in addition, the legal systems aren't so great. so why would we get in these bulldog fights like you see in the u.s. or you're seeing in herbalife today? it doesn't make sense for us. we would rather have incentives aligned with the controlling shareholders and work with them so that we can, together, create

more value in our company. >> what's the next step with corpbanca? >> for corpbanca, what we'd like is for the board of directors to reconsider this deal or start the process again and reconsider a deal with any of the other three suitors they had as proposed merger partners. >> how likely do you think that is at this point? >> there are a lot of shareholders that we talked to, other minority shareholders that are concerned about the deal. i think it's harder for them to speak out because alvaro does own three newspapers in chile. we need to know we're willing to go all the way. they have to believe that so that it gives them comfort as well. but we think that ultimately the board will realize it needs to do the right thing because it has legal fiduciary duties. >> teresa, thank you very much

for joining us. appreciate talking to you today. >> thank you very much. i really appreciate being on. >> good luck. >> thanks. >> when we return, jack welch will be our special guest host, everything from taxes, minimum wage, to disrupting the world of higher education. "squawk box" will be back after this becky quick break. [ male announcer ] at optionsxpress, our clients really appreciate our powerful, easy-to-use platform. no, thank you. we know you're always looking for the best fill price. and walk limit automatically tries to find it for you. just set your start and end price. and let it do its thing. wow, more fan mail. my uncle wanted to say thanks for idea hub. he loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. [ male announcer ] open an account and get a $150 amazon.com gift card. call 1-888-280-0149 now. optionsxpress by charles schwab.

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gm's recall reaction, the automaker reveals new details of the ignition problem urging drivers to use lighter key rings. we'll have a live report from phil lebeau. the changing housing landscape. bob corker talks to us about the future of the nation's mortgage

finance system. >> and jack welch is back. he'll be our special guest host today. "squawk box" begins right now. good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick along with joe kernen. andrew's off today. we've been watching the futures this morning. you can see the futures are indicated slightly higher this morning. dow futures are up by about 23 points. we've seen three days in a row of declines for the dow. the nasdaq broke that four-day losing streak, up slightly. this morning it's indicated to open up about nine points above fair value. right now, the s&p futures are up three points. the ten-year note is yielding 2.735%. we have jobless numbers coming in today. as the search continues for missing malaysia airlines flight

370, u.s. investigators are reportedly saying that the flight may have flown on for four hours after reaching its last confirmed location. that's based on data that's automatically sent to rolls-royce who made the engines. the asian authorities are denying the reports saying no engine data was received off the flight went off the radar. again, conflicting stories depending on who you're listening to. both initial jobless claims and retail sales hit at 8:30 eastern time. jobless claims are seen rising from 330,000 from last week where we saw 323,000. economists kmekt retail sale km jcpenney is relaunching its home goods section today. that move reverses what had been the center piece of ousted ceo ron johnson's strategy. the retailer is bringing back more lower priced, no frills brands that johnson ditched in an effort to go upscale.

the stock up by 22 cents. it has climbed up over the last month. >> and gm has some recall details. let's get to phil lebeau in chicago. hey, phil. >> this came out last night. here it is. about ten pages long, an amended time line of events from general motors regarding the ignition key recall and the headline is that general motors got its first indication there may be a problem with the ignition keys installing of certain vehicles back in 2001. that was with the preproduction ion model. the dealer technician report in 2003 is noticed in here. that's earlier than 2004 which was the previous date that general motors said they first started to notice stalls in a number of vehicles ultimately leading to the recall of 1.6 million vehicles. in 2003, it's also the first time general motors says there is some suggestion that perhaps the keys and the key chain were too heavy for the ignition which would result in the vehicle stalling. this is the saturn ion in

question here. gm's report, it changes the time line for when the company started getting information about the possibility of a problem with ignitions. this coming about a month before a senate committee is expected to investigate or will be investigating exactly what general motors knew and when it knew it. yesterday senator claire mccaskill said we need to find out who dropped the ball and put millions of americans at risk we also need to make sure that general motors and federal regulators are doing everything they can to prevent more tragedies like this, now and in the future. gm is estimating that the cost or analysts are estimating that the cost for general motors once it's all said and done to deal with all of the repairs, the recall, everything, it will go between 100 and 150 million. we should point out these estimates are all over the map. general motors sent out recall notices to owners earlier this week, saying we'll be giving you a recall of the part within the next month. in the meantime, only use the one key that comes with the car, not a heavy key chain.

yesterday, transportation secretary anthony fox was on capitol hill and he was asked about what nhtsa is doing as it tries to get more information from general motors. here's what he had to say. >> the outcome, we're doing a review here to see if there was a time -- once we know that, we'll go from there. >> the transportation secretary talking to us yesterday after a budget hearing on capitol hill. take a look at shares of general motors, guys. boy, this has been a rough week, especially if you look at the end of that chart. we're looking at the stock over the last month. the last week has been rough for investors at general motors as we try to figure out exactly how deep does this go in terms of information that gm still needs to provide to the federal government. guys, back to you. >> busy this week, phil. we didn't get to talk enough about the new jersey tesla thing either. we had a big discussion yesterday on that. >> what did you talk about? >> i did see on some of the blog sites, people on the left and

right, everybody's mad about it. then i hear just how powerful in some states the dealers are. >> that shouldn't be a surprise. in every single state, think about this, every representative in congress and state legislatures have auto dealers in their district. those are jobs. those auto dealers spend a lot of money in campaigns as well as in lobbying. they're usually the largest lobbying group in every state legislature. >> really? >> among them, yes. >> no kidding. that's amazing. >> we'll probably get on the subject with jack at some point, phil. stay tune. our guest host is jack welch. to intro you, i have to talk about so many things, ge, you're executive chairman of jack welch management. what was the other one. >> winning. winning. >> before he said it. you've had tiger blood for years before -- i don't know any other similarities with charlie sheen. when you come in, i never know what has really got you going.

can i just start with your knowledge from clayton and other places about the economy. yesterday we had someone say he was looking for 4% by the end of the year. today we had an economist, she says 2% to 2.5%. nothing's changed. everybody is wondering is it just the weather? have we had data points that show we're doing much better? do you think we're 3% this year. >> i just reviewed six businesses in the last 48 hours, three a day on tuesday and wednesday. and i would say that as of now, this economy hasn't changed in the last 12 months. we have a 2% economy. that little blip in inventory in the third quarter of last year didn't change it. however, there's a lot of optimism. there's a lot of optimism that the commercial and industrial business which has been on its back will come back the rest of the year.

