"squawk box" begins right now. good morning, everybody. welcome to "squawk box." i'm becky quick along with joe kernen and andrew ross sorkin. target, the retailer is set to post quarterly results before the bell. analysts are looking for earnings of 71 cents a share on revenue of $17 billion. this release comes a day after the retailer announced it fired the president of its canadian operations and two weeks after the abrupt departure of its ceo. we'll bring you the numbers as soon as it hits the tape. later today, the first on cnbc interview with the company's interim boss. minutes from the last fed meeting will be released at 2:00 eastern time today. investors will be looking for details or hints about the fomc's post bond buying strategy. we have block rock chairman

larry fink talking about the fed and the markets yesterday. >> the federal reserve is actually causing more disorientation in the marketplace, because they're purchasing more than is being created by the treasury. and so i think they should get it over with, move on. i don't think it will be disruptive to the marketplace. since they started talking about tapering, rates are down 75 basis points. that tells me they have not been aggressive enough. >> that's very interesting. beyond the minutes we'll be speaking to the fed, we'll be hear something other things this afternoon as joe mention. we do have new york fed president bill dudley. that's coming up at 10:00 eastern time. later this morning, janet yellen will deliver the ny kruu commencement address at yankee

stadium. stanley fischer's nomination to be vice chairman of the fed has cleared a key procedural hurdle. fischer is widely expected to win confirmation. andrew. news this morning about deals. a new study facing hostile m&a activity has reached a seven-year high. research firm dealogic saying year-to-year hostile activity now standing at more than $273 billion. that number was only about $71 billion. the very active m&a market is of course leading some to worry. worrying about whether a bubble could be forming. also in m&a news, google is looking to go an a foreign shopping spree. the company detailing international expansion plans in response to recent questions from the nec. they are setting aside 20

billion today's $30 billion for acquisition of foreign companies. the company adds it could spend about $4 billion buying offices and data centers outside the country. the other question, joe, is what you don't know what these documents is how tax related that investment might be. meaning is that money already offshore, therefore, we're deciding we're keeping it offshore and that's why we're going to make those acquisiti acquisitions. we heard cisco and other tech companies talk about that. >> we never did the postmortem one on pfizer. may 26th. still watching my clock. wouldn't it remind you of texas saying to toyota, no, don't come here. >> it's a peculiar thing. >> they opted, though, they opted for the worry about losing jobs overrode $1 billion of extra tax revenue. >> unclear it's actually the uk. it may be the price. >> it might be the bill ackman

entrenched management of astrazeneca. could be. the only time that really happened was with alligan. >> the only time in history. >> larry fink -- >> that was interesting. >> he's saying they should get out of qe entirely. >> they haven't been tapering fast enough. >> what i didn't realize, an interesting point, they're buying more than it being printed. >> yes. we're down 75 basis points. they should have removed it more quickly. then i heard, you know, esther is a name you don't hear a lot. >> biblical name. >> my great grandmother is esther. >> it's i beautiful biblical name. >> i had two great grandmothers, esther and a ruth.

>> i'm long esther. >> five years that will be a popular name? >> have you seen some of the most popular names they've come up with? people don't think that much. britney spears, jaden or something. >> one of my little guys, we have a max. >> you have a lot of maxes right now? >> i love max. but, yeah, everybody is a max. >> i don't know any other maxes. >> our class there's three maxes. >> john kerry talks about max-isms. >> which is class to marxisms. >> if we're wrong about climate change, what difference does it make, said john kerry. let's see. it was funny. we can spend trillions of dollars trying to do something we can't really do anything about that slows economic growth, hurts job production,

less economic opportunity for graduates and hurt had s the world's poor. >> he didn't say that. >> that's a quote. that's not bad if we spend trillions of dollars? it's always funny. you were right in the middle of this. goldman sachs. >> i apologize. >> no, no. i want to tell everybody what goldman sachs is doing. we talked about this before, six or eight months ago now. goldman sachs starting a formal process to sell its metals warehousing business. goldman bought the unit for $550 million four years ago. the move to shed the operation follows regulatory and political pressure. you might recall a "wall street journal" front-page story about aluminum. >> a little more class with

aluminum. >> you give me grief for -- what is it that i say? >> i can't pronounce anything. >> vigilante. >> you're going to go with aluminum? >> goldman is getting out of the business. jpmorgan is getting out of that business. everybody is going to try to get out of that business. >> this is from the midwest. of course i say aunt. >> what about vase. you gave your awn the a flower vase. >> a vase. >> you'd say aunt a flower vase? >> aunt, yes. >> that is snooty. >> is that snooty? >> i'm reading "the new york post." i can't feel that snooty. >> the shoe fits. citigroup wants to increase its market share in the mortgage market. the ceo of city mortgage says the firm could focus on buying home loans that other firms have made. other lenders make. she says that the bank will be

extremely careful about the quality of the loans that will make. speaking of housing, the head of the mortgage bankers association will join us first on "squawk" at 6:50 eastern with the latest weekly mortgage application data and more of these -- what would i call it? our cast of characters that come on all talking about housing being the most important thing to watch. >> the crazy thing is, with rates being so low, you wonder where the housing market would be if rates climbed to 3.5%, 4%? >> people like paulson say people see rates going up, i better get it now. >> there were other people who said it was an inventory issue. >> other people say there are cash buyers, investment buyers are crowding out people who want to live there. >> it rose the prices too

quickly. speaking of that business, los reported. lowe's reported. the home improfit retail reported 61 cents a share, a penny above but unlike home depot which was a penny below, they beat expectations. sales just like home depot were below statements. intuit posting better-than-expected earnings after the close on strong demand for its tax prep software. what did geithner use? >> turbo tax. >> is that ab intuit product? >> that's what i think of when i say intuit. >> he was the treasury secretary. he messed up his taxes. that should have been a clue. that might have raised a few red flags. >> only because he's the only

treasury secretary -- >> who did his own taxes. >> who's frankly poor enough to do his own taxes using turbo tax, probably in recent history. >> that to me tells me we have too complicated of a tax code. >> i think there are also question questions. he was in the imf. he was out of the country, moving back to the country. >> if you have someone come in who has all this experience in the private sector succeeding, why would you want him running american business? >> there's a story today -- >> like a paulson, a robert rubin? >> you think it's a bad idea? >> no. those are the guys you want. >> do you see who's becoming success if the in the private secretarier? did you see the bernanke story? >> yes, it's in "the new york times." how did i miss it.

>> private sector guy, he's making a lot of money doing his speeches as you would imagine. he did this dinner where david tepper says, he gave out all this stuff, i didn't realize what he was saying at the time so i didn't do a great trade. >> i heard this. he misinterpreted it. >> for bernanke to make money right now -- >> that's fine. >> totally fine. >> the dollars that he's earning now are worth half of what they were before he took over. where is that picture? you did not show me that -- >> i showed you the picture of katy perry and madonna. >> was that a post or the "daily news"? >> in "the new york post." >> i can't find it. >> i will share it with you. >> you did not point out "the new york times" piece on bernanke first thing in the morning but you felt it

necessary to point this piece out. show the camera. >> we were just noticing. >> this is a business network. >> you don't mention to me the bernanke piece and you say, did you check this out, joe? >> these women are unbelievable entrepreneurs. >> they are. >> is that katy perry and -- >> madonna. >> that's cool. >> did they kiss? >> i don't know. i don't know. >> who was it that -- britney spears and madonna did the kiss first. >> katy perry has the "i kissed a girl" song. >> i have a selfie with her, too. not a selfie. someone took it. she's draped all over me. it's embarrassing for her. following up on the results of super tuesday voting. john harwood joins us right now from washington.

>> what? holy cow, two days a in row, wow! >> the headline, becky, the tea party as an independent movement is officially out of gas. they lost all the elections yesterday. mitch mcdonnell easily beat his primary opponent, matt beven. >> by 27 points or something. >> if you're the senate minority leader you'd rather not have a primary that gets 35% of the vote. nevertheless, mitch mcconnell won easily. in georgia, the more conservative candidates within the republican party all trailed and the two leaders who go to a runoff in july are david purdue, a businessman, jack kingston, a congressman. that is the result the republicans wanted in george yornl. they got the nominee they wanted in the state of oregon. monica wehbe beat an incumbent.

john boehner easily defeated his tea party challenger. this is what the republican establishment wanted. this is what the chamber of commerce want. they sent out a note, flexing their muscles saying they exerted a significant influence over these outcomes. so republicans are bringing the best gave they've got to attempt to win back the the senate in the fall. >> did this change how john boehner behaves? has this emboldened him? >> that's an interesting question. i don't know the answer. it might encourage him in that direction. maybe it emboldens him to do something on immigration. on the other hand you have eric cantor, his number two in the house who's been saying we have a good thing going. why mess it up, why divide the party? why wake up conservatives and get them to expand the potential that they won't turn out and vote in the fall when we have a potential for a good election.

i'm not sure how that's going to cut. my guess is they will not move on immigration, the one big outstanding question in this congress. >> if congress doesn't move on immigration, that basically means they done the move on anything, right? >> correct. they're not moving on anything else, that's for sure. unless you get unexpected development on minimum wage. one of the things that's been lurking in the background is minimum wage. it's something that republicans in the past when they founded political politically expedient, they've given in. they made a deal with bill clinton on this in 1986. as of now, i think the most likely result is status quo, both sides sort of -- they've

got their weapons and they're going to be firing from here till november. >> when you talk about their weapons, the democrats are going to use minimum wage and inequality and republicans will use the affordable care act? obamacare? >> exactly. democrats have minimum wage. they have income inequality, equal pay for women. we have voting rights, the immigration bill on the republican side they've got obamacare. they've got the general unpopularity of the president who's in the low 40s. they have the benghazi thing. the investigation which fires up a lot of their bass, darrell issa still hammering away at the irs with hearings on the hill. >> memorial day is coming up. >> they do. >> they haven't even talked about this. >> that's more of a bipartisan thing. >> i would hope so. >> this is like fumbling,

bumbling along with every single department has got problems with no one overseeing what's going on. i just happened to see this. did you see emergency room visits are up or at least flat? >> that was supposed to be something that was taken out. >> there's a huge shortage of primary care physicians. so many people are trying to get an appointment because they need a primary care physician. they can't get an appointment, they are going to the emergency room. >> shortage of primary care physicians are something we'll have to deal with in a lot of places. >> do they continue? >> for states as well. a lot of states have scope of practice laws which limit what nurses can do and some of that is likely to change as a result of these pressures. >> you look at what happened at the v.a. and i don't think that these people are evil or trying

to do bad things. they are faced with what it's like with government-run health care where the supply is much lower than the demand for the services. there's no way to make appointments that can't be kept. they're like how are we going to do this? this is welcome to the future of obamacare. welcome to government-run health care. >> well, hold on a second. the v.a.'s had problems for a long time. >> people always used to say look at the way the v.a. runs. look how well that is run. people say it's so much smaller than a single payor system in the whole country. >> it's dealt with the same thing, a lot of veterans coming back recently, too. >> it's very, very -- if you don't take care of those people -- >> there's unique challenges with regard to the fact we have so many people coming back from two wars. it's a problem. it's been a problem for a long

time. it's going to be a front burner issue. >> it looks systemic. >> one point, you said some states would be pushed to loosen up and allow nurses to do more things. what are some of the duties? is this a good thing? because nurses should be allowed to do things like take more blood tests or is this a bad thi thing? >> i think it's a good thing. i was talking to gale wolenski, she said one of the things that has to happen, where they have restrictive laws, that needs to loosen up because we're going to be -- for the reason joe just articulated, we're going to be short of primary care doctors.

