slammed as the mexican chain reveals it's now the subject of an even broader criminal investigation into its recent food safety scandal. it's wednesday, february 3rd, 2016. we didn't have that groundhog day problem that bill murray had. it is tomorrow today. and "squawk box" begins right now. live from new york, where business never sleeps, this is "squawk box." >> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we're off to the worst start to the market in years, but we have a big lineup to help us tackle this volatility. coming up at 6:30, larry fink is here. at 7:00 a.m. eastern time, legendary investor and lmm

chairman bill miller will share his best investing ideas. by the way, his fund has beat 98% of its competitors over the years. and lloyd blankfein will give us his ta his take on the economy and market turmoil. this, by the way, is his first interview since his cancer diagnosis and treatment. >> a couple things to tell you about. asian markets tumbled overnight. the hang seng fell more than 2%. the shanghai composite fell a third of 1%. trader cited the dropoff in oil prices and yesterday's selloff on wall street as the reasons. of course, our futures this morning are keying off what just happened. but not really. we're almost flat across the board. s&p 500 -- let's just call it flat. dow up marginally. take a look at the price of oil right now at this hour. you're looking at wti crude at 30.34. in corporate news, watching

shares of dhi pochipotle. authorities now seeking documents dating back to 2013. they reported a decline in quarter quarterly sales for the first time as a public company. revenue falling nearly 7%. shares of chipotle right now at $450.27. that's off about 5%. as joe just mentioned, yahoo! under a lot of pressure this morning. i didn't know if it would come out this way. the company announcing it would cut about 15% of its work force. here's the interesting part. i thought the stock might move on this. consider a reverse spinoff of its core assets from its stake in chinese e-commerce giant alibaba. shares trading on the news of this, at least the opportunity to look at strategic alternatives. down, not up, on that news. >> just effectively selling all the businesses. >> well, we'll see whether they

do. i think there's skepticism, given some of the reports we heard earlier. >> whether or not they want to do this? >> not that this is a head fake or that this is for show completely, but whether they actually -- >> they're going to be facing a skeptical audience. >> yes. having said that, i think it's possible if you get a couple bidders on the table with decent offers, it will force their hand. so whether they want to do this or not or whether they're under pressure. nonetheless, marissa mayer will be able to speak to all of this because she'll be live at 9:00 eastern. news this morning. chemchina buying syngenta for $43 billion. chinese state-backed group has offered $465 for each syngenta share in cash. plus, a special dividend. this would be the biggest chinese takeover of a european company to date. syngenta shares trading a lot higher on that news this morning. >> and in earnings, we're right in the middle of the season, as you know. it's a busy morning. at 7:00 a.m., we're expecting

results from cnbc parent comcast. also, pharmaceutical companies like merck and glaxosmithkline. at 7:30, results from general motors. ceo chuck stevens will join us. and at 8:00, we'll hear from packaged food company mondolez. chairman and ceo will be on "squawk on the street" later. today after the closing bell, we'll get results from gopro and yum brands. on the economy, we'll get an early read on jobs friday. this friday? >> yes. >> jobs friday is like groundhog day for me. every day seems like it's jobs friday, which is scary. that means another month has gone by. i wondered what that was. so unsettling that, whistling. you know, yesterday comedy central had groundhog day on

every two hours. over and over. the closing credits would come on and they switch to the opening credits. there it would be again. >> that's a good play. >> something in the background for me if i'm at home, i'll have that on. >> it's like at christmas time, "a christmas story." >> something is happening at 8:30. adb private report. u.s. economy likely added 190,000 private sector jobs in january. the last one was gangbusters, right. but then it was -- what is it? it's february. so the last one was december. it was seasonal stuff. like 300,000 jobs or something. >> right. big question is going to be the unemployment rate this time. does it fall below 5%? >> doesn't matter. >> nothing matters. we're at 185 on the ten year.

we're in some weird, you know, "alice in wonderland" where either something really bad is coming or -- >> a lot of breaks in a lot of places. >> eight years after the full-ti financial crisis, we have negative rates around the world and $30 growth. >> wage growth. tha that's the only number that's going to matter. >> see if inflation comes potentially. >> you were over with them in davos. worried about income inequality. >> you were with me. >> i'm not part of them though. i'm not there as one of them. >> i see. >> fat cat elitist eating caviar and champagne talking about income inequality. that irritates me. >> did you enjoy the caviar? >> i didn't eat any. did you have any this year? >> i did not. >> you didn't go to the -- we didn't go to the -- >> no, because the -- >> we didn't go to that one. >> i went to that one. >> you went to the oligarch one?

>> yes, but had is a great barometer of what's going on. less caviar. >> no kidding. >> hard to find the caviar. i looked around. i just want to be clear. i was looking for of tthe cavia. >> another manifestation of the real pain taking place in this world. >> limited caviar. >> even affected you this time. >> they were doing fruit this year. just telling you. blackberries. >> how did you survive? >> they used to walk around with big vats, $50,000, $100,000 vats of caviar. they had big vats of blackberries. it was kind of a trick. >> did you go late? >> it was a late night. >> did you get there 10:00, 11:00? >> earlier than that. >> did they have the russian dancers? >> yes, they did. >> pretty cool. >> it was pretty cool. >> i'm going to interrupt this for a moment. let's get another check of the markets this morning. things have calm down after a huge down day for the markets yesterday. the dow was down by 296 points at the end of the day.

that was a decline of 1.8%. the s&p was down even more. it was down by 1.87%. for both of these, it was their worst performance in over two weeks. you have to go all the way back to january 15th. take a look at what's been happening this morning in europe. you'll see that at least at this point there are some red arrows, particularly in germany, where the dax is down by over 1. 1%. italy is down by over 1.8%. overnight in asia, you saw that the nikkei was down by 3%. probably a reflection of what was happening here in some of the u.s. markets. the hang seng index was down too by about 2.3%. oil prices driving all of this, down 5.5%. that's back-to-back losses of over 5% for oil. that's probably why you saw back-to-back days -- actually, friday was a strong day. you can see wti up this morning by 48 cents. back to 30.36. yesterday it closed below $30 a barrel. >> were we up 300 on friday?

500, that's right. >> and down 300 yesterday. >> so ridiculous. >> you can look at what's been happening with the ten year. 1.859. well below 2%. some people saying it's going to go to 1.75%, even below that. dollar is weaker this morning. euro trading at 1.0924. gold prices yesterday hit a high, the highest level we've seen since the beginning of november. this morning up another $2.20. >> i don't want to waste a lot of time here, but i got to tell you something. for more on the markets, we're joined by anastasia amaroso. she was on trump. >> she was on "the apprentice."

it was the first name, but spelled differently. >> i loved her. >> on a treadmill yesterday, watching with subtitles the best of oprah. oprah was there from years ago, had amarosa on. they got in arguments with the other people. people were being accused of being racist. sitting right there talking about all of it, the donald. i think this was probably 12, 14 years ago. looked basically the same. same hair. i was watching it thinking, amarosa is going to be on tomorrow. >> this is our amarosa. >> but where are they now? >> she was sort of villainous. don't compare. >> she was, but then she was really defensive about being cast as a villain. >> i've seen her quoted -- >> where is she? is she still around? is she a market strategist? do you know? >> our paths have not crossed.

>> earnings are a problem. that probably isn't surprising we can't go anywhere. >> no, that's the issue. the issue with the market is if you're looking at 120, 123 on the s&p 500 earnings and a 15, 6 times multiple, that means earnings are not good enough. and multiples are probably high enough given the amount of volatility that we have in the financial markets right now. so for now, the markets have to be range bound and have to have some catalyst. as we know, it's the peak in the dollar, the trough in the oil, and a stable china. we don't have those catalysts just yet. >> i need to interrupt. i have news breaking about amarosa. she's now an ordained minister who happened to campaign for donald trump in the fall of 2015. continue on with the marks, but

i felt compelled. >> any specific denomination? >> i have no more information than that. it's a bit of a -- >> christian probably of some kind, right? >> assuming so. >> cool, all right. >> i apologize. she's an assistant pastor at a church in los angeles. >> that's excellent. hopefully doing good work. so, have you got an explanation for why what we thought was worth $100 a barrel is now worth 30 and 1.85 as rates are headed up? does it mean there's a horrific recession on the horizon or not? >> sure. on the oil side, it's mostly been a supply problem. >> we keep telling ourselves that as we whistle past the graveya graveyard. >> it's mostly a supply issue on the u.s. side.

saudi continuing to pump heavily. iran also coming online. iraq also had pretty strong production. >> so that's what it is. >> we think it's more of a supply issue at this stage. we haven't seen a lot of demand indications. >> that doesn't explain the ten year. >> on the ten year, we think that's more of a flight to quality, flight to safety. >> what are we afraid of? >> so the markets are very cautious right now on china. we talked about that a second ago. and we're cautious really on where we are in the cycle at this point. frankly, i think we're closer to the end and to the beginning of this cycle. doesn't mean we're going to have a deep type of downturn or recession we had in '08 or 2011 type growth scare as well. >> the end of this cycle, meaning the end of the pause in the -- in growth, or we're close to the end of the negative cycle? we're at the end of a positive cycle. >> we're definitely in the seventh inning or eighth inning of a positive cycle. i think the market is trying to

adjust. are we at the ninth inning? are we over? >> what if we're over? what does it mean when we're over? how many years do we go into a bear cycle then? >> typically when you see the fed raising rates as it did back in december for the first time in nine years, the markets and economy can continue to act better and expand for a year to two years from that point. we really think you have another year left in this cycle. possibly even longer. the fact of the matter is we just don't have that much excess. we've seen this. corporate behavior, consumer behavior. when you talk about the cycle, we don't have that much excess to work off. that doesn't mean things are absolutely rosy either. we're in stall speed. particularly when you look at 4q and 1q data, we're barely at 1% gdp. >> you're saying we have one more year, we're expanding. the positive cycle that's ending wasn't very positive. it never got to the point where it felt like much of a recovery.