mcgraw-hill has a forecast of 4% on commercial and industrial. if that happens, we'll have a 3% to 3.5% economy. right now, in the first quarter, nothing counts. 15 to 17 days have been lost in weather. so you can't tell much from the first quarter. i would say nothing's changed up to this point. a lot of hope. we've had hope before in first quarter and it never came. >> can optimism be self-fulfilling and the ceos do things they haven't been doing? maybe optimism could -- do we need to see it in the underlying economy actually? >> the toughest part you have here now is everyone is on to doing more with less. capacity is being found everywhere. so you don't need p & e. the uncertainty about whether it be wages or this or that, people are reluctant to add people with

obamacare. you can have a lot of uncertainty about people doing things. they do think, though, no question, every forecast we had in the last 48 hours in our businesses call for a pickup in the last half of the hour. they all believe it's going to be there. they're seeing new orders, bookings aren't bad. it hasn't changed yet, i'll tell you that. this is a 2% economy. >> what's driving the optimism? is it just that, they're seeing good future bookings? >> for example, we have a buildings business where we erect ready to go warehouses and stuff like that. that business's bookings are up significantly. they're not deliveri ining much to the weather in that type of business but orders are up. this has been the most optimi optimistic second half forecast i've seen in the last four years. this is all happy talk up to now. >> in the past they weren't

happy and nothing happened. so that is a difference, so maybe it does mean something. >> and i -- one way or the other, i do think we'll have -- we're more likely to do 3 than 1.5. >> in addition to these people being optimistic without any evidence, some people say the stock market has also reflected that optimism already. so that if it doesn't happen, that it's already ahead of itself. >> the stock market is based on, where else do you go? you are trapped. every individual you know is finally saying i've got to get in. i missed it. i have to get in. >> tapering started and ten-year is down from where it started. >> tapering is a word that's used. it's still expensive, 65 billion. >> fed is still there. >> yes, the fed is still there. when you say taper, they're not there as much but they're still

there. taper is a funny word. >> two things have surprised me. that is that the ten-year, even though a lot of times it doesn't matter, it's the rate of -- it doesn't matter the rate of change. they have shifted, the feds. they think it goes to terminal pricing. the other thing is the way you want. i assume it should be much more valuable. that assumption is -- some of these things move to where they should go based on underlying economic. i wonder the ten-year is where it is because things aren't that much better. i worry the yuan has gone down because china isn't where experts thought. >> every expert you have on every morning is saying that. we've seen it also. china is going through a, is this guy going to deal with that $24 trillion bubble. is he going to do it. >> two things i thought were manipulated. now i'm not so sure. >> that's going to change the

game there. the impact of china is the one big uncertainty on this whole global economy, whether it's commodities or whatever. >> excuse me, becky. >> i'm sorry. can they make that transition with maybe some rough sledding at the beginning? but eventually over the next year or two or three years? >> they have a better chance than a free market does. i mean, they can at least try to manage it. and this guy seems like he's on a tear to clean this thing up, to do it right. i'm kind of -- i think things aren't bad, though. let's not get off on the wrong track here. we have a 2% economy that we have had in the last 18 months. we had a blip in the third quarter with inventory build. but i'm completely convinced that we haven't changed at all. and happy talks with going on at the end of the year in the

fourth quarter and nothing was happening, i'll guarantee you. orders were not coming in. and now we have forecasts that -- >> you're admitting they could be right about the optimism? >> i'm saying there's a chance this could be, 60% at 3% economy and 40% at 1.8 to 2. >> how much would you like to take a billion dollars off of buffe buffett? >> what a great promotion. that was awesome. >> rutgers didn't win yesterday. >> they could win the big -- the next four days are great, too, before the tournament even starts. great stuff happening. >> great stuff the last weekend. >> do you think florida? florida is awesome. >> they're so awesome, the way

they handled kentucky last weekend was unbelievable. >> how about that patrick young dude guy? i could move him out of the way easily if i wanted to drive the lane. i'd go right through him? why? because i'd go underneath his legs, between his legs. >> we had boone on. oklahoma state, they're a different team with this guy. did you see them last night? >> no, i didn't see them. >> i have to see if they won. i only watched the first half. they were up 20 or something. more from jack throughout the show. when we come back, tim sloan, cfo of wells fargo will join us live. we'll talk about the plan he has about fannie mae and fraed did i mack.

mortgage rates have been inching higher as the fed keeps its current pace of tapering intact. where do they go from here and what's driving loan demand right

now? joining us now is tim saloloan, cnbc global council member and cfo of wells fargo. >> i want to talk about what jacks with just discussing. >> sure. >> he's been looking at this economy for the last 18 months or longer and says it's been 2% from everything he's seen in the business he watches. what do you see? where do you think the economy stands right now. >> overall, i think jack's right. the economy is growing at about a 2% rate. if you bifurcate that, it was the government sector that tended to hold things down because of the sequester and tax changes and the like. like jack said, we're optimistic. job growth has been inching up, two years ago it was 174,000 jobs a month. last year it was 186 -- two years ago it was 186 and last year it was 194. you're seeing the wealth effect. if you look at the net worth of

u.s. families it's back to where it was in 2007. we need to do surveys of customers with gallup and without. our small business survey is up, the retirement investor survey is up from the fourth quarter. we're optimistic. as jack said, we expect the economy to continue to grow over the year. >> you expect it to be closer to 3% growth economy this year. >> yes, we do. >> seeing the same thing, which is interesting, too. let's talk about mortgages. there's been a lot of concern not just because of weather but also because of areas like california. there's been shakier, too. what have you seen? >> overall home prices continue to rise. year over year they were up 12%, 13%. we think that will moderate a little bit and it will be in the midsingle digits to high single digits. the affordability index tens to be very attractive. we originated $50 billion with the mortgages in the fourth

quarter. our expectations are slower this quarter. >> jack, did you want in? >> i'm in total agreement. one of the things we've seen is that retail space isn't growing at all. i mean, warehouses are growing as online stuff is occurring but if you drive up and down streets in florida, mall after mall is closed down. there was a huge excess of retail square footage. >> sure. >> and when you talk to frank blake yesterday, he's not building new stores. >> that's really interesting. >> stores aren't coming in. that whole building sector, this is really a segment by segment economy. if you're in oil and you're serving the bargain, you can't get your stuff up there fast enough.

if you're surveying a warehousing business, you're doing pretty well, too. if you're doing retail building, and a lot of stuff happening. >> that is an excellent point. i find myself, i don't go to the malls anymore. i buy online, too. >> getting squeezed. >> when you have dual income families, everybody's working you don't have time to get there either. >> i love jack, where can i cash in my optimism for money? you can't, can you? >> you can buy stocks. >> that's it. >> market is up year over year. it's been an attractive place to have your money. >> wells fargo has been a place to have your money, too. >> we've been up 36% year over year. >> the stock has done incredibly well. you've raised your dividends. was it up by 31%? >> this year you have to ask permission from regulators to raise again. what are your plans? >> we want to increase the

dividend again. we're in the process now where we're waiting for the fed to respond to the capital plans that we submitted in january. we're optimistic that our plan will not be objected to. we've been very public in saying that we want to increase the dividend and we want to continue to repurchase more shares. when you look at total capital return, dividend plus share repurchase, we returned $11.4 billion to our shareholders last year, the industry was up about 33% year-over-year. we want to do more this year. >> if you would look at happen with sanctions to ukraine, european banks, could that do anything negative to the overall economy? is that something you worry about? >> i think it's something we should worry about. it's one of the reasons the ten-year has rallied in the last several weeks. >> you think we'd do that, freeze the oligarch's money that's not in russia. >> i hope it doesn't come to

that. i'm hopeful they'll work something out. if they do, that will clearly have an impact on european banks and the banking system in general. >> how much exposure do you have with russia and ukraine? >> our international business which is growing and is exciting for us is only about 5% of the total exposure. of large banks in the u.s. we would have the least amount of exposure to nonu.s. companies. the most exposure we'd have would be in the uk and canada. >> what about this new fannie and freddie bill? what would that do to the housing market. >> it's unclear. the specifics aren't out yet. i think we're going in the right direction. we clearly have to change the way mortgages are ultimately held and financed in the u.s. it doesn't make sense long term that we're so dependent on fannie and freddie. >> to have the u.s. backing it?

