>> good morning, everybody. welcome to squawk box here on cnbc. i'm becky quick along with andrew ross sorkin and brian sullivan. joe will be back tomorrow. the s&p hitting all time highs yesterday. in fact this was a very broad rally. you had 12% of the components setting new 52 week highs of their own. the dow is now within .3% away from its record high in december. disney united technology and boeing all trading at 52 week highs. the nasdaq targeting return to 5,000. among the biggest drivers you have apple clearly heating things up but the nasdaq composite at 4899. shares of apple up 20% in the last month alone. check the futures and get a read on where things stand. at this point things have barely changed. dow futures down by 12.5 points but the nasdaq is slightly

higher. >> here's the big stories you need to know about this morning. greece topping your headlines. athens widely expected to ask for an extension of a loan deal with the euro zone. we'll talk about the implications of that. the bank of japan leaving it unchanged. the world's third biggest economy is on the lend. by the way, the nikkei 225 is up 4% this year. here at home a number of economic reports are set to role out this morning beginning at 8:30 eastern when we get the january producer price index. housing starts as well as building permits. later on in the morning we get industrial production figures and breaking at 2:00 p.m. eastern time we get the minutes from the last months fed meeting. that's at the top of the power lunch which i'm told is a fine program. >> i saw that in the prompter. did you write that into the prompter?

>> i script everything. >> let's tell you what's going on. fossil with weaker than expected earnings revenue and offering a less than rosie outlook. the company cites a decline in leather and watch sales. who is wearing a watch these days anyway. >> i usually do but i take it off. >> you look at your phone. >> you do. you have a watch on your wrist. >> then there's the apple watch. rackspace warning current quarter revenues will miss wall street expectation. the main reason a strong dollar and quarterly results from jack-in-the-box. boosted by strong sales. >> now let's get into what is referred to as whale watching. the filings from the world's most powerful investors. warren buffet's firm unloading it's 41 million shares of exxon mobil in the latest quarter. it only held that investment since the third quarter of 2013. berkshire also selling a smaller stake in conoco phillips.

as for what they have been buying, they purchased $15.6 million shares of deere and added 6.5 million shares of ibm to its holdings. that brings it to 77 million shares. that's been the huge question we have been asking. with ibm's shares struggling warren buffet said he would be buying. turns out he was. >> that's amazing to me. >> yeah we're going to get the chance to talk to him on monday of next week. >> monday of next week. >> we'll be in omaha sitting down with him going over the annual shareholders letter. >> but i want to hear about ibm in particular. >> we'll see what he thinks is interesting. it's more than 300,000 employees. all of these different business units. this is going to sound like a broad question. i'm sure somebody from ibm is watching. what is ibm? what does that mean? what do they do? you tell with a lot of companies

how they make their money but for me it's hard to tell what they are doing. >> they're in the middle of a major overhaul. >> hardware is all but gone. >> warren buffet has been the one people were wondering would he continue to stay in there and have faith. >> if you talk to people in it part of the problem is you used to have on site it people and you still do but there's a movement now to change and everything is done on the cloud and remote. so you wonder are they evolving or leading, or lagging? i don't know. the change in how i.t. is being done. >> they're moving the cloud but the cloud doesn't have the moet. when it was in your office you couldn't get rid of it. >> that's what i mean. if you had 50 ibm consultants on site they were engrained. >> but the business is a faster growing higher margin business if they can get there. >> what surprised me they sat down last year sometimes in the last six or seven months and he

said what big players in cloud are us amazon and he named a third and it wasn't ibm. it was not ibm which surprised me too. >> something we half joked about last year and i'd like to get our viewers thoughts on this. i called with the doing away of the term cloud computing. >> cloud is just a return to the way things used to be where you have a centralized server. >> hotmail is effectively cloud computing. if you're not in the clouds then what are you? your dial up. >> warren wrote a 20 11 letter and said he hoped the shares would lag so he would buy -- i don't think he necessarily hoped that the operational business would suffer the way it has but nonetheless the fact that he's buying shows some level of confidence. >> guys i was off. i said more than 300,000

employees. do you know how many they have? 431,000 employees and by the way, wall street not optimistic. there are 26 analysts that cover ibm. the average rating is a hold and the average price target is 161.80. the stock is at 161. so the majority of wall street sees basically no upside. so i wonder what warren buffet sees that wall street doesn't. >> we'll get a chance to ask him on monday morning. just a few days from now. >> cool. >> in a meantime let's think about notable moves going on. soros eliminated stakes in the following, apple out aig out, google out. he is cutting his take in teva and upping his position in herba life. carl icahn raised his stake in ebay to bring the holding to 46.3 million. >> let's get a check on your markets this morning. let's take a look at the s&p and

dow futures here. nasdaq may be the one to watch because they're marching back toward the 5,000 mark. we are seeing a mixed open implied for the s&p and dow down but really a couple of points folks. they're up exactly 1%. we talked about greece being the big story. europe is a big story. greece is up about 1.5% right now. the german dax, ftse 100 all up as well. overnight in asia they rose shanghai hang seng in hong kong up. japan keeping it's monetary policy as loose as it can go. add libing oils. wti crude down 1.2%. i was in texas last week. goldman with a report saying we don't think there's a supply demand balance coming any time soon. big fight over oil.

brent, wti, natural gas all down today. let's look at the ten year. the big story in the markets yesterday was the move higher in the ten year yield and that continues today. we're at 2.15%. historically still very very low. the fact -- we were at 1.64% on january 30th. this is one of the steepest increases in the ten year yield that we have seen in years and by the way, mortgage rates, are posting their biggest short-term jump in six years because of that move. >> yeah but 2.02% is the sticking point. we rallied toward that level and haven't been able to break through it. seeing it today that question where is the new levels are we're talking about. >> yeah a 30% move in yield and people say stocks move that much all the time. bonds don't. bonds are the super tanker that take a long time to move. especially if they're stuck off the port of los angeles. how is that for a segway. >> i was going to say we'll get to what this means for thouzinge

housing market too. let's check your currentcy markets here. gold got whacked yesterday. is there support at 1200? we may find out. the price of gold is at 1204. that's a level to watch. >> i mesdssed up. i said it was this monday. it's the following monday. march 2nd. >> it's the first week -- the first weekend in march. >> sorry i got into new york late last night. i'm a little confused on my days. >> it's 6:09 in the morning. >> i woke up in the middle of the night thinking i have to plan and pack for this weekend to leave. it's not this weekend. it's next weekend. sorry. breaking overnight we should tell you sony's ceo outlining his strategy for the consumer electronics giant. great to see you. tell us about the news today. >> well it's a long time becky since we heard any kind of offensive strategy for sony but

this is the start of first kind of series of offensive measures that sony is about to outline because the last couple of years have all been about restructuring but as we saw in the latest quarterly numbers some of that is starting to pay off. this is a new three year blueprint that the ceo of sony outlined today. some of the numerical targets are ambitious. hes looking at $4.2 billion. that's four times larger than where they're at right now. also an roe target of 10%. but the details and the overall gist of the business strategy is going to be vindication from the analyst that said over the last two weeks that sony is ready to move on the offensive. they'll focus on things they're good at which is the image sensors. the stuff that goes into the smartphones and might be going into the driverless cars somewhere down the line.

playstation franchise, pictures music, all of that is working well but then they're going to spin off some of the subsidiaries to give them more autonomy which means more responsibility should they not be profitable over the next coming quarters and there is the problem for sony. they're having problems in two areas. particularly mobile immune kags communications and television operations which have not been profitable. they're on the high end from couples like apple and samsung. in the television operations the margins are thin there. analysts have been wondering whether or not they can push these tuitions into the black out a sale and the ceo of the company said at this press conference that anything is possible including a sale or any other exit strategy. so you talked about the equity market being up at 8 year highs, one of the topper formers over the past year. sony's stock is up 8%.

guys. >> thank you for that. we'll continue this conversation. joining us now is lance, the editor at large. i guess the question is is this the moment we have been waiting for? there's been lots of moments we thought were supposed to happen with sony. we thought they would break up and get their act together but they don't. >> it's been such a stuff year for sony and so much bad news. they really -- they have really gotten smacked around in areas. we remember a couple of years ago they shed the computer business. they used to be a leader. they used to be a leader in tvs. now they're getting kicked around by samsung and vizio. >> i remember when it was like that little -- >> l fwrksg, it wasn't a quality brand but it's right there. percentage points behind sony because the company didn't know how to innovate or market to the

u.s. market anymore. it's fallen behind. from my perspective i look at sony they're a great technology company. tremendous innovation. like great smart home stuff but they have -- >> they're not commercialized. >> well often you don't see stuff commercialized or you don't see it marketed properly. they have built -- they built great tvs but they haven't done much to market them lately. i know that they recently showed us a pair of smart glasses but this is classic sony right now where the glasses were interesting but they have a separate box and control system for battery life. it's the only way they could do it so they weren't even at the same level as google but they were saying this is our future. >> i'm going to editorialize but from a consumer. not as a journalist or host or whatever it is. to me sony started to make their mistakes as a consumer when they started doing what i call the

microsoft mistake which is where they started to try to make their own things. for example, everybody started going to traditional flash memory. they went to the memory stick. so they had their own technology -- >> i own a computer with one of those. >> they were more expensive and frustrating. microsoft went with the zune and did the points to try to buy music. they didn't copy they tried to do their own thing. >> apple had that mojo and i think sony might have felt like they were apple in a way and tried to do everything with their own standard which failed. >> in the late 90s that's who we often compared sony too was apple. there were similar yarities. at the precise moment that apple took off like a rocket sony just started to stall but it is interesting that this focus on come poenlts and all the stuff inside because that's a good business. there's going to be a lot of

business for sensor technology. artificial intelligence, self-driving car, that's a good business to get into. >> what about the hacking scandal. what does that do? >> i don't think it does anything. i know everybody is really focused on it. it was embarrassing. it was embarrassing for the company and their i.t. department. >> no business impact? >> no. i can't imagine that it does. first of all, these hollywood types. they're used to it. they don't care. what they care about is howell does the show do or howell does your movie do at box office. that's all they care about. >> do they have to get rid of paschall. was that the right move? >> it was a nod to this is embarrassing. but it wasn't a major thickng. the spider man picture, she's still involved with it. so it's not like they showed her the door. they just had her step to a different level. >> three years from now what will sony look like?