>> positive from the market perspective. >> what about from the gdp perspective? >> it has been lackluster relative to prior cycles, but i think we have to acknowledge that credit growth is not going to be what it was in the past. by the way, this doesn't just relate to the united states. it relates to china as well. if you ask us, what is the biggest fear, the biggest indicator this cycle might be over, it's not over in the united states, but it's most likely over in china. because it's interesting, china, for example, they've tried to have six rate cuts. you would think this would start to spur some economic growth. it's not helping the economy so far. maybe it's stabilizing. it's not helping the market. certainly not helping the currency. the bigger issue is you have to watch the credit cycle too. in the u.s., we're kind of in a good place but closer to the end. in china, we're probably at the end. >> i would add to that, our view has been massive rebalancing going on. out of '08, the u.s. was really

the leader in terms of market performance, economic performance. europe and japan, as other examples, are much further behind in their recovery than we are. what we've said is, yes, the global rebalancing thesis is on track. it's been challenged by china's slowdown by the devaluation and so forth. where you want to position right now from an equities standpoint is in europe and japan. policy is more stimulative there. earnings are faster. valuations are much cheaper as well. it's really a perspective of positions as well. >> okay. so the s&p is back in correction territory. all right. i want to call you amarosa. can i do that? no, anastasia.

>> thank you as well. >> thank you. >> quick update. looks like she was the former assistant pastor at that particular church. she may have moved on to a new church. i do not know. i don't know what her latest travels are. i believe that's her business. >> you know where i read that? in the "new york times." they reported on it. on her and some of the support she was giving trump at the time. >> okay. good. where are they now? we should do a segment on that. >> regularly. business people. there's a lot of great names. >> that's more boring than pop culture. >> we'll mix. we got to go. coming up, ceo marissa mayer of yahoo! under a lot of pressure from activists. the company may be paving the way for a sale of its core internet business. then blackrock ceo larry fink joining us on the set to talk to us about why he's urging companies to stop giving earnings guidance and how to think more long term. "squawk box" returns in a moment. it's hard to find time to keep up on my shows.

that's why i switched from u-verse to xfinity. now i can download my dvr recordings and take them anywhere. ready or not, here i come! (whispers) now hide-and-seek time can also be catch-up-on-my-shows time. here i come! can't find you anywhere! don't settle for u-verse. x1 from xfinity will change the way you experience tv. welcome back to "squawk box." the first known case of zika virus transmission in the u.s. was reported in texas yesterday. it was contracted through sexual contact, not a mosquito bite. so now you could really call it an std, i guess.

the cdc updated its advice to americans after the case was reported. officials now say men having sex after traveling to zika infected areas should consider wearing condoms. the agency plans to issue further guidelines soon. i wasn't expecting this. >> it's happened before. in 2008 there was a neurologist who travelled to africa, came back infected, and passed it on to his wife. >> through sex? >> yes, and they determined it had to be sexual because there were no mosquitos there that would carry the illness. the couple's four children didn't get it. >> you're seeing health authorities say don't panic on this. but they use the "e" word with it, ebola. zika four out of five people don't show symptoms. there's the problem with pregnancy. sth that's a big, big significant problem, but it's not fatal. it only affects 20% of the

people that get it. >> but there's a lot of women who are of child-bearing age. it would be a huge panic because you worry so much when you're pregnant anyway. it's something that doesn't show up and could be an epidemic. by the way, these same mosquitos carry the dengue virus, which is pretty dangerous. let's talk more about yahoo!. announcing it will cut 15% of its work force and close offices in five locations as it explores its strategic alternatives. that stock moving lower on the news. let's talk a little bit more about ceo marissa mayer's new plan with victor anthony. he's with axium capital management. he's a senior internet media analyst. you're not impressed with the plan. you're downgrading the stock. why is that? >> yes, i am. several things. one, the strategic planning announced last night, i've seen multiple strategic plans come out of yahoo!. not just under marissa mayer, but under several ceos in the past. all of them have failed.

that's number one. number two, growth aspect of the business, that grew 44% in 2015. they're forecasting that to grow in the high single digits, 9%, for 2016. so it's decelerated sharply. number three, they announced strategic alternatives. there's risk around that. i'm hearing there's mentions from verizon. i'm hearing interest, but only for key parts of the business. so there's risk around that as well. and number four, i think all of these, you know, in addition to the work force reduction strategic plan, the potential sale of the business, i think there's also risk around managing all these different aspects all at the same time. >> do you think the plan is a bad plan, or you just doubt they can execute the plan? >> i doubt they'll be able to execute that plan properly. >> which plan are we talking

about? the actual sale? it can't be worth stezero. >> i don't think it's worth zero at all. i think it's worth between $6 billion and $7 billion itself. >> but you're now talking about offers that would potentially take a part of that business. what are we talking about? which parts of the business would someone like an iac theoretically want or verizon? what would they be willing to pay? >> i'm not totally sure. for interactive, i would assume they're only interacted in the search business. that's an area of expertise for them. verizon, maybe just for the media assets. >> you don't think somebody would pick off the whole thing and then break it off, take on the risk themselves? >> that's possible. i think it invokes uncertainty around the business model itself, as well as the potential reverse spin. there's a lot of risks to aff t effectuating that spin. that's why i decided to walk away from my buy rating on this stock. >> they have over a billion

unique visitors who come every month, either to the search page, the mail page, to some of the news sites they have. why are they struggling so much? >> they just have difficulty monetizing those 1 billion users. advertisers are not gravitating to the platform. they want to go to, you know, places where they think they could get better rois. that's google and facebook. >> so they're charging too much for what they're delivering, or just not capable of delivering? >> well, i think that audience, the billion users they have, really isn't, i think, driving product sales or conversions for advertisers. so that's what we're seeing. >> what about all the other products that she's tried to develop? tumblr they took a writedown on last night. is there anything in the pipeline you give her credit for? >> well, i give her credit for trying. you know, there are some -- the finance site i think is good. the sports site. they talked about investing in news as well and lifestyle. they've pulled back away from

original content. that was essentially a failure. there's not much i can give her too much credit for. i think, like i said, this is about six ceos i've seen since i've been covering this stock. all of them have been largely unsuccessful in turning around this business. it's not just marissa mayer. i think yahoo! is a struggling asset. >> what's the missing ingredient? what have all of these ceos missed? >> well, i think they just missed the fact this is probably an asset that needs to be removed from the public eye. you know, i think it probably needs to be a part of a larger organization that can invest freely in some of the key assets within that business. >> okay. victor, thank you for coming in today. >> thanks. >> coming up, blackrock's larry fink issued some advice to wall street executives. stop the earnings hysteria. he joins us next to explain why he thinks company provided earnings estimates are too short term and harmful to developing a long-term strategy. right now as we head to break, here's a look at yesterday's s&p

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welcome back to "squawk box" here on cnbc, first in business worldwide. take a look at u.s. equity

futures. a little bit of positive activity today. dow futures are now up by about 50 points above fair value. s&p futures up by five. this comes after a very rough day where the dow was down by almost 300 points yesterday. we'll see where things stand as we get closer to the opening bell. also look at the price of oil. that's been the big driver. oil prices were down by 5. 5% yesterday. you can see this morning wti up by about 60 cents to $30.48. >> and it is the letter that sent shock waves through corner offices across america yesterday. blackrock ceo larry fink issuing a warner to corporate leaders about the dangers of short-term thinking, writing, today's culture of quarterly earnings hysteria is totally contrary to the long-term approach we need with us n--. with us now, larry fink. we got to talk markets with you.

