potential blackberry. i can't believe blackberry would take over samsung. and shares of the canadian device maker. plus the world's third biggest smartphone maker unveils it's answer to the iphone 6 plus overnight. it's thursday january 15th you might remember this day. squawk box begins right now. >> live from new york where business never sleeps this is "squawk box." >> good morning everybody. i'm becky quick. if you thought trading has been volatile so far this year you have not seen anything yet. check this out. marketing swinging sharply in early trading this morning. at about 4:30 a.m. you were looking at the futures indicated up by over 100 points. the dow futures up by over 100 points then the crazy move from the swiss national bank that no

one was anticipating. you know the central banks are good about telling the markets what they're going to do in advance and when that doesn't happen you see swings like this. the swiss national bank coming out with it's news saying it was going to delock the swiss franc from the euro. since 2011 they had been tying the currency cap in 2011. swiss national bairng was saying you had to have 1.2 swiss francs to the euro. they let that go unexpectedly. >> moved 30%. basically 120 euro. >> 120 swiss francs to the euro. >> yeah down .86. >> right. it's complicated stuff and there's a lot to get your head around but this is a massive move. we've never seen a currency swing like this before. it was also the u.s. dollar we saw the swing against because the dollar was high against the

swiss frank because it was tied to the euro. when they let that go it was a massive snap. >> so it had been that they were benefitting by being tied to a weak euro but it wanted to go much higher and obviously i want it wanted to go much higher. we need an expert. >> people in the past -- >> look who made it here. >> i need him to explain to me why these markets would get -- >> risk on -- >> i appreciate how big a trading part -- how relevant is this little -- >> i'm glad i bought the swiss army knives last year. oil go down 60% and then a major currency moves 30% one day all bets are off.

how do you stake your claim on anything at that point? that's part of it too. these markets are insane. >> unpredictable. >> i'm going to blame this whole euro experiment which is so stupid to try to have all the multispeed economies with a fixed currency this is what happens. >> who are you blaming? >> the whole european experiment to try to all of these -- it should be 50% less. the swiss franc should be 50% more. >> this all just happened in the last hour. we have been scrambling to get our arms around this and we're lucky enough to have people willing to scramble with us. we're joined by mark commander. forest is here on set and well done. >> lucky we're in new york now. >> i love the fact that you're in new york. ten minutes door to door i'm here. it was awesome. >> everybody is like who cares. >> can we just not talk about this? it's amazing. >> we did. we have been talking about it over and over again how they

have been steadfast and holding this. >> that's the take away. we all thought that maybe this time it was different. maybe the central bank could hold the exchange rate because it's always failed. you never had a central bank be able to intervene in perpetuity and you saw them giving up finally after three years of intervention and this is the single biggest surprise. everybody thought it was the market that was going to drive the euro swiss down. the fact that snb just walked away that's where you see this massive dislocation. we had essentially euro swiss going to parody. >> the inflow of money because they knew the swiss franc was undervalued. >> they realized it was impossible to hold the peg after qe. >> this is getting ahead of it. >> they basically said you know what there's no way they'll be able to hold the peg. >> what about the -- just explain to the viewers, i already understand completely but what about the action that

the ecb does next week would make it impossible to hold that peg. >> ecb continues to deval it's currency. >> to southwest airlines the euro would go further. >> it kept putting further and further pressure because the point is that ecb was going to lower lower rates in europe. it makes it much less interesting. money would have been flowing out of the swiss franc. not to mention the fact that the russians continue -- >> i'm going to admit this is still over my head. explain to me why i'm supposed to care about the swiss franc. >> it's the company money. >> your capachino is going to cost you $10. >> to the extent you think there's broader implications. >> mark is probably better to speak to this than i am. i have no idea what the longer term implications are. it's not going to be a global impact. in my ways the fact that the

euro came down is positive because it helps exports in the long run. but financial sector we have no idea where the euro trades are. there's a lot of people that lost a lot of money today. a thousand point move. hedge funds and everything else. >> so chandler why does this mean that the risk-trade is -- why was holding the cap on why did that mean people would put risk-trades on and now they'll take it off. >> i don't think that's what it means. i think what the market is seeing now it doesn't have to do with the euro zone. it was a swiss bank strategy to fight inflation. before 2011 when they put the cap on the currency they tried buying foreign bonds to avoid their version of qe instead of buying domestic bonds because there wasn't enough of them. they had to buy foreign bonds. that's failed to fight deflation. so they pegged the currency or capped the currency and now they're giving up on it.

the force at work is not about the euro zone. do i agree that anticipation of foreign bond buying in the euro zone in the next two meetings helped impel the previous strategy. the key here is that oil prices commodity prices collapsed. we'll see this. headline cpi is going to end up going negative. already tomorrow it's a 1% headline to maybe.5%. >> let me try and connect some dots here. what we're watching is a central bank not able to hold the line on deflation. this is a small central bank and swiss national bank but this is this foretelling the future when it comes to the united states central bank and europe's central bank? are they going to be able to hold the line when it comes to this massive deflation when you're looking at oil prices down 60% and the other turmoil that comes with that. >> this is the most pornimportant

thing to keep in mind. the federal reserve doesn't target headline inflation. core inflation is going to remain sticky and in that basket of goods that make up our core inflation measures housing costs are something like 40%. housing prices are sticky. this is going to keep core inflation up. not headline inflation. this is a big difference between the federal reserve and other central banks. you can criticize it for several reasons and mandates and other stuff but at the end of the day targeting core inflation is superior to targeting headline inflation because of the noise. >> i'm confused. >> hold on. >> was the swiss frank -- because the swiss are so frugal and they don't -- they have their house in order is that why it's always seen as a safe haven. >> always of course. >> how could they possibly have the same currency as greece. >> they don't. >> i'm not saying euro but it

was tied to -- this had to happen didn't it? >> the point is the reason why they created the peg in the first place was to help all of their multinational corporations because the swiss frank was get sog strong it was going to make it impossible for them to trade. >> it's not about trade. it's about deflation. >> i'm talking about why they initially did this. why they initially did this. >> it's not about trade. it's about deflation. it was always about deflation. it was never about trade. >> they wanted to prop up their economy and they did. the big question is what happens to their economy. >> let's bring in steve reese. global head of equity strategy at jp morgan. he just got off the phone with his colleagues in europe. where were they in europe. >> freaking out. >> it doesn't matter. they all have the same currency. >> did you talk to someone in switzerland. >> london. >> close. >> pounds. >> same continent. >> switzerland is about 17% of the overall european equity

market today and it's an export driven economy so it's a negative for switzerland but on the margin it removes a competitor for the broader euro zone. i don't think it derails the story in europe. negative for swiss stocks today. they're down about 5 to 6% in local terms but look at them in euro and they're actually up. the timing i think is very interesting ahead of the ecb next week. >> they had to do this ahead of the ecb meeting. >> for sure. >> we just saw yesterday that the court clears the way. that was going to be the last sticking point to say that maybe the ecb would have trouble doing this soon but the deck was cleared and they're trying to move ahead of this. >> exactly. >> what's most interesting to me is this is a three year trade but the bottom line is central banks, bottom line is intervention eventually always fails in the market. we really thought this was going to be different. this with the most outlier case we've ever seen.

>> how big is the swiss national bank compared to the ecb. >> it's tiny but the dynamics that you cannot control your currency forever. the market is going to pressure you to where it wanted to go. >> okay. >> so now, because -- this is so insane. >> it's reviving concerns held by households and banks and this is putting pressure on all the banks already they're down 5 and 6%. >> why? >> swiss frank rates are negative. it's easy to finance because it seems like -- >> poland has pay back and the frank is going to be much more. >> much more. whatever you made up on the low interest rate you more than lost. that's the game people always

lose on. >> remember they took out the foreign currency mortgages before the swiss adopted negative interest rates. this is the kind of problem that we see not just in eastern central europe but remember the bis report. many countries and companies have borrowed dollars on low interest rates and the weak dollar. there's a currency mix match out there and swiss even though it's a small economy measured by gdp it's above it's weight. it's currency is an international currency. people flock to it. it could have continued to intervene like it had been. the market didn't force it too. the swiss chose not to continue to build reserves through intervention.

expanding it's balance sheet. it was not the market that other central banks telegraphed their moves. it caught the market by surprise. that's why we're reacting. >> are we on a line that's being tape recorded? is that why we keep hearing the beep. >> i'm afraid so. >> don't say anything you wouldn't want other people to know about. >> wait a second isn't everything we say always going out -- we're on tv anyway. >> recorded and live. >> marc what do you think the financial sector implications are for this? because what we don't know is how big the losses are in all of this and how big is this going to be everywhere. not just for example a lot stopped quoting them today. some of them might go out of business. there's a lot of fall out of this that we do not yet know and it's going to be very interesting to see exactly what happens the next couple of weeks. >> i feel better for retail investors in foreign exchange.

it's a dangerous game but i don't think that's the biggest problem. >> no but i mean -- >> the market is going to rally. i think that we saw that move yesterday down to below 180. u.s. yields are going to continue to fall. investors, retail and institution have little choice but to move into equities because the yields in the bond market are too low for even people that need fixed income. so rather than worrying about retail i'd worry about people that live on fixed income. they'll be hurt by this continue decline in yield. not the retail speculator taking on risk at their own desires. >> do we need to put a foreign franc relationship -- do you have any idea -- it's the -- 100 fillers make it. just in case you were worried. i'm going to watch the ratio. i can't do this marc. >> remember when like the end of

the year i said it's going to be a most volatile year even in my wildest imagination didn't think it was going to count like this. >> you thought you could count on the swiss national bank. >> i think this may be the first shoe of many to drop as we go forward. the financial markets will be in much bigger turmoil than all of us think. >> how come we never complained about the swiss national bank being like china as a currency manipulator? >> well because they're -- well you know the swiss is the biggest and the most pronounced in the g-10 universe but every central bank is trying to control their currency one way or another. swiss was the most obvious and strictest in terms of their approach. >> i go further the swiss is not part of the g-10. they're not part of the g-7 agreement. the swiss economically is a small part of the world economy so when the federal reserve, actually the u.s. treasury issues it's report a couple of times a year about foreign

exchange market they give the swiss national bank a pass because it's too small to really matter in the global event from the federal reserve and the treasury's point of view. >> it clearly matters to markets. >> often times they come from places that we weren't watching that you didn't think mattered all that much. >> it's is a well established international currency of risk reserve. >> the swiss franc can sink us. >> go ahead. >> it's a very small part of global reserves. this is a important for speculators and some investors but at the end of the day it's more indicative of the pressure of other countries as well with falling oil prices experiencing deflation and disinflation and what it really turns into is very low nominal growth. this is a challenge not only for the swiss national bank but all central banks including the federal reserve we also have low nominal go from the u.s.