>> they're going to sell off some stuff. they're not win ongning on the mobile side. >> is it palatable inside japan to make these moves? they always had one hand behind their back. >> more than it used to be. >> i think they will accept it. they want this company -- there's a tremendous pride in these companies that are, you know part of these national companies like sony but they don't want to see it go away. they want this guy to do whatever he needs to. we know it hasn't gone well but he's still in there fighting so this year he will make some of these really big moves. >> given the fact that it hasn't worked over the past two years is he the right guy? >> considering where he started, i think so. >> is there another guy in the wings that we should know about. >> not that -- >> i used to work for a japanese company years ago in another life far, far away.

it was a legend in japan. it's more about hanging on. it's not -- it's just surviving and slightly thriving and then you move up. it was the disrupter if you will. viewed as the hero and savior. if he can't do it an due i'm not sure who else is out there. >> he was there six or seven years and didn't get there either. >> often times if companies are based in japan and after a lot of business in america there's a huge culture problem. these companies that don't quite seem to know -- it's almost like they didn't make the transition into the 21st century. the other possibility for sony would be a purchase for somebody like soft bank that seems to pour money into everything. >> okay. we'll look for that. thank you for coming in. >> it's a pleasure. >> when we come back this morning, we'll get more on today's national weather forecast. a freeze over the south as resident there is prep for potentially record setting cold. plus why is the euro zone being so tough on greece?

michelle caught up with the man that's one of the reasons. he is a 36-year-old professor that could be the next leader of spain. why other european finance ministers want to send him a message. first here's a look at this date back in history. financial noise financial noise financial noise financial noise ameriprise asked people a simple question: in retirement, will you have enough money to live life on your terms?

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a fresh half an inch to inch and a half fell this morning across nashville to residents here are waking up to the fresh snow covering ice that did not go away yesterday. the city police responded to more than 100 crashes just on tuesday and of the four fatalities reported since the storm on monday in tennessee,

all were vehicle related. so stepping outside today unfortunately the music city is going to be dealing with a fresh bit of snow and the ice on the roadways but as you mentioned that record told potential three below zero is the forecast low tomorrow that would shatter the record of five. not to mention a record cold high temperature just into the teens for tomorrow. so the brutal cold air is the next big story. as you mentioned too schools are closed through the end of the week. back to you. >> thank you. let's get back to the markets. we're waiting to see if there's progress on the greece bailout negotiations in europe. michelle joins us with more on that and another up and comer in spain likely influencing these negotiations. >> two things to watch for today. we're waiting for the greek government to get a loan extension request because they do not want to do a bailout extension request. these words are important to them. so this is to service the home

constituent sy constituentcy. it's unlikely europe is going to accept this. we'll see how it plays out and we're waiting to see what the european central bank will do. they meet every other wednesday to decide on things like should greece, should they keep giving breathing room to greece's banks. they're likely going to agree to continue to do so today. the question is how much. they could throw us a surprise which would be devastating. second thing to watch for, let's get to now what we put in the tease which is one of the reasons why the euro zone is being so tough on greece. because they fear if they give into demands to be looser with greece on the requirements for the bailout, that will start to give even more power to other similar types of movements in different countries including spain which brings me to a 36-year-old professor who is leading in the polls in spain to be the next leader of the

country. you see him there ponytail. he's been in new york. he is leaving today. he was at columbia on monday. he came down to the new york stock exchange. we spoke for about 20 minutes. we did most of the interview in spanish. he is an extremely smart individual. he did some of it in english. we'll play the english part of it for you so you can get a sense of who he is. >> if you you could say anything to an american audience, a again rally capitalist audience who would you say. >> we do things better. >> such as? >> i think we have governments that work for people and not for the banks. >> do you think you're going to be the next leader of spain. >> i will work for that. >> you're only 36 years old. would you be ready for that. >> it's a difficult question. i think that we need young people doing things. i think we have much old people

with very old ideas. i think we need new ideas and new people ruling the government. >> so you can see passable english. in spanish incredibly articulate. he says new ideas but he is a self-described man of the left. he wants to lower the retirement age. he wants to raise the minimum wage and restructure the country's debts. it's a classic leftist position. >> he also represents a population there, let's say young men under 40 having a very difficult time when it comes to the unemployment picture. >> youth unemployment is huge there. one thing he has really been able to capitalize on and here in the united states we could understand this really well spain similar to the united states their problem was a real estate bubble. a huge real estate bubble and what is different about spain, here in the u.s. if you don't pay your mortgage you can have a million dollars in the bank but the bank cannot go after all of your other assets you mail in

the keys and you go live in a rental right? in spain they can kick you out of the house and you still be paying the mortgage. it's a recourse loan. so i have not interviewed people like this but read stories. they work for the bank for the rest of their life. imagine every morning you get up and you don't save, instead you're still paying a mortgage for a house you don live in. he has been able to tap into that anger. >> they can go after all of your other assets. >> you're the asset. you're putting yourself on the line. >> that's true in most of the world. the united states is unique in that way. in terps of having nonrecourse loans for real estate. >> so he was born in 1974. he is 40 years old. now you have this 36-year-old. i think there's a natural inclination. i have been to greece as well. you've been there and you saw the anger. they're frustrated with the old ideas. the old men in ties that haven't done anything for them. >> but none of these ideas by

the way are new. >> you'll see more countries that candidates such as this younger, more leftist because they're saying to the young people listen it's not your fault. we know you want to succeed. >> so to the effect the wrur negotiations. >> we may see a much tougher line. >> i'm not convinced at this point and there's another critical thing to remember here alexis when he chose his coalition partner in greece he chose a right wing party. a party with whom he agrees on nothing except no to the bailout, one. and two, this party if for some reason he decided he wanted them to vote on leaving the euro he picked the only party that would support them, right? >> when you call them right wing. >> it's not like the u.s. right wing. >> this is effectively a neonazi

party -- and they have admitted this is them saying this. so it's not a right wing like go -- this is a far right anti-immigration, hard line. >> noneconomic policies. >> yesterday morning you thought that -- yesterday you thought there was going to be a deal. now you think -- >> hold on. let's go back. last wednesday when they negotiated for seven hours source in the room told me they had come to an agreement of principal. they had a statement and they were sitting around waiting for athens and then they walked out at the very last second after they thought people were leaving the building thinking it was possible. they're still fighting about words. today they're fighting about words but they have to ultimately decide is whether or not they're actually going to do the reforms that the rest of europe wants. if they would do the reforms, i think germany would give them almost any money they wanted but they don't want to do any of the

reforms. >> they can't. that's how they got elected. >> but they also got elected promising they were never going to leave the euro zone so they're in a tough position. the question is who has more leverage. >> does greece have any leverage at all? >> we're learning every single day that we don't see italian and spanish yields rise sharply for fear that if greece leaves everybody else leaves. the rest of the euro zone has more and more leverage. >> that was my impression. because the market doesn't care because the debt has been socialized. meaning the ecb owns the debt. nobody is going to get injured. so it doesn't matter. >> we had a conversation about whether or not the market cared or not. >> the market doesn't care because the market doesn't own the debt anymore. >> right. exactly. let's talk about -- thank you -- when we come back why some hospitals are releasing medicare patients. it doesn't appear to have much to do with improved health conditions. a lot to talk about there. plus politics. new insights on a private

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hi, welcome back. >> how you doing? >> time for a segment where we go through interesting stories of the day. this is a deep investigative piece by the wall street journal which is that according to deep research done by the journal they found in many cases hospitals are discharging medicare patients in specific windows of time that would maximize the medicare reimbursement. in other words between 20 days and like 25 days it maximizes your medicare reimbursement. before that you get less and after that a certain point you may get nothing. the rates of people being discharged in that window couple of day window depending on whatever it is that they even alien from is factors higher than other types. >> they put to some specific cases where it had nothing to do with improvement in the patient's health or anything else along those lines. it was done on this time frame.

they couldn't point to any improvement or change or plateau. >> they focused on sepsis patients. something 300 or 400 or whatever it was, much higher were all released in a two to three day window that would have maximized the medicare reimbursement rate. >> do you think there's a business person at the hospital that tells the doctor what is do do? do you think they think about this subconsciously? do you think they have written it into the prosee tourcedure? >> i think there's a standard operating procedures probably not written into the rules. hospitals are trying to make sure that they are maximizing and the other side of this is the hospitals have gotten squeezed on these things too. when the affordable care act came in it squeezed the hospitals on the other early things. it set new standards to say you could only get paid in you were in the top percentile in terms of improvement along the lines. they're trying to figure out how

to make a buck on this too. what is concerning is what this means for the patients health. are you going to be kept in the hospital longer than you need to or get kicked out before you've shown improvement. >> time to go. i don't feel good. >> another story that caught me eye today because brian was looking at this story i started taking a look at cbs story that was out there. the pharmacy benefit manager it's the second largest pharmacy benefits manager in the united states is raising concerns about a new class of cholesterol drugs. these treatments are called pcsk-9 inhibitors. they're saying right now it's only a small number of people expected to be using this but could increase to 15 million patients overtime. they expect it will cost about $150 billion a year. they're raising a red flag about what it is going to cost and it's interesting because of express script fighting back and

trying to wage a campaign against the new hepatitis c drug. the pharmacy benefits managers coming in and acting as the new medicare and setting costs and deciding what they will and won't pay for concerns me for the same reason. i'm not convinced that the science is necessarily there to back it up. >> but isn't the whole cholesterol market shaky in the sense that the amount considered healthy and unhealthy continues to come down over the years? every time you lower the acceptable amount of cholesterol level you capture another 5 million people that have high can cholesterol and the doctors on the board are all on the payrolls of the companies that make the cholesterol medications. so why don't we just say one point cholesterol is now high. >> these inhibitors in particular are only going to be helping 620,000 people in the beginning. these are more people genetically predisposed. not necessarily what they're eating or anything else going on

with it but it's for patients that can't handle lipitor. they're warning about the expanding number of these patients. >> elizabeth warren hilary clinton had a secret meeting in washington in december where apparently hilary clinton was seeking advice from elizabeth warren. didn't ask her to endorse her out right but clearly trying to bring her under the tent. always a question of whether this is -- there's always the question in the party right now whether hilary clinton is going to end up having to move more left to match some of the rhetoric from elizabeth warren. >> or whether warren herself will run. >> whether this was an attempt to bring her in the family and keep her there. when he was originally nominated one of the things you get from staffers was she was frustrated nobody came to consult her. you haven't come to kiss the

ring and find out how i feel about this first. so a little bit of this might be i'm coming to show a little bit of respect. >> what did senator warren say? >> unclear. the report did not get perhaps the central idea. >> it doesn't surprise me at all that hilary clinton would seek her advice and check her out. >> what did she say? what did she walk away with? >> we don't know yet but we will find out. >> eventually we will. >> thus ends chairs. coming up the labor secretary joining talks at the west coast ports dispute. but is there any real hope of a deal any time soon? the man representing the nation's manufactures will tell us why it's critical that something gets done. we're back after this.

