29th 2015 and squawk box begins right now. ♪ >> live from new york where business never sleeps, this is squawk box. >> good morning everybody and welcome to squawk box on cnbc. i'm becky quick with joe and andrew. big media news this morning and good news for seinfeld fans. hulu striking a deal for reruns of the sitcom. terms of the agreement were not disclosed but the licensing deal is worth $180 million. we'll have more details later this hour. but if you are just waking up this morning, let's get you up to speed on the markets. check out the u.s. equity futures. yesterday under pressure for much of the day but ending higher. at this point the futures are indicated slightly higher with the dow up to close to 12 points and nasdaq it's a break even at

this point. >> let's tell you about the big stories we're watching this morning. a first quarter read on the first quarter gdp at 8:30 eastern time. forecasters say the economy likely grew at a snails pace. also the fed wrapping up it's two-day policy setting meeting in washington. announcement set for 2:00 p.m. eastern time. no changses expected on rates just yet. beyond the economy there's also a busy day in earnings central. we have companies set to post this morning before the bell mastercard mondelez and general dynamics. also we're continuing to watch the situation in baltimore. things were quiter there. demonstrators for mostly peaceful. less than a dozen arrests compared to more than 200 on monday. curfew ended at 5:00 this morning. go back into effect tonight and

we should tell you that today's baltimore airlines game will be in the afternoon and will be closed to the public. the team's weekend series against the rays will be played in tampa instead of home in baltimore. >> the next five games are not going to be in baltimore. that's weird, though. >> yeah to play in an empty stadium. >> yeah, it's weird but, you know, they'll get it done and get it on the schedule. >> that's never happened before. >> no they have to get 162 games in. they cancelled a couple of them and got to keep doing it. switching gears, back to wall street, a number of stocks on the move this morning. twitter revenue falling short of estimates. company cutting it's forecast blaming weak demand. for its new direct response adverse tiegz adverseing and twitters results were leaked before the markets were closed in a tweet that said it found the numbers on the companies investors relation website. we'll talk to an analyst. so twitter actually did it and i

don't know -- i couldn't -- >> you thought twitter did it? >> i'm saying that i thought it was a tweet from twitter but it was generated by twitter from selerity but i immediately thought of like some guy over at twitter is like dude you just released the numbers, man? oh was that -- oh man. i think they're stoners. >> which is what he told us about a year ago. >> dude what are you doing? >> twitter was quick to blame the nasdaq because the nasdaq operates it's investor relations website. >> yeah. the old routine. >> we've had this a couple of times now though. >> dave. >> jp morgan's earnings. >> it's happened to a lot of different companies but what usually happens is -- >> you think it was the stoner hitting the -- >> plus they're worse when they're bad earnings because you can't say anything. you don't know what to do about

it. >> it wasn't bad earnings. it was bad guidance they're giving. >> 6 million on the market cap loss or something. >> anyway no evidence that anyone was wasted but we don't know that they weren't wasted. anyway, goproshares getting a boost. the company citing strong demand for its flag ship hero four action cameras and a mixed quarter for kraft foods. erngs erng earnings beat estimates. a big miss for buffalo wildwings on the top and bottom lines. the restaurant chain hit by higher food cost. the price per pound for its traditional chicken wings increased 41% in the last year. and i, you know my idea they're getting out of antibiotics. nobody wants gmos. so i guess, if my idea of breeding genetically altered chickens just to make them

cheaper. >> might not go over so well. >> people aren't going to like that. >> what are you going to call them? >> you know those wings are small, right? >> what are you going to call them? >> i don't know. but you need one chicken for every two of the buffalo wings. it's not chair to chickens or people that love wings. >> you get four because you get the legs and the wings. chicken wings are also some of those legs. >> no they're not. legs are drumsticks. >> but you drumsticks too. >> what is the big drumsticks you get from the chickens. >> bigger chickens. >> are you sure? >> yes. >> so you get four per chicken? >> yes. >> but you'd like six i know. >> they must look different. oh, okay. there's the little wings and then the bigger the part of the buffalo. i prefer the littler once. >> i like the drumstick ones. >> you like the drumstick ones. >> yeah they got more meat on them. all right so they already have

four. >> i can make an argument for six or eight. that would be more productive. >> efficient. >> but guarentee you that the politically correct people aren't going to let us do that. >> that's what they called them. >> three or four breasts. >> politically correct -- >> it's the marketing they have the problem with. the chernobyl wings. >> the quarter current quarter profit will fall short of estimates. the ceo will join us first on cnbc at 7:30 eastern and the amount of product knowledge that becky has about what this company does is its technology is going to be in full display. >> you wait. >> so you knew enough to even figure out i was doing that

interview. >> oh, yeah. >> if it was going to be me i'd have to read up a little bit. >> i remember what they did 10 or 15 years ago. it was involved with the internet. >> it goes to the whole neutrality. it goes to net neutrality. >> it is a three anchor show. we'll all three get the chance to talk to him. >> can you say it akami. can you say twitter. >> if it hits you cold on the prompter. >> think i might have a tough time? >> you said earlier it was -- >> what was that? >> nothing. it was really funny that you just -- just now? >> a lot quiter. >> i would have added the er myself. i would have said they probably didn't mean that and i would have gone with it. just on my feet and just say, you know i'm going to stay

quiter because they probably didn't mean it was a lot quiter in baltimore. >> you know where it was not? with twitter last night. >> that was. >> that was a noisier situation. >> you sound nice. >> just get ready. we're going back to twitter right now. the stock having it's second worst day ever yesterday down as much as 22% on weak revenue and guidance. taking close to look at metrics. ad revenue up 72% year over year. total monthly active users jumped 18% but the mobile portion came in lighter than what the street forecast and that's where the problems begin. here to break it down with us is ronald. good morning. so well first before we even get there, 3:00 rolls around you're hanging out on twitter. how do you get the results and do you think that they're real and what was your first instinct on this. >> we got them the same way, everyone else saying -- we were very surprised. just a search for more information and more and more

news and tweets come out and you say this looks more and more real and the company took the bull by the horns and released it on their own so that was a good thing. surprise to everybody. unclear what it was and the stock reacted right away and more so immediately following. >> so the bigger question is is the stock market if you will reacting properly to this new guidance? meaning is this guidance as bad as everybody seems to be taking it? >> so i mean it clearly wasn't a good guidance and the quarter came in lighter than expected and a lot is due to how their direct response advertisers advertising did in the quarter given the company is in the middle of rolling out a new quality score algorithm which could improve overall equality of leads and bottom line is there's a little bit of disruption in the core business. stock down as much as it is because of the fear of unknowns in term of what that change in the quality score is. our thesis is basically that

frankly this quality score sounds a lot more -- very similar to what google does maybe to a little bit of what facebook does. there's a precedence so how they're doing things and overtime from an advertising special circumstance tif you do want to pay for better quality leads as opposed to more quantity of leads. it's the right thing to do longer term but how much of a disruption in the short-term is it going to be? that's why you're seeing the stock react as it did. >> isn't part of the question that the revenue coming in below expectations and revenue guidance for the current quarter, a lot of this has to do with this is happening as they're starting to ramp up and monetize the site. this should be the low hanging fruit. does that raise questions about what they have to do when it gets more complicated? >> that's a good question. i would almost say the low hanging fruit was maybe a year or so ago.

but what happened this quarter is because of what this quality score did and the change in terms of perception in quantity versus quality it impacted overall rates and that drove some advertisers to the sidelines so i would argue that the low hanging fruit was maybe last year and now we're getting to more of a robust advertising tool that has all the opportunities in the world and the question is how quickly can they do that. >> right. >> how hopeful are you on the video stuff? they seem to be launching. we'll get to a point where you'll be going through your feed and it's going to launch video almost automatically. they haven't done it yet but that's the word of what may come next. >> yeah, video is a huge opportunity across the web. certainly with facebook and twitter just launched the ability for consumers to post video on the app and edit it directly and with the launch of

periscope recently. i think video is the future. started with snail mail and going on into e-mail and now direct messaging and twitter more instant in the real time so when you think about what twitter can do and how they're changing the communication among users i think it's here to stay and will get more and more prevalent as time goes on. it's one of the multiple catalysts we think still exists. >> what's your target price on the stock? >> so our target price is now $48 down from 52 previously. >> okay. we'll leave it there. appreciate it. >> thank you. >> also quick programming note twitter ceo is going to be on squawk alley from san francisco i believe this morning. he's just down the street from our studio. that's going to come up at 11:00 a.m. this morning. >> let's get more on the trading day ahead. joining us is phil orlando. if i had to sum up what you said

recently and what you're going to say again today it's stay the course i think. >> i think that's exactly right. we put out a note about two months ago. the market had it an all time high at 2120 and there were a couple of things that concerned us. the fed meeting in march, we thought there would be a lot of confusion among investors there. we thought first quarter earnings and gdp would be terrible. all of those things happened but we didn't get the 5 to 10% correction in the market. we got 3 to 4%. so we changed course a couple of weeks ago and what we got wrong is we underestimated how intelligent the market was in terms of looking through the transitory issues and we think we'll move up to a 2350 level by the end of this year. >> you think that's the key. transitory. the dollar is transitory. the depressed oil sector transitory. one thing it will do i think in your view is delay the fed. maybe they'll do one and done but also your forecast for the

economy, you're looking 11. >> but 3% for the balance of the year. >> 2.8. >> 2.8 for the full year but the run rate second quarter on is going to be 3% plus. >> you have a high degree of confidence in 2.8. >> we do. what we're focussing on is the run rate. the first quarter is going to be terrible but i think a lot of investors in term of the weather understand the transitory issues that have driven the gdp number poorly. >> one thing we talked about a lot is the disconnect between corporate profits and how we feel about the overall economy. corporations have done well and done a lot of financial engineering. increased financial productive and they have been doing well but we think that's fed induced in a way too and we haven't seen the economy going gang busters

yet. >> i think you're right in that we're about halfway through the first quarter earnings season and the revenue numbers have been poor. flat year over year revenues. only a third of companies have beaten. the earnings numbers have been better because companies have done a good job of talking down the street so we're getting about three quarters of the companies have beaten but companies have done a good job of talking the streak down. so we're getting the better earnings numbers, share buy backs, the improvement of product activity et cetera rather than the strong top line growth. we think that will come but it's not showing up in the first quarter. >> and the fed won't move quickly at all? >> our best guess is -- we were in the june camp until we saw that jobs number which was terrible so that pushed us out to september. so our best guess is one and done but not one in terms of one hike. 1% is the thing. so what we think that we're going to see is a series of

quarter point hikes starting in september at every other meeting which will take us to roughly 1% of the funds rate next june. at that point we think the fed pauses. how does the market respond and economy respond? and give us a chance to see what the impact is. >> that makes a lot of sense but i haven't heard people lay it out. they'll get something out there so we're not at zero. if they come back every other month by the third time they actually raise rates does the market start to freak out thinking we don't know how long this is going to go on or how high it will go? >> that was initially why we thought we might get the 5 to 10% knee jerk reaction down much like the taper tantrum in 13. at some point the market is going to come along to our point of view and get a sense of what they're going to do. the fed isn't going to try to kill the market or economy but they want goat back to one. god forbid something happens in the world. >> that makes a lot of sense. >> we reset and we think 1% is

the right number. on the job markets. tighter than people think. wage growth is going to go up for that. it's going the other way finally. more people getting off disability than getting on for now which means the job market is a little better. >> was it the times? >> it may have -- i do read things online sometimes. i don't like it but i'm reading it. >> this is the -- i read the same thing and i didn't read the huffington post. >> well you should. >> i didn't this morning. i know that i saw it anywhere. where was it? no, one of our chairs topics. >> one of our chairs topics. i knew i read it somewhere. we read a lot. i get up at 1:00 a.m. >> absolutely. >> thank you, phil. >> just trying to see where that came from. it's a reuters story. >> it's a reuters story. might be true. >> when we come back this morning shares of gopro climbing

on strong demand for its action cameras. but first here's a look back at this date in history. ♪ flo: hey, big guy. i heard you lost a close one today. look, jamie, maybe we weren't the lowest rate this time. but when you show people their progressive direct rate

and our competitors' rates you can't win them all. the important part is, you helped them save. thanks, flo. okay, let's go get you an ice cream cone, champ. with sprinkles? sprinkles are for winners. i understand.

