analog, chips, base cliff, things that are relatively stable in price, relatively consistent in how they're working. they're returning lots of free cash flow to shareholders. >> all right, great. dow, ti, and cedar fair. we're going to "squawk on the street" now but we appreciate your time today, mike. thank you. >> thanks a lot. make sure you join us tomorrow. "squawk on the street" begins right now. note's ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. looking for some followthrough after a pretty nice start to the month of april yesterday. futures relatively indecisive ahead of tomorrow's ecb meeting. the jobs number here on friday. watch the ten-year adp was roughly in line at 191. mortgage apps down and the europe is led by the dax. the markets still looking to om higher despite private sector

employment data coming in just short of expectations. the dow starting from its highest level of the year. >> it was the moment that stopped all trading here on the nyse floor and you saw it only on cnbc. the fiery debate over are the markets rigged. now boiling over into larger, more heated battles. >> general motors ceo mary barra back on the hill answering questions from the senate subcommittee and we'll bring you the highlights when it begins a little over an hour from now. and amazon holding a big press event promising an update on the video business and we'll tell you what it could be and bring you all of that action live. we'll start with an economic report from adp, shows 191,000 private sector jobs were added in march. the numbers coming ahead of friday's big jobs number and, of course, the morning after the s&p hit a new record high. we continue to look for clues, guys, that march, in fact, was a thaw of sorts and this number didn't exactly let us down. >> no. but i keep coming back to those auto numbers yesterday. i mean, 16.4 million, gm up

rather shockingly given the fact that toyota and a similar negative recall was down 16%, it's hard to sell that many cars and have that weak an economy. we have some housing numbers, some mortgage numbers that are not that good, so we've got yin and yang. i think that residential construction, okay, nonresidential starting to catch on a little bit. it's still this mixed picture, but i think it's mixed positive. >> mortgage apps down for the seventh consecutive nonholiday week. down 1.2 this morning. and we know the weather was rough. but nobody was out there looking for a mortgage or a house. >> no. and i don't know how much the country's short inventory like northeast where there's different cities that just don't have a lot of inventory so you can't buy a house. but housing, can it offset this great auto number? perhaps. i mean, i know that we -- we had a really interesting guest yesterday, marty mucci who is the ceo of paychex. they developed a small business

index. and here you see these certain states do well and what's the overlap? it's oil and gas. >> yeah. >> so, i mean, that's a sector that does well. i had embridge on "mad money" last night. the pipeline is extraordinary. they're saying, listen, your country, basically because he's canadian is not showing a tremendous resistance to building pipelines. can you imagine what would happen if we were building those? that whole part of the economy is on fire. >> right. and you are obviously in favor of the keystone pipeline. >> i just think it's going -- embridge said it's going to china otherwise. i don't think the chinese necessarily care about our air, what happens in china doesn't stay in china it kind of goes to l.a. >> to the larger point of the economy, you know, these companies are spending a lot in terms of capital and putting capital in the ground if you will, but there still seems to be an unwillingness of many corporations to spend beyond what is necessary to really invest beyond and perhaps to

choose to return that money to shareholders, which is not necessarily a bad thing in the form of continued dividends or higher different den edividends can we get beyond 2.5% if you don't get the kind of increased capital spending that we've yet to really see? >> it's a great question. everybody is anticipating subpar revenue growth and why add employees in the subpar revenue growth? we saw the dallas service survey, dallas had federal reserve numbers out yesterday, and they showed good growth. but where's dallas? >> yeah. >> oil and gas. oil and gas. >> in the meantime the markets themselves, jim, we've got record closing highs in the s&p, the russell, the transports -- >> the transports. >> -- and the midcaps and now all the dow theorists having the transports at a high, industrials need 44 points today to confirm it. are you a believer in that? >> i think that there are enough industrials that can really take us over the top that are still stalled. i look for aerospace. we saw an order that -- didn't

you think there was a dearth of orders lately? but boeing got a big order. we need to see aerospace back into the black. there had been a momentary inventory glut. we heard that from alcoa which makes 2 million fasteners per plane, i think that passed. 16.4 million cars. but i want to hear from retail itself, because we're hearing slow out of the gate again. i saw numbers for home depot and lowe's slow out of the gate. >> yeah. prada today, what they are seeing for 2014 nowhere near the comes of last year. >> no. remember china the baltic freight down again. it will be interesting to see, we can't use copper because of the chicalean earthquake. and international spotty to better in a lot of the markets over there and i think that's important. but at the same time we see rental equipment doing better here, but at the same time, david, you're absolutely right. do i hear major american companies say it's time to put them to work?

no. >> no. >> right. that may never change. it's hard. >> wouldn't that be something? >> well, it's been years and years, great productivity increases along the way and an unwillingness in the sense to embrace the real kind of confidence perhaps that you need because you don't think the end market demand is there. >> low rates are one thing but until you feel like you're behind the curve on demand, why invest. speaking of jobs, jobs friday does mean another chance for you to nail the number and win a prize. tweet us your predictions for march nonfarm payrolls use our handle @squawkstreet, #nailthe number if you win a nice wireless speaker autographed by everyone from "squawk on the street" and you'll have until 8:30 a.m. on the jobs friday. and the consensus is 195 and adp didn't change much. >> no, it didn't. people are home to see all the averages hit the high and then say, well, why isn't my life a little better? why don't i feel that there's great job mobility in this country? why do i have to move to an oil

rig 13 miles off the coast of louisiana in order to be able to find a job? >> live in a man camp in south dakota. >> yes, yes. meantime, the debate over high frequency trading and whether the markets are rigged has been taken to a whole new level. yesterday's exchange on "power lunch" between iax grabbed nyse floor traders' attention in a very big way, take a listen. >> he said it in the book, you said it in the book, that's when i knew the markets were rigged. it's disgusting that you are trying to parse your words now, okay? you can't say that -- >> you are quoted that way in the book, but -- >> okay, let's walk through an example. >> do you believe it or not? because you said it. >> let me walk you through an example -- >> it's a yes-or-no question. do you believe it or not? >> i believe the markets are rigged. >> there you go. >> and i also think you're part of the rigging. if you want to do this, let's do this. >> i really do. >> for 72 hours we've held this debate. i think the general sense is o'brien of bats even if you are

sympathetic to his plight came off to defensively and turned people off but it certainly got a lot of attention down here. >> if it were a movie, you would say, geez, he's a bad guy, he's very defensive, he's a bad guy. i had a good discussion with joe kernen before you guys came down, look, it's entirely rigged -- it's entirely possibly rigged if you trade 50 times a day, these people are going to take a little bit of -- a little of your vig. if you are out there trying to find the next google, they're not really going to impact you. as soon as you say that on twitter, people say, why don't you recognize that these guys are a tax on the system? they are a tax on the system. i felt that the gentleman who was iex, that makes sense. it reminds me of the way new york stock exchanges used to be when it was a mutual organization and dick grasso would say, listen, it's the people's exchange. they have to make a living it's just i wish they made a living in a way that everybody knew. >> it's interesting. i will say this, it has

certainly elevated this conversation to across the board. last night i had dinner with a senior member of the wall street establishment, let's leave it at that. wanted to talk about it. this morning i get another phone call from yet another person who runs a very large investment bank. >> and they want to talk about it. >> they want to talk about it. now, they also want to talk about the fact how are you going to -- when we get back to this right or wrong, retail investors, can you really completely level the playing field? i'm a heng fund and i'm paying $100 million in commissions every year to goldman sachs should i not expect anything from that money? and by the way, if i'm warren buffett sitting in my bathtub and i get the phone call from brian moynihan one day saying, hey, you want to buy the stock low, and i'll give you a convert on that? what is that? a retail investor getting that call? of course not. is that wrong? >> there's a government and if the government deems then everybody should have a level playing field, then it is wrong. whether we like it or not. >> they do write offerings in the uk and they try to avoid the kind of things that buffett was able to take advantage of

because he is warren buffett. >> would you feel better if the s.e.c. comes out and say, listen, a guy that pays more gets better treatment and that's the way it is in this country? wouldn't you feel better if that's the way they said it? >> you can try to do everything you can to level the playing field, but you got to say there's two different worlds, they're playing different games, you know. >> there's also the game, let's say we wash them out entirely, volume comes down 30%, 50%, then we're here in the middle of the day trying to explain 100-point swings in the way we haven't had to in a long time? >> they do back away. they backed away on the flash crash. but, again, i want to come back to the idea that if you're playing this game at home and you're trying to beat these guys, forget it. it's not the right game. >> it doesn't matter! you don't have to -- all right. it's not about buying -- >> yes or no! yes or no! come on! >> you want to get into this? >> i wanted to try it. how did it sound? did i sound like the good guy or the bad guy? how'd it sound?

>> is he the good guy or the bad guy. in mike lewis' book he's the good guy. it's always white hat, black hat. >> people are saying today the more they think about it, for instance, the more they figure hft is the perfection of price discovery, right? there is that out there. >> you run ahead of meef. i don't want anyone to have a jump on my order and get it back because when i was at goldman sachs had an order to buy a million shares of phillips "p," i didn't want anybody to buy it ahead of me because my customer would have fired me. it's not what people should be doing at home. i don't think it's fair. how about life's unfair? >> it is. but the fact is that this gets to the belief that there's no integrity of the marketplace and you continue to have people saying forget about it in terms of the -- not -- that's a problem. maybe everybody should invest in mutual funds. and etfs which they already do. >> no. look at the -- >> and then you're out of business. >> okay. done what, i'll find something

else to do. i like this restaurant gig. >> you already are. >> i got the restaurant game and if you pay up you can get fresh avocado. >> thinking ahead, looki looking around the corner. >> i see it coming. look, i think the market for the last five years proves that if you buy high-quality companies and you hold on to them, you can make a great deal of money. but that is different from what they were arguing about yesterday. >> yeah. >> and i think that people at home if you don't day trade you're not going to know the difference. >> "get rich carefully." >> "get rich carefully." >> that's the point of my book. on page 176 i said it's rigged. now, i didn't come on here start screaming at people which could have helped my sales, maybe i could have sold another 50 books last night and i could have really brought home the bacon. what matters to me that people not get too caught up in it. i think it's unfair, but please don't decide, do you know what, i'm going to stop looking for google. i'm not going to find the next google. i am going to find a mutual fund and accept the fact that i can do okay. >> right. >> i think you should do both.

i think you should have discretionary camp for some of your money and put mutual -- i said the first 10,000 should be in an s&p fund because i don't want you to be undiversified but it's okay to have a quarter of your money to pick stocks and you watch the companies come public or maybe ceos come on "mad money" and you listen to terry lundgren and you say that macy's is good and i want to buy it and it doubles. i like domino's pizza it's at $10 and goes to $80. these things happen. it's not fantasyland. >> no, it's not. let's hope you can continue to provide the valuable insight. >> what did you think of them screaming at each other? did you like that? >> yes or no? >> yes or no? did you like it when jonah hill took the subpoena and threw it in. >> the subpoena, what was that? did you see that movie? >> who was the bad guy in that? hey, i ask it. who was -- was jordan the bad guy in that? >> yes. >> yeah. >> and the guy who rides on the subway. rides on the subway. when we come back, the watch is on to see what amazon's going

to unveil later today. they have a big event in new york city. we'll get more on that. also ahead autonation ceo mike jackson will talk about those auto sales numbers from yesterday and, of course, the gm recall crisis, mary barra once again on capitol hill today. take one more look at futures. dow's 44 points from an all-time closing high. we're back in just a moment. with all the opinions about stocks out there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today.

gm ceo mary barra returns to the capitol hill hot seat and in about an hour she'll testify at a senate subcommittee hearing. barra faced a grilling from a house panel in yesterday's hearing. >> how can gm assure its customers that new switches be installed beginning april 7th will finally meet gm's requirements? >> we are working very closely with our supplier. our executive director responsible for switches is personally looking at the performance of the new switches. we will do 100% end-of-line testing to make sure that the performance, the safety, the functionality of these switches are safe. >> i'll tell you the one thing that's ringing in people's minds is that memo from 2005 from an engineer who's not been named

yet, quote, none of the solutions represents an acceptable business case. that's the quote that's being repeated today. >> do you think that she's going to have to make good, gm has to make good in a way we're not even thinking? is it a obama situation? >> you point that out because, of course, they've hired kenneth feinberg to help them wade through this as they did in bp, however, they are -- under the bankruptcy code they are not -- they do not -- they cannot be sued essentially. >> although they can give up some of that immunity, yes? >> they can choose to. i don't know how you go about weighing that. >> today is a fulcrum day to me. i absolutely think that if this stock goes higher and we also had a reduce come out and said sell the stock. if this stock bottoms, then i think that's significant. look, i thought the hearings went -- i thought she did okay. you know, one of the things that i think people always forget is it's not an optimal situation in front of congress. it's not, like, wow, that was really terrific. because that ain't the goal. the goal isn't to come out and get the congressional medal of

testimony. it's kind of, like, just get out of there alive, you know? hope that frankie pantenjelli isn't giving you the high sign in the back of the room. >> a lot of people think the board kind of saw this coming and basically presented her as a fresh face with which to answer this problem that they knew was coming. >> boy, what a setup. >> was there anybody else to choose from? would they have gone in another direction? i find that hard to -- >> an engineer? >> i find that hard toa agimagi because she was considered -- >> where is the cobalt team yes or no? >> i don't know where the cobalt team is. >> the cobalt had a bad feel to it. didn't you come away with the feeling, wow, i'm glad i didn't come away with a cobalt. >> you can't spell pinto without a cobalt. >> isn't it the ultimate test that they had 4% gain in their come, in their sales? the american people just don't care? >> they may not paying attention

now. these things take time. >> i'm glad you mentioned that ken feinberg is there. when we come back we'll get cramer's "mad dash" and take a look at the premarket before the bell and a lot more of "squawk on the street" straight ahead. e. i tuned it all out. with unitedhealthcare, i get information that matters... my individual health profile, not random statistics. they even reward me for addressing my health risks. so i'm doing fine... but she's still gonna give me a heart attack. innovations that work for you. that's health in numbers. unitedhealthcare.