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the oceans off of southern california look like a parking lot for super ships. the back up caused businesses billions if not billions. some manufacturers are forced to cut hours for thousands of employees because of it. yea is joining us now. have you talked to anybody close to the negotiations? are we closer to getting a real resolution? >> well, you know it doesn't look like there's been much progress. we're pleased that the president

asked the labor secretary to help mediate but there's a lot at stake here and we need progress really soon. >> what do you think is going to be the fall out each day further that we do not have a deal? >> you know we're already starting to feel it throughout. there's ripple effects throughout our economy. if we have a total shutdown of the ports, the last shutdown was about ten days. if that occurs again it's going to be about $2 billion a day. that's an impact to our economy. we work very closely with the retailers and the president there. we're already seeing a slow down for wages in this country. many of our manufacturers are overtime and eliminate it all together. our markets are turning away orders already made because they're worried about our manufacturers being able to fulfill their obligations.

>> this happened before you referenced that in mid september. 13 years later jay to get us around any of these. we had it in 2002. why haven't we changed it? >> well you know every one of these disputes has a different look and has different issues that arise. the issues that are occurring right now clearly, this has been a dispute going on for several months. this is something we have been warn warning about the economic impact of it and we're starting to see the officials in the economy right now. i mention the manufacturers, kitchen appliance manufacturers that have lost orders. we have food processors or food manufacturers that are literally having their products rot at the ports right now. we have importers who have --

who still have items from halloween sitting out in the water and they can't use those products anymore. so this is having a really detrimental impact on the economy and ultimately it's not only lost wages, it's lost jobs here in this country and we need to see a resolution pretty quickly. >> what should that resolution be? >> well the resolution is they just simply need to settle this. so they need a new contract. they need to get that contract signed. if secretary perez can help with that, that's great. our understanding and, you know i've read what you've read our understanding is there's a dispute about how to settle few you tour -- future disputes. let's deal with this one and get it off the table and make sure that american manufacturers reason further hampered or losing their jobs because of the disputes going on in the 29 ports on the west coast.

>> jay it was a pleasure. thank you for coming on the show. especially so early. see you again. >> thanks. >> okay coming up a-listers from the world of fashion, hollywood, music and business teaming up in the name of education. that story after the break. but first as we head to the break check out today's squawk planner. here's what's happening at 7:00 a.m. eastern time. mortgage application and at 8:30 eastern january ppi housing stat starts and minutes from the last fed meeting. that as squawk box returns. ♪ ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry but you worry. what happens when your paychecks stop? because everyone has retirement questions. ameriprise created the exclusive confident retirement approach. to get the real answers you need. start building your

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♪ ♪ i can change ♪ fashion glitter, all convening in new york for the mercedes-benz fashion week. last week they came together to support an important cause. the celebs reimagine learning. john legend and ariana grande. joining us the woman behind this ambitious project. melissa kirsch. she's the ceo of venture new project. thank you for being here. tell us about the fund. >> well, the fund is going to be

focused on investing in great social innovators trying to change the world in education. reimagining how we think about an education today. >> what does that mean specifically? >> well we have all right started investing this money in great social entrepreneurs like eye to eye. that is bringing together dyslexic kids who are mentors to mentor young kids in schools. and we're working with the multimedia lab which is creating really cool technologies that in this day and age, we should be using technology more in schools. so they are bringing cool technologies that are making learning fun in the classroom. >> where specifically do you folk us? aside from things like eye to eye? are you looking at in the public school systems just ways to go through? >> yeshg the schools that i went to 30 years ago, they still look the same. and we have so much new technology. and the neuroscience tells us a lot of how the brain works that

we haven't really applied to the classroom. so w doing using the power of entrepreneurship to invent new schools for students and classrooms and teachers. really this is focused on getting to the teachers and also to parents. because a lot of parents don't know how their kids learn. and don't know what they can be doing at home to inspire their kids. >> can i wade into a controversial topic? >> yes. >> most venture capitalists and head fudges are anti-school, and anti-union where do you stand? >> well i think that's old debate. i really do when we think about education today, we have to bring everybody to the table. we have to bring the private sector into schools. we have to bring the nonprofit sector together with the private sector with public policy leaders to really reimagine how schools are. really, what was so exciting about last night was i think we're bringing -- trying to

change the dialogue. because the dialogue i think, has gotten old. and it's time to really think differently. so to have the creative energy at fashion week to have john legend to have the people from entertainment industry, together with the social entrepreneurs to say school's not working for all of our kids. we have 1 in 5 kids has a learning disability. we're not release their potential. >> 1 in 5? >> yeah. >> what would be a type? >> learning dyslexia ahdh actually 1 in 5 ceos is dyslexic dyslexic. there's amazing people who have learned differently. and school wasn't the perfect thing for them. all of a sudden, you know they faded. and we're trying to bring their

technicolor life back. >> what's your biggest challenge right now? who doesn't accept what you're doing? >> the goal of this -- i've been working in education reform for 15 years. and really we are working to try to build a coalition that is not debatable -- >> sounds like you're consciously stepping away from the debate. >> yes, to slow this down. and our country needs to be competitive. and we need the best education. an one of the things that america's great at is innovation. and we should be teaching kids to be creative and innovative in schools. >> can we get all of these people in the same room as andrew mentioned, it has become a very contentious debate. >> you know i think partnering with the entertainment world has leveled the playing field in a way. nobody is against john legend. everybody loves him. and he has been -- he and the folks at wme and other places have really sort of said what's find out what we all believe in together. and it's really about letting

every child's light shine. >> we want to thank you for joining us. >> thanks a lot. and coming up the morning's top stories including the latest on debt talk information greece. will a deal get done? plus we're going whale watching and talking about the world's most powerful investors are buying and selling. state tsai tuned, "squawk box" will be right back. can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪

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earnings alert.

inside actavis. ceo brent saunders will be here to dig through the report and show the latest for the deal. and college costs holding back entrepreneurs. how student debt is a drag on it. and it may be gets better soon. the second hour of "squawk box" begins now. ♪ start me up ♪ >> announcer: live from the most powerful city in the world new york. this is "squawk box." welcome back to "squawk box" here on cnbc. first in business worldwide. i'm becky quick along with andrew ross sorkin and brian sullivan. joe's off today but he will be back. we've been watching the u.s. equity futures and so far, it looks like things are barely changed. right now, the dow futures down 3 pat 5 points s&p down less than a point. nasdaq up by 1.5. nasdaq is approaching levels that we haven't seen since the

height of the big bubble. one of the biggest, apple. that stock trading at an all-point high. >> the bank of japan leaving its ultra loose monetary stance unchanged. b.o.j. says the world is on the mend. back here at home on. agenda. 8:30 eastern time january producer price index. housing starts and building permits later in the morning. industrial production figures. then breaking at 2:00 p.m. eastern time. we'll get the minutes from the last month's fed meeting. brian sullivan and the power lunch crew at 2:00. also regular tore followings revealing the latest news from warren buffett's berkshire hathaway. 40 million shares of exxonmobil. selling a smaller stake in contra phil lins. buying 6.6 million shares of

deere. andarding to the ibm hold and do wore wail watch whatting. >> we were talking about ibm in the previous house. january 2011 math is our friend. the dow, since the beginning of 2011 is up about 55%. ibm is up about 8%. that's being generous. it's been a laggard for now for a number of years. >> the worst performing dow for two years running. >> well now, it's american express. we do have interesting news that is just out from drugmaker actavis, when it completes the acquisition of allergyan as its name. with the consensus earnings report with ceo brent saunders coming up later in the hour. greece's government confirming that it will request an extension to its eurozone agreement. michelle is back with us. joining us back now just joining us for those in the news in

chicago or whatever waking up, how close do you think we really are? >> impossible to say. just to clarify what you just read there, they're going to see an extension of the loan agreement. and they've got this little hash tag that they put up on tv where we put "loan" in quotation marks. >> why is loan in quotation marks? >> because the euro wants them to fight for a bailout extension and fighting about the words and what they mean. and what's underneath all of that is conditionality. the greeks would like the zone extended and they could negotiate what the termses of loan will be. the euro says no no no you're going to commit to the conditions which we impose which would be a bailout agreement which doesn't stitt well with the constittent wants in greece.

the european central bank the governing council meeting every other wednesday. they consider a request for what's called ela, emergency liquidity assistance. banks are using ela which is a more expensive form of funding to fund the banks. the ecb could cut them off. that would be unlikely. or the ecb could say no more you've maxed out. or agree to give them more. if all of this is gobbledly gook to you, you can make that out, they could have roles starting in greece meaning you can't take that much money out through your atm. you can't move money around. >> do you think they recognize that? >> i'm certain that the greekfinance minister recognizes that. >> average greek citizens?