attention seinfeld fans every episode of the show about nothing is now going to be available on demand from hulu the digital streaming service signing a deal with sony tv for reruns of the hit nbc show said to be worth $180 million. the wall street journal reports hul outbid amazon and yahoo! with a price of $700,000 per episode. hulu is coowned by disney 21st century fox and our parent company comcast and this is -- we try to do docs here that are evergreen and nothing is evergreen. if anything is close -- >> the marijuana ones have been pretty close. >> but now it's legal so -- but if anything is really evergreen it might be this. jerry wears funny outfits and everybody looks a lot older now and things that happened in real life have already been covered.

>> i don't know whether it was larry david that the h the double dipper. the chip is too big. >> it's a john and paul kind of -- sum of the parts. >> generationally. >> my daughter. >> totally? >> totally. >> when i watched the brady bunch -- >> that is not evergreen. >> it was. >> it wasn't funny the first time, dude. it was lame. it was lame. >> just saying. >> marsha marsha marsha. >> it was lame. >> i watched it nonetheless. >> different strokes. >> i'm keeping track of them. i'm talking seinfeld and sorkin brings up -- >> growing pains? full house? >> stop. >> you mentioned evergreen docs and there's a doc i think will be evergreen on this network

it's going to run tonight at 10:00 p.m. eastern time. >> oh yours. >> 10:00 p.m. eastern and pacific this evening called white collar convicts. >> even the whitest collar prison is still scary and cool but even going into these is nervous. >> he got nervous. >> i bet he did. >> you're just a big 1%er and you're at risk. >> we were with 1%ers inside the prison. >> that's true. >> and i think some prisoners like the 1%ers because they figure if they ever get out that's a connection they could make, right? >> not only that but there's level of extortion that go on. there's a whole underground economy. >> is that in the dock. >> it is in the dock. >> you got to watch. >> i'm going to watch.

again and again and again. >> thank you sir. in the meantime consumer news this morning, which retailer has the lowest prices. it seems like a simple question. the answer can be complicated but cnbc has a study that shows which retailers have higher prices and which have the best deals for identical products and courtney is here to tell us all about it. >> here's the headline, target misses the target on the lowest prices and best buy isn't always the best buy for consumer electronics. cnbc teamed up with pricing firm nerd wallet to track preshipping prices online on a range of 11 electronic products 12 weeks from a camera to ipads, television sets. we looked at five retailers, best buy, walmart, target amazon and costco. on april first it was $30 higher than target.com for this l.g. 42 inch tv. walmart out of stock on the item. while you will pay for on best

buy.com they did have the best track record for being in stock. only one product was out of stock one time during our tracking. now the king of the priegscing jungle amazon. walmart.com was a close second. the lowest price on amazon.com for this vizio smart tv was $149 lower than the highest price on target.com. this time of the year is price competitive and all retailers change prices frequently to stay competitive. most offer price matching programs which is what best buy and walmart pointed out when we reached out to them for comment. so you can often get the lowest price but it might take a little homework. you're going to have to do the work yourself. >> so here's what i'm trying to figure out though there doesn't seem to be a rhyme or reason. i can't just go to one place? is there a search place?

>> i think again the headline conclusions is that walmart and amazon seem to have the lowest prices most often. >> but only for specific items. >> no most of the time. so we tracked it for 12 weeks and we did this highest, lowest middle, most of the time walmart and amazon will be the lowest prices and we think that that's because they have the most sophisticated algorithms. so a lot of this is computer driven and the sites are searching other sites making sure their prices are the lowest. target appears to either not be playing the game as aggressively or perhaps it's technology for searching other prices and it's algorithms aren't quite up to snuff. again all of this will be matched with price matching if you're really diligent but if you want to feel good amazon or walmart.com is probably your best bet in this scenario. >> if you have amazon prime. >> and with amazon there's third party sellers so if that matters to you it's clearly marked. if you want to get it from amazon or a third party you can

tell. >> thank you. >> we should also talk about go pro shares jumping this morning. erin the numbers were quite a bit better than most people expected. you're raising your rating on your price target as a result. >> yeah well we upgraded this stock about three weeks ago. the quarter was much better than an gattis pad pated. more importantly when the conference call started to roll around at 5:00 yesterday the earnings guidance was extremely strong. 380 to 40 million on the revenue line. we had been looking for 300 million. so we don't see this brand slowing down any time soon. >> you raised it to overweight for the rating. your price target is $47.02. the stock is at 53. >> so we raised the stock a couple of weeks ago. we went to an overweight at a $55 price target. we're now at a $66 price target. so feel very confident in the

continued momentum. >> i read that wrong. $66. i see that. we know that part of the strength came from internationally. what is it? half of their revenue is overseas right now? >> yeah about 50% of their revenue so continuing to see the brand just really take on new avenues as we move internationally. >> and in terms of competition, that's always been the question about go pro how long can they remain dominant. you have other companies eyeing the space. do you think someone else can come in or will they remain dominant for sometime to come. >> if we take a step back on the brand, they have an extreme amount of brand equity and has a broader ecosystem which i think a lot of other competitors can't compete with so they're creating very strong digital content and keeping users engaging in this content for longer periods of time. so i think ecosystem is what takes this brand to the next level so we do see it having

very very strong runway both domestically and internationally. we take a step back and it fits two broad themes across the board. the first is the consumer continuing to engage and experience healthy active lifestyles and the second is the obsession with documenting our lives. we're seeing the usage of the action cameras move much more into the family and much more into the home. >> great. thank you for joining us today. >> thank you. >> okay. coming up, lumberly ly inquiryiquidator. and white collar criminals capture our attention when they're caught and tried but what happens when the spotlight fades? we'll take you behind bars next.

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this is a devastating blow i was not prepared for. well, i'm gonna finish packing my things. 15 years will really sneak up on you. jennifer with do your exit interview and adam made you a cake. red velvet. oh, thank you. i made this. take charge of your retirement. talk to a state farm agent today. there's some facts about seaworld we'd like you to know. we don't collect killer whales from the wild. and haven't for 35 years. with the hightest standard of animal care in the world, our whales are healthy. they're thriving. i wouldn't work here if they weren't. and government research shows they live just as long as whales in the wild. caring for these whales, we have a great responsibility to get that right. and we take it very seriously. because we love them. and we know you love them too.

. >> news from lumber liquidators this morning. scott joins with us details on that. good morning. >> we knew it wasn't going to be pretty when they reported it's earnings in the light of that scandal but in the sec filing that goes along with the earnings report a little nugget about the criminal investigation that's been going on with the justice department lumber liquidators saying that the doj notified the company it plans to seek criminal charges over the company's sourcing involving the lady act which is about foreign sourcing and that that is likely to cost in the neighborhood of $10 million. it could be more or less. that's the legal situation that

continues to go on with the issue of floo wlwhether the flooring from china is safe. meantime with the 60 minutes report that came out during the quarter sales did fall. open orders did go up. company losing 29 cents a share. wall street expecting a 60 cent a share profit versus $258 million. open orders increased about 8% to $52.6 million. some holding off on purchases. one showing it's sticking with the company and the company announcing it's cfo we heard on the conference call earlier this month about the legal issues is stepping down effective in june. they have a conference call 8:00 eastern time we'll be on it. >> we're looking at the stock right now. looks like it is down 32.50 off

of a year high. so this stock has already had the brunt of a lot of this. the question is how much remains? . we'll have to see that. they buried that in the doj filing and not the press release. >> we'll be watching. thank you very much. staying on the legal theme tonight we're premiering our ground breaking new documentary white collar con victims. white collar crime costs a trillion dollars a year but how do we treat the criminals responsible for the epidemic? we thought viewers needed to see the reality behind the gates this was the first time in 15 years that a national news crew has been allowed to shoot inside a federal prison and interview an inmate.

>> there's a perception on the outside that it's the equivalent of club fed. true or false? >> false. i'm not going to pretend that serving time in a camp isn't easier than saying serving crime at a higher classification institution because it is but in the end prison is prison. we told where to be. when to be there. we're told what to eat and what to wear. shake downs and strip searches. all the same. >> strip searches. >> yeah of course. you leave this visitation room on a saturday or sunday they're going to take you down. everything is off to make sure that we're not bringing anything in. >> that's a financial advisor from nashville. sentenced to more than ten years for stealing more than $5 million from his clients. he's one of a few that admitted his guilt and you can come inside to see how he lives in white collar criminals life on the inside.

that's tonight at 10:00 eastern time and pacific. we'll be talking a lot more about this throughout the show. >> he is serving a ten year sentence. how far in is he? >> just about a year or two. >> you were in ken. >> i was in kentucky. >> where did you fly into? >> that's a good question. >> louisville? >> no flew into louisville an then drove a couple of hours. >> you were in kentucky. >> i was in kentucky. >> wow, that must have been something. >> why do you say -- >> i don't know i'm from right next to kentucky. >> went to kentucky stayed at a hampton inn. >> do you know who else is from there? george clooney. >> i should have read the intro. i don't think you should call your own special groundbreaking. we don't have to do it again. >> the next part then. >> no, this is not about the -- >> it is. >> it's not about your grown breaking special it's about that we're going to talk to some guys that are white collar criminals.