>> we can. good morning, everyone. >> good morning. this letter you sent, this is the third or fourth year you've sent a letter to ceos with which you have major investments, effectively telling them to stop thinking so short-term and to start thinking long-term. this letter in particular went farther than some of the previous letters saying get rid of guidance and perhaps more importantly give us a whole different set of guidance that goes out possibly several years about what you're doing. >> so the genesis of this letter was after reviewing with our corporate governess proxy team, the demand they have on their time, and some of the demands was it's harder for them to understand where a company is going. then when you have a moment where there's a proxy i ddisputf some sort, it just takes so much time. we wanted to think about ways in

which we could engage continue s -- continuously and have a better barometer as to how a company is thinking about their business, developing a business plan, and then how they're executing it. so the main genesis of the letter is, or the main points of the letter is let's think about a different metric. let's talk about your shareholder letter. why aren't you more forward thinking? i looked at my letters. i think historically, they were a little too backward. much of it has been through conversations internally, but a lot of conversations with different ceos. so the main point of the letter is please provide us with a strategic plan of how you think your company is going to evolve. tell us about your ecosystem. let us understand what your thinking is. i don't want to have anything that's proprietary or anything

that may harm you related to competitive issues, but you can give us a guide post as to how you're thinking, building a business plan for your business and where you're taking it. it is through that lens then we can then measure a company. and through that lens, if a company needs to pivot. i think the beginning of this year, the market reactions and the price of oil are good examples where people may have to pivot this quarter. and you have a framework to understand how a company is evolving with these market circumstances. >> we had bob johnson on yesterday. we talked about your letter on the show. we talked about two issues, or the two issues he raised. one is just in this age of activism and short termism, if you will, that this idea of getting rid of earnings guidance is going to be a tough one. and two, that actually the flip side is if you're a ceo and you put out a plan, you could get locked into it, and i think even raise some legal issues. >> i think his concern was if you weren't giving guidance and weren't telling people and then

missed expectations, that there would be all sort os of recriminations later with what did you know, when did you know it, and why didn't you disclose? >> so i actually believe the opposite will be the result. we don't give guidance. more and more companies are not giving guidance. and i know more and more companies in europe are eliminating guidance. so that's a trend that's beginning. i did not say quarterly earnings. i believe we need to have different metrics to look at how a company is performing. and through that lens, you could focus on, okay, it's not as important if you don't have guidance if you miss by a theoretical penny with the analysts. you could talk about through the lens of your long-term plan and your pivots and all that. i actually blooefz it gives-- be

it gives a better dialogue between your shareholders and company management. the second important thing that was more of an observation for yes over the last year, there have been many circumstances where cos were terminated. new ceo comes in, the company totally pivots. in these cases, mostly european companies. same chairman and the same board. and it almost is like they were separate from that old, strategic plan, that strategic direction. so an important component of the letter was having the ceo in his or her letter affirming that their business plan was reviewed by the board. and i just think that's a symbolic statement. it's also -- it's not a legal statement. it's just a statement that we reviewed our plan with the board. if there is some type of

abhorrent behavior, then you could raise a question. weren't you part of that plan? >> it certainly gives you faith as a long-term investor. i did think about another issue. in davos, i moderated a panel that had health care companies, retailers, and one of the big ceos who was sitting around the table, dow component ceo, said there's no such thing as strategic planning anymore. we used to have these one-year and two-year cycles. but the pace of change is so rapid, and a lot of that is technology. you basically have to have a rolling strategic strategy. and that doesn't have anything to do with the activists. >> true. but i actually believe, if you describe your ecosystem, maybe that's the discussion for that business. you understand, you know, more forcefully where -- how they're evolving their company, how they're thinking about moving forward. i actually think it's easier to digest an understand the earnings and what's going on with a company. >> i would agree with that.

>> so there's a balance of how much transparency do you want and how much opacity do you want. >> can you tell us about these meetings, these -- the ft described them as secret meetings with warren buffett and fidelity, all which seem to be suggesting they want to do what you're talking about in some sort of larger way that's more broad about long-term thinking. >> you know, there are more than those meetings. there are many meetings going on right now where people are trying to focus on how do we improve the quality of governance, how do we build a better dialogue with investors, how to improve the quality of a company's reports. i'm not going to go into any one meeting i attended, but whether i went to that meeting or not and whether those meetings happened, i'm not going to confirm or deny that, but i will say there are many dialogues going on with many participants.

the aspen institute has had many conversations over the years about long termism. >> real quick, and you're going to stay here and we'll talk markets after the break, but you also talk about social issues for the first time. i don't think i've seen any major investor talk about that as one of the metrics or criteria with which you're starting to think about. >> that's right. well, we are -- we hired debra to be part of our corporate esg business. >> esg standing for? >> environmental, social, and governance. >> so this isn't just a marketing thing? >> no, no. and actually we're looking at designing etfs. we're looking at metrics, how to think about this. i think what happened was -- first of all, our clients are asking us. more and more clients are asking us, esg is much larger in europe than the united states. >> but you'll still buy -- you'll allow a cigarette company

if it's in the index. >> if a company gives us money to invest in a specific index and those companies that are in that index, you know, contractically that's our obligation. we can talk to a client and say, do you want to have the index without -- >> but you're not taking a position on sin companies or -- >> no, it's no the my position. our job is to respond to what our client needs. but we're also creating products and designing products in which clients can, if they choose, to design a portfolio specifically that may be more designed for esg issues. no, i think the paris accord was very substantial. and i do believe this is going to become a larger component worldwide. you have the g-20 in shanghai in september. i do believe that is going to be a major component of the g-20 conversation. and then in 2017, the g-20

meetings in germany. and germany is much more forward thinking on esg issues. keep in mind, the most country sets the agenda. so i actually believe in the next two, three years, you're going to see more and more conversations about this. and i'm not here to tell you we're going to be forced to change our behaviors how we invest, but i think as this becomes a greater part of the dialogue, i think actually all the surveys show it's a major component with the millennials' views of the world. as we focus on invests for millennials, having these types of options, i believe, is a good component of how we should think. >> okay. we're going to continue this conversation after the break and also talk about where the markets are going. >> great. >> larry is going to stick around with us until 7:00. >> and the big names continue even at 7:00. our guest host starting at 7:00 will be the legendary investor bill miller. he'll help talk us through the volatile start to the markets. coming up at 8:00 a.m. eastern, lloyd blankfein will join us for

his first interview since his cancer diagnosis and treatment. right now, a quick check in the european markets. red arrows. still there with the dax down by about 1%. "squawk box" will be right back. was engineered...

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welcome back, everybody. the u.s. equity futures this morning have been a little bit higher after yesterday's massive losses. yesterday the dow was down by almost 300 points. s&p was down by 1.87%. this morning we're seeing a bit of a bounceback with the dow futures up by about 61 points. s&p futures up by seven. the nasdaq up by 13. >> pga golfer stewart cink, that's really his name, sinking a clutch putt on some unusual terrain.

this was a 94-footer at halftime. it actually wasn't a putt. it was the duke, georgia tech basketball game in atlanta. the full-court shot earned one lucky grad student a $25,000 scholarship. cink is a georgia tech alumnus. that's pretty good. let me see this again. there it goes. just the right speed too. wow. that's pretty great. >> nothing but net, so to speak. >> a little luck there. who knows. it should be pretty straight, you would think. >> you would think it would be pretty greased up. >> when we come back, much more from our guest host. not sure if you're our guest host. like a regular guest at this point. we're going to talk more about the markets. a busy morning for earnings. comcast, merck, and gm all expected to report during 7:00. lloyd blankfein at 8:00. right now as we head to a break, take a look at the dollar squawk returns in just a moment.

. welcome back, everybody. earnings just out from merck. the drug giant reporting a profit of 93 cents a share on an adjusted basis that was two cents better than the street

expected. revenue slightly below forecast. their earnings projections of $3.60 to $3.75 a share the street was already at the high end of that looking for $3.72. they are giving revenue guidance for 2016. 38.7 to 42.2. the street was higher. again for the dow up 500. down 300 yesterday. lots happening since the day. a lot has happened since larry fink was on a couple of weeks ago and warned us to look for more blood in the streets not necessarily type of shining type elevator but at least -- >> hopefully not my blood. >> ceo and chairman of blackrock the world's largest asset manager. i combine it with you're a young man. you built the world's wish with all the competition and

established firms and you're a young man and the world's largest which is unbelievable. incredible accomplishment. there's a reason for it, i guess. i don't know whether we're a full 10% down. i think we're about where we were or give or take a couple percentage points. but we have seen more blood and more angst and more churning which i think is positive if you're bullish, eventually, but do you think we're close to out of the woods yet >> probably not. but this is a buying opportunity. i don't know how to pick a bottom. i don't think anyone does. but i do does represent this value today. equity markets are properly priced now. i think they are a little high. earnings are coming in better than an off year going into the new year. i'm afraid the market is more

like what the markets were in '94 and '95. remember we had a major setback in the capital markets way back then. but the economy was fine. now since the financial crisis, the world's economy growing at 3%, 3.5%, 2.5%, been in the range. we're still going to have global growth this year whether on the low end of 2.5 or 3.5 we'll still have global growth. use that as a framework for the lens. since 2009 we've seen capital markets go much higher than the general economy and this is why all the angst in the world or angst in politics going on because of this shift, economy growing at a moderate rate and capital markets growing and so from lens of the capital markets we've seen high of 20% decline in the marketplace. but the general my is still chugging along. it's just chugging along with

more uncertainty and i think this is a reassessment of the capital markets. it's not -- unless you can frame the statement that the capital markets are anticipating a further erosion in the market and will cause a recession, i don't see that. i actually in the united states you are seeing increased family formation, housing going forward. consumer confidence is better because they are enjoying the benefit of lower energy and heating. yes, china is probably producing more uncertainty than any place in the world but china is still growing, you know, we can debate where, if numbers are correct at what level. people are spending way too much time focus tongue industrial component of china and not enough on the service side and the xi ten year plan is about that, away from manufacturing to service based. it's happening. not happening as fast. you have mexico that's

improving. you have canada that most people who have said with energy prices, commodity prices would be in a recession. they won't be in a recession this year. canada and mexico are enjoying huge benefits because of the weakening of the currency. so i look at the opportunities to be pretty large today. i would be a large buyer of canada, large buyer of mexico. i believe north america is the safest and best place to be. so, there are many opportunities in this doom and oklahoma. >> i'm hoping that it's an in r intermediate cycle. we didn't get a blow off selloff. so maybe we don't need those extremes on either side or go down to god knows what. >> i'm betting right now the dollar is going to weaken now. i actually -- that's the trade.