>> the right doesn't like it because it would still have the federal guarantees. it's going nowhere on either side. >> maybe that's the way forward. i think a couple senators had done a good job in trying to fashion something that appeals to both right and left but doesn't make both happy. clearly we've got to make progress. it's now six years since the crash. we're still dependent onfannie and freddie. it will be a combination of a change in fannie and freddie, restarting the securitization market and continuing to allow institutions to hold mortgages on their balance sheet. >> you're in san francisco, right? >> correct. >> do you think pac-12, can they hang with these guys? >> i went to michigan. i'm partial to wolverines. >> and san francisco, i mean, does it seem fair one team has more points than the other? and then wins and rubs it in --

>> i think competition is a good thing, joe. it's good in banking and also in basketball. >> need to look at this. i don't know about pac-12. can't tell. >> thank you for coming in. >> thank you. coming up, bob corker on overhauling the nation's housing finance system. plus, upping the ante. i love having a business excuse to talk about this. we have a mathematics professor breaking down the odds on winning. tdd#: 1-800-345-2550 trading inspires your life. tdd#: 1-800-345-2550 life inspires your trading.

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when we come back, senator bob corker talks to us about overhauling the nation's mortgage finance system. more "squawk" right after this. ♪

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the x1 entertainment operating system, only from xfinity. welcome back to "squawk box" on cnbc, i'm becky quick along with joe kernen and our guest host today, jack welch. jcpenney relaunching its home goods section. the company is trying to rebuild its own businesses by offering more lower priced items. more in-house brands and more floor space for towels and comforters. the company saw sales of plummet to $1.3 billion from $4.2 billion seven years earlier. initial reaction has been positive. citigroup upgraded the stock on tuesday because it expects the new home section will lift

sales. pen they are still 55% below a yearly high that was hit last may. >> who took all of that business? macy's or specialty places. >> a lot of it went to macy's. it wasn't a zero sum game. >> 4 billion to 1 billion. what was it, home -- comforters and stuff. >> towels. >> bed, bath & beyond? >> linens. >> a lot of those things. alibaba is 95% certain to choose new york as a list venue for its public offering. they are no longer considering a listing in hong kong. the company expects to complete the ipo sometime later this year. it's part of a planned exit from the business to be completed in 2015. jack?

>> i always liked it. >> he always liked that business. >> shares of fannie mae and freddie mac taking a beating over the past two days all because of the senate banking committee's proposed legislation to wind down mortgage lenders. it builds on a plan set out by senator bob corker from tennessee, who joins us now. you still have circles under your eyes from that pajama party on climate change. did you get pizza? what did you do that night? you did actually tell ghost stories, didn't you? were you there? >> are you kidding me? i've got a day job here i try to do. >> i know you do. >> like passing fannie and freddie reform. >> i asked someone earlier about this, the cfo from wells fargo. the left doesn't like it because they want to keep fran ni and freddie. the right doesn't like it because there's still too much government involvement in the

mortgage industry. nobody is happy. he said maybe that's a good thing. maybe it could go somewhere. from what i read, it's probably not going to be done anytime imminently, is it, senator? >> you have to be kidding me. it's the goldilocks deal. it's just about right. i really do think we'll have a banking committee markup, the early part of april. i do think we'll pass this bill out of the senate. i know jeb hens eehenserling ha looking at this, too. we're finally at that point where i think something is going to happen, i really do. i think this may be the biggest thing congress does this year that actually matters. i'm pretty upbeat about it. >> i guess the issue is for a while, people said fannie and freddie are the only game in town and the housing market would just be -- it's so vital to the economy, that if you mess around with it and do the wrong

thing -- so there still has to be some type of assistance, people think, which means the government is still a too big to fail type thing. >> not really. >> how do you get out without really not getting out? >> we're in a too big to fail situation with the duelopoly with them having the securitization platform within their institutions. what this bill does is move to a much more modular dynamic system where there has to be 10% private capital in advance of any kind of government guarantee. it's a big step away from where we are. today with $5 trillion in mortgages at these two entities, that would have to be $500 billion in capital. look, i really believe this is going to happen or at least we have a very good chance of making this policy happen. i think it's great for america. certainly moves us away from this private gain, public loss scenario. a lot of the preppies is out

there saying this is taking. it's not our job to try to solve a legal issue. they can go to the courts. it's our job to put in place public policy that moves us away from a system that everybody in america knows is inappropriate. i think this is a great day, been a great week, both on ukraine and here. i'm looking forward to getting back from recess and diving into this. >> well, speaking of great weeks, what is your take on the nlib and where do you think they'll come out on this volkswagen problem? >> i don't know, jack. by the way, i should bow. i'm sorry. how are you, sir? >> fine. how are you? >> very good. i don't know what's going to happen. obviously there are two entities that have asked to intervene. it has southern momentum which represented many folks there on the ground, in the plan the that didn't want to be represented. and then national right to work. i'm feel good about it.

obviously this is going to drag out for a while. the decision about what ultimately happens relative to expanding at the plant is sort of muddled up, if you will, until things settle out. i think it was a great victory for our community, our state, our citizens and i was very glad to be a big part of that. >> congratulations on speaking out. it was a terrific win. >> yes, sir. >> okay. you know what i want to just ask you quickly about, senator. i want to go back to the slumber party just for a second. you know, secretary kerry is now involved with the ukraine and he was also involved with syria. he's called -- you've got this 30 guys sleeping over while we have like jobs problems. i'm looking at a gallup poll. they ask about 15 things,

economy, federal spending. climate change came in 14 out of 15. race relations was the only thing below. we're proposing the higher minimum wages, which would potentially be negative for job creation, some people say. the overtime, we're focusing on this, the epa's meeting to make sure that that doesn't make it easy for some businesses to work. does it seem -- is someone not getting the message for what we need to do, it's an election year or what? >> a lot of the folks who were there at the slumber party are friends, i want to work with them on fanny and freddie, on ukraine legislation and other things. the fact is, if this was a serious issue, harry reid has a majority. he can -- rule 14, they can bring a vote to the floor as soon as we get back. you know, my guess is that the democratic party is very divided on this issue. and there were a group of people who wanted to express

themselves. they did it while many of us were sleeping and that's great, but you know, i don't think we're going to see any action on climate change between now and november. >> senator, very quickly, back to ukraine, you brought up the situation there. >> yes. >> that referendum take place on sunday. are you concerned about the senate and the house being in recess for a week before you can really pick back up and run with that legislation? >> i met with prime minister last night for an hour. what we've done over in the senate, becky, as you know, is much, much stronger than the house bill, we appreciate, provided a billion dollars in economic aid and through loan guarantees. but the senate bill has important sanctions, sanctions for the first time for economic extortion, sanctions for corruption. we've never done that before. it also has the imf reforms that i think are very, very important. if we ever needed to focus on the imf, ukraine is the poster child for that. and in addition, it does have

those economic assurances. i know somebody -- you all were talking earlier about whether we should be doing that. i think that's sort of a bizarre argument in that we have a country whose economy is cratering. and you know, we want to say, well, we're not going to give them economic aid because one of their creditors is russia. i think we've done the right thing. when we get back, becky, we'll be able to pass something that is very robust. the prime minister last night, knows we are with him. they know they have to sign this imf agreement before anything actually occurs anyway. so i think it's better to do something that's solid and strong than just do something that send a message. >> boehner has said he won't go ahead with the imf reforms. do you think that can make it through committee? >> we'll see. i think it's going to make it out of the senate. we'll see. things can change over the next ten days. i hope they will. thank you. i hear the music. go ahead. >> wait a minute.