>> we go to nurse practitioners. >> there's a lot of things they can do in new york and new jersey that they can't do in texas and mississippi. that's one of the things you'll see pop up in legislatures. >> what did you do to johnny quade? it was 9-4, nationals. >> we were so angry about losing that 1-inning game the night before, we jumped all over that dude. >> he has a 1.85 e.r.a. not equal rights amendment. you had a bumper sticker, e.r.a. now. >> give me the max potential for the reds. i don't know enough about their team this year. >> you know what, we're consistently four games below. when you're rebuilding, you lack at things like our center

fielder who's so great, billy hamilton guy, and fast. >> cost us the game the night before. >> i'm like hillary describing her secretary of state tenure. it was a relay race. i didn't do much but hopefully the team will be better. >> nats can go the different. i can't believe you got that in there. >> i'm working all the way. >> something newsworthy? >> yes. real quick news unrelgted. the former head of the china investment banking unit of jpmorgan was just arrested as part of the sons and daughters. >> oh, you're kidding. >> investigation by the chinese. >> by the chinese.

>> his name is fang fang, he's 48 years old. >> i remember that guy. >> looks like he was involved in this everbright ipo. when we come back from the break, we'll talk more about that. >> is this quid pro quo? are they mad at us now? >> this is part of the sons and daughters investigation. >> with all this other stuff, now that we're calling them spies? >> we'll figure that out when we come back. >> i like fang fang. that's kind of cool, right? >> yes. the fbi's new marijuana policy could be going up in smoke. lowe's reporting just moments ago. and what is target going to say today after getting rid of people? >> i would expect a contingency but who knows.

the fbi's no tolerance policy could be hampering efforts to fight cybercrime. fbi director james comey speaking at the white collar crime institute earlier this week. is that where you learn how to do white collar crime? i didn't know there was a -- is that where the big graduates go right to goldman on an investment bank. >> you go straight there.

>> like the phi beta capa. >> he said finding the best hacker recruits has been a challenge. >> i've got to hire a great work force to keep pace with the criminals. and i'm competing with a lot of better paying private sector entities for those kids. and some of those kids want to smoke weed on the way to the interview with the fbi. we've got to figure out -- we've got to figure out how to deal with that. >> knowing comey, i mean, i give him a carte blanche. he's so good. for ten years i've known him. he's going to be -- he's great. he's like 8 feet tall. congress has authorized the agency to add 2,000 recruits mostly to fight cybercrime. we can't find anyone that knows about computers that doesn't get high, basically, i think they're saying. if you smoked pot in the last

three years -- i didn't think you could ever have smoked pot. they're trying to a memend the policy. >> i think i can apply now. obviously i never inhaled or exhaled, kids. ones that could be watching. is this me or you? >> i believe it is becky. >> this is an interesting story. a middle school in rhode island has canceled its honors night. school administrators are citing the exclusive nature of the annual event. >> i'm totally with this. totally agree with this. >> instead of the traditional celebration, students will be honored during team-based ceremonies. it will afford us the opportunity to celebrate the individual and collective success of all students and their effort. >> yes, thank you. >> their progress and

excellence. >> you want to give people who are working harder and studying more, you want to give them different grades than other people? you don't want everyone to feel good about themselves and be equal? >> however are you going to talk over that strong man. >> you talk the talk and walk the walk but when push comes to shove, you want to make people different and grade them -- >> meritocracy. it's a word. >> what a concept. >> when i was talking about goldman sachs i was channeling occupy wall street idiot. i was not saying -- >> where are you on this? you're okay with this? >> no, i'm not okay with this. go to harvard sometime and say, listen, all you people that got as on that paper and all you paper that got cs, does it really matter, you're all going to get bs. see if these kids don't understand about earned success. >> "c" students might be okay with that. >> fairness is when you get rewarded for what you've earned.

>> i agree. >> not fair outcome. >> on this i really agree. >> can you imagine this? look what's been happening with the commencement speeches. even the guy from berkeley couldn't come here and he got yelled at. >> who? >> there was a guy that was supposed to come from berkeley. >> the guy you were talking about yesterday. >> no, no. there was a guy that was supposed to speak. he used some force out in berkeley so that the kids at the college back here on the east coast, even wouldn't let him come. condi rice, not letting her come. >> that was rutgers. >> that was rutgers. you're back to milton friedman going there is all you've got at this point. >> i can't believe people wouldn't want to hear -- >> al hersey. >> can i go back to the honors thing again? i had a memory of my -- >> if they had done this to you after all your honors -- >> i had an experience in first

grade, mrs. ball's class -- >> mrs. who? >> her name was mrs. ball. if you were a great student you would wear an "r." i never got one. it always bugged me. >> probably why you've worked as hard as you have. >> i think that was a tough year because of it. >> maybe i would have wanted to feel more inclusive at the time. >> just reading that is so pc. >> that's why you work as hard as you do now. >> because i never got the "r" in first grade. mrs. ball, thank you, for inspiring me. >> more fed speak on the way when we come back. how will it impact today's market action? we'll talk about that right after this. and yet, there's someone around the office who hasn't had a performance review in a while. someone whose poor performance is slowing down the entire organization.

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good morning. welcome back to "squawk box" here on cnbc. i'm janet yellenhere with becky with andrew ross sorkin. i'm joe kernen. >> the berkeley chancellor got canceled because in 2011 he used force to try to get occupy wall street out of there. hear ali hersey had to cancel and christine lagarde was supposed to go to smith college. what did she do? >> they were attacking the imf for being a corrupt system.

>> a what? >> a corrupt system that fuels the oppression and abuse of women worldwide. >> christine put out a speech literally this week about empowering women which included all these suggestions on how to take women into positions of leadership to help the global economy. >> horowitz said they can use inequality of pay for women. anyway -- >> don't do that. >> not anymore. >> all right. >> let's not go there. >> all right, all right. in the headlines this morning, the former head -- you have to talk about this. the former head of china investment banking at jpmorgan has reportedly been arrested in hong kong by that territory's anti-corruption agency, fang fang. >> that's his name, fang fang. do you name fang fang. >> i did not work with fang fang. >> were you aware of him as being a big rainmaker? china for the company.

>> he came after i left. >> he left in march by the way. he's been a focus of this bribery investigation into the u.s. into whether jpmorgan's so-called sons and daughters hiring program violated the foreign corrupt practices act. it's like a -- it's hard to, you know -- it's hard to pin that on them because the people that are probably the most qualified candidates just happen to be the sons and daughters of -- >> thus far, fang fang's e-mails, of all the e-mails that come out, it's his e-mails that seem to be the most direct, where he's telling people we should be doing this, it's a good program. the ceo of everbright had come to him, tried to get his son or daughter a role at the company. that's what's going on here. now we're not even talking about the u.s. the chinese as part of their -- >> that's what i'm saying. you're accusing us of the

cyberstuff. you don't think so? >> no. i think this is part of the larger anti-bribery program going on in china, i think. we will see. >> after all the nsa stuff, i don't know where you are on that right now, initially i think you see that he's a comic book hero. edward snowden at this point. do you think it's -- >> i have very mixed views about this whole situation. >> do you think it's a cynical view, us talking about spying too much when we have the whole nsa situation? >> that's what they're thinking. that's okay. >> you're taking cisco equipment and putting bugs in it and you're mad at us? okay. the power of the fed's word was unfolding on tuesday, markets tumbled after charles plosser,

philadelphia fed president said the fed may need to raise rates sooner rather than later. here with us now, rebecca patterson. this is not true. says ever bullish ed keon. you've been less bullish the last five or six times you've been on. you've been flattish. >> i think we get about a 10% return. >> i think you thought we got up to where we were, we may end the year where we are. >> i think you get about 10% this year. >> are you ever bullish? >> i was very bullish last year. >> are you the ever bullish ed keon? >> no. >> portfolio manager of quantitative management associates. we'll start with you. larry fink said we're down 75 basis points since they annou e announced tapering. they should be going much faster. >> the economic data in the u.s. remains mixed.

the u.s. economy is improving but with mixed data, i think they're right to move cautiously. at the same time, we made a small asset allocation shift last week. one of the most important parts behind the shift was the hook, the turn in u.s. inflation. inflation is still very low. i'm not raising an alarm bell over inflation. the fact that core wages are growing 2.5% annually. cpi has turned the corner, ppi has turned the corner. >> what was wage growth before, 2.5% now. >> historically it averages about 4%, 4.5%. we're still low. the point is that the trend has changed. >> we're coming from a viewpoint, go slow getting out because you believe it was a positive ar at least neutral for the economy. larry funk and others at this point, at best think of it as neutr neutral qe. >> right.