♪ all right. about 7 1/2 minutes to go before the opening bell. >> it's a wednesday. piper comes out this morning and says, listen, apple's a value play, too. you want to take up all the other value plays, you ought to

take up apple. going to be a boost in the dividend and the buyback when they announce the quarter and thinks the new products are underrated and goes up 43. $3 from last year. a little bit of growth is what's been driving some of these stoke stocks and i think the overall note is are you going to take hewlett-packard up this much? are you going to do that? are you going to take western digital up every day? how about taking up apple. it's not as bad. >> apple squaring off in court against samsung. i know it's your "mad dash" but let me throw some numbers at you. you have to buy samsung in korea, four times ebita, five times earnings, $50 billion in cash by the end of 2015. that's cheaper than apple. >> it's a great stock. you have to buy korea fund. >> not a bad memory business, though, forget everything else. >> samsung's a great company, okay? and i think that what's happened is a lot of -- if that traded here, i think it would go up very quickly because the comps are all so much higher. that's a great -- that's a great

insight. >> i do the know obviously if you run a hedge fund you can go over there and buy it. but sitting at home a little more difficult. >> an interesting one. mankind. this is the stock that's going to be up the most today. they got -- they got a panel approval, yes, for an inhaled insulin. this is something they talked about over and over again they'd be able to do. the interest is monumental and people betting against it in part because pfizer had done one and had to write it off. no one really cared. you have to watch this one. it is going to be incredible because the bears really felt it wouldn't get approval and the fda's panel said it did. i have no opinion on it. but i've got to tell you, the opinions are very similar to what you saw yesterday in that little heated discussion. >> so, an inhaled insulin. >> insulin. and they claim -- >> a lot easier. >> yes. >> and we'll take it. >> and i've got to tell you this is one where a lot of people told me it could happen and a lot of people told me over their dead bodies.

that the fda looks like it's going over the dead bodies. >> we'll watch it closely. >> look at it. isn't it incredible? >> biotech overall potentially. >> can i just say, do you care about a milicent if you own mankind today, yes or no? >> no. we've got the opening bell coming up after this. i know what you're thinking...

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all on thinkorswim from td ameritrade. ♪ you are watching cnbc's "squawk on the street." live from the financial capital of the world. the opening bell in a couple of minutes. interesting day setting up in new york city today, where amazon is going to hold an event, david, you know them better than jim or me, and people talking a lot about a streaming service. >> they are. or some sort of streaming device, in fact, there is already a streaming service that is amazon prime or amazon video which comes along with the prime service now $99 a year if you didn't sign up in that last period that you had. listen, they're no stranger to devices. we don't know how many kindles they sell, but we know they sell a lot of them. the kindle, of course, came before the ipad. it will be interesting to see. they're being very secretive about it. that's all we know.

just an update on the video business. but a lot of the speculation is some sort of tv streaming device and we shall see. meanwhile the stock price itself has been not a pretty affair since the quarterly numbers. there was disappointment there as we know. not as much for the u.s. as overseas to a certain extent. but amazon's got so many different legs working here. whether it is a device business that may grow today with the addition of something new or amazon web services. but, of course, the marketplace is still the key part of the company. >> these companies all just in the end going to just be on each other's turf, david? >> yes. >> isn't that going to happen? all the great companies, amazon, netflix, google, facebook, they all seem to need the eyeballs. >> in so many different ways you've got -- i have conversations now, for example, there's endless speculation about what charlie erken will do with dish. they have conversations who could acquire it. it could be google. it could be -- you go in different directions now that you would not have a number of years ago because to your point,

everybody is getting into everybody else's business when it comes to the content and distribution business. >> well, doesn't that bring down the valuation of everyone if everyone's competing? >> certainly introduces more risk. >> there's a look at the opening bell and the s&p at the top of your screen. down here at the big board, rubicon project, operator of a digital ad exchange, celebrating its ipo today, we'll talk to the company ceo in the next hour. over at the nasdaq, index therapeutics a specialty pharma company. >> a digital exchange that brings down the cost to advertise, okay? so, i mean, here you've got, this is, again, google has this programmatic advertising, and, again, it just puts -- it puts these -- the googles of the world more powerful. and now some people say, listen, it lowers the price of advertising. but everything is about the web and convergence. and i just think it's all your

hand-out. i mean, i know so many people who are watching things on their hand held that i would never have thought and there i am watching all my ball games. >> i know. i can't wait until apple introduces their bigger screen. that's going to be very important. >> that notion given a boost today by this report they're in talks to get control of the company that helps make screens on phones more power efficient, something you would want if your screen got bigger. >> yep. i mean, you got a lot of people watching video now mobilely as you say. and by the way, on the current iphone it's not that great of an experience as it gets bigering or you have a samsung, it changes the ball game noticeably. >> but i watch all of "house of cards" on my apple, my apple. >> you did? >> yeah. >> long time to stare at a small screen. >> well, i mean, i can't see as far as to the tv anymore, you get my age, believe me, that thing's perfect, tim cook. tim cook, congratulations for the demographic you don't want. >> you got what's her name --

well, yeah. >> spoiler alert? yes, no? >> i haven't watched season two. >> you haven't? >> no. >> you're in for a wild ride. >> wow. speaking of devices blackberry ending their licensing deal with t-mobile. >> i saw that. >> who broke up with whom, david? >> i don't know is the answer. not a big surprise, they'll continue to support the devices but they won't be selling them any longer. what's blackberry going to be? they're more of a security -- >> they kind of missed what we're talking about. they just kind of missed it. signing books last night. what do people want to talk about? apple, blackberry and 3-d systems. >> really? there they still want to talk about blackberry. >> is there something bigger lurking? can something big happen to blackberry? what do you think? can something big happen? >> what would something big be? >> you know, it's beyond my ken to come up with what something big could be. >> well, we've been watching the last couple days for this bounce in the teslas, the netflix, the

pricelines. 3% to 5% over a couple of days. citi has a take on gilead that i know you're watching. >> i think a lot of people, citi saying it could be a $96 stock. a lot of people are saying to meal, jim, if everybody holds hands in gilead, it has become a kumbaya stock, you have to be careful. you do have to be careful of bristol-myers pill that could come in, but right now gilead has the hep-c market really to itself. >> which we talked about a good deal yesterday. >> yes. >> that the current therapy's actually less than the existing therapy in terms of price. >> right. >> even though people -- there may be some complaints about that. >> you always find the health insurers, they balk at some of the prices. they know that without these drugs -- these drugs are all priced under -- >> they help something instead of having to treat it forever. >> this is revolutionary and i can understand why the stock is up. celgene up seven points.

why celgene up? because it's inexpensive versus pfizer. but, you know, i think that yesterday was one of those perfect days where you had the old and the new go up. people aren't backing away from these industrials. i saw, for instance, the disk drive stocks. have you seen -- remember this -- ideas that people said they wanted to short? >> yes. >> you mean western digs of the world? >> people wanted to short hewlett-packard, short the disk drives companies, short caterpillar. these are all these things that are selling at 10, 11 times earnings if they get it right even through that and that's what -- people want that and yesterday they reverted to some of the higher multiple stocks, too. >> hewlett-packard is up almost 19%. >> isn't that extraordinary? >> this year after what was an extraordinary move last year. >> well, also another theme that you've got to keep track of, do you remember gamestop reporting a really bad quarter? and where is gamestop? the stock has been on fire and someone announced walmart is not a threat to them. my charitable trust bought nike all the way down.

nike a class exhibit. see the stock is bouncing right back like it didn't happen. >> even though tiger's not playing the masters, ouch. first time after 19 straight years. >> but, remember, finish line said what's the hottest selling sneaker? the jordan. >> the jordan. >> you said the jordan -- the cult of air jordans just continues unabated. >> do you think the people know who he is? the finish line sales absolutely do know. it's a babe ruth-like name. they're not wearing lebrons. i think lebron is doing okay. >> they are wearing them. >> that's wrong. i didn't -- lebron, i take that back because i know you can find me right here and you can just decimate me. >> very long arms. >> he sleeps something like 13 hours a day. >> he's packed on muscle. >> he seems like a strong guy. i don't want to go against him. the 76ers, i see no sneakers named after everyone from the sixers. i'm just making that statement, you can argue it, because i know you're in a argumentative mode

but the sixers are not going to have sneakers named after them. >> alcoa is the third worst performing component within a week or two of earnings season beginning and nomura says be careful. >> they cut the numbers in half. now, one of the things that o s does, they announced a new brazilian facility sold through, clau claus cliklaus kleinfeld, now w happen is 28 cents for the fiscal year goes to 14 cents and european gross margin pressure that takes some of the fluff out of the stock, but the stock has moved too much for my taste and i'm a huge believer in alcoa. >> gm is positive, i believe. and you just mentioned looking for a fulcrum day. is that more reflection of whether or not the hearings put a cap on the trouble or that march was okay? >> march beat ford, the market share numbers are still very

strong. i think david correctly points out that, wait a second, this is not instantaneous. there will be fallout from these hearings but i just think the stock has gotten very, very inexpensive. it's a cheap stock if they don't have a bp-like situation. >> how do you ascertain whether that's a possibility? >> well, because of what you said, which is that the liability because of the structure. >> yeah. >> bp was an ongoing company. you know, gm had -- had a kind of another owner for a while. it was never blamed. have you ever noticed that? the owner seems to get -- the owner being the u.s. government. >> the u.s. government. never really comes under fire. always just some engineers. interesting. >> unbelievable. with that the dow is down 24 points. let's head over to bob pisani to see what's moving on the floor. hey, bob. >> hey, guys. we've got an ipo we want to bring you up to date with, rubic rubicon, take a look, $15 the low end of the range, $15 to