>> all right. once again, thank you. >> good to see you. >> coming up our guest host, bill miller. a big morning. he's here to talk about the dismal start to the year for stocks. later at 8:00 goldman sachs ceo lloyd blankfein his first interview since his cancer diagnosis and treatment. stick around, "squawk box" returns in just a moment. novati; from self-monitoring devices that can interpret personal data and enable targeted care, to cloud platforms that invite providers to collaborate with the patients they serve. that's why over 90% of the top 25 global pharmaceutical companies are turning to cognizant. our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way clinical research sites collaborate with pharmaceutical companies,

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x1 from xfinity will change the way you experience tv. blankfei markets in turmoil around the world, legendary investor bill miller is our guest. airlines, apple and amazon. why he says this market is an

absolute gift. a flood of earnings this hour. our parent comcast, pharma giant merck and general motors just a few. chuck stevens will join us on cnbc. exclusive interview with aig ceo. we'll talk about his plans to stream line the company as the second hour of "squawk box" begins right now. >> announcer: live from the beating heart of business, new york city. this is "squawk box". welcome back to "squawk box" this morning. right here on cnbc first in business worldwide. i'm andrew ross sorkin along with becky quick and joe kernen. look at futures. things are looking up. turning around after a tough time overnight in asia. dow looks like it will open up 60 points higher. s&p up about six points. wti crude at 30.43. let's take you through what

happened in the european markets and where we are down across the board. asia was much worse but in the meantime we'll get to joe because there are some earnings that just came in. >> yes, andrew. it is our parent company comcast. and when it was a cable company it was difficult to give the most important metrics, obviously, abuse there was operating cash flow and then you add in nbc universal and the theme parks and then it just becomes a lot of data and there are some things that people key on such as ads and, you know, high-speed internet ads and so on. from what i can tell and i'm not an expert on new media or old media but there's a lot of improvement in terms of whether you're losing video customers or adding video customers. give the bottom line customer, 80 cents a share, a penny below estimates but company points out

most analysts don't know anything about bottom of the line issues that affected it. special items, et cetera. most of the metrics did come in above forecasted, the company raised its quarterly dividend by 10% to $1.10 a share. also added $10 billion or its buy back is now -- added $10 billion, 5 billion which will occur in 2016 which is probably significant. that's where the stock is so far. you guys look at some of these other numbers. even the losses in video were all the way down, lowest in years. 34,000 or something. >> added 281,000 new customer relationships in the quarter. they said it's a 57 improvement over the third quarter of 2014. added 666,000 customer relationships and that's an 85% increase. >> that's it. we added 89,000 customers in video. and we lost just 36,000 total in

2015 which was the best yearly result in nine years. some of those other numbers were big. cable fourth quarter revenue is up. overall revenue number is like, if you ask most companies in the united states we do take a revenue number like this they would grab it. 8.5% growth in revenue would be the envy. probably domestic and not affected by the dollar. >> we should point out, they had an unprecedented year. driven by "jurassic world". >> amazing. >> theme parks up 39% to a billion operating cash flow up 37% to $452 million. >> high-speed internet. best fourth quarter in nine

years. total of 1.4 million high-speed internet customers added. not just cable. >> we talk about the core cutters all the time. seeing subscribers added. >> the other thing i saw and for every buyer there's a seller. we one that. ge did sell nbc universal and in the time that comcast have been managing doubled the operating cash flow in how many years >> since 2009? >> double. that's pretty good isn't it, bill? >> pretty good. >> yeah. things have aligned. not just all management genius although that's a lot, obviously. >> we're going to talk a lot more about comcast but let's tell you about the other earnings taking place. yahoo! on a lot of people's mind these days, earnings matching wall street estimates. revenue topping consensus. yahoo! says it will consider

strategic alternatives for its core internet business possibly against its will. the company announcing plans to cut about 15% of its workforce. shares this morning not moving higher on that news surprisingly. we thought it might. i suspect they thought it would. the ceo will be joining "squawk on the street" at 9:00 a.m. eastern time to explain the plan. >> our guest host is bill miller. chairman and chief investment officer. over the last three years his fund has beat 98% of his peers. his holdings, amazon, netflix, three major airlines, pulte group. great to see you today. the market was down 300 points yesterday. still a lot of panic. you say that this market is a gift. so you love things, the lower the prices go the more you like it. >> lower price. i think what's going on is you get the treasury, 10 year treasury at 185 and the s&p

yields about 2.3 and dividends grew last year 9%. so it's sort of hard to see why you want anyone to own a 10 year treasury when they can tone broad market at a higher current yield and the treasury has no growth rate. >> i think the concerns come from whether or not we're seeing an economic slow down. we're seeing one overseas. does this get imported here. do we see some sort of recession. >> people think the market has some special ability to see the future. the market is like you and me, buying and selling. you have jamie dimon and jamie said we're a bit short. we're seeing the u.s. economy fine. you see that in 70% of companies beating earnings estimates. comcast had a great quarter. it's one of those things there's a disconnect between what's going on and what the markets are reacting to. a company in our income fund a

lot is coming on new media. this is not a growth business. this is a crummy newspaper business. but they buy newspapers at three times cash flow. it's good. what they say is that they are seeing, their business is robust at the local level. barbershops, local car dealers. they say the ad business is the best since 2006. you're not seeing it on the ground in the u.s. >> these lower oil prices, we bemoan the fact it hurts the stock market but it's great for consumers to have much lower gasoline prices. >> the narrative follows the price. historically oil is at negative 85% correlation of the stock market. when oil goes down the stock market goes up. in every recession has been caused by higher oil prices. we lowered oil prices but the correlation is a positive. every day the stock market goes down.

oil prices, lower oil prices are good for the u.s. >> is that part of the reason you still like airlines. you thought these would be good investments just before anybody else did. >> we're up six, seven times on our airline positions. the airlines last year -- delta was down 10% last year when oil was down. they bought back 10% of their stock. they were up 20%. they did almost 4 billion of free cash flow. they will do 5 billion of free cash flow this year. they raised the dividend 50%. but nobody seems to care. >> richard anderson too, phenomenal operator and played mcguyver. cbs picked up the reboot of mcguyver. i don't think richard anderson

has time. >> he was in lots of things at one time. >> that's right. >> maintenance issues at delta. if he's around, here it s-right here. hopefully not, jerry rigging something. >> delta and american airlines and united. >> three of my top ten. they are terrible. they go down every day. >> what would it take for you to change your mind about the airlines at this point? >> maybe if the results were a lot worse. the airlines, the airline industry has consolidated before the consolidation the largest market share was 12% for a u.s. carry. the big three 25%, united, delta and american. it's a completely different industry. they are earning good returns on capital. they are doing it in an environment where the u.s. economy, nominal gdp growth rate is punk right now but earning

record profits. that will continue. tuberculos berkshire hathaway traded for 20 years before it figured it out. >> your home builde erers lefna and pulte. he thinks american households are being creative. your seeing? >> two weeks ago when the market or when the money was low every major home builder except for toll was on the 52 week low list. nothing is going on in china is affecting u.s. home builders. what about toil thing. that's hitting texas home builders. 2.5% of the jobs in texas are oil related. 13% of the income in texas. but the home builders are all reporting great profits. they are growing 15% 20%to 20%

year. ryan homes is four times this year's earnings and three times next growing 20% a year. makes no sense whatsoever. >> not like mortgage rates are going through the roof. >> mortgage rates are three year lows. >> you're right. that's some kind of leading indicator that might not work as a leading indicator. interest rates going up when? >> they are going down. >> i know. the fed supposedly is going to add some hikes which we'll see while the rest of the world is negative. >> the problem that some home builders and pulte they couldn't get labor, business is too good. they couldn't get labor. >> they couldn't get people to do the job. if oil stays low, oil workers will start hammering nails for home builders. that's a good problem to have too much demand. >> have you been fully vested in the stock market, like no cash on the sideline

>> totally. yes. >> for how long >> since the crisis. >> since the crisis. what kind of things are you looking towards to see -- >> you're nice enough to say my fund beat 98% of the funds in the last three years. in the last month -- it took bill ackman, you know, and david einhorn a year to throw es%. it took me a month. >> is that because of amazon. >> partly amazon. everything else. everything else is going down. >> you're not concerned. if you're fully invested there's not a way to buy additional shares. >> what we do we try to mon. etize the volatility. we try to add to ones that have gone down. >> i assume you're adding to amazon. >> amazon is a 10% position. so i can't say what we're doing but that's a very big position.