>> you should be getting out faster if it's actually hurting us. >> i think one of the comments we got from the fed yesterday was suggesting that, you know, they said 2% isn't our ceiling on inflation, i.e., we wouldn't mind if inflation overshoots that level for some period as long as we believe we can keep it under control. if the fed is saying it might be okay with inflation rising above that 2% normal threshold or average, we get a slow fed, we're moving further in the cycle, we made a move to get neutral again on commodities. we have started. this is just dipping a toe in the water. historically, once you get that inflation trend, it continues. it doesn't just stop in a month or two. if it continues, i'm saying we're early. we're just starting. but you want to start thinking about shifting some of your small cap into large cap stocks. >> i'll ask you something similar to that, ed. there's two schools of thought on that. the low volume and weakness many

some sectors, that is showing you that the entire market is too high and it's going to come down to meet it. then there's the other group that says the correction we're waiting for has occurred in these extended sectors. now we've already had a correction. which is it? >> i'm more in the second camp. >> it's already happened, it's healthy? >> the things that went down were the high flyers. think about the times where the market has one secretarier that went down and the rest has held in there. everybody was crowding into a small number of already very expensive names. the opposite has happened this time. the broad market has held in pretty well. some of the high flyers pulled back a little bit. to me that's a normal, healthy part of market. >> even though the volume is weak and we're having the small gains we're getting are harder and harder to come by. we're really not up at all for the year. >> earnings up 5.5% in the first quarter. the expectations for the year rising a little bit. >> that's good. >> despite the fact that gdp was

zero in the first quarter, corporations still making money. expectations up to 9% growth, 8% just a short time ago. i think the fundamentals are good. valuations are reasonable. i think we'll get returns in the market that's driven by earnings growth. >> we have dennis gartman come on later. i saw him earlier. he's looking for -- he's going to take the other side, i think. of course he switches pretty quick. this was monday. >> that's what makes a mark. >> the ever bullish -- >> he is not ever bullish. >> that's what it said. >> can i put you in a box, the ever shopping? >> no, no. >> i left a macy's thing for you. you immediately noticed this thing. >> it was in front of my little spot. like a clue that i needed a new outfit or something. you were jonesing for it. >> i just opened that, andrew. wow!

there's underwear sale. you'd look good in those. tell terry, terry lundgren. >> we have the weekly mortgage application numbers coming direct from the source, the head of the mortgage bankers association will be joining us with the breaking news in just a few minutes. "squawk box" will be right back.

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welcome back, everybody. we've been watching the u.s.

equity futures this morning. they are indicated higher. the dow is looking like it would open up by about 26 points. s&p futures up by 1.5 points, the nasdaq up just over 6 points. this comes after a day of declines. last night we were watching and once again, you did see significant declines, the dow down by 137 points. major averages posted the first decline in three days. we'll see what happens later this morning. >> what were you doing just then? what was that? >> flying on a trapeze. >> flying on a trapeze. >> the guy in my ear. >> i thought that was an arsenio hall thing. >> i forgot about that. that's years ago when he did that. is he still on? >> he's back on. >> he's back on now. >> good for him. coming up, we'll talk about fresh data on the state of the housing market, we have the mortgage application numbers right after the break. get you more on arsenio as well. then target, ahead of the company's quarterly results.

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e financial noise financial noise financial noise financial noise

welcome back to "squawk box." tell us the numbers.

>> mortgage applications week over week are up about 1%. but behind that are two key variables. one is purchases are actually down about 4% week over week. year over year purchases are down 12%. >> wow. is it refinancing? >> refinancing has picked up a bit. we're seeing a rally. >> down 12% year-over-year? >> first-time home buyers aren't coming into the market at the rate we would expect. that's traded to a whole lot of things. unemployment for first-time home buyers is higher, student loan debt is very high. there's nothing kick starting the low end of the market. >> what's going on in terms of the -- tell us about the pricing bans if you will in terms of what is selling and what isn't.

just look at mortgage rates, for example. jumbo rates are normally higher for conventional rates. jumbo rates are lower. on to th mark. all these variables the low end is down the high end is up. >> i have a more philosophical question for you. away from these numbers. it relates to tim geithner. who we had on a week ago. a big debate about the rescue efforts and what happened five years ago but actually how it's impacting homeownership today. i'm wondering the conversation even about what's happening with the gses now, if there was something he should have done then or we should be doing now

that we're not that would have changed the outcome? >> with full disclosure, as a member of the administration, when you are inventing a whole series of programs in the middle of the worst housing collapse since the depression, you are really inventing things that never existed before and the risk you run any time especially with so much federal money behind that is, you don't want to switch in a whole bunch of families that don't need that solution. i think at the end of the day, you had to contract. there is more regulation that had to be implemented. you had to protect families who can stay in their homes with every possible offer. but you didn't want to sort of help those who didn't need that. >> sustainable. >> there are people still say why are we here at 2% five, six years afterwards? because the fed orchestrated a bailout by keeping rates as low as they are. markets on the other side, people say these markets needed to clear.

you needed to flush out all of this stuff. should we have done more? remember japan didn't flush everything out. >> i know, you come from the outside. but on the other side. >> it should clear. others say we should have done more. >> sort of living where he is now. he is in the administration, he thinks we should do more. >> i don't. i don't. >> do you do too much? >> it's a delicate balance. look, i think if the fed hadn't intervened with quantitative easing. if they hasn't brought back most of the gses, there would have been no lead you've if market. we see recovery in a lot of markets. >> when the government started making it easier and raise homeownership, minorities raise homeownership above 70%, didn't that, wasn't that a part of the problem? >> well, without a question. the housing bubble it was a created is clear and they do what they should do on their own. >> i think they are doing that, to some degree.

there is always a fannie and freddie doing that for us. >> you should be able to find affordable loans and that the government can do that without getting into risky loans along the way. the problem is they were pushing into issues where you have 5%. >> you need an address or a job. >> it's a cost effective way to do more on the mortgage. ion. >> a lot of people are current on their mortgage. >> they didn't buy new furnture to pay her mortgages. you might as well get more furniture. >> americans could with a little help stay in their homes. >> think about some people shouldn't be homeless. >> we got to run. >> thank you. we appreciate you being here live and giving us the numbers live as well. >> this was great. >> come back. we appreciate it. when you come back, we'll have a preview of what could be the earnings report of the morning. we will check out changes and challenges for target and dennis gart mer of gartman letter is

today's guest host. "squawk box" will be right back. approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. when folks think about wthey think salmon and energy. but the energy bp produces up here creates something else as well: jobs all over america. engineering and innovation jobs. advanced safety systems & technology. shipping and manufacturing. across the united states, bp supports more than a quarter million jobs.

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good morning, everybody. i'm becky quick along with joe kerr fan and an drew ross sorkin. dow futures are indicated to open up 21 points, s&p futures up a point. the fax up 4, joe the ten year looked like it could potentially breach 2.5%. today that yield is sitting at 2.75%. target is set to report quarterly results before the bell. an a lists are looking for earnings of 71 cents a share. revenue is expected to be $17 billion. target's interim ceo will be on "street signs" later today. earnings falling below expectation, sales missing the . it was bad weather that kept customers out of the stores.

similar to what we heard from home depot yesterday. the home improvement chain full year guidance is above the current street consensus. that stock is indicated higher up by about 2% t. retail industry pencer will be joining us in just about 15 minutes and in other corporate news, the former head of china investment banking at j.p. morgan has reportedly been arrested in hong kong by the territory's anti-corruption agency. bang bang, left the bank in march. he has been the focus of a u.s. banking operation whether they violated the u.s. foreign corrupt practices act. >> i'm surprised that would be a criminal violation in thoin. whatever this is, it would be a civil violation in the united states. you wouldn't go to jail for this? >> although, the new leadership in china has been very, very, trying to really root out. >> in chicago you become mayor. >> then governor. >> no question. >> then you'd go to jail.

>> fortunately or unfortunately for him, the e-mails he wrote are the ugliest of all the stuff. it's the worst formula. >> the worst one is the ceo of everbright, wants his kid to be hired. he says, we should hire this kid. it will help us get the business. that's basically. >> mayor daily said once if you can't help your kid, who can you help? >> yeah. >> that was the first one. >> the real mayor daily. >> family first. >> i agree. the fed is also if focus again today, minutes from the last fmoc meeting released at 2:00 p.m. eastern, a number of the species are on the docket. investors continue to look for hints about the fmoc's post-bond buying strategy and black rock chairman larry fink made interesting comments yesterday about the central bank and the markets. >> i think it's fair to say that kiwi has done very little in

terms of helping the overall economy. it's certainly stabilized the capital markets. capital has been a huge beneficiary of this. plaque rock has benefitted from this. all investors has benefitted from qe. so i'm not trying to suggest it wasn't for not. but in terms of creating jobs for accelerating the economy, i think the last quantitative easing process probably had very little impact on the overall economy. >> let's get to our guest hosts for the next two hours. gold guru. you are more than that. >> i don't like any of these monikers. dennis gartner is founder and editor, publisher of "the gartman letter"als to join us on set, jim o'shaughnessy from chairman and ceo of

o'shaughnessy asset management. welcome to "squawk." . >> you can tell by the grey hair and lack thereof we have been around a long time. >> when i first started an "squawk," that was good stuff. >> yeah, you just got here. we all need to embrace what we have. >> thank god for small things. >> whether bought off the rack or whether it's us. get you goes arguing, maybe. i watched you. >> what was i doing? >> i don't know, why were you doing that? >> i think i was watching it because you were on. >> scary thought you said three things. in a bull market, you are either really bullish. >> you are neutral right now. >> you take the side that the underlying technic also have deteriorated in terms of obviously a few stocks moving higher to the point on low

volume. >> it bats me as sold as i am and being around as old as i have. this remind me of what happened in '73 and '74. >> those are words no one should say outside. >> why? >> because the stocks went from 60 to three. the best companies in the world. >> yes, they did. >> we stayed there until 1982. we fell from october of '74 when the dow traded 1004. by august of '84, we traded. >> that's where you think we are? >> i hope we are not. we hope we shall. >> it's disconcerting. >> i actually think we are coming off the longest inflation adjusted draw down that we have seen ever. if you look at stocks. >> what do you mean by that? is that food? >> i think it is good because we have a lot of room to go to make it up. if you look at the draw down inflation adjusted for the s&p 500, it peaked in march of 2000

and it didn't end until february of 2009. if you look at the draw downs from the '30s, they were much shorter in duration. so i think that, you know, i guess i'd be in that middle category, bullish. >> not strongly bullish. does volume worry you or do people always say that? . >> generally speaking, you want to avoid them like the playing. they end up turning in horrible results over the last -- >> what's the overall macroline and for the whole market, say, not individual stock? >> yeah, well, we are bottom-up dined of guys. so we look less at the macro. i would defer to you for a view on macro. but when we looked at just the highest traded stocks, those with the most turnover, there

are -- >> it gets you, that's the netflix. >> and the kalsas. all of those stocks you shouldn't go near. >> somebody else ask trade these. >> ma do you do, exactly? >> tesla is a classic example. >> you wouldn't argue it's come down enough? >> no. >> how much more does it have to go? >> i think it's got to go another 50%. >> 50% more? what's the price line? >> we love tesla. they do. >> there is a noise pollution. >> as cool as cool can gentlemen as a company. >> for note annual. >> $24 million market. >> day to day. actually. this guy, they love him. >> yeah, they do. it's got green pantied all over it. >> what do you sell? what do you buy? i am still long koeshlg long

alluminum. long kwoel coal, long alluminum. it's still a bull mampblth i do like coal. nobody else likes coal. i like alluminum. you couldn't talk about into buying alluminum six months ago, people have heard me say this a long time. it's an interesting pneumonnic device. >> like bitcoin? >> i would avoid bitcoin like the playing. one of my friends is a big supporter of bitcoin. the only reason i have any interest in it at all somebody as smart as brad has interest in it. >> you own some? >> never, no, never. >> i thought you toyed around with it? >> i would never own it. it is the harbor of thieves and truck dealers.

