cockpit errors. squawk box begins right now. live from new york where business never sleeps this is squawk box. >> good morning everybody and welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. we're not talking about even funding homeland security. as of this morning marijuana is legal in d.c. but now there's a drug war of sorts break down between the district and some in congress. we'll have a live report in about 20 minutes. >> we'll tell you about the big stories we're watching this morning. snapshots of jobs in a big way. inflation, manufacturing and housing. also beginning weekly unemployment claims. cpi, durable goods, housing price index and fed survey. ibm is hosting an investor day in new york.

it's been the worst performing stock in the dow for the last two years and it's underperforming the index so far in 2015. we'll talk to an ibm analyst later this hour and don't miss the ceo on cnbc talking about everything that had gone on during the presentation. the senate is set to vote today on a $40 billion spending bill aimed at preventing a partial shutdown of the department of homeland security's funding because it will expire at midnight on friday if congress doesn't take action. >> take a look at a couple of stocks to watch this morning. salesforce is raising it's revenue forecast pointing to demand for its cloud based software and services. workday results were in line with estimates and they're giving upbeat revenue guidance. earnings in revenue beating the street but the parent company of

victoria's secret offer light current quarter profit guidance and as a result the stock is trading low they are mork. >> let's get a check on the markets this morning. yesterday the markets were essentially flat. if you want to take a look at where the futures stand today. green arrows but moderate advances at this point. dow futures up by 18 points. the dow closed at another all time high. nasdaq at one point during the day set a 15 year high but it did end up closing down a little bit. came within 16 point of the 5,000 milestone. nasdaq is up by 6.5 points. in europe it looks like there's not a lot of activity. the cac in france is the biggest of the major averages. up about a quarter of a percent and greece down by 2.6%. also in asia overnight, you saw the shanghai composite was up by over 2%. the hang seng up by .5% and nikkei up by 1%. oil prices yesterday snapped a

five-day losing streak and finally rebounded to just under $51. that was a gain of 3.5%. this morning they're giving some of that back down to $50.54. if you want to check out what's been happening in the bond market. the ten year note still yielding below 2% and in currencies you'll see that at least at this point looks like the dollar is up against the euro at 11356. down again the yen at 11374 and gold prices you'll see gold prices this morning up by about $17. $1,218.50 an ounce. >> the fcc will be voting on one of the most significant internet regulations yet. we're joined with a look at what to expect. >> well the fcc is expected to approve by a 3-2 vote net neutrality rules to assure that internet providers treat all content equality. now in a key shift the rules

categories the internet as a public you till public utility. while internet companies and internet providers largely agree on the principles of net neutrality they disagree on regulating the internet as a utility in title two. while they argue this new approach supported by president obama protects consumers, internet providers say it raises the risk of government overreach. >> the key question here is really part of this collateral damage conversation is is this really a foot in the door ward price regulation of the broadband market. >> now the fcc says it has no plans to regulate pricing. if the vote goes as expected today we can expect plenty of lawsuits on the horizon which could delay the implementation of the rulses. >> here's the question that i don't really understand about all of this. we have gone around it a little

bit. what is the chances we actually get to the pricing issue? or is that built in but they say they're not going to do it -- how much are we supposed to worry about that or is that years down the line that that could actually become the issue. >> what everyone is talking about here and the controversy is not the fundamentals. it's if idea if you reregulate the internet and start treating it as a public utility that down the line regulators could start controlling pricing. so they say we're not going to do it. we just want to protect consumers but it's the question of this is going to be a slippery slope. >> more and more everything we discuss seems to be separated. there's dog people and there's cat people and right now i don't know if there's a problem really that needs to be addressed right now in terms of throttling or any of these things. i think we're creating a solution to a problem i'm not sure exists. now down the road the question is whether the marketplace

eventually, the private sector starts acting bad behavior. when we put these new title two things in the question is going to be does the government eventually start overreaching but some people would rather have the -- i would rather put trust in the marketplace not to be overbearing. >> right. >> as maybe a conservative minded person. the other side would rather put their trust in the government in being -- >> there's the middle ground where you say we're not going to do this -- >> but what would you rather have regulating this very important field in the future? would you rather have the government regulating or the marketplace regulating it? that's where the two sides differ and we have a democratic administration that forces it's will on a lot of different private industries and it's the wrong way to go in my opinion. >> and joe, the reason this is really an issue right now is because the content is starting

to be delivered. it's taking up more and more bandwidth. so you have 3-d content and virtual reality content. the content we're talking about is much higher bandwidth and this is going to start to be an issue down the line. can you imagine the amount of bandwidth it's going to give up. >> we're used to paying for preferential things that are better. there's a piece in the wall street journal today it's not something -- what worries me most is that if it's 3 to 5 years of uncertainty you know the return on investment is going to go down for the people that are building out the pipes. number one. whether it's incremental or not the internal investment. and any charges they incur are going to be passed on to consumers anyway. >> and the bigger issue is we have faster and faster things we need bigger and bigger pipes to allow more. >> you're going to get a slower build out. it's just simple. that's where the marketplace comes in. if the return on investment is

going to be less they're going to be less inclined to build it out unless they are able to recoop what they're losing with consumers. it's a bad move. >> i generally think you're right. the only thing that worries me is the great innovation that's happened over the last 10 or 15 years has been frankly beyond the speeds at which you can get the content which has been necessary to get some of this content -- to make some of this content work but has been the content that's driven this. the reason we want these pipes is the content. >> but wouldn't you -- you are assuming that someone is going to hack in bad faith. >> it's not that i'm assuming -- >> you think they're going to start hurting the companies. >> yes. >> then why design a solution. >> it's not bad faith. it's probably in good faith but it's the marketplace. >> it's a profit incentive. >> no no it's how you make --

its how you split up the economics. that's the issue. it's really about how you split it up. the whole debate is about how you split up the economics between -- it was the issue that we discussed about netflix. right now you subsidize netflix because of the way they price it. >> because of the way it's split out but effectively they're pricing it you say to make it easier for you but also more profitable. >> i'm not a user at this point. >> but the flip side is you can say to the cable company or the other guys the fairest thing would be for everybody to pay for what they actually use. >> but pointed out yesterday and what i understand is that the cable companies don want to be in a position of having -- consumers don't want this owner deciding how much to use and getting paid -- we use too much of the data you're going to get charged massively. so i pay for more data than we need to use because i don't want to go over and get charged massively on the other end. >> julia. >> i think there's another issue

here of whether this should be regulated by the fcc or a legislative issue. that was something brought up yesterday at the congressional hearing and at the end of the day with this fcc regulation this could be overturned during the next administration. it's inevitably going to be debated in court for years. so yesterday at this congressional hearing a number of republicans were arguing that it was better decided by congress. there's a lot of issues here. >> five political appointees. unelected political appointees are going to decide the future and the other thing is you're going to be -- for anything that you want now, the government basically is going to be in the position of deciding of -- it just conjures up a whole future of capitalism where we'll give you this we'll allow you to do this if you don't do this -- all the decisions will be made by government regulators instead of private sector forces.

>> one thing i would make which is if it was more competition among -- for the pipes then the whole game is a completely different game to me and the government is -- not only is it capitalism but there is a major government component to begin with because the only way you get the pipes to people's homes is via the government effectively. >> this whole argument becky is right about this it goes back -- do you side with mastercard or do you side with the retailers? it's the same thing. netflix and google are winning and comcast and verizon and others -- but it's -- they're on both sides. who the government decides to favor. >> we should be voting for the consumer. >> right but we should wait until there's a really big problem before we -- >> right. >> we're addressing this as a nuclear bomb instead of a rifle shot. >> right. >> by the way, as you know the title 2 thing to me goes too far. so even though we're debating

this we're not that far apart. >> we don't matter anyway. i'm glad you sort of agree with me. it's not helping. wheeler doesn't agree with you and it's going to happen today. >> let's thank julia first of all and then tell you about who this man is on the screen because in the next hour we'll be talking to the man that coined the term net neutrality. tim wu will be joining us. >> and you know reading the notes for professor wu he says there's going to be price -- that's what is finally going to happen. there's going to be regulations on price. we know how great that works out. joining us to talk currencies and euro crisis is jim o'neill. >> we have not seen this man in a long time. >> no, we used to have to worry a lot about every tick in the euro and you don't have to as much anymore and tell me where

it's trading. >> it's 113. but anyway you have gotten friendlier toward the euro. you're short the frank because you think when the peg came off the reason it went up so much is because it was sort of discounting the worst case scenario in europe which hasn't happened. so now you figure since it didn't happen it's going to give back a lot of the gains it made. >> yeah from the perspective i'm looking at the market these days the swiss frank seems one of the clearer things. we have this enormous rise because of the crisis and the fears of greece leaving and the fears of qe. those events have been dealt with at least for now. the swiss frank was already far too strong for the swiss economy and now i'm not sure world war

iii, which could happen there's nothing left to put money for. one of the clearer things to play rather than what seems to be a mass concern about the euro or the yen. i'm not particularly friendly toward the euro but for it to keep going down you probably need bad news because everybody is short and everybody is in love with the u.s. emphasizing i'm not as close to it as i was, the marginal economic data so far this year is a bit better than expected about europe and it's neither here nor there on the u.s. so the case for the oil which is so frequently and loudly articulated has worked for awhile but it's not so obvious to me that it's not interesting anymore. >> that was the other thing. most of your positions in just looking at your thoughts in your

notes are contrarian and that's the fed is going to have a hard time keeping the dollar strong. i think your point is europe is better and the fed is going to have trouble raising rates maybe because you expect the data to be a little more mixed here in the u.s. because the consumer is 70% and i guess you don't think the consumer is that flush although the consumer should be with oil but you think oil prices are headed back up anyway. >> right. so let me try and explain that. so you kind of go back over the six years since the crisis. one of the reasons why there was a case about the u.s. was actually a bit more structural rather than cyclical in that the u.s. would start to rebuild a higher savings rate. the consumer would play a lesser role in overall growth. exports and investment would do better and that sort of was happening. in the past 12 months not shifted a lot but the first signs of it and we certainly saw

it in q-4 gdp, the consumer is back to being king and in some ways the reason why we have the whole mess in the first place is because the u.s. consumer was too much of the king. so when the u.s. consumer is starting to be more than 70% of gdp as it's threatening to do again the u.s. structural story is not as powerful as so many people seem to now believe it is. it was but it's weakening and then linked to it and the balance of payments situation which included so much for the u.s. is being helped by the huge rise in domestic oil production as you guys probably talk about all day long or frequently about the collapse in the count the marginal excitement has got to be less than it was before because of the collapse in oil prices so it's almost self-correcting and i have been

quite negative about oil prices. it took awhile for them to drop. it's not in the long-term interest for oil prices to fall sharply. it helps the the consumer story but doesn't help on a sustained basis the rest of the rebalancing story of the united states in my view. so it's not a big thing but it seems to me when everybody is all one way, particularly when it's something that's so relevant for the foreign exchange market i learned over many painful years and decades you have to be careful. >> everything i hear you saying is a dollar is going to keep going because the euro is going to keep going down. oil is at 50 and it's going to stay here and go lower and you're saying not so fast. i wonder if you're saying not so fast to the new highs in the stock market in the nasdaq too? >> well there it gets into specific stuff. it seems to me though it's major cutting edge things involving

top u.s. companies. apple being the most obvious example although there is a partial link to what i said a few minutes ago. on one level apple's future is all about how much they're selling in china. so it's pretty important for cutting edge to be able to sell to the rest of the world, but the world's cutting edge companies are still largely being driven out of the united states and at the end of the day the nasdaq is reflective of that. so relative to the dow makes some sense because old u.s. which is dominated by companies in the dow probably is struggling more with the translation in part of the stronger particular. so that makes a bit of sense to me. >> okay. >> when you talk i watch downton abbey a lot.

are you open for an audition to doing something like that? >> you see a new role for me there, joe. >> i do. you got some free time right? you're very dashing. >> when i changed my life two years ago my mantra was if it can't be better it has to be different. it would satisfy that. i am currently immersed in leading a review into something which we got top of in the u. s. i'm trying to find new ways to deal with antibiotics. maybe when i'm done with that i'll try to get a slot on downton. >> that's the first time i've heard that in conversation. >> that's what i'm saying. he could step right into a role there and you wouldn't have to change anything. and he says i'm managing my own money. how long were you at goldman sachs, o'neill? >> just under 19 years.