>> they going to raise interest rates this year. >> the fed is. >> i thought it was data dependent. >> i think they will. >> would you buy today? you say buy equities then. >> we are. we thought this year would be more volatile and we're seeing that play out. i think there's a great time to be slowing adding u. s. equities. top sectors are consumer discretionaryies discretionaries. >> do you think we should break up jp morgan. >> i can't comment on that. >> you love that stuff. >> i know you love that. >> he lizelizabeth warren relates back to her once again. >> always. >> thank you for making us feel smarter about this. we appreciate it. a major product launch from the company many call the apple of china plus what's the real story behind samsung and blackberry. reports, rumors and speculations sending shares of the canadian smartphone maker. with plus here's a look back at this day in history. check it out.

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china's biggest smartphone maker unveiling it's latest device with the goal of going head to head with the iphone 6 plus. eunice has details on that.

>> good morning, xiaomi means little rice but the chinese company has big ambitions. they're the third largest smartphone maker in the world behind apple and samsung but the company has been able to really do that and gain ground because it has been able to sell a very acceptable phones at cut rate prices. now what we're see as good that the ceo is moving into the premium end. he is going to be unveiling the xiaomi note. this is a phone he says is going to go head to head directly with apple's iphone plus. he went through all the specs. lots of different features including a 13 megapixel camera. he said that overall it's going to be thinner as well as shorter and lighter phone han the iphone 6 plus. the price is what is attractive as well. the base model is $376. the proversion which is the one competing on the high end is going to be $540.

it's still cheaper here than the iphone 6 plus in china but at the same time it is showing a bit of a departure from xiaomi into the high end and taking apple on head to head. >> thank you for that report. let's talk about blackberry and samsung this morning because they're denying that they're in deal talks. router's report said samsung offered to buy the company for $7.5 billion. the stocks surged on that report but then dropped in a big way. quite sharply on the company's responses. here with us this morning is amil. he is communications analyst. good morning. >> thank you. >> do you believe them when they say they're not in talk or do you believe the original report? >> let's go back. we already had some form of

speculation in one shape or form of blackberry being taken out. now if you look at the commentary he is saying that everything is on the table. >> ceo of blackberry. >> correct. he said i don't rule anything out. i'm transforming this company. whatever is best for the shareholders he'll do. >> is he transforming the company? is there value? is there $7.5 billion worth of value. besides becky being a customer there's not a lot left. >> you have to look at what blackberry does. i look at it in three or four different parts. we all agree that they were pioneers in enterprising. >> people say the value of the patent portfolio, somewhere between 1.2 and $1.5 billion. >> sure depends on who is counting. >> who is counting. >> then you have the operating system. they have a new operating system. the world has evolved into an

ios and android. >> do we say that's worthless. >> or do you say that samsung wants to create differentiation and you talked about xiaomi. you want differentiation. do you write it off? call it half a billion? billion? i don't know what it is and the third component is infrastructure. every quarter they spent, $300 million in spending their infrastructure and finally you have 40 million subscribers? does that go to zero? 25 million? so when you add up all of these things depending on whou is looking at blackberry how desperate they are you could come to anywhere between 7 to $8 billion enterprise. >> we're talking about it in the context of blackberry but what does it mean to samsung and what does it mean to google. if i'm google and i saw that report and i realize that samsung is a major player in the android market without samsung i

don't even know whether android would be android today what are they thinking? >> well honestly google doesn't care who is going to win or not because at the end of the day you looked at xiaomi. they're going to depend on google. what their bigger issue is ios versus android. that's what they're looking at. >> put to the extent that you believe samsung is going to move over -- to the extent you think they want to move to a blackberry platform to get away from android. >> from time to time samsung always wanted to look at alternatives operating system alternatives. i think it's a big call to make that they're moving toward a blackberry system but there's always that risk from google's point of view because we're talking about differentiation against apple. >> 12 months out is blackberry an independent company? >> that's speculation.

it's too speculative. i can't make that call but in all likelihood if mr. chen -- >> you're an analyst you're supposed to predict the future. >> if he is able to continue transforming his company into software and achieve his goals on the software and services. but if he doesn't achieve what he can, everything will be on the table. >> thank you for helping us sort through this this morning. >> thank you. >> kmug it could be the currency story of our lifetime. shockwaves through the global market this morning. capping it's cap on the strength of the franc. we'll take a look at the major multinationals that are most exposed. you know when i said for the swiss and the greeks they have the same currency i was saying if the franc is tied to the euro and the greeks have the euro you have these two completely -- so

people are saying i think -- >> that's why they had to undo that. this is rocking markets all over the world. the swiss market though the stock market down about 8%. it's already blown about $100 billion already today. swiped out in a moment of minutes. >> it's 13 different currencies in the euro that the ecb follows. and now in hungary. anyway first as we head to break here's a look at how futures are setting themselves up. >> thanks for taking my line.

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look so forward to you coming here. we can't wait for you to join us for a glass of wine or two. >> we'll drink to that cheers. >> is it wine wednesday. >> what are you having there? >> it's wine every day. >> if it's wine what about margarita monday? >> at thetequilla tuesday. >> what's friday? >> friday -- >> i don't have a liquor that starts with an f. >> frangelica friday. >> thank you. >> it's me? >> oh it is. >> i can't tell that.

oh we're getting to know our new neighbors here in new york city and we thank our colleagues at nbc news for their warm welcome. you know it's easy for people like brian williams to say they're going to bring a casserole. >> i have not seen the casserole. >> i saw him and he still pretended like it was on his way. i want it homemade too. the big story this morning you're looking at it this morning comes from switzerland. the swiss frank soaring with the euro. the move comes after central banks shocked the markets by scrapping it's long standing cap on the strength of the currency. the impact being felt throughout the markets. the euro plunging against the dollar for stocks in switzerland. they're likely going to continue to trade a little bit lower. here's the look down about 11%. and that isn't necessarily what

we're talking about in terms of global influence although 11% move. >> it's the biggest one day decline in over 25 years. you're talking about $100 billion that evaporated from the swiss market. the ceo is calling this a tsunami for the swiss economy. moves in the euros and the dollars and our futures here in the united states moved rapidly. we went to down 150 points on the knee jerk reaction and now settling out in the middle. it's down about 100 points. that's worst than the last 20 or 30 minutes. >> that's the big one of the morning. a couple of other ones we're watching too. quarterly results from the world's biggest financial players. we'll hear from bank of america, city group, black rock before the opening bell. >> blackrock is out now. these numbers right now blackrock once again beating expectations expectations. looks like an adjusted number of

482. looking for 467 but the revenue number is relatively in line with what was expecting. i'm going to get a few other numbers in here as well adjusted 482. both numbers beating the expectations. they talk about assets under management which are a huge number there. up another 8% in the 4th quarter. >> i'm not even sure what the number is because it's changing rapidly. long-term net in flows for 2014. $87.8 billion in the fourth quarter alone. >> here's a couple of things we're watching. the day packed with economic data. we're dealing and at 8:30 eastern we'll get the producer price index and new info on the health of the housing market. the number of properties that are in foreclosure the process dropped last year to the lowest

several since 2006 so we'll put that in the good category this morning. >> take another look at the markets this morning. as we showed you futures are being rocked by the news coming from the swiss national bank. we started at 4:30 a.m. with a gain of better than 100 points for the futures. that all turned around on the shock move from the swiss national bank. what happened with the u.s. futures market is they tanked immediately. dow futures falling. they have been bouncing back and forth but they're down about 85 points. s&p futures off by 11.5 points. the nasdaq down by 22 and this comes after a series of volatile days for the markets we have been watching. it's been the oil market driving things. the bond market has been driving things and today we'll watch the currency market move things. let's check out european shares. the swiss shares are taking a massive hit down better than 8%. also seeing declines in other european markets. the ftse off by .6% and these

markets closed before the swiss national bank made it's moves. nikkei up by 1.8% and the hang seng up by 1%. let's look at oil prices. we haven't paid attention to them today but wti this morning is down 67 cents to 47.81. the yield in the u.s. is below 10%. another new low. 1.797%. check out the dollar because the currency market is where a lot of the action is taking place. not going to see it on all the boards although you do see it at the bottom. that's a decline of 14% and improvement from what happened immediately following the swiss national bank's announcement. the euro fell by 33% versus the swiss bank. that's evened out to a decline of 14.5%.

the dollar this morning is up against the euro trading all the way down at 117.21. gold prices too at this point gold is -- that's a massive move for gold. up $22. what you see happening in the currency market is going to rocket all markets today. gold up about $22 to $1,256.80 an ounce. let's take a look at the companies that stand to get hit the hardest from a weaker euro. joining us is mike thompson. he's managing director of s&p capital iq. this is a surprise. >> it's made a murky earnings season even murkier. >> what do you do? >> i don't think any company that relies heavily on european earnings expected such a big move. you know you have to think this is probably outside most of

their hedging activities. this is abnormal. you know i think the bigger issue is what this means, what it really indicates is going on in europe which is the deflation nary pressure deflationary pressures and what's going on. it's for coke and pepsi and mcdonald's that had a nice tail wind from the fact they're getting profits from the overseas corporations from stronger currency euro into the u.s. dollar. that goes against them. hopefully some of that can be offset by what seems to be now emerging as the place to be which is the united states in terms of the lendings. we went back to the back of the line and proversely this might be a real opportunity because as you saw gold went up but i wouldn't be surprised you see u.s. treasuries start to rise and what they'll have to do is buy dollars and in addition after awhile people will say i need a little bit more so they'll take a look at stocks but the problem with stocks is

that the earnings picture is murk murky before this. >> but repatriatiing it back to the united states it makes it less attractive to bring the money back. >> it certainly doesn't help them but a lot of companies do. we always talk about the companies that mark a lot over and don't bring it back but a lot of companies do bring it back. just recently ebay brought a lot of money back. so yes it would make it even less attractive to bring the money back but i'd say that the bigger issue for these folks is what does that mean for european operations? how is it going to effect the automotive sector. >> and sales slow down. >> consumer discretion. those are the three sectors that have the highest exposures to