$17, seen that recently, but the indications $15.25 to $16.25. the 2014 second quarter is looking a lot like the 2013 second quarter. notice all the market leaders, biotech, gold liners all on the upside, some of the high-tech growth stocks were up yesterday as well. this is the same thing that happened in the beginning of first quarter overall here, so watching a lot of the old market leaders, trying to put them back on here in the beginning of the second quarter. the last several days, though, the japanese yen has been weakening again, that's helping global markets. i know we don't put up the ftse, but this is the benchmark for the whole world, it's approaching the 2007 historic highs, we haven't made it there but it's very close. if weigh get over that in the next couple of days you'll hear a lot of people talking about the global markets hitting new highs. emerging market index saying this ten days in a row for the eem, we are down a little bit on

the eem, but it's got a ten-day win streak. sitting near the highs of the year. india which was a basket case a year ago, india had historic high, so a lot of these emerging markets that have been rolling over have suddenly stopped rolling over and moved back to the upside. let me move on to the hot topic whether the stock market is rigged, i was proud to take a part of that epic food fight, i think the big takeaway from the average investor, the people watching, if you're buying 100 shares of ibm on your ameritrade account or your e*trade or shwawbl account the probability that you will interact with a high frequency trader is practically zero. it doesn't mean anything to you. what it means something to is these people right here, the institutional guys, they're the ones who have been affected by this and they've been affected because the order flow has been migrating to dark pools because basically there's 100-share orders on the books no you and these guys can't get deals done in size. they get picked off or the order flow has migreated to the dark pools and they're not happy about it and there's some reason to indicate that there's a good

reason for them not to be happy about it. we'll have more on this in a minute. but i want to show you the knock-on effect on this, talk about virtu is supposed to start the road show and supposed to give terms. they haven't done that. and everybody is now assuming that this may have postponed. there's no formal statement on this. there's nothing on the books right now saying when they're going to go but there's no terms and no road show. two things, david, i want to point out, what's affected this. number one, goldman has announced they're probably selling their direct market business, maybe $30 million, goldman paid $6.5 billion in 2000. that could dramatically affect the valuation of virtu and that's a problem. and the michael lewis flap could affect them if there are changes in regulations. they say this in the s-1, yes, i read the s-1, regulatory and legal uncertainties could harm our business. guys, this is almost grounds for refiling an s-1 at this point the two events. and david, goes to show you timing is everything and for

this one, timing couldn't have come at a worse time. >> bob, interesting, of course, also $6.5 billion for a business worth virtually nothing, just one reason why you don't get as much perhaps merger and acquisition activity -- >> right. >> -- as we once did. the numbers are in for the first quarter and they weren't bad. judging from the headlines it doesn't feel like we're in a particularly robust% but when you look at the numbers themselves we're talking with global m&a hitting its highest volume in the first quarter since 2008 that according to dealogic and u.s. targeted m&a highest volume since 2007. and i will say it's always anecdotal and my conversations with those who deal with deals namely the bankers and lawyers who are always trying to shepherd along various ideas for the latest acquisition or a merger. there was a feeling that things were picking up, that there was

a lot more in the so-called pipeline than there might have been, even people who had been not necessarily positive seemed to have turned around a bit. but we've had a stretch here now where we haven't gotten a lot of big announcements. you had the bean deal, of course, and inflow from japan that's been an interesting characteristic, cross-border m&a which many people expect will continue was fairly strong. and, of course, you had our own parent company contributing i think the largest deal by far of the quarter, namely, the acquisition or announced acquisition of time warner cable, that being comcast. we'll see what transpires from here. ceo confidence continues to be a very important part of when you get deals but there did seem to be a sense that with somewhat quiescent markets, the volatility seemingly not a great factor and the strategic needs of ceos you would start to see more m&a.

it feels like a good quarter. >> one way to get growth is to acquire growth, but not a lot of -- >> not to mention as you pointed out, at times in this environment -- went up to double-digit gains we would see it based on the synergy numbers. and we've also pointed out a number of the synergy plays whether it be the small deal with men's warehouse or others, have come down lately. but they are gare getting rewar for doing deals and not penalized. we'll see. it doesn't mean we won't see a spate of deal announcements again but things did seem to slow. >> it's almost the summer. geez, when they go on vacation, there won't be any deals. >> almost the summer? >> i'm just saying they've got about eight weeks to do something, to do something major, and i am shocked by this. i wasn't fooled this year, because, i was faked out of my shocks, because i thought hind deal was the beginning and it

turned out to be the end. i can't under why the companies aren't trying to figure out how to get bigger. there are cross-border bank deals, sandanter. >> you won't see a lot of domestic bank deals. >> you can't because of the concentration. >> you might see breaking up as opposed to acquiring. >> one of my favorite i'm fool's joke was every s&p company would be in ireland. >> reading today in "the times" about the lobbyists who are trying to destroy potential tax reform bill that dave camp came up with. >> that was not an april fool's story. >> the tax inversion story is alive and well, carl, and a fascinating one. my favorite having can endo where they ended up in ireland when neither company was from ireland. >> alchemy has a very potent perhaps form la for schizophrenia, it's a double in base company. i wonder if they stay at the marriott hotel.

has anyone stayed at the marriott hotel in dublin? >> i haven't. >> tax inversion statewise, bill de blasio's new york drives a number of hedge fund managers to florida. every other day i pick up the phone, where you living now? florida. >> do you know what, i've got that true! it's really funny you mention that. >> it's true. >> or marc andreessen's joke about silicon valley's icahn will target them for spending too much money for being based in california. >> here you go. how about the best april fool's joke? >> thjimmy fallon. >> enough with the reply to all, everybody, come on. i had 100 of the black finkfein e-mails. >> good morning, if you look at the curve today with the fives at 177, that means all maturities including fives and up to fives are now down on the

year in terms of price, up on the year in terms of yield. we closed at 174 last year on fives. look at two-days of 5s, 10s, and 30s and what will jump out are a couple of things. the knee jerk reaction was teamening and the adp numbers at 8:15 eastern were decent, firm, and we had a 28% to 30% revision on last month, so it is the type of move one would expect. now, let's get back to the curve. a one-day of the fives tens and the one-day of the fiveses there 30s it's working its way out because the number was in the zone of expectations wasn't really too hot, certainly wasn't too cold. steepening seems to be what is happening in slow-motion. the long end is the driving force there. it pays attention to the fundamentals. if we look at what's going on in foreign exchange, the best place to start is the dollar/yen. you're to date chart, year to date we reveal we're about the highest level on the dollar/yen in favor of the dollar since the third week in january but the

great part of this chart is it continues to correlate very nicely with ten-year note yields and they are going higher as we get close to 280 so they're still in sync. with tomorrow's ecb meeting it looks as though we had some short covering in the euro currency but as you see on the two-day chart it seems to be slipping again. now it's firmly entrenched in the 138 level. it's going to be a very important meeting tomorrow. many are wanting to hear what mario draghi says, if europe is doing so well, behind the curtains there's a lot of talk with two letters of the alphabet, qe, kind of american style. we'll see. carl, back to you. >> rick, thanks a lot. rick santelli in chicago. when we come back, amazon in battle for your living room. the km set to make an announcement about its video business this morning. stick around to find out what that's all about. and gm ceo mary barra on the hot seat wucks again answering questions from the senate this time. we'll bring you the highlights as soon as they begin at 10:00 a.m. we're back in a minute.

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♪ chick-fil-a still eating the lunch of its competitors, the restaurant chain beating kfc as the fried chicken king for the second year in a row. sales passing $5 billion this year compared with kfc's $4.2 billion. chick-fil-a has a breakfast menu while kfc does not which could be part of the reason for the success but they are closed on sundays and they still manage to post the comps. >> my charitable trust owns yum, that's where they've made their bailiwick in china. and they are saying if you buy yum this is why the stock is up you are getting a free call on the breakfast taco initiative, so i don't know whether you had your breakfast taco this morning or whether you have granola as i do. >> yeah.

there is some talk about whether or not that thing is a success. we did ask patti doyle about commodity prices. cheese at record high and what xorn is do in corn what is doing and short term he has worries. >> monsanto reported this morning and the stock is coming back but anybody connected to that has been very strong, a remarkable price because of corn prices. >> can i come back to yum for a second? >> sure, sure. >> their sales per unit at chick-fil-a is so far out crushing yum here in the states, right? >> for kfc. >> for kfc. >> well -- >> why isn't that an issue? >> well, because kfc as important as it is in america, the growth driver is china. because they have thousands of stores in china. >> they got thousands of stores here, too. >> it has never really moved -- no, there was a time when it moved the needle, but what moves the needle is china. maybe it should.

maybe you're right. >> they better hope chick-fil-a better not come to china. >> barely open new stores here. >> popeyes has done quite well. don't forget. >> they were early. they beat mcdonald to china, that's one of the interesting stories. >> and starbucks, too. howard schultz will admit it that they have a great game plan in china. mary barra will be back on the hill for a second day of testimony and grilling about the controversial recall. but up next "stop trading" with jim. the dow is up four points. "squawk on the street" will be right back. right back. how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today.

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gilead, maybe gilead doesn't hold. i just think that you have to remember that this market still likes the old fashioned growth, not the new fashioned growth. >> that's well said. tonight good show on "mad money"? >> yes, we have danny meyer, put together an index for us companies with hospitality that treat their workers well and it so far outperformed the s&p that we visit with danny. and this time at gramercy, its 20th anniversary. one of my favorites. thank you, guys. when we come back, gm's mary barra on the hill. don't go away. way. i've always had to keep my eye on her...

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february factory orders increase a bit more than expected. up 1.6%. january's number originally released at down 0.7 now stands at down 1%. still a february number, so maybe weather impacted. adp wasn't bad, but it's a march number. maybe we're about where we ought to be on jobs. carl and the gang, back to you. >> rick, thank you so much. rick santelli in chicago. meantime, want to take you to washington, a second day of gm recall hearings with mary barra

begins in just a few moments this time on the senate side. we're going to update you when that hearing begins and we'll cover it all this morning here on cnbc. in the meantime, got one of our ipos just opening rubicon, ticker rubi, opens at $17.50 good for a 15% gain. >> indeed. and the ceo will join us very shortly. this is all, of course, about automated advertising exchanges. it is a hot area of the market albeit highly competitive. the adp report came in slightly under what a lot of people were expecting. stocks just slightly higher on the session overall. trying for four straight sessions of gains. let's bring in kevin karen market strategist with stifle market group. is steve liesman with us as well? is he joining us? let's stick with you, kevin. the figure is 191,000 for march. slightly less on the adp report than people were expecting, but you do have this upward revision

to the month before of 38,000. what's the conclusion from that? as we await the big one on friday, of course. >> well, there's really not much to make from it. you know, everything that we thought about coming into the year was that we were going to have an accelerating picture. of course, we had a difficult start to the year in terms of jobs. a big drop-off maybe 100,000 or so a month. if you average out the winter versus last year. we really wanted to see a pick-up there. 200,000 is sort of the number that we need to see. and a lot of may have been eight tributed to weather. but this number we get on friday will be a big one. because if we do see an improvement, then obviously we can read the sigh of relief that we saw over the winter is really more weather related. >> are you sure? are you sure? a lot of people would argue it the other way round. they would say, look, this is now a watershed moment because if anything the figures should start getting stronger because we should be getting a snap back from what happened with the bad weather. if, therefore, you disappoint,

the markets could be in a lot of difficulty, would you agree with that? >> in fact, that's exactly what i'm saying. >> okay. >> because what you had was this weakness and it was just written off to weather. we just took that for granted and moved on. but if you looked at the regional data, for example, regional construction, housing data out of california where weather was fine was pretty weak. so obviously that had nothing to do with the weather. china has nothing to do with the weather. you have had a bump up in interest rates which is having some unknowable impact, so there are a lot of other things. so up until now, though, markets have been flat and they've not sold off because of the weakness in the data and mote of it was written off to bad weather but this month is going to be a big one because there has been no bad weather so we better see improvement in the month of march. >> so far we are, kevin. i'm just curious as to what you are seeing in terms of the flows. is this real money being put to work driving us to new record highs? what do you see? >> no, i don't make much of the record highs because we had a 30% gain in equity markets last

year. we had a very -- we had a low single digit kind of improvement in earnings. you know, the serious money is going to need an improvement in underlying fundamentals meaning earnings power underneath this market to move us higher. remember, we were at $9 trillion of aggregate market value for the u.s. in the bottom in 2009. we are now approaching $23 trillion on a $17 trillion economy. big, big move up in equity valuations. we really need to see earnings power move forward from here. margins are elevated. top-line growth is there but relatively slow. it's hard to see the fundamental pace from where we are. >> it's hard to see the fundamental case from where we are. so, as we look at two averages at record highs, not a conversation about the transfortation index whether it's confirming the rally that we've had. what in essence are you saying to your investors, to your private clients, kevin? >> you know, i think -- i think what you have to do is look through the portfolio.