>> you know what we're talking about. >> very happy as well. >> you know what we're talking about. he could buy an estate like downton. you don't have to really act very hard to step into that role. >> notice how he put his hand to his ear like he's going to pull it out and walk off the set. >> very complimentary things. see you. >> when we return a drug fight in washington. why some in congress want a number of d.c. officials sent to prison this morning. >> and behind the mega hit like carry on my wayward son and dust in the wind. original members will be here to talk about their 40 year journey through the music business. we're back in just a moment.

back by popular demand it is our annual ask warren show monday mornings at 6:00 a.m. eastern show. we'll be live in omaha with berkshire hathaway ceo warren buffet. you can post it to your social network using the #ask warren and use twitter, facebook and instagram and submit a video question. weet your video or your vine at cnbc or you can share a video or instagram. remember to include the #ask

warren. but he will be with us live for three hours monday morning. >> as of this morning pot is now legal in washington d.c. but not everyone is happy about it. that's the way it's been. an odd consequence, tracie potts joins us with the story. >> hi joe. so there are republicans here on capitol hill who do not want to see this go into effect. technically it did at midnight just a few hours ago but they're threatening to have the mayor of washington d.c. arrested saying she could end up in prison for pushing this. 70% of d.c. residents voted it but washington d.c. is not a state like alaska colorado and washington state where it's legal they are subject to what congress has to say about it. d.c. is under home grow home use which mean ifs you're over 21 you can possess up to two ounces of marijuana. you can actually give away up to

one ounce. you just can't sell it and you can grow as many as six plants inside your home. not outside and you can't smoke anything in public. that means including in your car. so there are a lot of restrictions. a lot of caveats to this. d.c. says they will fight for what the vast majority of their residents approved but there is push back here on capitol hill from lawmakers that say d.c.'s mayor is willfully violating federal law. >> it sounds like colorado where it happens and they play it by ear and go forward with it. but a loft the questions aren't figured out. can you give -- can you grow some and give it -- like give your friends some if you want? >> you can give them a little bit. the law says that you can have two ounces and you can give up to one ounce to someone else. they specify you cannot sell it to someone else. you cannot -- there's no

regulation by the state of -- by d.c. there's no taxation or anything like that. it's written in a way so they're not creating stores or businesses. but strictly for personal use. >> you can't sell it but can you barter it. >> can you trade. >> you can't barter it. >> i immediately thought, i went to colorado. i may have smoked pot at some point once but i would not have liked to smoke the pot i crew myself i don't think and i would imagine that other people might be better at it than me with taking care of it or -- so that's why i was wondering if they could say check this out. >> so here's how that works for you, joe, don't come to d.c. because you'll only get an ounce or you're going to get arrested. here's the interesting thing about getting arrested. there's so many rules but d.c.'s mayor said for example, you can't use it in public housing. it's public housing. it's d.c. it's federal.

but the mayor said our police aren't going to arrest for that but if you're walking across the street you may be on federal property. say the national mall right behind me you kanlt do it there. so smoking pot and growing pot in d.c. is a tricky thing. >> as we go along we'll figure out how -- i don't know you better tread lightly down there. >> pushing the envelope. >> i saw another piece though that now they're looking again and pot may be less harmful. is that the next story. >> next story. >> thank you, tracy. staying on the topic of marijuana, some scientists say that recreational use of cannabis maybe less harmful than alcohol and tobacco. researchers measured the potential damage by comparing a lethal dose to how much of the substance is typically consumed and during social use the dangers of pot may have been

overestimated. one joint is equivalent to like six cartons of cigarettes. >> you're still inhaling smoke. >> i know you are. >> there's still carcinogens. >> but unless it's significantly more powerful or has more tar or whatever. and then the risk of alcohol is commonly underestimated. we went through prohibition. who doesn't know about how it's destroyed families and livers and dwis. >> you're saying you wouldn't smoke as many cigarettes. >> no, i'm saying in terms of the damage it causes to society, pot advocates have said alcohol is legal and it may be less overall, less harmful than alcohol. >> if you misuse alcohol, if you drink too much it leads to all kinds of terrible problems down the line. i have a hard time equating how many marijuana cigarettes would be better than a six pack.

>> when you drink, if you're stoned drunk you're driving 90 miles per hour. you may be causing some accidents with pot but it's not from going too fast. you're so worried about what you're doing. you shouldn't drive under either, under any circumstances but you're not going to be driving like a nascar racer. >> it's a weird debate to me. >> it is. but it's here. this is the debate -- are you going to test every person in colorado that's on the road now for a blood test for marijuana use? these are all things we should have thought about. >> the governor of colorado had a really interesting conversation about how he didn't want it but he's trying to figure out how to deal with it. >> and then you have -- it's the junk food you're going to consume too and if you think that's bad then you're going to end up eating a bunch of fillet of fish sandwiches and french

fries and -- >> doritoss. >> heath bars and dingo dongs, taco bell. >> you sit and make a list. when we come back this morning we do have a con certaining story out of the airline industry. why you nighted continental is issuing a warning to its pilots. and later how six young musicians from rural kansas ended up selling out madison square garden on their road to rock star super stardom. stay tuned. squawk box will continue in just a moment. there's confidence. then there's trusting your vehicle maintenance to ford service confidence. our expertise, technology, and high quality parts mean your peace of mind. now you can get the works, a multi-point inspection with a synthetic blend oil change tire rotation, brake inspection and more. $29.95 or less.

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?

♪ grind virtually any kind of food waste into an unending source of electrical power for a city? when emerson takes up the challenge it's never been done before simply becomes consider it solved. emerson. ♪ ♪ ♪ tigers, both of you. tigers? don't be modest. i see how you've been investing. setting long term goals. diversifying. dip! you got our attention. we did? of course. you're type e* well, i have been researching retirement strategies. well that's what type e*s do. welcome home. taking control of your retirement? e*trade gives you the tools and resources to get it right. are you type e*? in new york state, we're reinventing

how we do business so businesses can reinvent the world. from pharmaceuticals to 3d prototyping, biotech to clean energy. whether your business is moving, expanding or just getting started... only new york offers you zero taxes for 10 years with startup ny business incubators that partner companies with universities, and venture capital funding for high growth industries. see how new york can grow your business and create jobs. visit ny.gov/business

okay. you can imagine that big airlines probably constantly are sending out little things about safety. this -- if you look at the wall street journal or turn on the news you will see that this particular most recent incident with united is qualitatively different than the normal safety alerts that they send out. this was done in sort of a loud sit up and pay attention to this because we are -- there's some things we -- >> got a problem here. >> i commend united for doing it because you don't -- after the fact it's too late and united hasn't had a fatal accident since 1991. continental since 1987. a couple of jets were used on 9/11 but we're not including it that way. but in recent years with united and the pilots they tried to put the two together with continental. that's a lot of young pilots

being teamed with veteran pilots. it's an interesting piece to read all the things that are going into it. on one occasion a jet landed and the fuel left was below the alt you're always supposed to have at the end. >> somebody had to pull up. >> and in reference to that ups plane that landed too far down on the run way and then went -- because it landed too far down it then went off and skidded in. >> i don't like to talk about it. >> it's safe to fly in this country. >> i'm with you for commending them to doing it. deal with the fall out now. but you're right to bring it to the pilot's attention and make sure that you're keeping people on watch. >> the question i have is does this happen at delta? at all the airlines and they don't put out the memos? is there something that's actually happened at united

because of maybe the merger or these relationships when they're in the cockpit together that's different? is it just a consequence that there's been four of these things in a row, whatever it was that united felt to be able to do it. i'm glad they did it. >> obviously there's things that happen to all different airlines. i don't know if you looked at the incidents. >> but flying is a very safe thing to do. as we know. >> let's not talk about it. >> holding on to that -- >> approximate you'reyou walk around the streets of new york. >> when i do go on the plane. it's when i'm on the flight that i'm relaxed. it's thinking about it now. >> you're just narotic. coming up, carry on my wayward son. it's one of the biggest rock bands of the 70s. i thought we had the kansas basketball team here. >> i know blake's a huge fan. he's been waiting.

>> on supernatural. kansas is the subject of a new documentary film. the story of how six musicians rose from nothing to become international super stars. original members will join us on the set, next. over the next 40 years the united states population is going to grow by over 90 million people and almost all the growth is going to be in cities. what's the healthiest and best way for them to grow so that they really become cauldrons of prosperity and cities of opportunity? what we have found is that if that family is moved info safe clean, affordable housing, places that have access to great school systems access to jobs and multiple transportation modes

then neighborhood begins to thrive and really really take off. the oxygen of community redevelopment is financing and all this rebuilding that happened could not have happened without organizations like citi. citi has formed a partnership with our company so that we can take all the lessons from the revitalization of urban america to other cities so we are now working in chicago, and in washington d.c., and newark. it's amazing how important safe affordable housing is to the future of our society.

he's out there. there's a guy out there whose making a name for himself in a sport where your name and maybe a number are what define you. somewhere in that pack is a driver that can intimidate the intimidator. a guy that can take the king 7 and make it 8. heck. maybe even 9. make no mistake about it. they're out there. i guarantee it. welcome to the nascar xfinity series.

♪ >> a new documentary film about kansas. this is the band behind songs like dust in the wind and carry on my wayward son.

it made it's debut at the 30th annual santa barbara film festival. limited edition blu-ray dvd is available now or by sony legacy recordings. it's a story of six musicians who against all odds managed to break through to international stardom. joining us in studio are original members. the official drummer of squawk box as well along with guitarist rich williams. thank you for being in studio with us. >> great to be here. >> thank you for having us. >> this documentary goes back and looks at the beginning of the band. how did the film come about itself? >> well our 40th anniversary came around about a year or two ago and we spoke to sony who is our label about the idea of maybe doing something special and this idea kind of came about and we discussed it among the six original members that hasn't sat in the same room together

over 30 years so getting us to talk about it and of course discuss it with our director as well as our exmanager. there was a group of us that came together with the band and tried to figure out how we were going to do this. >> did everybody want to do it originally or no? >> yeah i think so. everybody was all for it actually. which was nice. it made it a lot easier to do. >> yeah. >> when you say the original group hadn't been together in a room for 30 years. was there bad blood or bad feelings? >> no bad blood. it was just as guys would retire from the band they went on to other things in their lives and so when this kind of came up it was like hey, we're getting the band back together. so we're just doing a documentary documentary. >> it's a crazy transition to where we are now in the music industry. no groupie stories. they told me that. i asked you that last time. maybe after the interview is over. >> it ain't going to happen. you need to move on.