what's happening over particularly in europe in terms of a deval youuation of the euro. >> why can't we look at this as possible that the fed doesn't do what it's going to do. the swiss finally figured out we can't continue to do this. if we raise rates in april or june and the dollar is already strengthening beyond belief and the rest of the yields are continuing to drop and we're strengthening right now at zero. if we go up how much stronger -- it almost prevents us from going up. it will make it worst for exports right? >> you're right. >> they might be in a reverse box box. >> the other issue this takes a lot off the feds. it gives them more breathing room. this is a global deflationary

process. when the u.s. economy was kind of having it's stumbles it was actually benefitting from strength elsewhere. now it's kind of isolated the other way. >> is larry sommers right that you missed your chance to raise rates because to fight deflation what you would do would be to lower rates but we can't lower rates below zero. >> but what's wrong with letting the market do it on its own. this is the way the market is supposed to work. in fact let the market determine the level of rate and in a global marketplace that might make sense. >> that's an admission that the central banks are ineffective. >> it also could be just the motion that you know it actually brings more market pricing into the world of treasuries and things like that. yesterday jp morgan's earnings were impaired. and yet their activity and their ability to make money because of the shape of the curve was

inhibited. so who would have thunk. >> all right. thank you. >> thank you. >> not the same as the thompson reuters. >> different. >> s&p capital iq. >> but you were at thompson for awhile. you remember people used to come in and then you wouldn't correct them. >> yeah. >> coming up the search for what's behind the drop in google shares. the stock near bare market levels and later squawk's market master on where he's finding value right now plus barry diller never would come to new jersey. he is coming here though today. that's like 50 or 60% of the reason why we moved here. to get barry diller in here. "squawk box" will be right back. how can power consumption in china impact wool exports from new zealand, textile production in spain, and the use of medical technology

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if you are just waking up this morning check out the swiss franc, a staggering development overnight after years of capping the strength of the swiss franc versus the euro. the swiss national bank in light of what's going to happen next week theoretically with the ecb they removed the cap and it's hard to think of these things but in terms of the euro it used to be it would take 120 swiss francs. >> 1.2 swiss francs to buy a euro. >> and when they removed it the euro has been so weak the swiss

franc where to where it would have gone. 86 at one point. >> what we heard people describe it today is athe swiss bank saying they couldn't hold the line. >> yesterday was the decision that came from the european court saying that what they plan to do was legal. that's seen as the last hurdle preventing the ecb from taking action. they have been talking about doing something like this for years. we might actually see it next week. >> we have to think of the angle of the watch collector. swiss watch collector. what happened to the value of all of those watches today. >> i thought of my army knives. i brought a couple home last year. they go up or down. i guess they went up in value. >> did they just go up 30%. >> i believe they did. >> you have a nice watch on right. >> i do. >> swiss watch. >> yeah. >> well good for you. >> so we're doing better. >> we're doing better.

>> maybe not the case this morning because futures have been under pressure. also coming up influential tech analyst joins us to talk google. shares of the stock down 12% in the last year and then mario gabelli. he told us that the market was at a reasonable place to buy stocks but he did caution that the volatile recovery left equities with no margin of safety but not overpriced. we're going to find out what he thinks in light of the currency fluctuates and volatility of the markets. stick around. "squawk box" will be right back. ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry but you worry. what happens when your paychecks stop? because everyone has retirement

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♪ welcome back to "squawk box." google hitting a 52-week low this week. concerns that the company has lost focus and maybe losing some market share to competitors like facebook. the stock is down about 14% over the last six months while the s&p index is up 5% over the same period. joining us now with a little talk about the future of tech and what it means to google mark mahaney. good morning to you, mark. >> good morning, andrew. >> do we give up on google?

what do you attribute all of this to? >> i think there are four or five overhang issues. one of them just ties into one of your prior commentatesors. google has exposure to europe and the currencies. so like the rest of large cap, that's a head wind. but as you mentioned, there's increasing concern that the incremental ad dollars, there's concern about this apple safari browser. decision will come up. maybe goozgle loses that share. there's concerns over the decisions they're making. all those things have come together to bring that multiple down to a market multiple. >> let's walk through each to understand your implications. the biggest cloud has to be europe and what the regulators really do there. do you think ends up happening? >> yeah that's very hard to call. we think it's highly unlikely that the extreme case happens that google is somehow broken

up. there are not any natural assets for them to spin off. we doubt that plays out. the concern about the incremental dollars going to google, the checks we do with advertisers, ad agencies et cetera, google remains the company that is perceived to have the highest r.o.y. they perfected search advertising. i don't think that's an issue for google. >> let's talk about apple and safari. what do you think the chance -- what do you think the real chance is that apple decides that they are no longer going to make google a default search engine on that browser and what that means on the desktop version of your computers and the mobile versions? >> i think you would have to look at more than 50% chance of that happening. the so what for google, however, is we think that's a 3% impact to revenue and earnings. risk to apple of doing this -- >> what percentage of google

searches on a daily basis are coming from a safari browser? >> we don't know. we would say it's in the teens percent. >> so teens percent, if you will, let's call it 15%. we'll make it up for now. why do you think it would only impact the bottom line by 3% or 4%. >> because there's three things consumers can do in response to this. secondly drop safari as their browser and actually switch over to chrome. and use the google chrome search app on the phone. there's an application. >> are you worried they're in amazon territory when it comes to investment investing things that may not work out? >> i'm not. i think this company made the right portfolio in terms of long-term trends. internet into car, google is there. they've also got great plays off

of youtube, google play. this is the broadest internet port foal you out there. to answer your first question we're buyers of stock. we think it's a great entry point. >> what's the target real quick before we go. >> 700. we think they deserve a premium of something like 20 times 16 earnings. that gets you to 700 bucks. >> thank you for joining us. >> thank you andrew. when we come back this morning, a swiss game changer this morning. switzerland's central bank shocking the markets. scrapped the zero ceiling which was its tie to the euro. that meant some real shakeouts in the markets for currencies and that has impacted markets around the globe. also -- europe floor. well, they called it a ceiling. >> it was a swiss ceil euro floor. >> but they were saying 1.20. >> couldn't go below that. >> now they can. market's taking advantage of that. when we come back we also have quarterly results from bank of america.

financial noise financial noise financial noise

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welcome back to "squawk box" right here on cnbc first in business worldwide. i'm andrew ross sorkin along with joe kernen and becky quick. coming up this hour we've got a lot to talk about. currency markets shaking up. and we're waiting for bank of america's report. and then the next frontier for the internet. sir richard branson backing a play to bring internet to rural areas. and our guest here this morning mario gabelli. we're going to get to him in just a couple of minutes. but first let's tell you what's

going on. we're looking for quarterly numbers from bank of america. we'll bring you those numbers as soon as we get them. before we do all of that we got today's top stories. and if you're waking up this morning, the big story is the currency markets this morning in a very surprise move switzerland's bank snapped its rate of 1.20 to the swiss euro. to head off inflation. in response the euro plunged against the swiss franc. if the losses hold it would be the biggest one-day drop on record. as joe had mentioned -- who said it this morning? we're going to remember this day for a long time. >> it is the ides of january. >> we should take a look at the u.s. equity futures. because they have been very volatile in the pre-market. they have moved all over. they were in the green several hours before this move. now in the red. the dow looking it would open

down 68 points. the s&p 500 opening off about 9.5 points. lots of questions. >> what was the estimate on bank of america? >> it looks like it was a miss. 25 cents versus the 31 cents the street was expecting. revenue also below. there are a few things that are happening here. you can say that the banks in general probably got caught off guard by that interest rate drop at the end of the quarter. that is costing a lot of them. it cost jpmorgan yesterday. looks like the same situation with bank of america. >> i think they're revenue is $29.94. what was it supposed to be? >> it was supposed to be 20.94. that is to be in line. >> there's a dva and non-dva. i think the majority of the analysts follow the non dva. there's not an apples to apples comparison. bank of america has a lot of different moving pieces. most of analysts go with the dva

number which would be 18.95. >> but you also see earnings fell to 7 cents because that's what increased charges. the charges at it still up to 31 cents a share. and then there's all the other metrics that we're talking about. the stock's down though. do we have it there? >> i did not look at bank of america shares before this came out. obviously the market overall is under pressure because of the swiss francs. but this is a miss on top of that for bank of america. >> yesterday expressed in swiss francs it would have been not quite as good as today, right? can you start figuring that out? >> right. if you look it was the swiss market. fell 8.5% in local terms. but some stocks were trading higher. you get crushed if you're a swiss national owning those stocks.

again, that's like a very quick look at what's been happening with bank of america. this is one of many financials we're getting today. here to take a broader look at some of the banks is anton schutz. anton, i know these numbers are just out, but what do you think? >> well you know no one's expecting much out of them. and unfortunately with the lowered bar from yesterday, they don't look terrific on the surface. clearly there's a lot of detail missing in what i know. these stocks have been pummelled. bkx is down 10% year to day. had a nice performance in december. but i think these stocks are all set up to bounce off of these not-great numbers. obviously macro has changed really quickly. changed yesterday. changed again today. probably will change tomorrow. so i think what you have to look

at is the conference calls, long growth. we saw some long growth at jpmorgan. obviously some good mortgage business. it's been costly in the past. but put with rates where they are, the mortgage business is primed to run very well. capital return will be critical on the conference calls. so discussion will be very important. and of course everybody's going to want to know what's your exposure to energy both good and bad. what energy loans are you making, what do you have and how's that going to help your consumer portfolio. clearly on the retail sales, we haven't seen strength in the consumer yet. i think consumer balance sheets are strengthening and i think they'll be good for banks with retail businesses like credit card. so i think consumer activity will be important. clearly the credit exposure is going to be a question too. >> the interest rate moves we saw at the end of last year that are continuing this quarter, the currency moves that we're seeing today, that throws a lot of things into question. how do you change the way you evaluate the banks overall as a result of some of these macro

issues? >> yeah i mean you know the way my portfolio is positioned i do have exposure. some of the big banks like bank of america, i do own that. we do have some citi. but we own a lot of small takeover names and the small banks have been growning loans faster. there are over 300 deals in small names last year. so the trend is up. and a harder interest rate environment makes it more likely that smaller banks can't compete and are going to sell. and that's the way i'm looking at my portfolio for the most part. on the big, they're cheap. you keep waiting for the regulators to stop fining them and punishing them. i mean that's what you're waiting for. but they all trade very cheaply to earnings. it's just the future growth. it just doesn't seem to want to show up given the rate environment. >> anton, are you focused on any regional banks anywhere? are you to used on the carolinas, florida, anything special? >> yeah i really love the southeast. i love the growth. great demographics.