>> that are in the ground breaking special. >> it's ground breaking that you visited a fly over state. >> we're going to be joined by bernie kerik and former former qwest ceo and we'll talk about them in the documentary. >> you will see him in the flesh today today. he newsed to come on. even before he did anything wrong i thought that was criminal. it was. it was so bad. anyway, coming up, forget stocksor bonds. we have a whole different kind of investment for you this morning. a coin collection expected to sell for more than $200 million. the biggest private collection ever. an 1804 silver dollar in almost

perfect condition worth like $5 million. first as we head to break, check out the regular dollar. not worth a lot. but it's worth more than it was a year ago. stay tuned. squawk box will be right back. ♪

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>> a glitch with ipads used by pilots forced about two dozen american airlines flights to be grounded last night. the company says the issue was related to a problem with software applications on the devices. apparently it was a problem -- what i didn't realize is they all get their flight plans on their ipads which is why they have them.

they were blacking out and weren't getting them. they had to correct it and it was something with the 737s. >> used to be that you had to carry around these massive books and they didn't want to do that anymore so you thought technology was supposed to help but if the ipad goes down you have a problem. >> you would think there's a paper back up. >> you're supposed to have two or three. >> they had two but they're all on the same system it would be pretty easey to disrupt. >> troubling from the idea of the grid and internet itself. our lives are -- there are probably lives depending on those things being up and running. >> but i started wondering we hear about problems with the grid if something happened but what happens if you're up in the air when that happens? >> that's why the pilotless plane is still on. >> no, the plane --

>> why couldn't they take off? what happens if that thing blacks out in the middle of a flight? >> oh i think you should still get down. the issue from what i understand about it was that it's a tech until -- technical issue. >> which makes me think there should always be a paper back up. if that's the case. we can tap dance our way around it. >> this one is is worth 5 to 10. >> 5 to 10 million? >> it's one of the few. they're auctioning off some of the rarest u.s. coins and we have them here from a private collection. the biggest or at least the most valuable ever and brian joins us

with some of the famous coins. >> this is 10 million here? >> potentially. >> it's an 1804 silver dollar and i had a bunch of silver dollars. i had some old quarters and dimes and half dollars and i never understood the stamp thing thing. but these you can be transported back. it was made at a time when -- who was president in 1804? i flunked jeopardy on things like that but it's cool to see these. who are -- what are -- are these the five biggest draws would you say? >> close, it's a mix of some of the biggest draws. we will be selling this collection over the next three years. so i brought two of the highlights from the first sale which will happen on may 19th. >> can we look at them? >> absolutely. three that will come up at a later point in time that's the

highlights. >> you'll raise 200 million you think for people that really have a lot of money to do this? >> we think when it's all said and done we could exceed the $200 million one. >> this is a 1797 half dollar. >> 1897. >> they're in amazing condition too because the ones i had the center of the coin you couldn't see them. you can't see it. they're flat. >> that will go for? >> 1.2 to 1.75 million. one of the amazing things about the collection is the fact that the coins are really focused on the 1790s to the 1840s. and if you think about the connection through history, when these coins were made they were put directly into circulation. >> this is beautiful. being in this good of shape is amazing. that's a gold piece snlt, isn't it?

>> an 1822 half eagle. a $5 gold piece and that could bring $10 million as well. it's one of three known in the finest. the finest of three known. the other two are in the smithsonian. if you want that coin and you're a collector there's only one shot to get it. >> we'll talk about the return. the return over -- they have held up better than a lot of collectibles. coins over the past 10 or 20 years? >> there's been a lot of studies that show when you look at collectibles and their returns coins are up there. >> finally this last one is an 1808. >> that's an 1808 quarter eagle. >> quarter eagle. >> it's 2.5 dollars. so that's the finest known

specimen. the only one in mint state available. >> it goes for. >> we have that estimated at 1.2 to 1.75 million. >> this was a texas property developer and her son that put this together? >> that's right. the father is the founder of lincoln property company so one of the largest real estate developers in the world. >> great. thank you very much. >> absolutely. >> and you know how many you brought in i guess, right? >> we do. we'll count them on the way out. >> when we come back this morning, five. i saw. >> a high flyer for investors. shares of cbre group soaring 50% in the last year. the commercial real estate ceo will join us next. ♪

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welcome back everybody. commercial real estate firm cbre just out with better than expected earnings with revenue essentially in line. the stock is up nearly 13% this year. bob selentek is the ceo of cbre. thanks for coming in today. >> thank you becky. >> it looks like business was up across the board in just about every region and every business line. >> business was up all around the world. here in the u.s. we saw revenues up 20%. europe and asia were under a little pressure because of the strength of the dollar. both of them impacted about 10% by the strength of the dollar but good growth around the world

in all of our product lines. >> overall, though how does the dollar weigh out? i know it puts pressure in asia and europe but there were two cents of gains because of dollar and hedging activity? >> yeah we had hedges in place and had a couple cents of gains from the hedges but the revenue was pushed down the growth in our revenue was impacted to the tune of about 5% because of the dollar around the world. 10% in europe 10% in asia. of course not here in the u.s. >> how do you deal with that in an ongoing basis because nobody is expecting the dollar to get much weaker from here? >> well, we have hedges in place. now, i will say in this environment, our biggest business, our strongest business is here in the u.s. so of course that provides with the natural hedge. but in general we try to make sure we have hedges that are in the right places around the world. >> here in the united states the demand is really for what for office buildings, for hotels? >> demand for everything. multi-family very strong.

office buildings very strong. industrial very strong given what's going on in the dotcom arena. they want big distribution centers around the urban core. >> so you're talking about strength everywhere? >> silicon valley is incredibly strong, but the whole u.s. the big cities around the u.s. are strong in terms of leasing of the they're strong in terms of capital flow for investment sales. so strong commercial real estate market. >> it looks like there is still demand that's coming from overseas for properties here in the united states too. you saw a strong demand from asian buyers here in the united states? >> asian buyers are very interested in investing capital here in the u.s. the reason is they view this as one of the strong growth economies on an extended basis. fundamentals are very strong for u.s. real estate. occupancies are going up rentals are going up not a new supply coming on so there's a lot of capital that wants to be here. >> what is it that you worry about, if the fed raises rates,

does that change the picture? >> i think that's baked into the assumptions about the prices of real estate. what we worry about is lack of supply. what we worry about is a global economy, the still choppy economy in europe. the fact that growth has slowed down a little bit in china and other parts of asia. but in general, a lot of enthusiasm for investing in commercial real estate. >> let's talk about what's happening in europe because we certainly seem to hear from people all the time that that looks like a better market in terms of the stocks in terms of the potential for properties that can be bought than even here in the united states. would you agree with that? >> well europe has gotten better. it's certainly gotten better in the last two years, but it's growing very slow lowly and it's very uneven. the u.k. london in particular has been the top market in the world in terms of inbound capital. we see that continuing. but there's choppiness around europe and slow growth. and the slow growth is projected to continue there. >> bob, thank you so much for

joining us today. we appreciate your time. >> thank you. coming up this morning, top stories, including the countdown to the fed statement. also black rock's top bond guy, jeff rosenburg, will join us as our special guest. we've got that and a lot more when "squawk box" returns. why do we do it? why do we spend every waking moment, thinking about people? why are we so committed to keeping you connected? why combine performance with a conscience? why innovate for a future without accidents? why do any of it? why do all of it? because if it matters to you it's everything to us. the xc60 crossover. from volvo. lease the well equiped volvo xc60 today. visit your local volvo showroom for details.

heads up fed watchers. jeff rosenberg tells us what to expect. he is a squawk market master. twitter shares plunging after a leaked earnings report showed a big miss in revenue. we'll ask an analyst if it's time to dump the stock or if it's a buying opportunity. and a map who gets paid to prepare white collar criminals for prison. >> teach me how to survive in

prison the way that you did. >> wait what? >> i could pay you. >> it's not a kevin hart movie, it's a document carry about white collar crime. a sneak peek straight ahead, as the second hour of "squawk box" starts right now. welcome back to "squawk box" here on cnbc first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. u.s. equity futures at this hour are slightly higher but it looks like the dow futures are up about 12 points above fair value, s&p futures up by 2 and the nasdaq up by 1. on today's watch list corporate earnings on tap, mastercard and norfolk southern. after the closing bell we'll get numbers from marriott and yelp and get the first read on first quarter gdp at 8:30 eastern time.

forecasters expect to see 1% growth down from the 2.2% that we got in the fourth quarter of last year. and the central bank wrapping up a two-day policy meeting today. fed watchers will look for a change in language on inflation that could signal the fed favors a summer rate hike versus a september liftoff. we are also monitoring the situation in baltimore this morning. things were much quieter overnight. there were less than a dozen arrests compared to 200 that took place on monday. the curfew ended about two hours ago at 5:00 this morning. it will go back into effect tonight. social media giant twitter making headlines when the company's first quarter earnings were released ahead in schedule, reporting a miss in revenue. the stock getting slammed. again, this came out during the session when it was not supposed to be coming out. stock dropped by as much as 22% right after those earnings were leaked. james is an equity analyst. james, thanks for being here

today. >> sure. >> so the first weird thing is this got leaked somehow, accidentally got out there and that created a bit of a stern itself. how much of a problem is the revenue guidance that they gave for the current quarter and how much that it came out when it wasn't really expected? >> yeah yesterday afternoon was a roller coaster to say the least but the biggest takeaway was the fact that the business value will take time to correspond with the social value that we see today. >> what does that mean? maybe the street got a little ahead of itself in terms of how quickly it could monetize? >> i think so. and i think the company may have gotten a little ahead of itself too. what they had successfully done last quarter was change the conversation from user growth to munne mon at thisization. what we saw this quarter was they're starting to see more headwinds than anticipated and more deceleration as we look

into 2q. now on top you have monetiization concerns. >> you can't keep changing your story and looking at the one good metric going forward. >> precisely. >> what were some of the headwinds they ran into? why was the growth lower than expected? >> the headwinds were on direct response. direct response is performance and advertising which is what google has done where you know exactly how much you're converting based off of the click-through rates. >> these are promoted things. >> the brand advertising, which is the stickier part of advertising, like with television, that's the harder dollars to get across. you're seeing a seismic shift right now but it's just happening now after many decades. so the direct response being the headwind i think is actually more of a concern because that

should be the lower hanging fruit in terms of being able to capture advertising dollars with the brand being the harder component. so when you're having challenges with the direct response side i think it's an uphill battle but i think the battle -- or the hill just got steeper. >> what is the company doing wrong? or do you think that this is -- i guess my question comes back to we've had peter teal on set who has argued for a change in management at twitter. is he correct in that or do we need to give this more time to let it percolate. >> twitter is an incredibly powerful platform. they know exactly what people are interested in. the issue is you don't have as many people as you want logged in and expressing what they are interested in. so that's going to take time. it's going to take time to fine tune what type of ad products actually work. so going back to the original point, the social value is there. >> is that management's fault? who are you pinning that on? is it the technology the construct of the whole company?

