>> all of this of course is happening as the markets close in on the 18,000 point level and the nasdaq stands at a 15 year high. it's friday february 13th 2015. squawk box begins right now. >> good morning welcome to squawk box here on cnbc. i'm andrew ross sorkin. we have a couple of big stories we're watching this morning. here's what's happening. president balm ball as becky and joe were saying headed their way to host a major summit on cyber security. it will be held at sanford university and ceos from american express mastercard visa paypal apple expected to confirm and tim cook expected to deliver a speech. also ports are open today but will be closed the next three days as the labor dispute starts to get ugly. the ports were closed thursday for lincoln's birthday. a day where union workers would

have received 50% more pay. and the widely anticipated movie 50 shades of grey hitting the silver screen. already breaking box office records in europe. could have a big valentine's day weekend. universal is part of the comcast family. in the meantime let's go to michelle with a check on the markets at this hour. >> yeah let's take a look at the u.s. futures following yesterday's 100 point gain on the dow and the nasdaq at a 15 year high. strength in europe feeding into the u.s. the numbers suggest the dow would open higher by 33 points: we want to bring your attention to the european markets. they're on track to end this volatile week on seven year highs. the german dax crossing the 11,000 mark after germany gdp numbers came in higher than expected.

greece however weaker than expected. we'll talk more about that later. shares of conagra tanking citing a strong dollar and weak sales. they are also appointing former chief sean connolly as the new ceo ceo. kraft is switching up the ranks. it's cfo and other senior executives will be leaving the company. also reporting a loss of $400 million and stock falling on the news. shares of aig dipping after reporting profits of 97 cents a share versus expectations of $1.5 a share. >> we have a tale of two gaming companies. king digital scoring a major beat earnings 57 cents topping estimates at 10 cents. also shares of candy crush maker spiking on the other end of the spectrum and shares of zynga

fumbling after they reported earnings and revenue that fell well short of expectations and groupon topping earnings as well but the forecast missed the expectations and they're citing unfavorable impacts of foreign exchange rates. >> we'll show you the other key markets in the morning. the price of oil at this hour is higher for wti. we were at 50 yesterday. we were coming off the bottom. brent is at $60.34 per barrel. the ten year yield, this is interesting to to watch. 2.00. so if you look to the right hand side of the chart the move has been higher even though not much head way yesterday. the dollar we have been talking so much about it in the wake of the earnings report and it's impact is weaker across the board this morning. we saw that yesterday too. 114 for the euro. 118 yen for every dollar.

pound is going to cost you $1.50 5 3. the -- $1.53. >> back to becky and joe in pebble beach. you have a line up this morning. i need to hear joe about your playing. >> seema said he got a 69. >> that would be an amazing score if that were true. is that true joe? >> we're still trying to figure out how to spell qe. can you give us a hint? what does it start with? what does it start with? >> q. >> it's a mixed metaphor. how do you spell qe. it is qe. >> it is. >> it's complicated andrew. you know it's -- i have a partner. so we shot 69 together. it's really not very good. there's people -- >> are you blaming the partner? >> no i'm not blaming the partner. i'm blaming the crowds. i'm blaming my swing.

blaming the game itself which is very -- you play. >> no, i gave it up joe. >> i'd like to see you, you'd be like the mitchelin man out there. but i can't do what you do. i can't golf either actually. >> the weather has been beautiful though. that's one thing we can say. >> we've never seen anything. last year we're in a tent what is the proof made out of? tent material -- how do you spell tent. anyway the rain -- we thought it was going to break through. >> they were trying to prop it up and make sure that the ceiling didn't fall. this year not the case. >> 77 degrees. >> i've been not freezing so it's working. >> going to get to 77 today. most beautiful. at this point you argue is it the most beautiful place on earth? it's a matter of opinion. >> this ranks up there no matter where you are. >> it does.

>> we have a huge line-up of guests for you. we're at the pro am. a lot of people are coming up. scott is sitting here first of all and we'll talk to him in a moment and we got a chance to sit down with randall stevenson. he's going to talk about everything with cyber security with the huge conference taking place today. what a big issue with all the companies facing anything like this and talk about reshaping the telecom giant as well we have to talk to him about the dividend because there's questions about whether the dividend is safe. we have the answer for that. that stock is on quite a run. we'll be talking technology trends with jeff yang and we have waste management ceo david steiner and glenn hutchens and i want to hear what he has to say about cyber security too because it's a huge issue no one is sure how to take on at this point. we'll also be joined by cbs health's executive chairman. so a big show ahead. >> you know 50 shades of grey

that's us -- >> what? >> well not us -- what a week. becky and i have had out here -- no it's universal. >> i did know that was universal. yes. >> i like this morning, joe are you ready for your 2:45 -- my what? >> i got up at 12:15 this morning. >> did you? >> my iphone said come again. >> i'm not going to complain. >> you're so nice. i'm not complaining. it's just crazy. 1:30. michelle mentioned u.s. stocks at this point look like a positive open. i think it was the highest s&p close this year just off an all time high. i think it was for some tech stocks quite a bit of new highs. i saw apple hit a new high for a $700 billion new company. wall street is cheering a potential ceasefire between russia and ukraine.

that's supposed to be sunday. we'll see how long that lasts. strong earnings reports but how could investors distinguish the noise from the opportunity? scott is global chief investment officer and our guest host for the next two hours. they have $220 billion in assets under management and that's probably one of the reasons you need broad shoulders. thinking about your overall view on things you think this economy for those that find problems with it you think it's really pretty good in reference to the rest of the world. >> absolutely joe. we reached the point now where we have wage growth starting to accelerate. unemployment getting down low enough that we moved from a recovery into a self-sustaining expansion. this is the kind of stuff that you see in late stage economic

growth growth. we're going to see an increasing consumption as wages go up. >> 70% of what we do is consumption. >> exactly. >> that probably takes the top spot over concerns in other areas. >> that's right. i think once we can get the wage growth. the wage growth is focused on the lowest earners. they have the highest propensity to consume their wages so until the economy overheats and the fed crunches credit down again which they will do we have a pretty good run ahead. >> you think it lasts two to three years before that stuff catches up?

>> i believe so. it takes about 2.5 years to move to the end of the rate cycle and then you get a recession. we're pretty good until 2018. >> you stayed on bonds. a lot of people for five years have been in various stages of saying you have to get out. you made money but not necessarily just treasury but asset backed stuff. you do a lot of different things. do you think this time its finally going to happen? the fed goes -- sometime september or later? >> exactly. >> of this year? >> and at that point set yourself up bring in durations and get out of the bond market basically basically. >> i think what's going on in europe, qe rates being so low, we're likely to get another down

move in rates from here but i don't think it will be sustainable and i think that will be the opportunity for bond investors to start pulling their durations down getting into floating rate securities. >> so your prospects too as well as the economy. >> i am. i have come to believe that we need to have more faith in the ability of central banks to print money. >> it works? >> it's inflated asset prices here and inflated asset prices in japan. it will do the same thing in europe. so i'm not going to say that it's going to solve europe's structural problems but it will push stock prices higher and that will be the place to be. >> but you also point out that valuations here reflect some of our preimminents already so the

real opportunity might be in europe. >> yeah. >> i think stocks are still going to go higher here. they have been expanding again. that usually leads us to new highs in the near term. we might have another 20 to 30% higher in the united states over the next two years but when you start to look in europe you can see some of the markets up 50 or maybe 100%. >> we always think of europe as a continent and think of them as a grouping together because of the ecb but if you look at the individual countries in that there's massive variations. germany and france have done before since the big crash but if you look at a greece or italy it's a very different scenario and they lost ground every step along the way. how careful do you have to be in picking your places there?

>> you have to be very careful. i'm not going to argue in favor of greece. greece equities will go higher but places like spain where they made some structural changes that are necessary. spain we have quitely been sitting around and they have six warts of economic growth even though unemployment is very high. somewhere around 25% they're making improvement and, you know, that's where you want to put your money. you want to put your money in economies where you have lots of upside and lots of room for improvement and spain has taken the appropriate steps. other places are ireland and portugal and france has been very slow to make structural changes and the 5 hour work week is going to be a real inhibition to their growth. it wouldn't be my first choice. >> scott, thank you. be with us for the next two

hours. >> we're out of here and first we heard about bob simon. if that wasn't unsettling enough and now david car makes the frailty of life that just hits home, doesn't it andrew? >> it really does. it really does. i will try to read this as best i can just because i have been up all night about this because we have sad news to tell you about new york times columnist david carr. he was a friend of mine. he died last evening. he was 58 years old. carr had a very long career. 25 years writing and analyzing media publishing the changing landscape of our industry. the new york times publisher and chairman called carr an irreplaceable talent. as i said he was a good friend of mine and one of the great princes of journalism. he was generous in his support and always fair. we wrote many stories together. years and years ago bruce buying

new york magazine and rupert murdoch. buying all sort of things. we had dinner in san francisco just a couple of months ago with tom. he brought me along to that dinner and he was an amazing man. he leaves behind a wife and three daughters and he will be missed. we're back in a moment. >> so sorry.

welcome back to squawk box. the hot seat is getting up.

yahoo! is cutting actually more than several between 100 to 200 employees mostly in canada. the cuts were across multiple groups but managing is calling it an organizational restructuring and not lay offs. people are shell shocked. since myer took the helm she is under pressure to cut costs at the company. she has favored a ranking system that dismisses those with poor scores. all right let's get back to becky and joe right now. becky talked to randall stevenson. >> michelle thank you very much. obviously at&t is the sponsor of the at&t pebble beach. been here for 30 years and randall stevenson has been making some big moves to try to transform the giant. i got a chance to talk to him yesterday about what the company wants to be. >> i think we'll be a very different animal from either of those to be honest with you. you made the comment about down the road.

it's not so far down the road. directv we believe closes the first half of this year. our first investment in mexico is closed. we're buying them out of bankruptcy. we think in the second quarter that closes so by the second half of this year the profile, the revenue mix of the company changes rather dramatically. rather than a company where our major revenue share comes from mobility business our number one revenue share will come from our enterprise business. and both wireless as we sell to enterprises. this is moving to be very powerful in the marketplace. bringing, you know sioux secure fixed line as well as wireless solutions to the market. that will be our largest business segment when we get to the second half of this year and it's growing. it's growing very nicely. when you look at our wireless business all the growth is coming from the b to b. the business to business sales piece of that. that will be our largest piece. our second largest piece of

business revenues will come from tv and broadband that we sell to the consumer. it's going to be a very large scaled business. our tv business is not profitable. we close directv and that becomes a very large scale tv broadband business that is profitability as soon as we close it. our third largest is consumer mobility and it becomes 20% of our business. it's the third largest share of our business and the most exciting part probably is going to be latin america. we have the best tv business in latin america. it will be the largest tv business in latin america and the investments we're making in mexico in mobility is going to make this a very fast growth piece of our business and one we're excited about. we like that a lot. >> is part of the reason you moved and changed the economy is because you're looking at a saturation when it comes to wireless usage and ways to find new customers there? >> the u.s. business is maturing. the wireless business is

obviously. so you do look for growth opportunities. our main motivation though becky is when you look at the u.s. and you look at what's happened over the last 7 or 8 years as you built out this mobile internet capability we have been convinced for a couple of years that that is going to replicate itself around the globe and that as companies invest in these mobile internet capabilities around the globe you'll see those economies and markets take off just like the u.s. did. we looked really aggressively at europe for a couple of years. we couldn't find a really good entree to europe and when we bought directv it acquired us to sell our assets and latin america was available to us. we look at mexico and if you look at a place where the mobile internet is prime to take off mexico is one we think is a really exciting opportunity. growing middle class. a very young population. the regulatory environment is very unique. the regulatory environment is welcoming to investment.