some it of driven by taxes. and large fortune 500 companies have been relocated to places like the carolinas. really great growth markets. the research triangle and charlotte and florida is bouncing back. so you have credit recovery. georgia's got cranes back up in atlanta. pretty amazing given the state of things a couple years ago. so very good growth. again, very fragmented. the largest independent bank in north carolina which we own is $4 billion in assets. the bigger banks want in because of the growth. that's where i'm focused. >> i don't know if you follow blookrock but that company came out and beat expectations by quite a bit. also raising its dividend by another 13%. it was already at $2.18. already yielding 2.23%. is this one of the ones you follow? would you be interested in something like that? >> well i mean i do follow the asset managers.

i mean clearly they're best of breed. they've done a great job. they have a large fixed income business. clearly wind in the sails with all these moves in the bond market. so for those of us including me who keep waiting for higher rates, this has been a very good business for blackrock. clearly some of the pain felt at pimco has led to flows in blackrock. very well-run company. clearly still some exposure to blackrock. so good for pnc as well you know, bet of rate in terms of managers. >> i'm a big fan of larry fink. when you're looking at debt almost 100 trillion you know he's got $4.5 trillion. so we are always thinking he's done a fabulous job and will continue to do so. but pnc -- i own some pnc because of that. they have about -- i'm going to cuff numbers -- about .18 share. so you hitchhike on it.

at some point they'll do something with that stock again. >> i agree. >> we like money managers though. >> yeah. i think pnc absolutely has a chance potentially again -- think about harvesting. they like that stake. it's been a great money manager for them. and they want to grow on the southeast. they obviously did a transaction where they bought a big unit for rbc. they want more market share there. they see a lot of market growth as well. we do have exposure to it. >> anntonanton, thanks for joining us today. >> he's already been posing some questions. our guest host this morning, value investing legend icon supermario. mario gabelli. you do own some banks, but you're more money management right? >> well, i mentioned, too, before that some people will go and look at beijing as a place to invest or -- and we said baltimore.

so we own in lake mason. we're big holders of that for a long time. and we've been fair lip large holdest of janus. i think we -- >> you do own goldman and morgan stanley. >> but it's not their prime business. when i was 40 years ago to become a partner, you buy at book sell at book. goldman was selling below book and it was not a complicated do. >> could you explain this? >> that's not a new transaction for you then? >> you sold some ibm and bought goldman sachs. >> that was a different issue. that was timing. you run $50 billion like we're doing, we have money managers. >> no need to brag and let us know everything. the bank of america just get news in here -- >> i was explaining, joe. >> okay. but the 7 cents in charges. and the charges were based on $1.2 billion to revenue based on

net interest income? >> charges to revenue for market related net income. >> you said one of the reasons you like it is because of the net -- >> i am focused on bank of new york neepz are net interest margins will rise at some point. maybe a surprise white swan, not a black swan through 2015 will mean the rate wills go up faster than anticipated. so i'm buying state street, northern trust, and bank of new york with bank of new york being the one that is more likely than not -- >> is bank of new york, is that a piggyback on peltz? >> no no, no. peltz comes along and gives you an extra tail wind. >> a lot can be done there. >> so what happened here? do you understand? market related net interest

income adjustment 1.2 billion. >> is this because interest rates unexpectedly -- yields unexpectedly fell at the end of last year? >> yeah. they got a little extra squeeze. they're coming down. the stock ran up to 42 or 43 and it's back down to 37 or 38. i like what is happening in the trust banks because that $200 trillion, they've done a fabulous job and they are more conservative or alert about how they invest their assets to get a higher current return. >> if i understand this properly, i think the banks were caught by surprise that interest rates actually declined at the end of last year. >> i can't comment on that. anton and those that follow that -- it's not a core competency. a billion is what we manage. we're sensitive about every stock. but if i'm looking over for takeovers i would go to the carolinas and florida. >> just looking at best buy quickly here too. you don't own any of that do

you? >> larry has been a big fan of best buy. >> trying to figure out what happened. they closed about 39. i think it's indicated at 36 or so. after the company reported what its holiday revenue was. i don't know whether it's below or not. but that's what's happening right now. it's down about 7%. saying some positive things about large screen tvs and mobile phones. the nine-week -- that doesn't -- international revenue down almost 12%. domestic revenue rose 13.4%. that's kind of interesting. but the nine-week same store sales domestic increased 2.6%. revenue up total 2.1%. but the international revenue is weak. >> you're going to find that on every company over the next -- the euro last year was 1.38. now i don't know where it is this morning. 1.17. and the canadian currency and latin-american currency. when you're looking at revenues and the earnings of the s&p are

going to have a really big head wind. >> i just want to quote the ceo for one second. i expect the holiday growth rate was lower than previous quarters due to the pressure we outlined last quarter relating to last year's initial rollout of ship from store. remember we talked -- the cost of doing all the ship from store stuff is quite expensive. people think it's cheaper but it's not. and the two gaming consoles and this one's interesting, was declined by the interest in tablets. >> but you're looking at a change in the way consumers are buying goods. and, you know -- >> but the margin compression, the cost for the way we like to buy goods now cost more and it hasn't caught up with the prices. >> you know i looked -- we studied costco. i haven't studied best buy. they've got a 10% gross margin. they do quite well. so when we look at retailing, we have our own niches. i talked to you about o'reilly

autoparts vendor. these have done quite well. and the users of energy have been the beneficiaryies of it. but i stick with best buy. >> thank you for that. we will come back of course to dr. love. we also have a big lineup to come this morning. a top fund manager adding visa to the squawk platinum portfolio. joining us in a little bit to tell us why plastic pays off. and then a shocking currency move with ripple effects throughout the markets. dennis gartman is going to break down this morning's swiss surprise. then we have sir richard branson. he's going to be joining us. he's backing a new satellite network. so we've got a lot to come. we'll be back. .

they have been all over the map. we saw the dow futures up about 150 points and then the national bank stepped in. they removed the peg they were tying themselves to the euro with. they had exchange rate between the swiss franc and the euro at 1.2 swiss francs to the euro. that the bank would no longer stand in the way. that the franc wanted to go

sharper up. we watched futures fall by 150 points. they've been bouncing back and forth since that time. the dow is up about 18 points. the s&p up by 1.5. you haven't seen anything yet. watch what continues to happen this morning. home builder erer lennar out with earnings this morning. lennar sold homes at higher prices. revenue was essentially in line. that stock looks like it's up about 1.6%. also economic data on tap today -- i thought i was done sorry. at 8:30 eastern time we're going to get weekly jobless claims the producer price index, the empire state survey. >> you're never done. >> no. never done. in fact continue now. when we come back this morning -- >> there's a great trade on lennar. but we'll talk about it later. >> make sure you stick around

for that. new ideas for the squawk platinum portfolio right after this. and later, the entertainment plays that could make you money this year. mario gabelli's take is also to come this morning. stick around. "squawk box" will be right back. breath in... and... exhale... aflac! and a gentle wavelike motion... ahhh-ahhhhhh. liberate your spine... ahhh-ahhhhhh...aflac! and reach, toes blossoming... not that great at yoga. yeah, but when i slipped a disk he paid my claim in just four days. ahh! four days? yep. see why speed matters, at aflac.com.

welcome back to "squawk box." the squawk platinum portfolio is back. now you can go online to cnbc pro on cnbc.com to check the managers' picks. plus read up on their exclusive analysis. here with her picks today is sarah mallick. thank you for joining us. you've been doing this with us for awhile now. you have three picks you're sticking with. >> we do. thanks for having me back.

first one we like is visa. we think investors aren't giving them enough credit. as that moves to credit we think that should grow in the high single digits. visa also has a great free cash flow profile. we expect them to buy a billion worth of stock this year. >> why these compared to mastercard? >> we like their positioning. 50% of their volumes in the u.s. they have nice emerging markets exposure. they're more associated with the base and all make us prefer visa right now. >> do you ever worry that somehow that the apple pay or future of something like an apple l pay completely and utterly disrupts the credit card business? >> we see that as being complementary to visa. we think visa is still well positioned and they should continue to do well even in an apple pay world. >> with apple pay, yes. but it's sort of a bitcoinish. apple thinks forget about visa

and mastercard, we're going it ourselves. >> that's not what we're seeing in the future. >> either way. let's go through the other couple of names. airmark is your next one. >> yes. we think they should hit the mark this year. new ceo from pepsi bottling. he knows that pennies count and that's what aramark needs. as he focuses on food and labor marks, we think that will help their margins get back to the industry standard. that should help them close their valuation. >> what's the upside? >> we don't actually give out actually price targets, but we do see them closing their valuation gap. >> all three of these, and we'll get to the last one in a second but all three you look at and say there is 10% upside 20% upside, 30%. i mean how do you -- why are you putting it on the list? the viewer who's trying to think i'm going to try to piggyback on you. >> we're putting on the list because they have tail winds. which has a strong tail wind from lower oil prices.

>> look at the nice segues she's able to make. keep going. >> like aramark the new ceo comes to place and makes them more profitable. >> you were nodding at aramark. >> we wrote a report on it prior to the ipo. clearly in the food service business they're a leader. it's consolidating and they've done a good job. we'd like to see more inflation on food because that gets passed through at a constant margin which works quite well. >> on ppg, implications on price of oil? >> 70% to 80% of their costs of goods sold are from oil derif derivatives derivatives. this should help them increase margins. another strong free cash flow story, we expect them to buy back a billion in stock year to date. and they're shedding non-core businesses. >> okay. the competition is on. thank you for coming in. >> thanks for having me.