what are the chances republicans take the senate and if they did and kept the house, would anything really change when you have a president that has veto power? >> absolutely it would change. first of all, the senate would function in an appropriate way which is now does not. no question, i mean -- >> what are the chances -- >> we would be putting forth a very pro-growth agenda. i'll do everything i can to make that happen. i believe it will. we'll just stay on message here. >> all right, senator, thank you. >> appreciate it. thank you. >> if you're thinking of jumping into the quicken loans billion dollar bracket challenge, listen to this next guy. the odds aren't very good if you don't know anything about basketball. but if you do, the odds can be better. you have a better chance of winning powerball. we'll have the mathematician who runs the numbers in just a bit. and a little basketball news as we get ready for march madness. american university punching

their ticket to the big dance by beating boston university last night in the patriot league chapship. final school, american 55, boston -- we have other ones we should have done. rutgers is moving on. in their chance for the big east. we'll be right back. ? "meow" or "woof"? wheels or wheeeels? everything exactly the way you want it ...until boom, it's bedtime. your mattress isn't bliss: it's a battleground of thwarted desire. enter the all-new sleep number classic series. designed to let couples sleep together in individualized comfort. starting at just $699.99 for a queen mattress. he's the softy: his sleep number setting is 35. you're the rock: your setting is 60. that works. he's the night owl. his side's up while you're in dreamland. you're the early bird. up and at 'em. no problem, because you're in it together... keeping the love alive. and by the way - snoring?

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nfl free agency kicking off with major signings yesterday. the new york jets have agreed to terms with former denver wide receiver eric decker, considered by many of the top free agent in his position. decker set career highs last season with the denver broncos. the four-year veteran has reportedly agreed to a five-year deal worth $36 million. darrelle revis and the new england patriots reaching a one-year agreement worth $12 million. the denver broncos beefed up their defense by signing demarcus ware. he recorded 117 sacks with the cowboys in nine seasons with the team. let's get back to our guest host today, jack welch. executive chairman of the jack

welch management institute at strayier university. we had senator corker on, the last thoughts he was talking about is what happens if the republicans take more seats in the senate. do you think that's a likely possibility. >> if you want this economy to take off, you want that the to happen. the republicans have got to just get their act together, have one mission. stop talking about 16 candidates and all this other stuff. the mission is, win the senate. get harry reid's butt out of there. and they've got -- run against harry reid. everybody who casts a vote is casting a vote to get harry reid out thereof. look, there are this many bills that have passed the house that are sitting with the senate for job growth. >> how many, what is that? >> 40. >> 40 of them. >> yes. >> if you look at that, it looks like the republicans are obstructionists. that is what's being sold all the time. if you win 14, why joe said will

it make a difference, it will make a huge difference. these bills will now go to the president and the president will have to veto. now we'll see who the real obstructionist to job growth, middle income recoveries, et cetera. we'll see all that clearly. you'll have a chance in '16 then. otherwise you'll be -- >> the stuff with the nlrb, stuff with the overtime, he doesn't need anyone to do the overtime pay. >> look, don't get -- >> he can continue to do all that. >> let him do it. but you get in there and you'll show who's doing what to jobs. right now it's screened. the public doesn't know that harry reid sits on everything. they don't know that. republicans are obstructionists. >> when you say republican -- >> one mission. >> who are you talking about, ted cruz and rand paul or chris christie and -- >> i want to win the senate. i don't want to go there, joe.

you're getting trapped. you're getting trapped. you're going with '16. >> that's how they'll play it. >> don't go there. go to alaska and north carolina, go to mark pryor in arkansas. go to each one of those places and win those elections. you have to win six. you have to hold kentucky and you have to hold georgia. you do that, game over. and then '16 is a real battle. but you have to have a clear mission. >> what were you going to say to me that i wouldn't like? >> i'd throw in the minimum wage. >> that's what i have talked about, too. you have obamacare has been the issue for the republicans which has given them their best shot at this. you just saw the florida election this time around, even states like colorado, where he looked like he had a strong chance of being re-elected. now he's facing a challenge from a republican congressman on this issue. >> a good one. >> if you look at what is happening with minimum wage, 58%

of americans think minimum wage should happen. when the republicans stand up against it -- >> if you have a mission and your mission is to win the senate, and you clearly -- then everything has to filter through that mission. minimum wage, throw it in. it's an argument anyway, whether it's more jobs or less jobs or whether it helps wages or not. >> right, the cbo says it's a loss of 500,000, a million or zero. >> so throw it in. don't get them get these phony issues. if you have a clear mission, i must win the senate, you don't have ted cruz versus rand paul, versus xyz. >> that's what they're going to use. >> i don't want to play that game. >> another side will have something to say about this. you know the stuff they're going to say. >> sure they are. did you read about the florida election anywhere? i mean, you couldn't find it.

the night before the election, cnn, msnbc, your sister network, all they talked about was this potential win. it never came on. >> i don't think they said it. >> they didn't say a word. >> you're in the aac now? why didn't you tell me that? >> i want you to stay on this. win the senate. >> i can't do that. all i can do is report. >> i report, you decide. >> sounds vaguely familiar. >> it's such a clear thing. becky, to your point, throw in those little -- >> don't let her have everything she wants. >> she deserves it. >> okay. >> thank you, jack. jack will be with us for the rest of the show. up next, we'll talk about march madness and bracketology. which has the better odds of happening, a perfect bracket or becoming president? we'll find out right after this.

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these guys this year. they got a lot of guys back from last year, clay anthony and the other guy. rob -- what's his name? ron? >> you've liked shockers for a long time. >> i have. let's talk about this bracket. you have to lead it, though. >> $1 billion. >> andrew is not here. >> $1 billion, that's how much quicken loans and warren buffett is offering to anyone who can guess the perfect march madness bracket. what are your odds? our next guest, jeff bergen, professor of mathematics at depaul university, figured this out. lay this out. how do you figure out the odds for someone picking a perfect bracket. >> the important thing no notice, the numbers kind of astound and intimidate, the mathematics is fairly easy and can be done at any high school in the country. you have to pick 63 games correctly. that's sort of like the odds of

flipping a coin and getting heads 63 times in a row. for that you would multiply 63 copies of 2 and that gives you 9.2 quinntillion. if you're just guessing, your chances are 1 in 9.2 quintillion. >> if you know something about basketball. >> right. if you start taking these things into consideration, to me that shrinks it down to about 1 in 128 billion. other people can have number in that ballpark because there is no exact number. i'd say the 1 in 128 billion is probably a pretty good ballpark figure. >> your chance of being struck by lightning is 1 in 30,000. your chance of being elected president is 1 in 10 million.

the odds of having identical quadruplets is 1 in 15 million. the chances of buying the mega millions is 1 in 176 million. >> some really horrible things are in there, too, that i don't want to talk about. >> you said you never want to be somebody. >> i never wants to be someone who gets a horrific disease that's 1 in 10 million or something. i'd rather not even try, jeff. >> what's interesting to note about this is, in this 128 billion number, if this quicken loans contest really does get 15 million entries and the people entering really do know something about basketball, there's a 1 in 17,000 chance of an individual getting a perfect bracket after the first round which means if there aren't many upsets in the first round you can expect there to be hundreds and hundreds of perfect brackets after the first round. you can imagine how the media will run with that on saturday

morning. they are going to go, hundreds and hundreds of people are perfect after the first round, more than halfway there. if you have a perfect bracket after the first round you still only have a 1 in 1.75 million chance of winning. don't be surprised if there are hundreds of perfect brackets after the first round. no reason not to have fun with it. >> if there is 15 million entrants, what are the odds that quicken loans and berkshire hathaway, i think yahoo! is involved, too, that they'll have to pay out? >> clearly buffett has had people run these numbers, too. the worst case is 1 in 8,500 chance of him having to pay out. to look at it another way, there's a 99.99% chance that we won't have to pay out. since i'm sure he's getting a pretty good dollar to insure against the billion dollars, i think this is a wise investment for him. not surprising.