we've had a big move in valuations. companies that you bought a few years ago may not make sense today in terms of valuation. in that case you want to trade out of those names into higher-quality, better-valued areas. i think large cap tech particularly the old tech seems to make some sense to me in terms of valuation and therefore i'm not surprised to see better action there. but those are the kind of trades you'll have to look at if you had a market, let's say, let's say earnings grow another 8% here and if you trade at 15% 16% times exyou can get up but it needs an improvement in fundamental earnings beneath this market and we had a big down payment on improvement last year. >> sure. which brings us back to the data. kevin, good to see you. kevin karen joining us. you saw it here, it's the moment that brought the floor here at the new york stock exchange to a standstill. people still buzzing about it this morning. michael lewis' new book "flack

boys" certainly sparking quite the fierce debate on cnbc. he was interviewed along with brad katsumama and the conversation struck a nerve. have a listen. >> investment in my exchange as a sign of corruption. and his backing of his exchange is a sign of virtue. >> you didn't call me -- >> it's the same thing. >> why is there a difference? the backing of me is bad. the backing of you is good. how is it different? >> because they're a financial -- they've invested -- the investors in our exchange don't trade on our exchange. this is part of the ro been, right? bill, again, i say the sky's blue, bill will say the sky is red, right? >> this building was owned by people who traded -- >> is he always like this on the show? this is insane. >> what you say is insane. >> all right. bob pisani was there and he was part of the brawl and he joins us now. clearly the drama is one thing but there are ramifications of this. let's put it forward to what

happened next. virtu financial you are watching it for the ipo and the high frequency firm postponed. >> this is a problem for them. it's a high-speed trading operation. the bottom line they were supposed to start the road show and give us terms this week -- >> i think we lost bob's microphone there. >> bob's microphone -- >> are we up all right, guys? >> we got him. >> there we are. with goldman sachs esh s essent we understand they will sell their market-making firm and that could impact virtu, and michael lewis' book there might be changes in the regulation. that could change it as well. we are seeing knock-on effects as well. what i am hoping to see the s.e.c. announces some hearings on this. the important is not so much high frequency traders. they need to look at the market structure. there are things that need to be looked at here and i think it's time to have a holistic review as they call it. >> i just want -- i just want to push back on the idea that seems to be repeated and repeated without challenge that actually

the markets are broken and that retail investors get a bad deal. the markets have never been more transparent and better organized than they are now and the deals that retail investors get with technology and with lower commissions are better than they've ever had and insider trading is at least something that they're attempting to root out. retail investors have never had it so good. >> thank you. >> and i think we should repeat that again and again to people lest they get the wrong idea here, bob. >> if you are putting in 100 share of ibm on your ameritrade or shwawbl account the canses you'll interact with a high frequency trader are almost zero. if you wanted to buy 100 shares of ibm 20 years ago it would have cost you hundreds of dollars. today it costs you $7.99. 20 years ago you probably would have called your broker 20 minutes later to determine if you got a fill or not. today it's almost instantaneous. the problem is with a lot of the guys here. the institutional players have been disintermediated a little bit. and they are not happy and i

certainly understand. >> bats was very defensive the president there. and it gets to the heart of his business model and what he feels is under attack right now. have a listen to the snippet. >> it's great to see bill doing that to promote a business model. >> he said shame on you. how do you react to that? >> i'll say it again. >> so i think he's outrageous. i think he's part of the problem. >> not much personal warmth there between anybody. >> no. and it got personal. >> yes. >> the other question here this raises, bob, and i know you've been focused on this iex, the protagonist the hero of michael lewis' story. are there questions now about conflict of interest? i know you asked about what he's seen in terms of a surge in business since the book was first on "60 minutes." >> i don't think there's a conflict of interest. look, brad has got an idea for he wants to be an exchange. homes not yet. he has a certain way he wants to model the exchange, which is

great. i don't think you should legislate other potential models out of business. i wish the guy well. important thing is brokered dealers are not owners of his business. it's owned by mutual funds, a few hedge funds and some private individuals. bats is owned by a different consortium. >> just for the record, whatever bats is doing wi ing with propr data feeds is no different than the nyse or the nasdaq. there is nobody who is more virtuous at assisting the high frequency traders than anybody else. >> these people have taken the existing rules that were set up largely in 2007 and they are playing by those rules. michael lewis are saying these rules are really basically unfair and they're difficult to interpret and too complicated. i agree with a lot of what he said. i do not agree with the idea the market is rigged. that's not a fair characterization. >> and that's fundamentally the big question and debate and i know we'll hear a lot more from

you about it. be sure to check out the entire interview the entire fight cnbc.com an explosive one. an explosive moment on television. when we come back, as mary barra begins testimony on the hill for the second day, we'll talk to the largest gm dealer in the united states. mike jackson of autonation when we come back.

mary barra is on the hill again as those recall hearings at gm get under way. let's bring in mike jackson today the chairman and ceo of autonation america's largest auto retailer and the larger gm dealer in the united states. it's great to have you back on the program. good morning. >> carl, good to see you this morning. >> love to get your take first on how you think she did yesterday. stock is actually up a little bit today and whether or not secondly you're seeing any impact in sales. >> first i think under the circumstances she did absolutely the best that one could. obviously she would like to have all the answers at this point but she doesn't. but i think to this point she has made all the right steps. she has sincerely apologized, said how sorry she is to the families, and in washington, d.c., she actually met with the families, which is not an easy

thing to do. >> right. >> she's appointed a chief safety officer that reports directly to her up the chain. at the store level we have the authority to get a loner car. retained kenneth feinberg it's a clear indication that they intend to do the right thing for everyone involved. because kenneth is a pillar of integrity, has shown extraordinarily fair judgment in very difficult circumstances. and he's certainly not there to do a whitewash. he's there to help general motors do the right thing. so, i think at this point i have to give her very high marks. >> all right. how about share, mike?

have you seen it start to shift around as a result of this, and do you think there's more of that in the offing? >> i think the consumer confidence and trust in today's general motors remains very strong. as well as for the entire renaissance of the detroit manufacturers. i think there's a bifurcation where this situation confirms what everybody thought about the old gm, but they still have a great deal of confidence in the new gm. and if i look at our sales for general motors in the month of march and in the first quarter, they still remain very strong up 7% in the month of march. >> mr. jackson, do you actually own inventory of gm cars that may have fallen in value? and if you do, what sort of value is it? and when you say that feinberg

has got the job and you want him to do well for everyone involved, would you seek compensation from mary barra and from gm for the capital loss that you've suffered on the inventory that you have? >> so, we had about 100 of these vehicles in stock at the same time the recall was announced, available as pre-owned vehicles. i don't see any sign as far as an impact on the value of that inventory, but in the sense that, you know, these cars are already very depreciated. they're on the low end of the curve anyway as far as value even before this recall. now, we have pulled those vehicles from stock, and we are not going to sell them to consumers until the parts become available to repair them and then properly present them to the consumer, so that's what we're doing on our side. and i think as far as our appeal for an impact on inventory to gm

or not, we will not do that. it's not simply -- in the grand scheme of what's going on, it's simply not of a material value. and as far as people who already own these considers, not us but consumers, general motors has said that if you have lost confidence in that car, bring it in. we have cash available from general motors to give you additional value for that car in trade on a new general motors product and we have had people take advantage of that already. >> just want to get your thoughts, mike, on auto sales, released for the month of march, looked pretty strong. i guess shaking off the weather impact that froze the consumer. do you expect that momentum to continue into the spring and can the industry hit the $16 million mark this year? >> so, i'm happy to declare the epic winner of 2014 officially over. fully recognize the irony of saying that from here in ft. lauderdale, florida.

business in the last ten days of march was simply phenomenal and that follows ten weeks of very quiet showroom traffic and very quiet sales. so, i don't -- i think this is final proof that this epic winter of 2014 really did disrupt the entire economy. and we see it in our business where not only new vehicle sales were impacted but also used vehicles and the customer care business, the consumer was simply frozen in. so going forward, i'm confirming that 16 million will be achieved, the selling rate for march was 16,400,000. we've had two 16 million months now, november of last year and august of last year. this is confirmation that the consumer's coming out of hibernation. will probably have a very strong

spring market with the additional pent-up demand in what was lost in this winter. >> mr. jackson, let me ask you, sir, at what margin. there are people who are saying that the average incentive rose 8% to around $2,800 a vehicle in order to clear that excess stock, is that correct? >> incentives have increased slightly. that's to be expected. there was a build rate for inventory that said we're going to be running at $16 million for this year and obviously we lost the first ten weeks of the year. so, manufacturers have added additional incentives to make sure the market got moving again. i can tell you the winter was -- if you offered those incentives in february, people wouldn't have come out for them. but by the end of march which is the traditional spring selling season, you put some additional incentives in the marketplace to reflect what happened in the first ten weeks of the year. it had an impact on the market. and i can now say confidently

the industry will break through 16 million units for the year. >> mike, good to get your take on obviously the gm news and march in general. the last ten days did sound like they were pretty good. we'll see you soon. >> all right. look forward to it, carl. >> mike jackson of autonation. thanks, mike. let's get a quick news update from hamiltllumpton pear. >> we've got a decision from the supreme court that could have the effect of further loosening the reins and the role of money in politics. the u.s. supreme court striking down restrictions on the grand total that any individual person can contribute to all federal candidates for office. but the decision did, in fact, leave intact the cap of $2,600 per election that a contributor can give to a single candidate for federal office. but it invalidated that separate limit on how much can be contributed to all federal candidates put together. that limit had been about

$48,600, it was challenged by the republican party and the alabama businessman who argued that the ceilings were a restrection on his free expression and we're told that house speaker john boehner has just endorsed that supreme court ruling as well. back to you. >> thanks very much, hampton, for the update from d.c. coming up on the show, the latest in the ipo wave. there's rub brubicon open, the and founder of the ad tech company will be joining us next. and we go to amazon's event this morning in new york. a streaming service, a dongle, a new tv console, we'll speculate on that. t. [ indistinct shouting ]

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♪ ♪ new york where dreams are made up ♪ amazon holding an event in the empire state with an update on its video business. that's about all we know. our jon fortt is there. there was a xowcouch and popcor any more hints on what will be announced? >> reporter: the official host of the event is the head of the kindle unit so hardware is involved. there's a lot of speculation. is it a dongle like chrome cast, is it a streaming box like apple tv. that really doesn't matter. it's about the service. it's about the software and about the experience you'll get on the tv. it's also about amazon prime. important to remember we're about two weeks out from the date when current prime subscribers are going to start seeing that $20 per year price increase on prime. what they announce in there i'm sure they hope will entice

current prime subscribers to continue subscribing after that $20 increase. a number of analysts on the street say they think the subscriber base is going to swallow that pretty well because prime has been a pretty good value for them. we look, the estimates are that about amazon has about $25 million prime subscribers adding about $5 million a year. though, amazon has not given a specific number on that. contrast that with around $44 million netflix subscribers. amazon prime subscribers subscribing for all kinds of reasons particularly to get two-day shipping, whereas netflix they're really subscribing to get that content. the prime value here for amazon is that when you're a subscriber you buy more physical goods and also you buy more media, so this is an ecosystem play where google, apple, amazon and even microsoft with xbox live increasingly trying to get people into their camp to sell this new generation of digital media that we're increasingly

seeing particularly streaming over the internet, guys. >> it is a race for the eyeballs, jon fortt, thanks for running us through what we do know at this point. i know you'll be there all day in new york for the amazon announcement. rub brubicon project just b trading at the new york stock exchange. shares are up more than 27%. the company priced at $15 last night, at the low end of the expected range. as you can see it now in the $19 range. frank addante is the founder and ceo of rubicon project. you got to be happy with this open. >> yes, we are, thank you. >> tell us a little bit about what your company does. digital ads. they're not all created equal. i know you have 96% of internet users in the u.s. what exactly do you do? >> we automate the buying and selling of advertising, so similar to new york stock exchange. we're automating the process in which buyers and sellers of advertising connect. >> there's some other public companies in this space, tremor i know is one of your competito

competitors. rocket fuel. what's the distinction here? because some of those stocks have had a rough time the last few months? >> those companies you mentioned are customers of ours, so we enable them to be able to purchase advertising from the top 500 sellers that exist in our platforms, companies like "wall street journal" and nbc, those companies you mentioned use our technology to buy and sell in an automated way. >> it's fascinating but there are big players in opposition, google with double click and yahoo! with right media and aol has made this one of the great things that tim armstrong is going to tackle head-on. how does the landscape kind of shape up for you with so many big competitors? >> sure. the interesting thing is many of the companies you mentioned are actually customers of ours as well. they've built technology platforms to be able to automate the sale of their owned and operated properties and the inventory that comes from that, where we're providing the platform for the rest of the internet companies and applications. >> isn't that exactly what aol is doing, it wants to provide the platform for everybody else?

