>> live from new york where business never sleeps this is squawk box. >> good morning, everybody. welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. trying to make sense of what the fed has done. a rate hike could come as early as early june but they also slashed interest rate projections over the next few years and cut the outlook for the economy. >> after the initial increase in the target funds rate our policy is likely to remain highly accommodative to support continued progress toward our objectives of maximum employment and 2% inflation. >> feds funds futures indicating the shift in a probability of a rate hike from september to october. that's part of what caused them in the fed's statement and on

yellen's comments. check out the futures this morning. 227 points for the dow. now down by about 25 points for the dow futures but up 5 points for the nasdaq and down by .57. the big story is the dollar. the dollar got slammed on this news but the euro surging past 110 at one point. it was the currency's biggest move since march of 2009. of course you have to keep this all in mind looking at the dollar verses the euro in recent months. the euro is back at 10898. michelle will be joining us with more on what happened in just a moment. >> in the meantime let's get you caught up on the other big stories we're watching this morning. target agreeing to pay $10 million to settle a class action lawsuit related to the massive 2013 data breach. individual victims may receive up to $10,000 in damages as part of the deal. a hearing on the settlements is set for today in minnesota.

apple officially a member of the dow this morning. this is the first day of its membership. the company ranks 5th in the price weighted index and today tesla has a conference call set for noon eastern time. we set this up earlier in the week when musk tweeted earlier he vowed to end range anxiety. so we'll find out what that means. >> we'll check on the broader markets as we like each morning. first we'll look at europe after yesterday's big move in the dow. asia, run through these fairly quick quickly because i want to talk about how rich the whole action was yesterday. the asian markets, you can see it's up. shanghai is up. look at oil. it's not going to be strong. oil should be going up but it's not. hit 42 for awhile. the ten year which probably after all was said and done knew

too much and went down. let's check out the dollar. as we said we do talk about it getting slammed. slammed back to 106 on the euro and then finally gold down at 1150 or so. we'll see the response after all of this. at least it's 1166. the thing that was so amazing to me yesterday was okay we're going to possibly raise rates so the market goes i'm going down. >> won't worry. >> but the economy is not as good as we thought it was so the spoiled brat do not want a strong economy. the idea of the first rate hike in ten years is more negative to them than a downgrade in the prospects for the economy. so they'd rather buy stocks based on a quarter point. >> what they would say is the fed is getting more realistic about what the economy is really like. >> we had the argument. what's real? gdp or unemployment?

they admitted that 5.5% is a joke. >> but then you should say the economy is not in good shape. >> you want to argue with me right away on this. what part do you have a problem with for what i just said. >> i would think you would embrace that. >> what part? >> the 5.5. >> i'm not embracing it. >> then you would say it's not in as good shape as it's supposed to be. >> i want the economy to be better. yesterday grant was on saying the fed can make things appear better but it want warrant the higher multiples and valuations. here we're back to not caring whether it's really an improvement in the economy or business prospects for people in the united states. we're just back to staying at zero is why we bid up asset prices even more not based on underlying fundamentals. maybe eventually the fundamentals catch up.

that's what they're hoping for. >> all along. she took out patient but patient doesn't mean impatience. >> talk to me. get out of my life too. >> they're trying to massage the markets. don't get too worried. don't have a bad knee jerk reaction. >> she got 200 points or whatever it was at the end of the day. she managed to make everyone feel so good. >> i actually laughed when she said that doesn't mean that we're impatient. >> the spoiled brat traders will be more -- we will trade a crappy economy for staying at zero. give me more free money. >> but the way i interpret it though is this is the fed being more realistic.

every number has been a little shady. there's been concerns about the market and more broadly what's happening is people are worried about what happens if we embark on raising rates at the same time that the rest of the central banks are lowering rates. this is more than protection of the dollar even though nobody will say that. this is trying to make sure that we're not helping those. >> we don't want the dollar to go up. >> it's protecting us against the currency wars coming to our shores without saying that. >> we moved to this location so we should probably get going. >> before we do that given the currency wars. >> don't you live here? >> she does. >> if you blinked at about 402 yesterday afternoon you missed a lot in the currency markets.

michelle is here with more on what that's all about. >> we're going to run through four charts of the dollar. dollar index and dollar euro and dollar yen and dollar swiss franc. incredible volatility at 4:00 in the afternoon. euro dollar is about $1.06. we go into 4:00 p.m. it's at $1.08. let's show you the dollar euro now. in a nano second it goes from 108 to 110 and back again which in the currency markets is a move of epic proportions. you can see in the dollar yen and swiss franc as well because now this morning we're back to as you saw below 107 again. it's raising the questions we had before. remember october 15th and the huge move we saw on the ten year

yield where it moved in a nano second 33 basis points. is it market structure or lack of liquidity. >> can one big player do that? i think it probably could. couldn't they? >> should one big player be able to move what in theory are the two most liquid markets in the world? the treasuries and the currency markets? his honor i can mean dollar jurors owe? >> futures contract and it went right back to where it -- >> right which is their concern. >> i don't know just seems like if you had something like that, how much none, if you're talking billions couldn't you do it. >> possibly yes. there's talk about all the liquidity provided that end up driving out all the trading liquidity and i talk to a lot of

folks in emerging markets debt because of what i do and they historically complain about lack of liquidity. they say it's worse than it's been and now that it's spreading to what should be more liquid markets, you guys were off that day but the ceo was in and his big concern was lack of liquidity in the bond markets. >> that makes sense to me because you have sen trillion banks buying massive amounts of bonds but they think it's effected the liquidity because? >> they talked about this as well and they say it's overall financial market lack of liquidity liquidity. part of it could be boca rule because so many houses can no longer trade. there's crack downs as well. what happened at 4:00? >> let's get more on the fed's message. the economy and how the markets are going to react.

where is this? >> we're your neighbor right across the street. >> you can be here in three minute with the elevator involved. he is chief invest lt officer of clear brook global advisors and a lot of that was history, what i just went through but the point being we're going to sell the market if you're going to raise rates but the minute you tell us the economy was not as good as you thought it was we're going to bid the market up. shouldn't we be more cynical about these guys? >> here's what i think happened. she wanted to drop patience and in order to get a unanimous vote to do that, to get the dove's to go along with it you had to m come back and say we're not going to tighten all that much. i think this was partly a compromise within the board.

she had been talking about moderate increases for sometime and what she said about moderate increases were inconsistent with the fed's own fed's fund rate forecast. this also was an attempt to bring those forecasts into line with the rhetoric. >> tell us what you mean. explain to people that weren't watching what you're talking about. >> when we do tighten it won't be as much as usual and it will be moderate. >> yeah. >> that was inconsistent with the forecast of the federal funds rate that were made by individual fomc members. that showed a much faster rate. so there was a convict between the rhetoric and what did they think they were going to do. this makes the rhetoric more credible because they brought their own fed funds rate forecast back down to what

indeed, would be a very moderate pace to tighten. >> what joe is getting at which i agree with is this is such baby steps. we're taking such tiny steps toward the idea of ever being able to raise. we take out the extended period phrase and we place it with patient. we take out patient but we have to promise you all of these other things so no one thinks this is -- >> ever going to happen. >> well they're baby steps but it's inevitable that they have to take these types of steps. but my concern is they only take baby steps and they need bigger than bayby steps. you need to build up a reserve so that when bad times come you can ease again. if they're going to be in such slow mo when they tighten heaven help us when there's a real problem and they need to cut rates and they don't have much left. >> in the wall street journal

they layout the opposite case which i'm still trying to get my head around which essentially says by going slow they're trying to prevent that very problem from happening. the big worry is deflation. they worry if they raise rates too quickly and to mix all the metaphors we have been hearing, tip the apple cart too far. >> they're trying to prevent the recession we would need the dry powder for. >> did they really have to vote on that word? did they really have to vote unanimously to take patient out? is that what our life has come to now? >> they don't have to vote unanimously. >> but they have to vote on whether to take that out. are you serious? really. >> no i think what he's saying is absolutely true. it's credibility. they at a certain point in time had to put into effect we're going to raise interest rates. it's going to be 25 basis points in order not to scale the markets to an extent where

actually on the news they would actually sell off the market. so you got a rally yesterday but now it's back to reality. housing starts are are bad. now where are we? >> we're sure all of this transparency is good. they raised rates. we would have no idea. they wouldn't tell anyone anything. they would just do it. they had some nerve. they didn't worry about market consequences. we have been caudeled so much to get a quarter point raise after 10 years. is this the first raise in ten years? >> it will be. >> first increase in rates in ten years and we're like are you okay? are you sure? okay. we're going to slowly remove this -- but it's coming. >> risk to avoid a taper. >> we may go to quarter point interest rates from zero. >> at some point. it hasn't happened yet. >> it also makes them so important and so part of our whole, intertwined with the

whole economy. is it that important? should they be that important. we had a guy yesterday that said let's get rid of the fed completely. >> it is important from the standpoint in that they can give a semblance of order to the markets in terms of rates where they're going to move so that the traders on wall street get a sense of how can i position myself without getting a surprise. the biggest problem we would have is a surprise and if there is a surprise you could see a dramatic sell off. michelle your point before the market doesn't have liquidity. if you really go out to try to sell bonds today, there's really no bids in the market. so they're saying what if there are a dramatic sell off in the markets. >> you really -- if anyone is on the wrong side of this trade don't they deserve to lose money? if they're that stupid? >> absolutely right. but there's so much money chasing yields and overpriced assets there's nowhere to go.

>> the fed just gave them a little more time. >> exactly. when it begins to unravel it could be a real price market. >> how good is it when you can't get a bid on a bond. a person that can't trade bonds why should they care? >> a great example would be all the money that's gone into the etfs from the retail investors they don't understand what they own but in the end when prices begin to unravel and the markets start to decrease and correct they'll have a serious issue seeing tremendous drops in prices. >> so the etf is priced here and suddenly it gaps down in a dramatic fashion they never anticipated could happen. >> exactly. look at the rates over the past couple of weeks from february to march the ten year went from 160 to 220.

that's quite a dramatic move. if you think about it across the spectrum of fixed income that could be really dramatic. >> yesterday jim grant said the one dislocation you can point easily to is the junk bond market. it's way overpriced right now. i don't think that's big enough to be systemic or hurt that much the other way. but could you make the same case for the stock market in general? and then maybe traders are right. maybe the only reason it is here is because we have been at zero and the minute it does start maybe some of the air does come out. >> what if it's in corporates? >> maybe it's somewhere we're not even talking about. >> here's the story, your rates are so low you can have a money market where you go from 0 to 1% to 1.5% and cash is still not going to be very attractive so i don't know that the market is that vulnerable to the first 100 to 150 points. >> they are trading lightly.