i should leave that to others. >> i want to know how much farther we have to go down with equitys? >> like you said, what does that 10%. >> you don't think it's a bear market? i city think it's a bull mark is there what are you saying, we will have a 10% correction at some point? >> anyone can say that. >> they may begin it. >> i think the process began several weeks ago when the nasdaq refused. >> we are in the correction right now? hardly call that. >> when do you arc you you should be buying now? >> not necessarily. >> i think you hit the absolute bottom. if you did, you just got bloody lucky she should avoid that. >> that is disgusting. you will never find the bottom. if you did, you got lucky.

there will be times when you got panic. my pro pensity will be to say, i should tend to buy some. >> let's not use that word. i think there is more selling to come. there is judicious selling to come. >> buffer leave, are you a bottoms up guy. >> yeah, basically, we love stocks with high shareholder value. that's buy back yield plus dividend yield. that's a strategy we were able to test back to the 1930s. >> they're kind of in vogue again. >> yeah, it's beaten -- well, everyone kind of thinks it's a new thing. it svenlt we tested it from the '30s through the 8ed. basically by focusing in on companies like northrup grumman. like marathon petroleum on the buy back side and then companies like at&t and bp.

they also have high shareholder yield, but their high shareholder yield is driven by a much larger dividend. whereas marathon and vi acom class b, super shareholder yield. >> if you were a purist, you would only buy companies that have dividends and the capacity to increase the dividends year over year? because if you buy a fawn dividend stock, you never get anything back. >> basically, you want to buy stocks where they are sending a lot of cash your way. they can do it by buy backs, which is more cash efficient in the u.s. they can do it through dividends. for example, if europe, if you are a global investor, you might want to look at dividends. they don't do buy backs the way we do here. here, you are better at looking at buy back and shareholder yield, because we do a lot of buy backs here. >> jim, thank you. >> thank you. >> i'm worried about next time. you probably look basically the same next time. >> i will.

i look at the picture of my grandfather, i'm 53. he looked the same until he was 90. >> he did? >> i have done this. i looked at the picture of my grandfather. at one time i looked just like him. >> you stablize. >> thank goodness. >> the same pick, too. >> anyway, we will have much more from dennis throughout the show. okay. coming up next, the report of the morning, who should investors expect from target quarterly results? we got retail, we have a rewith us. netflix, netflix wants to conquer university. what that story is all ability when we return as well. .

. checking the futures right now, bounce back again, which is typical of what we've seen. they haven't been extended declines in the last couple weeks. but there have been a couple bad ones like yesterday and like last thursday. then we came back the next day. we are kind of meandering around. speaking of these high flies. this is the one dennis immediately mentioned. >> this is one of the high flyers, netflix, they announced they will be expanding into germany and france the video service is trying to expand an international following, could eventually surpass a nuance. as of the end of the first quarter, netflix has 48 million subscribers, including nearly 13

million outside the country. you can look at that stock trading at $376 a share down from close to 480. >> a little below that maybe. >> now for the first time it is actually possibly short. >> how much farther do you think it has to go? >> a long way. >> what does a long way look like? >> a long way. >> now, that's interesting, were you short that or would you go long time warner, which owns hbo and makes "the profits"? . >> just seeing netflix over the last year-and-a-half, it's fallen, it's broken, it's rallied. the volume is light. somebody like myself, our propensity would be to sell that. >> the earning story of the morning is the retailer target. take a look at the wide range for analyst's estimates. they are looking at 57 cents at the low end. the average estimate of 71 cents a share is 14% below a quarter a

kweerg. can target get back its momentum or did it lose some customers for good after that data breach? joining us right now. contributor jan nipen the ceo of jay nipen world wide. jan, you have been watching this company quite a while. aid came the additional fuse the ceo of the canadian operations was removed, was fired for bringing someone else new there. what do you think about this company overall at this point? >> i have been watching this company most of my life, actually, in '06, i used to call them the best retailer in the world. now i call costco the best retailer in the world. i think target has fallen along the way. as far as the canadien operation i think the cade yen operation was set up to fail by what they paid into canada. had it gone absolutely perfectly, maybe it would have worked for them. they missed their estimate every quarter sense they went into canada. this one won't be for the

different. you don't fire the president of the place when it's getting better i think the p fresh remodels were a really bad idea. it put them more wage in competition with pal part. that was on greg's watch. i think the red card program is about to fade out as far as driving traffic through the store. it was a up with of his programs. i think the data breach was horrific. it was the largest data breach if retail history. so ten canada was this huge diluted acquisition. i can't imagine they didn't get rid of him sooner. >> although, having said all of that, there have been a lot of disappointments. what do you think about what the company can do from here? >> well, number one, i think it's hard to hire the next guy to run i..en in of us can think who that guy would be. i think that's a problem. even in canada, if they get a great guy. i don't think there was anything wrong with the guy that was running canada. i don't know who they've put in to make it run better.

they made mistakes in sourceing and customer. how do you fix those things if are you the few guy. >> it's logistics. the guy there is someone who is expert on sourceing and logistics and getting the stuff in the right place. >> that helps. >> it's hard to make a good first impression the second time. i think they've hurt themselves with that customer there. they've given wal-mart time to get ready for them. >> listening to cnpc, all i heard about is this company and canada, and i'm wondering, what's the problem? you say is it a matter they simply paid too much to get in or is it a canadien problem? this is something that has bothered me. >> well, they got releases from the hudson bay corporation. the day they announced it, i called the cfo at hudson and say, i'm sorry, did i read the right, was this the greatest deal on retailing? he said, from our side it was. i think they paid too much to get if. since they have been there, they

made these mistake zpls ba kind of mistakes can you make in canada that you can't in the united states? >> the hats with the flaps on them. >> exactly the problem they had. they assumed that was true and that's not true. the canadiens, they assumed the cade yens wanted something different. >> i don't have those stereotypical images. i was just kicked. apparently target does. i think cade yens are the finest people on the planet. most of them. >> i do, too. they started sourceing more into canada tan the u.s. the cade yen dmer crossing the border to shop at target all the time went back and said, this wasn't the target i was expecting. >> i don't like the montreal cade yens. i can tell you. that we will take care of them tonight. >> i think they had logistics issues, like you said, they had out of stocks more than they should have been. that's been a big problem in the target in the united states as well. >> what about today's earnings announcement? how much of the bad news has

been baked in. ba do you expect on these earnings released today, does it matter? >> no. you don't fire the guy out of canada if you expect a good number out of canada, i think it's in the guidance, all these numbers you see, nooeb nobody knew how to make this guess. if they get through 68 cents, we would all be thrilled. but i don't think it matters because i think q1 is just going to be one more thing to report. what everybody is going to say is, bhaps going forward and who will run the place and can they fix it? and i am in the camp of wow, there was one point if time i thought they could to fix it. >> you now i it's unfixable? 1234r wal-mart is doing a better job. amazon is out there with all the same product. wal-mart will do the channel retailing. target is behind the 8-ball. >> i understand the discussion. target is big enough even if they did overpay, it's a big enough company, they should have been able to go up there and get a food hold in canada if they

weren't stupid about how they ran the store. >> it was inventory, they didn't know what to put in the store? >> clearly, that's one of the mistakes. i think people went to the stores and they were disappointed. >> i've always loved target. >> they can buy online there, too. >> it's not that it's not unfixable. can you get your display better and have better product itself in the apparel business? >> they don't have great merchant prints, somebody that can cap cure the way they did, you don't think it's doable all over again? >> no, i don't think they k. so if they do get mickey to run the place. >> i am told the rangers game is tomorrow night. they're coming back here to madison square. i think it's an opportunity. i want to be a optimist. >> i had plans to watch it tonight. >> sorry. >> el with i guess, it's not going to happen. >> stick around, we'll be right back.

.

. coming up, the auto bailout. we are rolling up on the fifth year of gm's bankruptcy, the president's former auto czar on the road to recovery and the gm

recall crisis. we got all that and a lot more when we return. ameriprise asked people a simple question: . y

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box," everyone, in our headlines, tiffany is among the names issuing reports this morning. tiffany down 8 cents, fell 8 cents short of stills. it came in with earnings of 77 cents a share. retailers saw it come if above expectations. it is helping the stock in the free market trading. it's up by 6.5%. analysts are looking for earnings of 71 cents a share. of course, that is a wide range that comes into that 71 cents, it's unclear. revenue is up about $17 billion is expected. the street is looking for more information on the effects of that december data breach. with le have those numbers when they are out, we expect them around 8:00 this morning. no economic reports, but plenty

fed-related news on the calendar the federal banks will release the policy at 2:00 p.m. eastern time, janet yellin will make a public appearance if new york giving the commencement address at nyu. >> a quick report to add to those headlines. we will go and talk about this. as we approach xm's bankruptcy and ultimately the auto pailout, brookeings is assessing the state of manufacturing on the road to recovery, phil lebeau is in washington. he joins us with a special guest. phil. >> reporter: thank you very much, an druchl i am joined by steve radner, commonly referred to as the auto czar. you were the person leading president obama's auto task force. you will be talking at the event today, five years after the bailout of general motors and chrysler. when you look back on this, do you look back and say, just about as well as could be in terms of how well we did? they're not perfect, we did

about as well as we could be? >> i'm sure there will be people telling us we did things differently. as i look at their success in selling cars and if making profits and in hiring more workers, yeah, i think we got it about as right as you could under that circumstance. >> you have been following water going on with general motors right now, there are plenty of questions where the auto task force was in terms of due diligence with general motors with regards to the ignition switch and what was hatching at general motors? did you have any idea about the ignition switch problems when you guys were doing the bailout and structuring the bankruptcy? >> no, absolutely not. we are not for instance forensic account ants. we are physical guys. we know ma the management knows and cooss to tell us. nobody knew about it. nor did we know or could we have. >> critics will say you should have done the due diligence.