>> i'm not exactly sure what aol's plans are, they are one of our customers and they do purchase advertising through our technology. the challenge that any one of those companies have is they're all competitive with each other. this is like american express and visa/mastercard where american express is the closed network that nobody can participate in. we're more like visa/mastercard which is the open network that provides a transparent platform for the companies to transact. >> you've done this before, you took a company public on the nasdaq 15 years ago, in a similar space, a company later sold to double click. walk us through the path of profitability. are you there? when will you get there? what is cash flow like? >> we've been ebita positive for the last couple of years and we've entered additional geographic markets and launched into new products and markets with that cash. >> so, to the extent you are a supply-side platform for advertising, i just wonder about click fraud, how important is that? how does that figure into your business model and what you actually collect as opposed to

what's seemingly going on in terms of volume? >> sure. we're actually a full technology platform that includes the exchange itself to connect those buyers and sellers. we also have what's called seller cloud that enables sellers to enable to be able to sell their inventory. currently we operate in the display market. but the advertising market is a $100 billion advertising opportunity. and our mission is to automate all advertising starting with digital across mobile, video. >> but it's unregulated. >> you didn't answer my question. is it an issue? >> click fraud you say? >> yes. >> click fraud is an issue that has existed in search. it's not so much an issue in the display market. and our customers are the premium end of the market and companies like nbc and "wall street journal." they don't typically have that kind of an issue, you normally have that towards the tail end of the spectrum. >> will they be able to manipulate it in the same way that arguably high frequency

traders are doing to the stock market? >> it's a very good question. a big part of our platform is the security piece of it. it creates a safe and healthy environment for it. with any automated environment, of course, subject to people trying to game the system. but we've got a large staff of engineers whose sole jobs are to develop technologies to prevent that. >> all right, frank, thanks for joining us at post nine with the stock up 29% in its debut. rubicon project. >> thanks for having me. appreciate it. crude oil inventories crossing a few moments ago. let's get over to the nymex and jackie. >> hey, good morning. the department of energy releaguing its report for crude oil inventories and this is an interesting report. we got a drawdown today of 2.4 million barrels when the market was actually expecting a build of 1.8 million barrels but traders saying they are not putting too much stock into the numbers because of the accident in the houston shipping channel. and imports and exports were not

really moving through the channel so the numbers could be skewed this week. traders are saying they will be watching run rates as well and they expect them to decline further which means less oil for production. they're also saying they are looking for the declines in cushions versus the builds we've seen in the gulf coast. last but not least, we are watching prices under $100 a barrel, but, you know, you have that barron's cover saying we could go lower. with political and demand issues, they really don't think we'll go that low. last but not least on the gasoline side we saw a drawdown of 1.6 million barrels and distallates a build, but the numbers not really so accurate for this week. a very interesting report. guys, back to you. >> okay, thank you very much for that. 75, that would be an issue. okay, gm is bracing for further bruising cross-examination. hearings have just begun in the senate after the house

yesterday. and you see some of the opening statements being read there. we will talk to a company that is organizing a class action lawsuit next on cnbc. .ng an indy can be a tough act to follow, but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business. does it end after you've expanded your business??? after your company's gone public? and the capital's been invested? or when your company's bought another?

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hearings where opening statements are just being read. our eamon javers is in washington covering it for us. eamon, what is going to be different today about the senate panel for mary barra than yesterday in the house? >> reporter: well, the big thing everybody is going to be watching for here is whether mary barra and general motors change their strategy in this hearing against what they did in the house of representatives yesterday. mary barra pledging transparency, but not really answering the lawmakers' questions or not answering all of the lawmakers' questions, real frustration on the house panel yesterday as barra continued to cite an internal gm investigation and say we can't provide all the answers until this investigation is over. but then also saying that she's not pledging to release the results -- the full results of that investigation, not even pledging that that investigation is going to result in any kind of work product or document or report or anything like that. will they change based on the frustration they saw yesterday in the house today in the senate, that's going to be the big question and we're going to have to monitor it to find out. but they looked pretty tightly lawyered up yesterday, will they

say that way is the question. >> okay, eamon, thank you very much for that. one of the reasons she remains relatively tightlipped because the lawyers are watching and as we continue to monitor the gm hearings we want to hear from one of the attorneys leading now a consumer class action against gm. adam leavitt is an attorney with grant & eisenhofher in chicago, he said gm put its own interests over the consumers. welcome to the program, mr. leavitt. >> thanks very much, good morning, thanks for having me. >> what is the nature of the class action you are serking to get going? it's not actually i understand it from the victims of the accidents, it's the owners of the cars, is that correct? >> that is correct. while we're certainly happy to speak to anybody who has had a serious injury or an unfortunate incident as a result of the problems with these cars, our case is on behalf of owners and lessees of all the cars from '03 to 2010 and in our case we allege that as a result of the

inherent defect in these cars -- and let's be clear. every single one of these cars had an inherent defect when it rolled off the factory floor. every single one of these cars if the consumers were fully aware or frankly aware at all of these problems at the time they purchased these cars, they either wouldn't have purchased them at all, they would have paid a lot less for them. >> so, what is the -- how would you assess the size of the damage per car owner that you're after? what order of magnitude is it, do you think? >> it's very hard to say at this point. obviously we're working with leading experts on the automotive side and on the automotive economic side in the united states very frankly. and the appropriate time we'll put our damage figures in front of the court. but rest assured, it's a very, very substantial number because this problem's a very, very serious problem. >> we didn't get as eamon

alluded to many answers from mary barra's testimony yesterday but we did learn they have hired ken feinberg who has a stellar reputation in terms of awarding damages, he worked in 9/11 and the bp oil spill. does that provide you any relief in how they are handling it? >> well, yes and no. on the one hand, whatever -- whatever was said on capitol hill yesterday and frankly, i'm really interested to hear how she's going to -- how miss barra is going to follow up on her nonanswers in this morning's hearings. i think the fact that they brought in ken feinberg could be a positive sign, but the fact is, all we're getting right now are very carefully overlawyered sound bites. and all of these repeated apologies. but what i found very interesting yesterday is in light of the apologies and commitments and pledges, the one thing she failed to say and she would -- she wouldn't say is that -- is whether or not she

was willing to take responsibility for what happened. and as long as she continues to evade that question, we have serious issues. >> i don't understand what you're saying. you want her to accept some form of criminal liability on behalf of the company or you want her to make a grand promise that when she says that we're a changed gm, we have more of a cost culture, now it's about a consumer culture that focuses on safety and quality that they'll be throwing money away? >> what i'm saying actually is yesterday when she was specifically asked if she would accept responsibility for what happened, as you might recall she refused to answer that question. we think here there is what i said yesterday is arguably the most serious cover-up in u.s. automotive history that has put millions of people both at economic and physical risk. and for the ceo of the company to sit there under questioning

and say that she will do all sorts of things, she might do all sorts of things but then when specifically asked are you guys on the hook for this, for her to not answer that question remains very concerning to me. >> well, i mean, i guess if they -- to suggest they're not on the hook for it, why else would you hire ken feinberg unless you expected to at least pay some damages to someone? and there's also the added layer they are waiting for their own internal investigation. are you willing to let them finish that? >> i think that the internal investigation cannot run in a vacuum. frankly we've seen what's happened when gm wants to do things in a vacuum. frankly, the past 11 or 12 years has been in a vacuum and we what's happened now. and that's a serious problem. so, to the extent they're going to continue an internal investigation with their regular lawyers who they have used for all sorts of other things, i'm not sure that's enough.

i think one of the true, true advantages of the private litigation process in the united states is that it lets consumers retain lawyers and actually -- >> sure. >> -- seek what they are entitled to. >> i guess, the underlying issue if they admitted cover-up then the whole protection from the bankruptcy kind of goes out the window as you know, sir, far better than i. thank you for joining us. adam levitt there and we reached out to gm and got the following response, we don't comment on pending litigation, however, we will respond to the complaint in due course. our focus right now is on getting the vehicles fixed as quickly as we can, minimizing the inconvenience to the cars and also to ensure that something like this never happens again. when we come back mary barra will begin testimony on the hill for the second day. we'll talk to the second biggest dealer in the u.s., michael jackson.

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mary barra on the hill again as the recall hearings continue on capitol hill. let's bring in once again mike jackson the chairman and ceo of autonation america's largest auto retailer, the biggest gm dealer in the united states. i think you've been listening at least to the opening statement. there's been some discussion this morning about whether she says anything new on the senate side. i wonder if you know how likely that is. >> we'll have to wait and see, but i think it's unlikely and i think the expectation that she has all the answers about something that happened a decade ago and to be able to answer it to the last detail is unrealistic. she's done all the right steps. she has an internal investigation going on and, you know, there's a lot of risk to give answers prematurely that at

the end of the investigation prove not to have been accurate. and that creates another whole credibility problem. so for the customers of today all the right steps have been taken. the vehicles are recalled. thebeing produced running overtime at the delphi plants to make these parts available. customers can have loner can er and to get the correct answers to all the issues will take time. >> speaking of answers let's take a listen and see what claire mccaskill is asking mary barra. >> general motors had a lawyer and it was very clear at that deposition that there were two parts with the same number and that they had been switched out and that one of them was defective. when that lawyer for general motors left that hearing, who did he report to? >> i don't know which lawyer was at that trial so i can't answer that question. >> well, hold on, and i'll get it for uf.

you have some lawyers here with you today, don't you? don't you have your general counsel with you? >> yes. >> you are free to confer with him if he would tell you who that lawyer would report to after that deposition. >> again, we are doing a full investigation with mr. valucas and with all the individuals that are associated with this incident will be a part of that and the findings will be conclusive. >> it was mr. phillip holliday appearing on behalf of general motors from the king & spaulding law firm in atlanta, georgia. >> okay. so, he didn't report to general motors then he was part of king & spaulding. >> but he would have reported to his client. he was there representing you. he was your agent at that deposition. >> yes. >> so, he would have -- i guarantee you if i'm a lawyer and i'm at a deposition, where this bombshell has been dropped on my client, that there are two identical -- two different parts with the same number one of which is defective, i guarantee you i don't go back and tell the

folks at the law firm, i'm on my cell phone in the lofblby saying to general motors we've got a problem. >> i agree. >> i need to know who would typically -- would it be the general counsel's office that the lawyers that you hire would report to you on litigation? >> it would have been partokay. it would be very important for us to identify who that lawyer reported to after that deposition. >> i will -- that will be part of mr. valukas' investigation. >> i'm assuming when that happens there's an investigation internally. >> when i -- one of the findings that we've had from mr. valukas already is that within general motors there were silos and as information was known in one part of the business, for instance, the legal team, it didn't necessarily get communicated as effectively as the other parts as it should have been. like the engineering team. that's something i corrected today. >> mrs. barra, i'm not asking wlosh whether or not the lawyers called the engineers. i'm asking whether or not lawyers in a multimillion dollar

lawsuit where there has been evidence of a defective switch and replacement that had never been identified to the public being presented to the lawyers for your company, not report that up to the executive level of your company. those lawyers work for the executive level. they don't work for the engineers. they're hired by your senior counsel. that's who hires those lawyers, his office, correct? >> yes. >> okay. so what i want to know is, what investigation began after that deposition. >> that is part of the investigation -- so you don't know whether or not anything happened after that investigation. >> i don't have the complete facts to share with you today. >> okay. well, that is incredibly frustrating to me that you wouldn't have a simple timeline of what happened once you got that knowledge. so it went on for nine months. you have no idea even though you were in the executive level of leadership at the company at the time, it was never discussed anywhere in your presence. >> correct. >> for nine months even though this had occurred.