>> but i'll tell you something i thought in 1974 when your first album came out i was a senior in high school and i can remember going to the record store at the mall there would be album cover posters. there would be a smell of incense. there would be social opportunities in the record stores. what do kids have today? a stupid thing they hit up on their iphone and buy it there. they get one stupid song. it's not the same. i miss it and they're missing out, are they not? >> sure. we can't do anything about it though can we? >> that's a whole different generation as to how they discover music. >> could there be a kansas today? it's almost a phenomenon that we're missing out on because of that? now lady gaga has to wear these crazy outfits to make a name for

herself. >> so did elton john for that matter. >> he had great music though too. >> that's true. the instant gratification of music these days where you just push a button and you get it. that's the way it is but i do miss -- >> the nostalgia. >> you would look at it and read the liner notes and there's the concept that came with the whole package that's missing now. >> but vinyl has taken a 40 to 50% leap this year in sales and in fact we get calls from sony all the time wanting to keep making our music in vinyl because the younger generation is discovering -- >> your music is on spotify, right? >> very much so. >> taylor swift's music is not on spotify. >> it is not. >> would you think about taking your music off. explain the dynamic, to the extent you had a conversation about doing it or not doing it. >> we're in the position of being an older band obviously.

so any opportunity we can get to get our music in front of the younger generation they discover us on the will ferrell movies. in the video games. >> super natural, how did that happen? >> when my daughter goes out she wants to wear her black kansas t-shirt. she's 15. >> speaking of. >> i have something for your daughter, blake. and we brought it especially for her. it's a carry on shirt from sue natural. >> that is unbelievable. thank you. that is unbelievable. >> it brings up the point of reaching out to younger audiences. there's different ways to do it. >> it's all over supernatural and those fans have kind of embraced that song so to answer your question as far as spotify or other opportunities we want to be there and they're fans and they like the music. >> i think you guys need to sign this? it won't ruin it will it? >> no that makes it better. >> i think so. that is great. >> i hope she enjoys it.

>> tell us about maybe one or two of the stories from the movies because garth brooks makes an appearance in it. >> yeah. he was a fan back in the early days and we would be out on the road and people would come up to us and say are you familiar with this garth brooks guy and we would say not really. well he's this new country artist and likes you guys and in a lot of the interviews back then he would mention the band kansas so we kept him in mind and invited him to be on the documentary and he accepted. he's very gracious in the documentary and does a great job. >> i won't ask you guys about groupie stories like joe. but two things the words free beer and was there really a fight with steven tileyler at one point. >> free beer was a employ we used. we had to make an impression and we had to put some people in the

seats so we rented a place in western kansas and gave away free beer to fill the place. they didn't know it of course. so it was a very enthusiastic crowd and it impressed them. so yes we did do that. >> smart marketing. steven tyler, what happened. >> steven crossed a line with us and it's in the documentary. >> did he steal a groupie from one of you guys. he had a lot of groupies. >> he needed a shower. ice cold. >> what do you want to come back as in your next life they say a rock star. i'm not the only person that's thought this way. >> you may be. >> but anyway steven did try to pull something on us while we were playing. and we were going over very well with the audience and he did not appreciate that too much so he

showed his distaste for the whole thing and one thing lead to another -- >> what did he do. >> that's unbelievable. >> it's in the film. it's in the film. >> that's pretty telling i think. i haven't heard great things. nevermind. >> nothing personal. >> all right. >> we want to thank you both so much for coming in. it's a pleasure seeing you. we always love having you here. >> can we make rich the official guitar player for cnbc since i'm the official drummer. >> yes, squawk box. we're claiming you as our own. >> he's a big viewer. right? it's cool. thank you. >> by the way we do want to give one more plug because you guys are here with us this morning, preorder your special copy of the film go to miracles out of nowhere.com. thank you very much. >> thank you for having us. >> thank you guys. >> coming up when we return ibm

meeting with investors today. trying to rebuild and make its case after it's shares have dropped 15% in the last six months. the view from wall street right after the break. financial noise financial noise financial noise financial noise

welcome back the "squawk box." one of the tech's original leaders is pucking that trend.

shares of ibm down over the past three years. holding an investor meeting this morning in new york city. what is top of mind for investors and can big blue make a comeback? joining us right now is senior analyst at bernstein. good morning. >> morning. >> so can they? can they make it back? >> it's a long road back. i mean ma technology companies today, old line technology companies are facing this transition between old technologies and new technologies. the world is moving to cloud, to big data. that presents a challenge for all the -- >> so does the company have the right ceo? >> i believe that they are a good leader. and i think she's positioned the company well. we're talking about an elephant here. we're talking about a company that has over 400,000 people that has traditional businesses in main time frame and high end computing. >> you break the company up? what do you do? >> it's very difficult.

the company has a series of growth initiatives. they're trying to move to cloud. they're trying to move to big data. but those things happen very, very slowly andrew. and so you just hope that businesses can ultimately grow faster than the -- >> does the investor base have the patience? will they stay with them? >> i think what ibm really needs to show is it can grow top line. over the last 10 15 years, it's ban good stock. >> for revenue growth how long has it been zero? >> so the company's grown about 1% acquisitions over the last ten years. >> what about 20? 20 years? 25 years? >> it's been about 2% during that period. >> what do you think warren buffett sees that the rest of the market doesn't? >> if you're warren buffett, you say i like companies that produce a lot of cash, that have high returns on e equity and i like companies that ultimately

deploy that cash sensibly. don't do crazy acquisitions. and have a lot of recurring revenues and profits. ibm fits all those criteria. if you're buffett and you say i don't like technology i don't understand it, let me find a company that has characteristics of insurance. characteristics of the kinds of companies that i like. ibm in tech is about as close as you can get. but again -- >> the reason he likes the insurance companies is he can deploy the capital and buy other companies or other stocks. the key is are they using that cash correctly? >> yes, i think in general i don't profess to know warren's investing style, but i think in general, high return on equity high return on capital, high cash generative companies with predicted revenue and earnings streams and ibm has a lot of those characteristics. >> you still call it tech though. >> yes. the company is 50% services and

40% for the profitability perspective. >> i call it old tech google now. in this day and age, it's almost google is old tech. and new tech is everything. i don't know what ibm and hp are at this point. >> they're in transition right? and that's the big challenge. how do you take $100 billion company where 60% of it is declining. >> i don't think big blue fits the moniker anymore. it was the big blue chip technology. big blue is the giants. or at least they have as much claim to it even with their season. big blue doesn't really fit much anymore. they needs a new name. are you optimistic? >> well i think the challenges are significant. so i don't think ibm will be able to grow its top line over the next two or three years. certainly it's hard to say beyond that. the attractive part is there are a series of businesses that have very long lives. so main time frames are in data centers all around the world.

they last for 20 years. >> but you need to grow. you can't just stay how you are. >> exactly. >> all right. thank you. >> my pleasure. coming up st. louis fed president jim boller is here. we'll ask him what the markets should make of fed raises rates. and they are fed groupies apparently, we're going to ask him about. sfx: common city background noise ♪ credit belongs to the man who strives valiantly who errs who spends himself in a worthy cause and who, if he fails at least fails, while daring greatly sfx: background city noise

♪

he's out there. there's a guy out there whose making a name for himself in a sport where your name and maybe a number are what define you. somewhere in that pack is a driver that can intimidate the intimidator. a guy that can take the king 7 and make it 8. heck. maybe even 9. make no mistake about it. they're out there.

i guarantee it. welcome to the nascar xfinity series. congress willing the fed chair. >> you're sticking your nose in places you have no business to be. >> janet yellen fielding questions on transparency, rate hikes, and whether the fed is too political. st. louis fed president jim

bullard weighs in. plus we'll hear from one of the congressman who challenged the fed chair. a key fcc vote on net neutrality today and the man who coined the term will join us on set. plus we'll find out how many people really know what net neutrality is. >> do you know what it is? and dunkin' looking to grow its faltering k-cup business by expanding to grocery stores and online retailers. the c ergseo joins us on cnbc. the second hour of "squawk box" begins right now. live from the most powerful city in the world, this is "squawk box." >> van halen now? welcome back to "squawk box" here. anyway, here on cnbc first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin.

leisman is here. tougher internet regulation expected to be approved by the fcc today. the net neutrality rules will restrict providers to control download speeds and ask for payment for the use of so-called fast internet lanes. industry groups are expected to bring lawsuits challenging those new rules. we're going to talk to the man who coined the term net neutrality in a couple minutes. among our other top stories this morning, the senate is set to vote on a $40 billion spending bill aiming at shutting down the department of homeland security. funding will expire friday if congress doesn't take down. in tech news this morning, google is considering a strategic investment into jawbone. no word on the size of the investment or the maker of the up fitness brands. recode notes that jawbone has been putting its value at around $3 billion. and a lot of economic data on the agenda today. we'll be getting the weekly unemployment claims cpi,

durable goods, and the kansas city fed survey. >> focusing on the fed this morning, steve leisman is joining us on set with a special guest you brought along for two hours no less. >> for two hours. jim bullard. i think you were the first one to do one of these which is to sit with us for a couple hours and comment on everything. jim, let's start with the news from yesterday and to a lot of people it was the charges of political bias that were levied against the fed chair. is fed chair janet yellen in your opinion too politically biased towards the democrats? >> no. i think she's a very balanced and careful thinker on monetary policy. she does a great job in trying to forge consensus around the committee which is the key role of the chairman. she also represents us internationally. does a great job there. so i really don't see these charges being well founded. >> one of the charges was the

meetings with the treasury secretary jack lew. >> wait a minute. now, on that every chairman has met with the treasury secretary all the time. greenspan did it. bernanke did it. i'm sure when janet came into office they said you have to meet with the treasury secretary. >> it'd be weird not to. >> meeting with the president, i'm sure is on the president's schedule, not on the chairman. >> did he tell her at that point start talking about income inequality because that's what i'm going to do for my last two years? >> income inequality is a broad macroeconomic topic. it's a big topic that people are talking about. so why not weigh in? i weighed in on it. >> let's turn to -- i can wait. >> i didn't expect an answer. the groupie questions are coming later for the fed too. >> let's turn to monetary policy. i think before i ask you when you think the fed should raise rates because i think your answer to that is yesterday,

what's your best guess as to when the word "patience" is removed from the statement? patience being the one that says the fed is two meetings away at least from considering a rate hike. >> you know i thought the chair did a good job on this issue. i said that we should take out "patience" in march to provide optionalty for the committee going forward. which means because patience has come to mean two meanings. if we take it out, then we can move any of the meetings during the summer. but we don't have to. we can make it be data dependent which is what i'd like to see us do. and we'll see how the data comes in through the spring. then we'll make a decision. >> do you have a sense right now, if you could set interest rates from the fed at this moment, where would they be? and what is your projection for where they should be over the course of this year? >> as you know i'd be for

starting a little bit earlier on this normalization process. and it's not tightening. it's normalization. it's still going to be an accommodative policy even if we move off zero. i think there's too much focus about the first move. whether you're at 25 basis points or 50 basis points. not really that material for the macro economy. it's the path of rates that matters. what i'd like to do is get started. and then let it depend on the data. let things come in as they will through the year and let the committee react to that. so one of my concerns has been improve sog rapidly that unemployment will be down below 5% in the second half of this year. so if you're sitting around and you haven't even come off zero and the unemployment rate has come down below 5% that seems extreme to me. >> that's crazy. when's the last time we had a four handle? >> i don't think we got there in

'05, did we? >> bottomed at 4.4%. >> what year was that do you remember? >> it was right before the crisis. >> last time we started tightening we were only .1 percentage lower than we are right now. >> so i think you've got to have this vision that this is a normalization process. the policy rate is 375, 400 basis points below normal. so, you know either you've got to get started at some point as the labor markets continue to improve. >> you know, you guys say all the time this is data dependent you're waiting to see the data. we sit around and figure which data you're watching. is it the unemployment the rate of inflation? even at this point, something like the strong dollar. how much do all these factors weigh in? >> well labor markets generally are very important. we've gone through a period where we had poor labor market performance. now things are much closer to normal than they have been. you can look at other types of

labor market measures. but i think it really just comes down to the jobs report. created a million jobs in the last three months, by the way. and then on the inflation side inflation's low now. but a lot of that is due to this extraordinary oil price drop 50% drop. that's pretty substantial. and if you try to sort some of that out, i think you'd see that inflation is probably pretty stable. >> but that's a gamble right? >> look at the dallas fed trimming pc inflation year over year. it's about 1.6%. >> what janet yellen said yesterday as i understand it doesn't want to raise until she has confidence you're moving back in the medium term to the fed's 2% target. >> and i agree totally with

that. >> but what is there in the data that gives you confidence for moving back towards 2%? sort of the same question becky's asking. what data do you look at? the cpi is going to be maybe negative. and the core could be unchanged to negative. >> i think -- what i'm most concerned about is tips base break evens. and those break even inflation rates came way down. but it was highly correlated with the big decline in oil. and so i think it's hard to read those tips based break even inflation rates right now. but as oil stabilizes and maybe starts ticking up a little bit, then we'll be able to go back and read those break evens. but they have come back up as oil bounced off bottom here. those bounced back up. so the five-year forward is now 190 basis points close to two. it was down earlier. now i think that's coming back to normal. >> would you raise rates now though? where is that confidence moving back to the target?