>> absolutely. because they're drawing money like crazy which starts to feed on itself because it mean that the greek banks need more assistance. >> and no country in europe have defaulted as much as greece has. there are countries in south america, but greece a number of time. >> five time. >> yes, i'd say why would the market necessarily have a historical validation. the unemployment rate is among 25 year olds is something like 40%. they're angry. >> in theory both sides have a consensus to come to a deal. they hate messiness. the greeks in theory still need more money because they're back to the same position they were many years ago, right? every single day the greek government spends more money than it brings in in tax revenue. if the money gets cut off, what happens? you have to decide do i pay the military? do i pay for pensions?

do i pay for medicine? what do i use the cash pile for for the revenue that comes in. so they're in a tough position. they could very well get squeezed with the capital controls and see how far they go. as long as italian yields don't rise sharply greece doesn't have a whole lot of leverage. greece has said my leverage is italy. if you let us go they're going to start pricing in the italian debt. and then they say wait a minute the ecb is going to start buying debt soon, right? is the timing coincidence? think about it ecb has a lot of power. europe has a lot of power. italian yield aren't going to rise because we're not going to let them. >> michelle, thank you. joining us now for more on the market's creation to the greece tox we have hanz olson, global head of strategy for investment at barclays.

and j.j. cunningham who is chief strategic at td ameritrade. gentlemen, what michelle just laid out we watched the new highs and we're brushing off the concerns does that last. what do you think, hans? >> i think what you're seeing right now is classic debt negotiation. they should get a deal done because this is hurting greece. you know prior to this happening, this round of negotiation, greece was set last year to break a string of five consecutive years of economic contractions. they're going to grow last year this year. their debt from gdp went from 60% in 2009 down to 1% right now. they've done the work. they've done the heavy lifting. they've bent the cross curve, right? so to have people lining up pulling money out of the economy, trying to exit the banking system right now is uniquely ill-timed. they should cut a deal get it on and move on. >> you have just said though

they have done the reforms. michelle, i think we talked in the past there's still a lot more that the eurozone wants to see from them. >> they've done a lot of budget cutting. but when it comes to things to making the economy grow recommendations from the oecb, and restructuring. >> restructuring -- >> have not been done. and the two that have been done we're talking about reversing like today. >> internal you cut your costs, employment levels and the like. they've done all of that right? you look at the labor cost. the cost curve is bent. throw in cheaper currency. >> but this discussion, we talk about greece and greece is really guys tell me if i'm wrong, just a proxy for broader europe. because if greece gets some sweet deal cut, that's the fear the bigger countries, the spains the world, and your valuation, they're going to say where's our

new deal. so isn't greece important on its own? or is it literally just a vessel as to what the broader part of what europe may or may not do? >> i think you bring up a good point. >> 29 states have a bigger gdp than greece. and their debt is 175% of their gdp in greece. which as bad as some states are, and i live in illinois which is one of the worst, we're not to that level yet. that all said i think greece say bit of a proxy because why wouldn't other countries try that. the second thing, when you look at how it affects the u.s. markets it keeps the u.s. dollar stronger for a long time. we just got done with the earnings where they're telling us the strength of the dollar is hurting them going forward. and that's one of the bigger fears going forward. like retail traders, what does it mean to me? what i think it means this continues to be a drag on future earnings on companies that do business internationally.

>> that's different than saying if greece has its euro, it's cataclysmic. >> if you think about greece 60 the euro how could that not be messy? >> but is it a reason not to buy stocks? >> no. the thing is you have to remember that the greece -- the eurozone of 2015 very different than the eurozone of 2009 right? you have a central bank actually acting like a central bank right? you have a banking system that is much healthier than it was then. and a better growth than you have then. and you have the potential for spontaneous economic combustion, i.e. in good form that actually happens. >> would you be telling people to buy european stocks? >> the one of the things we've been talking about for a while and it's playing out like they

we thought you start to cheapen the currency. >> who are you buying from? >> multinationals -- >> you wouldn't go any lower? >> i don't think you have to. >> what about if you're an american and buying the them in euro you've got to hedge them? >> yes. >> what do you think, we're looking at nasdaq stocks picking up, technology stocks. do you think that january was the anomaly, or was this? >> i think the combined is what we're going to see for the rest of the year. volatility, vix trading under 60%. volatility up near 20 when we look back. but i also believe it's going to be us continuing to go higher. the fact is we're going higher in spurts. >> that's an argument for not buying stocks right now for holding off. >> well what i would say is this, to try to be a perfect

timer is very difficult. i think most people make the mistake as retail trader they try to be all in at the perfect time. if you do want to buy stock, think a little bit now. if they sell off, you can buy a little later. it's getting in and out at average prices. it's so funny, so basic, that people miss out on that all the time. it's hard to predict when this is going to be. it's been moving very quickly to the upside and downside the reason i think we continue higher is nobody ever believes. if you think about the last three or four years every time we go up we go like this is definitely the top, this is definitely the top. >> jim is right. if you look across asset classes right now, volatility is rising to all the asset classes that we've borrowed. it's probably not a coincidence as central bank qe recedes in the u.s. is that involved tilt is rising. >> the only this is crude oil.

they're down to 80% right now. >> although what is it 10% in the last few trading sessions again? >> yeah. what's interesting, one nice point, we hit all-time highs. the most interesting thing in yesterday's trade, the vix was up 7% yesterday. something to keep in mind. >> j.j. hines jnchtsj.j. hans thank you for coming in. when we come back the complicated relationship between student debt and starting a business. and the ceo actavis and the allergan acquisition.

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♪ off the street, no normore snow. welcome back to "squawk box." let's talk entrepreneurships. on the link between student debt and startups. >> good morning. the relationship is complicated. first there's the rate of entrepreneurship among young americans ages 21 to 24.

it fell from 23% in 2003 to 23% a decade later meaning millennials opened approximately 19,000 fewer businesses per month. that's krg to the coffman corporation. the debt outstanding fell between 2004 and 2013. of course there's a catch. those with debt have more of it. about $28,000 on average. now, some researchers say that debt may be the reason why fewer young people are deciding to become their own bosses. but $12,000 in student loans doesn't stop zachary from starts his own market research company. he says that debt actually pushes him. >> having something there just acts as more motivation and fuel to the fire so to speak, knowing regard it's we've got to figure out a way to make money so we can draw income from a very early stage company and be able to pay some of the responsibilities and take care of the responsibilities that i had and certainly other people who have joined us have.

>> but there's a silver lining in all of this. entrepreneurship actually peaks for those in their late 30s and early 40s which debt rates go down. with the youngest millennials actually entering the market there's hope that more new businesses will be created than ever before. >> thank you for map though i'm thinking of peter thiel, and peter thiel used to say he would not invest in a company in an entrepreneur over the age of 35. >> ages. he may be in ages -- >> no but part of his theory was that ultimately you -- that you can't -- early on in your life you can take crazy risks. >> jury hungrier when you're younger. >> even with the dead, later on you have a kid, you have a mortgage. you have all of these things and you can't do these things. there's a lot of people saying i'm going to make money, pay off my debt. do all of this stuff. and then i'm going to go out and

do my entrain newer -- >> nick goodman, the ceo of go gopro gave himself a time line. >> nick woodman is from a fairly well off family. i don't think he's carrying a lot of debt. >> there was money that his parents invested in the first business that went under so he was gun shy the second time around. >> not what he's done. his parents had money to give him. but the point i'm making and andrew, you make a great point which is how different, though and i hear your story, how different is student loan debt from mortgage debt? you have student loan debt. but when you're 35 you may have mortgage debt. is there a point in your life where you don't have debt. >> well that may explain the reason why there are fewer entrepreneurs under age 30. >> those are from 2013 and it's a hard pill to swallow

especially considering all of the press and venture capital money pouring into the entrepreneurs. this is hope that the millennials when they do get that that age bracket they start nur businesses. >> late 30s and early 40s? >> that's when coffman and the experts say you're more successful. >> i wrote about this about a year ago. bill gates was 20 years old. steve jobs was 21. warren buffett on this show was 26 when he started that company. ralph lauren was 28 estee lauder was 29. you go try to find the people who are over 35 and 40 a much tougher story. >> you're saying if i wanted to build my hyper loop i'm too old? >> too late. >> you haven't started? >> no. i'm 43. >> i'm thinking of resuscitateing roller blasd and lightdes and light

bull.bbulbs. that's my plan. >> in the late 30s. >> been doing -- it. >> if the hyper loop works he can go backwards. >> now 43 years ago old -- >> thank you for coming in. >> thank you. when we come back this morning, actavis ceo brent saunders will join us on the set to go through the company's earnings report. but first, taco bell goes asian, we'll talk about a new men you're item. time for the aflac trivia quiz. when did trading at the nasdaq begin. the answer when "squawk box" continues. 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.

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>> announcer: now the answer to today's aflac trivia question. when did trading at the nasdaq begin? the answer, february 1971. all right. let's take a look at some of the stocks that you need to watch on this wednesday morning. hilton earnings falling a penny short of estimates. now revenue did stop the streets few. but its current outlook looks light and pressures on hilton shares.

angie's list posting better than expected revenues. a mixed report for garmon sales and earnings investments falling a bit short. that stock trading on its outlook a four-year below garmon. fashion retailer fossil group could be the disaster du jour. the company citing a decline in weather and watch sales in north america. and meantime rackspace warning its quarter revenues will miss wall street's expectation. the reason a strong dollar. earnings at jack in the box, boosted by sales in qdoba mexican grill. i went through the facts on the commercial break and did quick number counting. 100-plus companies in the s&p 500, up more than 10% this past month. >> january was stinky.

>> yeah but this has been quite a comeback. more than 20% of companies up 10%. >> but it's the january indicator that doesn't make sense -- >> as january goes -- >> as january goes the rest of the year. that's not the case this year. >> the first days. >> the first days the first week and then they extend it to the first month. >> rain, if you get pooped on by a piggen is good luck. >> you know when who says that people who get pooped on by a pigeon say that. >> i didn't just randomly pull that up. we've got another fun story you that could connect but i won't. listen up fast food fans taco bell is testing a sriracha menu in kansas city. it's apparently a hit. it will launch -- i don't know how to pronounce this. >> sriracha quesoita.

it's just the latest change to embrace sriracha others like subway. there. you go. coming up the ceo -- is it acta actavi actavis. >> the ceo of the company will join us. interesting institution out of the company. but first making a run at the white house, former governor bob ehrlich will join the field, apparently. he'll join us to talk about why or why not. we're back after this. >> announcer: this cnbc program was sponsored by payton & rygel offering global solutions. there and back safely. for tomorrow is another fight. the 2015 m-class.