>> i became aware of the defect and the recall on january 31st. >> okay. so let me do quickly that if on february 7th, issued the first recall. 12 days later mr. cooper, the trial lawyer, pointed out in addition to the recall you had done, it was not complete. he pointed out there were four other models that had the defective ignition. six days later you, in fact, recalled those vehicles. on monday of last week mr. cooper filed a court pleading in california alleging there were additional cars that should have been recalled and had not been recalled because they had defective switches placed in them during repairs. last friday, four days later after that pleading, gm finally issued the third round of recalls. is this the new gm, ms. barra? is this the new gm that takes a lawyer having to write in a court pleading in court for you to finally recall all the cars that had been impacted by this defective switch? >> as we looked at the first population of vehicles we

immediately go and then read across to the other vehicles that may have the same part. often when you have the same part in another vehicle it can be a different configuration, a different geometry. as we looked into that population we then recalled that population. and then we immediately started to look of where were the spare parts from a general motors' perspective, for gm dealers we could go to dealer records and understand if a dealer put a spare part into a vehicle we now the vin but then as we worked with our supplier we learned that they had sold these parts to other third party repairers where there were no records kept. when we learned that, we immediately went out and recalled the entire population of all of these vehicles because we couldn't be certain if there was a vehicle that had a part put in that we couldn't track. >> and i think it's greatoff done that all. it's worrisome to me that it took three shots after nine months. senator heller. >> thank you. >> mary barra on the hill for a moment, bring back mike jackson, ceo of auto nation.

mr. jackson, what did you make of that exchange that you just heard? >> well, i certainly understand the frustration that all the answers aren't available today. but ingmarry has taken all the immediate steps needed to be taken at this point. and i know washington, d.c., this is not a strong suit. there needs to be a little patience that a proper thorough investigation can be done that all the answers can come out. so what needs to be done for today's customers have being done. and she's already made big changes in according to safety officer and reports directly to her to try to fix this in the future. >> mr. jackson, let me ask you another question. she said yesterday that she first learned of the switch issue in december, which was the time, of course, that she was named as new ceo and have the move into that role. presumably the board knew that this was coming. when you look at mary barra

there on the hill do you see her as new face of gm or do you think she is the person that the board put in to be the fall person to carry the can for what went on to restructure the business and then another ceo will be the new face of gm? how long will this take to clear up, do you think, for consumers? >> mary barra is the ceo of the new general motors and the renaissance that is going on in detroit is real and it is sustainable and it will last. i expect mary to lead this company for a long time. >> all right. >> this situation with -- >> we're going to -- mike, we just run -- we're bog to have to take a break. we're going to have you stay with us. it's great to have your valuable perspective throughout the testimony of mary barra and mike jackson of auto nation. ralph nader, former presidential candidate, will be joining us live to weigh in on the testimony. "squawk on the street" will be right back. right back. ahhh. beautiful day in baltimore

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these days, everything is done on the internet. and tomorrow you'll do even more. that's what comcast business was built for. slow dsl from the phone company was built for stuff like this. switch to comcast business internet. then add voice and tv for just $34.90 more per month. and you'll be ready for tomorrow today. comcast business. built for business. we have a news alert. any moment now amazon is expected to make a major announcement about the video business at an event in new york city. what can we expect from amazon this morning? our jon fortt is live you side

the event in new york with more. jon? >> hey, a few clues. i just ran up there. we've got the whole space decked out a little bit like a movie theater, milk duds, three big screens and an entertainment center set up. i saw dave, another one of the amazon kindle hardware executives up there. he told me, hey, eager to see what you guys think about it. we've been looking at it in closed-in room for a while. it will be nice to get this out to the world. obviously we know it's video, it's streaming. some piece of hardware involved in getting that information that entertainment, that digital media to people a little bit more seamlessly. we'll see how it stacks up against the competition when they announced in a few minutes jon, thank you very much. jon fortt, it's going to be a big event. we think we know sort of where they're going with the movie posters and the popcorn but we'll await specifics in a few moments.

this morning's squawk feed, joining us is john steinberg. good morning to have you. let's begin with amazon's big announcement on video. what do you think this is going to entail? >> it will be the spring of dongles. everybody has to have it. road crew is going into it. these are these little things you plug right into your tv so you can fling video from your tablet or phone. that's the war. >> what is their expertise in devices? >> they have expertise in bundling. how cheap you get it or a prime is bundled in some way or maybe you get a card to buy a bunch of movies free when you buy it. >> there was a discussion on "squawk box" this morning about the level of issaturation for t consumer. how many brands can you have for one television device. samsung tv, time warner cable on demand, you have your apple tv, you have another type of set top

box and then this amazon dongle and maybe the netflix account as well. >> it's a layers of debate. there are layers of competition. first everybody was competing to give you broadband service. then everybody was competing to give you what entertainment set-up you were going to have, where europe going to go to get your video. now they're competing in the hardware layer and original programs. so everybody is really fighting it out in media right now. >> does this sound material to their business or is this sort of like a discretionary items they can afford to lose money on on the side and see how it develops? >> everybody thought that about the kindle and look how transformative it was to their business. this could be the gateway to make it able to do it. it's basically giving away the raiser to charge the people forfo razor blade. >> grocery has been a slower roll-up than many expected. how long is the gestation period? >> i don't think anyone expected chrome cast to sell as well as

it was. it was a top seller over the holiday season. $29 price was impactful. if this come out below that level, $19 or free or bundled in some way or you get a rebate for free mediation it could be sold out by tonight, possibly. >> interesting. we'll keep an eye on it. obviously they've maintained the mks. they're not allowing cameras inside but people have been tweeting from within the venue. >> it will be interesting to see what their fren mys do as well. if you youtube allows them to have the content flow on this device when youtube and google have chrome cast out, what hulu does. >> this is available today, you said it could sell out tonight. or do you think they will say this will be available next month? >> i think it will be available today. it typically comes on the market right away because nobody needs to plan to buy a dongle the way you do to switch your cellphone. i think it will be available today, my guess. >> keep an eye on that. former apple ceo steve of

jobs was a fierce competitor and no different in dealing with google. in an e-mail in 2010 jobs promised a, quote, holy war against google and smartphones running android software. that e-mail was revealed during apple's patent case against samsung yesterday. i thmean, it's fascinating to g any color as to how he was running the business at that time. >> the court cases are amazing. the stuff you see years later is like a history archive. he mentions that they're weak in cloud service, like dropbox and the stuff that google does well p in. that's true today. i was just talking to cramer the other day. a has to buy dropbox no matter what the cost is because they remain weak in cloud-based consumer services. that was a theme brought up years and years ago as well. >> holy war is quite an interesting term to give this. i mean, we knew that competition was tough, but does this give you the sense that competition was even tougher than we once imagi

imagined? >> eric schmidt was on the board of apple. google was an intimate launch partner of iphone and then went and bought it. >> which he always saw as an affront, a betrayal. >> a deep personal hurt that leads to a holy war. leave it to jobs to not say we've got a battle with these guy, it's a holy war. >> more remains true as well. they were weak in noed notifications, vis-a-vis android. that remains the same today. android becomes the stick shift high performance car and iphone and apple is automatic, it krooifs well but doesn't have that left that android continues to have now. mean tile, this gm hearing continues on capitol hill. mary barra where the questioning at least from senator mccaskill was much more fiery than we sometimes see on the senate side. she is still asking the questions. let's take a listen. >> i respect him in all regards but i also respect him in that regard. so next would be the senator.

>> thank you very much, senator mccaskill. thank you for holding this hearing. ms. barra, the -- one of the families involved in this is a young woman who was killed, named natasha from elbert lehman, minnesota. i met with her dad doug yesterday. i talked to her mom -- or to her mom's husband yesterday. and this young girl was in wisconsin. she was in a cobalt with some friends and suddenly the ignition went off and the car barrelled 71 miles per hour into trees and two of the girls were killed, including natasha. and she was a hockey player, young girl, and one of the letters that her dad gave me that she wrote to him just a few months before she died. she talked about this is her words, i wouldn't be the good goalie i am now if it wasn't for you, dad, standing behind the net, behind the glass. just knowing you were there made me trust myself better and i

definitely felt secure to know you had my back. and i think you understand that these families need someone to have their back. they want to have the backs of their kids, at loose the memories of their kids. i think this is a lot about what this is about including major change in process that we clearly need in gm and probably in the transportation field in terms of how we look at these things. and as you look at this internal evidence, i think the things that we need to know including why did gm open numerous internal reviews but not elevate the issue to a formal investigation until 2011, why was gm's management not aware of critical decisions being made related to the defect, did gm disclose the issue during the company's bankruptcy proceedings. these are the things that on the minds of the american people. and then on the government side with nhtsa, did nhtsa have sufficient resources to do a prompt thorough investigation,

did nhtsa have the technical expertise and technology to evaluate this growing evidence. i know in our case and the weig weigel family complaint was made with nhtsa way back when natasha was killed. what could nhtsa have done differently as it was receiving complaints over this very long period of time. so my first question of you is really about your -- this internal process and i'd like to know what factors as we've just seen these recalls with more and more of them rolling out over the last few weeks, what factors did gm consider when it's examining whether or not to elevate a potential safety defect to a higher level of revi review? >> in today's general motors we look at -- as an incident is learned about and it can come from any source, it can come from our dealers, it can come from tests, it can come from outside, it can come from a claim being made, and it gets assigned to a team of

knowledgeable engineers. they investigate, try to understand what's happening, try to understand, you know, if there's an incident what it could cause. it then gets reviewed by a cross functional team and then to a final group that makes a decision. >> what's the single most important factor the company considers when looking at weather to do a recall. >> the most important thing is if there's a safety issue. we will -- and we've actually over the last two years made great strides to quickly get information, look and get into the field as quickly as possible. if you look at the data right now 07 general motors we do more recalls than anyone with smaller population because we're trying to get, if we find something, we're trying to get in and fix it as quick as we can. >> do you think there will be further recalls to come here in different models? >> i believe as we find problems, large or small, we will do the right thing. if it requires a recall, we will do a recall. >> okay. now, we have the issue of the claims with many of these families that have been

involved. do you think that families have equal opportunity to compensation regardless of whether and when gm went through bankruptcy? and if you could also describe -- you announced this appointment, how this would work so families would get their compensation. >> and we hired mr. feinberg late last week. we have our first meeting with mr. feinberg on friday. we want to -- it's open right now. he has guided us on the different things that we need to consider. again, as i said, we have civic and legal responsibilities. we are going to work through those. i anticipate based on the timeline he's given us it will take about 60 days. that's the timeline he's told us to plan for. as we explore and look at all the different options we have not made any decisions yet. all options are still open. i don't have a decision to that. >> so do you think that these families should be able to compensated regardless of the bankruptcy issue. >> that's why we hired mr. -- >> you're listening to gm ceo

mary barra in her second questions on capitol hill. this time with senate committee. she just said that there could be future recalls as the company sees them. they will issue further recalls and saying that they have scheduled their first meetings with claims executive, an expert ken feinberg, who handled the claim processing for september 11th. we want to get to auto nation chairman and ceo mike jackson. he's still with us. mike, your take on how bharry barra has answered these questions to far. she's pointed often as she did yesterday to the results of the internal investigation which we do not yet have. is that a successful strategy? >> i don't think she has any choice. if she gives out answers that are not confirmed by an investigation and later prove to be incorrect, that is going to do tremendous damage to her credibility. so i think considering the circumstances and the amount of time that she's had to get up to speed, i think she's giving the

best answers that can be given and in the immediate thing what needs to be done right now for today's customers and today's general motors, she's made all the right steps. clearly these vehicles, these switches never should have gone in these cars in the first place. the recall should have occurred a decade ago. the part number should have been appropriately designed. and i think she's basically admitted all that, has apop jized, expressed her sorry, met with the families. it really is a tragedy. what can be done today? i give her high marks. i have a high degree of confidence that she will continue to make the right decisions to get today's general motors through this crisis. >> finally, mike, as you take all of this in, i was asking people yesterday how they think this compares from a perception standpoint to audi's unintended acceleration three decades ago, the toyota recall.

where are on the spectrum of pain do you think this recall is for gm? >> i think it's very similar to the toyota situation, which i described, carl, you'll recall, we spoke back then at the moment. i saw that the confidence and the trust in the brand toyota remained and as long as they did everything that was appropriate now that the facts were out, that they would keep the trust of the toyota customers and that indeed is a fact and they have 15% of the marketplace today. i see the same thing right now. there's confidence in our general motors showrooms from the customers at today's general motors is going to do the right thing. now, the potential is there. if they mishandle the situation and make wrong decisions, the stakes are high and it can do tremendous damage to the company. but everything i've seen from this point, i believe that mary

barra will lead general motors through this crisis. >> mike, it's good to get your take. of course, we're well aware that you have an interesting in selling some of their cars, too. thanks for coming on. >> carl, good see you today. here's a question, what were you doing yesterday afternoon? if you weren't watching cnbc, you probably missed this. >> i think it's really hard to put a -- >> you said it in the book, that's when i knew the markets were rigged. it's disgusting that you're trying to parse your words now. you can't say that -- >> you are quoted that way in the book. >> let's walk through an example. >> do you believe it or not? because you said it. >> let me walk you through an example of -- >> yes or no question. >> i believe the markets are rigged. >> okay. there you go. >> i also think you're a part of the rigging, if you want to do this, let's do this. >> i really do. >> it was the moment that stop trading right here on in floor of the nyse. the debate might be over but the question still remains, are the markets rigged? former s.e.c. official will weigh in after the break. in aft. i've always kept my eye on her...