>> well if expected inflation goes back to more normal levels i'd have more confidence that it would follow behind. >> but that moment is not now? >> you've got to see that through the spring we have to see evidence of that. >> we had jim o'neil from goldman on. this is questioning things we assume to be true right now. the u.s. is just going gang busters compared to the rest of the world. we have to worry about the dollar strengthening more than the euro coming back. he says all those things whenever you're so sure of something, it's probably not true. is the consumer definitely in great shape and going to continue to provide 3%-plus growth in gdp? or are we over-confident. >> i think consumption does look relatively strong. depends how you read some of the data. anecdoteal reports seem to be positive about the decline in oil prices.

this is something that really matters to the lower half of the income distribution. they're spending a lot more higher fraction of their income on this. so i think you are seeing strength coming from the lower oil prices. >> the below average recovery numbers that we've seen we think 2.5 is great now because of the last six years. because of the financial crisis. that's what did it. it couldn't have been better if we had done some other things. could swrewe have done 3% or 4% from the recovery once we came out? could we have done that and shot ourselves in the foot? >> i think if the u.s. had a better growth strategy and long-term strategy we could grow much, much faster. but that's kind of a different story. i do want to say one thing. potential growth has been ratcheted down. so people have idea about longer run growth in the u.s. much lower than what we're used to during the '80s and '90s.

maybe a whole percentage point lower than it was. i just want to make this point. it used to be if you were growing at 3% you were growing at trend. but now you're growing at 3% you're growing a percentage point above trend. so that's why, i think, we're getting good labor market outcomes. >> what happened? why can china grow at 7% and we're happy with 2%? >> lots of complicated factors, but i think our human capital development is probably not as good as it needs to be. you want great technology to be able to diffuse through the economy. i think that the post-crisis atmosphere has been a re-regulatory atmosphere. >> yeah. >> on both sides. >> we're going to see more of that today. >> everyone's like all -- everybody's thinking about how to change the rules. >> both sides of the aisle. you can be non-partisan but give

me a break. >> certainly have different ideas. but i don't think anybody came out of the crisis saying we can leave everything the way it is now. not many people said that. they said we do need to re-regulate. then there was debate about how much to go. >> direct question on that is do you think dodd-frank regulatory reform bill is too onerous on the banks and reducing the economy? >> dodd-frank to me was a list of a bunch of things that you could do and some of these things might prevent a future financial crisis. but it's untested as to whether any of those things really work. and there's still quite a ways past the crisis it's still a raging debate about how can you

actually prevent a future crisis? i don't think even today -- >> but right now is dodd-frank weighing on the banks? is it inhibiting them from lending? >> dodd-frank is all about more capital and higher liquidity ratios and so on. and international standards. so, yeah. clearly weighing on. >> you've got health care. you've got labor. you've got energy. you've got epa energy's done pretty well. >> done really good. >> yeah, in spite of the utilities -- >> just wanted that one. >> we looked at 800 years of financial crisis you always grow slower. and why do -- a simple theory about why that is is when there's a big crisis the society naturally thinks about we have to change the rules somehow. and when the rules are changing everybody says i don't know where to place my bets. >> i thought you and all your

friends decided rogoff didn't know what he was talking about because he said 90% december death was -- debt was a problem for gdp. >> i'm on the me and all of my friends. my friends and i don't sit and talk about rogoff and reinhart. we listen to the grateful dead or fish. >> 150% debt to gdp was okay now. 200%. 800%. >> yeah we've done it before and it doesn't seem to be -- anyway. >> see. >> let me call my friends up. is there a lifeline on "squawk box"? >> thank you. >> you stay talking to him for awhile. but 8:30 we have cpi and durables and we'll get jim's instant reaction. we've got a fed guy processing the data as it's coming in. going to be cool. i'm very excited about that. >> thank you steve. we will have more from fed president bullard. coming up next stocks on the move this morning. we'll tell you what to watch. plus why one company is getting

a big boost from a court ruling on adultery in south korea. and later dunkin' brands ceo is going to be answering the squawk ceo call. the road. it can bring out the worst in people. but the m-class scans for danger... ...corrects for lane drifting... ...and if necessary, it will even brake all by itself. it is a luxury suv engineered to get you there and back safely. for tomorrow is another fight. the 2015 m-class. see your authorized dealer for exceptional offers through mercedes-benz financial services.

welcome back to "squawk box." a number of retail names to

watch today. kohl's raising dividend by 15%. also chico's tops consensus. and watch sears today. posting a smaller than expected loss. same store sales seemed to have slid. they always seem to be sliding. it expects to bring in more than $2 billion from that transaction. south korea struck down a law banning adultery. a court ruling that the law was unconstitutional after the decision. and the korean company is called unidas. it jumped 15%, the company manufactures latex condoms, apparently. and got a big spur after this news. >> you're telling us that news for a reason? >> i just read it because it was in the prompter. >> natural transition.

let's talk about pop music icon madonna. she tumbled downstairs at the brit awards last night. she was closing the ceremony with a performance of "living for love" she fumbled with a large cloak she was wearing. it seemed to be pulled backward and she fell down three steps while her dancers looked on. the song includes lyrics about stumbling and continues "i'm going to carry on." she did even joke about the fall on twitter afterwards. good news is she was fine. >> and for years she has been a performer. i've heard long ago there would be incidents on stage and she'd just power through. love her or hate her, she's great. >> to get back up after your fall like that. it was not a minor drop. >> the cape was supposed to come off. and the guys had stepped on it. if it had fallen off, she could have kept going. but because it was still attached she fell backwards. coming up the battle over net neutrality igniting a fiery

debate. how many people even know what net neutrality is. >> can i ask you about net neutrality. do you know what it is? >> no, sorry. guilty. >> morgan brennan hit the streets to find out how well people understand this complex subject. then the father, though, of net neutrality, tim wu will be on set with us to talk about it. anything? no. you? no. aflac! what are you guys looking for? claims! legend has it these hills are full of 'em. it can take months for an insurance claim to surface. claimin' takes patience. aflac paid my claim in one day. they got some new-fangled kinda one day payin' machine? hehehehe yea, i got aflac at work. aflac... in just one day, we approve and pay. one day pay, only from aflac. aflac...

welcome back, everybody. let's get back to our guest host today, jim bullard. we talked briefly about the strong dollar in the last hang when we were talking. while i agree with you on everything when you look to getting back to normalization, back to the idea of needing to start raising rates. the one thing that concerns me is how things are different around the world today. you have every other central bank in the process of easing.

off strong dollar as a result. if we start raising rates here what does that do to the dollar and how does that in turn effect our km i?economy? >> you hear about the dollar on a show like this because you're talking about big multinationals. although it's a little odd, isn't it? shouldn't they be hedging? they know what's going on in currency markets. so i guess my point on the trade weighted value of the dollar is not that different from what it's been over the last 15 years. we've grown at these dollar levels. and it's not much of a surprise. basically what happened over the last year was the ecb was a year ago thought to be very unlikely to do unconventional monetary policy. but as the year went on they got more and more likely. they finally took a big action in january. naturally if they're going to be way easier than you thought and the fed's going to continue on its policy of trying to

normalize, the euro's going to weaken and the dollar is going to strengthen. this is just a natural consequence of how the data is coming in globally. >> it sounds like you don't spend a lot of time talking about this. >> it is a factor and it does come into the model, but also you know we're not that open of an economy even today. so the dollar effects are marginal on the overall picture for the u.s. economy. >> you know you said the multinationals see what's going on just like everybody else and they should be hedging. how long should they be hedging? three, five years? >> i'm not going to recommend hedging strategies. but it's natural for them to say profits are down because of the dollar. that's part of running their business. >> you don't really worry about the strong dollar. yet the strong dollar subverts your effort to get inflation back to 2%. you're acting against yourself and what your goals are. >> it's a flexible exchange rate

world. and we certainly -- the only reason we take the dollar into account is to the extent it affects our forecast -- >> you could argue you should stay easy until the inflation gets to 2%. stay easy. so if in the act of staying easy it causes the dollar to stay strong, you know what i mean? >> monetary policy for the u.s. and the dollar is going to go where it's going to go. because that also depends on what the other guys are doing. and in the last year it has depended a lot on what the ecb is doing. they've been -- they went to a trillion euro open ended qe program which was considered impossible a year ago. they actually did it. of course that's going to -- >> you said in the past you didn't like the dual mandate either. >> i'd be willing to go to the single mandate. >> which one? >> price stability. because i think -- i don't think policy would actually change the way we do policy and the kind of

discussions we have here, but i think it would clarify for people the only thing the central bank can do is get that. >> it would take pressure off you guys to be involved in every aspect of our life forever. >> hold on. >> we have some rules coming on groupies groupies, by the way. >> did you feel that way post crisis? meaning by not -- by having this dual mandate post crisis where jobs actually matter. >> when unemployment went up to 10% in the u.s. we started referring to unemployment a lot and started talking about labor markets a lot. then in a way there's nothing wrong with that and it was chairman bernanke's decision to do that. but in a way, it gave people the idea that everything that happens in labor markets is because of the fed. and you don't want to give that impression. because the only thing the fed can do in the median term -- >> is washington a total pass? they can you know disagree on

everything and not do anything for years. >> i get the argument but the flip side is in a crisis situation where you have unemployment as horrible as it was -- >> it'd be nice to fix it with structural reforms. >> i disagree. that's not even part of the mandate, what that does to the decision makeing. >> we had to talk about labor markets. it is important. obviously it matters to everybody. i want everybody to have a job. i want everybody to have the highest they can get paid. we want all those things to happen. but you have to be clear about what monetary policy can do. and in the median term it's control the inflation rate. >> can you imagine there are other morning shows that aren't talking about the fed like this? they're talking about, like bras and recipes and movies and actors and stuff. can you believe anyone would want to talk about anything other than this? i can't. dual mandates. how do they get anyone to watch? right? >> we are going to continue our conversation with jim bullard. coming up though the man who coined the term net neutrality. he will join us next on the set.

there's nothing more romantic than a spontaneous moment. so why pause to take a pill? and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. why pause the moment? ask your doctor about cialis for daily use. for a free 30-tablet trial go to cialis.com

♪

welcome back everybody. decision day for the fcc on rules that could change the future of the internet. here is the definition of net neutrality. it means it's the principle that internet service providers should enable access to all content and applications regardless of the source and without favoring or blocking particular products or websites. but there are many people who don't understand what it means. and morgan brennan caught up with some of them. morgan, what'd you find? >> we didn't have to go very far. net neutrality might be the subject of a big debate in washington, d.c. this week with fcc voting on those proposed rules to reclassify and regulate the internet as a telecommunications service. but on the streets of new york what we found was that many americans still don't actually know what this is. take a look. >> i have no idea. >> okay. >> should i know? >> net neutrality. not really. >> i don't know what that is. >> is it saying that you're not of one political point of view? >> i have no idea.