>> no longer your professor's tia loan. so you've got a lot more going. >> thank you. >> and don't forget you can now go online to cnbc pro on cnbc.com. track the pros' picks and do it in realtime get alerts and exclusive analysis. coming up in the next hour john rogers jr. he's going to weigh in with his top picks for 2015. >> you like this quote. the snb raised the fees that it will charge banks to keep them depositing money. so they're not -- they're not lowering their interest rates. they're raising the negative interest rate. now to get them to take your money. >> they want noun go out into the economy, this is their way of enforcing it. >> wouldn't be get sog strong if they left interest rates where they were. so to offset this -- but it's so bizarre. coming up a deal to bring high-speed internet to rural

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welcome back to "squawk box," everyone. in our headlines this morning, bank of america posting earnings and revenue that were below what wall street had been anticipating. there was lower revenue from fixed income trading. that stock is down by about 2% this morning. blackrock raising its quarterly cash dividend by 13% to $2.18 a share. even before that it was already yielding 2.23%. that's big news for blackrock as well. we'll see where the stock trades at the open today. and shares of best buy getting crushed this morning. the company reporting same store sales rose 2.5%. but it warrants that it expects same store sales growth to be flat or negative. you can see right now that stock is down by 6%. >> the dow tumbling nearly 500

points since tuesday's high. dom chu joins us now with more on the market reset. and just more of the same for 2015, really. >> you're right. we talk about this volatility that we haven't seen in quite some time for the markets. we ended the year last year. and we're starting off in 2015 with it. so this is the year to date chart of the dow jones industrial average. we kind of totaled up showing you every single up and down move through the intra-day movements through the course of any trading day. as you can see here we've had a volatile ride. if you count all of the up and down moves on an intra-day basis, we've walked if you will, about 3,000 points or about 3,000 steps in the market place for the dow jones. that's a big, big move here up and down across the board. that market volatility very much a story for this particular at least morning here was we go into the second a of the month. some notes here.

we have seen that 500 points come off since those tuesday highs. this is the worst four-day dow losing streak in three months. so you've got to go back quite a bit of time before you see anything like we've seen over the past four days here. and then of course you talk about though record lows for treasury yields on the 30 year. 2.39%, 2.4%. just some more indication here that growth is slowing down. if you're looking for one bright spot in the market at least for the s&p 500, we saw a slew of 52-week lows hit yesterday. but one stock actually did pretty well. and that was mohawk industries. check out that stock. it was actually up. it's up about 12% so far this past year. it actually made a new record high in yesterday's trade, guys. back over to you. >> 3,000 points not so bad. 1500 up 1500 down. it hasn't been quite that bad, dom, but 3,000 straight down would be bad too. so we've had ups and downs. but net we're down how much since the beginning of the year on the dow?

500, 700 points? >> we're down about 4% from its highs that we've seen here. so we'll see what happens. >> all right. and we know you'll be watching it for us dom. thanks. >> you got it. switzerland's central bank -- if you haven't heard this already this morning -- it gave up on targeting an exchange against the euro. plummeting 10.5%. we've seen all kinds of moves in currencies and markets around the world. joining us now on the squawk line is dennis gartman. dennis you say that this decision is the swiss central bank's decision as the worst central bank move you've seen in four decades of watching the market. why is that? >> well it is. because one, they gave you no indication this was going to happen. they had been spending enormous amounts of money, enormous amounts of swiss francs which they could create at the central bank.

intervention to send your currency lower or to keep it lower is easily accomplished. they have quit doing that. the swiss franc has soared as a result. the money that the swiss central bank is going to lose is going to be in the tens of billions of dollars. the impact upon the swiss stock market and the losses that are accruing to swiss citizens this morning are going to be hard for the swiss national bank officials to defend. i don't know how they're going to be able to do that. this really is i think, a silly decision on their part. and it has been -- it has inflicted enormous losses across the world to a great number of people. not the least of which will be the people who hold mortgages. we heard that talked about earlier today. predicated in swiss francs. the damage has been severe. >> our guest host is mario gabelli. you've got to have something that keeps you awake and on your toes for something like this. there's a lot of things that can

happen. last year nobody thought about putin going into crimea. nobody thought about oil going as low as it did. this year what can go wrong? you've got $1.3 trillion of junk bonds and 15% of that is in oil. something can go wrong there. and the banks of the united states have perceived to be quality and strong maybe a bank will go bust. so in that currency change you know, there's a lot of dynamics. and the swiss will do with the swiss will do. and too bad. you know somebody's caught naked, it is what it is. you're going to lose a lot of money. when you have things that happen that quickly, the good news is somebody's going to lose money. they're unprepared to take risk. that's what capitalism is about. it's a good way to keep people kind of focused on what they should be doing every day. >> dennis what do you do in terms of moving your positions around today as a result? >> well the only thing i've got on them i'm actually very fortunate because i'm short the

euro against the british pound sterling which is working, the only other thing i find interesting and really quite fascinating is the manner in which stock index futures have gone from being up dramatically to down dramatically and now relatively unchanged. i think this breeds confusion. and i think confusion sends people to the sidelines. i think we're going to see greater amounts of volatility. the vix index is probably going to soar on this. you might get the vix to rally simply because this breeds confusion. and confusion breeds contempt. i think this was an ill advised move. >> i will hitchhike on that dennis. confusion also breeds opportunity. i consider it opportunity. you're half empty. my class is half full. >> well, i'll tell you what. to be corrected by mario gabelli is good. >> you're not being corrected. you're extremely good at what you do.

>> thank you, sir. >> thank you for calling in today. we appreciate it. >> my honor. you be well. cheers. >> you too. also steve leisman has an interview with christine lagarde. it will be interesting to get her take on all these moves as well. coming up when we return the space race is on. virgin galactic funding new satellites that will be delivering internet to underserved areas. sir richard branson will join us with greg wyler next founder of the project company behind the project. we'll tell you about it when we return. in my world, wall isn't a street... return on investment isn't the only return i'm looking forward to. for some every dollar is earned with sweat,

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welcome back to "squawk box." futures right now after being up triple digits then down triple digits, now on our way back up. up about 54 points on the dow. right now up about 6 on the s&p. but in recent sessions you can't even -- where we are at 10:00 a.m., you don't know where we're going to be at 4:00. at least we've recovered after the initial shock of that move by the swiss national bank. >> you don't know where you're going to be at 7:30 a.m. >> how about this day we were up

almost 300. >> then dropped down 150. it has been interesting moves. let's turn to our guest host morning. legendary investor mario gabelli to get this thoughts. you said this creates opportunities. you saw opportunities even before these moves. you've been watching media very closely. do you see? >> in the media world we're talking about the 3 billion new consumers. but the smartphone and penetration of mobile devices need content and distribution. one of your guests coming up deals with wireless connectivity. the president of the united states is saying we have to bring broadband into the local communities, have competition, get you up to significant speeds. so there's a lot on distribution. for my point of view i like the content companies and i like to look at stocks that are beat up i can own for the next three or four years. one of them that jumps out and it's 700 million shares. has done a fabulous job. they've got great cash flow.

they've got short-term issue. but over the next five years this is a stock that will double and do even more than that. so buying back taking excess cash flow positioning itself. so that's what i want. sony has done a fantastic job. i think at some point there will be a consolidation. obviously doing well in beverly park. and something will happen. >> you said consolidation. you say consolidation in context of zone snisony? >> no. columbia pictures paramount. something will happen. you've got another guest coming on at 8:00 so let me step back. john malone warren buffett have been wealth builders for the last 30 years. right now if you have the fingerprints of john malone on all of his companies and there's a grid of them including directv and several others. he's got $110 billion of equity

capital, not counting the debt. he personally has $8 billion in the game. not like warren. warren's got a little more. but the point is what is he doing on financial engengineering. he comes to work every day thinking of scale and consolidation. and discovery is part of his fingerprint. and david understands that. and so -- >> you think discovery becomes a larger umbrella for a much dr. >> or it's a $20 billion. you're paying for facebook, alibaba, google hundreds of billions. they're trying to get into this business. well you know they want to be in the content business. who do they want to own? how do we see global consolidation? there's a company in the caribbean coming out of england that wants to do something. >> we had a guest mel karmazin that said he thinks cbs should

be together. >> i love mel spp he looking for a job? obviously he sold his radio station to cbs. he understands that. the understands the fact you need a network that's limping. able that things could be done on and would work. you've got national in between that. that's an element that will be in play at some point in time. and there's a lot that will go on. >> mel this week? >> last week. >> it was last week. >> i didn't know. i just -- >> hey, you can have mel any time. >> he was in the last week in the last seven days i should say. there we go. >> just to be clear, none of this is going to happen nothing really happens until we get some clarify from the fcc in terms of what net neutrality really means, all the other deals on

the table. >> the directv is clear that that has to be done. and for my point of view consolidation is an important dynamic. you need scale, you need structure, and you need to consolidate some of these players. notwithstanding that, you're not going to have clarity on net neutrality. whatever the fcc announces in the next couple weeks will be debated in court for a year or two. the toll for trucks is like $50. the toll for cars is $14 before discounts. and so you've got to have heavy users pay more. otherwise who's going to pay for the $45 billion. who's going to pay for the infrastructure. you want to maintain that infrastructure. you know, north korea -- not north korea. south korea was better than anyone else in wireless for a long time in broadband and speeds. so the other part is live entertainment. you know. you're in a studio here where --

>> and we're across the street from the owner of the company you like a lot. >> madison square garden is splitting up and doing engineering. you have companies like others that are involved in live entertainment. and that plays. okay? whether it's any entertainer you want. i like country and western and anything to do with nashville so i'm focused on that right now. >> you also started telling me something. sometimes you move a little faster than i do. >> never. >> explain to me about what it is you're following with the growth of pets. >> why would anyone like on monday morning of this week -- why is there consolidation in -- so i'll give you some statistics. i'll have to read one because i want a less than unaccurate number. there are 53,000 veterinarians practicing. and there are 85 million dogs 94 million cats.

so when you think about what we're looking at who distributes companion pet products? patterson and shine who are very good companies and obviously nwi which was taken over. who is providing the health care products the veterinaries need? that's how there's a consolidation going on there. i'll stop there. >> all right. mario, thank you again. mario our guest host this hour. more from him in a moment. when we come back richard branson on his new investment on satellite for rural areas.