>> i think there was a miscalculation as far as how effective their targeting capabilities were down on the lower end of the purchase funnel. >> it's not as sticky as facebook, right? i use twitter much more often than i use facebook but a lot of times i'm a voyeur watching what other people are saying. >> the reason with facebook is they built the most comprehensive user profile of consumers in the world. they're able to track you across device across platform know exactly what you're interested in who you're connected to. twitter, they don't have that advantage because they only have 302 million people logged in. >> which is probably why i prefer twitter to facebook. i don't want someone tracking my every move. >> the value proposition to consumers is not quite understood. the first line of our report was what is twitter? we were trying to explain it to investors and it's going to take times for the value proposition

to be resonating with consumers. they're doing a decent job with some of the new initiatives, but -- >> you're keeping your neutral rating on the stock for now? >> yeah. look, the stock dropped 20% yesterday. the reason we're neutral, we expect it to be range bound, between 40 and 50 for quite some time. it will take some time to digest. i think 2q perhaps is setting a low bar for them. >> you don't think video changes the game for these guys? >> video should change the game in terms of pricing engagement. however, if you're not getting the right ad in front of the right user at the right time they're not going to be clicking on it. >> james, thank you for joining us. a programming note for you, twitter's ceo will be on squawk alley coming up during the 11:00 a.m. eastern hour. the fed capping off it's two-day policy meeting today. investors will be listening closely at 2:00 p.m. for hints on the timing of that first rate hike. here to tell us what he's expecting is jeff rosenberg,

chief investment analyst for fixed income at black rock. you've had to -- when things change what am i supposed to do when things change? i'm supposed to change and you've changed with what's happened. >> our expectations at the beginning of the year joe, were for the fed to raise interest rates in june. we always said that the first liftoff was less important than what happens after that. obviously people are focused on this meeting today and what it signals for whether june is in play or not. we had to push it back. we pushed back our expectation for liftoff to september and the main reason is that we've just had -- we'll get the first quarter reading on this later this morning, a weaker economic start to the year than anticipated. with that weakness the fed tapped into that and into its concerns about not lifting off too early. >> you pointed out that the market itself in terms of yields steadily declined and then it was backed up by the slow economic numbers. so you're saying that the market was right in responding to what

was happening, but then you say the market really shouldn't have done that because we're immediately going to go back to 2.5%, 3% starting this quarter. >> well, we had a gap between the market's expectations and what the fed was signaling going into march. the fed brought down its signal but then the market brought it down as well so the gap is still there. >> so it's good that they did that so at least we won't bow shocked when they finally raise. the one thing, and i'm looking at some of your figures, we can actually bring up one of the charts, i think we made it for you. it is just so weird that the first quarter going back to 2010 has averaged 0.6%. this doesn't show it here but the first quarter of each year was 0.6. second quarter, 3.0. third quarter 3.1. fourth quarter 4.6. don't they try to adjust it

seasonally to smooth it out? >> absolutely. what the chart is showing is the first half of the year for four out of the last five years has been surprisingly disappointing. we so already adjust the economic data for cold winter weather and holiday shopping and it's still beyond that. there's been a lot of idiosyncratic reasons. each year there's a different source. one year we had u.s. fiscal policy uncertainties. the other year you had eurozone. this year it's the oil price impact. the oil price impact is you cut investment, right. the other story we talk about, the collapse in rig counts, well, that shows up in the economic data as a collapse in investment data. no one anticipated that. the seasonal adjustments certainly didn't have the oil price collapse in it and that's contributing. certainly there's a winter weather story again this year. >> you know what then you would almost view the first quarter as an earnings report that always has special items in it for the past four years and say the actual normalized run rate of the economy has been 2.5 to 3,

then why are we at 0? >> exactly. so the market has a very short-term focus. the idea that we could have stronger economic data is still there. we think that's the case. but it's not until it shows up that the market will react. our concerns going forward is that that's about to show up. as we get out of the data point today is backward looking, that's first quarter. it's the data that we're about to see that wring in the april and then as we get further into may, the may data series that's where we think you'll see more of the strength and economy show up. then you're going to pull forward some of these fed expectations. >> you don't think the fed will box itself in and say there's no way a june hike is coming right? >> no, absolutely not. that will be one of the changes. they said in the last meeting april was off the table, so that will change. they're not going to precommit because that goes against what they have said which is they're going to be data dependent. it's a little tight in terms of the window to see the april data that shows up in may and the may data that shows up in june you

don't have quite enough time. that's why everybody, ourselves included, pushed the expectations of the wait until september. >> what would happen if they did raise in june? >> it depends on the communications ahead of time. there's a lot of speeches there's other opportunities that if they felt that now was the time to go in june they could begin to signal that. remember the taper tantrum was signalled in a bernanke speech -- >> but you pushed everything back, so your two-year fed funds rate by the end of the year you say 1.75 now. >> we cut it because of the time period to see higher interest rates, which really affects the two-year the most is just less so we had to push those expectations back. so we still expect the fed to raise interest rates for some normalization, some modestly higher interest rates -- >> i think larry wanted to raise rates and he's backed off. remember, we had him on a couple of times. does black rock think that there's going to be a day of

reckoning that they stayed too long at zero? >> i wouldn't call it a day of reckoning. >> you think that there are dislocations somewhere? >> i think the concern is that you go into a policy transition. you want to be careful about areas of your portfolio, areas of the markets where there's not a lot of risk premium for that where you have complacency. we see in the fixed income markets where there's tight levels of spreads, where people aren't really necessarily pricing in the potential impact of a change in monitor policy. >> if people have been moved on the risk curve, they're going to end up losing money somewhere, aren't they? >> that's where there's some concern of six years of zero interest rate policy -- >> that's what i mean. what does blackrock think? >> i think the complacency and where the risk is is that people have had to reach for yield in an environment of six years of zero interest rates. not the first increase but

that's why i say it's all about that pace. it's what do we then price in as to the level of normalization. the fed's telling you by the end of 2016 you'll have a 2% fed funds rates. if you start to change the perspective that i don't have to take risk to get a fairly decent set of yield, then you look at all the other stuff that's been used to get yield in your portfolio, that's where you're going to have a repricing. not neszcessarily on the day of reckoning. >> they want to make sure it's orderly. that's their fervent hope. >> of course but it's hard to necessarily engineer that because of the needs for income in the face of persistent zero interest rates. >> they're not going to do anything or say anything today. >> you sound so disappointed. >> blah, blah blah it's just going to be more of that. >> come back in june and we'll see -- >> it's going to be the minutia that matters. if they box themselves out of

june, that would be interesting. if they make a promise on something, that will be interesting. >> and the market will focus, as you highlighted in the beginning, do they upgrade inflation. do they focus more on inflation or more on growth. if they focus on recovery and expectations, that will be a little more hawkish for the market. >> we can talk about the fed saying absolutely nothing or like inner prison -- >> exactly, they're not going to say anything. they haven't been saying anything for years now. >> we need to spice things up a little bit, get things a little bit more interesting. thank you for doing that. >> what kind of documentary is it going to be? >> white collar one. ground breaking. i think it's ground breaking. >> i just want to make sure. >> it's the first time a national news organization has been allowed in in what 15 years? >> 15 years. >> 15 years into a prison. when we come back the squawk ceo call is in session. next up the ceo of aflac is here to talk earnings and insurance companies. then akamai delivers faster

internet content and headwinds from the strong dollar. plus, get this country star vince gill is here. he is teaming up to reward innovations in rural communities. maybe we'll get a little song or so out of him. we'll be back right after a break.

welcome back to "squawk box" this morning. quarterly results beating the street pretty handily. it has hired lazar to explore strategic financial alternative the. we'll try to understand what that means. also time warner reporting adjusted earnings of $1.19 a share. that beat the street by a dime. we're going to talk now about aflac reporting fiscal fourth quarter earnings up an adjusted $1.54 per share in line with wall street estimates. dan amos ceo, joins us with more. good morning to you. >> good morning. thanks for having me. >> joe can do the duck. i can't do the duck. >> or say amos. >> amos that would help too. >> or amos.

>> do you want to do the duck first? >> becky did it. >> aflac. >> you did it didn't you? >> i kind of wimped out. you do it better than i do. >> i can do it like gordon godfrey. >> gilbert godfrey. >> dan, let's talk about the earnings. specifically we all think of the duck. but really so much of your business is in japan. so much of the business is about what's going on with the yen and what's going on with the dollar. so walk us through what's happened here. frankly, how worried are you about the currency headwinds going forward? >> well you know we saw the yen weaken significantly in the fourth quarter. of course it was in the first quarter. we collect all of our money in yen. we pay all the claims in yen and then it's the translation when it actually takes place in terms of how our operation works. so we always talk about even when the yen benefits us to look at it excluding the yen.

we were right on target in term of our consensus estimates. you know we really have very little control over the yen or currency, so we basically just run the operation that way and it's doing quite well. you know, japan post which is the largest distribution system in japan, has started selling for us. although i can't go into specifics, they are doing very well and continue to do well so the japanese market has been very good for us and we expect it to continue. >> and when you look at the operations itself i see your cancer and medical products coverage jumped 21%. that was the good news. but sales of what's called the child endou you -- endowment and other products dropped. what happened there? >> we actually put caps on how much you could sell because we are really in that third sector.

i think it was actually up 121% for the quarter. so it's been very strong. it's been due to a new product we introduced. but frankly the first sector at this level we make a decent profit margin but not anywhere near what we do with the third sector the cancer and other products so that's what we're pushing. >> you launched back on february 17th this new critical care protection plan. how is that coming? >> well that's doing quite well for us. it's still early to tell. you know, the one thing that's been going on that's different is also the one-day pay that we have in the united states. >> and you came on to talk about that. >> yes, i did, correct. we now estimate that we will approach two million claims that we'll be paying under one day pay. now, that's not every claim, but we can process almost 70% of the claims this way, so it's really

changing the way we do business. it's really making a difference in consumers' lives in the united states, so we're very excited about that as well. >> are you picking up customers as a function of the one day pay? have you seen a jump as a result of that? >> i believe we will. we've only had it out there for three months so it's -- but certainly the ability to get cash in people's hands during the time of need is important, and i ultimately think it will be an absolute advantage for us in sales. >> okay. >> dan, don't you have to buy fixed income just to -- because you're an insurance company? how difficult is that? and you probably like the fed to raise rates, but then that's going to hurt you in japan again because the dollar gets stronger. what do you think they ought to do? >> well i don't know exactly what they should do but we you know, buy a lot of our investments are in the yen, which the jgbs, which is an

issue. but we also buy some corporate bonds, u.s. bonds and then we hedge it back that little bit to make a difference in our overall portfolio. >> but it's tough, right? >> but certainly i don't know of an insurance company that wouldn't want a higher yield. >> it's tough. i don't know how you keep it going because you can't -- i don't know how you match assets and liabilities in a zero interest rate environment. >> that's the reason joe, i was -- joe, that's the reason that i was saying that we're not really pushing the life insurance. >> you're capping it. >> almost zero cash value in the health insurance side so we don't have that issue like life insurance companies do. >> right. it's like trying to get a mortgage. banks don't -- there are banks that don't want to give mortgages. >> not for 30 years. >> insurance companies have stopped offering lots of different -- a lot of them aren't doing it any more.

dan, thank you. >> the fed thinks free money, everything -- the economy is doing better. there's no repercussions. people -- business is not as usual in an environment like that. >> i remember when buffet said it would be better off if these people held on to their money and paid them later. >> it's a borrower's market it's not a lender's market. they have big problems. >> very much. when we return, your're a white collar criminal facing a prison sentence. what do you do? hire someone to get you ready, that's what you do. it's the premise of will ferrell comedy "get hard" but it's covered in cnbc's new document carry, "white collar convicts." we've got a sneak peek in just a moment. ...and takes the wheel right from your very hands...

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you have any skills you will survive in prison. let me see your mad dog face.