in fact they're soliciting us and asking us to come and invest and we put that together and we think this u.s. experiment or experience is going to replicate itself in mexico. we want to be at the front end of that. >> randall talked about other things with us as well. there's questions raised about whether the dividend is safe and moody's analyst downgraded it recently because east worried about the idea of being able to keep one the dividend after the company agreed to spend $18.2 billion in the wireless spectrum. we have a answer on that and we'll get to that later but we talked about the brand of at&t when it comes to sponsoring jordan spieth. >> we got to know jordan and his family and we have fallen in love with he and his family. he represents our brand very well. he brings to bear the millennial generation and he has a lot of advantages for at&t and we hope

we bring a lot of advantages to jordan spieth as well. >> he's quite a character. >> he's very mature. he's 21 years old and amazes me how much in command. how polite. >> have you been watching how he plays at all? not as much as i have been watching? >> yes. >> he's like a phenom and in fact you were sitting next to him at dinner and i got to talk to him as well and i said are you 23 or 24 now? >> 21. >> yeah, time flies but randall wants to get his monies worth. 21. let's get them early. remember phil did things like that too. get them when they're still in swaddeling clothes so much. he'll have a long unbelievable career. i don't know how many majors we're talking about but suddenly majors are a lot more available

to everyone now that a certain tiger seems to be how about this lost in the woods. tiger woods. that is a bizarre story. >> not like he's been a huge threat. >> lately. but we were talking to jordan and i don't think it was necessarily off the record but because it was one of his idols and no one in the world thought you would ever see his short game be where he was. he was the most confident player in terms of his chipping and putting and it's hard to watch and nerves as you get older, it gets harder on the short game. it gets much more difficult but tiger you thought was sort of invincible. >> yeah. >> up next a biotech stock that's really been invincible. it's almost -- i forget the market cap but we watched it go from a single couple of billion dollars up to multiple tens of billions. it enjoyed quite a run over the

last five years if you bought it. bob hugin will tell us what's in the pipeline as he joins us live from pebble beach. he had a good round yesterday as well. plus you're going to meet the ceo of a start up who is betting that the death of the handwritten note has been greatly exaggerated. he has impressive backers on wall street. >> that's not handwritten. >> no. >> it's machine written. >> handwritten by machine. >> i don't know. that's coming up when squawk returns. >> i think you spell qe is it cue? as we head to break let's look at yesterday's s&p 50 o 00 winners and losers.

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wow, that's what we're talking about here. it's 77 degrees today. i haven't seen a cloud since we have actually been here which is last year both days three hour rain delays in the beginning. had to get in the car and drive somewhere in the wind and sideways rain and wait somewhere to play. this year is unique and makes it incredible. good morning and welcome back to

squawk box here on cnbc. michelle and andrew are holding down the fort in new york city where it continues to be -- it's winter. >> yeah it's february. >> still is february i'm told and the headlines this morning, a rash of executive -- that sounds -- >> scratchy? >> of executive exits, kraft foods has shaken up it's executive ranks with it's financial officer and chief marketing officer and executive vice president all leaving the company. gary will exit as conagra ceo and will be replaced by sean connolly who is ceo of hillshire.

it doesn't matter and nike chief financial officer donald blair is retiring in october. he is vice president of finance and andrew will replace him if you need to know that or if you are related to him. let's check the futures now up 24 after a pretty good day yesterday. they got the s&p to the highest levels in 2015. a lot of it has to do with the motion that maybe both sides talk tough but might be able to do something. >> that's sounding more and more like there's potential. michelle can probably tell us more about that. we will tell you that at least the potential right now, the early signs are that things are looking more hopeful this morning that greece can reach a deal with it's international lenders. a government spokesman says that negotiators will do whatever they can to ensure that a deal is reached. at a monday meeting of the euro zone finance ministers. greek stocks jumping today on those hopes.

the country's primary stock index jumping about 5% today and more than 10% this week. >> all right as we were saying -- i'd say you hear after the break but i'd like to let you in on some of the stuff that's happening. it doesn't matter. commercials go but we're here and alive and talking the entire time. i think we should have outtakes. bio tech stocks have been on a tear. look at this comparison over the last five years. the sector is doing much better than s&p up to 94%. we're talking about three times that much. it's up over 300% over the fast five years. joining us is the chairman and ceo and off camera i was asking about what the market cap was. it's somewhere above 90 million. trying to go back to when it started to talk about the wealth creation that can happen if you do things right and i was trying to find out when it was founded.

that was the most important tile was when you joined but then you did point out -- >> i think it sort of persisted. >> market cap was 200 million when i joined. >> what year was that? >> 99. >> and the company was formed to do other things. not even pharmaceuticals so it's a persistence in taking technology and finding the right application and expanding that success so today we're so excited about our pipeline because we have been one of the leading companies in reinvesting where we made profits and put it back in the business and that paid off in the organic pipeline and partnerships we have done to build one of the highest promised pipelines in the industry. >> and i've even i don't know that maybe the book should be written some day on the individual that knew the whole history and realized it was an antiinflammatory product and said we need to take a second look at what this can do and a lot of that $90 billion market

cap is based on the positive therapeutic efforts on cancer. >> it's an example of risk taking. here you had a situation which was one of the most notorious drugs in the world but there's also thousands of molecules around it that no one would touch because of the parent come pound. and the visionaries said we're going to take this compound and get it approved for the indications and use it safely but as a template for discovering new classes of drugs. we have gone way beyond that but the technology still in terms of protein homeostasis has given us a great advantage and it's a big part of the pipeline today though it's far from what it was originally but that vision wasn't realized and that's what has really contributed to the stress. >> what did the death rate -- it

wasn't necessarily a death sentence ten years ago but it was pretty bad. >> it was a very clear death sentence. >> it was. >> a one in three year expected survival where today it's 10 plus for many people and the expectation is you'll die of something else in many cases. advances are continuing. we haven't left it there because we had big, big vanceadvances. we're going after the high risk population so change this to a chronic disease. that's our goal and we're committed to it and making great progress. >> lately you have been stepping out from the ceo role to -- not an evangelist but you want us to -- she ruined the term it takes a village because there are certain things that take a village. >> raising a kid is one of those. >> i think parents are more important than like some collectivists idea of raising a child. >> if you have grandparents or other people involved.

>> i don't think she meant grandparents. you know who we're talking about. we have an election coming up here so i'm starting early. >> anyway your point is we need to, all of us whether it's private or public we have fallen behind in basic funding and research. why is it down in the private sector? is it the public sector's fault that it's down in the private sector? >> we went through a period of questionable research productive and now the advances coming with information technology being more intensively applied to drug discovery and all aspect of health care the revolution is accelerate accelerateing so we're seeing much more investment coming to the sector which is allowing more to be spent on rnd. >> what is missing? >> it's an ecosystem. you need great institutions.

academic institutions. we do a lot of basic rehe search but you have to have the whole ecosystem working. >> should we be raising nhi funding? nsf? >> absolutely. there's a lot of bipartisan support in washington to really look at all the regulatory aspects. our investments in rnd and say let's accelerate it. let's be more coordinated and have goals set and make sure we're working together from the administration to the congress to private enterprise. academic medicine. there's a good momentum and the science is there. we're really in a race. if you think about the demographics of the developed economies we have a big problem coming from alzheimer's, metabolic disease. cancer is a disease of the elderly as the immune system wears down so we're in a race to invest more to solve the problems. if we don't make the investments now in a coordinated way we have

destabilize economies. we can't support the cost of caring for elderly people. it's an international imperative. the company has to step up and make sure that we're doing the best we can. it's an exciting time. the pace of change is accelerating. >> do you think something is missing that was there before? or do you think it was a new era with new possibilities? >> well the science is progressing. the activation of the targeting of the immune system allows a multiprong strategy to address cancer which we didn't have ten years ago so that's advancing science and some of that immune simulation has broad impacts even by cancer because there's many diseases serious where the immune system is overactive so we're learning so much and it's going to be -- in the next ten years it will be fantastic. >> we don't have much time unfortunately but there's individuals, kyle bass and

others that look at the way patents are extended and maintained and there's a target on big pharma's back on the notion that 70 or $80$70 or $80 a year is too much and medicare needs to bargain and get cloeer prices. there's conflicting forces going on. >> drugs have to have a value. >> but should you be able to extend patents for beyond the norm -- should you be able to do an extended release and go another ten years or should people challenge that. >> listen people are going to do what they're going to do but if you have good patents and innovation and they add something to the patient and add value proposition, every drug has to have a value proposition or it's not going to be reimbursed. this isn't some game where there's people paying whatever -- there has to be a

value proposition. if you cure disease what's the value to that. >> are you prepared for people coming along and challenging. >> we've been there. patents are the life blood. pipeline is the life blood and if you don't have a strong intellectual property strategy to defend that estate. you have a problem. that has to be one of the core expertise of a company. great research and great intellectual property protection. >> there's people and i'm not going to mention any names. i don't know when we're tossing back to new jersey but there's people that think margins in the united states are too high for drug companies and that we need to do something about it. you're making too much money. >> but think about it joe, when you think about the industry overall. people say look at all the cash overseas. when you look at cash flow and you look at taxes and you look at the entire situation of prices versus taxes et cetera the system is not so unbalanced really in terms of the issues of where cash flow for companies

domestically and overseas. so the u.s. in term of being strong positive policies for corporations, europe and other countries have some good things. we have to give becky a hat for 2016. it's great to be here but pga we're hoping to see you there. >> mickelson won the last one. >> actually go remember that. i'll pretend. >> you were probably out there. >> it was a great tournament. >> it was. >> thank you, bob. >> thank you for having me. >> and last but not least a lot of the price controls around the world, in my view with much more innovation coming here because we're able to redeploy. >> it hurts patients when people don't have access to innovative medicines. >> thank you for joining us. let's now get back to michelle in new york. >> you're so right joe it is so unjust that the united states bears the shoulder of all the

innovation that all these very wealthy countries around the world demand subsidized drugs for their populations. i don't understand why the japanese deserve subsidized drugs or germans. they should help pay for innovation if they like the results of medicine. >> and michelle we provide all the security for those countries as well. it's okay. you know it's fine. we're the united states. we'll do all this for you. no problem. >> i wish in trade negotiations they would make it a higher priority. bring down the cost of drugs for everyone around the world. but we digress. let's check on the markets so far this morning. the futures look descent this morning on the back of gains we saw yesterday. dow would open higher by more than 27 points. s&p by more than 2 and nasdaq by 11.5. oil is higher this morning. we're in the weird world where when oil goes up people are happy. wti is below 52. brent is at $60 per barrel. euro will cost you $1.14.