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welcome back to "squawk box" this morning. the need for speed sparking a space race as tech companies jockey over ways to bring faster internet connections to more of the world's population. virgin galactic announcing today a new investment in one web which is launching low earth satellites to offer broadband to rural areas. sir richard branson joins me now from his home in the caribbean and we hope to talk to his ceo in just a little bit of one web. but richard, tell us about what you're trying to do and who the audience is for these satellites. because people have tried to do this before, but it's always been pretty tough to make the economics work. >> well we partnered up with qualcomm. we plan to put an initial array

of 468 satellites out. and if that's successful we want to go to 2,400 satellites. so more satellites than are currently in the sky today. the idea is to try to reach the literally billions of people who don't have internet access or wi-fi access. a lot of them don't even have mobile phone access. and to do so with good quality reception at good prices. and that's something which we both feel confident about and we've got some other quite large investors who are going to be announced over the last two or three months who also believe in the idea and think it could work. >> richard, the model for this and in particular the audience, is this u.s. based? global? let's talk about the economics. because i'm just curious to try to understand what the cost base will be for those who are trying to get this service relative to

other opportunities and where you see this all relative to what google is trying to do, for example, with lune. >> they -- as far as america is concerned, obviously whatever president obama announces tomorrow is great. but there will still be plenty of places in america where they can't get internet access. and we'll be able to supply those. but i think the big beneficiaries of this are going to be third world countries where they're just not getting education, they're not getting, you know all the benefits that you get from having internet. and being able to set up their own businesses and so on. i think they will benefit enormously from this. as far as price is concerned, the initial array is going to cost nearly $2 billion to do. but we can still be very

competitive on price as far as the end use is concerned. and we believe that they -- the break even of this is not enormous. you know it's something which qualcomm and virgin group looked at closely. we feel makes sense economically as well. it's also you know fantastic for virgin galactic because we have laumpbl ofnch of one which is an efficient way of putting satellites in space. we can literally take off every three or four hours, replenish satellites when they come out of the five years. and take off again and put more up. so it's a great boost for virgin galactic as well. >> sir richard, i'm sure you looked at others who tried to do this before.

they didn't do it successfully. what is different about this? >> we've looked -- we certainly looked at others. and it hasn't deterred us. i think what's different now is that you know we have virgin galactic which can put up small satellites cheaply, quickly, and efficiently. we -- you can build small satellites now for a fraction of the price that you could ten years ago. and we're going to be talking about, you know the quantity of small satellites which enable us to be able to drive the cost down to an incredibly competitive level. and there's a lot of technological breakthroughs that have taken place since the companies of the past. >> sir richard branson, we thank you for joining us this morning. we wish you well with it. it's a great project.

if any it's actually works and is as successful as you want it to be it will do great things for reaching a lot of people who don't have the service right now. so thank you. >> we look forward to tracking it. >> thanks. coming up barry diller. the owner of brands like match.com, tinder. also citigroup numbers expected any minute. we'll bring you the numbers only as "squawk box" can do. always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

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doing business with barry diller, the media mogul our special guest. from freedom of speech to tinder to floating islands. his expertise on the big deals in the works and the next big thing to hit the industry. volatility is the name of the game. citi citi citi citi citi group earnings. and the power of the social media. as the final hour of "squawk box" begins right now. cy live from the most powerful city in the world, new york, this is "squawk box."

>> welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. i think we're in the presence of greatness with barry diller. barry diller is here. thanks for coming to new jersey. the show's 20 years old now. >> are we in new jersey? >> you are confused. this is new york. >> thank you. but i think the cars are distracting. >> as a backdrop? >> yeah. >> we like the energy. >> well it's nice for you. i think the goal is to make it nice for viewers. i'm sorry. it's none of my business but i've been watching. >> you are a guy who knows a thing or two. >> if you could slow the traffic to four miles an hour. it'd be a good shot. >> be a better shot. okay.

>> let's talk about what has broiled the markets. and you read the commentary not really with currency traders here, but definitely abroad. they haven't seen anything like this in 30 years. they're calling it a tsunami and a hurricane and a tornado. switzerland's central bank shocking the markets by scrapping its long-standing cap on the franc. the impact being felt throughout the market. the euro once again plunging against the dollar but the euro's been plunging for awhile. and, you know the swiss franc has been going down with it when normally it wouldn't have. at least at the swiss franc, very strong. it moved 30% just this morning. backed off a little bit. but it's roiling financial markets. we'll find out what it means. because eventually our stock sold off to down almost triple digits. we're up right now. check out what's happening in europe at this hour. actually there is the euro at

1.17 right now. the european markets are actually doing a little bit better, but not in switzerland, obviously. that market was down as much as 10%. u.s. futures have been all over the map. but right now they're now down. you saw it was up four a second ago. the last time we checked it was up 60. so traders are trying to figure out exactly what this means in this country. earlier this morning mark chandler talked about the currency market and how bond rates are putting pressure on investors to get into equities. >> i think investors retail and institution have little choice but to move into equities because the yields in the bond markets are too low for even fixed income. people who need fixed income. so rather than worrying about retail, i worry about people on fixed in k, pensioners retired people. those are the people that will continue to be hurt. not the leading spectator. >> much or on all this in just a

bit. you can imagine if there is qe next week and the euro continues to weaken and we've still got this swiss franc pegged lower and lower. >> much more painful at this point. >> right. they had to do it now. but they also had to lower interest rates which is actually raising the amount that they charge banks to hold. >> they didn't give any advanced notice. most when they do moves like this, the ecb has been talking about what it's going to do next week. without advanced notice that's when you see massive moves. >> but for swiss exports, it's going to be hard. and for swiss banks which already had problems now they've got to pay more money just for the bank to hold their deposits. quite a bit more. so it's a negative -- there's not been an interest rate. tough pay them to hold it. citigroup earnings out moments ago. right now the stock is indicated lower. that's the first move we're seeing.

48.11. it closed at 49.05. we're down about 2% because it's another miss here. >> 6 cents versus the 9 cents they had been expecting. also 17.8 billion in revenue versus the 18.5 billion expected. bigger than expected legal fees. a profit of only $350 million. that includes $3.5 billion, some of those legal charges were previously disclosed others are repositioning charges. and that compares to a year early profit of $2.46 billion. >> corvat acknowledging that it fell short of our expectations. but still got a stock now trading below $50. come back a little bit. $48.13. but that's what the five-year chart looks like on that name. here's what else is happening right now. bank of america posting earnings

and revenue that was also below wall street's expectations. impacted in part by fixed income trading because we saw those big changes. more pressure than expected at the end of the quarter. you can see this morning the stock is down about 3%. $15.56 is the last trade. blackrock raising by 13%. that stock was already yielding 2.23% even before that. we'll see what happens to this stock this morning. we have not gotten bids on this yet today. but best buy, that stock is under some pressure this morning. after the company posted better than expected holiday season sales, but also cautioned that it's going to be includesing spending in order to promote sales growth and warns it expects same store to be flat. let's get to the man of the hour. we are happy to be joined by barry diller visionary in the media world for over three decades. his career has been well

documented from paramount pictures to fox to qvc. these are just a few of iac's brands. in addition to being senior executive at iac, he is also the chairman and executive of expedia. we are happy to have you in our studio for the very first time. >> i'm happy to be here. >> as joe made the point many times, we moved for you. >> i appreciate it. >> that's pretty complementary, is it not? >> it's complementary, but i may not hold. >> but we need vision. i remember when you bought that -- like it was on tv to buy stuff. it was like why would anyone buy that thing. it was all about the internet even back then. i listen to what you say. >> it had no vision and it just had curiosity. >> but it worked. >> andrews' curious a lot. i bet he's curious right now. >> i'll tell you what i'm curious about. we haven't talked in awhile or

since the news last week of this horrible tragic massacre in france. and we haven't talked since the sony hacking event and what that means for free speech and what it means to be an executive of a big media company and how you deal with all of this. >> well that's large. on sony and i do think it has reflections on it. sony is not a hero in inception in the sense they decided to make a movie that had huge controversy. they made the decision to have a movie that was controversial or didn't work you make movies you're going to make mistakes. i don't blame them much for that. i think of all the players in this they deserve the most sympathy because they were actually the victim. and they then were i think,

absolutely unheroically banged by the president who didn't have the facts and while he was saying the absurdity of you should have called me. yes, i have a business decision to make get the president. i mean it's kind of crazy. >> and he's been watching all of this. if they were interested in helping, they could have called sony as well. >> well they had been i believe, at a very senior female level of the white house been talking to sony executives directly. also sony at the time that he made his statement, they were working on a digital release. i was working on it for our service to be a digital release. so i think he's not a hero. the motion picture industry is absolutely unheroic. they for three weeks said nothing. nothing about standing up for

free speech. nothing about the responsibility editorial responsibility et cetera. they were utterly silent. so that means that all of the members were saying huh-uh. we're not getting involved. so one of the things about this free speech thing is that you have to, of course -- one of the things is when you have an incident of any kind everyone has to get involved. like they did after the terrible paris. so they ain't heroes. the only real hero oddly is george clooney. why? because for three weeks right after this happened he did try to gather support. he wrote a letter to all the heads of the movie companies and dozens of celebrities to sign. celebrities said okay we'll

sign. not one studio would sign it. in the end no one would sign it. so he really did try and stand up. so i think that you know the swirl of this is that there's an issue of free speech publicly and there's an issue of free speech privately. public free speech has responsibilities. i don't think private has any responsibility. >> would you have made the movie? >> actually, i don't know if i would or not. i probably -- i don't know. stupid to say. it's so easy to say i wouldn't. but i've made so many crappy movies over a very long career and i think we've made some great movies but you make movies, you're going to make mistakes. i've made movies you know we made a movie once called warriors that the first weekend "warriors" was a kind of violent

film and the first week there was a shootout in a theater. and we withdrew the movie. we never showed it again. you make mistakes. >> okay. with the understanding that sony was the victim we still saw lots of e-mail traffic and other things from the executives at sony. so my question to you is is there a fallout from that? when you look at the ceo or amy pascal and some of the things that were said what do you do? >> it's so ridiculous. amy pascal and scott rudin are not racists of any kind or color. zero, not. were they insensitive? slightly insensitive. are you, you, you, and everybody else? >> totally in private. >> we are all insensitive other than what we're sensitive about. and so to -- the absurdity of her going to that fraud al sharpton and asking for forgiveness and then he making a

statement saying should she lose her job, he said i haven't decided that yet. i thought the world has gone nuts. private -- any kind of private communication, e-mails. we all have to know that whatever you say more than likely it's going to get out. but the terrible thing is to see a thing on a cab which says if you don't want it on page six, don't do it. i would like to ask anyone would they want to live their lives in every respect of their life that way? >> but that's why the studio heads wouldn't stand up. they all thought there before the grace of god goes i. they all had e-mails they didn't want dug into. all of us do. i should say all of us. >> who doesn't? >> any fallout though long-term for sony? >> none whatsoever. all this stuff saying it's the end of amy pascal because of this, that's pooey. by the way, i think michael handled himself well.

he was working on releasing the film. and then to get blind sided by the person that he'd been supportive of all this time didn't even give him the courtesy of saying you know we're going to say something in a few minutes. everyone was waiting for that press conference. we were in negotiations with sony during that and had to wait until the president spoke. no one knew what he was going to say. >> we're going to slip in a quick break and come back and talk to you about m&a. i want to hear about this deal with woody allen. and other issues. stay where you are. when we come bab, more from barry diller including his plans to build a floating island off of manhattan. then some market-moving data. jobless claims and. rks pi minutes away. also value picks with ariel investment ceo and a battle over ipa. "squawk box" will be right back.