>> net neutrality no i don't. >> or is it saying you don't really care who owns the internet? >> you said yes. do you think you could explain it? >> not at the moment. >> or who your provider is. perhaps. would that be a decent definition? >> okay. not quite. but to be fair net neutrality is not exactly an easy thing to explain. however, several folks did give it a try. take a listen. >> regardless of the band width that you use, everything should cost the same. >> so whether you can access the internet, everybody has equal access to the internet. they pay the same price at the same speed. >> it's got to do with the fast lanes and slow lanes, right? >> and the internet. >> and the conservatives say no give the corporations ability to buy faster on the internet. and then all the people that invented the internet and all the net geeks and weirdos, not myself i'm not a weirdo are like the internet is about

inherent democracy. why would we give corporations money to be able to speed it up for the rich and slow it down for the poor. >> okay. so as you can tell right there, this has become a very politicized issue nap guy also had a great answer when i asked him if the internet should be essentially regulated in terms of telecommunications service essentially as a public you till. quote, as long as they don't come knocking at 3:00 a.m. at my door to check my band width. it was probably a ratio 4 to 1 folks that didn't know what net neutrality was let alone what this debate involved and the fact that it's really not that folks don't want to impede. everybody no matter what side of the aisle kind of wants to maintain net neutrality. it's in terms of those rules and how those break down and what that means, the actual possibility of regulating the internet as a telecommunications service and the door that potentially opens to more future

regulations. so folks didn't really seem to get a grasp on that for the most part. >> okay. thank you for that. i wish i could twirl my mustache. i love that guy. who better to break down the issue than the man who created the term? he's here with us this morning. tim wu is a professor at columbia law school who actually coined the term back in 2003 in a paper he wrote. his latest book is called "the master switch: the rise and fall of information empires." and given that you not only coined the term but have been a proponent of net neutrality, i assume today you think is a very good day. just answer this. we keep hearing from every telecommunication executive that comes on the show they say innovation and capital expenditures on broadband over the next five years as a function of this legislation is going to slow incredibly and that whatever innovation we would be trying to create on the other side through net neutrality, it's going to get injured because the money won't make sense. >> yeah. i just disagree with that. i think we have the proof in the

pudding. there was -- the industry just invested another $45 billion in spectrum knowing it was coming. if you have rules for highways it's not like people don't build buildings. i think we'll see the same levels of investment going forward. i think those projections have been wrong in the past. >> i don't want to channel you. you don't feel -- >> when you don't feel it you don't -- i know. >> i don't have the -- >> we don't need you to pretend, andrew. we can take over if you want to for the other side. >> go for it. go for the other side. >> i think both companies have the concept of return on investment is important. >> sure. >> so you don't think at the margin there's going to be any lessening on return of investment for this builders of this? >> the business model net neutrality bans has never ban good proven model for cable industry. cable broadband and fios have incredible profit margins already.

over 95% marginal profit. so they're making a lot of money on the basic model which has been under net neutrality. only bans slow lanes and fast lanes which is an incremental amount of revenue. on the margin some might be lost, but the main income just comes from the regular business model. >> you're talking about the idea of net neutrality. that's now been conflated into how it's going to be enforced. and to take title two and put some of these companies and look at the internet as a utility, it raises the concern that down the road the government will tell you how much you can charge for these things. and that does change the profit outlook pretty drastically. >> if you're talking about price regulation, i would agree with you. if we were saying broadband is limited to $20 a month, good for consumers but i don't think net neutrality which is the rule we're looking at now opposed to some future price regulation affects it. >> what if someone aidsaid this is a solution to a problem in a huge end to end government takeover of the internet for a

problem that doesn't exist. >> i think the problem is proven to exist. >> where? >> well one of the reasons -- we've had a net neutrality rule for a decade and a half. >> without this. right. and it's worked fine. it seemed to have been going fine. >> i'm on the same side. if it's not broken don't fix pipt the reason we have the new rule is the court struck it down. the internet sector has been growing like crazy for the last 15 years. >> a problem we have this nuclear solution to when it could have been a targeted rifle shot, could have probably solved what we needed. >> is it verizon's fault for challenging the law? >> actually i'm blaming verizon. the shots were struck down by this courts. we do do this with a lighter law. verizon struck it down over and over and over again. they overdid it. >> i've read like, everything, professor. can i call you tim? >> fine. >> i'll call you dr. tim.

it's the first thing i thought of? are you with me dr. wu because i don't think you are. but in europe can we say one way or another whether the heavier hand of regulation has hurt broadband? i've read it's much slower and i've read the amount of investment we've had three times the amount of investment here. >> i think those are different rules. if that's true because of a completely different set. i don't think net neutrality has a bigger effect. i think it's a huge impact on start-up innovation. and that has been the big growth in this area. when you look at the u.s. economy with jobs they're not so much from the broadband, they're at net neutrality. >> maybe we're agreeing in look, net neutrality itself doesn't seem like a terrible thing. most of the companies would say it too. i think you're right in gets back to the idea that verizon messed it up by challenging these court laws.

if you now take the solution from the fcc and if it is extended to the price comentrols, then what happens? >> that would be another debate. but i don't think you can, you know, talk about something that hasn't happened. >> how do you feel about usage fees? consumer usage fees? one of the big issues a piece is out today where he says look. you have a hard cover book early, you pay more for the book. if you want an airline ticket early, you pay more. however, it's on the consumer side that pays. and right now the consumer does not pay. >> right. >> would you be in favor of getting your time warner cable bill and if you are a big netflix user you pay more than the guy who is just doing e-mail? >> it depends how you use it. i think metering is fine. if you use more you pay more. what do you think is fine is you use netflix or this company. then there's a monopoly. what we're trying to do here is

not hurt the competition which i believe in very strongly. to say you have special deals or bad deals for netflix, it hurts the competition on the internet. >> the term net neutrality, how did it come to you? were there other alternatives you scrap snd. >> yes, broadband discrimination. and the other ones were even more worse than net neutrality which isn't great. >> it's not going to be the last question quite yet. >> sure. >> sorry. >> is it okay if you're going to decide either whether the market place or government regulators decide something. you can imagine from now on any waivers anyone wants, they're going to sit down with regulators. these guys will be in a position of deciding one way or another how to enforce all this stuff and pricing and all these things. once again you're going to see companies going in and bowing to government regulators. is that better than letting the market place decide how things shake out? >> you know you state it an

abstract way. i think you need rules of the road. i think net neutrality has been very successful in creating a lot of growth in the u.s. economy. we needed those rules again because they were struck down by u.s. court. >> i think we all agree. it's verizon's fault. coming up -- we may play that. stick around. fed chair janet -- so you've heard it before? okay. fed chair -- huh? >> when your name is dr. wu you go. >> janfacing tough questions -- opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

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 confident retirement today.

fed chair janet yellen testifying on capitol hill. scott garrett accusing the fed of acting and making decisions clearly on a partisan political basis basis. >> i'm sorry. we meet with a wide range of groups. i think it is a complete mischaracterization of our meeting schedules and my meetings are entirely public. my schedule is completely in the public domain. >> that's where i'm actually taking this from. this was just handed to me. >> that's right. >> it's good this much of it is in public domain. all we're trying to do is make more in the public domain.

>> these are private one-on-one meetings and i do not think it's appropriate. if i had breakfast with you, i would not make a transcript of what we discussed over breakfast. >> joining us right now is congressman scott garrett. he's a member of the financial services committee. sir, go ahead and lay out for us what you think is happening here. >> so i think whether you're talking specifically about the street or the american public in general and what they're looking for from the fed, a little bit more both a certainty and also a transparency in their actions. both on the monetary side but also on their side dealing with their huge new powers that they have under dodd-frank as their regulatory side as well. that's all really congress is looking for here. and what it is you have here is this myth that's been out there that they've had for years or decades that the fed is somehow totally independent of partisan politics entirely and for that reason they should not be held accountable on either front on the monetary side of the regulatory side. and i think that is just a myth.

>> although congressman, i have to say, chair yellen sounded very reasonable in her responses that we just listened to on this. i don't think we'd necessarily see a transcript of every breakfast she ever had. >> and we were not looking for a transcript for every one. so i don't know how reasonable she was when she responded back by saying that no we're not going to give you a transcript. but what we were saying was that there is evidence of partisan interplay with regard to the fed. and all you have to do is look back over the years. i think i laid out a half a dozen or -- over half a dozen examples of where politics and partisanship plays into it. not only by chair yellen but her predecessor as well. when the partisanship plays in and there's a lack of independence by the fed, then all that argument goes off the table. and all we really want the fed to act as is be open and provide certainty that we see from any other federal agency as far as openness and transparency. >> the fed looks pristine

compares to the fcc, my friend. >> so i'm not sure in what sense you mean. >> i'm saying if you want to talk about someone that looks like they're folding to political pressure and partisan interests, the fcc's decision on net neutrality says they listened to what the president said and they took notes of what he wanted and just wrote the rules based on what the white house wanted. you'll never see that from the fed. >> you're sure you see that from the fed. that was one of my examples when under the last election what was the partisan issue they were talking about and that was income inequality. just a week before the election you had the fed chair talking about income inequality. when was the last time you heard the fed talking about that? >> but that's not proof that janet yellen did that because it wasn't her idea to come up with it. part of the proof for this is you say she visited the white house 55 times to visit the secretary of the treasury. what's wrong with that? >> right. and you make a good point.

if there was only one example here or one example there, then it would be just pure coincidence. but when you go through the entire list of their activities both by her in the past then you think it's more. when you have the former chair coming out, bernanke -- you've seen bernanke come before our committees and say can you tell us your decision on this. he says the fed is independent. we don't get involved. except of course when the president had his spending program of last term and the president was pushing that. and at that time bernanke says great plan. the stimulus program is going to turn the economy around. and oh yeah. that was right before it was up for -- >> though that may have been hoping to get more off the fed's plate and more to the legislators' plate. that they had to carry the water when other institutions didn't get their act together. >> we can help the whole budget thing. but these all together show the independence of the fed is a

myth. all we're asking for is some degree of accountability and transparency in the area of guidance monetary policy and regulation front as well. >> all right. well, congressman, thank you for joining us today. we'd love to see you back here with us. >> thanks. coming up when we return dunkin' making it easier to get your coffee fix in the comfort of your own home. expansion of k -cups. the ceo here with us and he did not bring doughnuts this morning.

[ male announcer ] your love for trading never stops. so if you get a trade idea about, say organic food stocks schwab can help. with a trading specialist just a tap away. what's on your mind lisa? i'd like to talk about a trade idea. let's hear it. [ male announcer ] see how schwab can help light a way forward. so you can make your move wherever you are. and start working on your next big idea. ♪ ♪ ♪ [piano background music begins] ♪ we are one, we are essentially the same regardless of where we come from. um, there are definitely things that are different about us culturally and everything else but at the end of the day we are the same and we really need to start seeing the world as a place that was gifted to us. [thunder and rain] [thunder and rain] [thunder and rain]

he's out there. there's a guy out there whose making a name for himself in a sport where your name and maybe a number are what define you. somewhere in that pack is a driver that can intimidate the intimidator. a guy that can take the king 7 and make it 8. heck. maybe even 9. make no mistake about it. they're out there. i guarantee it. welcome to the nascar xfinity series.