118 yen for every dollar and pound will cost you almost $1.54. >> you'll meet the man behind the new company trying to keep the tradition of handwriting notes alive. he has a big time wall street backer betting on his idea. i'm excited about the next segment. >> plus real estate mogul and minority owner of the nets and chairman paul jacobs. a must see coast-to-coast edition of squawk box this morning. we're coming back in just a moment. 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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xfinity customers add xfinity home for $29.95 a month for 12 months. plus for a limited time, get a free security camera call 1800 xfinity or visit comcast.com/xfinityhome. welcome back to squawk box this morning. what does gary cohn the rapper nas and ceo of makerbot all have

in common? they're early investors of a start up call bond. it has a new technology in a very old trade. perhaps oldest. the handwritten note. the founder and ceo is here. he is here with us this morning and we're very excited about this. you make a computer system or service that will take my handwriting. >> yes. >> and i can type a note and will write it out using a signature pen. >> and you physically mail it. >> exactly. >> so when people get a card from me they will think i actually wrote it. >> we can improve your handwriting. you could choose from other handwriting styles. >> this is amazing. >> there's a time and a place for everything. so there's a time and a place for a face to face conversation. a time and a place for phone call and there's a time and place for e-mail and obviously there's a time and place for disappearing message like snapchat. we think of it as like the

opposite of snapchat. if there's a time and place where you want your message to disappear and we also think there's a time for your message to last forever. >> nobody writes note cards anymore. >> they do but it's less and less. there's a hurdle. >> and you do it all. >> look at this video. is this a robot. >> dear andrew are you writing me something. welcome to bond. >> i'm welcoming you to bond in the future. >> that's a robot doing that with whose handwriting. >> that's my handwriting. >> and it's learned your handwriting. >> yes we taught it my handwriting. and it understands how do you space your letters. how do you space your words. really we think of ourselves in many ways as a new kind of personalization company because we think that the personal touch is really important. i care a lot about relationships but it's not the handwriting or taking the time to write the note. how do i have a stamp? wrote have the personal stationary. maybe i'm in the back of a cab or my flight is delayed and i'm

thinking about sending something to someone. >> how much does this cost? >> it's the same pies as a card. it costs $2.99 for a single note. you can completely customize the stationary. >> so i can make it look like my stationary. >> yeah, you want to have a beautiful experience. a part of it is you want to send someone something that feels really good and feels really special. that's what i think. i wanted to -- when i would get handwritten notes from people it makes me feel really special. >> so i can send the note from my iphone. i can type out a note -- >> you can see what it's going to look like and then our machines will do all the rest of the work from there. >> for $3. >> yeah. >> put it in the mail. >> that's crazy. >> those machines cost how much and you're manufacturing them here in new york city? >> yeah we do everything from designing the software that learns your handwriting to the hardware and robotics. >> so my handwriting is a little bit like a third grader with a broken finger. how i can make my -- how can you improve my own handwriting? >> so there's three things we

can do. we can give you your exact handwriting as you currently enter it in. >> how would i do that? >> we have two ways. you can come in and submit a handwriting sample a couple pages. >> but does every "a" look the same? >> no. that's actually the beauty of it. not only does every "a" look different, we actually -- even if you wrote the same message twice -- you know if you wrote the same thing ten times in a row, it would be different. >> wow. >> so the same way if you wrote a note every single note would be completely unique. >> what's the website? >> it's called hellobond.com. >> thank you for coming in. >> this was cool. >> i'm going to go online and send out notes. i'm going to send one to becky and joe in pebble beach which is where they are right now. and for valentine's day you can do this. >> thanks for having me. >> come on back. i want to use this thing. anyway we are -- we're going to send it back to them but in the meantime we won't. more in a second. coming up the next step for the

markets. scott minerd is set to tell us what guggenheim is telling their clients to do with their money. and waste management making big green taking out the garbage. david steiner's going to talk trash with us when "squawk box" returns.

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welcome back everybody. a lot of times people wonder what the average investor can do to reap return in this low rate environment. let's peer into that with scott minerd. he is our guest host to us for the past hour and next hour as well. scott, people wonder that all the time. they think the only good deals are for those who have millions. >> right. it's interesting. we were always an institutional high net worth-ultrahigh net worth money manager. i would keep getting asked the question can i put my money with you. you get somebody with a hundred thousand or a million dollars, and we can't handle that. so we launched a series of products. and we essentially use the same strategies in our mutual fund products we use with our ultrahigh net worth clients. so you can invest in our core bond fund. or you can invest in our macro fund designed to imitate one of

our hedge fund strategies. >> if it's imitating it why not wrap it into the same portfolio? >> for an individual if with $100,000 to invest you can't qualify. now you can do it through a mutual fund. and our fund the guggenheim investment opportunities fund is actually beating the hedge fund indexes. >> what's the expense ratio? >> pretty low. i mean about 1.5%. >> 1.5% although if you compare that to what you see with 20 basis points for an index fund how has this performed other -- it depends on the market. >> it's always a matter of the market. but we've out-performed our major competitors and in hedge funds. >> over the last one and three-year periods. >> exactly. so if you're a small investor and you'd like to get institutional style management and you'd like access to a hedge fund type product, it's a great

substitute. and you're not paying 2 and 20 you would be paying in a hedge fund. >> scott is our guest host. he's going to stay with us for the next hour as well. we have something coming up here. later today president obama is going to host a summit on cyber security. but before he does he's going to do it without ever actually referencing the word internet. they've had a meeting. they will not say internet in talking about cyber security. and the ceo of one of the biggest telecom companies is going to weigh in. at&t chief executive randall stevenson will give us his take on this threat. "squawk box" will be right back live from pebble beach in just a moment.

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combatting hack attacks. president obama set to announce an executive order on cyber security. markets in europe getting a boost from strong german growth numbers. what it means for stocks here and abroad. trash talking at pebble beach. waste management ceo david steiner stops by to talk some trash and profits. tech trends and putting money to work. jeff yang of red point ventures tells us where the next tech disruption could be. a look at the next big tech winners. as the second hour of "squawk box" begins right now. welcome back to "squawk box" here on cnbc. andrew and michelle are back in new york city. we'll be checking in with them in just a moment. but we have a big lineup here joining us today.

at&t's ceo randall stevenson, the ceo and chairman. he'll be talking everything from cyber security to net neutrality. also we'll be talking with jeff yang. and waste management ceo mr. steiner. and david dorman. let's check the futures ahead of friday's session on wall street. so far we've seen some moderate advances. the dow futures up by 27 points. the nasdaq up by just over 11 points. all of this is coming as we closed at high levels -- near high levels once again yesterday. in our headlines at this hour president obama is in silicon valley today. that's where he'll be participating in a summit on cyber security. this comes amid hacking attacks at major companies. germany's economy grew but 17% in the quarter.

that's twice what economists had been expecting. and the news from germany is among the factors boosting oil prices this morning. brent crude has risen above $60 for the first time in 2015. wti crude is also higher this morning. you can see right now it's up over $1 -- i'm sorry. brent is up over a dollar. wti is up to $51.90. a cease-fire agreement between russia and ukraine this week. but they're likely awaiting the monday meeting out of europe when it comes to greece and negotiations. let's get to rebecca patterson, a cnbc contributor. how are you doing? >> i'm doing great. >> you constructive on the markets here? >> did you say the word constructive? what does that even mean? >> cautiously bullish? >> i'm thighrying not to say the same thing the last few days. we've done nothing but bump and

grind for the past few months. we finally break out of this range. >> it is interesting how headline-driven the markets have felt so far this year. and monday obviously a big day with the european finance ministers talking about greece. we hope the cease-fire in ukraine holds. i'm not going to try to predict ukraine. so that is going to be something to keep an eye on. but i do think greece at the end of the day is more likely than not to get a deal. we might have a game of chicken between them. >> but markets haven't been that fearful of either of those situations. even though we've been gyrating around this level, it's very high levels. >> the good news is compared to 2011, greece is -- i don't want to say it's a side show. it's still important, but there's less contagion. in 2011 spain, italy, portugal all moved with greece. today greece is on its own. i think that's a good thing and that's helping european stocks do their own thing regardless of greece. >> this move with the dollar. it seems to have faltered the

last few days. why do you think that is? >> everybody was long. they're taking a bit of a profit right now. i don't think it's over. it is interesting that this dollar selling came in conjunction with comments from our treasury secretary here in the u.s. which i thought was very clever. >> clever by him? >> clever in that he said other countries shouldn't devalue their currencies. currencies are a two-way bet. if they're not getting weaker they're getting stronger. which means the dollar is getting weaker. the treasury secretary said we want a weaker dollar without saying it. and we know this is all for the trade agreement that the medication's trying ing-- administration's trying to get through. i found it an interesting coincidence. >> but the dollar is going to be stronger for the rest of the year, are you in that consensus? >> i'm complete will i in thely in that camp. the economy i believe is doing strong enough even with low

inflation they'll probably want to start raising rates in june. >> you still think they're going to. >> absolutely. >> that's not consensus anymore. >> it's about 70% priced in for a june hike. the fed wants to start normalizing policy. we don't want to get to the next recession and have nowhere to cut from. >> so if the strong dollar continues, on the one hand you say multinationals are going to get hit, don't buy them. at the same time if the dollar is the only strong car insurance b si in -- currency in the world, everyone wants to move because the bank from the dollar alone with the growing economy. what wins there? you buy dollar-based assets because of that? or do you avoid them because you know they're going to be hit by profits? >> i think multinationals will get hit continued throughout the year. wow, that was a bad sentence. but i don't think the hit is going to be as bad as it is right this second for a couple reasons. one, corporates they change

their hedges i'm sure changing right now. still get hit, but less of a hit going forward. a lot of the currency moves have happened now. qe in europe is priced in. the bank of japan may do more. to get down to parity quickly doesn't feel as likely. so it's going to be less of a head wind. it's as much the speed as the level. >> the euro in theory would get weaker or do you go up? >> we've been bearish on the euro for some time. given we're getting some of these risks hopefully reduced, stabilized in europe and the data in europe are getting better. helped by lower oil. i think our next move would be to close underweight on europe stocks. but stay hedged on the currency. >> spend the money on the hedging which is costly. or buy an etf. >> there are currency hedged etfs. the interest rates are non non-existent.