if you were going in doing any other deal with any other company, you wouldn't same ply say, management says everything is okay, so we, therefore, think it's okay? >> certainly if we had more time or in the private sector, there have been plenty of examples in the history where private equity guys made investments and found out stuff later they wish they had known before. when people choose to hide things, even the most dill jent people can't find it. >> looking at ma mary barra is doing, how are your assessments? >> i think she is handling it very well. i wish we all would know quicker of who knew what went. i think the process is complicated. it involves juggling a lot of different factors. i think ken fine berg i worked -- ken feinberg is a reasonable guy. >> should they be compensateing victims before things that happened before the bankruptcy? >> i think that's a complicated question, honestly.

i don't have an answer for you. the question is, where does it stop? there are many ought people. >> exactly. >> that have claims against old gm. bankruptcy is unfortunately a part of our way of doing business. there have been many other examples if bankrupt companies like asbestos. we are deserveing victims. we are not deserveing to get everything they deserve to get. we have to see how this unfolds. >> you think a judge comes out and says, look, you can't compensate some victims and decides your events didn't merit compensation as opposed to these other folks? >> that's one of the complicated things they will have to balance. the bun thing i'm sure of, it was late gaited to the supreme court, chrysler was done in compliance with the law. >> they have added 22,000 jobs since 2009, gow to some chrysler plants. they're in full capacity. they can't build them any faster. did you even envision that five years ago that it would go the well with fiat and its ownership

with chrysler? >> honest to god i didn't. we thought sergio was the capable manager. we would not have saved chrysler if we had someone like chrysler step in as the ceo. from the day i mettle, i thought he was an impressive ceo. here's an important lesson, how one guy from one huge company can make a huge difference. that's what sergio did. >> you told me before we went on, this was the process of fiat and chrysler coming together, it was like a dating process. you knew almost immediately. >> it was a day if process. people would set up a mind day. i get calls from bankers when i took the job saying you got to meet the guy. i didn't know who he was. he was trying to find me. he knew chrysler was a perfect fit for fiat. finally, we came together and got married. >> given the fact we have chrysler running at fear xavths you got ford and general motors

running on three shifts for most of tore claims. is it time for the auto makers to start adding more lines, more plants, or do we run the risk you have too much capacity here in the u.s.? >> i think one of the queens of the auto rescue, which i confess we didn't fully anticipate was the way of taking so much capacity out of manufacturing here would eliminate the incentives and make pricing much firmer. so, sure we should add capacity overtime. i hope the auto makers will add it in the u.s. you want to run this industry. it's a high fixed cost industry as you know. you want to keep that pricing firm so the profits stay there. >> yet you have countries like members can, where auto makers are adding them constantly if terms of capacity. >> this is one of the things we will talk about today. because we saved two great american companies and derivatively we helped save ford. but how many jobs we saved is a different question. we are in a world wide competition for jobs in this country and mexico at a quarter of the labor costs provides

workers who are every bit as good as the american workers. >> steve right there. the auto czar, five years after general motors and chrysler were bailed out and went through government bankruptcy. guys, back to you. >> phil, thank you. appreciate that, very, very much. >> a lot of fun. >> thank your very special guest. >> up next the ceo jonathan bush out with a book on how to fix health care. he will join us. then retail is in focus as what do we decide? target or target? >> it us'd to be target. i think it's back to target now. target was cool, when it was cool it was target. we'll go through the numbers, talk management shakeups at the company in a bit. we'll be right back. ..

they are pricing products at unsustainable levels. a new $84,000 hepatitis c

treatment from gilead costs $85 a pill. the insurance pushes too much of the cost of treatment onto the patients with high co-pays and deductibles for drugs. fittingly, this story will lead us into jonathan, our guest, jonathan bush the chairman and ceo is out with a few book called where does it hurt? an ent (fewer's go ahead to fixing health care, where are you? it just seems better instead of staring into a camera. >> it is, you are a black dot on the wall, with i is not as much fun as the beautiful man. i'm at the imperial headquarters of athena health, which is a fabulous place to be. >> are you in bought town which is like right between being and harvard and m.i.t. so you have a feeder of -- 1234r like athena health, we are barely on the other side of the

tracks. >> jonathan, i have a question about your book when you have been if there. are you so disruptive you have a lot of great ideas, so you should have written a book. by writing the book, does it also make the case for athena health? is it all sort of synergistic? >> well, the synergy, obviously, a lot of these ideas of focusing if on different parts of health care and making them amazing rather than leaveing them all in these giant kind of general stores, that can't, they shouldn't be able to do everything in an amazing way, requires information across a wider range of playerss to be seamlessly checked. some predispose some sort of health care internet. some sort of way this specialized urgent care center can zip what he has done back into the primary care doctor's chart and to the hospital. the patient never shows up there, et cetera. there is the synergy 12k34r you

are very smart. because if you could, i justify a lot of problems. the solution would be athena health. >> that would be a good way to write a book. that doesn't mean it isn't true, there are problems, they do need to be real. >> i think that the health care information neighborhood would be a lot better with a second starbucks, just like all neighborhood. it doesn't have to be athena health. there has to be health care cloud in the marketplace, with i is barely covered in the book. remember, the way athena started is we actually started with a women's health center attempted at a chain of women health centers that dramatically reduced the cost of maternity care in the country by pulling together the hospital, the mid-wife the doctors, the nutritionist into a secretary general experience. but we couldn't pull the information together. so we ended up crashing and burning. now we got examples in the book of people doing that. not all on athena, all of them

should be on athena. >> we heard a story about the hepatitis c treatment is more expensive. that's sort of one instance of things that treat something and some tension can be three times as expevensive and maybe something is a third as much. maybe it does the same thing. but how do we ever really know? >> it's a great example. >> but everybody wants the greatest treatment you can gentlemen maybe not for other people. but for you and your family, you want the best can you do. how can we distinguish? some things are better? >> and they're more expensive. >> i think the problem is health care has a zeechltz we discovered at athen na health a disease that's been through the health care system. it's mostly gone through the best players, it's called urqs, upper right quadrant syndrome. if you define your market too narrowly and get too good at your market, so you are stuck in the upper right quadrant, the only thing can you do to grow is

jack the market on a smaller number of customers that can afford you. big medical centers, are trapped in this upper right quadrant. the book includes ways that companies can redefine tear market. the example we all know is microsoft versus apple. apple wakes up and says, wait ba minute, i don't want to sell computers, i want to sell computing t. ipod and these things break open the market. they're still smaller tan microsoft on labtops, they are way bigger because they redefined the market. this is the kind of thing you needed in health care. dr. oz is a surgeon, wait a minute the real problem is people don't know if they don't sleep, they need sugar, they get diabetes. so he does a media empower. -se one of the crazy ones the book would call for, cast light, disrupting the marketplace the payer marketplace. >> geo will be on later in the 8:00 hour.

geo who runs cast light. >> giovelli cavella. one of the greatestf oall time. >> there is the affordable care act, the obama administration participants lose money, they will tap federal funds to pay back for that. this has been a hot ticket item that politically has been very charged. what do you think about that idea? >> well, the ultimate condition of upper right quadrant position is one player. a lot of this sort of mitigates towards the government waking up as the one player. which would be very sad for all of us. around so every little slip towards that is bad. what the administration should is done, of course, let those payers that are in the connectors choose a wider range of benefits than the government

makes them offer some different people can buy different things. i said before the biggest thing with health care seven how much it costs, it's for all that money, ecan't trick it out and have gourmet drugs. we sand can't say screw tra, make it cheaper. i'd rather die if i have six months to live. we are not allowed to make those choices, as a result the product offerings don't have the product managed to us. they don't have to make themselves better to appeal to us. with which is why it seals so scler ought sosclerotic if you are in the health care system. >> are you not a huge obecame care fan. but you got these companies developing incredible things. it is expensive to develop these things. so things are going -- prices are going to keep going up. some things shouldn't cost as much as they do. now, obamacare has this panel of

people that decide water affordable and water not and what everybody can be able to get. not everybody gets a chancer treatment that extends life six months. it seems like you got to do it some way, is that a part of the afofdable care act, there is this panel of experts that decide what the rest oufs are able get? >> all parts of obamacare, it's an extreme trap that was gotten into in 1958 when we started third party insurance and destroyed the demand curve, the marketplace. the only way you can have these drugs and treatments co come down if costs is if they're shopping for them. if they actually cannot be bought by people who can't afford them in some way. it's the only way anything got cheaper. in the box i talk about a mammogram and corrective surgery. lacics surgery. the mammogram costs have gone up 80%. it's the same dam mammogram.

during the same time until 2012 when i finished the draft of the boork 2013 the cost of lasiks costs $300 an eye to $200 an eye the quality is off the carts, people didn't get itfuls they paid for it themselves, people didn't pay for itfuls it was product managed. you can get it on sale, they fixed out how to deliver it better and better. health care needs more players. >> the catch 22 is that you can't have people that can't afford things which makes the supply and demand fundament apples lower. you can't do that. >> it's like a catch 22. >> the 40 million people that weren't affording it before obamacare him they couldn't afford an all you can buffet of tershary treatments unloimt limited. >> catastrophic somehow. >> the book talks about ways within the context of obamacare to do shopping, to start making

choices to create some demand curve in the health care market, which is what it needs more than anything. >> last question, did you send an autographing copy to david einhorn? >> i am going to my office right now and do that. >> good idea. excellent. >> back to you. >> thank you goes for having me. >> say hello to geo. >> we will. >> what a smart guy. >> he's a smart guy. >> i'm worried david einhorn will take that book and put it in his next presentation. >> i think he will have it next to his toilet. do you remember, have you seen this? >> i know where you are going with that. >> it's not that difficult to figure. i'm slow. >> a little rough. it would be a little rough. >> when we come back the manage:shuffle at target this morning, could more changes be on the way? we'll find out soon. we are expecting to hear from the company if just about ten minutes. ready for the summer and the long drive to the hamptons? well, a few service is ready to revolutionize your trip.