>> depaul is in the big east and you actually did win. >> yes, i woke up this morning and saw they beat georgetown. that was a pleasant surprise. >> good job. we have to go. you don't know what to use. away game record and -- anyway, we have to go. thank you. >> okay. thank you. coming up, what is coming up? a special higher learning interview with the dean of jack welch management institute. at 8:30, jobless claims. tdd# 1-888-628-2419 searching for trade ideas that spark your curiosity

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jack's back. >> this economy hasn't changed in the last 12 months, however, there's a lot of optimism. >> jack welch is here, and he's brought some friends. >> lighten your key chain. a new warning from gm as the investigation into a major recall continues. phil lebeau will have the details. plus, we introduce you to the founder of execute to win. as the final hour of "squawk box" begins right now.

welcome back to "squawk box" here on cnbc, first in business worldwide. andrew is off today. you don't think that's a coincidence, you said? because you're here. >> jack did not say that. >> i did not say that. >> what did you say? >> i wish he were here so i could talk about the mayor of new york with him. >> he did. >> i did say that. >> you don't think he's ducking you? >> no, i don't think so. i think he's perfectly capable of handling me. >> the futures at this hour are -- the futures at this hour are up 23 points, up 3.35. in studio, sharing some of his thoughts, jack welch, executive chairman -- >> he did not say that. >> we know he's not really ducking you.

jack welch management institute at strayier university, we'll hear more from jack in a bit. first, becky has the headlines. the search for the missing malaysia airlines jet is now into its sixth day. the flight may have flown on for as many as four hours going off of radar, based on data transmitted from the jet's engines. apparently rolls-royce had something where data was constantly transmitted back. they made the engines. malaysian officials are saying those reports are not true. we're a half hour away from the latest data on retail sales and jobless claims on what will be a busy morning for economic numbers. we'll get import and export prices as well as business inventories this morning. discount retailer dollar general matched estimates by earning $1.01 a share for the fourth quarter. revenue came in shy of consensus. also shy of forecast, current quarter and earnings guidance.

general dollar says the weather has continued into the current quarter and is affecting its bottom line. general motors telling owners they should avoid weighing down their key ring with anything more than the key and the remote. phil lebeau joins us now with more. hello again, phil. >> hey, joe, the significance of the new information from general motors which by the way, a ten-page document filed with the national highway traffic safety administration yesterday, the significance is that general motors may have known about problems with faulty ignitions before 2004. here's the time line according to the new information. in 2001, a service technician for general motors noticed a preproduction saturn ion that had stalling. that was the first indication there may have been a problem. then in 2003, a technician at an unnamed dealership witnessed a stall with a saturn ion.

all of this information comes as general motors faces multiple investigations about recalls. the d.o.j. is investigating. you have two congressional hearings, nhtsa, these recalls could end up costing general motors from $100 million to $150 million, a number of estimates out there on wall street. one of the significant costs will be replacing the ignition switches. that's supposed to start next month. the estimated cost will be $2 to $5 per vehicle. you add that up, you'll get somewhere in the range of $8 million to $9 million total cost. delphi is the supplier of the switches under investigation. there will be a slight impact on delphi, not a huge one. take a look at shares of general motors over the last week. analysts say the impact could be up to $150 million. what's interesting, guy, bark clays w -- barclays saying it's not clear what it will take to get this stock moving again. they do not see a catalyst on

the horizon for some time. which brings up the question, is this basically the dead money. theoretically gm gets past the doj investigation. you see that stock trading under $35. barclay's saying there's no catalyst out there. >> our guest host is jack welch, executive chairman of the jack welch management institute at strayier university. did you hear what phil just said? a dealer, a guy at one of the dealers noticed the problem. >> noticed it 13 years ago. didn't get run up the flal pole. >> what about new jersey and tesla? i was kidding her yesterday, since dealers provide so many jobs, for so many people, that we need to keep the dealerships around. that was sort of a false narrative that i put up. the way we're trying to handle -- >> that's a model t argument.

>> it is. we really shouldn't have -- there should still be record stores instead of -- we should still have photomats. because there were jobs we lost. why would new jersey do this? pure corporate cronyism, is that what you would call it? >> corporate cronyism or -- >> political. >> political cronyism. >> there was a large, successful lobby. >> you should allow tesla to sell direct to people? >> absolutely. he's got a model that's exciting and new and innovative and more efficient. potentially. not that haggling that goes on out there with all that other nonsense. >> that's a sad commentary on the political system then is what you're saying. >> joe, not the first time. >> i know.

i likened it to, i guess, ethanol, that lobby or farm bill. i even likened it to some extent the teachers unions. we can't do anything about teachers unions. they're very powerful. >> look what they're doing in these cities. look at new york. imagine shutting down the charters. i mean, come on. it's crazy. these are powerful people. we talked about the coke brothers in all of these speeches. the coke brothers can't touch financially what the teachers union puts in there. >> why should we be optimistic about when you see the -- >> win the senate. >> win the senate? >> win the senate. get off all these other stuff. win the senate. if i can get you focused on that. >> you think i'm a thought leader or something? you think what i say matters? >> you are. >> really? >> all right, jack, i think that's nice of him to put me in that position.

if you at this point were trying to start a business in this country -- >> i have. the jack welch management institute. we'll be talking about it. >> let's talk about that. >> we've created jobs. >> you've created jobs. >> it's working. >> do you think once we get our higher education and even k through 12, once we get that in a better place, is the american dream still alive? can it still be possible to come back or are we going to be automated out of the existence. >> no, we're not going to be automated out of existence. the american dream is still alive. you see it on every corner. you'll have a guy on here at 8:30, lee benson who built a company out of nothing in the aircraft maintenance business and has created a software program, playing in the cloud, that will change the way companies evaluate people and tie people to the mission. >> if andrew were here, he might say -- i have read at least 50% of the jobs we have will be,

within ten years, robots doing them. >> wall street, not only that, we have the story that the wall street jobs will get moved offshore over the next ten years. they're facing pricing pressures and it doesn't have to pay those jobs in big, expensive cities like in new york. >> i think there's something to that. we had that on the farm 150 years ago. i mean, constant invention is part of our society. it's what makes us great. that's why we have to win the senate. >> do you think they could put together a tax reform bill and send something to the president that he wouldn't veto if it did involve lowering corporate taxes or bringing back some of the money that's offshore? do you think you could do that if the senate and the house passed it? what do you think would happen? >> bringing the money back and getting some tax revenue from it. get 5% or 10%. you can put that towards --

>> we should do it now but we're not. >> tonight. >> but on the other hand, that's not going to change. there's plenty more money around to build. that's not going to change the job situation. the idea that the company is getting money back will all of a sudden have buildings going on. >> what should both houses do then if they were republican? what would be the first three months, what should they try to do if they win. >> put all kinds of jobs bills up. >> the president has jobs bills he wants to put up. you know what they involve. >> we have to put those in front of -- >> infrastructure bills or things that get rid of regulations? >> you could take some money from bringing the money back. tax it at 5%, 8%, whatever, and put that money towards infrastructure and not creating any deficit issue. more from that. you can create jobs right from that, bringing that back at a

modest tax bill. and you might get more building. but i don't think you will. >> yes. >> but you can take the tax revenue that you'll get, that you're not getting now. there's no plan to get and put it towards jobs. >> you are just blatantly partisan about the republicans winning the senate. i need to say that right here. you're blatantly partisan. >> i am. >> we are going to have much more with jack throughout the show. as we head to break right now, check out shares of amazon.com. the company has raised the price of its amazon prime program to $99 from $79. amazon said it was previously considering a price increase. yesterday we were talking about $139. when we come back, ridding the world of bad managers. it is one of the challenges that the dean of the jack welch management institute at strayier university is dealing with.