>> the market is not their problem. they don't need to constantly think that they're involved with it. let it do what it needs to do. >> they want to think they're involved in the bond market. >> but are they that involved with the stock market? should they hebe? why would they care about the taper tantrum. that we lost 5% in the stock market. >> all along they have been promising this would be a graceful exit that it wouldn't be dangerous because they can get out of it. if markets start to go a little chaotic not only is it not the graceful exit but they don't have much powder. much that they can do anything about it. you have to stop the avalanche. >> how many people talk about the fed like this in the united states. >> i think we know all of them. >> people are talking about food and they get to this and they're

like what is the -- >> 19 minutes on the fed. >> what is the fed. it's the central bank. >> it actually matters. everything that's happening in the economy. >> we get excited about it. >> i do. itunesed in yesterday at 2:00 to see what was happening. anyway, thank you folks for being here today and coming over so quickly. michelle we'll see you in a little bit. >> where are you going? i thought you were international. do you have something planned? >> no currencies are international. >> do you have any tickets? >> no but i am ready to go two or three different places. >> i have bags packed. >> what are the two or three? >> greece. i'm waiting for capital control heres. >> i was in italy last week. >> italy last week. >> interviewed the italian finance minister. it was lake como. >> did you bring back stuff? what did you buy there? >> cheese. what? >> nothing. did you put that in your carry on? hopefully not. >> yeah i did.

why are we talking about this. it was sealed. >> other corporate news this morning yahoo! is losing china closing the last operation move in beijing. yahoo! turned over control to alibaba in 2005. also shares of guess getting a big boost this morning after the apparel retailer beat the expectations and expenses declined. also the online business grew. watch apple supplier jabil today. it topped expectations helped in part by the strong iphone sales helped in large part. michael corbat's annual compensation by more than 10% last year. they site high legal expenses and the fail to meet regulatory approval.

bank of america must allow shareholders to vote on a proposal. they're telling the firm it cannot exclude the proposal from the corporate bailout. >> coming up warren buffet fans making a pilgrimage to the annual annual meeting could stay in his childhood home. target raising the minimum wage for their workers. but first here's a look back at this date in history. ♪

welcome back. target raising it's minimum wage to $9 an hour. this follows similar moves by rivals wall street and tjx. the retailer won't confirm the change saying it won't disclose wage levels at least publicly. but that's the word on the

street. >> invest like warren buffet and live like hill too. airbnb is putting his childhood house up for grabs. the hospitality website turned the opportunity into a contest. if you want to win a weekend stay at his childhood home entrants have to answer questions like what are you most excited to experience in omaha. the retail value is $2,250 although some buffet fans would consider it priceless. entries have to be submitted by april 1st. >> he has groupies. >> he does. >> it's a cute little house but a lot of houses like that around. coming up madness on the court and the office today. i love productivity numbers during march madness. that doesn't include leading up to when the tournament starts when everybody is looking at their brackets and changing that. >> right. >> anyway the ncaa tournament ready to begin. plus starbucks ceo with

criticism following his company he's program that was designed to improve race relations. that story and the controversy coming up next and as we head to break, here's a look at yesterday's s&p 500 winners and losers. ♪

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welcome back this morning. we're in the shares talking about the stories that are getting our attention. the big one this morning howard schults getting a lot of flak for this race together campaign. having them write it on the. >> coffee cups. >> on the coffee cups. it's on social media. huge push back. one of the pr people for starbucks ended up actually deleting their twitter account because they were getting personally attacked so often. he has done this before. in 2012 when the fiscal cliff was going on he had them work together on them. he commented on this yesterday and we have a clip we want to show everybody. >> all we're trying to do is potentially do something catalytic to start a conversation. we don't want to be intrusive. we're trying to raise the

awareness, the level of empathy and compassion necessary to bridge the cultural divide in this country today. if a customer or barista wants to opt out of it it's not mandated. it's simply an act of kindness. the question is should business be in this business. >> the question is where he's been living if he doesn't think that we've been talking about this recently. >> after the situation in ferguson and after what happened. >> we talk about race a lot lately. after the election of president obama a lot of people thought it would usher in a era of better relations and it's something we talk about nonstop. race card we play it on both sides of the aisle constantly. he said that loretta lynch, the republicans put her in the back of the bus. i have my problems with him for years. piano mother says don't say anything if you don't have anything nice to say against a person.

voted against rice and eric holder was african american. who is in the back of the bus the woman or -- >> i can't figure out what side of this you're on. >> i'm saying he just said i'm doing this to start a conversation. we're having the conversation. i just want coffee. we're already having the conversation. shut up howard. >> now you're saying what i was trying to get to. >> and the conversation should be had because it's not perfect. >> so then the question becomes should a retailer or company get involved in either racial issues, he has done things on gun control and things on gay rights and you said you want to go in and get your coffee and you don't want to talk about these things. >> howard is howard. genius. but we all have our problems. >> would you not go get coffee

there now. >> no. it's not a big issue for me. but it's like okay howard. and you know what he is using it as an advertisement for starbucks too so that's almost exploiting the whole issue which makes it even more -- >> yeah. >> let's talk about something that doesn't cause people to worry. the journal has a cool piece which has going -- and i might have taken villanova going the wrong way. i'm not going to say what i did. a 3 point shooter but just thinking about this whole bracket thing, it's an exercise in futility.

i'll probably lose to you. i've done so much -- but think about this 64 -- have you ever noticed like guys that have a gambling problem, they end up in the gutter from betting on one game again and again. so they're like football -- they lose when they're trying to pick one winner so we're trying to to 64 and then think about the size of the casino's in vegas. who usually wins whenever anyone gambles? there's no way to do this. >> my only question is when we talked about this a few days ago. >> i'm macking aking a lot of excuses. >> but you said originally you don't want to lose. i need to know your approach. are you trying to win or just trying to not look bad. >> i've never seen where it's you can bet on kentucky or the field. kentucky it was a 49% chance of

winning everything. i decided i don't like that. he was right about doing it. so i don't have kentucky anymore. two years ago when i didn't have them then either and i wish that i had because if you don't have them you're out. >> how far -- did you take them to the final four? >> i did. i think i took them to the final four but i'll tell you the greatest thing about this tournament, someone said this to me two days ago. a big villa nova fan but the greatest thing in the world to watch five good players that play as a team can be five great players that maybe aren't playing as a team and the hampton has a chance against kentucky. probably not a great one. but the upsets that you see it's so great. five players playing as a team. >> are playing as a hand instead of fingers. >> right. >> and they can do something really special. there's something special in about every game. if it's anywhere close you have a chance fouling.

if you hit your free throws and overtime. so there's 16 games. >> 16 games. >> right. >> i haven't even done mine. i have to hurry. >> i care about every one because have to pick. >> how many innings? >> four quarters which brings us to our next story which is about money and currency and the crazy effects that it's having on the luxury goods market. it's the largest watch maker and lower prices in some markets it's dropped by average 8% in switzerland, china, united states, and south america. 7% in the u.k. it's going to leave prices as they stand in the euro zone japan and singapore because of the crazy moves, 25% in one direction it makes it super expensive to buy a watch in switzerland and the united states.

people can buy something in the cheap areas and sell it to 25% less overseas. they're going to lose control on this. you are no longer able to control your market in the place you're selling it. >> what about the apple watch andrew. >> that's another problem the tag has got. is it a huge problem? some people would say it is. >> i don't think so. >> what if apple watch starts looking cool. >> the apple watch has the $10,000 version but think about this. >> is that heavy? are you wearing that one yet. >> it's not out yet. >> let us know. >> but what happens when it's out of date meaning like there's a new technology a year later. >> that's what worries me.

the 10,000 you can't do because they say they're going to give you a credit on the last one. >> unless you think that it's possible by the way that this becomes a collectible item because it's the first one ever if you think that the 20 or 100 years from now. >> it's never actually got all the bugs worked out. >> the reason the iphone works so well is there's always upgrades and you go iphone 4, iphone 5, iphone 6 and there's people that give it to their children and their children and their children. so only one person bought a watch in five generations. that can't happen with iphones. that's why it works so well. $18 billion a quarter now to justify a trillion dollar market cap they're trying to get to. >> that's true. do you think they're trying to get to a trillion dollar market cap. >> i do. i think they're trying to get to a $10 billion market cap. >> i just think they're trying to earn, as they should, trying to maximize profits and return

to shareholders which is a good thing. >> it's a good thing. not a bad thing. >> say that with feeling. >> it's a good thing. >> to maximize shareholder value. >> i would like to maximize profits for shareholders. but also for employees. >> and consumers. >> right okay. that's hard to do all of those things. >> it is. but coming up when we come back oil prices down sharply. again this morning we'll talk to one hedge fund manager called crude directly and made a lot of money in the process and later stock picks. mario gabelli and boonepickens and we have a big show just ahead. the lightest or nothing. the smartest or nothing. the quietest or nothing.

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the output. >> when we come back this morning we'll be talking to one hedge fund manager in london who correctly called the drop in oil prices and is making a lot of money for his investors in the process. and beyond our boarders a money manager urging that they work best when the fed starts to hike rates. is now the time to park money overseas? we'll ask him next. right now as we head to a break check out the euro. right back after some pretty turbulent times yesterday. stick around, squawk box will be right back.