>> can i ask you a psychological question. on a month like this how you feel and what do you about it. you had tough times before. >> really? yeah. yeah. andrew -- >> there's a lot of viewers who have their own bad months. >> i think my psychology, i think my mom must have dropped me on my head when i was 6 months old. i like lower prices. lower prices tell me i have higher future rates of return. when prices are high i get nervous. when prices are low i feel good. i like a market like this even though it drives people in my crazy. >> you can buy apple for $780 or $520. now apple is cheap. >> we heard how cheap it was at $780 billion which it was not cheap. might have been on some metric. but at 523 you have to think

there really is now value. >> here's an interesting statistic, right. ibm has had years of declining revenue. ibm is a well managed company. has strategic challenges. ibm trades at 7.5 times enterprise value. apple trades at 4.5 times enterprise value. >> were you buying at 708? >> it was one of the few things. we got apple right most of the time. >> you were watching. >> we had sold it when it first got to 700 on the pre-split and we bought it back around 400 and we bought call options on tight. it's worked out well. good position for us now. >> maybe at 500, half a trillion. then i want has to double get to a trillion. these guys are saying it's a slam dunk. >> that's what they were saying then. apple tends to trade on aspirations and they have been negative so the stock is punk.

but it's a very cheap stock. the difference between apple and ibm ibm has an optimized capital structu structure. tim cook is doing a good job but need do better on the capital. >> larry fink talked to us over the last month, about a month ago at the beginning of the month he was saying he expected to see more blood in the streets before things get better. he said this is a buying opportunity. he would be jumping in here. how much do you even try to figure out how much longer last here or is that a psychological figure nobody can figure out. >> larry is a great guy and i hope he's the helped of the fed at some point because he has nothing left to prove on wall street. but, my view is that you can tell how low the market will go.

i think it's low enough right n now. as i said earlier, if you got the s&p 500 when it yields more than the ten year treasury, unless the world is coming apart that's sort of a no brainer. >> bill will be our guest host for the rest of the show. by the way you think it's worth it -- yeah, never mind. >> yeah, i hear you. this isn't our fault. when we return, southern company thomas fanning on quarterly results and where energy prices are head. cnbc exclusive with peter hancock. "squawk box" will be right back. we're the hottest young company around but if we want to keep the soda pop flowing we need fresh ideas! >>got it. we slow, we die. >>what about cashing out? no! i'm trying to build something here. >>how about using fedex ground for shipping? >>i don't need some kid telling me how to run a business! i've been doing this for 4 long months. >>fedex ground can help us save money and deliver fast to our customers.

not bad, kid. you remind me of a younger me. >>aiden! the dog is eating your retainer again. let's take a short 5-minute recess. fedex ground is faster to more locations than ups ground.

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now when someone says... show me funny movies. watch discovery. record this. voila. remotes, come out from the cushions, you are back. the x1 voice remote is here. southern company posting fourth quarter results beat estimates by a penny with a profit of 44 cents a share. revenue was short of street estimates. tom fanning is here to break it down. anyone need any heat in the fourth quarter? that would have made it a little difficult? >> joe, great to be with you again. it was the warmest december in history that anybody recorded. so i was very proud of the way the company was table adjust and

still hit our numbers. >> we just had larry fifrnk talking about not worrying about quarter to quarter stuff. did it give you and opportunity to do some long term stuff? >> we do that all the time. i've between portfolio advocate in terms of energy policy in the electricity sector. we continue to do that. we're leading the renaissance in nuclear. we invested in renewables. that's what we're do. we're long term focussed 100%. >> 4.4% yield is available at today's price, 4.372. i figure that you raised it pretty consistently. can count on that, right? >> absolutely. in fact, you know, a lot of time high yields indicate risks. we're one of the least riskiest

companies. if you look at risk adjusted yield it's a tremendous value. >> how do analysts -- how to you earn 800 million less. revenues how did they miss by such a large number? >> no big deal. the way we're struck youred in ba, alabama, mississippi, florida, is really we pass along fuel savings. to the extent fuel prices are lower we pass that savings along. that results in lower revenue. it has no income impact. >> i just don't understand analysts can't figure that out. you're also at the atlanta fed. >> right. >> atlanta fed has been consistently sort of lower than a lot of places for gdp estimates. how is the economy according to the atlanta fed? is it 1% gdp? >> joe, i got some interesting stuff here. you remember especially in our

december when we were together i was on the show with dennis lockhart president of the atlanta fed we were talking about liftoff and i was talking about my kind of leading and lagging indicators and i had been showing i think throughout the year the leading indicators were eroding in their strength. and it looked pretty negative. well i'm here to tell you that i think our leading indicators may hit a period where we're adjusting to this new reality that is a strong dollar, low oil prices, and even kind of reacting to these kind of malaise in the worldwide economic markets. we seem to be turning around on the industrial side. anything related to automotive or housing, really good stuff. here's the other one that's interesting. the lagging indicator has typically been commercial, and the relationship there is essentially this, industrial sales, create jobs and grow incomes. people move in, they get jobs, they consume more.

commercial is the laggard and basically says as more people move in you add more dry cleaners and schools. there's a commercial sect josh that seems not to be correlated at all. it's related to the digital economy. as we electrify there's a whole new sector of commercial growth that has double the income in terms of job creation and it looks like it's growing much stronger and in sustainable way. >> i like that. number one, utilities should know what's going on basically and then you have the atlanta fed input as well and both of those things were positive. i'll remember you said that and i'll remember the date. i'll move all my money back into stocks today based on what you just said. >> i think it's positive. >> watch the market move on this if i make that move. i'm just kidding. >> when we come back much more

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. among the stories that are front and center activist investor star board value found another target. taking a stake in marvell technology group. says the semiconductor company shares are undervalued. it's $8.67. we'll see whether that moves up higher. we're 45 minutes away from adp's january report. home improvement retailer lowes is buying rona. lowes tried to buy rona several years ago but succeeded this time around. >> general motors rolling out quarterly results. let's get to phil lebeau with the numbers.

>> they were we were stronger than expected. revenue coming in slightly better than expected at 39.6 billion dollars. that speaks to the rich mix of trucks, suvs, cadillac being strong in china. overall margin 7%. in north america they hit that magic mark of 10% profit margin. basically the entire profits of $2.8 billion for the quarter came from north america. china was up but still losing money in europe down 300 million. south america better than some automakers coming in at break even. for the full year gm earned $5.02 a share. better than 4.83 the street was expecting. two notes. record profitability in north america of $11 billion last year and record profitability in china of $2.1 billion, 9.5% margin in china. coming up in 20 minutes we'll talk with cfo of general motors,

chuck stevens. we'll talk about raise theed guidance for 2016 and about why it's hard to get anybody interested in the auto sector. these guys are getting hammered along with the rest of the sector despite the fact they turned in record profitability last year. >> phil, thank you very much. our guest host this morning is bill miller and he has stock picks for us. let's talk about what phil was just saying nobody likes the auto sector do. don't you. isn't fiat chrysler one of your holdings. >> yes and that gm. >> what do you like about these stocks >> they are cheap. great dividend yield. auto sales are probably not going much above the 17 million but not going back to 9 or 10 million. it's basically a value story. we try to think of these things if we owned 100% of this company would that be a good thing. i would love to own gm 100% with

the balance sheet they have. the market doesn't care. the market is worried about auto sales. ford is 11.5. >> why don't you own ford because they have been doing so well with truck sales. >> we own ford at one point. we switched ford to fiat when fiat was cheaper. >> do you look at these cycles with low gas prices that have driven consumers to want bigger and more expensive cars that guzzle more gas. every time prices have gone back up that's a shiel that changes pretty quickly. >> europe has been punk for gm. i'm bullish on european auto sales because the european interest rates are zero. and gasoline prices are low and taxes are high in europe on gasoline. two biggest factors in auto is financing cost and then the driving cost and i think that something like a fiat will benefit from that. >> though we've talked a lot over the last couple of weeks about the zika virus. a huge concern. today we were reporting there

was the first case of it being transmitted sexually in the united states. but do you have a company that you think could benefit from people really trying to corral this disease. >> it's our second largest position. we don't own it because of the zika virus we own it because synthetic bowling is one of the great opportunities for next 50 years. >> what is synthetics? >> basically, what we have been able to do and what's happening right now we have the ability to reprogram dna and so in reprogramming dna, dna is like software. synthetic biology is basically to refor example the entire genome for all living things. so any disease can be cured with

synthetic biology. intrexon is run by a guy -- jeff bezos is an authentic business genius but you would never know what when jeff was 25 or 30 years old. the guy who runs intrexon is an authentic business genius and has a record of creating billions of dollars of shareholder value through companies like clinical data and pharmaceuticals and this is by far the biggest thing he's been involved in. he was on cnbc the other day and asked by kelly evans, kelly showed a clipboard, she says the stock is down 40%. and how do you think about your stock. he says i don't think about it at all. what i think about is building instrin sick value per share. if i do that everything else will be fine. i think that's right. to get to your point about zika

virus. they bought oxitech has a agage modified mosquito. the male mosquito is modified so when it mates with the female mosquito the larvae are sterile or they will die. what they've shown in various tests in costa rica or brazil they can reduce the mosquito population in 60% to 80%. not just mosquitos but any type of insect borne disease for crops they can genetically modify it. when the w.h.o. declared the zika virus a world health problem, that means exactly nothing to intrexon in terms of

the actual fundamentals. it's years before the zika virus and the mosquito made a dent. what it means, though, is it gives an impetus to the regulator change around synthetic biology and genetic modified stuff which is what intrexon does. >> when you got in this stock it was in the teens. how long ago was that? >> maybe a year and a half ago. >> since that time it's gone up to $70, back down the teens and now in the 30s. >> right. like mr. toad's wild ride at disneyworld. >> for an investor to think is the future here or not. one thing for the ceo to say i'm not worried about stock price i'm worried about building this. as an investor how do you feel watching some of these charts? >> i would wish it would go up every day that would be nice. but for us it's a company because the option set on this

thing is so large. the opportunity is so large that we just own it and when something changes in the way in which the synthetic biology world is going on, we're in this thing for, in essence for years or decades. so i would like it if it didn't have the volatility but it doesn't matter notice. it's a little bit like what was said about bit coin. he said it would be really stupid to have money in bit coin that you couldn't afford to lose. the second stupidest thing is no moynihan bit coin. could be stupid to have money in intrexon that you can't lose. but there's a possibility it's worth hundreds or thousands of times the current stock price. >> bill is with us for the rest of the show. when we return aig plan to stream line but not break up.

ceo peter hancock talks exlufy to "squawk box". then a first on cnbc interview gm cfo chuck stevens. "squawk box" will be right back.