♪ decaf? dunkin' brands announcing this morning it's expanding its partnership to make dunkin' k-cup packs available at retail outlets nationwide and online. right now they are only available at dunkin' stores in the u.s. joining us now nigel travis ceo of dunkin' brands. are all these single cup things? i make my own coffee every morning now in the city. i do. but i use the three to four cup thing that goes into the keurig and i drink all four cups before i leave my house. >> you drink four cups before you leave your house? >> you can't tell? go ahead, nigel. >> so joe, i'm delighted you

have our coffee early in the morning b. these are the k-cups so all your viewers can see them. as you say they're now going into grocery stores. this is a great deal for our consumers and for our shareholders. but it's also a great deal for our franchisees. because we partner with our franchisees in the long-term deal to share in the deal which of course boost franchisee profitability which is something we're all about. >> how come you don't worry people like me won't even go to dunkin' donuts anymore? >> well i happen to know joe, that you will. >> that's a lie. i was making a point. but what about people that make their own coffee at home now? aren't you cannibalizing your stores to some extent? >> no we don't believe we are. in fact, one of the reasons we've done this deal we believe that other people may get some of our customers may get used to other taste profiles out there. a lot of people are out there in

the coffee space. a lot of other brands. we want dunkin' donuts to come into grocery stores and other retail outlets and dominate as we have done in the restaurant space. so i think this is actually defensive of our store position and our franchisees actually employed an independent consultant and they came out to the same conclusion. >> i understand what you're saying. you know, as a user just personally i thought, wow. i would like to have the little k-cups from dunkin'. put the morning blend in there. okay. so just update us quickly. we don't have a lot of time. we got this news. what about california? have you broken ground? how's that working? >> yeah california is going great. we've got five stores up and running. they're doing really well. we've got about another 15 stores coming later this year. california is actually going much better than we expected. so our developments and i think the other week when i saw you

guys, we talked about china. so we've had a very busy first two months of the year. i feel good about everything we're doing. but this is really the icing on the cake. because it's going to make sure everyone can have something. >> for me, i'm not a smart man, but it's earlier in california so they should need more coffee i think. doesn't that make sense? isn't it three hours earlier? it seems they need more coffee out there. >> yeah. i agree. joe, i've got to send you some doughnuts. >> well i don't need those. send me more of the three to four k-cup size original blend things. less than $50 worth. >> supersize me. >> oh boy. >> thanks nigel. when we come back we'll have more with jim bullard. stick around. ietest 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. can data help cure a disease? the right treatment for you is out there. the problem is some of it's in this lab. some of it is in her head. some of it's in this new journal. and the rest of it is in your personal medical history. ibm watson can not only read this data, but understand it. it's trained by doctors. and it's always learning. it can help find hidden correlations and help your doctor recommend treatment options for you. there's a new way to work and it's made with ibm.

just because i'm away from my desk doesn't mean i'm not working. comcast business understands that. their wifi isn't just fast near the router. it's fast in the break room. fast in the conference room. fast in tom's office. fast in other tom's office. fast in the foyer [pronounced foy-yer] or is it foyer [pronounced foy-yay]? fast in the hallway. i feel like i've been here before. switch now and get the fastest wifi everywhere. comcast business. built for business. you just got a big bump in miles. so this is a great opportunity for an upgrade. sound good? great. because you're not you you're a whole airline... and it's not a ticket you're upgrading it's your entire operations, from domestic to international... which means you need help from a whole team of advisors. from workforce strategies to tech

solutions and a thousand other things. so you call pwc. the right people to get the extraordinary done. ♪ ♪ how sound b is the u.s. economy? james bullard is here to tell us from the fed's rate policy to breaking economic data and reaction. we will cover it all. >> net neutrality front and center with the fcc vote hours away. we'll get thoughts on the nast dak nasdaq 5,000. and it's been a hard winter

for many across the country. could take a toll on your house. the costars of flipping boston give us some tips on sprucing up for the season. and what investors can expect as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york. this is "squawk box." >> good morning again, everyone. welcome back to "squawk box" this morning. check it out. apple interviewing its first watch ads. the three versions of the watch are featured against a stark white backdrop. some say the apple watch could help push the stock over the trillion-dollar market cap. we'll see. we are a little more than a month away from the watch's release. here's what we're watching

at this hour. economic reports coming out in 30 minutes. durable goods and cpi, that's all at 8:30 eastern time. also ibm is hosting an investor day in new york. big blue has been in the worst -- has been the worst performer of the dow the last few years now. it's underperforming the index again in 2015. but you don't want to miss the ceo of that company ginni rometty. then google considering a strategic investment into device maker jawbone which i'm wearing. no word on the size of the investment or the implied valuation of the maker of the up fitness brand. we are less than -- okay. less than 90 minutes away from the opening bell on wall street. the futures right now are not doing a lot. up about 8.5 points or so. checking out the markets over in

europe at this point those are small moves except for in greece. luckily there are some individual issues that are moving this morning. the company points to demand for its cloud-based software and services. also sears posting a smaller than expected loss. the retailer says it expects to bring in more than $2 billion from completing its spinoff of 200 to 300 stores. kohl's also looks to be a winner today beating estimates. raising dividend by 15%. okay. it is decision day for the fcc. a ruling on net neutrality is just hours away. eamon javers is there this morning. he joins us with more. >> they're expected to start meeting at 10:30 eastern time at the fcc in order to pass rules and expected vote on new title two regulation of the internet.

title two is the fcc's authority to regulate sort of like a utility in which case they're going to have several rules that will prevent internet broadband. providers from having paid prioritization. that would be charging consumers and companies more for selective access to internet broadband to push out their content a little bit faster than the competition. that's something a lot of internet companies like netflix and twitter have rallied against. and it looks like those new rules are going to go into place later on this afternoon. this is something that president obama pushed hard. and now fcc chairman tom wheeler has announced new rules that will do in essence what president obama wanted. not without a lot of debate and a lot of lobbying here in washington, d.c., though guys. you can imagine the big internet broadband providers were not happy with this. a couple of really interesting lobbying techniques i spotted. one was somebody created a phony

department of the internet twitter handle and website to mock the government regulating the internet saying this is going to be like the dmv have been control of your car. you don't want the government regulating the internet. that argument appears it will have lost by this time tomorrow morning. >> okay. >> yeah. there's three democratic appointees eamon. i guess that's a loss. okay. >> you're going to have the two democrats voting with wheeler, the two republicans likely voting against it. and so we expect that this will pass this afternoon. and part of the politics of this joe, is there's this idea out there among the american consumers that internet companies are these little start-ups that begin in garages and they need to have access to the same kind of broadband that the big powerful companies have. and you don't want to create a system where they would have to pay to get in the fast lane along with everybody else. that's the argument from the little guys. >> yeah i know. but it's cute because the little guy's got $800 million from

soros. the ultimate little guy. he's so cute. >> there's a lot of money in this debate absolutely. >> there is. and the other thing we point out -- becky pointed out a few times and i said you're right. remember when it was walmart versus mastercard with the fees? >> retailers versus credit card companies. i don't know it's ever benefitted consumers. >> now netflix, amazon google versus comcast, verizon. right. and the great thing is we're sticking the government in there so that anybody that wants to do anything now gets to go to its corporate headmaster and bow to government regulators again to get anything done. which is just what we need for the internet. >> look how fast these debates change. you talk about the debate for walmart. i remember when the unions were fighting walmart viciously for years. yesterday we saw the president of the united states call the ceo of walmart and congratulate and commend him for raising wages for his workers.

so these debates as soon as the economics change the debate terms change and the sides swap. this is what's happening this year. >> it's amazing. we're not even close where the two sides stand. it's so clear. it's like reading the editorial pages of "the wall street journal" one day and "the new york times" the other. never the two shall meet let eamon talk. what's your problem? >> the republican congress decides they need to do something about this fcc vote. will may pass some kind of legislation to block it? the betting in washington is they won't do that. but if they're really upset by what happens at the fcc today as we expect you can see them passing something to try to undo it. whether the president would sign it is a whole other question. >> thank you, eamon. now. >> we have max here. i wanted to get max into the conversation. >> i see that. okay. >> as you heard, it is a decision day from the fcc. we're going to turn to a major investor and entrepreneur who

has been disrupting the tech scene for the past 20 years. he's the cofounder of paypal as well as the point of sale lending service company affirm. he's also the chairman of yelp as well as a board member of yahoo!. also evernote. so the question for you this morning given the conversation we're having, where are you on net neutrality or title two? >> i'm generally less regulation, more free markets kind of guy. >> just move over this way. >> the two shall meet, i guess. i've seen markets go awry -- >> you guys all hands over there? >> no no need to touch. >> excellent. i think the internet isn't broken. so i'm a little bit -- and they got here without government regulation and partly because of no regulation. >> so a solution for a big problem that doesn't exist. >> i would say one thing on the other side of the issue just to be sort of balanced.

if you give the government tools to curb anti-competitive behavior, i don't think it's such a bad thing. i think the situation is where entrenched players, single provider, those situations exist and they should be addressed. >> we had david karp tumblr. an employee of yahoo! now. he came on and argued that he believed that net neutrality was necessary. >> it was like a ten-second pause when we asked him a question. he had no answer for. did you see twitter? >> i did see twitter. but he has that view. i don't know where marissa comes out. but most of the content guys feel this is important. >> i think the content guys see the ownership lines of other content guys and cable providers. and there's a national situation for competitive pressure. so yes, it's very clear where the lines are drawn. but i think fundamentally for the world i live in start-ups,

it's an issue that impact primarily anti-competitive or lack of competitive behavior. and the government enabling that would be a good thing. >> this is the second guy that supposedly was the poster child for net neutrality. remember the other gentleman? >> eric schmidt. >> supposedly the small people that are going to be hurt when you know, the innovation that you worried about because they're going to have to pay, it's going to stifle the innovation for the small guy. do you remember the last guy we had on? >> yes. >> so now we've had two. >> yes. >> the truth is it's a much more nuanced answer. >> the real answer is this is a complicated issue and 95% of people are talking about here is emotional emotional. the internet should be free. yes.