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welcome back. u. s. crude stock hitting a record high and despite a brief bump higher wti is still down close to 20% this year and while lots of analysts struggled to get a handle on the price of oil we found one hedge fund manager that's been right over the past year. rcm asset management which manages the oil focused commodity funds saw returns of nearly 60% last year. a new record for the fund.

the fund's co-manager joins us right now. we struggle to find people doug who actually called this right. you have gotten it right so far. tell us where you think it's all about to go. >> well that seems a long time ago since last year. i went last night and when i came out of there i saw the oil price moved up 5% and i felt like i had missed an arab spring while i was inside but the volatility is huge and the reason the volatility is so huge is so many people are interested in playing in this marketplace. just take a look at the uso. the retail investors in the wti contract. these guys added $3 billion to that on a bet that they're trying to catch the bottom of the oil market. the trouble with that one is every time that they roll to the next future they lose 5% of their investment because of the market. so it's a very very difficult

volatile period but if you look purely at the fundamentals the u.s. has too much crude oil t. storage is bulging and the big question mark is when does it fill up? when is it all over. if you read the eia website they say 600 to 600 million barrels off storage but as a trader in a previous life you know that you can never get that amount of storage used. so taking 80% of that. we reckon 90 million barrels. so the spreads are telling you there isn't an awful lot left and if you run out then the front of this market, prices can break 40 and head to 35 and if the speculators all got themselves excited about calling the bottom decide that's not the smartest thing it can overshoot further. >> what is the bottom for you then? just to be clear. >> you know when you have a

market that has huge amount of longs and huge amount of shorts somebody tends to win. the question is who is going to win? in the second quarter it will be lower than the first quarter. april and may is the weaker period of the year. in that context one would say we're going to continue to build inventory which is going to pressure the long. now when you see what happened last night you may say well you know maybe that's not the case but my analysis says that we are coming into the weakest period. we're going to build inventory further. it will move increasingly from crude into products. and from that period we are pressure the longs who decided that they know when the bottom of the market is. i definitely feel we're going to see below $40 t.i. wouldn't surprise me to hit the bottom of 2008 which is 43. and if you recall at that time interestingly, there was no or very little shale production at

all. and we still hit $33 a barrel. and the dollar at that time was not as strong as it is today which obviously is a headwind for demand around the world. so people who think that they know when the bottom's in are paying 5% to roll their purchases every month which is straight to the bottom line. and i think it's a very very dangerous strategy when we're coming into the weakest demand period of the year. >> help clarify one more piece of this. so appreciating we could fall further from here and it sounds like we do that in the short-term, look out if you can and i know it's tough. look out 12 months. where are we then? >> what you need to see, we will sit and wait for a late friday night before heading to the pubs to see what the rig count's going to do. and frankly the rig count has obviously come up substantially. but the reality is the production that's coming out of the u.s. today is probably around 40 billion more a month.

if you're sitting there and you need cash to financial loans that you've got against your business, you need to produce. you just cut out all the stuff that wasn't produced and was prospecting. that doesn't surprise me at the moment. what you really need to see to turn this market around and say okay let's have a thing is that u.s. oil production does decline month to month. to stop its growth. and right now every time we have a weekly report from the d.o.e. we don't see that. i want to see real data. the problem is we may run out of storage space before that happens. which may give price shock. and you've got to realize a lot of these guys when we have the rally, probably locked in more hedges. probably saying we've got a cure for the next three months six months. and it will just process. so it just extends the pain until we really do some meaningful balancing of the supply and demand.

>> okay. doug, thank you. very insightful and interesting. we'll see what happens, of course. we appreciate it. as you know the fed sending some dovish messages hurting the dollar. so how will the emerging market read the fed's signal? joining now is from blackrock. and thank you for being here today. i know that you've said that when the fed starts to raise interest rates, it's a good time to be involved in emerging markets. what do you think yesterday after the fed took away patience but made it seem they're not going to be actively raising rates for awhile yet? >> so one needs to think about the economic backdrop around which the fed may start to raise rates. the level of conviction that the fed needs to have in terms of an economic growth momentum in the u.s. needs to be pretty strong. and that means that the world is

looking better and emerging economies are looking better. the u.s. consumer in that context would be making consumption decisions. and some of those products happen to be produced. we have three preview episodes in which the fed actually raised rates in 2004, '98, '94, '95. after a period of volatility which tends to happen when you hit this type of inflection point, after that, economic growth momentum that dominates asset prices in emerging markets. and actually over those three periods we could see very well that emerging market equities did well. what's going to happen this time, we have to see actually if the level of comfort of the fed in terms of economic activity in

the u.s. makes them actually start raises rates later this year. also in the context in which the dollar trends against the euro against the yen has triggered a generalized weakness of emerging market currencies. and if anything, the currency determines the value of asset prices in triggers in important macro adjustment that has been underweight. and that's also an important sign for it to perform. >> this time might be different when you are looking at such massive currency swings. i can understand if you think that the dollar has moved as far as it's going to go. if you think that things have leveled out here. but if you think the dollar still has room to run, it might seem like a craze say time to buy into emerging markets. why not wait until you think the currency move is finished? if you are buying markets and

the currency continues to gain value against some of the emerging markets, it's harder and harder for you to make up what you're losing in the dollar translation in terms of earnings gains. >> what history tells us is that when you see these currency swings of 25 30% as we've seen in the dollar against the euro in particular and the yen, that's pretty significant. and that triggers sort of the macro rebalancing that we're saying you can see implicitly in the fed's comments. there's some level of concern of dollars and financial conditions in the u.s. so on a going forward basis, can the dollar get stronger? probably, yes. but you could argue that the bulk of the adjustment already happened. now, in addition to that when you look at the complex, the weakness against the dollar

currencies have depreciated against the dollar 15%. but they have appreciated against the euro by 10% over the same period. so there's nothing about this time. >> thank you very much for joining us today. >> thank you very much. coming up next squawk market master mario gabelli. his take on patience janet yellen's comments. and all the individual names he loves and always has interesting ideas about when we return.

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the big question today. how should investors play the reality? we'll turn to mario gabelli for help today. he's best known for stock picks in media but he says europe is ready to boom and adds japan and india to that list. plus the ceo case study. >> all we're trying to do is potentially do something catalytic to start a conversation. >> howard shultz launching a race together campaign at starbucks. and he's blowing up social media in the process. the second hour of "squawk box" begins right now. welcome back to "squawk box" here on cnbc, first in business worldwide.

i'm joe kernen along with becky quick and andrew ross sorkin. our guest host for the next two hours, that little guy with the mario carts he's not super. you are super mario. you, my friend are super. super mario gabelli. you don't deny that do you? >> nice to say hello to you too, joe. good morning. >> good morning. chairman and ceo so much ground to cover with him this morning. you're not a macro guy. i'm sure you have comments about this. i already said you have some interesting things about a lot of individual issues especially about media. but all the way to catnip and all that. so you ready today? thank you. but one comment that we just alluded to from janet yellen is driving a lot of conversation today. >> just because we removed the word "patient" from the statement doesn't mean we're

going to be impatient. >> okay. i can pretend i'm 4. i understand what she's saying there. that was enough, i guess leisman is here eventually and we're going to talk about this huge move we saw. 227 points after being down. how much were we down when it came out? >> i don't know. i was in a meeting. >> like a hundred points. >> so 300-point swing. >> the dollar regained almost all of its ground it had lost in crazy trading and then it backed off. everything moved around just from the -- i thought she deliberately decided to couch what she was saying about patience by moving to the other side and tempering those comments. anyway -- >> it's like taking with one hand -- giving with one hand taking with the other. >> can i remind you on monday i put up a full screen that signalled patience. >> you called it.

>> when she said she wasn't being patient, she was making fun of all of us for talking about -- >> and we deserved being made fun of in my opinion. >> but we're not in there actually doing embarrassing -- >> we didn't have a countdown clock on the screen. >> we have the word "patience" in like 40 foot lettering disappearing. >> so steve is here on set with us. you were there yesterday. what do you think has happened? how has things changed? >> i think things are different. it's one of those things that when it finally happens, it changes things. you have the difficult task today of digesting all of this new information from the central bank and figuring what does it mean. as expected the fed removes patience from the statement and clears the way for possible rate hikes this year. it needed to do that. the committee then seemed to go further than markets expected by signaling a pretty dovish test for the first rate hike in about

a decade. so out is patience. is this more complicated -- what do you want to call it? locution or whatever you want to call it. it has to see confidence moving back to the 2% target. >> referee: and what market participants should be doing is looking at incoming data just as we are and forming their expectations for where policy will be going and should be going. just exactly as we will be doing by attempting to understand economic developments as they unfold. >> here are the other big things that happened. it lowered the funds rate by at least 50 basis points per year. 62 basis points in one case. it cut the unemployment rate to

5% signaling there's still more slack in the markets than we thought. and reduced by 20 to 30 basis points. i want to show you one other thing we did tell you about. fed went down to 62. much closer to where the fed survey already was. right on on 2016. we're 184. right on top of that. you can see what happened to the fed funds futures for 2015 adjusting. big shelf down. it's like the el capitan from yosemite. so it comes down to this folks. when you think the fed will hike rates is based on your own forecast of when you think the u.s. economy heads down towards the 5.1% unemployment level. and when you think the fed will have confidence moving back to the 2% target after six years of hand holding we're all on our

own now. >> we're not though. we knew they would have to lower expectations of where the interest rates would be at some point. you're right. that whole idea of the unemployment market changing dynamics. that gives them room not to raise rates. >> decided 5 is a mistake anyway. >> i ask this question. is the new policy to keep the market guessing? i actually think it is. the new thing is it's trying to create -- and i think this gets to -- >> a little bit of joe's -- >> not a charade, but there's been a one-way trade. now it's a two-way trade the fed is much less clear now about what will trigger it. those two things i showed you confidence in moving back. they could surprise us. she came in there a little bit guns blazing. she goes just because i said not

april doesn't mean not june. so they want us to be a little more on edge. >> i like that. >> i think we had one of the coldest februarys on record because of global warming as joe will attest. i have one to get you going on that. >> no. it's cold because it's warm. >> i think it's cold because temperatures are low. that's my personal opinion. but i think you have this maybe increasing better economic data in the spring. and all of a sudden this euphoria in the market about the fed not being on until september or until october, i think that gets dialed back. >> i like that. if her goal is to put us on our toes again i like that. >> suggested that in the interview. that this idea of the quarter point rate hikes for greenspan. and look. forward guidance and holding the market's hand was a big part of policy the past six years. that's why i said yesterday was

historical. because we moved away from that back to the fed. >> now gave you the input. do it yourself. is it what target did yesterday raising the minimum wage ofr the free market doing it so wages go up? >> i think that's right. and the market data is what we want to look at. we want to look at part-time for economic reasons coming down. look at all the slack being applied. >> you're going to focus on wages. >> that's a piece of it. you're going to have this did klein through june. you've got to see stabilization and increases. >> in that mix of the elements that you look at what weight do you put on the dollar and currency? >> i think the currency is a piece of it. one way to think of it is think about the currency the importance of it as trade is a

percent of the economy. the united states is one of the least trade-sensitive countries in the world. about 13%, call it 20%. i put about a 1/5 value on it. it's going to exert downward pressure. >> i like that and that's absolutely correct except profits are 25% of the s&p. >> but it's a one offer. isn't it? you take a court in q1 of the move, but q 2, q3 it wanes. >> so you're going to have a drag for the next three quarters on the reported earnings. >> but a year from now -- >> all right. we have a currency expert at the table. the chief market strategist at worldwide markets. you want to jump in? tell everybody they're right or wrong. >> absolutely. the dollar will have its effect. one thing you can't forget is the dollar is going to have its effect on gdp as well. it's also going to affect u.s.

purchasing. it will make consumers buy more things from overseas. so -- and that will help retail sales. so the dollar i don't think, has as much effect going forward as everyone thinks on the economy. right? it's going to go up and down. yesterday's move after the fed was a classic stop run. it went up two figures, came right back down. the fundamentals between -- >> what was that at the end of the day? >> it was -- it went up. that was everybody who was short for six or seven months, however long it was. the fundamentals haven't changed. the dollar went right back to where it started from. and the equation between the euro and the dollar hasn't changed. there are still more risks on the euro side. the euro's still being pressured. the qe that the ecb is doing is likely not going to be effective.