>> what is a mad dog? >> your mad dog. what are you doing, james? >> sad dogging you. do you think that's a strategy that could work? >> that was a clip from will ferrell and kevin hart's comedy "get hard" about a white collar criminal who needs help preparing for prison. it's part of a new cnbc documentary. i spoke to a retired federal prison caseworker who know gets paid to get clients ready for life behind bars. jack johnson, a former bureau of prisoners case manager is now a consultant who charges clients $200 an hour for a cold dose of preparation. >> they're walking into a prison and they're literally freaking out, trembling. they're thinking of shawshank redemption. all eyes are upon them when they get to the prison so i try to teach my clients to be humble be a fly on the wall don't do anything special. >> most of these guys aren't

used to that. >> exactly. i sit down with a guys and tell them they're not going to make it. >> you have clients with tens of hundreds of millions of dollars and you're saying you've got to lose the arrogance. >> exactly. diplomatically. i'm a communicator so i can get the point across. >> i'm a communicator i can get the point across. >> what does he mean that they're not going to make it? >> he tries to break them before they even get there. there's a prebreak. >> so it doesn't have to happen once you're there? >> once you're there -- >> first impressions are everything. >> we went -- i think we showed the clip yesterday, we went with this guy ken and you could watch him getting broken. we interviewed him a week before and took cameras. you'll see him actually going physically to prison. it's amazing. it's amazing and horribly sad in many ways. >> when you say broken what do you mean? he doesn't look the same doesn't walk tall? >> yeah i mean you sort of fall to pieces when you realize that your freedom is getting taken. even though some of these

prisons are hard some of them aren't but it's an emotional -- >> that's the elephant in the room for me that i need to know. >> what's that? >> is the things that you worry about in a -- like a penitentiary that i drive by every day, northern states prison, which scares the heck out of me is white collar -- do you have the same concerns in a white collar prison that you have? is there a chance that you could be raped in the shower? is there a chance that there will be you know demands for some -- doing things that you don't want to do? will you be trading cigarettes to get food that you can eat? >> there's a completely underground illegal network. >> do people have shanks? do you have to make your own shanks? >> the answer is yes and no. you're going to hear from joe and bernard, both of whom were put in the hole and were in horrible situations with people with shanks. >> but kerik put people in there, right? >> skinheads, the whole thing. they weren't in there with those guys the entire time.

that was for a particular piece of it. if you're just in a camp and you're just in a camp and not moved -- if you're moved, any time you get moved, you're moved with everybody else and that's actually where things run into trouble. plus there's an underground network where, yes, cigarettes people are putting money into people's commissaries from the outside, paying people off. the whole thing is complicated. >> the other day you read the individual that killed jeffrey dom dahmer finally and he said the guards knew what he wanted to do and they took a walk h he was alone with -- i mean maybe you can bribe guards? >> guards get bribed there are gifts that are given, the whole thing. people want drugs. we were talking about antibiotics like z-pack. in white collar that's a very thing to have. >> hard to get? >> well you have to go through the whole process. >> why do you want that? >> people get sick and they want them. some people will take the first two or three pills to get themselves better and save the

others and sell them. >> wow. >> that documentary airs tonight, 10:00 p.m. eastern time and pacific. you don't want to miss it on either end. so there you have it. >> that guy is tall. oh no he's not. 63 inches not 6'3". so that would only be 5'3" there. coming up, the ceo of cloud services company akamai is here. the company delivers between 15 and 30% of all web traffic. as we head to break, take a look algt at u.s. equity futures.

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welcome back to "squawk box." i don't know if people will appreciate the inside joke on that song. meanwhile alibaba freezing hiring for the rest of the year. the executive chairman making that announcement to staff saying the company has grown too

quickly. they have grown so quickly they're going to stop hiring people. mortgage applications dropping 2.3% in the latest week. that decline came as interest rates rose. and lumber liquidators saying the doj is investigating the company seeking charges. you might remember a report alleging that the flooring that was sourced from china had excessive levels of cancer-causing formaldehyde in it. also akamai technology service speeds up delivery of online content. the stock has been on a tear since the beginning of the year but it dropped in after-hours trading after the company forecast current quarter profit below expectations citing headwinds from the strong dollar. joining us to talk about the quarter is tom leighton the ceo. thanks for being here. >> thank you. >> so the strong dollar was what kind of got in the way? what happened? i thought only about a quarter

of the company's revenue was from overseas. >> yeah. and when you convert that revenue back to dollars, it comes out as a lower amount in dollars, so it makes the growth look a little slower than it really is. >> in some cases, the analysts have really been on top of it because everybody knew that the dollar got quite a bit stronger over the course of time. what happened with the analysts here that they weren't able to factor that in and put two and two together. >> i think they do factor it in over time. sometimes getting the latest adjustments can be hard. i think we were pretty close on the estimates in terms of what the analysts were forecasting. i think the important thing to remember is that the business is very strong. very strong overseas. this artificial conversion as we report earnings really has nothing to do with the success of the company. >> part of what you're doing is not just web traffic but also cloud infrastructure services and security. what is that exactly? how does it work? >> security is our fastest-growing business. very important to our enterprise

customers. there's a wide range of entities trying to bring down websites embarrass companies, steal data corrupt the content on new sites, for example, to report their own story. and we stop those attacks by intercepting the attacks where the attacker is before the attack can get to the data center that hosts the website. >> one analyst had said that the company has set an internal revenue projection for that business of a billion dollars. is that true first of all? second of all, how are you in terms of hitting that goal? >> yeah we don't report the long-term estimate for any one of our businesses but there's tremendous potential for our security business. as you know it's growing at 80%, you know year over year and we're deploying new products into that business now. we are very excited about the future for our security business. >> why don't we talk about web traffic in general. it seems like the entire internet has been turned on its head since the fcc came out with its ruling about net neutrality.

where do you come down on this whole battle? >> on balance we were very pleased with the fcc ruling. they made it clear that akamai is not going to be regulated. we're providing a benefit for the internet as a whole. the only way cdn would get regulated is if it's owned by a carrier. and of course akamai is independent and provides help across the spectrum. we make the internet faster more reliable and more secure. >> you would have been against fast lanes i'm assuming because that would have meant people would have bypassed you? >> nobody by passes us. we have the unique technology that bypasses the congestion points on the internet and that's where all the pain is being felt. why, you know your quality is not so good at home because it's getting congested there. we bypass that and make a better experience for users everywhere. >> when netflix blames the cable operator, sometimes the cable

operator effectively blames you. >> no there's no cable operators that blame us. >> not you directly but the hub or -- they don't necessarily name you but they say there are these choke points and you are -- you are supposed to be speeding it up but their connection to you could be slower? >> well no the choke points, that's our whole point. we get around those choke points and deliver the content close to the end user. our software is in thousands of locations around the world, so that when you go to nbc's site or you watch the olympics really what you're doing is you're laptop or your mobile device is connecting to one of our servers right nearby. far from any choke point. now, if you don't use akamai then you're going to go across the choke points to get the content and it's not going to look very good. that's what's happening when you see this debate play out is these choke points, but we're beyond that. >> do you still teach? >> i taught last fall at m.i.t.

i do that every other fall. >> you must be one of the richest guys there too, aren't you? >> i don't get into that it's more about technology. >> a co-founder of akamai amazing. and they needed you, even though you're still a professor at m.i.t., right? >> well i'm full time at akamai? >> so you're not teaching now? >> i'm not teaching now but i do teach every other fall. i teach the math for computer science course. it's their one core course of mathematics where we teach them the tools they need to go out and do things like google. >> is akamai a 128 -- >> no we're next door to m.i.t. we're in kendall square a block from campus. >> on what street? >> on main street and right near ames. >> i think we graduated from

everywhere the same -- you've got a ph.d. though. >> in 1981 from m.i.t. >> tom, thank you for joining us today. >> thank you. >> come on back. i've got about a million more questions. >> i'd love that. coming up country music star vince gill teaming up with frontier communications working to boost small town economies with a contest that rewards innovation. vince gill and the ceo of frontier communications are here to talk american emerging markets, next. there's nothing more romantic than

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it says that we're listening to country star vince gill. i don't hear you singing. >> just a second. let it go. >> so we are listening to you. there you go. he's working with frontier communications on america's best communities campaign. it's a competition for the best plan to improve small communities. they have narrowed it down to 50 small towns. a lot are in ohio. good. and the grand prize-winning town takes home $10 million. here to tell us more vince gill

and maggie the executive chairman of frontier. used to be ceo. you just until recently right? when did you step down at ceo? >> just two weeks ago. yes. >> so you can focus more attention on this. what will you do -- there's so many things that we can imagine small communities would need. what are you trying to address? >> well you know, in the 10 1/2 years that i was ceo of frontier, we have a lot of communities across the country and a lot in rural and suburban america. as i would travel around i would see these great public-private partnerships in these small communities, everybody working together. i said you know wouldn't it be great for us to invest in our open country to help these small communities be bigger more vibrant and a better place to live. so we put this contest out there to encourage these small towns and communities. you would have to have 10,000 people to 80,000 that's kind of the sweet spot for the contest. and to give us your ideas and

your thoughts on economic development and improving your lifestyle. and we didn't put any restrictions on what they could come up with from an innovative perspective. we had several hundred communities apply, and we had a panel of outside judges that are experts in economic development take a look at their proposals. and they picked these top 50. >> what would a representative proposal be? there was a simpson episode about a monorail. it's not about building a monorail. >> no, it isn't. >> you need a monorail. but what are they about? >> there's a whole host of things. >> like what. >> i'll give you some categories. health and wellness. so putting in walking trails. >> nice. >> building parks and ballparks for kids. community centers for people to get together. there is downtown revitalization programs where they're taking small little diners or coffee shops and upgrading them to be better experiences. >> so it's part public and part

private in terms of innovating. i thought it might be entrepreneurial -- >> and there are 15 communities that have business incubators for entrepreneurialship as well. >> why so many in ohio? which is a good idea. >> yeah. there's a lot of great towns in ohio. >> southern ohio? >> southern ohio as well. and, you know we have 19 states are represented in these 50. so we are -- places like valparaiso. >> that's what i wondered. i saw the arrow -- or the star. it valparaiso. >> valpo we call it. >> my grandmother lives there. >> oh really? >> how are you getting involved? what's your angle. >> well, they kind of needed somebody to be a front man, spokesperson. i like to say hood ornament. and i really -- i love what they're doing. they're asking communities to invest in themselves. they're asking people to better

themselves. and there's no gotcha. they're not trying to sell them something. i just love the spirit of this whole thing. we were really excited to partner up with them. i'm having a ball getting to know some of these folks. at the end of the day, even the towns that aren't going to succeed and win the big prize or whatever, they're still going to have the investment of doing what they have done for their communities. like she said the private sector the community leaders, nonprofits, they're all kind of banding together you know and i like seeing that. they're going to take care of their own. >> i know you're from norman oklahoma, right? >> norman yeah. >> i guess it was a smaller town but now it's a pretty big town. it's over the limits at this point. >> it wouldn't have been very fair if my hometown had been involved. >> a bet these people in these small towns know who you are, don't they? >> well i've made a nice living visiting a lot of these people over the years. it's where i come from. i feel comfortable in those

places. my mom grew up on a small farm in kansas. my dad the same thing. and so it feels like home to me. i love these people. i think that three-quarters of the people in the united states are from rural communities so this just makes sense, you know. >> and we do think there's a multiplier effect on this $10 million. so we have 50 great companies that are now adopting each one of these communities. companies like boeing chobani yogurt at&t verizon, procter & gamble, so they're all going to help their community win. and in addition to that i want to give a shutout to our partners, because the weather channel is one of our partners dish network and cobank which is a very large bank that funds agriculture and actually infrastructure isn't a lot of small towns in america. so there's a whole host of people banding together to really make this happen and bring it alive. >> that's great. >> when's your -- you're still recording, right, vince? >> absolutely.

just can't prove it. >> i was trying to order up a small town -- a jason aldean song or something. in the last five years there's probably been ten songs written about small town usa. that's just country and one of the great things about it. not telling you to do it but are you working on an album right now? >> oh yeah working hard. >> is there writer's block? >> no. >> vince, tell them about the song that you're dedicating to the program too. >> there's a song that i wrote for my -- i think two records back, a song called "what you give away" and all it's basically doing is embodying that spirit of all that you can take is what you give away is the premise of the song. >> thank you both so much for joining us. we love hearing about it and we hope we can hear back a little bit more about how some of this works out too. >> absolutely. we'll get to you when we come to the 15 from the 50. >> maggie vince, thank you both

for joining us. >> thank you. when we come back some of the big movers ahead of the opening bell. then the big business of fine wine. the ceo of silver oak winery is here to talk top shelf vino. stick around "squawk box" will be right back.