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unbelievable. hormel shares underestimate. spam is facing margins, the low end of the prior forecast, thinks some input costs are more. a lot of pork and other parts of the petition complex have gone. >> what do they put in spam? >> that's a good question. >> pork, isn't it? >> no question. i will not be a spam someone that disparages spam. i won't. i like it. >> good for you. >> tiffany's earnings, stills, try it. did you ever have spam on pizza with pineapple? another one. >> no. >> i'm not opposed to it 12k34r revenue beat the street. intuit had strong demand for tax preparation software. it cut the revenue in profit

outlook. >> i utes mint, which is an application they bought a year or two ago. >> do you use uber chopper? >> i can't comment if i utes uber chopper. it's not uber chopper. it's like it. >> you own your own, you don't need to use the uber. >> i have people that download it? >> you can't be but a hand. of folks. >> hamptons. >> we will talk about it. i think there is a market closer to 500 to a thousand. i do. at the price point. >> alternate every other day having lunch with unof those people, typically 1234r robert frank will do that. >> pretty much. coming up, management shuffling, target may not be going as well as the taken had hoped. are the moves rattling investors, request they improve performance at the big box retail sfer we will find out after the brake. then the ceo of cast light

hoping to shine thelight on medical costs. we will talk about the quarterly report after going public. "squawk" is coming back in just a moment. making new york state number two in the nation in new private sector job creation... with 10 regional development strategies to fit your business needs. and now it's even better because they've introduced startup new york... with the state creating dozens of tax-free zones where businesses pay no taxes for ten years. become the next business to discover the new new york. [ male announcer ] see if your business qualifies.

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target. quarterly results are out. and the recent management shuf him has investors wondering what is next for the company? the recent management changes ahead. shedding a light on health care costs, we speak to the company's ceo after a rough start since going public. >> getting to the hamptons has never been easier. robert frank on a new luxury service that could save you hours of travel time. the final hour of "squawk box" begins right now. ♪ come fly with me ♪ let's fly, let's fly away ♪ if you can use some exotic booze ♪ there's a bar in far far may ♪ >> welcome back to "squawk box" on cnpc him i'm joe kernan along with becky quick and andrew ross sorkin, old blue eye, fonder, publisher. >> publisher of the -- it was a

frank? >> that was frank dino sort of chaven elled frank occasionally. >> from steubenville, ohio. >> i loved dino. >> from steubenville. >> frank is from hoboken. hey, futures are up a little bit. 35 points or so. as far as headlines go, i don't know what they would be except maybe mortgage rates. they're falling to their lowest level to november. flakes i applications to purchase a home fell 3% in the last week. they were on "squawk box" earlier this morning. >> what's selling are the high end. >> when you say high end is that over? >> it's over a half a million dollars. you see everything is upsidedown, the high end selling. unemployment is better for wealthier americans. the interest rates are lower.

you don't have student loan debt piled on to that end of the market. all these variables mean the low end is down the higher end is up. >> all right. let's talk about target's earnings, the company out with those earnings. they came in with 70 cents t. street had been looking for 71 cents. you can also take a look at water been happening. they are now looking for 2014 full year guidance. they are expected adjusted eps of 360 to 397 that compares to the prior guidance of 385 to 419. >> that will be below. the high end is below. was revenue below expectations? >> let's see. we are looking at all earnings per share. it looks like comps. i can tell you, it looks like they came down 0.3%. the estimate was down 2% t. flat

still looking for revenue. >> stock is not doing -- >> i don't know leak it will come to a huge surprise for target shareholders. a lot of this has been telegraphed, particularly with the removal of the canadien operations. >> i don't think i've ever seen a spread that wide on the range of the estimates. >> from 58 to 70 cents. >> unbelievable. >> that is a big spread. just looking at the canadien segment results, that's where a lot of attention will be focused. it looks like they had sales of $393 million. in february, they shot guidance, they expected it to be 1400-to-$500 million. they're coming in lower than estimated. the ebita came in at a loss of $144 million. it was a the loss, they suggested anywhere from $150 to

$170 million. >> i wonder what the u.s. ratio had to do. that's moved a bit in the last two or three months. >> they are also talking about water happened with the traffic there because of the data breach. they saw a huge drop off in public. they say the strongest month since december was march. so it does suggest people are coming back, getle over that data breach t. u.s. top traffic was down a little more than 2%. they had fewer people in the stores. those going were buying more. they did see a 2.1% increase in bask size. joining sus joe fieldman. jeff sonenfield and a cnbc contributor. gentleman, thank you both for being here. joe, why don't we start off talking the actual numbers and the gains for the full year. what do you think? >> yeah, the actual numbers for the quarter are about as

expected. actually the comp was better. same store sales came out much better. it seems they are moving away from that data breach and seeing a return t. guidance for the full year is weak. canada continues to be a problem for them. you know, operationally, there is a lot of issues they need to fix. so i would think that will hurt the stock a little bit today seeing that gains. >> i think the question becomes, who do you think should be running this company. is that the next thing you wait on before you decide what to do with the stock? >> the stock is up, be i the way. >> is it really? maybe because the same store staels sales. the expectations were so low heading into this quarter. i pine, look, i think you do have to kind of wait until you get a new manager. i think they want somebody probably that can do operational leadership. you can always find merchants to help run the company the truth is what they sell is basic. it's a lot of reorder.

what you feed is somebody that can to him in there, clean up the operations and have that background, it may not be a retail person. it may be outs outside the industry 12k3w4r the strongest comp store sales were in hard lines. it was driven by mid single increase in electronics. comps in food and health and beauty were positive. so what does that tell you? >> well, it tells me that the issues, one of the issues that i've remark youed they have is on the merchandising from home and apparel, where you haven't seen that pizzazz and what used to give it that target attitude and chick chick. it hasn't been there a while. operationally, that part of the business needs to be uplifted. >> jeff, when you look at the search for a new manager, what do you think target needs to take into account? >> well, i think they look to

somebody who can stabilize this operation for the future. it might be a little controversial. i don't think they have to have some prince of retail, like mickey drexlers. i thought i heard you talk about earlier on the show. it could be somebody outside of retail. i mean, after all, people were giving ron johnson of late of j.c. penney, thinking he was the wizard of merchandising, way back, you know, web he was at target and it turns out maybe he wasn't the pier dal worker there. in fact, steve jobs was the brilliant genius. you can get people from outside to come in and do it differently. they got several people on this board, in fact, from the world of technology, one missing piece of this puzzle. they got to understand direct marketing. they need a strategy and understand how people can shop online and pick up at the stores the way you can do with the

competition they have enrique castro got fired at google. got fired. before that, he had a celebrated history at dell. the mackenzie guy, early mid-40s, a lot of running room there also you got several people on this board. this is one of those few boards, it's 40% women. mr. reagan four women on the board. >> smart for a retailer. >> well, a fawn retailer, fan taft iric turn around leader, anne kahe a woman who used to be the head of all marketing for coca-cola. the products didn't work in her favor. she did very well. she has been a president and ceo of asia for coca-cola. they have a couple of super

stars that can i can turn to on that board. they hit the ground running. we seen people come in off the board and do well. that can happen here. but they do have to address the unonline capability problems. they have a brand loyalty issue. there has been recent research suggesting 85% of customers from target are loyal to target will come back. >> joe is pad at me for saying it's smart to have women on the board. >> they all shop. not at northrup grumman, put them on target. >> they should be on all boards. >> i'm uncomfortable. not just shopping. >> i think it's smart for a retailer. >> i'm appalled, absolutely. >> sexist. >> it's sex identifiediis sexis. >> only 45% of the boards. >> where people shop a lot.

>> at least target is a little smarter than the average board. >> i expected more from you, becky, that's all. >> canada probably still has remains a vexing issue. these guys, they made mistakes before. they backed out of marshall fields and sold it off to barnes and noble. they backed out of dayton's the original company. here they are 102-years-old, probably 112-years-old. they have been around a while. they've made mistakes. i think they will be able recover from this one. >> joe, what is your rating on the stock? i'm not talking to you. what do you need to see in terms of any information before you would recommend this stock? >> i think you want to see traffic is returning to the store. it's down 2%. you'd like to see it different there. again, that's sort of a good thing. i think you need to see who they

will replace now or put in place as the new manager. the new ceo. >> that would be a big driver for me to help nail it down better. you want to see target, canada stabilizing a bit. it sounds like the ebita was a little better. this is a question of leadership of this country. that itself big issue. >> i think that's the missing story here has been this data brooch was a preventible problem. i think some of the loss of confidence we had in management. it wasn't just canada, it's the middle of last month, of march. we 11ed this thing could have been prevented. in 95. >> five or six other retailers also got hit. they got hit hard for confessing what happened in the middle of the holiday season. >> this is the largest in history. 40 million customers have other credit card information out there. another 70 million. this is the biggest ever. t.j. max, they used to be the biggest.

this has beaten that. this was preventable. it's a failure of management oversight. their technology was there to warn them. they could have intervened and blocked this. they didn't t. canada problem was unknown. >> canada has gotten worse every quarter. >> to the canadien humorist, at least check, the least checked out book is called canada, our friendly neighbor to the forth. >> thank you both. >> i think they should be on all boards. but i've always to the that. >> you never devated from that? >> never. >> castlight. you foe about this? this is one of the most fascinating companies. this company i truly believe could change health care and the cost of health care. >> it's a health care company looking to help customers reduce health care costs. they went public a few months

ago. not bout controversy. we will speak to the ceo next. financial noise .