>> do i hear you say that's the end of the momentum trade? that things may stabilize? >> yes. what has changed is the speed of the move. i don't think we're going to get any more great accretions to the dollar. it's now priced in. the difference between the u.s. economy and the u.s. is now stable. it's not going to change anymore. is the fed going to -- 42 two things were moving. is the ecb going to do qe? well, they've done it. is the fed going to cut rates? right now they're not. that has been taking the pressure off a little bit. >> if the fed turns around and cuts rates in june as steve suggests they may do -- excuse me. raise rates in june does that change the momentum? >> absolutely. this is a classic sign for profit taking. it hasn't changed the fundamentals. that's still there. and the risks are on the euro side. i don't know that the germans or greeks know what's going to happen there. but we are inching towards some

sort of resolution that the market has not priced in. >> are you leaving? >> no i'm still here. you want me out of here? >> no no. we only have a minute but i want to ask you something. >> go ahead. >> i took it that you can't -- that if you do terminal pricing, you're doing that at your own risk. you shouldn't necessarily think a quarter is three. because if we may do a quarter, but then every time we do it we're going to think about it. >> are they going to do it tomorrow or -- >> i mean is it really -- once it starts does it mean we're going to be at 3% and people will immediately price that in? >> don't ask me that question. ask your buddies on the fixed income market that question. >> i thought that's what she was saying too. >> that's what they're trying to avoid. trying to say if i'm going to 3% and i start tomorrow with .25% they want to -- >> but it could go from 3% and back down. >> stan fisher when i

interviewed him end of february said categorically it will not be the quarter point regular increments. and while they make it more data dependent, they do keep you on your toes. and i think there's an interest. and i think it's a financial stability interest. a systemic risk interest in creating that two-way trade. >> it's letting the markets be markets again. bringing volatility back. >> and these are early days. i think he would call this the beginning of the beginning. not even the end of the beginning. they took this essential step to remove patience but what happens next and even -- i imagine they're going to tweak this new formula. >> do you think she high fived anyone at 4:00 yesterday? >> she probably did. >> so she cares whether the market goes snup. >> well i think they don't want it to go down in a big way. i think they don't want to see jerkry ryy reactions. so this is something that happened over the time that you and i have known each other which is that -- a long time it is. the stock market has become much

more central to fed policy. it began with greenspan. it began as something they talked about rarely. and alan has been on this program a lot, talked about the centrality of the stock market to economic growth and to fed policy and that's a new development. so they watch it when they can make a big change like this and get away with not a 200-point decline they high five each other. >> okay. >> like charlie munger says, i have nothing to add. >> you better have more to add because we're talking to you in just a moment. >> he's so full of it. he always has something to add, believe me. >> thank goodness. we need him here. >> ask him about cable vision or something. >> we're very good at bottoms up. coming up stock picks from mario. plus today marks apple's first trading session as part of the dow. we'll talk to an analyst about the tech giant's future. then later has howard shultz

jumped the shark with his latest project? the controversy surrounding the starbucks leader still ahead. we're talking about him, though, aren't we? and starbucks.

now with the xfinity tv go app, you can watch live tv anytime. it's never been easier with so many networks all in one place. get live tv whenever you want. the xfinity tv go app. now with live tv on the go. enjoy over wifi or on verizon wireless 4g lte. plus enjoy special savings when you purchase any new verizon wireless smartphone or tablet from comcast. visit comcast.com/wireless to learn more. welcome back everybody. our guest host this morning is mario gabelli. i know that you are a bottoms up guy, but we have had so many

significant moves whether it be currency or trying to figure how we match up versus emerging markets. how does that change your view if at all? >> well you clearly like this morning i'm reading the report and you look at the impact of currency on the reported earnings. when you have 52% of your business in the u.s. and you produce it here that's one thing. when you have 48% outside, that has a tremendous impact on your reported earnings. and the market still has to absorb that daily. on the other side of the coin is i look past that and look at what draghi is doing and stimulating the european economy. and you look to 2016 you're saying, hey, will the markets start anticipating that in oxz october and with a stable currency year to year. somewhere in the 95 110. that has an impact on the earnings. so you start anticipating.

>> where are dhings underprices right now if you think the market maybe gets to that point in october? >> i've argued keep a seat belt fastened b. you look at the s&p earnings. you've got the energy impact. you quantify that. and you look at the multiple and you look at what elements impact stock prices fundamentally and where they will be next year. and so you look for margin of safety. where are we in that regard and then you look at elements. now, if i'm producing something in france with local currency and local costs and exporting and selling in the global market place and my stock has done nothing, wow. i as an american can go in and buy the stock 30% cheaper than a year ago and i'm going to have a company do extremely well. >> so you're feeling the love back in the markets if you're looking at some of these other places. we've heard that also -- who was it? it was united technologies chairman. >> reverse that.

if you're an american company competing against the german company and you're competing for customers outside the world and your costs are u.s. based, there's a problem. they have a 30% price advantage. either their margins improve or they gain share or you're going to have to cut costs. >> well you're going to do that. the reverse of that has been and you have to limit a tax policy instead of going territorial. that brings in a lot of others. you have to tie in regulation tie in free market. you have to tie in tax policy and currencies. this is easy. >> this is not easy. >> no it is. except one thing. today like you saw yesterday you have hair triggers on etfs and fact kal asset allocation. when joe was saying before in currency was there were stop losses that triggered some of the move up in the dollar. >> don't bring that up.

>> 1987? >> yeah, october of '87. yeah the market had a bit of a pullback. >> it was delightful. >> look. you have that again in a flash trade may of -- what was that? 2010. that was one day. procter & gamble went from $65 down -- one stock $90. it all happened within ten minutes because somebody miscalculated how the etfs would work. so this is -- look. if things change dynamics change fundamentals don't. you look for pricing power, earning power, and how is that to intrinsic value. >> am i right though? i think in all my years i talked to you on the set, i don't think i've ever heard you give that detailed of a description about the broader economics. things have changed very rapidly.

there have been some massive moves and during the financial crisis, i don't remember you talking about really analyzing things that differently. >> on a macro basis. >> if you ask you shall receive. >> it just shows you how different things are right now. >> not necessarily. we've always been doing that. by our competency and compounded knowledge is on industry specifics. but when you hook at the automobile industry we produce 17 million in the united states. you can't go back and say how is the auto industry because dana for example has half their business outside of the united states. you look at cash flow at the amount of cash they have available for redeployment. so it -- you always look globally. but we talk stock specifics. >> let's nar owe dana specifically now. how does the entire case for dana change based on all the analysis you just mentioned? >> i think your booms next year the truck market rises and the united states you still have a notion of where does transportation go.

what do they do? they got hit in venezuela with currency with the economics. then you look at brazil and argentina. so now we look past the air pocket. how is their balance sheet and cash flow? how bad is bad and how good is good. what can they earn three years from 2340u when things converge on the upside and where's the stock relative to that? they went from having 20 million shares outstanding. balance sheet was challenging. they have a fantastic balance sheet today. stock's $21. what can they earn and where will the stocks sell at? so we look at dana. we look at january. lots of companies like that. and as an example, bottoms up. this is the old "washington post." you say what's the world like. >> all right. we're going to come back to these two points because i still

don't have an answer on what you have out of dana. >> i'm buying. look. either i'm suing them they're suing me i'm managing money for them, or they're firing me. we own the stock, nibbling at it. the better one is a navistar. we'll talk about that later. >> did you fill out a bracket? >> yes. >> who'd you pick? just the win? >> you know i'm in the -- >> it's a simple question. >> kentucky is obviously in the final four. and -- >> but are they winning or no? >> who'd you pick to win? >> i'll tell you i'm going to stick with -- >> you are so slippery. you're slippery. >> i'm sticking with -- >> you just said final four. i. >> i just did now. thank you. boy, oh boy. what happened to the billion-dollar bet last year? where's buffett? >> did you see what the odds are? one in some number that ended in quadrillon. >> you don't have to put a buck up. just submit a bid.

>> all right. coming up will apple soon be a trillion-dollar company or is it the death now for the dow jones? today is the first trading session as a dow component. an analyst will give us his call on the stock. that is still ahead. take a deeeeep breath in. . . and . . . exhale. . . aflac! and a gentle wavelike motion... ahhh- ahhhhhh. liberate your spine... ahhh-ahhhhhh......aflac! and reach, toes blossoming... not that great at yoga. yeah, but when i slipped a disk he paid my claim before i knew it. ahh! so he had your back? yep. in just one day, we approve and pay. one day pay, only from aflac. [duck snoring]

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all right, everybody. take a look at the futures this morning. yesterday you saw the fed with its news market ended up with about 227 for the dow. s&p up by 25. look this morning, things are relatively flat with the dow futures down about 11 points. s&p futuring up by half a point. and the nasdaq up by 8. when we come back we have the top stories including yahoo! officially leaving china. plus the future for apple as it enters the dow. as you're waking up check out the euro this morning. wild moves there yesterday. settling back in around 1.0695.

stick around. "squawk box" will be right back.