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maybe it's one of the greatest artists of the 20th accept tree and i'm worried about her last night. i got into -- reacquainted with my joni mitchell phase like a year ago or something. tmz reported yesterday she was unresponsive, in a coma and, you know, she fell ill a couple of weeks back. and they said they had to give someone else like power of attorney. it sounded bleak. this morning they're saying that contrary to rumors circulating on the internet joni is not aa coma, she's in the hospital she comprehends, she's alert and a full recovery is expected. >> good to hear. >> i just hope that that's the truth. tmz, as i said -- you know things get on the internet and i read about ten different places last night that it was dire. hopefully we can put stock in this latest account. let's take a look at some stocks to watch this morning. hess posted a bigger than

expected loss as oil prices dropped but revenue managed to top expectations. northrop grumman, earnings and revenue beat expectations and the company raised its guidance and the stock not really responding. in fact it's not moving around at all. all right, andrew the ground -- a ground-breaking promo is coming up. >> ground-breaking documentary is coming up later today, 10:00 p.m. eastern time. a look at what life for white collar criminals is like in prison. it's the subject of a new documentary that is joe -- >> ground breaking. >> tonight on cnbc 10:00 p.m. eastern and pacific, you can catch it both times. up next a former nyc police commissioner bernard kerik will join us. also joe nacchio will talk about their time in prison and dispel some myths about living behind bars and we have some other questions for mr. kerik as well. we're back in a moment. plan

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straight ahead. ganluging the growth of the u.s. economy. gdp data set to be released just minutes from now. will a sluggish first quarter keep the fed on the sidelines? what does it all means for stocks and jobs. the numbers and the market reaction coming up. and a special birthday present for jerry seinfeld. >> happy birthday. no such thing. >> the co-creator of one of the longest running sitcoms signing a streaming deal with hulu. >> you've got to have bills, paper money. you can't pay me this. >> i said that's all i've got. >> then you've got no calzone. >> details just ahead as the final hour of festivus begins right now. >> let's rumble! live from the most powerful city in the world, new york this is "squawk box." welcome back to "squawk box"

here on cnbc first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. we are just about 90 minutes away from the opening bell on wall street. right now it looks like futures are slightly weaker. this is down about 20 points from where we saw the dow earlier. right now down about 14 points. take a look at the markets in europe at this hour and you'll see that right now at least for the major averages there are a lot of red arrows there as well. >> here are the storyies investors will be talking about today. a first read on first quarter gdp, we'll get that in 30 minutes. the economy likely grew at a snail' pace consensus for only a 1% annual rate. also the fed wrapping up it's two-day policy setting meeting in washington. we'll get an announcement set for 2:00 eastern time. no change in rates expected. marketwatchers will pay close attention. starwood hotels and resorts is exploring strategic and financial alternatives. the company says no option is

off the table. shares rising on that news. stocks on the move this morning, twitter revenue falling short of estimates and the company is cutting its full-year forecast blaming weak demand for its new direct response advertising. i am able to see a tweet. they let you get rid of it. they say is it irrelevant. those things i don't follow people and it's advertising. you can click on it it says is it irrelevant and you click on it and it goes away. who are they selling the ads to? >> no no no if you click it's irrelevant that's good for them to know because they're not going to serve you that ad but they'll hopefully serve you an ad that's more relevant. >> i'm violated. i'm going to stop to that andrew. don't you feel violated? >> no because you're getting the service for free. >> it's like watching television with commercials. >> they're lucky i'm on their stupid service. >> i'm sure they consider themselves that. >> gopro shares getting a boost

on an upbeat current quarter forecast. the company cites strong demand for its flagship hero 4 action cameras. and a big miss this is concerning, for buffalo wild wings. i think it's because it's on the cost side of things right? on the top and bottom lines. the restaurant chain hit by higher food costs. the price per pound for its traditional chicken wings increased 41% in the last year and that's before -- >> they started culling millions from the flocks because of avian flu. >> we should mention sally smith will be on tomorrow i believe. >> she is? >> maybe she'll bring us some wings. >> so they had a bad quarter for march madness then. that's one of their biggest -- >> 41% increase in costs over the year that's pretty significant. >> we're going to turn our attention to white collar prison time. what happens when the chief executive officer becomes the chief executive prisoner? there's a common perception when

corporate bigwigs go to prison they have it easy. the reality, though is more difficult as dennis kozlowski found out when he was convicted of looting his company. >> i did not realize i was in trouble until the jurors came back and started reading guilty. that's when it really hit me. >> in 2005 he was sentenced to 8 to 25 years. dennis kozlowski, ceo, became prisoner 0584230. >> the very first thing was a fight amongst two people sitting right next to me at breakfast. they started pounding each other with their breakfast trays and an all-out fight broke out. i said, boy, this is going to be a long time if this is the first day here. >> he ended up serving more than eight years in state prison. he went from earning more than $100 million a year to 85 cents a day in the prison laundry.

he did socks, if you can imagine that. so anyway he's just one of many of the disgraced leaders we spoke to for this documentary. woe also sat down with two gentlemen you're about to kerik is the former commissioner of the new york police department. also joe nacchio. thank you, guys for being here and for being part of the documentary. i'm going to ask you the question that joe asked me about, frankly, you guys and this whole system earlier, which is -- >> shanks. >> how dangerous was it? what was the worst day like for you? >> i think for me the worst day is getting there. the worst day is surrendering your freedom. the worst day is the strip search, being handcuffed taken into custody bowingeing placed in a 12 x 8 cell and being left for hours. >> you were in solitary. >> i went 60 days in solitary in

new york city, which is -- basically it's an 8 x 12 metal box and you're locked in there 24 hours a day. >> solitary confinement sounds horrible, but i might prefer that to being in with someone who scared me. >> well the reality is there's other ways to hold people in protective custody in administrative segregation, and there's a use for solitary. if you're a threat risk to the institution or to staff or to national security. but to take somebody like me -- or worse, minors take young kids and put them in solitary for minor institutional infractions and make them lose their minds, it's not good for society. >> why were you put in solitary? >> i was told for protective custody. >> somebody else who was put in solitary is joe nacchio. joe, thank you for joining us this morning. >> good morning. >> when we spoke, you talked about the danger of being in prison and specifically i remember you were moved at one

point and also put into solitary and also put in with some pretty tough situation. tell us about it. >> yeah. well you know the worst day of my experience besides the reporting date was the trip i took with the u.s. marshals for seven weeks, including four flights on conair as they moved me between minorsville, pennsylvania for a 15-minute court appearance in denver. it took them seven weeks to get me back and forth. i was in three penitentiaries, a medium, and i was in solitary in oklahoma city. >> and did you ever fear for your life? >> well you know i wouldn't characterize it as fearing for your life. you fear and you're in situations where you have to respond appropriately. and i think it's very -- i always founding it was very important to respond appropriately. you never look for trouble, but at the same time if trouble finds you, you have to learn how to deal with it. >> right. i was telling these guys about

what i called the underground chit economy if you will that goes on. >> chit? >> c-h-i-t, chit or money. how does it work? >> well there's an underground economy in every prison. as i told you when we met, you could get almost anything you want in prison camps. i think from the folks i know who came from what we call behind the wire they could get anything they want. the currency inside the prison is usually fish packages of tuna that you can buy at a commissary. a lot of money gets exchanged outside of prison too and there's ways to do that. so there is an underground economy and it runs from everything from things that you might like to get, a lot of people were buying drugs, buying alcohol, buying food to you know, security issues. so you have to get in there and really adapt yourself to the fact that you're in a brand new world. as i like to call it lord of

the flies for grown-ups, and learn the rules and forget who you were on the outside and become a part of that population and survive. >> joe has talked about the idea of people getting thugged out. did you have that experience? >> yeah. listen basically what he's saying is in the institution i was in it was tuna fish and stamps. the reality is they suck all the societal values out of you and they institutionalize you. and for somebody like us that's older, that can get through this, that's one thing. but you take young kids 19 20 years old, first-time nonviolent drug offenders, nonviolent, stick them in there for ten years, they are complete thugs when they come out. we make them far worse than when they went in and it's just stupid. >> so here's the question, though. we're talking about white collar crimes in this instance. >> okay. >> should we treat white collar crime, somebody who ripped somebody off or steals money,

differently than the kid who sticks up the corner store? >> well listen first of all, if it's violence violent people belong in prison. violent people have to come out of society. some of these white collar offense -- many of these white collar offenses commercial fishermen that caught too many fish? come on, stop. they're regulatory issues. >> that makes sense for something -- commercial fisherman taking too much out but there's white collar crime that does massive amounts of damage to people and destroys lives too. >> well let me jump in on that because the way you started your program calling us crooked ceos, i had to take umbrage to. what's crooked is the whole criminal justice system appeared the way the department of justice selectively applies the law. we are putting people away for political crimes in this country right now. yeah, you get the high-profile guys really who are white collar crooks, but a lot of people i

met, you'd have to shake your heads and say why are they in prison? and to the core of your question which is is there a better way to do it i agree with bernie. i think you have to make a distinction between violent crime and nonviolent crime. the amount of resources we waste in this society for vengeance, putting people who can contribute to society even if they're under the guidance of the federal government you know, we could be working in schools, we could be working to help underprivileged kids we could do a whole bunch of things. but society would rather see vengeance than constructive rehabilitation. you know, prison is not about rehabilitation in this country. it's about the exercise of vengeance. it's a stain -- >> but what are the deterrents? how does that factor in? >> i think the argument of deterrents is a hollow argument and i'll tell you why, becky. today if i was a good prosecutor, i could convict you of a federal crime. there's 4800 federal laws that can put you in prison. there's 300,000 regulations that