. welcome back to "squawk box." we got another recall to tell you about at general motors. this is now the second in bun week. it's a recall just this morning. this one involving 218,000 cars.

a chevy aveo models. these are models from 2004 to 2008. the professional fire hazard. for the further details yet made available. if you own one, call the dealer. >> i have an old rule, there is never just one cockroach. whenever there is a problem, there is more. >> yesterday they were suved, crossover suvs that had seatbelt issues. but it is what it is. okay. let's talk about castlight, health on the forefront of the health care transparency. joining us now to talk about transparency is dr. geo cavello. i want geo to explain to joe what castlight does. because i actually believe this company, i can't speak to the stock price. can i speak to if he succeeds,

you talk about free prarks and things, this would change the costs of health care. >> geo it like he mentioned the stock price like it must be too high. >> no, i'm saying. >> did you hear though, impolice it in that. i don't know about the stock price. >> i'm not going to make any comments on the stock price. i do believe if we focus on lowering the cost of health care for the american enterprise and building an iconic company, every steak holder. great, great question. let's start by the fact that the american enterprise is $600 billion a year in health care costs. what do they get? 30% waste. castlight provides transparency on costs, quality and by using a platform that allows to you get incentives to people to do the right care, to design your

benefits and the rules of engage:for your liese in the right way. creating a free market, where finally, you can have an idea where the prices of health care is. >> i just got some bills yesterday. the test a few months ago. i got the bills. >> think about it. you're a consumer of health care. for you, it's like walking into a supermarket, having cereal, having no idea what is in the box, how you will pay for it. >> now they want me to come back every six months for tests. i'm not going to do it. >> he takes all the prices through the insurance companies and he is able to, i don't want to speak for you. he is able to actually tell you the price if advance. >> that's so philosophically, i would want people to be in charge of paying for their own health care, then they would shop. that's why philosophically, i don't see why, if they say, i get it from the government

anyway, i don't care what it costs. philosophicallily, you think obamacare is the way to go. >> he doesn't believe that. >> earlier, you said he likes -- >> you want more and more people to be insured as possible? >> i want as many americans to have affordable health care as possible. i believe that's good for the country. we don't target that. >> obviously -- >> you are a creator of a transparency of price. >> that sounds good. >> people have to be in charge of their own health care. >> you are absolutely correct. >> benefit the state is in charge of health care, that's why you can't have a bill gulp. you say these things and mandating behavioral changes. >> let's get off obamacare for a machine. because obamacare -- >> we will never get off it. >> it targets the uninsured. we are a platform, an inten interplease platform that targets insurancers. it doesn't affect our market very much. although, they put in liss the

cadillac tax. are you familiar with the cadillac tax? if your premium goes up. >> except for unions. they don't have the cadillac tax. >> it's another prime example of this law. go ahead. >> has created an urgent need from employers to lower their cost of care. that's unsustainable the cost of care. so now you are actually right. one thing that's happening is more and more people paying out of pocket. here's the deal, as you say, you are paying out of pocket. you have no idea what you are buying or shopping for. that's where the castlight platform comes in. >> one thing. >> that's how we started the business. >> maybe we should have approached reforming health care from this point instead of doing it with the cart in front of the horse? >> transparency is the building block of every free market. and health care has now been a free market since 1935 when the

employers. >> this is the closest thing to discovering the price of corn. you are trying to discover the price of a mammogram, the price of whatever trucks you are taking. >> we are much more than that. that's the beginning of the building block of our application. >> let's talk about one thing, though, i mentioned the stock in the beginning. the stock is down, 70% lower or about, now it's back up to 17. it had been down as much as that when it was down on wednesday, it was trading 1180. how is that impacting the way you think about the business right now, employees? >> we are laser focused on building an iconic company that is going to change health care and by doing that, every stake holder will be happy. >> did you feel it was overpriced to begin with when it came out? >> we are laser focused on building our business.

our business is going to be an iconic company. we are changing the biggest segment of the american economy, $1.7 trillion. if we code there, everything else works out well for us. >> as a journalist, you consistently ask the questions that need to be asked that never get answered, right? >> thank you. >> right. >> it's a compliment. >> topping so much. >> i think it's great. >> it's a very powerful thing. i'm with you. he's not a socialist. he's a buddhaist. >> coming up, jamey wright diamond speaking to matt lauer. : in retirement, will you outlive your money? uhhh. no, that can't happen. that's the thing, you don't know how long it has to last. everyone has retirement questions. so ameriprise created the exclusive.. confident retirement approach. now you and your ameripise advisor can get the real answers you need. well, knowing gives you confidence.

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. welcome back, everybody. j.p. morgan ceo jamey wright diamond announcing a $100 million investment in detroit over five years. it will boost small business, commercial and residential properties and job training. he announced it earlier on nbc's "today" show. matt asked him what he hopes to accomplish with this investment. >> a very famous clint eastwood commercial run around the super bowl years ago, he says it's halftime in america. he says it's halftime in america and the second half is about to begin. when you look at the second half, you are in the city of detroit, you think the home team can win? >> yeah. i do.

what we see is people dom together. if you were in town, you said, hay, we need business, schools, infrastructure. one of the thing we are investing is to help that real line between mid-town and downtown. we think if people come together with great plans. it will work. look at the school. it's a carter school, 90% of kids graduate and go on to college, that is fabulous. why don't we promote more of those things? >> when beam digest jamey wright dimon is investing money, maybe he's crazy, crazy like a fox? money to be made here? >> we grow the city, create a healthy, vibrant city. if that happens, it's good for us, too. i also look as an american patriot, this is one of the few cities that hasn't had a renaissance. most of the cities have. if it's done right tray can have one here, too. >> what do you think of that?

>> i think it's nice $100 million. it's a great idea. i wish they hadn't plane, where is the 20 billion the reg haters and the shake downs from the government, where did that go? >> that is a good question. >> do we know what they're using the money for? >> i think some when to the homeowners to support the green technology. >> not much. >> and the cell technology. >> so this private company decides to put it into a private sector usage and help detroit out. it's only $100 million. it's nice to have the 19 billion 900,000. >> it's a lot. >> to do sell lar things with. he doesn't. it was a the amount you had to set aside for all the terrible behavior during the financial crisis which you outlined. >> should i even comment? >> on what? >> one-fifth of that is what he gets a year. >> oh. >> you did that for me? >> i did that for you.

>> that's, i did that for you. >> that's what savend ra bullock gets for making a third of a movie. >> how much does she get? >> she gets $70 million. >> for "gravity. request itself why is she not giving it to detroit? >> i'm not saying he should support sandra bullocks. coming up -- >> getting hit with a carveball. >> everybody deserves what they get. >> portfolio manager is going ojoin us in just a moment. we are back in a moment. join us in just a moment. we are back in a moment. t join us in just a moment. we are back in a moment. toi joi. we are back in a moment. join u. we are back in a moment. join us. we are back in a moment. to join us in just a moment. we are back in a moment. just take a closer look. it works how you want to work. with a fidelity investment professional... or managing your investments on your own. helping you find new ways to plan for retirement.

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. welcome back to "squawk box," everyone. we have been watching some of the big retail stocks, after the ones coming if. take a look. target, it fell short the latest quarter. sales were better tan expected. the company cut its earnings forecast and says it can't estimate future costs related to the consumer breach t. stock is down 39 cents. but a lot of this has been anticipated after the fuse we saw yesterday. >> why do we have 91 cents versus 71 cents? is that ba it is? >> for the. that's not right. that's based on -- that's not

the adjusted number t. adjusted was 70 cents versus 71. >> i would have paid a different forecast. >> that's just me. >> mr. smart alec. as we were saying, they came in a penny below. tive fishar tiffany shares are higher. it has an expanded jewelry collection up by 6.5%. we are watching shares of lowes, severe winter weather impacting its results. even though it fell short, low fes is racing the fur year forecast. >> that is up. petsmart bet estimates by 3 cents first quarter profit of $1.014 a share. they say sales are being impacted by a challenging and volatile environment.

>> what is happening here? did you call me smart ass? i can't even speak. what happened? i'll tell you in a moment. >> share with the table. >> i can't. >> you can't? >> astrazenica urging the drug companies to reopen its dialogue with pfizer him pfizer has until may 26th to start takeover talks. if you think about what the value proposition is here, astrazenica have gone down 10 billion as a result. i would arc you the board lost almost $20 billion in two weeks. >> andrew didn't want to do this story. you bucked him so much. that's why you aref laing right now? >> story across the tape. 650. >> okay.

it has taken a while. >> it look a long time to get it into the run down. by the time we got into the rundown, they were screaming in my ear, to imported story has been lost unfortunately. >> water the deadline, though? >> may 26th. >> if it was over, this is the kind of thing people would say, what was that all about? does nothing come from any of this? was it worth it? >> what did he lose? $20 billion. >> not pfizer. >> oh. >> everybody is not focused. >> i'm saying astrazenica's board has didn't a disservice to its shareholders by not endpajing in some form or fashion. >> both companies, when they're involved in this are taking off the ball, the daily one u running of the business. >> you could argue this whole

transaction is the result that pfizer can't find growth anywhere else, operationally, are struggling unto itself. this is a band aid. >> you have no side effects, it's hard. >> lipitor goes off patent. what do you do? investors are. sorry, tony. >> you are the guest host. >> minutes do out this afternoon. let's hone in on the fixed income market. our guest host dennis gartman is an editor and publisher. i'm sure you read tone's stuff. they paid you like huge, now are you in newport beach. are you tan. you are happy. >> tan, a little bit tan. it's a great place. we have a few building this week. we are very excited. >> that's right. >> great, come visit. >> you still are telling me. i think i understand, the reason

bonds have done so well the ten year the yields have fallen as simple as people being on the wrong side of the trade. they were sure they were going to make money. >> the futures mark, when we put it altogether, various interest rate futures. the ultrabond future, the treasury bond, ten years ago five year, you put it in terms of duration dollars, a fancy term for interest rate risks. it's speculated. they're the most short a few weeks ago than they have ever been by large amounts. this is a switcharoo before ben bernafke said the feds might taper. here they're record short. many investors came into the year believing bond rates would rise. they didn't. remember, yields rule from under 2% in the ten 84 to three.

in the process, this short-based grew very large. it goes beyond, tennis the speculators in the futures market but investors in the cash markets. >> meaning the anticipated uptick in the economy, football one, you got a weird weather situation, number two, it was never slam dunk. >> it's a 2% economy. >> it is? >> it is. it seals to be accelerateing into the 3z given the fact that the smashing and the endow:s, pension funds find temss sitting there, instead of being along 60% stocks, 40% bonds, find themselves long just by the strength in the stockmarket are having to be sellers of stocks and bonds. >> pimco does have 13 global offices. many of those sorts of inzors

step into the market. for the past 84, they have been big buys, to invest in marks to close out their long-term viabilitys. but one of the bicker reasons for the move in yields this year relates to what we call the new neutral. which is the idea that policy rate won't go to the old four but more likely two or so in the future. in fact, bill dudley the new york fed president said seemed to suggest and said the policy rate t. fed rundz rate. the one people think will go up next year will be below four and a quarter in the next rate cycle. it's one of the biggest reasons fields have fallen this year. because it looks like the fed is signaling. it looks like the next year will do so gradually to a low level water phone as a look for two, not the usual four.