i think there's never enough competition. i think the government should not be subsidizing competition. the government should not be regulating competition. i think they should be enabling it. >> no, no. on broadband though. i think some of it is interesting. but we could use competitive battles. but is it another example? these are good intentions. and we know where they pave the path to a lot of times. nobody is not for basically what we're supposedly doing here. it's the method where the problem is. >> i think it's the fact it's so nuanced and people writing the regulations are not in the battle every day. >> then we rush headlong into it with good intentions. who knows five years from now we look back whether this was a huge screwup. >> given that these things typically shift in the winds of administrations, five years from

now we see it's a huge screwup. the reason i'm not so worried about it is there will be another administration and they will change it. >> why go through the process? for the lawyers? there will be three to five years of billions of dollars of lawyer fees. >> i guess the one thing it does do is create uncertainty. and leave not only companies not certain what to do but not we don't have a lot to do anyway. >> i think it's part of start-up life. >> you're welcome back here any time. >> i have a question for max. you're involved in a lot of businesses. you do strategic plans for your businesses. are you worried about the decision on net neutrality? is it entering into strategy for any of these companies? >> not that i've heard, to be honest. i actually asked my followers on twitter yesterday. are you worried about net neutrality issue and i got one telling me yes but the answer

was so emotional he's worried because he's worried. vast majority saying it's important. it's going to happen. it's going to pass. we can see it's going to pass. we'll figure out how to live with it. >> i'm sure peter thiel, the libertarian he is he probably has similar views to you. it makes me wonder whether any of the supposedly altruistic people that the left loves so much are saying that they want this for fairness and net neutrality. how many of them are totally conflicted because they own a company where they would have to pay fees. how much of it is not all truistic at all, it's totally about competing effectively with other business? >> i should hope it's for running the business. >> the guys putting it forth today, wheeler and the others the big internet response that they got after john oliver or whatever did some youtube, they're all taking their moral

high ground against the guys who provide the pipes. >> we do want the internet to be free. >> but there's definitely a group that have the moral high ground. and it probably comes down to self-interest just like everything else. >> i think the internet should sort itself out rather than the government. >> call it what it is. like everything else. right? >> yeah. >> how much -- durbin loved the mastercard right? no. where was he? >> durbin loved walmart. >> yeah. he loved walmart versus the other people. >> max, thank you for coming in. we appreciate it. >> you can stay here if you want. >> i don't know what you want to do during the break. >> you have a problem with that? >> no. coming up more from st. louis fed president jim bullard. plus a trifecta of data. jobless claims durable goods,

and cpi at 8:30 eastern. and then the spring buying season this year. we talk real estate and the forecast for house flipping. and jim cramer will be with us from the new york stock exchange. what does it mean to have an unlimited mileage warranty on a certified pre-owned mercedes-benz? what 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. only at your authorized mercedes-benz dealer. e 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? i sure hope so. with healthcare costs, who knows. umm... everyone has retirement questions. so ameriprise created the exclusive confident retirement approach. now you and your ameripise advisor.... can get the real answers you need. start building your confident retirement today.

i love my shows, but i can't just sit around all day. that's why i have xfinity. their cloud based dvr lets me take everything i recorded, anywhere i go. which is perfect for me, [whispering] because i have responsibilities. ...i mean that's really interesting, then how do you explain these photos?! [people gasping] objection your honor. sustained. with the x1 dvr library you could take anywhere, xfinity is perfect for people on the go.

back by popular demanding with it is our annual ask warren show. monday morning starting at 6:00 a.m. we will be joined by warren buffett. it's your opportunity to ask him questions as well. you can post your question for him to twitter, to facebook or to instagram. just make sure you use the #askwarren. you can submit a video question this time for the legendary investor. again, that's monday morning 6:00 a.m. eastern time. get back to our guest host st. louis fed president jim bullard. you weren't able to talk about congressman scott garrett. you commented earlier in anticipation of what he might say. do you want to just comment about it? >> it's really arm's length from politics. i mean it's not that we're not ever talking to anybody in a political sphere.

we are. but the decision making a step removed from congress. and, you know do you really want to bring that right back into the senate banking committee or the house financial services committee? i think congress has always likes the fact that they can put it out to the fomc and complain if things don't go right. that's fine. >> in the past you've had administrations and officials who have complained about that independence. >> we're a creature of congress. they could abolish the whole thing and bring all the decisions right back into the senate banking committee or joint economic committee. >> i want to change the topic for one second. jpmorgan just had investor day two days ago. spent the day trying to

articulate why the they should be one company not broken up. do you see what others will end up staying the size they are or the market forces for what you have done and what treasury's done or what the government's done will force them to break apa rt? >> they're facing increase gzing regulation. special fees liquidity ratios. things like that. some of that is coming from international pressure. >> the fed on the list in terms of capital requirements. but that's a huge part of it. >> sure. i've argued that the best thing to do from a regulatory perspective would be to have smaller firms. i think you know that i've been arguing that. >> but you think that's a market force that forces the smaller firms? >> if it came through market channels, all better.

i don't want to 12e7step in and tell them you want to get rid of this or that. i want to let the ceo make the decision. >> you don't think there's an argument to be made that these firms do -- jamie dimon would say if you want to be globally competitive and deal with the great big multinationals you need the scale of a big bank. >> it's an argument about scale economies against financial stability. what i'm saying is if you had a lot of smaller firms, a kind of a milieu of smaller firms you wouldn't have the scale factor but you'd be able to have more regulation. and i think the u.s. could run away with financial services in the future. if any of those guys get in trouble, you could let them fail. you don't have to worry they will crush you. >> we talk to people like will burg ross. banks under a billion dollars were getting snapped up left and

right. because they couldn't keep up with the regulatory requirements. it just didn't make sense. >> that's because dodd-frank is cascading down to smaller firms that had nothing to do with the crisis. so that's been an ongoing issue and problem with dodd-frank. but what i'm saying is if you would have smaller firms, let's say 20 or 30 of them instead of five of them then they can innovate. if they do something wrong you can let them fail. that's a better model. you would lose some of the economy scale. but you'd be making a conscious choice to do that. >> but the chinese banks are -- >> chinese banks are not going to be innovative. >> and that's the answer? >> you can do a little syndicate or something. >> that's very true. >> really the rest of the world has these big institutions that are protected by governments. you're not going to see a lot of

innovation. they're going to be static organizations. >> what you said about qe 4 -- >> which time? >> i -- >> i thought once we got to qe infinity -- >> but we said if we needed we would bring it back. that was in reference to what if things go south. saying these guys are never going to get out. someone asked you that question but saying theoretically if you needed it. >> that was basically what happened. you know that was -- that comment was made at a time when there was a lot of volatility in the markets. went with it. i was pointing out the committee could do that. >> do you wish you hadn't said it afterwards? you never regretted it. >> i thought it was a good interview. >> no regrets. when we come back nbc's al roker is an inspiration to kids in iowa. we have that story after the break. plus boston has seen record

snowfall and it's been brutally cold. it's the fourth coldest winter on record in the northeast. believe it or not, though the spring home selling season has begun. we have a special real estate update with the co-host of the show "flipping boston." but before we hit the housing market a big day for data on wall street. we've got inflation, durable goods, and jobless claims numbers all headed our way. stick around. "squawk box" will be right back. [ male announcer ] your love for trading never stops. so open an account with schwab. and when a market move affects, say a cloud computing stock you're holding, we can help you decide what to do. with tools that help you see how market activity is affecting your positions. so when the time comes to decide whether to scale in or scale out... you can make your move wherever you are. and start working on your next big idea. ♪ ♪

when we come back, breaking news on the economy. we've got jobless claims cpi, and durable goods all when we come back. can data help cure a disease? the right treatment for you is out there. the problem is some of it's in this lab. some of it is in her head. some of it's in this new journal. and the rest of it is in your personal medical history. ibm watson can not only read this data, but understand it. it's trained by doctors. and it's always learning. it can help find hidden correlations and help your doctor recommend treatment options for you. there's a new way to work and it's made with ibm. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets

and drive forward with broader possibilities. cme group: how the world advances.

welcome back to "squawk box" this morning. among the stories front and center morgan stanley will pay $2.6 billion to the government to settle mortgage bond claims. which reduces its 2014 profit by more than half. and in tech news global tablet shipments are rising but a report from strategy analytics suggests apple's market share continues to slip. and nickelodeon is releasing noggin. it will cost $5.99 a month. also we should tell you about students at one iowa school who have been trying to work their way into the record books with help from al roker. they're attempting to break the record for the longest uninterrupted live weather webcast. they started at 3:00 p.m. tuesday. they will continue until 10:00

this morning. students say al roker was their inspiration after he broke the record for the longest uninterrupted weather forecast. jobless claims cpi, and durable goods data. the futures at this hour are up a little bit. look at the 10-year note. rick santelli standing by atin chicago. >> we the the presidents holiday. we saw the big drop of 21,000 last week. now we're up 31,000. up 313,000. close to expectations. last month revised from down .4 to down .3%. strip out some of the volatility then you get a number that is hotter than what we're looking for up .2%. continuing claims are 2.4 million. that is down a bit from 2.42 million.

some of the other numbers are starting to come out. durable goods orders. up 2.8%. that's better than we were looking for. 1.6%, 1.7% is what we were looking for. but for the gain there were you gave half back on revision released last month down 3.4% now down 3.7%. here's an interesting number. so durable goods headlines up 2.8%. strip out transportation, you're up .3%. if you look at capital goods orders non-defense, always a proxy for kind of future spending, capital investment. it's up .6%. that isn't bad. we were looking for a number about up .5%. down. 6% last month. no shocks on cpi. but they are spending more time moving sidesways. claims trying to deal with holidays. durable goods better than expected. but we've had volatility in durable goods.

and some of the recent numbers have been big. some of them have been small. but i guess the biggest news today, we have negative yields out to euroville. you have their bund yields now under 30 basis points. you have the actual quantitative easing process the actions of actually buying beginning in march. so it's no surprise to me markets are starting to move and everybody should read this story. everybody's been talking about what showed up in "the journal" today. where are they going to get it? that is going to be on the light side. boy, sounds like they're going to take all the grease out of the gears. you know from 2001 to 2006, we didn't have 30-year long bonds. nine years later we're paying the price. can't imagine what some of these tight supply issues are going to -- how they're going to metastasize in the financial culture of the global economy years down the road with all the

supply ending up the good stuff in the central banks. >> crazy. so the numbers were late today. they legalized marijuana in washington. is that them saying we'll get around to it. is that what happened? >> i think that's okay man. that's the way we want to do stuff. >> we'll get them out sooner or later. >> we'll get to the numbers. just chill. it's not like getting them out sooner. >> i'm wrong. it was a two-hour delay because of snowstorms. >> oh. >> which in future months it might be -- >> i'm just hip to the idea that -- can i just talk a bit about the numbers? >> he was out in colorado, he was telling me. >> you were out in colorado? >> i have out in colorado where my son is forbidden to go to school. you know what? i don't really care. here's the thing. i didn't say that. did i say that? >> you did. but go ahead. >> let's talk about inflation here which is so interesting. all negatives on the good side.

food at home is down 0.2%. obviously energy down 9.7%. even your utilities are down 3.4%. these are month to month. you can sort of get, you know these could be year on years numbers. this kind of volatility we have in these numbers, very interesting numbers. and then you look at even medical care. medical care commodities is a component here. down 0.3%. new vehicles down. used cars down. could be similar changeover this year. but then you go to the services sector. that's up 0.3%. that's the largest part of the consumption in the economy. transportation services up 0.4%. medical services up for small 0.1%. let's go to jim bullard. jim, these numbers come in and i think it's the dichotomy. 0.7% on the headline. plus .2% on the core. what do you make of these if the

metric is you need confidence, we're heading back to 2%. do you get it with these numbers? >> the core being hotter than expected i think will bolster confidence a little bit that inflation is going to go back toward target. the headline number is not too much of a surprise. that was expected to be down substantially because of the declines in energy related goods and services. i think a tiny bit of this report. it's just one number. we'll have to see a string of numbers and look at the whole picture. >> let's talk about the durables. rick is right. the incredible volatility in this, it's negative positive don't know what to think. but we did get a pop in this business investment number up 0.6%. what's your outlook for capital spending this year and how important is that for the overall economy? >> certainly like to see capital spending go up. this is a positive report so that's good news. you're right about the

volatility. you've really got to somehow average or look through or get other data to support the case that this business investment is increasing. >> can you give us your forecast for the whole year for growth? and beyond that as well. >> i think 3% or better for this year on growth when the dust settles at the end of the year and i think just pretty good momentum in the u.s. economy. and i also think that we have important tail winds in the form of lower gas prices. that's going to help consumers all through this year. and we've got these lower interest -- lower long-term interest rates courtesy of the ecb action that drove their yields down. >> so we ended three or do three for the year. >> for the year. >> because we did 5 one quarter right? they don't count for what he's measuring. >> i know. but you mean for all of 2015 it's 3.