>> thank you. >> good to see you. we're going to get back to joe and becky be more of her interview with randall stevenson. >> we mentioned this earlier, but president obama will be holding a cyber security summit. randall stevenson, at&t's ceo, will not be attending the meeting. but we asked what he would say to the prt if he were there? >> it's a big issue obviously with everything we've seen over the last couple years with home depot to sony. it's proving to be the issue is real now. and it's not just something that's a little bit of a problem. it's a major problem. i think implications are that significant. and congress has been talking about this and the president has been working this issue for quite some time. and we don't feel like we're much closer to a solution for

addressing this than we were a couple of years ago. and a couple of things are going to have to happen. we're going to have to obviously get a mechanism in place that will allow the government and business to share information freely and openly. but to do that the congress is going to have to step up and provide liability protection for companies. because that's a big issue for companies that are, you know exchanging information with the government and so forth. and so there's a couple of key elements that are going to be required. it's not going to be an easy issue to address, but it's an issue that is of national security importance. it's going to have to be dealt with. >> how safe do you think at&t's network is and how safe as a person do you feel? >> we spend obviously a lot of time on security. and security is something we sell. right? we believe our network is very secure. but nobody should be too boastful or too proud about their security. because there are people that really have a major interest in cracking security of networks

cracking security of companies. it's just one of those things to invest cautiously and stay diligent about cyber security. >> i also got the chance to ask him about a recent downgrade from moody's. the concern from that analyst was they spent a lot at the wireless auction. moody's has raised questions about whether or not at&t would be able to continue the dividend policy. i got the chance to talk to mr. stephen stephenson about that. he says the dividend is safe. >> we've raised the dividend at at&t every year that we've been a publicly traded company. and we're actually pretty proud of that record. we would not be taking action that would put in jeopardy an element of our shareholders' return that they depend on that they expect. so the dividend is a high priority for us. we prioritize our capital

allocation first invest in the business and position it for long-term growth. second, return capital to our shareholders. and the dividend is the main way we return capital to our shareholders. and so now what's happening after the spectrum auction and directv is our debt ratios are going to pop up a little higher. they traditionally have been. directv is cash flow after one year. so we feel comfortable we could begin to pay that debt down in a fairly aggressive manner and get our debt ratios back to levels that people are accustomed to seeing with at&t. >>ly say that one of points randall made is they are adamant about investing in the future and investing in the spectrum is important for at&t as well. >> i want to see. i'm still very interested in the whole net neutrality issue and how that plays out over the next -- in the coming months. you saw the republican commissioner and some of his comments. and now congress is getting involved again.

randall stephenson has made comments. it's going to be tied up with litigation, but if it were to -- if the worst case scenario for companies like at&t were to come to pass i think he will follow through on some of his plans to not invest as much if you're not going to get a decent run. and go elsewhere. >> we will be showing that i think in about an hour and a half. 8:30 eastern time. we'll have a little bit more on his thoughts on net neutrality and where he thinks it's headed from here. >> if he were to invest outside of the country -- >> which he's already doing. >> but you can see there will be fewer jobs in this country based on some of this -- i don't know whether it's a government takeover of the internet but -- >> heavy regulation like utilities. >> and the whole -- now people are talking about the president's pressure on wheeler and whether that was appropriate and, you know, i think they're going to look into that.

whether the president can tell the s.e.c. what to do. that's what's happening. up next one of the early investors that we saw in netflix and speaker giant sonos, jeffrey yang is set to join us after the break. he is a top venture capitalist that forbes puts on their midas list. he's going to tell us why mobile is here to stay and where he's focused right now. plus we're going to catch up with one of the owners of the brooklyn nets. bruce rattner. he's going to talk the nba all star game here in new york. >> there in new york. >> okay. i think they mean back there because we're not in new york. where are we right now? >> we're in california this morning. >> you sure? okay. this apparently is in new york. the big business of the barclays center. real estate and much more. we'll be right back.

welcome back to "squawk box" live from a very, very chilly new york city this morning. a host of stocks to watch that we're looking at this morning. shares of conagra are tanking. the company citing a strong dollar and weak sales also appointing former hillshire brands chief as its new ceo. and then kraft switching up its

maker this morning. announcing that its cfo and a couple other senior executives will be leaving the company. kraft also reporting a loss of $400 million. the stock falling on that news. shares of aig dipping after profits reporting -- reporting profits, rather of 90 cents a share. aig also announcing a $2.5 billion stock repurchase program. so with all that we're going to go from a freezing new york to a very balmy pebble beach in california where becky and joe are. i wish right about now, given the weather, i was with you guys. >> yeah. toif say this year is definitely worth it with the weather, andrew. we have a very special guest with us this morning. what do netflix, sonos, and stripe all have in common? they are all funded by one of the valley's hottest venture capitalists. jeff yang. he has been named to the forbes magazine midas list. joining us now founding partner

and managing director of red point investors. jeff is here himself with us this morning. >> thanks for having me. >> on to have o e the companies i mentioned, so people understand thebred of this. you're also in home away netflix, tivo. these are things you saw early on. i think there's a reason you are in the midas touch section of the magazine. >> we've been very lucky. thank you. >> i think luck has a little bit less to do with it and also just spotting talent early on. what do you look for? how do you suspect something's hoe t? >> well i mean really what we're looking for are entrepreneurs that we think can shape industries. we look for someone with a lot of vision and a lot of passion to change the world. usually i think entrepreneurs are compelled to start companies. they see a market opportunity they have to fill. and it's a vision and a passion and the ability to convince over

people willing a company into existence that didn't exist be fr before. >> do they really have to convince you there is a need for this product they are pitching? >> usually you kind of see it right away. you never know. i mean it's -- you know after the fact. but usually i think great entrepreneurs see patterns when others see chaos. so they're usually in industries that are prime for disruption. and they talk about, well all these things that you're seeing in the world. and when you walk away that's the essence of what we do. we bet on things that could be really big. >> what's one or two things you've seen recently that we will be hearing about in a few years. >> for instance right now i think the transition to mobile has really shaken everything up. you know, the -- all the

businesses that were created on the internet are now moving to mobile. and that creates an opportunity to have a new start page and you experience whenever you take this always on connected device out of your pocket, that you rethink your relationships on a bunch of surfaces. think of what uber has done for transportation. or what airbnb for housing. or instacart for food delivery. what it's done for offline businesses. we're an investor in home away. they want to be the star page for home services. when you think about maid services, you never would have thought this would be a business that might be started by technology. but the notion of taking your phone out, it would be great to have my home cleaned or handyman services or plumber or electrician or that type of thing. it creates a lot of really interesting opportunities right

now. >> have you read articles that fewer young people are starting businesses? there's fewer entrepreneurs. it's very fertile in technology land. everything you just talked about, it all seems to be based on somehow the web or the internet. in one way or another. i was wondering, if we didn't have the internet would any businesses be getting started? or is this -- is it a fertile environment right now for entrepreneurship? >> it's incredibly fertile. i've been lucky to be in the business, my 30th year, there are always people with a lot of passion and new ideas that realize it. one of the things you've figured out about america is that entrepreneurial spirit is part of who we are. but now it's not just america. it used to be the venture capital business was confined to a couple geographies. silicon valley and boston. and now it's not only those

places, but new york and l.a. and austin. but it's beijing and shanghai. it's you know western europe. >> domestically will it generate middle class jobs? to the same extent that it used to? that's what we're all worried about. with robotics and everything what are we all going to be doing in 20 years? are we running out of things? will we finally shut down the patent office? >> no. well, i don't think so. >> because they always think that. we always think we're at the end of the road. >> right. everything great is done. but one of the i thinks i was just talking about, for instance, disrupting offline businesses and local businesses. so food delivery or driving or housing or any of that type of thing, i think that has an opportunity to affect people all over the world. but also it changes this concept of delivery of local services. and it's still a services business.

i mean you could argue that facebook only employs a few thousand people and it's not the same as federal express or something like that. but i think this whole orientation of organizing a workforce that is really more part-time and on demand that creates a lot of jobs. and these jobs are pretty high paying jobs and people are choosing to do it to supplement their income or to have more flexibility in their life. and i think that actually creates a lot of things to do. >> i want to thank you very much for joining us today. >> thanks for having me. >> you do stuff with golf too. you long golf? should we be long golf? >> well i think golf is in a better position but it'd be great if there was more participation. we've got to bring women into the game. we've got to bring people that have already played. but we've got to get juniors playing. i think there are a lot of smart people that are now working together to try to change the definition of what golf is to

bring more people into the game. and that would be great. >> takes work. >> a lot of work. >> that's what i'm learning. can't just come out here and -- i don't know. anyway coming up trash talking the ceo of waste management. david steiner. on how the company is cleaning up. say you're a finance guy. a farmer. a researcher. you used to depend on experience. the internet. your gut. today you can use ibm watson analytics. it can make sense of all kinds of data. uncover hidden correlations and new opportunities. and give recommendations with more confidence on who will buy. what to make. where to plant. which helps you make smarter decisions. there's a new way to work and it's made with ibm. is there such a thing as a sure thing in business? some say buy gold. others say buy soybeans. i say, buy comcast business internet. unlike internet providers that slow down when traffic picks up, you get speed

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coming up when we return hoops and real estate. it's all star weekend in new york for the nba. one of the minority owners of the brooklyn nets is waiting in the wings. he's going to talk about basketball, the barclays center real estate, and a lot more when we return. coming back in just a moment. no. aflac! what are you guys looking for? claims! legend has it these hills are full of 'em. it can take months for an insurance claim to surface. claimin' takes patience. aflac paid my claim in one day. they got some new-fangled kinda one day payin' machine? hehehehe yea, i got aflac at work. aflac... in just one day, we approve and pay. one day pay, only from aflac. aflac...