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♪ welcome back to "squawk box," everybody. we've got headlines for you. chesapeake energy is accusing its former ceo aubrey mcclendon of stealing the sensitive data including data and maps. they're claiming he used them to start a company. he denies those allegations.

and snapchat could value the company up to $19 million. and best in show. the beagle taking home best honors from the westminster club show. on the second time that a beagle has taken home top honors. a tough break for applicants to carnegie mellon's science program. the program accidentally e-mailed acceptance notices to 850 people who had been rejected admissions. a sad story. correction notices then went out seven hours later. the school apologized for the mistake. and asked the recipients that they received the rejections. >> i wouldn't do that. i'd show up first day for class. >> horrible. >> it's a great school. hard to get into. >> what do you do if they say they can't accept them after -- >> you know what you do. just coming with this just now, you refund their acceptance -- you refund their admissions.

what is it 100 bucks to apply to schools. i know it's a small comfort, but do something. just not a sweatshirt. >> right. according to the new nbc news/maris poll the republican field for 2016 remains wide open especially the states of new hampshire, iowa and south carolina. and the list of conandidates continues to grow joining us live former governor bob ehrlich. >> wait a second i'm still back on the carnegie mellon story. >> but you're hopeful. >> i'm listening, running around new hampshire, listening, talking to small business people. >> for some people you would be a presidential hopeful. >> i believe that's probably accurate. we do not lie to the media.

i tell people as a republican governor of maryland hostile does not intimidate me. i'm kind of used to that. >> listen as a virginia boy, you don't have to worry about that governor i'll say you're frenemies, neighbors to the north, as we say. >> warner and i actually say we made history when he was governor of virginia and i was governor of maryland. we actually liked each other. >> you're a man who is aware of the presidency of the united states and may or may not be interested in that job. let's move on. you wrote an op-ed, governor talking about the oregon governor who just left. you're sort of knocks the general progress indicator. 26 metrics. what's your beef. >> people made phonyies these days. it covers the measures of economic development.

in a very cynical age when people are tired of all of this i think contributes to all this. the genesis here quite frankly, is this sort of phony progressive think tank produced alternative to gdp. >> well you know i guess i could see it both ways governor in a sense some of these other metrics, the official ones that maybe you're not in the gpi, if you will i don't want to say it can be manipulated. >> sure. >> but when you say there's no inflation, go talk to the good folks in maryland who say well my health care costs are up my college tuition for my kids is up. my mortgage is up. so you're going to tell me there's no inflation? >> how objective it is really that's my issue. the softer you get, the more prone you get to politics to the spin. look at the states obviously, the more liberal states that have looked into this alternative metric. i just think in this time of

great cynicism it covers up pretty poor performance from anti-business governors an anti-business state legislatures. >> do you believe that the u.s. economy overall is in recovery? >> you talk about running around new hampshire and running around different states. i see a profound sense of nervousness with middle class american. i think the foreign policy aspect to it. but despite the metrics. despite the macro numbers. the stock market being up. middle class america is not very happy with this spotty recovery. and you see it in your discussions with people. your face-to-face meetings as you run around giving speeches as i'm doing now. >> yeah but do some politicians contribute to that governor. >> of course. >> all you're hearing from both sides of the aisle, they're play to get middle class which apparently belongs to nerve at 1% not improv rischimproverished.

>> i love your point. >> i know people are struggling throughout. however the average size home is up 40% over the last four years. the average car. there are people doing okay. i know it's not pretty kay correct to suggest that. >> it would help if the president of the united states would stop beating up the joe plumbers of the world that you didn't build that mantra. that's what we get from a progressive administration. it's you didn't do this on your own. you see this in a legislative regime. it's anti-business. small business is tired of this administration. they're not happy with it. this president does not identify with small business people with entrepreneurs and you see it in the rhetoric. >> but i'll blame the gop, too, maybe not not as deep into it as the democrats but the gop has done a lousy job of making us feel good about government. and the reality is if we're not

there, governor i've seen it on cnbc i tend to ignore what happens inside the beltway, right? just go on with your life because what's going on in that weird ring of 95 increasingly has less and less to do with how the 99% of everybody else who doesn't live in the beltway goes about their life. the government is disattached and disinterested and there's nothing -- and both parties have nothing -- >> i'm a former governor of maryland so i do not go around -- i didn't do this to state legislature with congress as governor. i don't go around beating up governor. the united states marine corps is government by the way. the fbi is government. so i think you're right, to the extend in my party, we have this habit of beating up on big government. >> i meant elected officials. if i didn't make my point clear i meant elected officials. >> well no your point is well taken. sometimes, we go overboard we cross the line. we become the anti-government.

there's excellence in government but also things that government should not be doing. we're also the federalism party and obviously those lines get run over in this town regularly. >> the last and most important question, will the university of maryland football team ever again wear those hideous semly flag helmets again? >> can i just say this kevin boyd, i love under armour if the school board reflects the terps ahead, who care what is they look like. >> i love maryland. and the capital city. it's a fantastic state. >> thank you. under republican control now. >> thank you, governor. appreciate that. >> take cares. coming up specialty pharma company actavis out with earnings. the company's ceo is going to join us next to dig through the quarterly number and talk about the acquisition of botox maker allergan. and ebola. the update on the deadly outbreak. we're back in a moment.

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forecast for the next four years and announcing it will change its name to allergan when that acquisition is complete. joining suss brent saunders the ceo. and on the cover -- >> i'm hoping it's going to republish that. >> and you never -- >> my mother didn't want to raise a drug dealer. >> i just want to mention this for a sexcond, why? >> we had two actavis, even though, brian, you mispronounced it -- >> what is it on the record here? >> actavis. and allergan have a 60-year history. and actavis has a relatively new name. allergan stood for innovation. it stood for customer focus.

you and that really describes, i think, the new company that we are today, better than actavis. we'll keep act actavis from certain geographies and customer lines but allergan was the better of the two as a company. >> so this deal closes soon? >> really soon. i think we're on track to close end of this quarter or early next quarter. >> you beat on the top and bottom lines? people did not expect that this had morning? >> i know wee keep surprising people. >> here's the question were the analysts wrong or did you guide them properly? >> well i think we did guide them properly. we beat by 10% to 15%. we beat by roughly 13%. so in that range. i think in fairness we have a lot going on with innovations, the deals, people worried that we can't or people can stay focused on the business.

and we just keep proving quarter after quarter, that's not true. people are energized. they're excited. they're focused on their customers. getting their jobs done. new drugs are coming out. the business is working. >> i need ask you this something happened in the news this week. you confirmed a temporary injunction related to the generic drug? how important of that is a deal for you? >> that's a temporary injunction and the court will rule whether or not it can stay in place or not. >> it's usually an indication that the court is not necessarily going to side with you? >> well not in this case because, remember it was the appeals court that said okay you can go ahead and launch your product. and then yesterday, astrazeneca went in court and said we'd like to maintain the status quo. not sure we were fully informed that the status quo was we were out with the generic version.

we are to get out and have the lawyers talk to the judge and see if we can go forward. >> can we go back to the cover of forbes. they talked about five years, three companies, $100 billion in m & a which i think you've done in just the last year. and then zero inventions. what is the future of allergan? what is this company like? a company that makes acquisitions or from here on out -- >> the zero inventions our company has invented and launched new drugs in fact we talked off the air about antibiotics we expect to launch any day. and we have lots of new medicines coming out. we have a great new -- in fact today, we're highlighting the portfolio in new york. we have potential by $6.5 billion of new drugs in late-stage development. in new areas like diabetics and i sd to a new drug for

schizophrenia. we're committed to r and b. and allergan has always been and we're going to keep that. and the deal may be opportunistic and strategic. it's not what we do. we were not trying to buy allergan, remember. we were just running our business. and it was put in play through a hostile situation with valiant and we were a white knight. >> people look at valiant. and people see that as buying things. you you're saying that's not your future? >> that is not our strategy. when we model out five years or ten years we don't put m & a into the strategic plan. we don't put making deals into our strategics. we're focused only growth. to the extent we do that organically, that's the first purpose. but if we can supplement that,

we'll do that. >> what percentage will you devote to allergan? >> i think that's a horrible metric. i think that's got be big pharma in big trouble. trying to tie. r & d to a percentage. what does one have to do with the other? what we say sets as you part. if there are good opportunities, let's be transparent about the good opportunities. let's have the return on investment against risk in this r & d. and you should do it. if you spend it as a percentage of 57 knew what happens? jury going to put junk in that pipeline to get up to the number or you have great products that you don't want to go over that number. >> you would know over the years what the average should be. do you think -- >> look -- >> -- do you think there's any type of metric that we should focus on? >> besides the success rate.

>> i think you should look at the number of products coming out and the productivity of that spent. if you look at the actavis and the legacy of actavis, allergan or forest dobbs, you're seeing tremendous productivity coming out. next year we'll spend $1.7 billion on r and b. and if next year if it's a billion five because we have to kill a few projects that don't meet the threshold or risk that's fine, too. >> let me ask you one other piece of this. if you condition the investor to believe that the number effectively could be zero it makes it much harder to spend when you actually do think you have a chance. >> so we don't condition zero first of all. what i would like to say, i prefer to spend more that mean we have been disciplined. we have great opportunities. we believe in the projects that

we're spending against and we're going to get them done. or a high percentage of them done. that's the base. the reality is you never get to zero because we have an infrastructure we have to maintain. i would say roughly 3,000 people in the r & d people of actavis. so you could never get back to zero. >> congratulations on your earnings. >> thank you. >> love have you back when you do close it. >> terrific, thanks. coming up the son of donald trump and the philanthropist that has raised millions. eric trump coming up. at does it mean to drive as far as you want... for up to three years... and be covered? it means your odometer... is there to record... the memories. during the mercedes-benz certified pre-owned sales event now through march 2nd, you'll get complimentary pre-paid maintenance and receive your first two month's payments on us.