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welcome back everybody. we're joined once again by barry diller. we look to you for judgment on content. i've heard you say there's all sorts of good things on television. most of it happens to be on showtime or hbo or whatever

you're watching. i was wondering if you're watching things on netflix or amazon. they just got heralded at the golden globes. so what do you think? where are you watching content these days? >> i am not watching content anywhere close to the way i used to of course which was one of four channels. and you would actually -- there was a thing called -- i can't -- this is -- >> take it out. >> it's screaming in my ear. so i don't watch linear television anymore. and i haven't for years. since the dvr, since directv, since all of that. so i only watch shows i'm interested. i don't watch networks any longer. i think that's true for a growing number of people. i think because you get more and more optionalty. it is going to break up the kind of closed system will break up with all of these other

opportunities. and people's television viewing is going to be to a program, to a theme of a concept. it's going to be -- it's simply not your mother's media any longer. >> will you look for the words "squawk box"? were you searching for the words there? you were watching us this morning, weren't you? >> no. >> how'd you see the cars going by? >> i saw them yesterday. >> okay. so you were watching yesterday. that's close enough. >> you've got a good thing going which is called live. anything that is live then you're going to be able to draw people to actually say oh it's the morning, i'll watch you or one of the other bimbo shows. >> take that. >> amazon just did a deal with woody allen. >> yes. >> probably for a lot of money, we think. >> i would think. but yes.

>> does that make sense to you? and do the economics -- there's a lot of money going to original programming. to some degree is great for the viewer. but i wonder long-term if the whole thing still works. >> well you have to -- the models are really changing. here you have amazon. amazon is not doing this for benefit of advertisers. essentially the program in this case is the advertising. because amazon only wants to get more people to sign up to prime. and if they sign up to prime, they get a whole slew of things some of which is fresh new video. so that's a model no one has ever heard of. and there's -- by the way, they don't care i presume they couldn't care less how many viewers they get. probably like to have some but the issue for them will be do they think it enhances and increases the subscribers to prime into their ecosystem. so you can't compete with that.

if you are out there thinking i got to get ratings because if i get ratings, then i can get advertising. of course there's now no pricing power with advertisers anymore. because the advertising swish is moving, of course, to digital mobile et cetera. there's no pricing power there. there's no pricing power for cable programmers because they've stretched the bacon so wide with costs of 130 or $50 for all this stuff very little of which you want. so you're not going to get the kind of increases that programmers guide. and if you're a cable operator your margins are being decimated on the program side. >> i hate to interrupt, but quickly let me tell you of breaking news. target corporation just out with news it plans to discontinue its canadian operations. obviously those canadian operations have been the big problem that have been dragging

down stock for quite a while. if you look at what's happening with that stock price target shares are trading higher on this news. $77 is the last trade i see after it closed yet at $74.33. they say they are unable to find a way to get target canada to profitability until 2021. as a result, that's why they're making this move. it has 133 stores about 17,600 employees. they do expect $500 million to $600 million in cash cost. more on this in a bit. >> did they ever make money? >> no. >> never made money? >> i don't believe so. people -- the analysts the street -- even though target had the big breach last year the data breach what analysts were saying at the time was they were more concerned about the target canadian operations than they were the breach itself. >> none of the lumber jack shirts and the hats with flippers. i'm kidding. i love canada. that's our most faithful ally and friend.

>> we had canadians standing outside the other day. >> we did. you have one of those hats. >> i do. i love it. going to turn back to barry diller. we had dick parsons on last week and mel karmazin on who made the point he thinks time warner should merge with cbs. but dick made the point that he thinks that once this deal gets approved or not, you will see a domino effect. >> for what i was saying before if you can't get pricing power and growth because all these areas are challenges because the inevitability of the move the centrist moving from a close system to an open digital system has such consequences. if you can't get growth, you have to consolidate. i think what happens is it

consolidates. you see now almost nobody who has a cable channel or a broadcast channel takes much outside programming. they essentially -- it is now utterly vertically integrated. >> and is that a good thing or bad thing? >> for who? >> for the customer. >> who's the customer? >> the customer is the viewer. >> okay. for the viewer it's a good thing. the reason it's a good thing, all of this stuff, is because you have models now that have come up hbo, netflix. netflix -- hbo was always in the business of not counting viewers but being able to push the boundaries and do interesting things. netflix even more so. amazon everyone more so because of their differentiated -- >> i wonder. would you see a woody allen deal with anybody other than an amazon? >> almost impossible. it would be very unlikely. and so for the viewer they're getting choices they never had. it's why television right now

creatively is so far superior to movies. as a creative enterprise. >> we've got big screens too. what happens in february and how would you say that that happened? you got wheeler who probably knows pretty well who shaub done.done -- what should be done. and then the president who northeast deep in his heart what's right. i think he appeases his base a lot with things he knows are not going to happen. he can at least be on the right side of things for the far left. >> they're on the other side of this argument than you are. >> no. i'm sure you don't want the 1932 rules, do you? you want it as a utility? >> excuse me. i'll tell you what i want. >> okay. tell me. >> this dialogue has been going on for at least ten years. it has had a wonderful effect. it has had net neutrality

without did sh. >> we're already there. >> excuse me. without rule making. the reason it's habit, though is because of the dialogue because of the fear of the players that if they should make some misstep, the they should do something wrong, put traffic ahead of somebody else's traffic. if they should do the bad practices that have happened from the beginning of communications in terms of taking over everybody, so that's retarded them just that it's in the air. right? >> right. >> so i simply would like this argument to go on for another ten years and everything would be fine. i think no one is going to pass title 2 with restrictions from the '30s. >> i don't want that tell me what i want. >> he wants a modified title 2. he wants a modern one. one that says certain -- >> not nearly the smartest. >> -- one that sen certain basic

things but conserves a free market system. >> he doesn't like free markets anywhere. >> that's not true at all. >> anywhere. so the status quo is probably -- that's different than what the president has asked for. that's what i was trying to get you to say. >> i think the idea of him so superficially -- first of all, he can't direct the fcc. >> no. he can try. >> independent agency. >> he can try, but he can't. >> presidents can't direct the fed either. >> can you stick around a little bit longer? >> was i leaving? i'm happy to leave. >> no we're begging. we're groveling. stay. >> okay. we have a bit of data that could move markets. plus more on this morning's swiss market surprise. also metals hit heart over the past week. copper falling over six straight days. lead now at a 30-month low. our portfolio guest says there's

a stock play there right for the pickings. we'll talk about all that in just a moment.

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welcome back to "squawk box." breaking news.

empire january, a better than current read. just shy of expected. but here's where the action's at. buckle up. ppi. we're looking for a number down .4%. we all know energy prices are going down. we just about got it. a little light, actually. down .3%. but here's the secret. if you take out food and energy what would you expect? lower or higher? up .3%. that's a big jump. all the numbers last month were unrevised, so i find that a bit fascinating. and if you look year over year it's now over 2%. 2.1%. .3% higher than our last look. 1.1% if you include energy. we have a horrible deflation problem. i can only think about world war ii when i look at the fact we're

1.1% on ppi on a year over year basis. we could argue stability. we could argue deflation, inflation. look what the swiss did this morning. let me think. are prices calibrated by things like interest rates and what your currency is worth? central banks gone wild. it'll be new in the spring. we want to pay attention to how it moves the markets. back to the gang on the desk. "squawk box" new york. >> all right, rick. thank you. let's bring in steve leisman on the numbers and michelle caruso-cabrera who's here on the swiss franc. do you think about the numbers today? >> obviously as rick said the food and energy on ppi was a surprise. it looks like it was driven by services, some increases in private capital equipment. but i'm seeing a little bit -- natural gas up 3.2%. so that's going to drive it.

gas up 14.5. so a nice beat on the upside for empire state. and i did not see or hear claims. did rick give us claims? this is a volatile period here for claims. looks like they rose to a four-month high. >> 316,000. >> right. you're looking for a big increase with layouts. and the question is how much the seasonals get that. on the swiss franc i know michelle's going to talk about it but a lot of people saying this is the first victim of qe. saying that what this is all about is getting out in front of next week's move by the european central bank because what was going to happen was they were going to have this basically need to buy a whole lot of euros. it has skyrocketed. >> michelle? >> welcome to the world currency wars. they keep saying how do you defend a currency? if you're trying to keep it from going up you have to go out there and buy the other

currency. right? so you print up all the francs and keep buying euros and keep buying euros. how much longer were they going to do that when they knew the european central bank was committed to weakening the thing they were buying and putting on their balance sheet. at some point they think we'll have to cover our losses. >> the thing that was shocking was it came without any warning. we've seen from the central banks over the last five or six years is much advanced notice are hey the market is coming the move is coming. >> becky, the general rule has been when it comes to monetary policy, you're absolutely right. but usually when they do exchange rate actions, they tend to be unannounced. in part because of the exchange traders to really get in front of these kinds of actions. by the way, just want to mention, this is one of the things -- maybe one of the first things i get to when i talk to christine lagarde today. and i think michelle correctly

brings up the possibility of currency wars with one guy rotating around the other and sidestepping downward. >> we were going to send you an e-mail to maybe bring up the swiss franc. >> thanks joe. that's brilliant. >> you've got it covered, sounds like. which is why you are who you are. >> i'm just -- you know you think very deeply about these things to come up with these kind of answers. >> becky, your point. watch for dislocation. right? and watch for people who made money. because defending currencies on either side is difficult. >> it's like price indexing. it's like things all of a sudden -- >> it'll work eventually. >> yeah. all right. thank you steve and michelle. the squawk platinum portfolio is back. you can go to cnbc pro on cnbc.com to track the portfolio managers' picks realtime. hear with us a john rogers at ariel fund. john has $10 billion under management. have you changed any of the thams that you brought us in the

past? >> we're working more on our industrial companies these days. our vice chairman made the case that everyone talks about low energy prices being great for the consumer. it's also great for industrial companies. they have to get their products from the plant to wherever they're going to go. costs a lot of energy to build steel and run a plant. so we think lower energy costs are really going to help industrial companies too. >> hopefully the ones that aren't involved in oil and gas production. so you picked the right ones. which ones? are those the ones you're bringing us today? >> those are our favorites these day. >> anixter telecom. >> it's been around far long time. sam zell is the larnlgest shareholder. >> next on the list? >> kenemetal. it's really underperformed. they compete with warren buffett's iskar out in israel.