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welcome back to "squawk box" right here on cnbc first in business worldwide. among the stories front and center right now west coast ports are open today. but they will be closed the next three days as the labor dispute heats up. a day where union workers have received 50% more pay for overtime, or would have rather. the ports have been severely congested due to work. that slowdown contracts are ongoing. more hopeful signs this morning greece can reach a deal. a spokesperson says negotiators will do whatever they can to ensure a deal is reached at a monday meeting of finance

ministers. we'll see if that's true. and take a look at u.s. equity futures at this hour. you're seeing some green arrows. dow likely to open up 28 points. s&p 500 looking like it would open up about 3 points higher. stocks trading near seven-year highs. getting a boost this morning. i should say european markets getting a boost this morning. here's another eye-opening headline. china will pass the u.s. as largest retail market in the next three years. that's according to cooper's and the economist. a projected growth rate triple the u.s. as reasons for china's retail surge. of course they do have 1.4 billion people. at one point you would think they should have larger retail sales than the united states. >> this weekend new york city will be center court for the 64th nba all star game. the action will be taking place

at madison square garden and the barclays center in brooklyn. here to tell us about that is bruce rattner, part owner of the brooklyn nets. and part of a new york based real estate development company. we're going to get to the nba in one second. let's talk bad news. you were pushing hard for the dnc to come to barclays. >> we sure were. >> and philly won. >> it did. but it was a great contest. it was fun to do. philly's a great city if you want to go to bed by 10:00 or something like that at night. >> ooh. >> you're talking trash already. >> no it's a great city. >> you'll have another chance to do this in a few more years. >> that's true. >> how much is a meeting like that worth? >> in dollars to the city? >> in dollars to the city and in dollars frankly to you. >> for us it's a break even. you don't make a lot of money on that. you probably lose money. the city hundreds of millions

of dollars. >> you lose money? >> yeah. you probably do. >> why? >> you put the barclays center out for the four weeks before. >> because of the load in is so long? >> getting it ready, security and everything. all in all it's probably break even. it wasn't economic. we just wanted to do it because it's new york and brooklyn. >> you got all these people and at the same time there's all kinds of disruption and people don't go into the city because they know it's going to be so crowded, et cetera. >> well you have all star weekend this weekend. our city is not disrupted. when i went to denver, it disrupted the whole city. this city could have handled it. i think it was much over-exaggerated, the issue of logistics. i've been here in the summer the end of july you can get around easily. i don't think it would have been terrible. >> let's talk basketball for a second. you guys are going to do the slam dunk contest and the three-point contest tomorrow

night. >> that's correct. >> then the all star game itself at madison square garden. >> sunday. >> do you guys compete for that? how did you land up on the saturday night and the garden landed on the sunday night? >> it was deemed by the nba. >> but was there a -- are people campaigning in the back? and which is the event that people want more? i happen to think more actually the slam dunk contest and the three point contest is more interesting. >> i like that too. i like saturday night better. not only because it's with us but because it's kind of more fun. slam dunk, three point. the game as you know hopefully will be wonderful. i'm sure it will be wonderful. but i probably would have preferred that. not the game, but the slam dunk. more fun to watch. they're both great events. the nba decides which one gos where. >> you didn't have to ask? >> no. they said this is here and this is here. that was it. >> is this a big money making weekend for you. >> no. by the time you put it together you lose things. you don't make a lot of money. you do a lot of things because they're fun to do they're

enjoyable, they're great for the city, they're great for the nba. that's what this is about. >> i'm going to ask you about a topic that may make you uncomfortable. the arrest of sheldon silver. he had so much influence in real estate. >> nothing really makes me uncomfortable. takes a lot. we've had a situation in this city and town where a lot of different allegations against politicians. it's been an unfortunate thing. i don't want to comment about that specifically. i know sheldon silver and he's done a good job as our speaker for many years. he stepped down. they're allegations and we'll see what happens. >> may be hard for you to answer this -- i don't think it's the hardest question, but maybe just to be open about it. the mayor. your relationship with the mayor. how are you -- what is your relationship like with the mayor? and how do you think he is treating the world of real estate in new york city? >> so first of all, i have a nice relationship with the mayor. i support the mayor. if you look another what he's

done he's done a good job. why? we have everything from pre-k to this vision stuff on the streets. crime was down last year. we're in balance. and then he comes across with his idea of housing, housing, housing. the most serious single problem we have today in the city today is housing and he wants to do 200,000 affordable housing and 160,000 market -- >> but he's borrowing to fund the deficit. >> he's borrowing to fund the deficit. well i don't really know that. is that -- i haven't seen that actually. is that true? >> so you're not worried about the level of spending in the city? >> i'm not worried at all. the city is going great. the city had almost 100,000 job increase last year. that's as high a number we had. >> what do you say to the people who say you want to improve the housing condition, you say it's better people get higher paying jobs. >> unfortunately it's hard for a mayor to affect that issue. that's such a national issue. we are in unemployment, 100,000

jobs last year. the record number. so this is nothing to do with the mayor or not mayor. it has to do with the city generally. city is doing great and it is. we are doing well in creating jobs. the housing is all very important. look at our education. he appointed a good education commissioner. our crime stuff is down. there's a lot of other stuff. when you think about the city it has to do with our finances which are good our crime which is good our education. those are the three areas that really count. >> do you support the tax they're talking about on what they call the millionaire tax or the empty apartments that will be along 57th street? >> i do. i actually do. i think that's correct. i don't think there's anything wrong with that. i'm well to do. i don't mind paying more taxes. i don't want live on 57th street, but i think that's fine. the rich have gotten extremely rich and basically the middle class that is stayed or gone

down in terms of their level income. something's got to be done. if we don't do something, we're going to hear about it. >> come on back. how are the nets going to do this year? >> the nets are going to do better than up until now. let's get to the playoffs. >> it's like the knicks and nets it's not a good situation. what do you think of the dolan e-mail? >> whatever. that i'm not going to comment on. pretty careful about e-mails, let me tell you. >> bruce rattner, we're going to send it back to joe in pebble beach now. joe? >> kind of took a shot at philly there. who stays out until 10:00? have you ever stayed out until 10:00 any way? >> not recently. that's a late night. >> yeah. that's pretty late. i don't know what he's talking about there. 10:00. coming up time for a little trash talk on the golf course. waste management ceo david steiner joins us to talk about getting rid of your garbage more efficiently and how he was able to post ten under. ten under? we're going to be right back

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waste management isn't just about picking up the trash. they're also about reducing reusing, and recycling. the company says it's well on the way to achieving its recycling goal of eliminating 20 million tons of waste from the system by 2020. and investors like what they're hearing. the stock is up over 22% in the past year. david steiner is the ceo of waste management. he joins us now. what is it? completing the circle? >> closing the loop. >> we use everything and nothing ever goes totally away. >> you can always repurpose it reuse it or even better reduce it. >> we're on our way to doing that. we come out here and there's a lot of ceos out here and a lot of them don't want to come on. you know? i don't know i could be out there golfing. with you it's like you're in waste management anyway. you got a problem with me playing golf out here? i'm waste management right? >> the only people that have

problems with me playing golf out here are the spectators. they're at risk. >> or they're afraid you won't pick up your trash. >> i feel comfortable when you drive around here. all you see on trash day is our waste management cans. glad to have them. >> and they said david steiner, you've got justin hicks and you said, yes. justin hicks? leading the tournament. leading the tournament eight under. >> there is a business lesson here. which is to be successful in golf, just like in business you don't have to be the best just surround yourself with the best. >> good work. >> i got the leader in the tournament. he's eight under. as a team we're two under. so i'm just going to sit back and watch. >> i don't think 20 is going to make the cut this year. because the weather's so good. >> i've never made the cut, we'll see if we did it this year. >> i did it one time. i need to tell myself that again and again. >> you tell yourself that often

enough, you'll start to believe it. >> so this -- i was trying to figure out your business in terms of the drop in oil prices. then i was thinking wow. everything must be so much cheaper for all your trucks and everything else. then i thought about you do a lot of recycling. then you extract commodities from all the recycling that you do. and those prices have crashed. so it's not even worth -- the margin has been totally shrunk. >> well so what we've got going on is we have a fuel surcharge that covers any increase or decrease in oil. that doesn't affect our profitability. >> does that kick in right away or is there a delay? >> it delays about a month. so, you know, there's a little bit of a delay. >> you get hurt by this. >> we're getting hurt by commodity prices. what you've got going on is lower oil prices affects plastics recycling. then the biggest thing we recycle is fiber, paper, cardboard. what you've got right now is the

slow down on the ports in the west coast. and slowed demand from china. paper prices are at multiyear lows. it's leading to making recycling not profitable. we're the largest in north america. and we can't invest if it's not profitable. we've got to figure out what to do in our business to make it long-term sustainable. >> have you slowed down investments in the meantime? >> absolutely. you know two years ago we were investing anywhere from $100 million to $400 million in a year. last year we invested nearly nothing. just maintenance. for the first time since recycling took hold in the early '90s last year rates went down in the united states. and they went down because you can't extract the value out of these materials. >> but can you get out of recycling? i mean -- >> absolutely not. the customers want it. we want to do it. it's the right thing to do. the question is how do you make it profitable over a period of time to not just us but so everybody can make the proper investment so we can do more.

>> like boxes. is it sort of indicator of the economy? is there more waste during boom times? your collection business is your bread and butter. and thank god there are garbage collectors. have you ever seen it -- >> when there's a holiday. >> the most important day. it's doctors and then garbage men. does it get better? >> absolutely. actually we're seeing a lot of improvement. you know we saw on the last downturn, it was interesting. i never realized how dramatic the housing effect is on the waste industry. when you build a house next to my house, there's no new residential customer. you just build a new house. but when you build residential subdivisions, you get customers. and then businesses come in to surround that subdivision. and so we get a multiplier effect from new housing developments. >> and dumpsters you get paid

every week if someone rents it. >> you get paid whether you pick it up or not. >> i wish we had more time because you were in waste energy. that was going to be great. you got rid of that. now you say to focus on your core. >> right. >> but if oil's at $50 or $45 and it costs a lot of money, this is like the pie in the sky idea to go waste to energy is it less profitable now? did you decide to do it before oil prices came down? it was a good move. >> we decided before the prices came down. and natural gas drives that because natural gas drives electricity prices. you've seen that down dramatically. it's the untold story well we're still associated with it. we signed a long-term agreement to where we supply the waste to those plants. the front end hasn't changed at all. it's only the back end of it with the electricity prices. for us we're not electricity experts. so there was a lot of volatility in those. >> you sell them your waste. they pay you for your waste. >> correct.