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online mba programs are gaining traction and paying off. here's one example. 70% of the students getting their mba at the jack welch management institute have been promoted and/or received a

raise. joining us right now, andria backman, dean of the program at strayer. thank you for being here. >> thank you. >> you have a unique mission to rid the world of bad managers. >> yes. >> how do you do that? >> for our students, the most important thing we teach them, learn on monday, apply on tuesday and bring it back on friday. if they're not seeing change immediately inside of their own workplace, the investment isn't worth it for them. the 70% of people you mentioned who are experiencing promotions right away are doing just that. that's why it's happening for them. >> let's talk about the program itself. it's growing rapidly right now. how big is it. >> we have 650 students, expect to have over 800 by the end of the year. >> the online programs i have been amazed. i was a skeptic just a few years ago. i have been amazed by what they can do and why they are so important to people. probably the biggest reason you

can have people who are still working who find time to do these programs at night or in between whenever they can get together and do these things. they can do things you'd never be able to do before. >> for our students, one of the things we are experiencing and really expect to have happen is that they're changing the careers they're currently in. they take the learning and apply it in their current careers. most of our students want to have career advancement. they can build networks of other students who are working professionals. our students are 37 for the most part, that's the average age. they're bringing really rich ideas and experiences into the classroom with them. >> one of the challenges, though, with online programs is how do you actually have that personal touch with students? how do you develop the personal program for that. >> it's a really good question. icy challenge for sure. it's a challenge for all of us in this space. we have -- our faculty cares so deeply about our students. on the way in, if you just want

to be an expert, there's plenty of places to go and work. the expert end coach. the faculty have a big role in ensuring that students feel like they're a part of a community. the other piece is, jack, nobody else can say they have jack, right? inside their program. but jack does quarterly q & as with our students. i do video conferences, our faculty do video conferences with the students. it is as real as it can be being an online program. >> jack, what kind of questions do you get from the students? >> a lot of them about careers. i'm stuck in this situation, my boss is this and that. what can i do about that situation? i'm not getting enough resources in my area. how would you take this project that i have that's so good and take it forward? all kinds of practical stuff where they need to generate their careers. most of my q & as end up being

their careers. mine is career oriented. >> it's not theoretical stuff. it's stuff they're trying to figure out every day. >> the biggest thing andria said is the faculty's job is to please the students. these students are 37 years old on average. they're spending their money and they're mature adults. if these teachers aren't delivering -- i'll let you tell them. >> one of the things i hear jack talk about is differentiation. one of the things we pride ourselves on, if we are going to teach it, we have to practice it. we have a high performing faculty but that didn't come easy. >> when you say you differentiate, how do you do that? >> we have metrics that measure how they're doing in the classroom. >> we pitch them out. a professor has to please --

tell them about the nbs scores. >> this is one of the differentiators for juror for jwmi. we are right now, our student satisfactions scores are in line with companies like amazon and southwest. that is unbelievable. we ask for their feedback and the entire jwmi team comes up with an action plan to change the experience for students every term, all the time. >> higher education is a place where you've not seen change. it's probably one of the last places you'll see change that has come through. it seems like we're reaching a tipping point. you look at undergraduate education, where it's 25,000, sometimes 50,000 or more for a private institution, a year. that's unsustainable. that kind of tuition. that's where i think you see a push back. >> agreed. >> the online component is part of that. i know those massive online courses, that's all part of it.

>> i'd like to make a comment about mooks. >> they're the massive online courses. you have a professor who teaches it. you may have 20,000 people who sign up and take the course. >> it is a great experiment that's under way. we're learning a lot from it. the reality is people sign up and never login or never complete. what they intended to do. at the jack welch management institute, our goal is to make sure everybody who wants to complete the program. >> mooks, i don't know what they've really done to move the needle for educating the masses. >> you don't get a grade. employers don't look at them as a real -- something that you've actually completed at the end of it. you're not going to get credit in the real work force. until you get that, it's a problem to lean on these things. >> one thing that fancy mba schools provide is they provide a dignified way for a tune to

the go back and get an mb apt and change jobs. we don't want that. we want our employees, they're all employed. our goal is to educate them on how to do their job better and grow in their existing company. that's what's happening. they're getting promoted, getting raises. andrea, you can tell it better than i can. it's an incredible story of, we are not a transition zone, harvard, stanford, et cetera. you never go back to your old job. you get a dignified way to move to another company. >> yes. is there anything that's done in these -- like at a harvard mba where you're with all your student -- with your peers working on a project and interacting in a social way which gives you management skills to handle people. is there anything you can't do like that?

>> our students do it using technology instead of face to face. those are provided to them. >> remember carl's piece. i don't have an mba. it seems to me you could impart management principles, especially from you, and it wouldn't have to be in a discreet location. i don't understand that. right? >> it has been a truism that you go to a bar after class and sit around and talk about the case. >> right. >> well, we have working adults with children and everything else. they're going back to their job and practicing it. you might tell them about the blackboards on friday. monday, tuesday, friday. >> we do actually collect from our students, not just lip service but collect the stories. it's called lessons from the field about how they're applying the learning and what they're realizing in their workplaces. we're getting tons of stories from our students. this is affecting me immediately, that's really different in this space. >> that's great. >> andrea, thank you for joining

us today. >> thank you very much. >> thanks for coming in. >> you can drunk at home. you don't have to drive. thank you. >> thank you. coming up, jobless claims data. later, a cloud based company disrupting the world of business management. meet the ceo of execute to win. find out if it can help your business. "squawk box" will be right back. announcer: where can an investor be a name and not a number? scottrade. ron: i'm never alone with scottrade. i can always call or stop by my local office.

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when we come back, jobless claims and retail sales data and much more from our guest host, jack welch. as we head to a break, take a look at the equity futures. nasdaq up by 9, s&p up by close to 3 points. we'll be right back. ameriprise asked people a simple question: in retirement, will you outlive your money? uhhh.