they've done well against them. >> is it down -- just with that in general? why have they had a tough year? >> because of lower commodity prices. they have a lot of products that support the industry. that's been hurtful for them. we think long-term they're going to be extraordinary. >> and what's your third one? >> the third one is mts. they do testing systems, high-performance testing systems. we've been out to visit them. they had a huge big industrial testing equipment that's really world class. >> all right. we've got to keep it short this time. can you tell us anything about "star wars" that we don't know? the new "star wars" movie? >> i'm not in charge of that yet. >> what? next time just a little something. you know what i mean? harrison ford got hurt or something, right? >> last year yeah. his leg. >> he's all right though.

is he 70 yet? still hans solo. all right, all right! they snap like that. you got it out of your ear. >> i don't have that much input. >> too many things going on. you can no go online to cnbc pro. i said this leading into him, did i not? on cnbc.com to tra kck the pros' picks. still to come tomorrow paul meeks and jason subotky. coming up next, barry diller is here. he's sticking with us for the rest of the hour. we've got a lot of ground to cover with him including management shakeup at tinder. don't roll your eyes. this is going to be a great conversation. as we head to break, take a look at --

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we are happy to be joined today by "squawk" regular barry diller. visionary. not quite a cnbc contributor yet. but we're talking. a visionary in the media world for over three decades. senior executive at iac and expedia. where were we last time when we -- oh. so what we decided was that probably those very draconian rules that the president wanted for net neutrality -- >> never happen. >> so then we're back to my initial question. why would he pretend it could

happen other than to just sort of sound good to people? >> that's a good thing that -- >> it's like saying who doesn't like clean air and water? >> it just is more complicated than that. and since he's up for saying anything about almost anything because there's nothing that happens that a statement doesn't come out about, so he made a statement about this. i don't take it as -- by the way, since he can't influence really truly the fcc, it's just meaningless. >> put democrats on it. there's more of a majority -- >> i feel like it puts pressure on wheeler to not go all the e wa i to make it look like he's listening to him. >> i think wheeler is a practical man. and i think he knows that. he knows business. he gets it. if he does propose rule making it is not going to be draconian. it'll fix maybe a little of title 2 for certain limited

purposes. other than that it won't be. i don't really worry about it. >> if they did do it don't you think that it would dry up the huge investment? >> that's absurd. >> at&t would still invest? >> they have huge margins. i mean nobody is -- >> because it's a duopoly or monopoly. >> the thing that should happen and i'm really angry that it hasn't is this dumb government in this case precluded t-mobile and sprint from merging. and then you get a real competitor that would go in and would undercut everything else. you'd get real competitive pricing and get better service. and the government said oh the third and fourth. but it's ridiculous. it's a total duopoly. so unless you create a third wheel of competition -- >> and they used your stupid formula. what formula is that?

another thing from the '30s that we still dredge up. okay. that didn't make sense. like, those two major players. t-mobile and sprint. >> the thing is you'd have -- i mean masasan has improves the service and competes like hell. and that's what this market broadband needs. so -- i mean -- anyway. >> but you think these deals do happen and you do think -- >> which deals? >> comcast -- >> oh i think consolidation, there's no way around it. >> what happens to the future of viacom sumner's holdings? >> oh, sumner. sumner, no one knows. there's no way to know. because presumably he'scould change

his will at any moment. he does vote the share so he directs the outcome of cbs and viacom. and not only does he not want to die, he will refuse to die without ordering the future. so it's only what's in his mind. there's no way to know. >> what do you think john malone is up to? your old frenemy. >> no john's my friend. he's been my partner since i left fox. and i -- first of all, almost no one has the mind of john. he just has a fantastic brain. i think he's happier than ever. and he's building a huge cable company under the noses of almost everyone outside the united states. he's the biggest cable player in the world.

>> do you think he still wants to -- is this still a piece of the puzzle he wants? >> andcharter is a vehicle in the u.s. he tried with time warner but i think they screwed it up. by the same hand that kind of soured john and mine at the moment. they'll make progress. look. comcast is not going to be the only real programmer. programmer and digitaler in the broadband distribution program business. >> all right. barry diller is our guest host for this house. "squawk box" will be right back.

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>> that was target ceo brian cornell talking to courtney reagan in november. this morning we just learned that the answer target is exiting canada saying it's unable to find a realistic scenario in which target canada can become profitable before 2021. shares rising this morning on that news. we've got much more though from barry diller and we want to get to him including the success of tinder when we come right back. and also programming note. tomorrow's "squawk box" guest host is legendary short seller jim chanos. he's going to join us at 7:30 a.m. eastern. we're back in just a moment.

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you've been unmatched, right. >> right. >> tinder. >> not on tinder no. >> whatever on match. >> two bad dates. >> oh. martha. >> yeah you said try again, right? that was martha stewart at our cnbc 25 event a couple of months ago. joined by the gentleman you in saw to martha. right, barry diller. senior executive at iac. >> yeah. >> how did you get that deal? know someone there? majority shareholder of tinder.

martha's not on tinder apparently. that would be -- >> that would be probably -- >> easy. >> no it would probably be irrelevant, i'm afraid. >> all right. there's a word for it. so tinder at the atlanta hawks game. >> yes. >> there is world, i don't -- i -- i'm scared to move forward. >> you're a little above the age limit. >> thank you. thank you for that. i don't -- you said it's not about hooking up anymore. people using it socially. >> i said it's not anywhere near only about it because the thing is tinder particularly for people who are going to cities where they don't know people whatever, they go on tinder in order to be part of a community find out what to do who to talk to et cetera et cetera, who to meet, yes, is there flirt going on? probably so. enormous number of people use it as a communications tool. >> that's what michelle caruso-cabrera is saying she uses it when she lands in a new city. >> she says she uses it for. >> figuring out what's

happening, where to go quickly. >> it's true. it's a wonderful -- look all of the stuff is harkes back to princess phone, but, no this is just another way, sophisticated, technically, you know enabled way to communicate. to be -- to be talking, and people like to do that. >> so you know visionary and everything that we've called you today, media into the future, five, ten years content is important. will content, will they figure out a way to get paid everything it's worth, somehow? >> well as i say, they don't have pricing power. >> how -- what happens? >> well i think consolidation happens. i think -- in other words, look for amazon you said earlier, probably paid well woody allen, well, right? >> yeah. >> he's being paid by a kind of alternative method than

advertising or subscription kind of models. and so i think what happens is first, you get consolidation, you get absolute vertical integration. in other words, if you own amazon, you're going to own your programming. netflix owns all of its programming. hbo's always owned all of its programming done they pay people well but people working for the man, meaning independent producers are gone because there's no model for independent producers anymore. great fortunes jill brookes probably made $1 billion out of "the simpsons" co-creator and producer of "the simpsons." those days are gone i think. >> doesn't mean people won't get well paid and who would be sorry for people making $4 million, $12 million instead of 140. >> commercials only on live events at some point?

>> i don't know. look, the thing is it's going fast and slow. fast is everybody and their mother is getting into digital programming. >> right. >> of all different kinds, valuations and all of that noise. that's very fast. slow is this is a model, this closed system is a model that has been built up over a very long periods of time and it's going to be five or ten years before -- right now you're getting chinks in it no more cable growth no more people to subscribe. in fact cable degrowth. so i think that that you know that -- that so to speak pile-on means you're going to have different models and if you don't have the different models -- >> barry, can you talk about the coca-cola board. >> sure. >> the company's under assault from david winters. >> please. >> that's what i say. >> he's just another blow hard. >> he's got 100 shares. >> and, you know so i don't --

look, company's hardly under siege. the company acted in a dignified way. i might have been less dignified in my response to the missed math, a kind word to say, for what david winters said about coca-cola's compensation programs but -- >> did you appreciate how much compensation being distributed at the time, meaning -- >> what happened -- >> what was voted on -- >> what happened which is really weird -- it's weird -- what happened coca-cola had a compensation plan in place for a very long time. they had to renew the plan. the rules said that they had to say that x number of shares would be -- would be given over a four-year period, right? cokeca-cola had no intention over a four-year period at least

ten, maybe a 20-year period. but if you took the four-year period and didn't read underneath it and dwrund standunderstand it, it wasn't an obligation you would have said coke was giving away all of the stuff to its employees and diluting shareholders. in fact, coke's delusion under 1% standard for companies, et cetera, it's all blown to hell. it was not, it should have been better explained. coke learned a lesson. should have explained it in more detail at the outset. >> okay. two other quick questions for you. building a floating island. >> yes. >> off of manhattan. >> fool that i am. >> how did that happen? what is that about? >> it happened -- >> what do you think of criticism about it. >> i understand it. i mean you do anything people are going to criticize it. i'm sympathetic to it and all. it happened because we my wife and i played a fairly big role in the high line and loved the high line love the lower west side, i love public spaces and

this opportunity came to build -- basically tear down a pier and rebuild it. about was prosaic idea. i said why don't we be ambitious and get really be ambitious about what it looks like what kind of park it is we can have performances. like many things it grew and i think it's -- i think it's going to be -- i mean hopefully we will be able to do it. i think we will -- it will i think, be great for people. >> looks awesome. as a new yorker i hope it works. appreciate what you've done for the high line and all of than thank you for being here coming in. see you next week. >> or not. >> sure. >> but you have to travel to where i am. very far away. >> we can arrange that. >> we can arrange that. >> that's it for us today. join us tomorrow. time for "squawk on the street."

good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer david faber at new york stock exchange. we're down four straight days. talk about whipsaw action this morning, as the swiss national bank abandons its cap against the euro cuts rates. more on what that means. citi and b of a under whelming bank earnings. ppi came