>> you got the good end of that. they're buying your waste. >> you get paid to pick it up. you get paid to drop it off. >> and they get paid to make electricity. so over the long run -- >> who'd want that company? shareholders decide i'm going to invest in a company to buy somebody else's waste. >> energy capital partners bought it and got a lot of utility holdings. they manage the electricity. >> what a business. >> it's a great business. >> i'd like to sell my waste. anyway. thank you. excellent. and where are you today? you were pebble yesterday. >> we are at monterey peninsula today. >> all right. that's how you did it. thank you. good luck. i like your green tie too. >> okay. thank you, guys for that interview. we'll come back to you in a moment. the measles outbreak in a moment putting the focus on vaccinations especially among children. scott cohn is going to join us. as we head to a break, look at

makers of king digital. better than expected earnings. shares surging in the premarket. "squawk box" returns in just a moment. at ally bank no branches equals great rates. it's a fact. kind of like mute buttons equal danger. ...that sound good? not being on this phone call sounds good. it's not muted. was that you jason? it was geoffrey! it was jason. it could've been brenda.

what's that thing? i moved our old security system out here to see if it could monitor the front yard. why don't you switch to xfinity home? i get live video monitoring and 24/7 professional monitoring that i can arm and disarm from anywhere. hear ye! the awkward teenage one has arrived!!!! don't be old fashioned. xfinity customers add xfinity home for $29.95 a month for 12 months. plus for a limited time, get a free security camera call 1800 xfinity or visit comcast.com/xfinityhome. . the nationwide measles outbreak that started in california is focusing on attention on silicon valley where a lot of employees put their kids in day care with or without measles vaccinations. scott cohn is live in our bureau

there with more on that story. scott? >> hi, michelle. we got word that a linkedin employee potentially exposed travelers to measles. they are working on that issue. down here in silicon valley there are dozens of day care facilities. think of all the workers with kids. it says all of the 300-plus children it cares for in its valley facilities are vaccinated. nonetheless nonetheless, they sent a letter to parents last week urging them to make sure their child's shots are current. especially the mmr vaccine. other centers may be less protected. according to data first published by wired magazine this week, 92% is the threshold for what they call herd immunity. but it's as low as 59% at cisco systems in san jose. it says health is a top priority.

one expert tells us the focus has to go beyond day cares. >> i think you have to go beyond day cares. i mean you have to go to schools and just the population in general. >> now, one of the issues here is this data at the health department is a little bit stale. there's a look to update the numbers. there's also a move in the state legislature to get rid of the so-called personal belief exemption that lets parents opt out and get more people and more children in particular vaccinated. michelle? >> yeah. big story that we've been talking about now for more than a week. scott, thanks so much. let's get back to becky quick in pebble beach. a story you've been very interested in becky. >> yeah the vaccinations. we brought our kids out here. my son is 3 1/2. you don't get your second booster for measles until you're 4 years old. we got his second booster early because i was worried enough

about bringing him out here. it's stunning to see people who haven't read into the research as much. so it's something i've been doing a lot of lately. anyway let's get back to our guest host today. scott minerd. we've talked a lot about where you see the markets, what you're worried about when it comes to the central banks making moves. we've not talked about are some of these issues that made for a volatile market. if you look at the situation in ukraine, supposedly a cease-fire. if you look at isis and threats out there, how do you try to put that in your thinking on all this? >> there's always the black swan event which you can't predict. you know the 9/11 sort of event. but if you get away from that you look at the ukraine and see what's going on there. the political instability. that is actually good for us. in the short run as capital seeks safety it keeps driving u.s. asset prices up. and i think asset prices in

western europe. a lot of money has already fled russia. and it continues to come out. so net net as an investor today, i see that as a positive. you know greece it's kind of funny. i think i've seen this play before. and -- >> a couple of times. >> exactly, right? and the world has sort of gotten itself to the point whether greece stays in or it exits, there's likely to be some sort of successful transition. so i'm not too concerned about greece. it may create noise in the short run. but over the next few months i don't think it's material. and then isis, of course is an all new animal. this is not like traditional terrorism. this is an attempt to create a state. and it's self-funding. this is going to have a major effect i think, on the world balance of power. and i would expect that all of these things we're talking about whether that's the ukraine or

isis or the increased military spending on the part of the chinese is going to have a dramatic impact on defense expenditures over the next decade or two. so i think there's some sbres interesting opportunities there for people interested in that. >> we want to thank you very much for spending the morning with us. it's been a pleasure seeing you. >> is it the morning yet? >> the wee hours. >> where we are or what time it is at this point. it's kind of a fog. >> i know i don't have a coat on. >> you were up at 12:30, right? >> 12:15, but who's counting right? scott, thanks for being here. we'll see you soon. >> thanks. >> andrew back to you. >> okay. we've got a huge lineup still to come all out on the west coast with a couple people back on the east coast as well. at&t board member glenn hutchins is going to join joe and becky. and then qualcomm executive chairman paul jacobs will be here. we'll ask about the massive settlement where china. and then cvs health's david

dorman. we're back in a moment with all that.

welcome back to a special edition of "squawk box." texas drillers getting crushed by low oil prices.

and the ceo of at&t on game changing rules for the internet. plus the ceo of qualcomm on paying nearly a billion dollars on a settlement with china. joe and i are live at the pebble beach national pro-am and we are joined by at&t board member glenn hutchins. >> plus david dorman will be here executive chairman of cvs health. the third hour of "squawk box" begins right now. welcome back to "squawk box" right here on cnbc first in business worldwide. i'm andrew ross sorkin along with michelle caruso-cabrera. joe and becky are at the pebble beach pro-am. before we go to them michelle's got some morning headlines. >> among or top stories at this hour, a new hope for a greek deal. the country will make every effort to reach an agreement

with its eurozone partners when the ministers meet on monday to discuss a potential new bailout package for the country. european powers are warning russia of new sanctions of a cease-fire deal with ukraine isn't implemented. the german chancellor and french president saying more sanctions are possible if the truce fails. and president obama talking cyber security today. he's expected to announce new executive action to address online security at a summit in silicon valley. speaking of cyber security apple beefing up security to its messaging and video chat apps. a two-step verification process. users also need to use a four-digit code sent to the user's cell phone. it requires two elements of verification. what you know and then what you have with you. we talked about getting double authenticated on as many things as you can. on gmail you get double authenticated. >> it's so much work. >> but in this day and age, the

only way. let's take a quick look at the u.s. futures following yesterday's 100-point gain on the dow. dow would open higher than 24 points. look at european markets. the major indices are on track to end at seven-year highs. greece is higher yet again. hopes for a deal and also german gdp data that was better than expected. german dax crossing the 11,000 mark for the first time ever in intraday trading after gdp numbers came in higher than expected. right now let's get back out to pebble beach, california. oh, it is so gorgeous out there. i don't know if you can see the shot. we're jealous. >> actually that doesn't do it justice. >> yeah. tv never does michelle. but i saw -- i have one of those things on my weather app where i can look wherever i've been or put in. it was 12 degrees back there this morning. it was 12 degrees and there was

a wind advisory or something. so 12 degrees and wind, right there, that tells you something, doesn't it? >> yeah. we'd rather be here. >> yeah. it was hot yesterday. literally it was hot walking around. i don't know. >> boohoo. >> yeah. man i miss the east coast. few stocks on the move this morning. salics pharmaceuticals. the drug maker shire reportedly working with advisers to prepare a bid for salix. said to be working with center view to explore its options. another drug maker, ariay pharmaceuticals. under pressure from activist hedge fund sarisa capital to replace its chief executive. some fresh gdp figures out of the eurozone are boosting

sentiment. but it's fairly astounding. with greece losing nearly 25% since the crisis the question becomes can there only be upside from here? our next guest says it has been a lost decade for europe. joining us right now is glenn hutchins. he is the chairman of north island and an at&t board member as well. it is great to have you here. >> nice to be here. thanks for having me. it is better to be here than 11 degrees at home. >> what's north island? >> north island is my personal holding company where i invest all of my capital outside of silver lake. >> this is just your money. some day i want to do that. >> come join me. i could take you as my first outside investor. >> i could give you all my money and i could own half a percent of the assets. >> probably not. >> i probably couldn't. we need scientific notation for that. >> now i know why he's always busting my chops so hard.

>> you got three from harvard, you've got an mba and you can sue yourself when you do something wrong. because off law degree too. >> and i don't have to hire a lawyer. >> you're very smart. and you still have a mustache. it's all very interesting. >> do you have a question, peck becky? >> i do. i want to talk about what we were talking about off camera. you said that you think that this is reasonable eboulence. what does that mean? >> we're in a two-speed economy. other parts of the economy haven't kept up as much because low interest rates have driven into risky assets. but if you look today at all the measures of the kind of conditions you see pre-a bear market. you don't have any of those in place. >> none of the signals that are saying look out here's what's

coming. >> there's nothing to look at the stock market and say problematic. on the other hand you look at these records that we're achieving and say to yourself okay. we've had that big bull run from 2009. the market's at a reasonable market. what's been behind us? we're at a high level. >> you don't see it disappearing tomorrow. >> and i see probably interest rates will continue to stay low because economic conditions in the world, assets will continue to come to the markets, company wills continue to do well work hard at generating earnings and revenues. like at&t. of which i think they're good reasons to stay in the market. but the big bull run we've had post-2009 is probably not repeatable repeatable, would be my guess. but fools predict stock markets and interest rates. i'm going to try not to do that. >> okay. let's talk about -- because there are two camps. one is larry summers who said there's no reason you should be doing this.

here's four reasons that you should hold off on raising rates. including how strong the dollar is looking at the world around us. looking at other issues. then you have somebody like larry fink who says enough is enough. zero interest rates. not what the fed will do, what you think they should do. >> so i'll leave it to joe to criticize larry summers. i will say two things. one is you look around the world. you have europe and japan in particular keeping rates very low to begin to stimulate their economies. europe in particular because they're not taking the structural actions to improve their economy. and there's also a lot of resistance from germany. all they've got is really interest rate policy and qe. japan's got the same thing for different kinds of reasons. and then you've got chinese slowing down russia in crisis. you've got a lot of reasons why the rest of the world is going to be in a relatively low interest rate environment. that's point one. that'll put some constraint on what the u.s. can do.

and it will also put some constraint on what kind of growth we can get. the stronger dollar, weaker economy outside the united states collapsing right now. it suggests you need to increase. big point number one. big point number two, if you look inside the united states we've had very good performance of employment finally. a million new jobs best job performance since 2007. but we haven't seen that translate into wages. >> right. >> into incomes. which has two important effects. one is you need that wage to operate on consumption and get the next level of growth. and you also aren't going to start seeing meaningful inflation that will cause interest rates to have to respond until you get wage mush inflation which is a big source of inflation. there will be a couple of reasons we might have dampening effects. remember the fed is data dependent. it's data dependent.

so there will be a couple of effects that push that out further. the larry fink school of thought and it probably seems to be people who are making these policies think is we do need to get at some point to normalized interest rates. sop will you make some token moves to begin that process? probably. but will it be something that will have -- will they go to the point where they have negative feedback on markets? almost certainly not. that make sense? >> yes. >> we're going to really have a heart to heart now. we're going to really -- >> can i come sit next to him? >> we talk about a lot in reading some of your comments i was struck with a lot of things. number one, you talk about just how disappointing this recovery really has been for six years. and employment has recently gotten better. but really we -- i think joe biden was making a point. it has been a tough six years for americans to go through. >> absolutely. and we need to keep track of

that. >> and i know -- you know we're on -- we have opposite viewpoints on certain things but you are through and through a capitalist. so i'm just wondering, do you think the last six years could have been improved how? by less government activism or more government activism. where did we drop the ball? do we do too much or should we have done more? >> that's a good set of questions. so primarily i think while government could have been an important player i think one thing government could have done differently that would have had very good medium and longer term impacts was to invest in infrastructure. >> that's from your side. >> i would have tilted a lot of this -- the stimulus plan. i would have taken the stimulus plan -- i would have been less worried about rating stuff. i would have thought about a five to ten year process of investing in america. they wanted tax breaks.