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the debate over high frequency trading and whether the markets were rigged were taken to a new level on this network yesterday. take listen to this. >> do we have computerized trading on our market? yes. the high frequency trading should be eliminated from the industry vocabulary. >> yous used it 20 times in this book. >> it wasn't his book. >> you're quoted. >> computerized trading and

scalping. people use computers to scalp. they look to be in the market. you cannot scalp trades. you cannot scalp orders on ix. >> joining us now on the cnbc news line is larry har risz, a former chief economist of the s.e.c. currently a finance professor at the usc marshall school of business. larry, it's good to have you on the show this morning. good morning. >> good morning. how are you? >> good. that's great tv as we all know. it was interesting and fun to watch in some respects. but add some gravitas to it. where did you come down on what the two sides said yesterday? even with the advances and the pros of what technology has allowed us to do. why are we still looking at the holes in the system? >> well, the marks are much improve bid electronic trading in comparison to where we were, say, ten years ago. they could still be a lot better. they are features of our market system that need improvement and i think michael lewis has very

ably brought our attention to some of those problems. unfortunately he hasn't highlighted the great benefits that we attained from the electronic trading. not all of it is nearly as bad as you might think if you read that book. >> what are the solutions to root out the remaining evils? are you in favor of washing out some of these hfts? >> i'm not concerned about washing out the hfts but i don't want them to have special privileges that the rest of us don't have. but perhaps the single most important thing that the s.e.c. could do now is get rid of these arcane payments that are associated with what's called maker taker and taker maker. attainments that the exchanges are giving to brokers to route their orders in ways that are not always in the interest of the clients. so the brokers get these payments that pervert their order routing decisions in some cases. and those decisions end up

favoring the high frequency traders. that needs to be changed. >> larry, observers say that this is a phenomenon that really affects the institutional traders. that there is a group of haves and have nots within that group but the retail trader will still get the same quote on scott trade or e-trade or whatever they're yauszi iusing and they' getting the same quote. is the retail trader insulated from what's going on here? >> no no. both sets of trader, both retail and institutional, are much better off because of electronic trading. but the trobs that i've discussed and that michael has discussed affect both types of traders. for example, supposed that the market is 20 bid, offered at 22. both retail traders when they're buying will using a market order, 22 or less than 22.

but as many quarters that are set in the book sell at 21 that would allow the retail trader to buy at 21 if they only knew about it. now, the order -- these orders were often hidden which are completely appropriate but there are very easily discovered by simply sending the ordered t to the exchange. so a retail trader might be getting a fill at 22 because the order is routed to a dealer that is being paid for the -- that's paying for the order flow where he otherwise might be able to pay for -- buy it at 21. >> larry, we'll have to leave it there for now. obviously a lot more work to be done, as art cashin said the other day, until we fully itemize the costs of all of this, it's going to be hard to see any policy change. thanks for your time. >> sure. >> larry harris, former chief economist with the s.e.c. we do want to bring you breaking news and introduce you

to fire tv. amazon announcing the new video service. of course in this event in new york city. dual band, dual wi-fi. they're calling it thinner than a dime, kayla. quad core processor. two gigabytes of ram. which they're arcing, jon steinberg, is two to four times more than competitocompetitors. >> they're already saying you're not going to get the latency you get using the different boxes. it's going to predict the content you want and preload it. it runs on android, another check box for the android dominance of the universe campaign. and the interfacebooks like net plik. the big question is how much does it cost? hasn't come out. what exactly is the content beyond amazon prime content that's going to be available on it. >> we were joking before if we don't know how much it costs it's free, right? >> included. yeah. but, no, it's a box. so i had it wrong. it's not a dongle, it's a box. it looks more like the apple tv. >> jon fortt, you are there. tell us what you know.

>> we're waiting on the price, touting the fact you can navigate it by voice. took a shot at apple and the directional remote control in the beginning. a little bit of a cheap shot because you can control apple tv using a touch screen and keyboard using your ios device. amazon going the direction of touting power. there's a gpu in this. graphics processing unit. as well as interface and the ability to surf. but we're not sure yet until we know, as you said, that price point, until we know what more content plans they have, exactly how this might alter the landscape. remember, this in and of itself, this announcement in and of itself isn't going to make amazon any money. it's about the prime sign-ups and the media downloads and purchases people do because they're in the eco system. >> is it more or less than you were expecting walking in, jon? >> it's about what i was expecting except that i thought

they might go the dongle direction like chrome cast. google did it. roku came out with one. the fact that they're coming out with box and going for power and speed, going for that voice activated navigation direction, i think it kind of says that they're looking not to just do the lowest common denominator here, they want the interface, they want power. it's a little bit more of a kinect meets kindle not only motion control but voice control. they're making a technology play here. >> jon, but they were also working on original content. i'm interest if they said anything about their programming intentions and what type of programming will be carried on this new fire tv. >> they are touting the original programming they have, talking about the ten original shows that are coming to amazon video this spring. so i think they are aware that it's not just a matter of purchasing content. they've got to offer something

unique perhaps they can condition themselves as well. >> john, busy morning for you. appreciate that. jon fortt joining us from milk studios in new york city. live pictures of gm ceo mary barra in front of the senate on capitol hill today. there's richard blooming that, one of the most outspoken senators. we'll talk to one of the more outspoken people when it comes to car safety in a moment, ralph nader will be here later this hour. . aflac.

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breaking news here. amazon announcing the new video service. it's called the fire tv. let's listen in. >> i tried. listen. this thing is tiny. it's incredibly powerful. it's unbelievably simple.

it's the best place to watch the most popular tv shows and movies in the comfort of your own home. okay. let's get right into it here. ah. one more thing. great news. you're all taking one home today. i'm super excited for you to check it out. okay. so when we started the development of fire tv we looked really closely at all the customer feedback that we had been getting. we immediately noticed three performance bundle nets that jumped out at us. the first is the processor. fire tv has a quad core processor. it's best in class for a product of this type.

>> peter larson, vp in charges of the kindle for amazon. we'll talk more about what that means for the likes of apple tv, roku and others. in the meantime, a minute until the european close. let's bring in simon hobbs and see what's happened across the continue necontinent. >> the ecb meeting tomorrow. let's look at the final scores. europe is mostly higher overall. gained for a seventh session. one of the major dynamics for the quarter is this rallying in emerging markets. in europe, it's playing out in greece. you see there, a gain of 3/4 of 1% on greece. not only, of course, this week have they passed the new bailout at the finance minister's level for europe. but also there's that talk that actually greece could be back selling its own sovereign debt in the market this year, two years after default. up 16%. the bonds keep rallying, too. the yields going down now to a fresh four-year low.

there you go. 6.19. who would have thought we would get quite there. just some other news coming through. deutsche has confirmed that it's clear stream operation is cooperating with authorities in this country. the allegation seems to be that they may have violated the iran sanctions with their settlement in custody division. deutsche boerse is flat. let's have a look at the dutch operator sbm. this is a floating platform operat operator. it us tdoesn't have any indication now of brazil. they make reusable biofuel. the senate finance city chairman published a bill to reinstate tax credit here's and that operator is having a great day. in the meantime, if you're traveling to europe be careful. there is a lustrike day three.

back to you. >> good word to the wise. thank you for that. we want to get back to the amazon news of the day because we just heard from peter larson, the executive in charge of the kindle. they share a time in firetv. i was looking at a tweet from rich greenfield and said i never thought my roku or apple tv was slow until i saw the demo of this. >> that's a great tweet, too, because people don't care ability processing power. they care what does it do for me and how much does it cost. this is the great steve jobs innovation in terms of doing presentations. the answers on this are very, very good. you can watch hulu, netflix, youtube. it's not a closed eco system so you can getting a cess to just about any of your content. amazon cloud drive is integrated as well. so i think these are all the strong points we were looking for. the last thing now is going to be the punch line, what is the price. if the price is super cheap, it's going to be really devastating for roku and hurt a. >> the remote control has blue

tooth and also has voice activation so you can talk to it and control the tv with your voice. is that a game changer? >> you know, it is and it isn't. it is i guess because it's hard to type in with the remote control and put in all the letters to search for something. >> the worst. >> this does resolve that. we are seeing a tremendous amount of come modification. last week we talked about it. now all the boxes are the same. they all do the same thing. it's just a question of content and price. >> yeah, that's a problem. right, it's a problem for consumers who are going to have to choose somehow. >> this is also the problem with gopro coming to market as well. with hardware companies you have this threat of hardware becoming commodity fied. this is what happened with the flip cam. competing in the hardware layer is difficult. amazon is not doing that. this hardware is basically going to be a freebie and it's going to be used to push out the prime content and create more stickiness on the amazon platform. >> you just compared gopro to the flip cam. >> i did. it could be. that is the possible concern. >> all right.

with that in mind, are we taking a break here? i think we are. a lot going on between amazon, gm, and the market as well. $1.17. >> off of its highs. but still in positive territory right now. we will get you back to capitol hill after this break where gm ceo mary barra is still in the hot seat. the major question of course, why didn't gm do anything about the ignition problem sooner? we will talk about that with a man famous for his stand on car safety, former presidential candidate ralph nader. he will be with us in just a moment. moment. know what the experts at your ford dealer think? they think about tires. and what they've been through lately. polar vortexes, road construction, and gaping potholes. so with all that behind you, you might want to make sure you're safe and in control. ford technicians are ready to find the right tires for your vehicle. get up to $120 in mail-in rebates on four select tires when you use the ford service credit card at the big tire event. see what the ford experts think about your tires.

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let's take you back to washington, d.c. mary barra in front of the senate. in this case, marco rubio. >> someone says we have this information. we don't any it's a big deal. that is negligence and certainly someone like that shouldn't continue to work for the company. when you also look for evidence in that investigation that in fact people knew this was a problem but decided that the costs weren't worth it. are you also in search of that, to see if, in fact, there were individuals or a culture in the company created by a group of individuals that encouraged employees to make these sorts of cost benefit analysis based on economics and not on customer safety. >> that type of analysis on a safety defect is not acceptable. it's not the way we're going to do business and that is not the culture we will make sure that that is not the culture we have going forward. >> but again, my question is, if, in fact, you discover or will you look to see if, in fact, there was a decision made

by a group of individuals not to move forward on this because of its costs? >> yes. >> you want to know the answer to that question? >> yes. >> and we will know the names of these people and we will know the process by which they made that decision as well? >> we will work on the process. in raising the names i have to make sure i stay consistent with employer liaws that i have. but trust me, we acted swiftly we had issues with people in the past. >> i would follow up talking to your counsel and ours as well. i'm not sure there are any laws that allow companies to shield an individual who may, at that point, what appears to be a criminal decision, not to move for card ward on a safety item. >> i guess we need to complete the investigation and have the facts in front of us and we will act not only from a company perspective but if there's issues beyond that that have to be dealt with, we will deal with those. >> my time is up. will you fully cooperate with the justice department if they

want to conduct a condition current investigation alongside the internal up with? >> we will fully cooperate with the justice department. >> thank you. >> senator johnson. >> thank you, madam chair. ms. barra. like the senator, i met with the stepfather and mother -- >> that's gm ceo mary barra answering questions from a senate panel. having faced the house energy and commerce committee yesterday. on news line is ralph nader, author of the upcoming book q t "unstoppab "unstoppable." he joins us on the news line. mr. nader, great to have you back on the program. good morping. >> thank you. good morning to you. >> barra's ans are always preface with this warning, this caveat they are still working on this internal investigation. are you getting anything valuable out of these hearings so far? >> she admitted she was notified first about this ten-year cover up regarding the faulty ignition

switch january 31st. so two month and gm ceo can still not tell a congressional committee what the full story is or even what the par shatial st is. she is waiting the complete investigation. what does that tell you? it tell use that gm's vertical and horizontal bureaucracy is a huge mass of ambiguity. it tells you that there is not a clear line of responsibility from the design committees to the review committees and approval of the overall vehicle. in this case, the saturn or the chevy cobalt. that's what i think -- that's what i think the problem is from a benign point of view, that basically, this is a gigantic bureaucracy that does not ascribe specific responsibility and accountability at the get-go. >> in some of her answers she