>> so did he imploy it will be sooner rather than later? >> it's his view. >> we aren't shocked by that. >> what about rates falling 75 basis points since tapering started. you didn't taper nearly fast enough. you should have been more aggressive in pulling back. >> inflation, why not leave it in if it does for the harm in. >> it's difficult to control. >> we haven't seen that. this is the unwinding, it hasn't been difficult so far. >> ultimately the fed sites two main risks, the fed owns 1.5 trademark of the 6 trillion that exists. it's not factually market. risks to financial stability. at ever higher prices. ultimately that, can prove to be destabilizing for the markets

and the economy. so the risk to financial stability probably the biggest feed the fed reduce its bond buying. >> so, okay. so we washed out all the shorts now. now it's ready for the shorts. >> you want to stay on long bonds? >> right now, it's a bet, the neutral rate, low palmettos rate means investors need want worry about large increase thes in rates. today the ten-year is roughly 2.5. almost exactly where it has been a year now. it's at the low end of its yield range. this isn't the best time to be adding interest rate risk. we should expect rates to go up slowly expect an increase over time. >> what do you think of this idea? bernanke in his private speeches. the rates will never be at 5.5,

2346rs his lifetime. >> honey the fed is not said, bill dudley said this, the neutral policy rate that gives gas or puts on the brakes keeps things going. this four and a quarter percent. that's the old future tral. ben bernanke said we will never get there to four and a quarter in my lifetime pimco agrees with that if reason why the policy rate will be lower. >> he's a young man. he will live a long time. >> three rate hike cycles. it when to the five and a quarter in 2006. 6.5 in 1996 and 1995. it won't get there. some day, in his lifetime, but the lack of credit across demographics. so many forces that are powerful

and long term. >> did pimco get a new building because of all the things that happened there? the argument between mohammed and bill gross? >> you should zay see. >> it's not because of that. >> for so long where we worked. >> you don't want to move in the house? >> it's doubled since i joined in between. it's the footballs of ploy i don't see have not. certainly the space has nod. >> it has nothing to do with, i'm sick of cleaning up, none of that? >> we feed a place, our clients stev do. >> when we come back the uber of helicopter, getting to the homp tons will be easy, we will tell you all about it. robert frank will be here. .

welcome back to "squawk box," everybody. it is sweet week after returning to fork city after the absence. three navy ships are scheduled to arrive the morning. the usual sea services wasn't held last year because of sequestration. the event costs money for security, home rooms, porting large ships and aircraft. >> talk about transportation. if you feed a helicopter this upcoming memorial day you can't boy pine, there is an app for that, a new company blade is offering on demand travel from new york city to the hamptons with the goal of expanding across the country.

robert frank took the trip. >> reporter: if you are lucky enough to have a beachhouse this summer, you still have to get there. >> that means traffic. unless you take a helicopter. a new company blade uses an app that makes booking a helicopter faster and cheaper tan existing charter taen companies. with three taps, you can book four flight which costs about $500 for a single trip. can you use played's crowd sourcing function to fill those seats. >> we've had many, many conversations with people said i never knew i can do it for that price. if you remember, i didn't foe know i could to do it so conveniently. that's pa we're going after. >> reporter: the plan is expanding to saint tropez and martha's vineyard. $500 is a huge chunk of change for a one-way trip.

blade says it's buying a chunk of time. >> one of the things is you can see the traffic that you are not sitting in when are you in this helicopter. >> you talk about validating a purchase. it's wonderful. lucky to identify friend's cars in there, something to talk about over a drink later. >> less than 45 minutes later, here we are in beautiful east hampton. just about a mile from the beach. now that is a commute. >> so, look, $500 for a one-way trip. joe i saw you. >> that's per person. >> let me put that in perspective. if you have 16 weekends in summer, you take a helicopter each way, that adds up to two first half days of extra summer over the course of that summer for $2.5 million. the wealthy take that calculation. >> what is it normal for a regular charter company? >> the big difference is this

app. maybe we'll get a camera. part is the cost. typically, it will be around 6 will $500. it's so easy to go in here. you look. i am looking at friday flights. 3:53 that works for you? >> the time. >> one available. two seats. we book the flight. that's three taps, you have your helicopter seat. it's so easy. >> how many people does the coptor carry? >> six. >> you can carter one and crowd source the seats to your own friends to other people. >> how many coptors do they have? >> they are working with liberty helicopter. which has some of the biggest fleets. >> two pilots? >> two engines, two pilots. >> so all the helicopters are two engines one pilot? >> hey, they're starting with the hamptons, which is uniquely suited to this. whoever built that stupid place put one road out there. can i see doing it for east

hampton, not for the kwog, if you go to east hampton, it's another hour-and-a-half. >> it just gets sunday night, it's even the basic getting out to kwog is really tough. you look at nantucket, vegas to l.a. $500 a. special party with friends. >> that's a cool way to go. >> i'll put it in perspective for a house renting in august for $25,000 a week. $500 is not that bad to get out there. >> if it gives you an extra two hours there. two hours back. >> we are back to the oldest expression in the world the rich aren't like us. >> they can boy time. this is the one thing that money can boy that's great by is time. >> who said that the rich aren't like us? >> we will tell you later about their mazmazearati.

>> it's cheaper. seaplane is cheaper, it's like $350. >> you have to swim in. >> so the flight characteristic osf a helicopter are better than that of a c-plane? >> i'm more comfortable in a helicopter than a c-plane. i don't like heights. so. >> really? 1234r when we come back, we will talk target.

let's get down to the new york stock exchange, where jim cramer joins us now this morning. you know, the earnings flow has kind of slowed down a little. we finally did get to see target and it wasn't really much worse than anyone thought. we are still trying to figure out they overpaid for canada but how did they mess it up up there? >> you got to talk to blake nordstrom, president of nordstrom, who said look, if you do an accelerated rollout of canada, you will blow it. if you go into their website, they will show you how slowly they want to roll out canada because it is such a more difficult environment than the united states. target did the opposite. they literally came in -- they kind of parachuted in there. you can't do that. it's a big mistake.

that's what they're paying for. i was surprised given the breach that things weren't so bad there. also, you had an unbelievable guest who really gave i thought a very nonpolitical view of the bonds. it was welcomed because it had nothing to do with republican, democrat, bernanke, yellen. it was a straight out analysis. that's why i always loved tony. >> yeah. in terms of it was a really crowded trade initially. >> yeah. that was just -- look, that was one of those analyses which basically says i'm a real good trader, i'm watching the fund flows, he's watching trillions now, not watching the millions. when i first met tony. but you know, tony is an honest broker. people listen to honest brokers. >> there is the raging battle, i don't know where you are, larry fink says we want to get out. they weren't aggressive enough. rates fell so we could have tapered more quickly so he's at least thinking at best it's neutral, at worst it actually is hurting, then there's other

people that think why not do it, at the worst it's neutral but at the best it's helping the economy. there are people that think qe was good and people that think it was neutral or bad. >> i think rates overshot, that's something tony said. the ceo of home depot said this whole mortgage thing was really surprising. if you read the subtext of home depot, we will go back to the mortgage rates that we had before last summer. i think that makes sense. look, i personally have been saying the federal reserve should be selling bonds, not buying bonds. the demand is incredible. >> yeah. they're buying more than -- >> they should just be selling. the market will bear anything. get out of this trade. the fed becomes nonideological. we get a straight out mortgage market that you guys were commenting about mortgage rates going down, frank blake indicating that mortgage rates were too high versus where they should be. i just think there's a lot of good things happening but you're not allowed to really say that because it's 20% correction, everybody is nervous. i wish i could join that mob. i'm stuck with the facts. >> yeah. >> we don't need a helicopter to

go to the jersey shore. >> no. i was down there in 55 minutes this weekend. ridiculous. garden state was a breeze. exit 105 on the beach. >> you don't need to go where they go. >> i was on the beach in 90 minutes. >> see you in just a couple minutes, jim. coming up, dennis gartman's big trade idea. y god! look. you need to see this. show him the curve. ♪ do you know what this means? the greater the curvature, the bigger the difference. [sci-fi tractor beam sound] ...sucked me right in... it's beautiful. gotta admit one thing... ...can't beat the view. ♪ introducing the world's first curved ultra high definition television from samsung.

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welcome back, everybody. our guest host today, dennis gartman, is the editor and publisher of the gartman letter. we have a question for you. we want to know what your top trade is or top two trades heading into the second half of the year. >> one, we know there's a drought in the high plains of texas, western kansas, oklahoma. it's really decimated the hard red winter wheat crop. at the same time, the crop in illinois, indiana, ohio, soft red winter wheat, doing quite well. i would like to be a buyer of hard red winter wheat, seller of soft red. >> what's the wheat contract we are looking at? >> the wheat contract you're looking at is probably soft red, the one that used to be called the chicago board of trade contract. i want to buy the old kansas city board of trade which is traded on the chicago board of trade. you have to call it hard red winter wheat. second thing, the euro is in difficulty and i would like to be short of the euro rather dramatically against almost any other currency. >> i don't understand why that

hasn't happened sooner. we keep waiting for the euro to get to parity with the dollar. >> eventually it has to get to parity. it's probably the same number of reasons tony was talking about people being short of the bond market. every smart guy you know has tried to be short of the euro but they stopped and now it's probably healthy again to be short of it. let it start trading under 136.50 and you will see people coming back into that trade. selling euro, buying canada, selling euro, buying new zealand, selling euro, buying aussie. >> what do you think of the yen? >> i had been bearish for a long period of time and it has just worn everybody out, expecting to see mr. koroda become far more expansionary. he's chosen not to do so. i thought the imposition of the higher consumption tax would force them to become more aggressive and they haven't. again, everybody you know is short of the yen, expecting the yen to get weaker and it hasn't. a week and a half ago i said i'm going to stand to the sidelines. sometimes the best trade is the one you get away from.

that has saved me a lot of money in the past week because the yen has gotten relatively strong instead of dramatically weak. it's a good thing to be out. >> dennis gartman, thank you. >> thanks for having me. always fun to be here. make sure to join us tomorrow. "squawk on the street" begins right now. good wednesday morning. welcome to "squawk on the street." david faber is in washington, where he will interview liberty media's greg maffei in a few moments. the dow coming off of that three-week low, retail leading the charge once again. tiffany, target, lowe's, another gm recall. the ten-year yield around 2.54. yellen speaks this morning but is unlikely to take questions. she gives the commencement address at nyu.