democrats wanted increases in support payments. so we got a lot of money that went in immediately to both sides into the economy. the notion is we have a cyclical problem. we have to jolt the economy. that didn't work as well as people thought it did. i think other things stopped the stampede rather than those things. >> the 800 billion could have been good, glenn. >> i would have spent money on bridges, roads, tunnels, broadband. if you understood the problem as being more structural rather than cyclical i think that would have been a major thing government could have done differently. so that's -- put that over there for a second. >> but we kind of blew all our money the first time around. >> i'm not sure if you blew it it's just the notion -- >> a lot went into union coffers. >> and also tax unions that were saved. >> we sold on shovel ready infrastructure. >> again, you're thinking cyclic

cyclicly, not structurally. in my view it was a balance sheet recession. it wasn't a notion where, you know revenues are down because interest rates went up. it was a massive buildup of debt all around the economy. >> would it have been much worse if we didn't spend that? >> i'm sure it would have been much worse. >> we'd be at 15% unemployment by now. >> i think the effect was evan essence. it was a balance sheet with big debt on the economy. consumers, businesses government. and that takes five to ten years to heal. you weren't going to get through that quickly. >> you don't attribute it to regulation or raising taxes to millionaires and obamacare and all of that. none of that? >> i think it would have been much better had we not had that uncertainty. >> to have obamacare instead of focusing on -- you know what? you're here for an hour.

this is not adversarial. >> i agree with you. very constructive conversations. >> exactly. you were on that panel. you signed off on them. i'm not going to bring those up this time. did that last time. >> not going to bring those up this time. >> yeah. >> glenn is with us for the rest of the show as joe just mentioned. we have more to talk about with him. andrew, i know you have more from back in new york as well. >> we do. big lineup to come later this hour. coming up next qualcomm executive paul jacobs on the massive settlement with china and a new coach for his sacramento kings. he's in town for the all-star weekend. then we have more of becky's interview with at&t's ceo randall stephen son. then david dorman is going to stop by the pebble beach set. that's coming up at 8:40 eastern time. that's early in the morning for becky and joe. we're back in a moment. before he opened his first hot chocolate stand calling winter an

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call 1800 xfinity or visit comcast.com/xfinityhome. welcome back to "squawk box." it is an all-star weekend for the nba. mark cuban and dan gilbert, basketball legend magic johnson joining a few blocks from here talking about how high-tech ways are making the league better and

bigger. and qualcomm executive is here with us today, david jacobs. he is also part of the sacramento kings that have a new coach. before we talk about basketball question have to talk about the big settlement between china and qualcomm. what does it mean for the company and what does it mean for you doing business in china? >> i think it's good for us, actually. what it means is now the way that we do business that we charge royal tistyies on the selling price, that's all been established now. of course it's a big fine. we're disappointed with that outcome, but it's good to see that the business model is intact. and the people we work with our partners there, we're still ready to continue with them. >> whenever we see these fines coming out of china and it's an american company, i read and think is this legit? or is this -- is it a phobia? is this trying to give more advantages to chinese companies

over your company? do you have any thoughts on that? >> look it's always a politically sensitive topic. >> right. >> but certainly some american companies are feeling pressure over in china. and there's definitely a strategy in the chinese government to establish national champions. there was an acquisition, for example, of a company that was a competitor at the low end. and they're trying to build up. but we're also trying to be partners with them. so we did a big deal with their company that makes chips. so we actually send the designs to china and they'll make them there. so there's a whole back and forth of how the ecosystem works and how you participate with that. >> you feel you were treated justly? >> it's a process. we've been through any number of the governmental processes including in the united states by the way. you never feel great going through those things. >> i was going to say china versus europe. you also had to deal with same kind of national champion issue? >> at that time i had just taken over in '05. we were going up against nokia

who you argued would be national champions -- >> those were the days. >> and i think that process sorted itself out. and the nice thing about it in that case it actually dragged on for a long time. people were saying 3g wireless was going to be hurt by our business model. turned out to be proved wrong because we could see the growth of the market at that time. >> i want to ask about phones and innovation. this an apple. i don't think your chip is in this one. you're in this one? >> of course. yeah. we have the modem chip in there. >> okay. so my question is this is a flat piece of glass. maybe it can get a little bit thinner over the years. it can hopefully get faster. but how much innovation can happen in this device? >> there's a lot of good stuff coming. we're going to get wireless charging into those things. >> how far off is that? >> that's actually starting now. >> wireless charging? >> you just put the thing down and your phone will recharge.

>> but that's on like a pad? >> it actually doesn't have to be lined up. the new technology you can have it spaced out. it can hover above it. >> when will we get it where i'm here and it's in the air? >> that does exist, it's the idea of willing to accept that idea that power is being sent toward the a ir to their phone. >> because people get paranoid about all the physical stuff. >> they think there might be -- >> they think they're getting microwaved or something. >> how it works, there's safety standards and you test everything like crazy. >> i hadn't even thought about that. people do worry about putting these things up to their head. in the uk people say this kids shouldn't -- they have labels on them. >> they don't have a lot of power. if you have a blow dryer near your head you have more power near your head. if you sleep under an electric blanket. they put out low power. >> cnbc the celebrating its 25th anniversary this year. so i want you to look ahead 25

years from now. you have a wearable on. this is the beginning of it. what is this whole thing going to look like 25 years from now? >> that's hard to say. but i think there will be shg something. the fact we'll be more instrumented whether it's things we wear on us, maybe even things inside our body checking to see if there's biomarkers for -- >> are you playing with any of that stuff yet? >> we are. we're doing a clinical trial that will tell you two weeks ahead of time whether you're going to have a heart attack. the phone is going to ring saying go to the doctor. >> how would that work? >> it looks for biomarkers. what happens is cells die ahead of time. so you can start to see the traces in your blood. and your blood system is a nice thing. it touches all the cells. >> wow. >> anything goes on inside your body, stuff shows up. >> and it delivers a message. >> it will deliver me message and you'll hear about it. in the future i think that's going to happen. we're going to have some kind of technology maybe not full

cellular, but it will be into the body. >> $50 million deal. >> no. he's great. sixth winningest coach in nba history. we need somebody to come in and really drive this team. we've got very very passionate fans. that's why the team stayed in sacramento. we've got to make those fans proud. >> thank you. appreciate you coming in. >> good to have you. >> have fun this weekend. we'll send it back to joe in pebble beach right now. joe? >> okay, andrew. thank you. i don't think anyone needs that much money when so many have so little. coming up some big movers this morning, we have our list of stocks to watch. and then coming up cvs health non-exec chairman david dorman joins us to talk about the company's decision to quit selling cigarettes.

♪ let's take a look at some stocks to watch this morning. smuk schmucker on the list. it said its coffee business would continue into the end of the year.

smucker is behind the folger coffee brand. the firm saying that the retailer would be hurt by deflationary pressure in the u.s. apparel market as well as a stronger dollar. conagra cutting its full year profit forecast due to both a stronger dollar and weaker sales. separately the company also announced that former hillshire ceo will become its new chief executive officer. campbells soup cut its forecast. and it too, is citing the negative impact of a stronger u.s. dollar. they should be selling a lot of soup on the east coast. it must be the stronger dollar with all this cold weather. and power producer dte rising this morning. 12 cents above where expectations were. all right. when we come back this morning, we'll get the latest read on

import/export. that's on the way. then more of the at&t chairman and ceo randall stephenson. plus we have glenn hutchins with us on set. he's going to talk to us about what he sees in terms of cyber terrorism and net neutrality. dow jones futures right now up about 35 points. s&p futures up by 3.5. nasdaq up by 12.5. "squawk box" will be right back. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

import and export prices for january just seconds away. rick santelli's got the numbers. sir? >> yeah survey says down a little less than expected. down 2.8% month over month. we were looking for a couple of tenths over 3%. and year over year looking for a bigger number. we have it. minus 8%. but that's also versus a 9% expectation. last month the down 2.5% month over month now dipped under 2%. minus 1.9%. and year over year now 5%. yields still hovering a bit over 2%. the dax cracks 11,000 on gdp. that was a bit better in europe. mostly due to germany. back to you. >> okay. thank you, rick. >> all right. check out the price of brent

crude this morning. it is now topping $60 for the first time in 2015. that's after hitting a low of $45 last month. west texas intermediate also higher right now back above $50. $52, in fact. even though we've seen higher oil prices the last couple days they are well off their highs. big story of the year. lower oil prices while they've been positive for consumers, they've been hitting the oil producing states very hard. like texas. and that's where we find brian sullivan this morning. brian. >> good morning, michelle. thanks very much. we're not here to tell the oil story. you've told it. everybody knows what's happened to the price of oil. what we're going to do all day today on cnbc is really tell the derivative story. what's going to happen to real estate, to banking, to the consumer, car sales. whatever it might be. that's why we are here. i have to say, it's not bad to be here. it's already 55 degrees in galveston, texas. all day we'll tell that story. here's why it's important.

they've accounted for 16% of all housing starts last year together bob wettenhall and 23% of all jobs created over the last six years were here in texas. so if texas slows down there's a chance it could slow down all the data. maybe not hurt the u.s. economy, per se but could it tweak the data to give the impression that's the case. yesterday we came down and we did have a chance to sit down with houston mayor annise parker. i asked her if she was worried. she said not yet. >> what's happened is we've gone from a supercharged superheated economy with just really fast growth to a more sustainable and more organic growth. now, if the oil prices stay where they are for the next few years, i might become a little concerned. >> so that's it guys. it's not where the price of oil is now or the decline, it is how long oil prices stay at $40, $50

$50, $60 a barrel. everyone i talked to we're fine. but then they start to open up more off camera and say we're going to have job cuts if it stays this way. 25,000 announced job cuts so far in the oil and oil services industry. houston is a big place. but if it stays low, michelle and andrew that's where you're going to get some pain. that's the problem. the length of time. >>. >> sure. the decline in oil pricings lots of winners. but there's a lot of losers. we focus overseas so much, but right right. here in the united states. >> and very quickly, we've got a big 2:00 eastern time show. we've got all kinds of guests. can i just say here's another reason to watch. our producer justin salolomon decided to break out foot just moments before my hit attracting a hitchcockian gang of birds. watch it because there might be

some good luck dropped on me at some point during any live shot today. >> that's funny. good for you, justin. thanks so much brian. let's get back to becky quick in pebble beach. be earthquake becky? >> thank you. net neutrality is big given the fcc's signals lately. i spoke to at&t ceo randall stephenson yesterday. and here's his take. >> we don't know exactly what the f kr rkscc is going to do yet. so then we will have full site. >> they've given pretty clear indication of which direction. >> clear indication. it's been a surprising move. you know we've been talking about net neutrality for a long time. and net knewneutrality used to mean providing a free and open internet.