has discussed the need to remove some of that bureaucracy, cut down some of the layers of red tape so that executives are more involved personally in making some of these decisions that previously had been made at a lower level. what level of comfort do you have that a policy like that would succeed in removing some of those layers and that would help to identify problems like these in the future? >> well, the history of general motors is not a positive, in answer to your question. in the past when gm has gotten into trouble they've said the same thing, they've got to reorganize, they've got to focus responsibility. a few years ago when i was trying to figure out how many layers inside gm from the shop, factory floor, to the ceo, there were 18 layers, 18 layers. maybe there are fewer now. but certainly there should never be more than five layers in a company like gm. i suggest that what she should do right away, and she doesn't have to wait for investigation

here, is to set up an independent group that reports to her directly, engineers who know what the defects are but are being told to shut up and get in line, can complain to and they can be covered anonymously. they can be guaranteed they're not going to lose their job if they report a defect that's being covered up to accompany. >> that's an interesting suggestion. >> we argue a couple of conspiracy theories. one is the government time their sell of stock because they saw this coming. another is that they chose barra, the board chose barra as ceo because her hands were the cleanest. how far along that limb are you willing to go? >> not long at all. i do fight the government, after all, the taxpayer in the form of the government, the bailout of gm ended up with over 60% of the shares. more than a controlling interest for three or four years. and they could have easily have

exercised the rights of ownership in a capitalistic economy without even having to invoke regulation from washington. and they didn't do that at all. so they lost an opportunity there to save lives and to straighten gm out which would have been in gm's best interest given what's happened in the last few weeks. once the media gets on gm and gm becomes a daily beat as you can see, there are reporters vying to uncover the next story about gm. a company the size of gm is going to find stories spilling out unrelated to this faulty switch, spilling out that are adverse to its own reputation. and just yesterday's story about all the problems apart from the faulty switch that the cobalt caused the dealers, the chevy cobalt. and that's what gm has got to be worried about. if i was gm i would move to

settle it by paying awe huge fine to the justice department. i would settle it with the victims' families who were ripped out from the bankruptcy before 2000, i would set the existing cases. i would go all out because it's being undermined by a thousand cuts of its own causation. and it just can't to late that kind of reduced sales. >> ralph, as you know the wheels of justice often turn slowly. i'm sure the company would like to get these issues solved. you also can't rewrite history. i'm wondering now at this point with mary barra as ceo. they're looking to establish a trust to begin paying out victims. what is the right thing for john mccain to do beyond settling with the government when we're just talking about customers and affected families here. what is the right thing to do? >> the right thing to do is to provide them with a forum that's called courts of law the

families should be able to file their lawsuits. if they want to settle through their lawyers with gm, that's theirprerogative. if they want to go to court, that's their prerogative. i don't believe in a trust fund run by mr. feinberg that's had a lot of problems with the bp spill in the gulf. >> finally, ralph, you know, hft, high frequency trading, has been a big debate this week in the wake of michael lewis' book. an author who has written about you from time to time in a political prism. what's your take on where technology has led us in the stock market and michael lewis' take on that? >> michael lewis has performed another public service. you know, he humanizes these inhuman definitions of greed on wall street. and, therefore, his book is putting heat on as we speak on the securities and exchange xhipgs and new york stock exchange and others.

what most people don't know is the vast majority of stocks that are traded and derivatives and options and calls are high frequency trading. i mean, it is not just disrupting a share of marketplace for ordinary investors and chipping off pennies that amount to billions of dollars over the years. it's actual li the bulk of the trading. and that means that wall street s. h has moved to a completely speculative realm of behavior when it was established many years ago to engage in investment. it should be for investment, for speculation, which is why i and many those favor speculation tax on wall street which would help reduce the deficit and help reduce taxes on ordinary people. >> what kind of legs that will have on the hill but that's something we will continue to watch.

ralph, it's great to have you insight on that and gm. thank you for your time today. >> you're welcome. thank you. we want to continue the conversation on gm with senator richard bloomenthal. he joins us on "squawk on the street." senator, thanks for being with us. >> good to be with you. thank you. >> if this hearing did anything this morning so far, it has just drummed up more anticipation for this internal report that gm at some point will produce. what answers do you want to see from that if you are not able to get answers today? >> the steps that i think are most important is, number one, to provide a fund or some justice for the victims and i hope that this report will provide a basis for it, but even before then i think that ms. barra has the power and certainly the obligation in my view to provide for more justice, whether it's a compensation fund or waiving fee

immunity, which is an extraordinary thing gm got in the bailout, so that people can get justice if they have been harmed by death, injury, or other kinds of damages. second, warn the consumers that these cars should not be driven until they're repaired. i established in my questioning that the recall notice talks about rough road conditions or jarring events as increasing the risk. driving these cars right now is unsafe at most speeds even with taking the keys off the chain, as ms. barra advises people to do. third, i hope gm supports the legislation that senator markey and i have introduced which would improve the car safety accountability system by requiring more reporting from the companies when they discover defect and more disclosure t to the public by making available a database so that consumers know when there are defects and they can make smarter choices.

>> in her defense of the company she said these oversights were then, this is now. that was a very cost conscious gm that made decisions differently and now we are a company about the consumer and about the level of safety of the product. what level of comfort do you have with her saying that and with the state of gm at this moment in time? >> actions speak louder than words. i'm very comfortable with her saying it, but the words are meaningless unless they're backed by action. and the action has to consist of showing that gm really is going to come clean and face its moral and civic obligation. she put it as civic obligation. i think it's a moral obligation as well as its legal duty to do right by the customers who were harmed. but frankly, i think that the more and more i learn, the more convinced i am that gm has criminal exposure here. that they will be forced to do it if they don't do it themselves.

and then i think telling consumers to get those repairs as soon as possible but keep those cars off the road until they do make the repairs. i think those actions will speak a lot louder than words about any change in culture or leadership. the new gm dates from 2009. and if there really is going to be a new gm beginning with mary barra, she has to demonstrate it by action. >> finally, senator, what's the likelihood you think we're ever going to hear from the engineers who wrote that 2005 memo or the ceo who ran this company when this problem was really in its early stages? >> this hearing will be followed by others, i believe, and certainly the chairman of the subcommittee, senator mccaskill of missouri, indicated today there would be more hearings. my hope is we will hear from the engineers who signed the forms that indicated there was no change in the identification number of the new part, which is extraordinary. i want to hear from whoever was

involved in telling the government of the united states during the bailout when taxpayers footed the bill for billions of dollars that there was no material adverse event or fact that should be disclosed. who signed off on that representation which now evidently proves to be, at best, misleading and, seemingly false. >> that is an answer, senator, that is in high demand right now. for now we thank you for joining us. we will continue to watch that hearing today closely. >> thank you. up next, more from amazon's big event where it just unveiled the firetv device. instant reaction from who else but buzzfeed's jon steinberg. ♪ [ male announcer ] when fixed income experts... ♪ ...work with equity experts... ♪ ...who work with regional experts...

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amazon just announced the new video service, the firetv. let's bring back jon fortt who is outside. i think we're getting pricing details, right? >> we are. 99 bucks, which is an interesting play for them because that puts it right at the same price as apple tv. it's going to be more expensive than a chrome cast. they are making a premium argument here that this has more entertainment, more bang for your buck. they talked about amazon stud yeses, the game studios that they have. they got not only original video

content but also original games. games from the likes of game loft take two, disney, there's a "monsters inc" game here. not conceal loefl but not quite as low level as simple mobile games either. it's kind of in the middle. so this seems like a gamble that your casual pc gamer, not your hard core gamer who is going to get an xbox one or ps4 but the casual gamer is going to want to get this device, play a shooter game or strategy game, something like that. the controller, the fire controller, that's going to be 40 bucks. so when you put these two things together if you really want to do gaming it's going to cost you around $140. if you want to buy games, amazon is saying the average price is around $1.85. probably have some free -- more than 1,000 free, they say, at launch. you will have some $1, maybe $5 games. but this is mobile price games. a little bit lower quality than

console. and also the video that we expected, guys. >> we are hearing now, jon, it is available today, which was one of jon steinberg's points. how quickly could they get this out. >> it's a little bit of a weird device. neither fish nor fowl. if you want a streaming device you want it cheap. if you want a console and a lot of games look like shoot them upper type games, is a 14-year-old really going to say, mom, i want the kindle fire to play the latest games? especially when these games are not up to the parody of the new sony ps and xbox one. the price point is not where i would have liked to see it. >> the amazon customer is normally someone with a purchasing power because they were an e-retailer customer at the heart of it. how much of amazon's demographic is interested in that intense gaming technology? >> are you interested in any kind of gaming technology and are you going to ask for an amazon firetv if you're a gamer. i think the answer is no. in fact, apple looked for a long time and is still looking at bringing ios games to the am tv.

there's been numerous delays. maybe the reasons for the delays is they haven't been able to figure out what exactly are the right kind of games for that device. i would have liked to see a $40, $49, free product with prime with everything bundled into it. you get cesesame, nickelodeon. the gaming is weird. >> go ahead. >> the issue here is that amazon couldn't have done this technology and broken even for also money than 99 bucks. so now they've got to convince people that it's worth it. we're clearly moving past the era of just customer acquisition, sell it below cost, offer it below cost. they need to make quality here in the content. >> jon fortt doing work in new york city for us. jon, thanks. we want to get to chicago and talk to rick santelli. he's at the cme group. you've got the santelli exchange today. what's on your mind?

>> there's only one thing on everybody's mind down here and that's tomorrow's ecb meeting. granted, whether it's ecb meeting, fed meeting, bank of england meeting, they're all important. but this one is especially important. think about this. stress test in europe are going to be a big deal. in europe, shadow banking isn't like it is in the states. okay. let's get to something first. the euro/dollar currency. first, see a short-term chat. starting february 1st. this pattern really is a bit bearish. looks like the market will roll over. most technicians think 134 is the area. look at a one-year chart on your screen. you will see there have been plenty of these channels that haven't had huge breakouts. but what makes this different? i'll get back to it again. in the u.s., we have securities markets that are, you know, excellent. so shadow banking, much of the money corporations need, whether it's ibm, ge, comcast, they go into the marketplace, the securities market. it isn't like that in the

eurozone. so the stress tests are important. what's more important is the notion their banking system needs to provide capital and there are things arcing against it. okay. let's look at charts number two and three. the first chart is a 20-year chart of the boons versus the guilt. that spread difference between them, 116 basis points in favor of the guilt is the widest, the biggest premium going back to 1997ish. if you look at the next chart in is the boons versus tens. that spread is the widest at 118 basis points since about 1998. and 116, 118, you get the picture, that means the guilt and the ten-year are right around the same yield which is true. 280, 279. what that tells me is, drawing capital into europe isn't going to be any type of party. they don't have big shadow banking. so i think the reason tomorrow's meeting is going to be hyper important, i think they need to come up with a way to ease back

the euro currency and do some type of stimulus. do i think it will work in the big picture? probably not. but i think these charts auger for a big day tomorrow. if it is, 134 seems to be the support most traders are talking about. kayla, carl, back to you. >> it's going to be a big day tomorrow. the euro, look at the chart over the past few weeks and months, it's formed a wedge that's climbed in right below $1.40. so people are saying, i don't know, do we have to see a breakout depending on what the ecb does tomorrow. >> expectations, that's what rick was talking about rchltsz a check on the markets right now. we're at 22 to the upside on the dow. the s&p is up by 4, 1889 is the level. nasdaq is holding on to slight gains. amazon shares up by half of 1%. they were hugging the flat line but they have taken another trip to the upside. jon, as we've gotten more news about this firetv. seems like wall street is putting a little bit more of a bid under the stock. >> they feel like amazons that a strategy to get the content on the tv.

they're in the mix with google and roku and netflix. they view that as positive. >> they've got a busy morning as well, as have gm and we. day is not over by a a long shot. we have scott wapner coming up. >> good start to the quarter, carl. we're talking about this move in yields as well. very top of the 9, you said we got to watch the ten-year. >> the adp number and jobs number. >> everybody focus on that. welcome to the "halftime show." high frequency frenzy. with the industry under fire, another defender speaks out on "the half". why he says hft is good for you. record run. why one of our guests says stocks will surge again this year and how you should play it. prime time, as amazon makes a splash in new york today, we debate whether the stock is set to rip or dip. we're following day two of gm's ceo mary barra in the hot seat on capitol hill.