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welcome back to "squawk box," every. we are just a few seconds away from the weekly jobless claims. that number, the street is

expecting, 330,000, 323,000 was the number just a week ago. we'll also be getting retail sales and import prices. retail sales are expected to be up 0.2%, import prices up 0.4%. rick santelli is standing by at the cme in chicago. steve liesman is in studio with us. rick, we send it over to you. >> a litany of data. here we go. retail sales headline, february up 0.3, a little better than expect. if you take out autos, still up 0.3. that's good news. take out autos and gas up 0.3. let's mush it all together, the big group, that's up 0.3. 3s are wild. let's quickly look at january revisions. here's where it gets a little sticky. wasn't a good number, dunn 0.4. do you it's down 0.6 are. ex-autos on change, down 0.3.

that smushed it all together number which was down 0.3 last month, doubled to down 0.6. you have to balance these two out. jobless claims, dropped from 324,000, 9,000 less at 315,000. that's a slight revision originally released. continuing claims, a different time frame, 2.85 million as expected. import prices for february, they were up 0.9. almost double expectations. if you look at a year-over-year versus that month-over-month, they were down 1.1. up close to 1% month-over-month. take a wider view, down 1.1. here's the kicker. we expected that year-over-year view to be minus but we expected it to be down close to 2%. so the numbers really need to be looked at through the context of revision and by the way, prices month-over-month last month were

revised up higher from up 0.1 to 0.4. i'll be interested to hear what steve says. retail sales is a good number, rate of change working in our favor. if you average two month s together, it leaves you a little flat. japanese interest rates supposedly had some action today. amazing what a couple of basis points over there gets people excited. >> rick, stick around. steve, your thoughts. >> you like this revision down with the 324 and then the 315. the yes out there has been we know there's been less firing going on. we don't know how much hiring is going on. maybe it's been muted because of what's been happening with the weather, january and february. the retail sales, rick is exactly right about how to look at it. i would take the two months ago and say i have really no idea what's going on. there was a downward revision in january that was long. we expected a bounce back in

february. minus 0.9, plus 0.4 in some of these categories, they come back. it will be until march we can know, it is amazing we forecast the weather much better than we forecast the weather's affect on the economy. there are basic pieces of data about weather that we didn't have and just don't exist. we're trying to figure out, like, if it falls -- if the snow falls we don't know the effect of snow on different populations and demographics and things like that and what kind of thing to effect. ubs see a point increase on sales, an increase in payrolls. ian shepard also said, yes, it's the weather. there it is. the severe weather likely accounts for a good part of the recent weakness but it's not the only factor. the boost from lower energy spending, that was in the summer, is over and that is what ian thought accounted for a decent falcon -- fall consumer

spending. economists are throwing that out. i think we're okay here. i think 2% is right. we're probably did, jack, 3.5 in the second half of last year. a little bit of pay back from that plus the weather means we're down to a 1.4, maybe 1.5 in the first quarter. again, like you have been talking about all morning, people are looking for that 3% in the second quarter. i think, joe, you're right. we better get it or the market might react in a negative way. >> the markets have been -- everyone that comes in have been, except for a few people, are still at 2. >> the thinking is some of the head winds have gone away. i know you were questioning a guest earlier, can ukraine be a head wind? i hate to say it like this, it seems so intencenssensitivinsen. it's a flight to quality in the ten-year. the economy might be helping the

fed taper with less tumult in the markets. >> the euro just now, 140. 13. just under 140. >> every year i get to spend a little time with a bunch of central bankers in a room. it's a private thing where a couple journalists get to go. we're mostly sworn to secrecy. i think it's not out of bounds for me to say that almost every central banker in this room, a year ago and two years ago, thought either one of two things was going to happen. the euro would fall to parody with the dollar and/or draghi would be forced to bring the euro down to parody the dollar. all of these bright minds have been dead wrong about the euro and why it's strengthening and why it's good for to to be strengthening. >> hey, steve. >> yes, rick. >> i love that story. i don't mean to give you a hard time. >> it's okay. >> about the room. i want you to think about it this way, okay.

now, if they were that far off on foreign exchange -- >> right. >> how could they possibly get the little bolts and ball bearings in a machine called the global economy that is just a humongous mouse trap and think they could get any closer on that? come within on steve, you have to acknowledge that. >> i don't disagree, rick. the question becomes whether or not -- >> why do you always seem to be on the side -- i'm not trying to be insulting. but it always seems like when we have these debates you're defending the their activity and i'm trying to kick the tires on the fact that, you know, if they were a laser beam, they couldn't hit the moon from the earth. >> rick, rick, i consider myself a reasonably open-mind person. if you came up with an alternative to the brightest -- >> wait, wait, wait, wait. you're changing it. >> i'm not. >> i'm a reporter. okay? we elect people and they put

people in central banks to accomplish the mission. okay? but just because i say and you say that all the things we look at, say they're missing the boat, the argument is who cares, you need a reason to do it better. i don't know that that flies. >> no, rick, i'm not disagreeing with you, that the system is flawed and it's not perfect. >> it's not flawed. the system is fine. the people are flawed. >> no, the people are flawed and humans are flawed. >> as all humans are. >> we haven't found a way to repeal that. >> yes, we have. it's called market aggregate personality dynamics. >> i get that. >> you let a bunch of people come up with the answer. >> right, right. okay. >> why don't we do it more? >> what you're talking about gets down to the old debate that we've had for a very long time, rick, which is how do you get interest rates? let the market set it or do you let some group of guys and women in a building in washington set it?

if you let the market set it, what you have to do is find the way. you find a peg and it's gold or some commodity basket and what we found, rick, is that that leads to much worse human outcomes than if we somehow get together and try to shape it based upon forecasts of some of the brighter minds out there, rick. if you had an alternative, rick, if you could find me a peg for the interest rate and cost of money i'd be happy -- >> we have to go gentlemen, rick, steve, thank you. good-bye. >> bye. up next, managing from the cloud. the disrupter who has created a tool that connects employees to culture and management strategy. the founder of execute to win joins us after the break. as we head to that break, check out the future which is have improved. they were up under 20. they're up over 30 on the dow. "squawk box" will be right back. , she makes underwater fans that are powered by the moon. ♪

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you know what i like? gr granularity a granularity. our next guest created an operating system that aims to re-invent the way we do business. joining us now, lee benson, founder and ceo of etw which stands for execute to win and our guest host, jack welch who is a major investor in the company. when i said that i'm an expert on the cloud and i'm going to grill you and -- that was not

true. >> really, i was looking forward to it. being grilled on that. >> in fact, it will be good for me to be here. can you explain to me how this works and then everybody will understand. >> at execute to win, the primary issue we're addressing is this annual ritual of a painful performance evaluation process. almost everybody hates going through that. and along the way a few companies have tried to solve the problem and essentially in solving the problem, all they've done, it would be companies like workday and success factors, is automate what's already a broken process. now companies are spending millions of dollars every single year just throwing that money away on this broken process. >> who are the supervisors that have to write the performance or is it the people that have to go through it? >> what we hear all the time from employees is they think they're knocking it out of the park, achieving what they should be achieving and they find out during the review they've completely missed the mark.

that's really the issue. >> is the problem they're just finding out during the review once a year instead of finding out through the course of the year. >> they're just finding out once a year, not having a continuous conversation. what we do at execute to win, we link every single employee right to the strategy of the organization and the desired behaviors in a way that they always know exactly what's expected, exactly where they stand 100% of the time. there's no surprises. in fact, when it's time for the performance appraisal, they know their score before walking in the room. it absolutely works. >> what does technology have to do with that? what does the cloud have to do with that? >> it's ease of access, very easy to deploy, easy to use and interact with it. one of the ways we actually use it, i have a couple different businesses. i've designed this operating system originally to get better results in our existing companies. we have unhads of employees. a way that the employees would interact is they're getting in here on a daily, weekly basis and describing what they're doing to make us measurably

better than we were the day before. in the past year we set this goal of uncovering capacity about 25% at one of the businesses and they uncovered, the employees collectively, 200,000 hours of capacity. >> wow. >> this was 100 people we didn't have to hire to handle the additional work coming in because of all the growth. we gave 16% of the pre-tax net profit back to the nonsupervisory employees proportionate to their income for achieving these results. >> how much time do i as an employee have to spend every day as part of analysis? is that a huge workload for them to have to do it every day? >> most of this stuff everybody is doing anyway but they're doing it in a very inefficient fashion. so with this -- >> we're complaining around the water cooler instead of telling you? >> complaining around the water cooler. if you go to front line employees they're spending less than 15 minutes a weak interacting with it. for me, for example, i get a stream i read through and interact with probably 20 minutes a day. ten years ago i couldn't have got that much information in an

entire day if i wanted to. >> it sounds almost like twitter for an internal work feed. >> in a way it really is. one example, i used to get thousands of e-mails that i'd sort through. i get less than 1% or 2% of those e-mails because everybody is nested in the right spot within the organization. no more examples, send an e-mail out, copy eight people. all of that is gone. >> i was going to say, we hear about our performance constantly, from twitter or e-mail. in fact, as it comes out of my mouth -- >> we are reading it to constantly see the feedback. it's almost like an online comment box. >> this fits in really well with our last conversation. it's like a corollary so what you're trying to do with nba. you immediately get accountability. >> you know where you stand and you know what you have to do to go forward.