customers can get to what they want without any distractions or blocking or any prioritization. we all said that's the right ambition. free and open internet. we have now under the president's urging with the fcc moved from pursuing a free and open internet to regulating the internet end to end. and that's the part that quite frankly, is a little puzzling to us. you think about what's happened over the last decade. mobile internet being built out, fiber being applied. iphones being launched with unique business models and ecosystems in the silicon valley. and you ask yourself how do you want -- how do you preserve that and maybe even accelerate that pace? i think most people, their first answer would not be regulate the internet. we think we have a solution that goes not as far as regulating the internet. it seems like the fcc and the administration are committed to

this path. if they are, yeah there will be litigation. i won't tell you exactly what form that will take. it may take the form of industry and movement and so forth. but there will be litigation. it's quite certain that will be the case. and these would be rules that have basically overturned years and years of supreme court rulings. years and years of fcc positions on what these services are, how they're to be categorized. in fact, going back to the clinton administration, it's been deliberate we have light touch regulation for these services. to be allowed to mushroom and grow and bloom. that's exactly what's happened. >> if the fcc goes ahead with this though even if the industry or someone else takes them to court over this how difficult is it to turn back an fcc ruling? right now you have congress both houses of congress that are republican. who knows what happens in 2016. but we've been told by industry analysts that once something like this is put in place, it's hard to roll it back. >> yeah.

that's generally the case. but, you know the fcc has taken action before. that the courts have overturned. i mean as recently as 2004. when some of the broadband rules were thrown out by the courts. the fcc did have to back track on some of those. this could be the same thing. but what you really don't know and this is the reason why i suspect the industry will be asking for a stay of any order. because it's hard to put in something like this and then undo it. there are also implications if these become title two services as their categorized, they are taxed differently. well, are we going to go tax the consumer immediately for these? are we going to wait until we get rulings from revenue? all of these are uncertainties that will require us to pursue a stay. i'm quite confident that these rules are implemented by the fcc, but there are a lot of details that have to be flushed out here. it's uncertain what all this is doing, it's putting the industry

into a lack of clarity. >> you can see more of our interview with at&t chairman randall stephenson at cnbc.com. our guest host this morning is glenn hutchins. he is the chairman of north island. he is also a board member of at&t. and a guru on technology. weigh in on net neutrality. >> yeah so i say a couple things in context. one is i largely agree with randall. even though i'm on the board of at&t, my greater economic interest is on the internet side of things. but my view is that the internet companies need to create incentives for the networks to advance aggressively so we can have the robust platforms to grow on. people who don't see it that way are either misled or trying to free ride on the network. trying to get something for nothing. that's big point number one. big point number two is that this fcc regulation is a 1930s

piece of legislation. that it was itself repurposed from railroad legislation in the 19th century. that they're now trying to use to regulate the most dynamic entrepreneurial innovative economy in the history of capitalism. it's sort of wrong minded. >> you have your hat back on. this is an administration that you back completely. don't they -- do they talk to you anymore? do you talk to them? do they care what you say? >> this was a situation where i wasn't consulted in advance and i just disagree. >> how many things do you need to disagree with before you decide, you know, maybe i'm not going to be on this side of the fence? seriously. >> i've been married for 32 years. >> all right. >> we don't agree on everything. one reason i'll enjoy spending time with you is i never learn anything from somebody who agrees with me. >> you learn a lot then.

>> i can't understand how you come down the side of so many things. >> it was a democratic commissioner of the fcc. he proposed -- he worked out a -- i think a very effective compromise which will be at the heart of whatever legislation follows this. between the wireless and wire line companies and networks and the internet companies. and verizon chose to challenge that in court and overturn it. it was done under section 706 they couldn't extend to. so there was a democratic-led, if you want to get into the partisan stuff, compromise out there. but there are three major issues that are worth thinking about. one is that the proposal that's made doesn't make a decision between long haul and local distribution. that's an important one because it's the only place where networks have the chance to discriminate. by the way the important thick to understand is this is a solution in search of a problem. there is no evidence of any

material interference of any internet content going to computers -- consumers by the network companies. it is -- remember this is a solution in search of a problem without a practical problem. but the only place you could do it would be in local distribution. and this reaches long haul. and long haul is incredibly competitive. there are lots of reasons you need to manage that to move the stuff around. and having this all grouped together, one big problem. the second big problem is that under title two, you regulate price and terms. now, they say that it will forebear. go look at your tv and look at all the ads for the wireless companies. there is not a problem from the consumer's perspective with price. it's an incredibly competitive dynamic business. we're not really going to regulate price even though we give ourselves the power to do it. also there's a lot of concern about what regulating terms means. right? so that's the second big piece.

the third big piece and this is one which i think is existential for the industry. and there are a whole bunch of reasons that doesn't make sense. there were small pieces in the compromise where you would not block things but mass i have spending and infrastructure spectrum going into wireless right now is really being challenged by this. >> we're going to go to break, but you say you like me because we disagree. i never find anything we disagree on. which is why i'm trying to figure out what it is that pulls you from the private sector, free market oriented side of things. >> we'll talk about this when we come back with more from glenn in just a little bit. right now, though let's get back to andrew in the studio. andrew? >> thanks guys. we'll come back to you in a moment. coming up he is the former ceo of at&t and current non-executive chairman of cvs health. we'll speak to david dorman live

after the break. take a look at itt corporation. beating estimates and raising its dividend by 7.5%. we're back in just a moment.

cvs coming off a better quarter. marked by the end of tobacco sales. investors aren't fazed by the loss of tobacco.

shares up nearly 3%. a decline in revenue was offset by medicaid expansion. let's talk about the transition and much more with dave dorman, the non-executive chairman of cvs health. he's also the former chairman of at&t. also founding partner at center view capital. which i think we just mentioned that in rechbs to a story this morning, didn't we? >> yeah. >> which one? with a -- in terms of a pharma deal. like an actavis investment move. we can talk -- i mean it's like why would we talk about the cvs chairman because of net neutrality? because he was chairman of at&t at an important time. i didn't understand what you were doing at the time -- >> i didn't either. >> no when you restructured and sold it to sbc and it became at&t again. here we are again at at&t which i didn't know if it was ever going to get back to where it

was. suddenly it's back to where it was. and i think you were underappreciated in terms of your emphasize there. >> if you think about the net neutrality discussion, structurally at the time long distance was made an industry when it was really a feature. think about long distance today in the context of telecom services. almost completely disappeared. you're buying it with your wireless phone. it's a great example of regulatory overreaching coming to a set of conclusions that the market reputediaterepudiated. >> right. and then the whole cigarette -- i give you grief about that. you lost somequite a bit in the front with that move. maybe you made it up by calling it cvs health and everything. maybe you didn't. but i'm going to give you credit because at least it's not the government. at least it's not a nanny state. if you do it as a company, it's a business decision you're free to make.

so i applaud that. but i don't know where you draw the line. because you sell candy and sugary drinks and all these other -- >> as far as i know twinkies don't kill you. >> that's what i said. in moderation, all that stuff is okay. >> you could almost argue that -- maybe not. but don't open any cvs's in davos. everybody's got a cigarette in their mouth over there. >> it's a, i think, $700 million a quarter down. the two quarters we saw decline were beer and snacks. >> which you made it up with obamacare and medicaid. >> yeah. so we've opened up -- we have 65 million people that we serve. we have 5 million people in the stores every day. i think had we chosen to sell cigarettes and call ourselves health, it just is completely inconsistent. >> you wanted the health name in. maybe over time it's worth $3 billion a year. i don't know. for shareholders i don't know

what i would say. >> we got a little bit of pushback, but as you pointed out, the stock's gone from $50 or $60 to $103. it's performing well. >> then you're on the board of ebay, too, aren't you? >> yeah. that's always interesting. >> you were palatable to everyone in this situation. >> i was the olive branch between carl and the company. >> yeah. >> and so we've recently announced that we've come to an agreement. i was a little surprised that carl wanted more than the actual separation of the two companies. but we negotiated. we've added an icahn representative to the board today. and they'll select the board they want to go on after the spin. but he was, you know, i have to say it. he was reasonable. >> yeah. he probably gets all the cash huh? >> well i think that got reported. i think the company has $12 billion in cash. and they get five. unless we lost $5 billion since

the last board meeting which i don't think we have. >> so -- i mean, i don't know how we tie it all togetherhave. >> so -- >> i mean i don't know how we try it all together between net neutrality and the future of health care and bvms. you've got to compartmentalize everything in your mind. >> talking about the new breakfast burrito. >> as far as health care goes will we see the cost code come down? >> i really do. as you push things to consumers making their own decisions. if you go into a mini clinic today and we've got strep throat we can administer a protocol with a nurse practitioner we can disburse the right drug without a doctor, that's way less cost. and the people paying both the consumer is and the company, appreciate that.

that's a revaluation of health care. >> who's your pro? >> i'm playing with roberto castro. >> and what did he shoot yesterday? >> 69 bogey-free. and he could have been better. >> you played yesterday? >> we played pebble. >> where are you today? >> spyglass on saturday. >> have fun walking up -- how do they do that how is every hill uphill? >> that's what i say. i don't quite practice rounds there. i practiced once and i'll never go back. >> seems like 18. >> it's harder on saturday than thursday. >> thanks david. back to michelle in new york. yep. coming up next, we're heading to the new york stock exchange and check in with the "mad money" man himself, jim cramer with the final opening bell of the week.

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welcome back to "squawk box." let's get to the new york stock exchange before our good friend jim cramer joins you, jim, the nasdaq 15-year high? >> holy smokes. >> there's a lot to like. remember, these stocks are not selling it at very expensive, whether cisco which is not that

expensive stock. this recent run. microsoft not doing that well but not expensive. a lot of companies, cloud-based companies taking the place of row doing this provocatively, taking the place of surface providers that were dominant when we were 16 years ago. i just don't think between the techs, they're just okay. they're just okay. it's not that big. >> it's crucial that the multiples aren't crazy like he were back then. remember they didn't even have multiples back then? >> yeah mish them. you're right. we can't have a situation where the valuations are so out of whack for 2016 that they didn't sustain it. apple stocks 15 times earnings. that's just not that bad. >> and there are earningses. back then there were puppets. >> thanks jim. >> thank you, guys. coming up next, we're going to head back to pebble beach one last time with the nasdaq a few

percentage points all-time high. is it too late to jump in on the tech wave? we're going to talk with glenn hutchins when we return.

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u.s. stocks look to end the week with a high note the nasdaq an excellent bright spot. is there still opportunity to get into technology. let's check with glenn hutchins. glenn, you heard what jim cramer had to say. he said there's more to like here, what about you? >> look picking stocks not timing the market. if you picked well in 99 and 2000 and bought well google and ebay held them through the ups and downs you would have made a lot of money today. i think less of absent market levels and the qualities ofjectorytrajectories. >> so things like -- >> of course we're in the middle of the at&t booth, the biggest technology boom of all time.

>> glenn, thank you for spending the morning with us. >> where are you playing? >> cypress? >> the island? >> that does it for us from pebble beach. michelle and andrew. >> michelle enjoy the long weekend. "squawk on the street" begins right now. ♪ ♪ yo pump up the jam ♪ ♪ nba all-star weekend starting a little early in new york as two of the league's best players will be here at the big board. and there is a basketball hoop on the floor. we'll talk to kevin durant and james harden later on on "squawk on the street." i'm carl quintanilla wit