can also require prison time. so i can prosecute and put anybody in this country in prison any day of the week. now, that's where we've become no longer a nation of laws but a nation of men. so i think we exaggerate what's going on in our prison systems. you know 55% of all people in prison today are there for nonviolent crimes. then when people come out, those people can't get jobs. it's called collateral consequences. there are 40,000 state penalties if you count them for all 50 states imposed on ex-felons. so even when you pay your debt to society, you continue to pay it. that's why you have recidivism and repeat crimes being so prevalent among folks who have been to prison for the first time. >> guys, our twitter is lighting up. i want to ask a question. it says have these guys shown remorse for their crimes or do they assert their innocence? i'll start with you, joe. >> there's no question in my

mind i'm asserting my innocence. i can't say i show remorse. i show remorse for the terrible process that i and several others went through. my crime was a political crime. it dealt with saying no to an intelligence agency doing illegal surveillance. i've said that publicly many times. i'm say it until the day i die. the federal government can say i'm completely a windbag and wrong and not showing remorse. all they have to do is declassify what was prevented from being presented to a jury in my case. my rub is i never got to tell the jury what really happened which gets to another one of the fallacies of our criminal justice system that you truly get your day in court. but there's a lot of other people i'm not the only one, but holding that aside, you have to look at the overall criminal justice system and what it's doing to society and it's really, i think, a stain on the american character. >> bernie? >> for me. >> yeah. >> i made mistakes. there isn't one of my charges

that couldn't have been handled civilly or ethically. if you don't believe that ask timothy geithner. while i was being prosecuted while i was being indicted timothy geithner was being confirmed by the u.s. senate for exactly -- after he admitted on the record that he had failed to pay taxes for years. there was no indictment there was no criminal charges, there was no prosecution, there was no nothing. and there are several of those cases. that's a reality. i made mistakes. bottom line is i was prosecuted when i don't think i should have been. >> let me ask you a question about coming back into society trying to get a job. we were talking about a news story that happened yesterday. koch industries changed their policy. it used to be they would ask you on an application if you have a felony. now they're not going to do that. >> it may help in some cases. the fact of the matter is with going el and the intelligence network, it really doesn't make

any difference because somebody is going to hold it against you anyway. we are creating a permanent underclass, a permanent underclass of society. a second class of u.s. citizen all across this country by the millions taking people like joe and others out of the workforce that's costing the united states taxpayer billions of dollars over the reported cost of incarceration. billions. >> let me ask you another question just because it's in the news and given your history. your views on what's going on in baltimore and how that situation is being handled. >> look i think it started out bad. you know they weren't -- they didn't have the resources they needed to do what had to be done. i don't think they were prepared. i think the mayor should have called way earlier, should have called in the national guard. they knew they were burying freddie gray. they knew there were going to be protests. they knew they could be violent. they should have been prepared. they should have had more resources on hand. >> do you think we're going to see more and more violent

protests across the country like this over time? >> i think the media drives this stuff. >> are we at a tipping point? it feels like there's a lot more of this. >> what you're talking about in terms of the 55% number nonviolent, you know a lot of kids in urban areas don't have fathers for whatever reason and a lot of it is drug related and these are the same guys coming out, theoretically, if you're right, violent and are not there. >> they come out worse. they come out far worse. >> and the president said we've got to do some soul searching. i think the prison system is part of the soul searching that he's talking about, which exacerbates -- >> there has to be change. >> you're leading to income inequality. what are you leading to? >> no i'm just leading to the question of whether we're going to have broader -- whether this -- what's happening in baltimore -- i'm just suggesting over the past two or three years we've started to see more and more violent protests. >> it's a criminal justice system. don't think that there isn't some truth to the way that

police handle urban areas, because there's no way it's not -- >> police go into those areas because there's high crime. it's like new york city you know people bash the nypd -- >> you know that there are -- we need the cameras, i think. don't you think? >> i think the cameras are fine. they can use the cameras. >> joe? >> i just want to add something. look the reason we have crime in the inner cities in bad neighborhoods is a lack of economic opportunity. >> that too. >> the people i met in prison even the young guys you know crime is a young man's game. when they get to about 40, the recidivism rate drops to about 40. those guys can't get jobs either, much less the young. if you bring somebody out of prison and they're denied their ability to vote and they have all kinds of sanctions on getting licenses and at best they have a g.e.d. grow and every business should knows trying to hire them what do you expect them to do? the money in the drug trade is so great.

it's the only thing they know. so unless you get at the root cause of poverty, and the root cause of poverty is family structure, economic development and opportunity. unless you get at those three things, you can't break the cycle. i met people who were generationally prisoners. their parents had been to prison their grandparents had been in prison and most likely their kids will be in prison. i think someone who has been in prison, their children have something like six times the rate of ending up in prison than someone who wasn't. so you have this generational thing. it's a very complex question but it's about education, family and economic development. >> okay. we've got to leave the conversation there, joe and bernie, thank you for coming in this morning and being part of the documentary. >> thank you. >> we appreciate it very much. you can hear more from both of these gentlemen in the documentary tonight at 10:00 p.m. right here on cnbc. when we come back this morning, the ceo of southern

company on quarterly results. plus a look at how the economy fared in the first quarter. the gdp report is just around the corner. stick around "squawk box" will be right back.

southern company was out with first quarter results this morning. earnings and revenues slightly below expectations.

joining us now is tom fanning, chairman and ceo of southern company and chair of the federal reserve bank of atlanta. what goes into your recent quarter results, tom? what are the headwinds? >> really it was a good quarter. it was above the estimate we gave the street. i think what you're seeing is an overall theme of an improving economy, particularly joe, it's interesting from an economic development standpoint. the capital intensity of our backlog is roughly three times normal. so assuming we get good results in a worldwide economy and kind of a good outcome on currency valuations, i think we could see more capital investment in the southeast, much stronger than the rest of the united states. from an industrial standpoint anything related to housing has been going great guns. only dark cloud there really relates to primary metals. i think that is a function of low oil prices and a strong dollar. residential, we're starting to see some improvement, which we

haven't seen in the past on household wealth croweation. interestinglies ay as the income is getting better people aren't consuming it they're saving it so that's one of the things to watch in terms of forward economic growth. >> we've had people argue that companies need to be more long term, not short term. given where oil prices are right now and given that fracking is going to continue to be something we can do in this country, long term what makes accepts sense for utility companies, nuclear, renewable, natural gas? do you get out of coal completely? what would you do to put southern company in the right position 20 years from now? >> i think southern company among almost all the companies in our industry is in a terrific position because we are the only company in america that is betting on the full portfolio. we're building new nuclear.

we're stwengtinventing our future in coal. we have a coal plant in mississippi that has a carbon footprint less than natural gas. we've moved in an enormous way to natural gas. we're one of the biggest investor in renewables particularly solar, and investing in energy efficiency. you've got to play the full portfolio, don't big single bets in terms of this nation's energy future. >> tom since you're on the board of the fed or you're involved with the federal reserve down in atlanta, watching what's happening, what we're going to hear today, knowing we're below 6% now on unemployment and maybe we get some wage gains, are you concerned about the fed is behind the curve or do you think they ought to stay at zero for even longer than people think? >> i think the fed is just where they should be to be honest with you. you know one of the things they do very well is they listen to the different districts and they try and get real life stories to go with the theory of where we

should be on monetary policy. so when you think about it i think they're going to be data driven and i think they want to take action that will be sustainable well into the future. regular, predictable, sus tanable performance is what i think they're after. >> does it feel like a 3% gdp economy right now down in the south. >> certainly the south is a little bit stronger i think, than the rest of the united states. we're starting to see the influx of people coming back. i think that's the function of an unfreezing housing market. and more kind of manufacturing taking place here than elsewhere in the united states. now, whether it's going to get to be 3% you know we've all been predicting 3% gdp growth for some time. and i know earlier on your show you were talking about how the second half of the year is typically better. it's hard for businesses to kind of bet on a hockey stick of

recovery. i think we want to see real sustained improvement. when you look around the world, this is not just a domestic issue. we've got to understand kind of how the e.u. will evolve. think about eastern europe the middle east and what kind of transparency we see out of china. this really is a global economy and we've got to figure out how we fit there. >> when analysts look at southern company, they talk about things like maybe it performs in line or slightly below in terms of growing revenue with the utility industry average return onic ic equity is improving but could be in a better position. what are the things operational operationally that you look at and decide you've got to do better on. >> growth. i think we're right at the top of the industry. i think the real issue for us is when you think about we've been building significant gas assets we're reaching kind of near the end of our nuclear expansion,

we're right at the end of the significant coal plant i mentioned before what we've got to do is think about ways to deploy new capital effectively. >> all right, tom fanning, thanks, great to see you. thanks for coming on this morning after earnings. all right, see you later. coming up gdp data. the fed and investors will be watching the numbers very closely. plus feats of strength for hulu and a very good day for jerry seinfeld. we'll explain the details of hulu's deal for seinfeld reruns right after the break. boys? stop less. go more. the passat tdi clean diesel with up to 814 hwy miles per tank. just one reason volkswagen is the #1 selling diesel car brand in america.

welcome back to "squawk box." we're going to get our first look at first quarter gdp and atlanta fed had it more right than the economists, up 0.2. the street was looking for up 1%. come on! i don't know i can't imagine what they were thinking about this number has been destined to be close to zero for a while now and it is right about where most pegged it. remember, fourth quarter gdp was finalized at 2.2 capping the year with a 2014 gdp of 2.4 and change. so obviously this isn't spectacular but it's better than zero. if we look at personal consumption, it was 1.9. that's a little hotter than we were looking for but less than half of our last look which 4.4. if you look at the price index,

it was down 0.1. that's cooler than we were looking for but we all know there's a lot going on with prices velocity commodities, the dollar and we'll continue to monitor. the most fascinating thing about today is that we're over 2% in atenure. when was the last time we settled above 2%? anybody? anybody? it happened to be the last fed meeting. back to you. >> rick thank you. rick santelli. right now let's get to the rest of our panel for some instant analysis. michael gapen is the chief economist at barclay's. also steve liesman. steve, what's jumping out at you? >> the whole thing. this is just -- you know here we go again. is this tiring anybody but me? >> yeah. >> we did the report several weeks ago saying the q1 gdp is weaker than expected. even when the economists know it's weak they can't get out in front of the weakness so they can't predict it. here they're coming in with an already weak forecast of 1%.

it comes in at 0.2%. as michael points out, that's probably energy down 23%. consumer spending rick is correct, a little halter erhotter than expected but a huge comedown from the fourth quarter. only 1.9 now. weakness in nondurable goods. a very surprising decline, by the way, in state and local spending. let me bring in michael here. anything else you want to -- that jumps out at you? >> no i think you hit the main point. in terms of the miss relative to our expectation, we were looking for something closer to 1 so thank you for trumpeting our -- >> steven stanley was out there from pierpont with a zero. so hats off to him for predicting an unpredictable number. >> our forecast at 1.8 was in line with what the numbers showed. the minus 23 in structures is a big decline.