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welcome back everybody. the change the world series returns with another announcement. the eric trump foundation donating an additional $20 million to st. jude's research hospital to open a state of the art surgery and icu facility. the foundation has donated over $10 million to the cause. joining us now is eric trump the president of acquisition, at the trump conversation. eric, thank you for being here. >> thank you for having me. >> tell us about this donation and st. jude. >> we grew up with our health. a warm house and a great family. you see so many kids struggling with the most terminal

life-threatening illnesses. st. jude's is filled with health care workers that work 24/7 to fight pediatric cancer. >> how did you get involved? >> i went all around the world to the research hospitals. when i walked in it wasn't a plain jane vanilla hospitals. for profit hospital. they raise a lot of money through guys like us the trump foundation, and they put that money to work as we talked about in the green room. the problem with childhood cancer, big pharmaceutical companies don't want to fund it. you might have 300 cases of some subset of cancer. there's no money in that. >> and research it's difficult to do things with the research. >> that's right, it costs a lot of money. and it's much more possible for these guys because they don't focus on the kids. and they are so special. >> when you give money, how do you make sure that it's used the right way? or let me say, here's the money, it's your business you're the hospital, do you get involved in that? >> well first of all, you have

to go to the best. little shops aren't solving the problems with cancer. you need the biggest computers and tools in the world. you're not going to succeed. you go to the best who have the best infrastructure. and have the smartest. you talk to some of these doctors at st. jude's their iqs are the highest. >> do they say eric this is what we woe like to do with the money? what do you think? or eric this is what we did with the money. >> well with st. jude's a surgical suite, people will go in to have brain tumors taken out. long recoveries. so we're building the most sophisticated icu. that money was pegged specifically for that project. >> let's talk about your day job, too. you were are closely involved

with the real estate that the trump organization is putting together. where do you see real estate right now? i know you're watching with properties around the globe. >> we really are around the globe. great hotel in washington, d.c. miami, $550 million in project rebuilding. 800 acres. and an exciting project. thornbury in scotland. iconic resort. we bought properties in ireland. literally all around the world. manila. and turkey the list goes on and on vancouver, toronto, et cetera, et cetera. we're all over. real estate is hot right now. new york's hot. there's a lot of formed investment coming into the city. people feel comfort about parking their money here. and the lack of russian funds coming in. i think we'll see a little bit of that. but people feel safe in new york. buying up building left and right. you see penthouse apartments going online for $150 million.

and the sony building happens to be next to trump tower. >> but named a lot of places outside of new york. >> sure. >> there are better opportunities inside or outside right now? >> you know we've been very optimistic, we went to ireland when ireland was half away dead. we grabbed a classic. an we went to miami when miami was almost dead. we've been optimistic. we go to markets that we find incredible assets that are the best and make great deals. we're expanding and we believe in the global profile. but i think new york has been very, very solid. there's other markets in the country very solid. >> do you worry about the strong dollar in terms of its impact on the american real estate market especially in new york? >> it's interesting, we're on both sides of the equation right. we're doing projects in europe where we're investing u.s. dollars into europe. and we're doing projects there where we're bringing money back. in a certain way it's almost a

natural hedge. where you go to local. >> eric thank you very much. coming up when we return the rally on the nasdaq all-time highs approaching levels not seen since the height of the dot kom comlevel. we're back.

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the march back to 5,000. investors pushing techs to all-time highs does it mean another bubble is brewing. we'll find out from kevin landis. economic jail and bob schiller joins us with reaction from the housing start and producer index. and the tributes to the garage. from bands to garage. what is it that drives businessy we're going to find out as "squawk box" continues right now. ♪ >> announcer: live from the most powerful city in the world, new york. this is "squawk box." welcome back to "squawk box" here on cnbc. first in business world, i'm becky quick along with andrew

ross sorkin and brian sullivan. we're less than 90 minutes away from the opening bell on wall street. we've been watching the futures this morning and it's a little unclear where the future is headed. dow futures down by 15 pat 5 point. sapp off by 2, nasdaq down by 1. let's look at the markets in europe right now, you'll see right now, at least in france the cac is up 0.8%. ftse is relatively flat. in greece 1.7%. mortgage applications plunging more than 17% in latest week. this as rates rose to the high efl levels. and global levels greece likely to ask for an extension on the jury row zone. oil prices falling no catalyst here other than analysts saying that it's overblown the inventory data later today. brian over to you. >> thank you, andrew.

a number of 13-f filings to tell you about those are hedge funds that investors have to file with the ftc to tell you what they own. the data is as of six weeks. warren buffett bying more of gm and ibm and the new one, deere, 20th century fox and burger brand. and meantime george soros is betting on energy. investor taking new positions in devin energy and transitions offshore. like buffett, he's increased his position in gm dumping some technology companies including, get this google intel and apple. and carl icahn bidding up ebay. the activist bidded up shares $30 million. that puts it at $36 million or $2.6 billion in shares andrew. >> we are just about to the peak of the internet bubble.

so does that mean we're back in bubble territory or not? dom chu joins us and he's got data for us. dom. >> andrew, there are similarities 15 now and then. valuationwise, numberswise, maybe perhaps. then we saw let's take a look at companies that were iconic back then and see how they exist today and see how they stack up then and now. here's our presentation of looking at stocks. s&p 500 technology stocks back then traded at 67 sometimes earnings. today it's more like 17. so valuations are already a little bit different. now, take a look at mike vo of the back then the poster child for large technology back then it was worth $526 billion. even more as inflation adjusted. today, of course a more mature company, it's now worth about $350 billion and trades out 18% earnings just in trend with the market. perhaps a little different there. if you look at another company,

this one we talk about all the time cisco systems was worth $467 billion. it traded at 223% earnings. built-in expectations. today, a more mature company, $150 billion and trades at 18% earnings. again in line with the mark. one of the ones that's interesting here is yahoo!. everybody knew yahoo! as the anything portable back then. at $94 billion and traded at nearly 1800 times growth. and look at it today. that big stake in alibaba that is going to spin off at 6%. yes,/similarities between the market then and valuations then and now. it's hard to make an apples to apples comparison guys. because we don't know if yesterday's yahoo! is the same

as today's maybe gopro or something else. but we do know that these companies no longer trade at the same multiples that they did back in the internet bubble. >> dom, interesting. thank you very much. our "squawk" portfolio members are capitalizing on the tech's wild wide. kevin landis is leading the pack with 19% gains. apple, netflix to his top picks. apple was the fifth performing stop stock and the s&p 500. and netflix, of course takes the top spot. kevin, congrats. you're doing great. netflix and apple paid off. so are you trimming any of those positions? >> no we're not. we tend not to be very active traders we like to buy and hold our best positions. but let's just say it's earlier in the year. things can still go horribly wrong. >> yeah but this is a better start than the opposite right? isn't that true? you'd rather be up 19% than down 19%. >> right.

>> what do you attribute it to? apple we understand. netflix is one of those names, people loved, they hated. they loved it again, they hated again. why do you love it? >> every time i see bad news coming out about cord cutting and i think about the really really terrible condition that cable companies are in sorry about that i think who's on the right side of this disruption and who is it that growing and profitable on the right side of this disruption? it's a pretty short list. netflix is kind of first, second and third on it. >> would there be anybody else who would be a quote, zrumgs or cord-cutting play for you? >> amazon is moveing in that direction. >> with fire tv? >> right. and amazon is doing something fairly smart, right? they're going after award-winning shows, right, with transparent. again, netflix is the fewer play on that thesis. and that works really well. you know it was interesting, when dom did his comparison earlier he was talking about

companies market caps. netflix looks like a pretty expensive stock. but when you take a look at its market cap and the industry it's disrupting you'll feel better about it. >> is there anything -- i'll put you on the spot and you can tell me to take it somewhere if you don't like this question -- is there one company you that follow, own or won't buy that you think is simply the most misunderstood in a good way or bad way stock out there? >> well i hope every stock we buy is misunderstood. if you're an active money man -- >> no unless people love it and it turns out to be a fraud. >> well sure you don't want to get caught owning that. that's why you don't own most stocks. really, when you look in our portfolio, as long as you're going back to the '90s. everyone was buying cisco back then. suppliers to cisco because we thought those were undiscovered right?

today, who's really misunderstood? >> you know in some ways i would have said netflix, but i think people are starting to come around to that story. so that's a great thing. but today, most tech stocks are a little bit misunderstood just because it's kind of hard to wrap your head around when somebody is doing something really new and interesting. >> to your point, that's why you don't own most stocks you made the case to the trimle or quadruple ets. are they overthought of? are they overloved? >> if you're an active money manager, the quad q is basically a competitor who is asleep at the wheel. you should like that. just remember this though anytime you're index investing that's a list of stocks therefore a portfolio stock. somebody picked them. you might want to ask them who picked them and why. >> kevin, you're doing, up 19%. thank you for joining us. >> appreciate it. thank you.

we will talk to you about a few stocks johnson & johnson, $600 million to settle is a long-standing lawsuit to the boston acquisition of guiden. and a sandwich chain potbelly earning more than expected in sales. coming up curing ebola. how prepare said the country to stop an outbreak? what drugs have shown potential benefits but are we close to finding a real solution? how might they be readily available when they do? that's next. and then a who's who in media. attending the code media conference. we'll get the buzz there and the economic data. you've got the producer housing starts and building permit out in 20 minutes' time. and if that wasn't enough why the garage has been a great

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have you heard of the new dialing procedure for for the 415 and 628 area codes? no what is it? starting february 21, 2015 if you have a 415 or 628 number you'll need to dial... 1 plus the area code plus the phone number for all calls. okay, but what if i have a 415 number, and i'm calling a 415 number? you'll still need to dial... 1 plus the area code plus the phone number. so when in doubt, dial it out! welcome back to "squawk box," everybody. we've been watching the futures

this morning, after yesterday, touching new highs for the trading day that you can see this morning. there are red arrows. we're talking moderate delays. s&p future down 3 points. nasdaq down by 2. the numbers of the outbreak of ebola have dropped significantly. joining us with his take on the current ebola issue and lessons learned. ron, thank you for joining us. give us the state of play. not necessarily the u.s. i want to get to that in a second. where are we in africa in terms of combatting this? >> yeah we've made tremendous progress in the last few months thanks to president obama's leadership. there were 1 million deaths in from ebola and that number came

down to 90,000. and from 1,000 cases to 200. so we've made progress. ebola is like a forest fire. even though one ember is still warm, the whole thing could ignite. today, we're down to zero cases of ebola, we have to stay vigilant and fight it to the end here. >> let's talk about our preparedness in the u.s. give us a grade. where are we? >> we've gone from a "c" to probably about an "a"-minus. we're so much more prepared with 50 ebola treatment centers. 50 labs. protective gear, good standards and a screening system. much more prepared than we were when this thing broke out to identify it. we will come back from fighting the disease in west africa with the disease, we're going to get that person quickly identified and quickly isolated. and treated. we've treated ten ebola patients in the united states. eight of them we got to quickly,