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welcome back to "squawk box" this morning. among the stories front and center yahoo! is now leaving china closing its last operation in beijing. the company's latest cost cutting move yahoo! turned over operations to alibaba in 2005 and stopped offering services there 2013. also citigroup cutting michael corbat's contribution. he's down to $13 million this year. the bank citing high legal expenses and the company's failure to win regulatory approval in last year's stress test. and the s.e.c. says bank of america must allow shareholders to vote on a breakup proposal. just a couple of hours, apple is going to begin trading at a newly minted dow component. a move that marries the most watched index with the most

valuable company in the world. shares of apple have jumped about 5% in the past week alone. but still not back to their highs. for more on what the move will mean for the tech giant, will power at robert w. baird joins us. i think there are two camps here, will. one is the camp that brings up a classic valuation metrics for apple. still cheap. with its growth rate and the quality of its management and its products and everything else, how can you not love it where it's priced right now? then there's another camp that is already up 8,000%. is it going to double again from 750 billion? the law of large numbers always seems to come into play. which camp is going to win out here. >> well as they say trees don't grow out of the sky. i don't know whether it will double from here. we think there is further

upside. any time added to the dow, it is more backwards looking. it's about what have you done for me in the past? where are you today? the question is now are they at the top of their game or is there more ahead? we tend to follow the camp where we think is there more innovation ahead. it's incumbent upon them to push that envelope. one thing worth pointing out here, there's an interesting irony. the companies replacing at&t is the very company that really helped them usher in the iphone era. in 2007. >> i can pick five other dow components i would have thrown out. although maybe they thought they already had verizon. i don't know. aig, citigroup, it's littered with -- you know it's bad to take any moment in time and extrapolate forward on it. they've messed up a lot in the past. who are they? employees of dow jones that make these decisions.

>> yeah. no, i guess that's right. no one has the perfect crystal ball. but for apping look i like the pipeline moving forward here. of course you have the watch around the corner. if the rumors are right on the service, we laid out what it could mean for apple. those are significant opportunities. that's going to be the key to continue to innovate to push that stock higher and break out of whatever the passed out curses might have been. >> tough to question apple and to be skeptical about whether they'll succeed at something. but i can make a case on both of the things that you said. the watch, i don't know. maybe future generation watches. i don't know. i don't know what the overall market is for the watches. and there's a lot of different players getting into that tv area. you spent 30 here and then get hbo for another 10. then you're back to $90 which is what you're paying right now. i don't know how that works

itself out now either. but to earn $18 billion every quarter from here on out, you know should not disappoint. iphone still probably does it for them. everybody's going to want an iphone 7 and 8. that is probably more important. >> the iphone as we all know has been the core driver. >> you know that enables the capital returns we all talked about. think about the content business. if you take that globally over a period of kweers all of a sudden it does become more meaningful. to me $30 or $40 a month, that can be a compelling product given their ability to improve the user interface and all that. they could do it right. that's what i said.

i would never short their ability to surprise with how well they do something. there were a lot of skeptics about the iphone. i was a skeptic about the iphone. i thought it was going to be a phone. i didn't know it was going to be my map to -- you know, and everything else it does. >> of course a lot of the initial smartphone competitors were skeptical. you go back and look at comments from of course blackberry and nokia and motorola and others. you know there was a lot of skepticism. at&t in some respects took a chance. you know it obviously paid off in spades for apple in particular. >> thank you very much. yeah. thrown out of the dow. anyway, thank you, will. your whole life it's been will power, huh? that's cool. >> it has, yeah. as a fellow ohioan what team do you like for the tournament for ohio? >> i took up -- i figure if i'm

going to take up steps, i want to take teams to hope for. i've got xavier winning. i've got cincinnati beating purdue. i'm a little bit worried about that. that's today too. that's this afternoon or tonight. i don't have ohio state. they got killed by -- who'd they -- they got killed by someone just a couple weeks ago. a good team. >> they've been up and down. well dayton could be a surprise. >> dayton's great. dayton last year put a dagger in my heart with cincinnati or one of them. anyway, thank you, will. where are you right now? you're in ohio where? >> well i'm actually in dallas but i grew up in southern ohio. that's right. >> which part? >> i grew up in middletown. >> you did. that is cincinnati. all right. good. see you. we got to go. andrew's chomping at the bit. >> well, no. i wanted to talk to -- champing. i want to talk to mario on apple. reports say apple could be

putting together a new package for the fall. this is a big issue. and i want to understand the economics of the breakdown of the bundle if you think there's a breakdown of the bundle coming. >> this bundles have to be broken down and analytically. first the video content. i don't want 500 channels. i have a house that i'm paying $18 per month to get basic cable and that's the cable vision. in addition to that however, i'm renting the box so i'm paying $25. if i want to add services to that i add it a la carte. so the cable guys can do that. efficiently you put the bundle in. i'm now -- i hate sports so i don't want to pay for espn. so that unbundling is going to be engineered when they're ready

to do it. so a la carte is coming. then the second part deals with telephone and broadband. >> let's talk content first. let's say espn ultimately long-term gets unbundled or cnbc gets unbundled. or any channels get unbundled. all of a sudden espn which used to collect $7 for every cable user in the universe is now going to have to rely on a smaller group of people yeah but they can charge that group of people $10, $30. >> that's my question. the question is does the margin come down on that? are there enough people in the world who are going to spend that money to support the network? and all of these networks? >> i went to the movie the other night. i paid $15. and that was at a senior citizen discount. in addition to that -- >> if you can't see how people are going to pay for -- espn is going to make -- when they break

up a company and say some of the parts is worth more than the whole, why does that make sense to you when you can make money with the sum of the parts? don't use espn. use stained glass network. >> no. but do a tbs. or do even a usa which is owned by nbc. hold on. let's take somebody that relies in large part on reruns of syndicated content which you'll be able to get on vod in the future. those channels, what happens to the value of those channels? >> let's go through the math. there's 120 million households. a hundred million of them have cable satellite or cable. they get $5 a month, that's 500 million, times 12 is $6 billion. and you have a high incremental margin on that. so now how do you replace that $6 billion? >> yes. >> okay. so the answer is when you look another other forms of entertain lt, if i go to a baseball game if i go to a movie theater, i'm

getting -- how many days in a month? 30 days a month, 360 -- and i'm getting 24 hours. so on a cost per viewing -- cost per package, that is not expensive. it's a bargain. sirius. sirius charges you $12. okay? apple is going to charge you "x" dollars. could they price it on demand based on the quality of their programming and that's what people will pay for? if they're charging $20 a month, that is $1.30 a day, andrew. you know that's like -- >> it might look different for the offerings you have. >> that's correct. >> and even for the cable operator, right now i have xfinity and there's nothing i'm lacking. seriously. nothing i'm missing. >> in 1973 came and created primetime access. the hope is that they didn't come in and create a la carte today and that the free market

system, that's the point i want to drive home. the free market system is creating these competitive dynamics. [ overlapping speakers ] >> and for you, it's lifetime and oxygen and oprah network. but for other people they're going to pay for what they like to watch. and it's going to be bid up. you'll see. >> the consumer will pay for what they want when they want to watch it. >> it's not just going to be those three. >> the economics in the business is going to change radically and companies will go out of business. >> stain glass network. not espn. not oxygen. >> we'll come back and talk more in just a moment.

welcome back to "squawk box," everybody. piper ja ifffrey citing concern to the impact from paypal to google wallet. facebook, samsung, and traditional banks. monster's price target cut to 55. school of business being renamed the gabelli school of business. congratulations, after our guest host mario gabelli. joining us now to tell us more about the unification process is

the dean of fordham's gabelli school of business. >> thank you. >> do you have business cards yet? >> we're only three weeks old here. >> what does this mean? >> we're using new york as our platform for education. it's a wonderful city. we have a global vision where we're bringing fordham to the world and the world to fordham. >> so what do you make of the argument when people say you don't need to get an mba anymore? that they're less popular than they used to be. >> i think the number of people getting an mba has declined but the value has not. i think with the new mba and what we're doing is marrying the important technical skills but also the soft leadership skills. employers tell me every day they need people who solve problems

people that work in teams, people that are really unfortunately. these are the things we've built into the curriculum. >> what do you think is driving the sort of decline in applicants for mbas? >> half empty, half empty, half empty. this is a jesuit school too. i'm long gabelli school of business and long mbas. nothing ever -- >> skroejoe, we're going to get you on campus to see. >> it'd be a positive outlook for all this. >> what do you think is happening? >> i think part of it is cost. and the rising price and there's a lot of messaging in the press that there's not a return on value of investment. but in my view you have to look at the long period and you can't only look at your salary. you have to look at the quality of life. and if you do that kind of discounting, you'll see that is worth it. >> we have jack welch who comes on, too, and he has the school

of management and what they're trying to do is get people to get the degree in the shorter amount of time and do it on their own time. it's harder when you look for those who studied to go back and do that. what do they get out of being on campus? >> it's a huge network. and relationships with faculty, it gives the students a chance to practice what they're going to have to actually do in the workplace. so for us it's a huge upside. the other great thing is that because of fordham's location we bring a lot of guest speakers to campus. this weekend we had alex gorski and this gives kids a chance to listen to leaders and make their own decisions. >> what's an mba cost these days? >> there's two parts. one is the opportunity. those are the dynamics. the question is the payback. it's not only a piback in terms of numbers but terms of psychology.

and more importantly it's about the free market system in the united states. and tough have that vision and allow everyone to be their chance for whatever they want to do in terms of success. >> it's hard to sell things if they're not -- if things aren't really bad. one football player retires at 24. football, it's the beginning of the end for football. one person doesn't get an mba, nobody's going to get anything. they're going to go to terminal pricing immediately on all these things. it never happens. >> she's got her own ph.d. from nyu. >> football will be fine. tv probably will be fine. >> part of the strategy is laumpbling ing launching a ph.d. program in business. we've been growing our faculty. the other good thing about fordham is we have practicing practitioners who teach. and all of you are all welcome to come and be adjuncts at

fordham. >> well thank you. unpaid. congratulations. >> thank you. coming up the ceo of msg leaves for sotheby's. we're going to ask mario gabelli about the move and what it means for msg and more. and in a bit, boone pickens joins us to discuss the reentscent price moves in black gold. and how he wants to fix america's energy problems. we'll be right back. 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. ♪ ♪

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welcome back, everybody. breaking news on hp. the company announcing it is hiking its dividend by 10% to 18 cents. it says the dividend increase will take place in may. they announced it remaining at 16 cents. >> that's okay yield. welcome back to "squawk box." time to talk about msg. the company's ceo stepping down to take the helm at sotheby's this week. and there are reports about costs being passed on. mario gabelli, it says here let's ask our guest host media investor for his take on what this mean ifs for the stock. gam forif gamco is an investor in msg.