>> yeah. >> that's a forecast. i don't know. right now the wrap -- >> in an economy that has a potential growth rate closer to 2%. your growing a full percentage point above it. >> should we expect these big jobs numbers to continue? we've been doing 250, 280 even i think was the three month aempl. a million jobs over the past three months. >> very impressive and i do expect that to continue. i expect labor markets to improve all through this year. i think unemployment will be down. below 5%. >> do we get to a point where this expansion which has been going on for a very long time but has yet to come down to the middle class and to average wage earners, does it finally get there this year? >> people are talking a lot about wages. you look at the last four years. productivity in the u.s. has only averaged about half a percent a year or .6% a year. and then you look at inflation on average over the last four

years, you know, especially if you do core you're only going to get 1.5% or something like that. a rough measure is where inflation plus productivity it's about 2%. so it sounds to me like the pricing is exactly right as far as wage gains. if you want more wage gains in the u.s. you need more productivity growth. that's our problem in the u.s. low productivity. >> okay. we should say why jim is in town. are you in town for the chicago conference? >> yeah. >> uh-oh. we're in new york, dude. >> but they do it here. >> i thought, wow. that would be a big screwup, wouldn't it? you're here for the chicago conference. no. >> chicago conference has a booth every year. i try to come to it. ben bernanke is going to talk i think. >> we're going to have other guests including another big one. not as big as jim. >> we had kansas. >> not as big as kansas. >> but it's a pretty big guest.

>> okay. coming up next the cofounders of city light homes and costars of the show "flipping boston." what they say you need to do to spruce up your home. and why they fear the market could take another hit? here's a look at futures a the data. seeing green arrows across the board. we're back in a moment. financial noise financial noise financial noise

over 20 million kids everyday in our country lack access to healthy food. for the first time american kids are slated to live a shorter life span than their parents. it's a problem that we can turn around and change. revolution foods is a company we started to provide access to healthy affordable, kid-inspired chef-crafted food. we looked at what are the aspects of food that will help set up kids for success? making sure foods are made with high quality ingredients and prepared fresh everyday. our collaboration with citi has helped us really accelerate the expansion of our business in terms of how many communities weve. blap working with citi has also helped to fuel our innovation process and the speed at which we can bring

new products into the grocery stores. we are employing 1,000 people across 27 urban areas and today, serve over 1 million meals a week. until every kid has built those life-long eating habits, we'll keep working. . the boston area has seen some of the worst of it. this could be the first time the city has been hit by two

blizzards in the same winter. another foot of snow adding to the more than 42 inches in the past two weeks on track to what could be the snowiest winter ever. >> boston and the rest of massachusetts still digging out after record amounts of snowfall this winter. and with the spring home buying season just around the corner we have just the guests who really know the beantown real estate market. the cofounders of city light homes. they were also the stars of a&e's "flipping boston." let's start with the snowy condition. dave you've got a personal situation. you just finished your dream house? >> yeah. we just finished a project up on the north shore of boston. happy wife happy home. couple of kids running around. unfortunately now we have two foot of ice dams which have been chewing into the property and 9 out of 11 ceilings damaged, destroyed. i'm not unique in that process. we've got so much of that going on there. >> where on the north shore? >> by beverly airport up on that area.

peabody. >> i love that. >> i'm not unique in it. i did some research and we've got guys coming in from minnesota with steam machines steaming ice dams off the property. it's ground level. >> you can't chisel it away. >> you can't. >> you can chisel your way out the problem with that is if you don't know what you're doing and we're talking from having hired plenty of guys over the years doing this stuff, come the spring your roof shingles are shattered. they're gone. you don't see it because it's frigid and cold. you're saying the ice dam stopped, great. then springtime comes and you're like you've got to be kidding me. >> so what happens? that actually has to -- it's almost like when a storm comes through and destroys all kinds of property ahead of buying time. >> what happens is you get all this snow that sits on your roof. the attic is not supposed to be warm but hot air leaks from wherever it is. and then it melts down and gets

jacked up right where there is no more heat which is your gutters. it says i'm not melting anymore because there's nothing to melt me. unless you have a product out there that can prevent that like a new ice damming type of thing where it's electric wires going through your drains it's just going to freeze. >> people do that? >> people do that. >> there's companies out there. it's interesting. it's funny. it's like supply and demand if for a situation that nobody could really project we'd be dealing with. who says we're going to get eight feet of snow in four weeks? there's not a line item on a spreadsheet anywhere. >> there is now. >> i added eight feet of snow in one month on a spreadsheet. >> companies are popping up all over the place. they have a process now that's interesting. they take leftover panty hose.

whatever. they've got panty hose they're using with rock solts and trying to throw them on the roof. it's not that exciting but it's hurting a lot of people. >> how do you get a read on the boston real estate market? >> this stuff here is definitely slowing everything down for us. you know we were talking off air about the south boston. so we have a project right now in south boston on mass avenue that probably has i would say easy six weeks delay. i've got contractors that won't come out and bit the job because there's nowhere to park. you know? and if they're coming out to bid it, they're adding an extra this amount because i've got to deal with parking tickets and the nuisance. all this craziness. >> jim, i know you listen to anecdotal evidence from people in your district all the time. there were weather delays. does this add up to this point where the fed will take a look at it? >> this weather effect i think nationally is going to be quite a bit smaller than last year. i think it will be a little bit

negative. but not as big as last year because it's only affecting a smaller part of the country. i mean last year you remember atlanta getting ice and being shut down for 48 hours or something like that. i mean that was a long ways south so it swept more through the middle of the country. st. louis hasn't had, you know nearly as bad a winter as we had last year. but on the boston market aside from the weather, how hot is this real estate market? >> it's hot. i mean aside from the weather, it's a hot market. i'm looking at pricing, you know compared to the peak of 2005. right before the crash 2006. and we're almost back there in some cases we're beyond there. i mean you're seeing numbers in south boston at you know easy 1,000 bucks a square foot now. where the building we just purchased was purchased just before 2000 for 200 grand.

now the guy sold one for 600. another for 500. we brought it rough for 1.5. we're probably going to get $800,000 a square foot. >> how much for this square? >> i'm not familiar with that market. but if i had to guess -- >> little street in -- >> it is. if i had to guess, i'd say you're up at average, 6, 7 million. >> but there's no spring in boston. >> well there is. it's three or four days. approximately. if you're lucky. >> and what if all the snow melts at once in boston? >> if it was like a couple degrees warmer was that so bad in boston? are we sure this is bad? are are we sure this is bad? >> alaska has no snow. did you read that? we got plenty for them whenever

they want it. >> thank you very much for coming in. good luck with the house. when we return we've got jim cramer from the new york stock exchange. monday back by popular demand it's our annual ask warren show. becky will be live in omaha with warren buffett. if you have a question for him, post it to your favorite social network using the #askwarren. you can even submit is video question via twitter or now vine. remember to include, though the #askwarren. we're back in a moment.

in new york state, we're reinventing how we do business so businesses can reinvent the world. from pharmaceuticals to 3d prototyping, biotech to clean energy. whether your business is moving, expanding or just getting started... only new york offers you zero taxes for 10 years with startup ny business incubators that partner companies with universities, and venture capital funding for high growth industries. see how new york can grow your business and create jobs. visit ny.gov/business

he's out there. there's a guy out there whose making a name for himself in a sport where your name and maybe a number are what define you. somewhere in that pack is a driver that can intimidate the intimidator. a guy that can take the king 7 and make it 8. heck. maybe even 9.

make no mistake about it. they're out there. i guarantee it. welcome to the nascar xfinity series. let get down to the new york stock exchapgnge where jim cramer joins us now. it's d-day for the fcc. yesterday, comcast hit another all-time high. >> how do we interpret this? what does it mean? who wins who loses? >> well, it's profitable cash flow. cash flow is extraordinary. people pay their bills and pay more and they don't notice it it's one of those businesses where i think that it's -- it's funny they call it net neutrality it's a utility na has tremendous growth and tremendous profit. it is, of course we work for them, but it is a remarkable

business, that has been remarkable for a long time and continues to sign up people continues to capture a business market share now. makes a lot of sense it goes higher, because cash flow is one of the most amazing consistent ways to be able to -- for a stock to go higher. keep seeing that profitable cash flow over and over again. >> i wonder if it's tied up three to five years and there's uncertainty and less investment and rois go down i wonder who are the winners and losers. does netflix win from this decision today? >> i think that netflix -- remember, i've always felt the president hates the buffer ity that's really -- buffer buffer this weekend -- honestly the buffer stands for the idea na some guys do better than others. i think there could be lots of winners here. we're not digitized enough in the country and the cable companies will be involved in digitalization. netflix is involved. look i think it's a bright future for this group. i think this industry's very

very strong. >> got to go i guess. ibm's over 160 again. >> hear them emphasize higher growth. need 25 go to 40%, 50%, maybe, someday the high growth in salesforce.com, for instance reasonable to expect that's what they're going to talk about. plain old ibm is losing and the fast ibm's growing. if they can get that story up where we know there's a clear path for fast growth the multiple goes higher. i think they can do it. >> see you in a couple of minutes. when we return we'll play a little rapid fire with our special guest home. tomorrow on "squawk box," the race to find new antibiotics. walter isaacson on net neutrality. and oil tycoon harold mahamm is here. 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? 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

with everything from investing for retirement to saving for college. our commitment to current and former military members and their families is without equal. start investing with as little as fifty dollars. being a keen observer of the world has gotten you far but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running.

finally a few rapid fire questions for james bullard. you've played along with us in the past on this. we have a few lighter questions. first thing we're wondering is what's your first read every morning? first thing you read when you get up. >> i read the headlines from the "wall street journal" and from the "financial times." >> okay.

what -- i should say who is your favorite fed chairman of all time? >> favorite fed chairman i better say chair yellen. >> if you take your current chair out of the mix, who would be it? >> i've always liked volcker, great figure in the u.s. and courageous ending the big inflation in the '70s. that was important not just for the u.s. but globally. >> certainly set an example. can you spell kocherlakota? >> the prompter. >> he didn't look at the prompter. >> le was looking at me for that. by the way, for those who don't know he's the minneapolis fed president. what job would you have if you weren't a banker central banker? >> certainly research. i love research. that's what i've always done. and i loved every minute of it. >> if we decide we only need one, st. louis or kansas city

make your case. why do we need two? i'd get rid of st. louis, sorry. >> there are some federal reserve banks close together boston new york philadelphia richmond, washington. we've got too much on the east coast. >> two in missouri. >> no, but they're there 250 miles apart. >> someone wrote that in. why should there be a st. louis and kansas city? >> that question's been around since the dawn of the fed. >> if there were to close one, we'd close kansas city right. >> i don't think you should close feds. using the regional structure to your advantage. you've got low-cost cities and do a lot of the work in lower cost areas. >> where do you think some are underserved? is there ridges of the country that could use -- >> i didn't think so. the fed has a branch system. you say there's no fed in l.a. but there's a branch in l.a. there's no fed in seattle but a branch there there's a branch in miami. if we wanted to we could

certainly -- people felt they were underserved -- we could beef up. >> thanks jim. great two hours. thanks dunkin' donuts. >> really? >> right there. join us tomorrow. "squawk on the street" begins right now. ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david favor at new york stock exchange. two trading sessions left in the month after we hit intraday highs yesterday. retail earnings driving the bus, upgrade of amex and more. oil on pace for its first up month in eight, but giving back today. back below 50. ten-year yields around 1.97. you saw bullard on "squawk box" this morning. the markets, the dow posting another record