all recovered, home healthy. so we've shown we can in america, identify ice late and treat and we're much more able to treat. >> how much money have we spent on this so far? >> the u.s. has spent about $2 billion so far. $5 million in west africa. congress approved a bipartisan basis, president obama's emergency funding request to finish the job in west africa and really get our system prepared for whatever comes in the future for ebola. more importantly for that next one, that scary pandemic around the corner. we needed to be prepared from that one. we need to take the lessons from ebola and really get ready for the much more dangerous thing out there. >> ron, that was my question. part of what you did is making sure u.s. hospitals were prepared. the thing that surprised me the most with ebola is that the cdc wasn't doing what i thought the cdc did. i thought it was what you saw with the movie "outbreak" that

the cdc would come in and clean everything up. i was amazed how they really didn't have the power that i assumed they had. i know of part of what you did is get hospitals prepared for ebola. how prepared do you think we are for the next thing? >> well again, i think we're a lot more prepared than we were. we have a lot more work left to dough. that's why implementing the emergency funding request from congress is so important. you know ebola as scary as it was, it was scary, and as dangerous as it is and it is dangerous. it's still a relatively hard think to predict and has clear symptoms. it never had gotten to the mega cities where it could have spread like crazy. pandemic flu, where it spreads that's where we need to make sure the money is spent. and well deployed to help the readiness for that. >> ron, i want to turn our

attention to a different disease, measle.pleasemeasles. do were need a measles czar? >> i don't think we do. cdc has a gunfire response to this. look, ebola was super, difficult involved making new policies, doing a lot of things doing a lot of innovation. measles is very simple and straightforward. the science, the experts give us a clear view on this already. it's a vaccine that's safe and effective. when parents were using it on nearly a universal basis we almost wiped this disease out. we need to vaccinate kids. we know what works on measles. it isn't a complicated problem it's just one that the american people need to step up and take care of. >> do we need a federal law requiring it? >> i personally believe that a federal law would be a good thing. i don't think we need it. the laws are in place. the question is people are using

the exemptions to get out of complying. people are just dodging the law. we need people to understand this vaccine is safe. it's effective. it protects your kids and it protects other kids. the things people need to appreciate they're not just making decisions about their own children but when they fail to vaccinate, they're making decisions about other children. i think it's important for people to step up get their individual vaccinated and get this under control. >> thank you, ron, for all the good work you've done. appreciate it. when we come back this morning, julia boorstin brings us from the rico's code media conference in california. it's the virtual who's who in media technology. we'll be hearing about it. and later, starting a garage-based business. some of the businessest names in corporate america have done it. so what is it about the garage that gets people motivated to pursue their dream? we'll find out in just a bit. "squawk box" will be right back.

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welcome back everybody. the cove media conversation kicked off last night with big names across the media landscape from facebook to buzzfeed to "the new york times" company all talking about how it's changing the way we consume content.

julia boorstin is there. she joins us good morning. >> good morning becky. the biggest question here last night is what is the future of news and will it be subsumed into facebook's news feed? facebook has been talking to publishers about facebook's hosting content but says we don't want to devour the internet. but cox does want to shake things up with the acquisition of oculus cox is working on apps so everyone can create virtual realty and experiences to share in the news feed. >> when you're using facebook you're just sending along little bits of experience. you're just sending a photo, a video, a piece of text. i think the version of the world where you're ending you know a fuller and more safe picture of what you're doing. >> do you think people will create that experience? you'll be able to make virtual

reality. >> you'll do it, beyonce will do it. >> and they said it's important that they work together to grow readership. not to grow revenue. "the new york times" is posting ads that we like content. it ran 40 native ads last year a controversial move for the gray lady. >> we called them posts. winning awards very heavy enjoyed by timer's leaders. that feels like a storm that never happened and creating a business which is growing very strongly. >> tom told me he's been building the company's investment and video and ad tools. and digital revenue to compensate for paper losses. becky. >> julia, thank you. right on deck. breaking economic news. we've got your producer index. we've got your housing starts.

all breaking in minutes. we'll give you the number us and full reactions but ahead of that the futures mixed. across the board, s&p, dow jones and nasdaq all indicating a decline at the open. not by much but a drop nonetheless. we're back with the data, reaction and analysis. stick around. can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ the answer is yes, it can. so, the question your customers are really asking is can your business deliver?

welcome back to "squawk box" this morning. making headlines, snapchat is raising venture capital. and roars say the latest round if you can possibly believe this is valuing the company up to $19 billion. that doesn't seem like that's anytime soon just yet. the bank of japan leading the monetary stance on change. the bank of japan saying the world's third biggest economy is on the mend. the nikkei up 13%. plunking more than 13% in the latest week. this rose to the highest levels of the year. >> quick point. we're comparing nasdaq 5,000, right we're on our way back then. back then companies got criticized for no real revenue. and wall street with all the

eyeballs, remember that? >> yep. >> all of these non-or the of gap metrics. snapchat, $19 billion. i'd like to hear what our viewers think as well. is it the sign of irrational exuberance? >> funny you should mention the term irrational exuberance. standing off waiting to be with us it robert shiller coming up in a bit. the indian prime minister modi is selling the mon 0o monogrammed suit. the suit has modi's full name stitched in gold pinstripes. it's estimated to cost $16,000 to tailor.

modi has taken flak for his expensive taste in the clothing. >> who pays for the tailoring? >> i don't know. >> does president obama have to pay for his own clothes? >> i doubt it. >> i would think he would but -- >> i don't know. that's a good question. >> i'm guessing modi's suit was paid for by the generous people of india. >> of india? >> yeah. not by him. here are the markets this wednesday, we're seeing a drop in futures. not much folks. the dow indicating a drop at the opener of just about 27 points. over in europe a different story. in fact, greece did well. you know should how much of a head line greece is because now it's a permit resident of the europe even market board. greece's athex up 14%. and ftse down. the asia bigger story. up 1.2%.

and the loose money policy is going to be here for a long time. ten-year treasury note. this has been an interesting story. there's oil. crude oil is done one buck. to the futures market. and by the way the ten-year treasury note rising 30%. >> apparently the president does pay for his own clothes, by the way. just wanted to let you know. we're seconded away from housing starts. and ppi data. rick is standing by. >> january starts. 1.065 million seasonally adjusted annualized unit. that's down 7% from last year. permits they were also down not quite as much. 1.53 looking for something higher at 1.7-ish. last month, 1.03 up to 1.06. it's down 7 cents taking that into account. let's look at january ppi. we're looking for a number down

0.4. but it's much more, down 0.8. so there's your energy presence. strip that out, though it's still down 0.1. that's cooler than we were looking for. year over year one1. -- excuse me 1.6 ex-food energy. and we see what's going on with energy. just what went on with my generation with calculators, your generation with computers. the hc isn't negative for the average retail citizen. 212, boiling point after touchen an intraday high of 216. why is that important? that's what we set on last year. can you imagine having a ten-year note or bond actually in the red. that hasn't happened for a

while. remember high yields were established last year in january and this year in january. more to come treasury international capital flows and we'll be there to bring it all out to you. back to the guys at the desk. >> rick, thank you. in the meantime, let's get more on the numbers. the broader housing market and the economy from one of over very own aqua laureates. joining is robert shiller, economic professor at yale university. and also the author of "the new york times" best-seller "irrational exuberance." professor, it's great to see you today. >> my pleasure. >> the numbers that we just got, declining housing starts 2% what does that tell you? >> well, housing starts they're still very low by historical standards and they've been improving, i'm not -- this is a little wiggle in the index. i'm not totally surprised. we saw some weakness in the nahd

housing market as well. so it looks like a little -- i tend to want to look at the long history. we have had a downtrend in housing starts since this data began in 1959. american americans longed housing. >> well they also loved making babies a lot more than that. you look at long term. you have to look at the nuclear family so to speak is 2.3 people. >> right. >> in my house, under 3. >> congratulations. >> i'm trying to do my part. >> nuclear family is expanding because young people don't move out when they grow up. there's a distinct uptrend in what they call boomerang kids. they might go out for a while, they reach 25 and they're back. so that's not creating demand for new housing. >> there's all this research that suggests that maybe the millennials are about to start

buying houses. do you believe that? do you think -- what's been holding them back to this point is that a turning point? >> well that's the way it is in economics. there's a new new york fed study that just came out that showed evidence that it's student debt that is say major factor holding young people back from that. i think it's this american dream thing that we've kind of got be out of sync with that. it's not so important anymore. >> can i correct something you just said because i keep hearing this, that student debt is holding kids back. i don't believe that. >> why not? >> it's the cost of college. cause college costs have doubled in 15 years. >> you're making me feel guilty. >> it's not an individual thing. it has nothing to do with yale. but you get my point. you went to a great state school. i went to a great state school. >> so did i, by the way. >> where did you go? >> michigan.

>> that's average -- i'm just teasing! my parents could never have afforded to pay cash like they did for my education. it's not debt. it's cost. i'm just saying about debt. if it wasn't for the cost -- >> well it's because we've seen technological improvement in every other sector. but i'm still at the blackboard. i have a slate blackboard and i'm writing with chalk. so things haven't changed. but maybe we don't want it to change. we're building new dormitories, colleges at yale. they look like they're from the 19th century. people love the old dormitories. >> but it's outpaced the pace of inflation overall. that can't continue. >> well i think it may be a long trend, as long as what people get in a college education is relationships to people they get -- keep classes small. they get to know the professor. that is not -- if that's what they want technology is not

advancing. >> do you think we're going to get to a point where you are going to teach a class, it's going to be videotaped and you in college or other colleges throughout the country are going to watch you? >> no. i have 200,000 enrollees. >> you do? >> most of them dropped out. >> why did they drop out? >> i had 8,000 completed the course. >> out of home? >> out of 200,000. >> there you go. this is it right? it's hard to -- >> well, it's not -- >> it's like having a gym in your house. this is just me versus paying a personal trainer. the difference is the commitment. right? >> right. >> you've committed to something. if you get accepted to a yale, you're committed. you're going to go to class. just watching somebody online for 300, a couple hundred bucks there's for equity in that education. >> we digress, though. let's get back to what we wanted to start talking about what's happening with housing. i know you're looking at longer

trends. it's back above 2%. rick pointed out we're now seeing the new levels for the ten-year yield. all of this in turn ends up impact wlauging what you see, what you get for mortgage rates. how do you see that? >> the big turn in the housing market was 2012. that's where qe3 was started. the 30-year was down to 3.35%. i think that had a huge psychological impact on the market. people thought this is a no-brainer. i should buy now. and that mood has passed. this uptick we've seen in housing prices since 2012 may be contrary. i think home prices are not -- they're at about the right level, based on history. so, maybe they don't won't go anywhere in the near future. >> in the near future. i wish i knew better what the future was. i'm now thinking we've seen a

big increase in home prices since 2012. but i wouldn't bet on that continuing. >> you know, let's talk a little bit about the markets overall. you coined the term "irrational exuberance." >> well alan greenspan -- it goes back 100 years. >> is this a time of irrational exuberance. we're getting back to the nasdaq 500. all-time highs. does it make sense for these prices to be here? >> the thing is striking, maybe not today, the low-term interest rates. it's stunning how low they've gotten. the recent year 30-year was half a percent. that's incredible for 30 years. and it's pushing the stock market up. it's not the kind of euphoria we

saw in 2000. >> what percentage do you have? >> it's about half. >> half. have you changed recently? will you change it? >> i'm thinking of getting out of the united states somewhat. >> why? >> europe is so much cheaper. >> and you'd buy big multinationals based in europe? you'd buy smaller companies in europe? what would you do? >> well what i have done i've invested in italy indexes. spain index. >> are you hedging currency? >> no i'm not. >> is this time -- something you said really stuck to me a moment ago. i'm thinking about phrasing it which this snapchat $19 billion because of this and we're old and maybe we don't understand. maybe that's true. one thing that has stood the test of time doesn't matter whether it's tulips gold or the internet is greed, right? >> right.