>> you're talking about a company with a $5 billion market cap. they spent the billion dollars refacing the garden and because of this work of an activist they announced the plit spling of the company in two parts. so you're going to have sports which are the knicks the rangers. and you notice that the rangers are doing extremely well even though they lost to chicago last night. the knicks are doing extremely well in terms of establishing a new record that hopefully will never be repeated again. and so what are the teams worth as stand alone teams? then what is the entertainment, what are the venues worth? and then we have msg network. that is what you're referring to. that is the msg network charges about $5 a month for people to view it. and what do you get for that network. they have 8 million subscribers. then you have advertising and so on. so the question is when they split the company and we don't know all the details yet, will they be able to have to charge

more money because of on their cable network will they be able to ask time warner to pay more? will they be able to ask dish or fios and others? that's a free market decision. i don't think they need to do that. and within the framework, i'm going to basically have two pieces of paper and hopefully both of them will have more fit and focus and therefore scale them up and hopefully make more money. now why did tad smith go to sotheby's, that's another issue. and whether or not they have to pass the cost on they will not raise tickets to the knicks this year or they shoot themselves in the head. >> is he the right goo i-- guy for sother ersotheby's? >> i can't answer that. the dow coming back after a crazy drop. the ceo of global nvtsers joins us. we have a big hour left as we get ready for the opening bell. stick around.

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the day after. is wall street still feeling bullish because the fed is acting dovish somebody and what happens to the oil markets,

stocks around the world, and the dollar? the ceo of allianz joins mario gabelli to guide you through the trading day. oil titan boone pickens says we need to stop blaming opec for the pain in the u.s. oil patch and look in the mirror. and are we on the verge of another tech bubble? are investors like mark cuban right? one says no way. a tech investing giant is here to make his case. the final hour of "squawk box" is begins right now. live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box," everybody. this is cnbc first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. we are less than 90 minutes away from the opening bell on wall street. right now you're seeing some

moderate declines from the dow and the s&p 500. nasdaq indicated up slightly higher about 6 points. this comes after a big day of market gains when the dow was up 227 points. the s&p up by 25. check out the euro this morning. you can see that at this point things have evened out a little bit. the euro is back at 1.069. first here are some -- >> now officially a member of the dow, it starts this morning. the company ranks fifth in the weighted index. also a conference call set for noon eastern time, ceo elon musk vowing to end anxiety. we'll see what that's about. and target settling a class action lawsuit related to the data breach. individual victims may reach up to $10,000 in damages. hewlett-packard increasing

their quarterly dividend by 18 cents. which will occur in may. in other tech news gene munster downgrading ebay to underweight citing concern about the impact to paypal from google wallet and then apple pay, facebook samsung, and traditional banks. and shares of guess getting a big boost this morning. the apparel retailer's earnings beating the street as expenses decline and online business grew. joining us now elizabeth corley. you have a big responsibility. you okay? >> ya. investment professionals looking after it. nobody needs to worry that it's just me. >> excellent. so do we give coup does to janet yellen?

she did exactly what she wanted to. the market ended up sharply higher. she took "patient" out. is that good? >> "patient" out but not impatient in. >> so should try to not royal the markets when it needs to be doing things. it needs to be sensitive. >> i think every central bank around the world is sensitive to the fact that any word any gesture can shake markets. and they're behaving quite responsibly and trying not to do that. the challenge they face is they've got to get off this tight rope and get back to a monetary policy. so at some point carefully something will happen. then you can't then blame the central banks of what might happened to markets. that's why people need to think learn. >> i want to know what you think about this. so will it be possible to have an orderly exit that doesn't hurt? that doesn't come home to roost? and does it matter -- whoa. sorry. does it matter how they do it?

>> that's a perfect example of what might happen. just a small gesture and look what happened. it could have gone everywhere. >> could their actions if they do it wrong, could it cause something that doesn't have to happen? >> what is do it wrong? this is a very delicate balancing act. there's a sense of being lower for longer being more accommodative. sensitivetivity to the fact that growth is not well distributed. i think the central banks will do not to create an inadvertent effect on the market. they've got to have that freedom of movement where their monetary responsibilities at the head of their thinking. >> it is a weird dynamic, because most people do think db they've stayed way too long and yet there are plenty of people that say the job's not finished. we may be just above stall speed, but it's not a given we're out of the woods. >> that's exactly right. the u.s. came out strongly but now the growth is sort of

slowing down and data is inconsistent. look at the eurozone. it's been a real challenge. emerging markets are struggling. and then you think to china where they're trying to rebalance the economy. so we're in a massive reset around the world. and it's going to be very difficult to move away and slowly normalize from where we are now. >> you like europe more than the u.s.? >> right now for stocks absolutely. yes. >> everywhere? greece? >> well, it's interesting. we can come back to greece but if you look at the dax, the euro stocks, even at the uk their returns are stronger than the s&p and it's much stronger? >> but you don't -- the currency continues. >> if you're a dollar investor that's a major issue. >> how about japan? >> well japan's done very well. and i think, you know whether or not the third arrow has really had the effect the abenomics have worked or not. look at the nikkei. in local terms t good. and we've had investors for the first time in the last 12 18

months dipping their toe in the water of japan again. they've seen great returns. >> does allianz have a view of what is maximum gdp in the u.s. right now? can we do three and four anymore? >> that is literally the trillion-dollar question. there's so many uncertainties on what's happening in the data. one of the things that surprised me and maybe you've had experts on your show is what's happening in the housing market and the fact that a lot of the economy is people coming in to rent rather than buy. that's been such a great driver of growth and sort of you could argue whether it was correct growth. that's not there at the moment. you've still got some under utility in labor market. i think it's been great. but to put a number on us is a challenge in the short-term. which is why you see the fed being accommodating. >> and if we can't do it it hurts the rest of the world.

>> but i think a lot of companies are struggling with that statement. and the u.s. has done far, far better in that regard. >> they mess around with numbers in the economy. they do the currency adjusted china passed us. china has not passed us. not even close. can we pass the baton global for them? >> what's your time frame? what's your time frame of your question. >> cyclical is what we're going to talk about. 20 years maybe. >> 20 years assuming they have political stability. >> well the numbers on a global. got a long way to go. clearly they've got to sustain export growth. that's going to be a delicate currency balance for them at the

moment. >> are you based here now? >> am i based here? >> yeah. >> no i'm based in the world. an airplane. >> she's apartment "a" on first class business travel around the world. >> come back and guest host or something. >> i'd love to. i'm here every six to eight weeks. absolutely. >> got a lot of money, got a lot of responsibility. >> el we've got a lot of clients we're looking after here. >> you know mohamed too i bet. >> not that well. we chat occasionally but i don't know him that well. >> well, we'll bring you to mohamed or bring him to you. great. thank you. >> it's been a pleasure. thank you so much. >> you're welcome. when we come back this morning, billionaire investor boone pickens on how low he thinks oil will go. plus the future of natural gas and the keystone pipeline. he is our special guest next. and later we'll get jobless claims numbers. also horowitz managering market

scott cooper on tech valuations. and also get jim cramer's take on the fed and market reaction and much more. "squawk box" will be right back. shall we dine? [ chuckle ] you wouldn't expect an insurance company to show you their rates and their competitors' rates but that's precisely what we do. going up! nope, coming down. and if you switch to progressive today you could save an average of over 500 bucks. stop it. so call me today at the number below. or is it above? dismount! oh, and he sticks the landing! e financial noise financial noise financial noise financial noise

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now with live tv on the go. enjoy over wifi or on verizon wireless 4g lte. plus enjoy special savings when you purchase any new verizon wireless smartphone or tablet from comcast. visit comcast.com/wireless to learn more. today's focus on energy this morning.

right now morgan brennan is looking at drilling for deals. morgan morgan? >> good morning, andrew. check out the etf. the xle, if you will. this is what tracks the s&p's energy sector. if you look here it's been falling on the heels of crude. down about 18% since six months ago. that's created some deals. though i've got to say not for the faint of heart since of course oil could still move lower. nonetheless, take a look at baker hughes. this is an oil field service company. these guys have been some of the most volatile on crude falling. but according to stocks this could gain 14% over the next 12 months. a cheaper way to buy halliburton halliburton. next up, carizo oil and gas. the implied upside on fact set, look here. 21.5%. they say it's likely to buy more acreage that that would be a

good move for the long-term for this company once oil prices begin to recover. lastly, third stock to check out, enterprise products partners. now, with crude inventories at a record high midstream companies like this one stand to gain. so take a look at this. 29%. guys, just to say it again, crude still move lower. these are certainly names to check out. but consider them for a longer term play. back over to you. >> all right. morgan, thank you very much. as morgan was just talking about that rally in crude fading this morning after a group said the group had no choice with regards to cutting production because it doesn't want to lose market share. envenn tour in the united states pushing wti to six-year lows as the buildup in stocks continues. legendary oil man boone pickens telling the financial times that the u.s. has overproduced and u.s. producers have got to

balance the market instead of the saudis. boone pickens is the founder of bp capital and he joins us right now. and boone, good morning. it's great to see you. >> good morning. >> so explain those comments. when i first read them on twitter about the idea that it's really the u.s.'s fault and we have to get our market in order, it made me wonder what you're talking about. you're not talking about a potential cartel here in the united states. >> well you've replaced the cartel. you've replaced opec. they produce 30 million barrels a day. and they're very consistent. and if you want to see what the saudis are going to pick listen to their minister. he said they would not cut production to increase the price of the oil. that's exactly what's happened. 9.6 million barrels a day. okay. problem is for price is the

united states. we present to 9.5 million barrels. and our industry is so efficient. listen. if anybody should get a gold medal, it would be the oil and gas industry. because they have increased. we were down to 4.5 million barrels a day. we're twice that now. but while we did it we produced too much oil. and now supply is greater than demand. we had a demand issue last year. we counted on 4.5 million barrel demand and we got 660,000 barrels is all we got. that was a problem. now, going forward and i was on the show december 23rd. i said watch the rig count. that i do oil rigs already on oil production were 1509 rigs. today it's 866. so we are getting ready to

balance the market. >> when we balance the markets, i remember you also told us back into $70 a barrel. you think that's still the case and what's the time frame for that given the oil rig drop that we've seen? >> you remember i think the way i answered the question was i said we'll be back to 90-100 within 12 to 18 months. i want to adjust that and say 80 to 90. i'm going to give myself a little room. i said 12 to 18 months. that's what i said. then i added by the end of the year we'll be at $70 a barrel. >> boone, you've been very good in the past about consolidation in the business. is it getting to a point where it's going to be cheaper for the majors to buy on wall street rather than to prospect out in the fields? >> buy on wall street. >> in other words, will exxon start buying someone?