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>> welcome back toe "squawk box". futures are up 44 points or so. they were flat then up 50 now up 44. came off of oil which is gaining, what was it like 2% or something which now sis only 60. goldman sachs ceo lloyd blankfein coming up which is, going to be great to see him and to get his take on exactly what's happening globally with all these crazy markets. insurance giant aig making waves in the news with its latest rounds of restructuring. peter hancock joins us now in studio with a business update, president and ceo of aig. can't say too much. earnings are coming when. >> in a week or so. >> are your in a quiet period? >> yes and no.

there won't be too much news. >> people know maybe not everyone does bust can you summarize the key points of what you decided to do. when was that last week? >> a week ago monday. it's really three elements to it. one is increased strategic focus, narrowing the focus of the company, returning $25 billion of capital to shareholders and announcing a couple of divestitures and one is our floatation of the mortgage insurer. >> this will allow what? not just more visibility for people to understand aig but will it also free up certain units to do thing that they are not doing now and be more effective >> first, we wanted to really make it clear where the operating earnings are coming from. we divided the company into the legacy portfolio which is about a quarter of the company and then operating portfolio which is the other three quarters and

demonstrated that the operating improvements that we're executing over the next two years will bring the operating business into the teens where i think investors expect it to be while the objective function for the legacy portfolio is to dispose of that as effectively oppose over the next couple of years. it's really dividing the company into two pieces and then within the operating portfolio into bite size chunks. >> you can sell them better. >> can you sell them if the "price is right". >> peter, you like the plan but we should mention carl icahn does not. he doesn't think it's ambitious enough. he would like to break the company up much further. will this placate, not carl icahn, but when you have this contest which is coming, what have you heard back from shareholders over the past week? >> well, shareholders like the basic elements of the plan. increases transparency. returns capital the home. it recognizes some of the unique

tax attributes that aig has and the loss of those tax attributes if you were to break it up in an aggressive way in the short term. >> what kind of conversations have you had with carl? >> i've had conversations with him and my chairman has had conversations with him. really trying to understand what are the opportunities that aig has to optimize its capital structure and narrow its focus on what makes sense in terms of our core business. we've done a lot to narrow the focus of the company over the last six years. we sold over 40 companies. it's not like many companies that have not already narrowed their focus, but obviously there's more things we can do to make the company more efficient, return capital to shareholders. >> are you disappointed he's not happy with your plan? did you know going in he wasn't going happy. >> i can't speak for any one investor. many of our investors have been

in the stock for a long time. have a deep understanding of aig and the insurance industry and recognize that there are opportunities to make this company more valuable through using our capital where we can grow best. and returning it where we don't. and, you know, others will see there's always, other ways of doing this. i think probably the most fundamental issue that we have tried to explain to people is that the specific designation is not a major factor inhibiting us. >> met life, example is trying to split itself in part to rid itself of the designation. why it is okay for you and not them. >> met life while an insurance company is a very different mix of business than ourselves. primarily a life insurance company. and have roughly twice the leverage and twice the exposure to variable annuities. because of guarantees on equity

prices that doesn't look good under the fed's capital regime which uses a stress test. we have a much more moderate annuity business. so the regime that the fed has just is not a binding constraint on us but the rating agencies are. so that's why we have to focus very much on how the rating agencies view our plans and our. >> the reserve the fed has criticized, whatever shot he took. what was it 3.6 billion in reserve charges for what. >> we're in the property casualty business and the casualty part of that has very long duration liabilities. we insure against adverse events that often occurred many decades ago. estimating what those claims are going to be over to decades to come requires constant updates. so to give you a sense of perspective the $3.6 billion is on top of a reserve number of $58 billion.

>> right. >> if you look at the scale it's not as big as the numbers suggest but it's material and i think has information on old accident years and also more recent ones where greatest severity of claims has popped up. we're not the other one, zurich and other insurers had to adjust. >> if you did more would it hurt the -- i mean you have tax benefits that expire in three years or so, right? you're doing the right amount of restructuring to maintain. that's an important part of aig's future. you don't want to waste those, right? >> correct. we have a net operating loss which means we won't pay tax for some time, but we also have foreign tax credits foreign tax credits have a much shorter expiration date. so because of the nature of the tax law it's crucial to have the

life companies earnings associated with a property casualty company in order to use those tax credits. those tax credits are worth $1.3 billion per year which is, you know, ten times what it cost us to comply with being. >> you got to think about that. you know what, glad you have this job. can you imagine. >> tough job. >> and then are you also trying to invest in yield producing assets to offset -- what are you doing? what have you got? >> needs to hire bill miller. >> it's impossible for insurance companies to get yield anywhere. >> we have an excellent chief investment officer doug shields who you may know. >> no way. >> he joined me last summer. >> he's a long time friend of this show. that's amazing. >> yeah.

>> great. good luck. what would do you? you sound like you know what you're talking about here. >> i pretend to know. that's as far as i go. >> i'm curious about why you decided to sell the adviser business and why you're spinning off the mortgage business because james gorman at morgan stanley has been building an adviser business and the mortgage insurance business is justin early stages of a major move. so those are two pretty good businesses. and so why those and not something else? >> so we look at all of our businesses not whether they are good or bad businesses but we're the apartment monthly own of those businesses. when we look at the adviser business they sell some of our product but vast majority what they sell is manufactured by other people. so by having them be independent of us, it removes any conflicts and potential conflicts that they may have and we are very hopeful they will sell more of

the product that we manufacture without that conflict. i just think they are better owned independently over manufacturing of the investment products. >> peter thank you very much. >> thank you. >> carl icahn's birthday is february 17th. have a big party. >> when we come back we have gm cfo chuck stevens on the company's quarterly results. stick around. know your financial plan

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welcome back to "squawk box". i'm phil lebeau. we have an interview with chuck stevens, cfo of general motors. you just announced your fourth quarter. you just beat the street. chuck a lot of people are looking at your numbers and other auto earnings and saying is this as good as it gets for this sector and for gm right now? >> it's great to be here, phil. as we said before, no, this is not as good as it gets for general motors. we talked about 2016 having improved earnings, improved margins, improved cash flow and improved earnings per share. great year in 2015. but more to come in 2016. >> how much more can you grow margins especially in north america? look you're hitting the targets you set at greater than 10%. how much growth is there? >> we have significant opportunity looking across the rest of the business to grow margins.

european broke even in 2015 versus a loss. we still need to continue our performance improvement in south america and gm international operations. we have significant growth opportunities in on star and gmac financial. with continued strength in north america and other opportunities there's a significant opportunity for us to grow margins going forward. >> chuck, let's talk about the start of this year. you report strong sales yesterday and yet because of the growth of incentives and i think you guys according to jpmorgan were up 31% year-over-year a lot of people think they hit you guys lower they hit the entire group lower there's a real concern about a recession weighing on auto sales in north america. >> so let me talk about january incentives first from a general motors perspective. our incentives were up but primarily being driven by the sell down of models that are being replaced like the cruz, the malibu, and that's not a trend. we expect to see that moderate.

i would suggest our incentive discipline over the last six years is more an indicator of our disciplined approach to the market than january. relative to the industry we don't subscribe to the view there's a downturn imminent. the industry fundamentals, the economic fundamentals would support and we're not alone in this view, would support the u.s. industry is going to continue to be strong for a number of years. >> chuck stevens, cfo of general motors joining us from the company's headquarters first on cnbc. joe, you heard it. they believe there's "room to grow" especially on the margin side and we're not at the top of this auto sector and yet we've been talking for some time. there's no love for any of the auto stocks right now. back to you. >> gas is cheap and people like big cars. up next must see exclusive interview. lloyd blankfein will join us on set right after this break. "squawk box" will be right back.

a world of worry. today returning to trusted names on wall street for guidance. >> i look at the opportunities to be pretty large today.

bill miller. >> there's a disconnect between what's going on and what the markets are reacting to. >> goldman sachs ceo lloyd blankfein joins us in the studio as the final hour of box begins right now. >> announcer: live from the most powerful city in the world, new york. this is "squawk box". ♪ welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. we're 90 minutes away from the opening bell on wall street. futures have moderated again. up 17 points. we'll see whether oil has pulled back. crazy, 95% correlation. supposed to be the opposite way bill miller says. >> 85% opposite correlation.