>> and don't interest rates drive us into risk -- risk-taking decisions? >> right. and reaching for yield. right now, it seems like there ought to be something that i can do that would make a lot of money. well there is for some people maybe. but for most of us you look at the major asset classes. they tend to be pricey. so what do you do? in my new book "irrational exuberance," i conclude the book with saying you have to save more. but unless you some have special idea realistically, you're just not going to get the same returns that you -- and yet, i don't think people have reached that state of mind yet. that retirement will be difficult if you don't save more. >> professor schiller we want to thank you as always it's a pleasure talking to you. we hope to see you again soon. >> my pleasure too. when we come back we'll talk more about the good old

garage. it's got tools, bikes, cars its use, endless especially when it comes to starting a business. steve jobs jeff bezos and lori page are just a few people that have begun their careers in what consider an irworkable space. we'll find out how some of the most successful have started their humble beginnings and what to do about a garage that makes starting a business there so easy. right now, take a look at the best garage rock bands on rocker.com. these are voted on by users. in my world, wall isn't a street. return on investment isn't the only return i'm looking forward to. for some every dollar is earned with sweat, sacrifice, courage. which is why usaa is honored to help our members

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♪ ♪ say nothin' ♪ welcome back tokck to "squawk box." we're playing garage band music for a reason. some of the latest started in the garage. and the startup origin stories from fortune. the first humble headquarters for some of the biggest consumers in technology brands. thanks for coming in. >> thanks for having me. >> here's the question we always have this idea that it starts in a garage. first of all, we were talk about housing starts. there's not any young people in their own garages these day. does that have something to do

with this? >> that's true. there have also been startups obviously in dorm rooms with a famous example, and also dell back in the '80s. >> i guess what i'm trying to get at is there something about the garage or something about the dorm room that is somehow different? are we just catching these kids the ate certain age, at a certain time when they don't have their own places. >> exactly. >> and this is where they live and this is where they're going to do it. >> i think it's that the garage has always been a place for projects whether it's when dad is tinkering on something on his workbench or garage bands are getting their start. but it's just this open space that comes with a home and maybe these young people are still living at home. or they have their first, you know, starter home. and there's just this open space that maybe not even being used for cars. so why not take advantage of that, rather than spending the money on rent. >> and early on in the show we

were talking about age, ageism with peter thiel. a lot of people we were talking about started very early in their teens and 20s. >> right. >> do you think there's something about age and entrepreneurship? >> i do. and the whole garage phenomenon actually is a long tradition that stretches back to the late '30s in the dawn of the silicon valley. and they didn't want to prevent brain drain. and graduates there, can't you just start up can't you just do something around here? here palo alto, it was all agricultural. so it wasn't what we know today. but hewlett-packard decided to go for it. well packard rents an apartment with his wife. and they must have had a cool land lady. because it sounds like hewlett

was squatting on the property. and a freestanding garage which they also up and used and took advantage of it and started tinkering away. >> is there any great example of a company that doesn't start small? and maybe just got funding and went off and got a real office and then it actually worked out? >> well one of the examples that i found was of an unusual origin was john paul mitchell. paul mitchell and jean-paul were already established as heir care professionals. they had done their thing and wanted to regroup and do something different. >> right. >> had to start from -- you -- >> sort of scratch? >> yeah. >> not totally scratch. i got it. >> thanks for coming in this morning. it's a great story. check it out in "fortune." >> "squawk box" moving to a shed.

news at 11:00. a shed? garage. jim cramer at the new york stock exchange. we have a room called "garage." it's reopened with the economic data, the eurozone whatever jim wants to talk about, we'll do. and american express, jim has said that the company has lost all credibility. a lot more on amex. jim cramer it's all coming up -- stick around. t. and i earn 5 times the rewards on internet, phone services and at office supply stores. with ink plus i can choose how to redeem my points. travel, gift cards even cash back. and my rewards points won't expire. so you can make owning a business even more rewarding. ink from chase. so you can.

jim cramer joins us now. want to ask you about two dow components, one, american express the worst performing dow component, one, ibm, the worst performing dow component for the last two years. american express, what do you think? >> american express express, frankly, the future of a lot of their growth came from wherever costco goes. we didn't understand that interrelation. on the previous conference call management talked about the possibility the deal couldn't work out. gave you no insight how this was perhaps their biggest generator of cards, and kind of were i think, believing 2% to 4% of their revenues could be heard. it's much more than that. i think it's the shock that came from the idea that wow, we

didn't know that costco was the principal driver. and you know what? the company should have shared that with us and the company should have given us more insight how material this was, why i question the company's credibility. ibm, if warren buffett weren't there, i think it would be lower. they have a big analyst meeting. maybe they can talk about 73% of the company we don't want to hear about instead of the 27 we do want to hear about and make the other part relevant to what we like about tech because right now ibm doesn't have growth that we want. >> were you surprised by warren buffett's additional shares that he bought? >> i think warren buffett is a guy who believes i think they believes in the buyback, and the company's says we're going to give the existing shareholders exactly what they want. i've said to the company, no those guys are cadre, they'll be with you thick and thin. you want to bring more people into, to do that you need growth. maybe they will come up with that. but right now, they're only pleasing the cadre, not pleasing

the people they need to find. >> thank you. we'll see more of you in a few minutes. american express declined by investors. the stock, the worst performing dow component so far this year down more than 17%. it's trading at levels not seen since october 2013. the company ending its partnership with costco. what gives? we'll ask an analyst after the break. the smartest or nothing. the quietest or nothing. the sleekest... ...sexiest ...baddest ...safest, ...tightest, ...quickest... ...harshest... ...or nothing. at mercedes-benz, we do things one way or we don't do them at all. the 2015 c-class. see your authorized mercedes- benz dealer for exceptional offers through mercedes-benz financial services. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities.

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boeing shares keep moving higher, up 15% this year clay claiming tight ol of the year's best performing dow stock. today the year's worst performer so far, which is amex american express. down almost 20% year-to-date. joining us on set, analyst and at do guggenheim partners. not so hot now. what's changed in just a matter of months? >> i think the biggest change, which isn't necessarily the costco relationship, but exposed by the costco relationship, is the fact that this company's done a great job of growing its earnings faster than its revenues. but with the loss loss of costco it has to recapture share --

>> do you blame amex or was it a costco thing? they disputed over fees. which suggests amex valued the best -- >> could have kept it. >> everything's available at a price, right. >> it's a question how much do you want to erode your returns. is that accretive over time. >> jim cramer's point they were misleading on the conference call, didn't fess up to admit now much this is going to cost future potential earnings. >> yeah, i think i take a slightly different perspective on than i don't think they dissuaded the market from an incorrect view how big the relationship was. >> you think it's not that big of a relationship? >> no in other words, historically, they seemed to imply it wasn't as big as it turned out to be. so to a certain extent i agree with the management -- >> how much focus on growing market share and at what expense is that going to be to the margin? that's the big question. >> yeah. i think it's a significant

challenge, right? so earnings year not looking at earnings growth from the '14 level until maybe 2017. >> you know what we're not talking about. apple pay. people wanted to talk about amex and apple pay. we're not mentioning it. what's happened? is it chugging along? is it a success, a flop? >> it's chugging along. >> i tried it it was neat, didn't serve me any value. you swiped the card. didn't save any time. >> that highlights challenge with the new technologies which is that it's up to consumer adoption. it has nothing to do with apple or amex. >> apple pay -- >> so what do you do with this? if you think it takes until 2017 to actually get back to growth again on those numbers what do you do with stock now? >> i don't think there's much to do here. in the short term i think there's negative revision risk. i don't think all of the risk is

out of '16 numbers. it's moving sideways. >> when you think of them relative to mastercard, if you had a dollar to put into which one do you put the dollar into? >> so we're recommending visa mastercard, not amex. i would say that mastercard has been more on a roll here. so maybe that's the better option. >> because they're doing what, though? >> they seem to be winning relationships. now, of course, part has to do with bank partners rather than as a network. they get the benefit. >> a viewer has a question. i'm going to ask you the question, we know the exclusive deal with costco and amex is over. but can you no longer use an amex card now? is it only visa or mastercard or still use it it's just not exclusive? did costco totally boot them. >> for the next year the relationship remains in place. after that we don't know because costco hasn't announced who their new partner is and what network they'll be using. that's a question that has to be answered. >> we've got to run.

does amex have jetblue in i saw a tweet pop by that says they may not have them too, is that right? >> i think jetblue announced they're going with barclays a lesser impact. >> all of the airlines they wrote. thank you for coming in. "squawk on the street" begins right now. ♪ good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer david faber at the new york stock exchange. the dow is six points shy of a record close this morning, as we prep for fed minutes this afternoon. a bunch of earnings reports that greece will ask for that loan extension tomorrow. oil's giving back still comfortably above $50 at 52.307 the ten-year 2.12 that's just about the high for the year. road map