say about 15% of that will be related to capex. we were tracking minus 11% so that's about twice as large of a drop as we expected. we were looking for a big decline from net trade. it looks like it came in stronger than expected. >> let me fill you in. that minus 7.2% on exports, that's the dollar right? that's in part at least. maybe the west coast port slowdown is part of it but also the dollar having an effect out there. >> that's right. i think some of it is port strike-related, we'll have to see how that washes out but also it's related to a stronger dollar. i would say a lot of this will be transtorre and weather related. obviously a stronger dollar will be with us and oil and gas investment will be weak at least through the second quarter and probably the remainder of this year. >> that's really the main question out there, it's for the federal reserve, it's for investors, it's for television business anchors trying to

answer the question. is this last year where it seemed -- first of all, it was weather but even the weather didn't seem to explain that minus 2.1% decline. people are still scratching their heads over that. whatever that was, it didn't matter much. we get a huge bounceback of 5% in the second quarter. but this it sounded to me like some of it looks to be temporary, but some of it is going to linger on. the dollar and the effects of the dollar aren't going away. the decline in energy an energy investment not going away. >> but the immediate impact is that the fed probably is not going to do anything in june right, until you figure out what this is one way or the other. >> right. i think this certainly means that june is -- yes, it's a live meeting but i think the odds are quite low. we do get -- the inflation data has been coming in stronger than i think they had expected but obviously the activity number is soft. they're going to have to get back and look at some of these details, but coming into the report i'd say maybe two-thirds of the softness would be related to weather and transitory factors, but the dollar and the

energy story is likely to linger. >> what is interesting that i think -- and luke crandall also nailed this 0.2%. i think with the 0.2 which is off of the minus 2.1, i think we did 3% year on year. >> that's right. >> because you have the 5 and the 4.8 in there. you finally got to 3%. i want to frame the fed meeting. take a right at the light, go straight into the night and you're finally on your own. we're finally on our own here. no calendar based guidance for the long time. remember they got rid of patience and then they told us unlikely in april. i think, what do you think of this, no monthly reference at all. now it's meeting to meeting. we're finally data dependent. >> in other words back to normal finally, seven years later. >> it's these very very tentative baby steps towards normal. i think we have finally gotten there. i'm letting go of your hand. then i held two of your fingers, then i held your index finger

and now i'm letting go entirely. >> we had rosenberg on. >> i heard. >> first quarter has averaged 0.6% for the past five years. you're supposed to seasonally adjust it because you know that january is winter, right? so when winter comes why does it surprise everybody every year or did you use climate models that we'll be at 70 degrees from now on. >> the issue is not that it's 0.6 for the past five years, it's the last 30 years. >> you know it's going to be winter. >> there's not just weather. there's something that goes on in the capex spending and defense spending. >> january is winter. >> they're yelling at me while you're yelling at me. >> january is winter. >> michael, thank you. up next streaming seinfeld. plus, it is wine wednesday here on "squawk box." we have the ceo of silver oak joining us to tell us why his company is jumping head first

into the bourbon barrel. take a look at tomorrow's lineup as well. ♪ ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ ♪ she can print amazing things right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ ♪ my mom works at ge. ♪ ♪

it's another sign that hulu is stepping up its game. the digital video giant has landed the rights to signeinfeldseinfeld cutting a deal for all 180 episodes of the enduring nbc comedy. the deal is said to be valued as just under $1 million an episode which translates to nearly a $180 million windfall to be split by sony tv time warner's castle rock and seinfeld profit participants, including co-creators jerry seinfeld and larry david. it is expected to be announced at hulu's up front presentation today. if we really had some inside info i'd like to know what it means to each cast member. by the way, happy birthday to jerry seinfeld. he's 61 today. >> not a bad birthday present.

>> no. and i'm telling you it was about six, eight months ago i saw him and for 45 minutes it's the mastery and the genius of seinfeld is just -- no one can do it. it was unbelievable. and obama stole the bucket list thing from jerry. he did. or his writer did, or whoever wrote that thing. maybe someone else had done it before. >> jerry has done everything first, right? seinfeld. up next, why america's love affair with bourbon is helping boost the bottom line for one of napa valley's wineries. the president and ceo of silver oak, you've seen this stuff, it's really expensive, will be along. "squawk box" will be right back.

i like white. >> are we on? good we are back. you like chardonnay. >> i like chardonnay but i -- it's wednesday, wine wednesday here on -- and we're wining more than usual. every day is wining day at "squawk box." it's past 5:00 in napa valley. 5:00 a.m. that is. two family owned california wineries have been pioneers in aging wine in american oak barrels. david duncan is president and ceo of silver oak. he has flown in from the valley to join us now. i think everybody now knows this wine because at premier places

i've been at celebrity golf tournament or something like that like the bob hope and if they serve silver oak, everybody gathers around to get it. and celebrities for some reason they buy cases. i saw all the people -- the bold names that like silver oak. how did you do that? why? >> our goal has always been to make a deliciously drinkable wine. i think our use of american oak, the way that we pick our fruit, the fact that we blend our wipes from different areas the napa valley and the alexander valley all lead to trying to make a wine that is approachable enjoyable and goes well with food. >> if someone went to napa -- famous people went and toured your winery in napa. i can't remember who it was. >> a lot of different people through the winery. >> celebrities and things. >> lately on social media, we've had lebron james. >> lebron. >> and different people.

those are just out enjoying a bottle of wine and telling their followers that they're having silver oak. >> and i'm not a big red wine drinker. i'm not sure why, tannens or something, it's hard for me to sleep sometimes. i do get it really. but people say when you see silver oak, you've got to try this. you taste it and it has no -- have you tried it? >> no. >> for a cabernet it has no bite to it. and it's not cheap, right? >> is that because of the oak? >> it's also because of the fruit that we use and where we locate, you know and get our grapes from. but the american oak definitely has a distinct profile to silver oak and is something that we are known for. we use 100% american oak barrels and that's something that is very unique to silver oak. >> i still don't understand why everybody can't use an oak barrel. it's not like you have to drink 20-year-old or 10-year-old wine these are -- a good year could be 2010 2011 2012 right?

>> woee age our wine for two years in barrel and two years in bottle before we release it. so in the fifth year after vintage is when we release the wine, so they do have a little age on them. >> and it's not just wine either right? bourbon too? >> you're seeing the american oak boom with bourbon right now, especially with artisan bourbons. other things than aged and fermented in american oak are like tabasco. you know your scotches. so there's many things that -- american oak tastes good and people really enjoy that flavor profile. >> so this guy definitely -- you know silver oak, i know andrew knows silver oak. you don't have a mic on. can you just nod? you know silver oak, don't you, because you go to the finer places in new york city. is it not fantastic, andrew? yeah? it is. he's going on -- he's been

around promoting his ground breaking white collar criminals. you're still private, aren't you? >> we are. we're a family owned business. my father was the founder with a partner. and we had the opportunity to buy out the other family. >> you must have had the opportunity to sell many times too, right? >> pre-recession we were getting a lot of inquiries. but today we're not interested. our family is very dedicated to what we do. silver oak and tume are both our brands. >> how about cases? >> between the two brands we make about 100,000 cases. so to put that into perspective, we're consolation brands or gallo is 6700 cases so we're a relatively small winery. >> have things really dried up since the great depression? >> things are very good again. i think the consumer confidence levels have gone up and that's a direct correlation to wine

sales. so you know restaurant business is booming again and so that's very good for us. and so yeah things are -- we are completely out of wine. >> we only have 30 seconds. you've got to weigh in. you know this brand, i know. >> it's good stuff. >> it's smooth and drinkable but it's really really expensive. >> it's pricey stuff. >> like if you're used to thunderbird or md-2020 or something. i don't look at the year vicinity annual,vintage vintage, i look at the proof. >> have you asked the one question i'm curious about? what do you think about the water drought in california? >> it's a serious problem for the state and for the population. it's really not that big of an issue from a farming standpoint and certainly from a grape growing standpoint. >> they don't use as much. >> and we've had 33 inches of rain in december and a couple of little storms. >> in northern. >> we just don't have the snowpack. so that's really the issue for the drought.

>> right after jerry brown said this is the new normal and it's not going to change you got 33 inches of rain. when we come back a san francisco treat. jim cramer live from cnbc's new a special west coast wake up call. squawk will be right back. ♪ ♪ [ radio chatter ] ♪ ♪ [ male announcer ] andrew. rita. sandy. ♪ ♪ meet chris jackie joe. minor damage or major disaster, when you need us most, we're there. state farm. we're a force of nature, too. ♪ ♪ e financial noise financial noise

financial noise financial noise

let's get down to the new york stock exchange. is there a greater city? i don't think so. >> actually, if you could move it to three hours different it would be good because everybody starts to have fun when starting to think about your show. >> you know i do like that you have welcomed to our world at 6:00 a.m. isn't it. who does that? we do. but now you know what it's like. >> wait a second jim's up every morning when i wake up. >> have you ever watched a playoff game in your life? have you ever been able to go to a basketball game? >> no. final four, no. >> you watch the first quarter, the least important quarter.

>> i haven't seen 48 hours or date line live in a long time. it's got, that's the only way to watch it. >> do you know there's a show letterman? it's been on 33 years. you missed it for 33 years. >> i hear there's a show on after that. i could turn that on after the alarm clock goes off. what are you looking at today, jim? point 2%. winter blind sides us every year. this weather. >> the fed has to raise immediately, right. isn't that important. fed must raise. >> i think there's a good quarter and then stop but at least have something. >> 4%. we heard that. it should be 4% right now if it came from mars. >> i don't know. i don't know what's going on. some people think it's causing us to stay slow. that's their rational. they do. they think that's part of the problem. >> they're just so wrong. >> we'll see.

anyway, thank, jim. okay. coming up tomorrow on squawk box, great line up of news makers. can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant

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hour. liquidateors weighing in on the accompany. scott joins us with the details. scott. >> that's just part of it. in a statement a few minutes ago he says this quarter has big moving parts. one of the moving part a federal investigation the accompany disclosed before but now saying with the kwaurlquarterly earnings report they will seek charges over the laminate flooring from china, presumably. the accompany is setting aside $10 million to deal with that. the number could go higher or be lower. rob lynch saying we deeply care about our customers. the $10 million set aside for the d.o.j. situation. they're doing free air quality testing. all told $15 million led the accompany to a share.

wall street expecting 15-16% share profit. sales of the chinese laminate flooring has plunged as a result of what the accompany says is customer demand. it is going to step away from the chinese laminate flooring moving more toward european and north american flooring. that will also come at a cost. the accompany is battling some 100 lawsuits over the issue of offully malof. some of the samples tested did exceed the limits. that's preliminary testing and it's testing the accompany is taking issue with. nonetheless, it's suggesting more regulators closing in on the accompany and the accompany trying to do a lot of damage control. back to you. >> scott thank you. the stock looks like it's down 17% just this morning on that news. very quickly, folks. >> whose still in the stock? wouldn't you just take. >> there's still $900 million.

>> you think he would take a step aside. >> you've seen most of it come. >> tomorrow squawk on the street starts right now. make sure you watch that docket. >> good wednesday morning. welcome to squawk on the street. live from inside our studios this time at 1 market in san francisco where it is a lot warmer at 6:00 a.m. pacific. i'll tell you what's running cold today is the pre-market. here's oil but more importantly the 10-year which cracks 2% for