it's totally interesting. andrea sends out leadership to companies through skill soft. skill soft distributes those as part of jwmi, lee then takes that, puts that into the system. the hr system is no longer some boring thing. you know the cash flow of cnbc from the ratings you're getting. you'll see all that. and if cnbc is making a ton of dollars -- >> they would never let us know that. i know it's good. it's like under lock and key. >> in an easy revenue system everyone will know the productivity, the cash flow, the everything. >> you must remember, "squawk box" is like almost the "today" show. do you remember how much, just for our next contract? >> highly profitable. >> it's highly profitable, isn't it? can we talk -- let's go to break. see, i was right. this is similar to what you

could do at strayer. i do understand this business pretty well. >> i think you do. >> isn't accountability always something? if that's missing, nothing works. >> he's linking a system to the strategy. so that the hr system isn't an annual event. >> you know what's expected of you beforehand. >> exactly, joe. >> it's also important you gave back a lot to the employees who are helping define this, so there's an incentive. >> the compensation has to drive the desire, performance, behaviors, everything we're looking for. >> lee, thank you. >> thank you. thanks for having us. >> what are you, you're backing this a little bit? >> no, no, no. i'm a friend that works with him. >> okay. all right. when we come back, jim cramer live from the new york stock exchange. plus, much more from our guest host, jack welch. "squawk box" will be right back.

stock of the day, amazon.com rising in premarket trading after raising the yearly cost of its amazon prime program from $79 to $99. they chickened out. you said you wouldn't do it for $139. >> $99 from $79 seems like a reasonable bump up. $139 didn't especially if you are not using the other things they are offering like streaming video. we have more from our guest host jack welch and the ceo of petsmart talks about man's best friend, the state of the consumer and much more. and muc. .

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♪ cheesesteak, cheesesteak ♪ ♪ it's the cheesesteak shuffle! huh! ♪ ♪ every day, all day, cheesesteak, cheesesteak! ♪ ♪ every night, all night cheesesteak, cheesesteak! ♪ ♪ 9 a.m. cheesesteak! ♪ 2 p.m. cheesesteak! ♪ 4 a.m. cheesesteak! ♪ any time (ruh!) >>geico. fifteen minutes could save you fifteen percent or more on car insurance. let's get back to our guest host jack welch who started off talking about whether we're really in a 3% economy, whether we have ratcheted up a little bit which everybody's expecting and the market seems to be anticipating. and your view that there's optimism but you haven't seen it on the ground yet at this point. >> not yet, joe.

you know, it shows you, though, despite all the regulation that's been layered on this economy whether it be bills from the epa on coal, whether it be the aca or any of these things, this economy is resilient. i mean, we've got a steady growing two plus percent economy. that has the chance. now, in segments it's very strong. oil. autos are good. housing's going to get better. and so we've got -- so if we get the construction industry going in the construction industrial business, we will see some real growth. >> maybe the question isn't why are people optimistic, the question is why isn't it actually working? europe is more under control. but it's more under control than it was. >> clearly. >> suddenly we're not -- >> abe has done something. >> i don't know about china but

they're still growing at a pretty good rate. >> we always get 7 1/2. >> right. we also get, you know, the worry about the debt ceiling and that type of gridlock is kind of on the back burner. so, there are some things -- i think there is a reason that people -- the housing market's gotten better. all this accommodation from the fed. there were reasons to be optimistic, so i would look at it and say aren't we doing even better and you highlighted a lot of the reasons why we're not. we're resilient but we're still being held back by self-inflicted wounds. >> most of the policies are just negative for growth. and so if you clear that out of the way, this resilient economy is poised to take off. >> and you think you clear it out of the way in 2014, in november, by -- with the senate. >> i don't want to discuss 2016 and i don't want to be talking about mrs. clinton or i don't want to be talking about ted cruz or rand paul. i want to talk about individual senate races one by one and then i want to make decisions on

policies like -- like the minimum wage which we talked about. the minimum wage is not a clear-cut -- >> go ahead and do it. don't let them use it as a wedge issue. >> don't let it be a wedge issue. and then you clear away the brush and you get a real growing economy, the potential for a three plus percent economy and that's going to solve a lot of other problems. excuse me, becky. >> while we have you here, nobody knows management better than you do. gm is in a terrible situation right now. watching what happened what now looks like the last 13 years. a new manager's who's in with the new ceo mary barra, what would you do in that scenario knowing what you know right now? >> she's in the ultimate wonderful position of being clean. come clean with everything. make sure that everything's on the tabl. bring the people in the company together. rally them around one more. i think what ceos have to do out

there today is say, we're a growth company. we're going to be a growth company and just keep talking about growing so that everybody that walks into the meeting has an idea how can i grow this company. and she can do this. she's got a fresh slate. the government's sleend it up. i understand that gm -- the new gm may not even be liable for this issue. she's got to clear the brush and say it's a new day. it's a new gm, it's a new day. we're a growth company. they've done a nice job in the brands. they've got new designs. >> i had a little discussion yesterday about greed versus maximizing profit for a corporation. i said they're not the same thing, that you should never be driven by greed. but you should always try to maximize profit. this person came back to me and said that's what gm did trying to maximize profits by not doing the recall earlier, and my point to him was, no, the right thing

that they should have done to maximize profit was not get into this situation. not have this mess. are there cases where maximizing -- are there cases where you should not try to maximize profit as a corporation? >> well, you are always trying to do the right thing, so doing the right thing profit is an outcome of doing the right thing. profit's not -- >> and vice versa, probably. >> absolutely. >> and short term versus long-term issues so you always -- >> you have to balance short and long. >> short and long. >> eat while you dream. >> but profits allow you to innovate which allows you to compete which allows you to hire more people and you hire more people and more people have jobs. >> sure. i've seen lots of companies -- i've been hundreds of them in the last four years. the 2009, 2008 recession sucked the fun out of business. >> yeah. >> we've got to get the fun back in business. we got to get the -- a growth mindset. i'm telling you a ceo today who goes to work and doesn't have a

growth mindset and isn't talking about growth and reinforcing all that stuff is just missing the boat. >> it's been great having you here today, jack. >> good having you, jack, we'll see you again soon. >> i look forward to it. >> make sure you join us tomorrow. "squawk on the street" is next. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with simon hobbs, david faber at the new york stock exchange. cramer is off today. not a bad morning taking shape. futures rebounding after a couple of rough days. retail sales came in with a beat. jobless claims a three-month low is the weak winter data starting to thaw. ten-year yield would suggest still some reason to doubt that around 274. stan fisher on the hill today for his vice chair confirmation hearing and europe is relatively mixed today. the roadmap begins with amazon, new prime