>> then 95 positive he said earlier. yeah. used to be 85%. noncorrelated. we have a lot to discuss. first becky has a round up of the day's top headlines. >> fewer americans applying for mortgages in the latest week. total applications dropping by nearly 3%. this has a lot to do with snow. we also have some deal news. chemchina agreeing to buy syngenta. this would be the biggest ever chinese take over of a foreign company. also yahoo! under pressure this morning. take a look at the shares. company announcing it will cut 15% of its workforce and consider a reverse spin off of its core assets from its stakes in the chinese e commerce giants a lie about a about a. stock down 1.4%.

marissa mayer is coming up at 9:00 eastern. >> now to our very special guest. joining us in his first television interview since revealing his diagnosis of lymphoma. happy to see you. how are you feeling? >> i think i'm doing pretty good. by the way happy to be seen. >> we want to talk about the markets. how are you feeling, what has this whole experience been like? >> you know it's kind of -- you know i'm very reality based. i've been kind of no choice, no problem and i just never, from the moment i got it, the diagnosis i just went about it. to deal with it. it turns out i was able to handle the meds pretty well.

600 hours of chemo the last few months. but i was able to -- i was able to go to work and i'll tell you this. whatever you might think of if you were in this kind of situation how you re-order your life tend of the day whatever i have been doing at the last 35 years i must like because i'm still doing it in the last 35 years. i also liked it after i got sick. it was actually important for me to go to work in a felt good about it. >> we talked to jamie dimon who also had a similar situation about a year and a half ago. did he say it changed his perspective both on business and life. has it changed yours? >> i must be so thick, i missed that whole thing. maybe one day i'll stop and reflect on it. but really at the end of the day i just want to -- >> as the chemo gets stronger you knew, i'm sure you were forewarned it's tough. was it about what they said it would be or even tougher?

>> i would say that being a fatalist i was, i read all the worst things and prepared, definitely prepared for the worst. when i got the diagnosis, again maybe it's part of my tradition. somebody said how jarring, how shocking was it when you got the information. i said i was only shocked and i got a physical and was told nothing was wrong with me. i would say, i read the stuff. and there was -- i didn't miss it. i didn't not know i was on the chemo, but it was pretty manageable. the stuff they say could go wrong i had my share of that. i needed along the way -- for all what people say and all the optimism about targeted, going right to it a lot of that stuff is in the future and at the end of the day it's still a napalm approach. when you napalm you get isis and

kurds in a iraqis and everybody else. basically it's all your systems. the bad producing cells get it but also so do the runs that make your red blood and white blood cells and all those other guys. you know you're under treatment. i had 600 hours of chemo over the last few months. but having said that, it was all pretty manageable. basically the doctor said, my doctor said in advance of it you'll have about 80% and that's what it was. i was able to go to work. function while the lives. every three week cycle, spent four and a half or five days in the hospital. that's that. i didn't travel. and i had a lot of optionality in what i do and didn't do. i got a pass. i should of thought of this a while ago because i didn't do any of the things i couldn't do

but i also didn't do any of the things which i didn't want to do which normally you don't have that choice. >> throughout this whole period you have been watching the markets which have been gyrating like crazy. >> i appeared plenty. >> just not here. so while we haven't seen you tell us what's been going through your mind beyond this treatment in terms much what's going on in the world. >> what's going through my mind, i remind people, to say the least it's an interesting fun time in the market. this is what we signed on to do. a lot of the stress and strain that we had over the last few years weren't things that we were, you know, weren't the reason why we came into the markets when you think of the regulation and the those elements in dealing with some of the surviving issues that came out of the financial crisis, and now this on the other hand, you know, is a busy two way market where you can have guest whose

think the world is cataclysmic and others saying what a great opportunity this is. i would say, you know, on the whole, i agree with almost everybody who is sitting here, as i was driving into your studio today, towards your studio today but i'm generally sanguine. we muddle through. some of this overreaction to overreaction of assets being swollen and now there's a reversion and -- i think you sound smarter when you're negative so i can regale you. i'm in the risk management business and i spend my time of the worst 1% possibilities so i can go on and on about things to worry about. but we should muddle through and this adjustment equity prices makes sense to me. if multiples are slinging and

you multiply the earnings you get to an s&p that we're approaching now. >> that sound like you think the stocks are more fairly valued at this level not necessarily a buying opportunity. >> fairly valued if, in fact, people -- the valuation reflects earnings, again times a multiple which reflects sentiment. if mark to market sentiment at this point it's riskier world with a lower, you know, more pessimism than before so you attach more multiple. that sentiment can change on a dime and same multiple, multiply by 18 or 19 as more confidence returns. it makes sense for now. but at least i under it. i can explain why it is. i'm not looking for things, you know -- >> gary cohen, maybe you watched

him when he was on. i hope he's right. >> of course he's right. >> there's an oversupply of oil. if you can explain a lot of commodity weakness on the supply side rather than the demand side then maybe we're getting more overly. >> for sure. there's an oversupply. this reflection. it's a self-fulfilling prophecy. if everybody is make being equity decisions especially in a world dominated by basically -- the equity matter has become a macro market. used to be macro markets were foreign exchange and you trade interest rates and currencies and pit stocks. now etf and etfs, you look at the oil price, it's buy or sell in correlation to a self-fulfilling prophecy. i certainly see that's happening. we have to be reality based in this and we have to respect what is happening.

it doesn't make -- it doesn't make sense. i do think most of what's going on in the price of oil and i kind of know that intellectually, how cheap oil and natural gas is being recovered, fracking. you get a move down in the price of oil because saudi arabia said it will stick to its gun and defend its market share in the face of iran coming on and putting more supply in the market. and oil moves down. s&p is falling. i don't know why s&p would have that reaction to the underlying cause. >> one more point. it's a combination of that and the global interest rate environment which is almost unprecedented. seems to indicate we're over estimating growth globally. combined with oil it's like whoa there's something we're not seeing. >> there's a lot. again, going on.

now again respecting the market, i said i can one what's going on in the s&p. what's going on in interest rates the fact that can you borrow money for free in a lot of places or nearly for free and people can think of a way to earn more money than zero off of that, it makes it worth their while to borrow. now we say we'll charge you for not borrowing money from us. that's a big whoa, and it's hard for me to reconcile it other than to acknowledge that's what it is because it doesn't feel and other guests, you know have said this. there's certainly not zero growth. and you know there's a lot of things that can go off the rails but by and large it's not. and, you know, certainly if you look in the u.s., things are improving, not the trajectory people want and of course there's sentiment that's bad.

politics are bad. everybody hates everybody now. i think it's just adding to a general malaise. frankly i think this negative sentiment is not justified by, you know, by the reality of the numbers. >> up mentioned politics and politics are bad. bernie sanders take shot at you personally. how do you see this whole campaign turning out and also do you think that it's impacting the markets in any meaningful way. >> i think you mentioned it by name. i don't take it personally since we never met. another kid from brooklyn. it has potential to look to personalize it. it has potential to be a dangerous moment. not just for wall street, not just for the people who are particularly targeted but for anybody who south of line. we have a moment in time where people are -- it's a liability to say i'm going to compromise, i'm going to get one millimeter

off the extreme position i have and if you do you have to back track and swear to people that you'll never compromise. it's just incredible. it's a moment in history. eventually people, the electorate will notice nothing is getting done and somebody will come up with a new idea of saying hey send me to washington and i'll compromise and i'll get things done and that will be the new new thing and everybody will rally to that point. there's a pendulum that swing in markets and also in the political economy as well. but right now it's an odd moment in time. could you imagine we could ever have a country if the jeffersons and the hamiltons, just came in there with a total pledge and commitment to never compromise with the other side? >> do you think wall street or the business community should be

worried about bernie sanders or is? when you see the comments. i'm just curious. i'm assuming you're backing hillary clinton. >> yes, you're assuming it. >> i don't want to help or hurt anybody by giving them an endorsement. >> the young people in this country are supporting a socialist. suddenly we forgot socialism doesn't work. i'm ready to fire all the academics at the universities. >> probably a reflection of these people growing up. >> stoocialism doesn't work. >> have you been to cuba. you should go. because you go there, stop in miami and you just see the cuban community and how much wealth they've generated here and how,

you know, really exciting and optimistic a community. you go to cuba it's the cousins, same people. >> hold on for just a moment. we got the january adp employment report on friday is the big jobs number but right now let's get over to steve liesman. >> adp private-sector payrolls rising by 205,000 in january. the december report which was stronger already revised up by 10,267. here are the numbers. 205 is the number. estimate was 190. beating the estimate. the good sector revising by 13,000. services very strong of 192,000. there's the nonfarm payroll estimate for friday at 185 which the government plus private and you can see they are running a little bit light. we point this out because adp does a good job in december of signalling the strength in that december report. it was at 257.

initially. here's jobs by industry. construction, plowing ahead a sign of the weather up by 21,000. manufacturing unchanged better than negative numbers. but still a sign of weakness in manufacturing. professional business service at 44,000. 79,000 for small, 82 for medium and large at the end of the pack up 44,000. adp pointing out it's the large businesses that are more sense tifr sense -- sensitive to the volatility. disconnect continues in what's happening in the markets. yet the service sect jobs jobs market and the consumers seem so be doing okay. >> thanks, steve. >> i thought it was something important to interrupt me. >> let's leverage that information. is there a disconnect.