will a large major like shovechevron build up reserves again? >> i got it. you look at exxon. they have turned a corner on their production. they produced less last year than the year before. so they're in decline and the only way exxon can get back i think their production is around half a billion barrels a day. they're going to have to buy somebody. they'll buy enron. they'll buy one of the big independents probably. if they want to get their production back to above where it was. you remember that's what exxon did on ito. is that right?

yeah they did that on -- they were number three on gas production. bought ito and they were number one. so there is a way. just like you said. buy it on wall street. >> hey, boone. in the journal today, it talks about some big oil companies giving up on their plans or efforts to expand the fracking revolution outside of the united states. and my question was is there -- is it possible -- let's say that 10, 20 years from now we go back to the rest of the world. is there just as much oil available through horizontal fracking in the rest of the world as we've been able to generate it in the united states? do we have -- that would just -- i would think there's so much more around the world we could still get out if we needed to. >> you said as much as. i can't answer that part of the question.

what i can answer is when you have oil fields you have source rock. and shale production is coming from the source rock. yes. you have source rock every place you have oil field. >> but it's also the question of cost efficiency and scale. >> if it's $500 a barrel by then. i'm talking about when do you actually deplete all the oil? i mean we never will. >> not to mention we've gotten better. >> and 30,000 feet under the sea is another big place when you can do it. >> that sounds hard. >> i agree. >> that's going to be expensive. the one to focus on is exxon's discovery in the russian arctic. and that's a big one. but what's it going to cost to get the oil out of there? >> as long as they don't want to reclaim alaska, we're okay. >> well, i tell you.

alaska. let's take 30 seconds on alaska. you're sitting there with a pipeline that transports 2 million barrels a day. it's down to 500,000 barrels. at 300,000, it gets too difficult to pump it. you need to get some oil in that pipeline. and so the obama administration ought to open up anwar and let's get going. >> fat chance. >> pardon me? >> fat chance. that's not going to happen, right? >> wait a minute. the administration's starting to come in the right direction. no, scratch that. that's not true. >> hey, boone. let's talk about natural gas. because this has been the one that has confounded a lot of people for an awfully long time. what's your prediction on natural gas prices? why have they continued to be under such pressure? >> well, i'm talking to becky? >> right. >> okay.

becky, the -- what's happened is really what we did in oil. we did it in spades on natural gas. we were so efficient, the industry did such a good job they actually showed up with too much gas. so at one time i'm talking about five years ago, we had 1400 rigs running on natural gas. today you have 300. we over-supplied the market. and, boy, we did it big time. you got too much gas is what you did. and so consequently here you are one thing about it as rigs come down for oil, you're going to be -- watch this one. but you are going to be the associated guess that comes with oil, that's going to slow down. and consequently at some point, you know i'm 86.

i think i'll see $6 natural gas again. >> are you going to live to 110? >> you think i got to live to 110? please. come on. >> i'm looking at you with a long life span boone. when you say you think you're going to see it at $6 how far out are you looking? are you looking four years, ten years, fifteen? >> oh i think i'll see $6 gas within five years. >> okay. and, boone, when it comes to what's been happening in washington, we've talked to you about this for years at this point. the pickens plan about trying to get people to use trucks the big rigs with natural gas. where does that stand at this point? >> well you know the company that i founded, clean energy fuels, our volume's coming up 30% a year. so it's happening, but man it's

happening slow. and again people have to take my age into consideration. that we've got to make some of these things happen faster. and -- but it's going to get there. i had lumpbl with a guy yesterday that has 26 hurkss00 trucks and he's looking at it very close. you're going to save money with it, but there's no question it doesn't come without a price. it's more expensive and so but you do save money. but the thing you can count on in natural gas, the price isn't going to run up on you. and like it does on oil. and you say, well it runs up runs down. that's true. but on natural gas it's a pretty low price at $2.60. >> boone, just to go looking at the downside of what's going on obviously some companies have a high dependence on junk bonds,

high dependence on other elements. one of the areas you mentioned on the pipeline is the through put. if you can't store the oil somewhere, are the pipelines going to run into a problem and is that going to have an implication on mlps that are catering to the pipeline business? >> well i -- here you are. you're going to hit an all-time high inventory in the next four to six weeks. and then you're going to decline very fast. let me give you a number that is a number that if you shut down all of the 800 rigs drilling for oil and all of it that isn't going to happen. but if you did, you would start to decline at 387,000 barrels a day. >> okay. hey, boone, we want to thank you -- >> we've got until 27 now. boone, just real quickly, oexz

state was like in the top five at the beginning of the season weren't they? >> i don't want to answer. i start to cry when you say things like that. >> they were. >> yes. >> but i'm wondering whether there's still a chance if they rise to the occasion here. because i'm filling out another bracket 37 bracket. becky tried to not fill out her bracket. >> i did not not try to. >> well the deadline was today. >> we are playing omaha tomorrow night against oregon. >> i know. i hope you win that game. >> that's going to be a tough game. >> i know it is. >> oregon those ducks, whatever game it is you can blow up the ball and throw it up in the ball and tell them what game it is. the ducks can play in ig i

think. >> i know. it's great. so now -- because i beat you. now you tried to not fill out the bracket this year. >> you know what happens when you trash talk? you gave me the best luck ever now. >> joe's got coastal carolina beating wisconsin. >> no, i'm takeingeingeing oklahoma state now, boone. >> if carolina beats wisconsin, i'll jump in the lake. >> you will? >> we've got this on video. >> we want to watch that. >> boone, thank you so much for joining us. always a pleasure. great to see you. >> sure. okay. when we come back we've got jobless claims data. we've got more reaction to janet yellen's comments. check out the futures right now. you're looking at a red arrow on the dow. the day apple starts as part of that. down 30 points.

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just a few minutes away from the jobless claims number. rick santelli is standing by at the cme in chicago. rick, the numbers, please. >> and the numbers are 291,000. that's a big jump of 1,000 from a 2,000 upward revised originally released 289. so here's how it goes.

was 289, became 290. now the most recent read 291. 2.417 on continuing claims. that's also fairly lateral move. and when it comes to a current comp balance, minus 113 billion. of course that's a deficit. it's a little bit bigger than we were looking for. it follows a revision of minus 98 to now minus 100. our last look the reason i bring that up of course is with the stronger dollar -- forget it. with the weaker euro weaker yen pretty much all foreign currencies associated with central banks affecting the value of the dollar to the upsite. the multinationals, exports. to watch the current account balance or the trade deficit is going to be very enlightening and impact gdp. preopening equities are down a little bit. the dax is down a little bit. but all things being equal, i think the big news today is whether it was the euro or whether it was you know some

of the european markets in the wild corrections due to janet yellen and company. they're actually moving back in the same direction they were before they were kind of interrupted of central bank. and i do think you want to look at these trends in big terms. remember, something's long in the tooth. i understand that being the short euro position as one mentioned, but in the grand scheme of things you know it's very compelling to look at the direction of the european central bank and think that that trade could get even longer in the tooth but still be profitable. i think that's the type of thing traders are going to be looking at today. >> okay. thank you for that rick. let's get to steve leisman who has more on the fed this morning. >> real quick the claims number is nice. we had jumped up above 300, back down towards 290. and i think some of that softening from february worked

in. we have a terrific guest right in the studio who's going to give us live comments. but here's some of the guys i follow. goldman sachs says liftoff considerably more likely in september than june. a lot of folks hearing september yesterday than june. pier pierpont saying every substantive tweak is dovish direction. everything else they did screamed patient. i don't know who's supposed to introduce our guest here but i also have -- it's becky. >> well actually steve, stay right here. we want to talk more about this. in the meantime let's bring in the chief economist at rbc capital markets. tom, thanks for joining us. >> thanks for having me. >> would you agree with commentary they may have removed the word "patient" but everything else they did screamed patience? >> that was her m.o. yesterday. we've been saying june for a really long time. we're not going to change that call at this point. i think the reality is by removing patient, you put it on the table. there's no questions that the odds of the june hike have faded

to some extent. now people are piling into the september view. i have to be totally honest. this is not sort of a two-handed economist view on this. i don't care if it's june or september. >> that's the most important thing i've said all morning. >> it doesn't make that much of a difference. you know, we'd like to get it right. i'd like to be right that it's going to be june but again practically speaking -- >> mario, in the grand scheme of things, over the decade or the fiver years of your investment horizon, rate the difference between june and september. >> no difference at all. and then a different question. you've got an economic question versus the stock market question. in 1981 i botught a 10-year. you look at the end of it. >> i think if i had my rates

strategist here, he'd be in the fetal position by me saying there's no difference between june and september. because from a short-term particularly rates market perspective, sure. those guys are going to feel pain from that. but i'm speaking big picture macro. >> for people playing this the reason we saw the dow up 227 points yesterday is because people think okay we've got a little more time left in this where there's nowhere else to go but the stock market. >> right. look here's another idea that i think it's worth exploring a little bit. if you have the ecb engaging in qe now in a significant way, i think people have to keep in mind what happened back in '04. when greenspan coined the conundrum phrase you could go through conundrum part two. a lot of times they find homes in the treasury market. whenever that is june or september. when the fed finally does

embark, what you could have happen is ten-year yields could go nowhere. most people think they will lift. but i would remind people of the conundrum. and it was very similar. you had all these flows basically entering the market. this time it's magnified. i think that's an important point that most people aren't talking about. >> mario, you would say? >> the trab that we're in is different. and that is the consequences, for example, the discount rate on pension plans for both state local and corporations has come down to you look at balance sheets today, look at the footnotes footnotes. you'll see the swing. so take that aside. what's the negative of these lower interest rates in nominal terms over a large number of industries? and that's what we're thinking about. and what are the implications for that and what is the valuation. future stream of earnings today are worth a lot more. so is that realistic? is that valid? and so -- that's how i tie all of this to the equity markets. stock and company specifics

opposed to looking at what draghi is doing to inflate assets. >> can i ask tom joe's question which is does the quarter point really matter? if they did the quarter. and he goes not putting words in your mouth, but why not do a quarter? is it not the better part of prudence to take that quarter, put it in the market and have that on the way? >> i think the fed is desperate to get at least a quarter point in this year. i think what people have to keep in mind now is october 15th. that was a nightmare of a day from a rates perspective. and we know that it spooked officials because i think what that made them realize is wow, are there really this -- is the market really this fragile? >> really this stupid. >> that's the question right? >> i think as a result of that, they would love to get a hike in there. >> will the market then take all of that future rate hikes and bring it forward to today? will the market behave?

>> done as of yesterday. >> maybe yes, maybe no. >> i hear music in my ears so i know you're cutting out, but -- >> they shlusually ignore it. >> yeah. i don't hear a thing. >> there's a lot to say on this topic. we can talk about it at another time. >> tom, thanks for coming in. great talking to you. steve, thank you. >> my pleasure. when we come back this morning, facebook groupon, and twitter. we'll ask scott cooper at tech valuations and why he thinks it has room to run. first look at the u.s. equity futures. after a strong update yesterday you'll see the dow futures giving back about 41 points this morning. s&p futures down by just about 3.5. nasdaq up by 3. stick around. "squawk box" will be right back.

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welcome back to "squawk box" this morning. more than 70 new companies are valued now at a billion dollars or more including social site pinterest. $11 billion. the big question, do these valuations hint at start-up strength or signal a bubble brewing? here is the managing director of andreessen horowitz. thank you for coming in. >> thanks for having me. >> you look at these unicorns -- are these unicorns or not? >> they're certainly unicorns in the sense there are not that many that get to this level of valuation. they're not unicorns in the sense that i think we should not

be worried about these valuations. a lot of what's happening is these companies are staying private tremendously longer periods of time. that's causing to confuse the private markets with bubble talk. >> one thing we talked about is the issue that while they remain private, they have public investors. >> that's true. >> so we look at t. roe price and blackrock. what does that mean? >> i think you talked about it earlier. the biggest trend that's happening is the shift of dollars from the public markets into the private markets. sop if you're t. rowe and you're saying where am i going to make my money? there's not a lot of growth in the tech markets publicly. a lot of the companies that just quite frankly aren't growing significantly. so i think what this is more a reflection of is if we're going to beat our benchmark, we've got to come in more. >> what does that mean for the average retail investor? >> it's not good news for the average investor. very challenging. >> go back to 1999, everybody

went public. >> i think so. there's a couple things that happen. the s.e.c. passed the jobs bill and i think that helped with that part of it. what it hasn't solve sd the structural markets are still hostile to the small cap companies. you've got no research coverage no liquidity, it's not a good place to be. so the money's available in the private markets. you're better off taking that money and being able to grow. >> so you monetize your wealth that way by looking at the last round in value the company based on the new marginal buyer. which is what happens in the stock market anyway. >> i think that's right. it's happening now we see the shift from public to private. so data point just to give you perspective, in 2014 tech ipos average 11 years from start to ipo. if you look over the 35-year history of ipos of teches it's five and a half years.

>> four and a half is bad, 11 years is probably bad too? >> i think 11 years is bad. the retail investor has no chance of seeing any appreciation. all the appreciation is going to, you know accredited investors or institution who is can afford to kind of get into the private sector. and it just means the companies are going private later which means the public market appreciation is muted. >> but the retailer investor could buy t. rowe price and come in not directly. if i'm at calpers and i'm a retired teacher and they invest -- we have the same dynamic. somebody's making money. >> talking about investors getting in early. you know alibaba's lockup just came off yesterday. are you hearing that people are going to get out? what's the -- >> so we're not an investor at alibaba. everything i've heard is purely anecdote ta l anecdotal. if you look at this, i think people will be exiting if you look at the early investors. i wouldn't be surprised to see people do it. most of the venture firms, when something gets public you ought

to have a really good reason to hold it or you ought to forget it. they're not paying us to be -- >> and not only that you lock up your return. >> that's exactly right. i wouldn't be surprised to see people take out money. >> don't forget you get your carried interest which is a tax advantage when you sell. not when it's marked up. >> exactly. >> let me ask you about another investment. lyft which competes with uber. sort of two thoughts in the world on this. one is it's a winner take all business that only one business wins because of the social networking effects. then there's another view that is like sort of like the telephone companies. . you can get two sort of like verizon and at&t and everyone has enough coverage there's enough cars everywhere that you can have two compete. i assume you stand on the second. >> you said to take a guess? >> on the second version of that world unless you think it's one and lyft is going to be the winner. >> we don't think this is a winner take all market. liquidity is very market specific. lyft has run the numbers and we've seen it which is you only

need a certain kritcritical mass. and gives you sufficient liquidity to have reduced wait times. we're in the latter category. there's huge growth in both markets. >> does uber's valuation make sense to you? >> i haven't seen their numbers. what i can tell you is part of that investment at $40 billion is things like a convertible note discounts to ipo, it's not entirely clear how to value that. >> there's been a lot of unspent private equities there. >> there still is overhang from kind of the days when they raised a lot of money. >> thanks for coming in this morning. >> thank you. appreciate it. when we come back this morning, jim cramer from the new york stock exchange. he will join us live. plus make sure you join us tomorrow. former pimco chief economist paul mcculley will join us. "squawk box" will be right back.

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so many networks all in one place. get live tv whenever you want. the xfinity tv go app. now with live tv on the go. enjoy over wifi or on verizon wireless 4g lte. plus enjoy special savings when you purchase any new verizon wireless smartphone or tablet from comcast. visit comcast.com/wireless to learn more. new york stock exchange. jim cramer joins us now. saw you. you're in there, jim. you got your own bracket, your own group, don't you? >> yes, we do. i went with a different orientation. i wanted nova all the way. either you went with the idea -- >> i took nova too. a crazy one, eastern kentucky, winning it all. >> you've got to do a crazy one. the point is when you have a favorite like kentucky that's the $2 to win 210.

you have do it with kentucky but then do one with maryland blows out kentucky oracle notre dame. it's more fun. if kentucky goes out in the second round, half of the country country's going to be in a terrible funk. >> looking at this culturally i don't remember feeling like this, ten years ago. it's gotten bigger and bigger every year it's weird. i honestly think productivity is going to be down for the next couple of days in corporate america. it has to be. i mean you really want to not know about dayton? do you want to risk that? who can risk that in their job, not know about dayton? that should be shameful. >> in short with yellen yesterday, one business question, whether -- i think she's happy she was able to 0 it and the market closed higher which is weird. >> she doesn't want a currency crisis february data weak enough she can get away with this and she's a very smart person.

nothing wrong with stock prices going higher. that's an okay thing. >> thank you. countdown is on. three hours, i think. see you in a couple of minutes. your countdown is seven minutes i'm was talking about the first game. >> hi. >> oh here we are. when we return known for media picks but there are other names in his portfolio who he thinks he can make money. he's going to tell us about them when we return.

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time for rapid fire stock session with mario gabelli. you like health and wellness as a category. your favorite? >> over the next several years several parts and that's the companies that produce body parts, like knees, hips and body parts, and the health consolidation i'm talking about the notion of individuals that want to have less salt less sugar, and less elements that are antibiotics in the food chain. companies like international flavors and fragrances i have 80 million shares $118 stock, 550 in earnings new ceo, currency short-term challenges

but observever the next three or four you want to buy buy. and -- >> stuff that makes food taste good without adding too much salt? >> correct. how do you maintain the taste without the salt sugar? how do you do that? how do you sell the pepsi? you're the gum on the back of the envelope if the gum isn't on, it doesn't work. second, that's area, we are talking about companion pets the notion of 93 million cats 88 million dogs in the united states alone, and you are paying to take care of them what are the companies that distribute health care products? what treats food? what are the companies that's in the dental business i happen to like patterson company, going through their own challenges it's 100 million shares $50 stock in minneapolis-st. paul area. in addition, going to a totally different area -- >> i want to go media. >> i've got to trunk you first.

nava star, europeans want to consolidate, there that is a numbery. stock's 28 80 million shares a bargain. >> sony? >> yes. >> why? >> oh i think abe has given the animal spirits to the japanese. the company's got a billion shares at 28 28 billion, the a tiny morsel no debt if they sold off financial services. they are morepheous coming playstation 4, a big winner and thinking of profits. laying off of people. the whole culture of japan has changed. in addition, vivendi has a lot of cash, 22 euros, a big cash i don't know where they're going. i would love for them to buy an american company. and -- >> we'll run out of time. viacom. >> you want to hear about it? >> still like viacom?

>> they've done a lot of things right and the question is not if but when they -- the family decides to sell. >> this is -- you're playing for terminal value, if you will? >> there's fundamentals, too, andrew. there's 400 million shares -- >> that's my bet. i have viacom, he's got apple. >> that's irrelevant. >> you may be both right or wrong, that's your bid. mine is simple 40 billion, they still have scale. >> this is a -- we've got to go. >> thank you. thank you. sorry. love you, too. join us tomorrow. watch cnbc all day. don't worry about the stupid basketball thing. join us tomorrow. "squawk on the street" is next. ♪ what goes up must come down♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at new york stock exchange. david faber is off.

premarket, relative steady but anything looks steady after yesterday's wild ride courtesy of the fed. oil lost a good chunk of yesterday's gains, sitting below the mid-40s there, 43.10. the dollar of course winded after the biggest