you look at those numbers. >> it's much better than the prime minister vailing sentiment would indicate. >> we haven't talked about china. where do you land on china? >> again that's one of the stressful places in the world. but i think we kind of know it. we don't know the queens of everybody that used up a lot of their reserves. $4 trillion of reserves. that's a big cushion. it's a big place. cushion looks smaller than otherwise would be. they are making some mistakes. getting a lot of things right. if i had to bet it muddles through. they get through this. very disciplined and organized kind of place. they won't get all the decision right. but you could have a bad year -- united states in the 20th century had ten bad years in a row and still a good century for us. i wouldn't give up. for china the test what we have to think about and we're a big investment bank in china and do

a lot of their capital markets and m and a activity there and for us it's how do we scale our investment so we can endure the stressful periods, not withdraw but actually build and invest in the business and hard to out how to invest because the risk of over investing you have to pull back because you'll go through a long period strefs where noth-- periods of strength there. >> did you get the letter? >> i got the letter. zmeents wa >> he want as much los a much l. >> we don't give earnings guidance. we talking to our investors. i bet more will come up here and say they don't have a long term view and nobody would concede

they are not sharing that with their investors. i would say we have a long term view which we change all the time. >> right. >> to deal with new issues and new things. i can always tell you what our ten year forecast is and what our plan is and as i look back at last year's ten year plan not the same plan -- it's not -- ten year plan doesn't have enough years to go, it's reconciliation with the external world. we don't give specific guidance but we're always communicating with people and i think that's what everybody is doing and that's what he's saying. >> you don't think, just totally shifting gears, you don't think that the fed and central bankers around the world have from policies built any huge bubbles because of mall investment? everybody is worried the markets are telling us something is

coming that we just can't see that can be horrific and that's the fear some people see. if growth were so slow we can't repay tint on all the debt. >> all that is fine and when we get second guessed down the road when everything is sorted out people will find fault with hat they did. i just went through, had a disease, taking chemo. i'm cured from the disease. right now i'm trying to deal with the cure. i'm dealing with the chemo solution. ask me who i have taken the chemo or not. of course i would. i think if i were in their place and i was living with the lower, maybe the higher risk of inflation and bubbles, but the lesser consequence of that compared with going over the ledge and dipping into inflation which there are very little tools especially now in this environment where there's no fiscal policy and there's

limited opportunities in that case, i would do what they are doing. i would take the pledge and this is what i would do. again you have a lot of pressure. it's baked in the cake that whatever they do someone will criticize them after the fact, you should have gone earlier. how do you know? >> 50-50 hindsight. >> arm chair quarterback. >> arm chair halfback. >> a lot of times -- look the difference in acsecond guesser and learning from experience, being a good manager or bad manager, good motivator or not how much you let after acquiring information seep into assessment much other people's performance. people who manage the crisis do a good job or bad job. people up at harvard where it's quiet or calm you should have gone 13 degrees left instead of 15 degrees right in a calm. with the information that people had at that time, people need

pretty good courageous decisions and not second guess. in our business people have to take risk, pricer to side what our clients want to do sometimes people come to us, they have been thinking about something for two years and we put a price on it in 20 minutes. we have to do that. you think yourself what did we do with the information that was available at the time. if you're a second guesser, you will always be right but not have a lot of friend in the long run. >> just quickly on the central bank point. you mentioned you're back to getting back to what you wanted to do before. the markets are volatile. you have two side. is that because central banks are pulling back. >> these are very hard difficult markets. not to para dphrase the godfath, this is the life we chose.

that was my way of reminding me from a point of view we're good risk managers. if we think we're good sailors we don't want to do it when there's absolute dead calm or in the middle of a hurricane. but for 90% of the time if you're a good sailor against a poorer sailor you out perform them. sometimes when things are really, really bad or really, really brilliant you can't distinguish the wheat from the chaff. >> so as a practical investor, your stock trades belows book value. >> yes. >> that implies you can't earn your cost of capital over time. >> our balance sheet is not what our balance sheet says it is. a lot of european pleasant things. >> two questions. number one thinking out five or ten years what can you earn on

equity on average every time and second how do you manage capital when the market says every dollar that you retain on your balance sheet is worth less than it was. >> again, this is a moment in time. we had a general down trend. we've been trading for the last period between 1.1 and 1.2 times book value and at this moment you can draw a lot of weird fun facts about a lot of people's, you know, ratios given the big downdrafts. i wouldn't extrapolate off the tippy top or this moment in time. in general that's a low ratio for us to book but that's, you know -- we're not in an industry that's generally in favor now. by the way, we're in an industry where everything we do, and basically our business is really core investment banking business

correlates with growth and confidence. m and a, ceos feel confident. financing market people feel confident so they. finance tracks. we manage assets in a risk assets where people feel more confident. then if they feel unconfident they put it in low fee money markets. our business depends on people reforming, reshaping their portfolios. all those things really correlate with growth which correlates with confidence. this isn't the most confident moment. i would say in a cycle this not the best moment for our business. now it's possible "the cycle" lasts a long time. i look back on this year and say oh, my goodness i missed the golden age but i don't think this moment is the golden age for business confidence at the moment. so i think things will get better. that being said we're also

reality based. our roe during this period, we had a litigation settlement from a prior period but prior to that was it was 11.2. we've been double digit roe which is the highest roe continuing for our category. so we really, really pay attention to returns. but we also see ways in which we can grow. grow our asset management business. technology thing that people think are so disruptive and punitive we embrace and will improve our business a lot. >> you mentioned the settlement. what are investors -- how much time your spending in washington and what are investors supposed to take away from these big headlines on 5.1 billion mortgage settlement. >> i wasn't. that was technical. did you read about that? must have been really important.

i think the settlement we did, i don't know whether we were the 19th or 22nd bank and ours is actually, you know, kind of smaller because we weren't that big. we're not a mortgage -- one of the weirdness and an indication how poorly we did in allowing a vacuum instead of a narrative about our business, we were, you know, representing the mortgage cry s-we bought mortgages from other people and to that extent we were aduccused there's some validity we bought other people's mortgages and went out to lent money and could have been an enabler between us and an institution that created mortgages we didn't do that. but anyway, we settled these issues as everybody else and i think it wasn't -- it didn't have a big bang or explosion. our number was relatively small. >> some people will say banks

today are regulating utilities and some say they are entrepreneurial institutions. which is it. >> we're highly regulated. that's a burden to reconcile. we're highly regulated. as a result much safer. but we still have to be entrepreneurial. at the end of the day people come to us and ask us for capital. if we have a really good -- sometimes we provide our own and sometimes we have such a good reputation as being able to pick success stories in the future that our investor client base will come along with us based on our research and our urging. and so we have to be both. we obviously are regulated but we have to not only be entrepreneurial we have to have a reputation for being good at it. if we didn't have it we couldn't be very good at corralling the capital to support the people that need it. >> you said at the top because of your illness you got to say

no to a lot of things. since your back here today should we assume you're back to doing things you don't like to do. >> i've learned to like the things i don't. >> we're thrilled you came in and that you're feeling better and we hope to see you a lot more. >> thank you. still to come on "squawk box" this morning investing advice from bill miller including more on some names he's buying right now. stay tuned you're watching "squawk box" on cnbc first in business worldwide. opportunities aren't always obvious.

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coming up when we return much more from our guest host, bill miller. first as we head to a break take a look at u.s. equities. dow up 55 points higher. you're watching box first in business worldwide. frank abagnale. convicted felon and con man. that was a long time ago. you know, they made a movie about it. you were shown to be quite skilled at fraud. times change. now i help catch the bad guys. me too. i help banks detect fraud by applying cognitive analytics to public financial records and social media. so if somebody said, "catch me if you can...?" we can. let's do a sequel. it could be a buddy movie. i would like to have a buddy.

let's get back to our guest host bill miller. lmm chairman, legg mason. lmm chairman. not any more? >> lmm chairman. >> legg mason. >> it's a made up thing. >> chief investment officer. you had how many years that you were beating the s&p as a record, right? how many was that before it was broken? >> 15 years. >> it was broken in which year? >> 2006. >> 2006. then we had the financial -- like the world hopefully only ends one and that way you don't have to worry about it that much. if the world ends you shouldn't be long. that was almost the world

ending. that shouldn't be long and you were. how do we know what's happening now isn't the beginning of something similar? why are you sure the time to stay long and not get defensive which would have helped back then? >> if you go back and disaggregate the problems that were back then one of the thing that i missed was that stocks were not terribly expensive back 2006 or 2007 but you had an asset class housing which had a massive move. you looked at debt for housing. when you have these things these crisis type things for the 1930s or 2008 it tends to be an asset based bubble which is debt finance. >> did you know housing was in a bubble. did you stay long in housing stocks. >> no we didn't own housing stocks then. they were expensive relative to history. we have financials which were not expensive and got happy. >> got much cheaper. >> yeah.

>> like i said, usually don't see -- if it's called the great recession can't have one of those every three years or use the word great or every six years. maybe that was significant. every once in a while you see global interest rates and oil and just see some of the things maybe china or what happened to the yuan and it looks like something nasty could be brewing. i hope it's not. if it's not it's a great buying opportunity. no one wants to be holding the bag if we're going into some type of cataclysmic event. maybe we don't even know it's a dirty nuclear or who knows what it could be in this dangerous world we're in right now. >> some geopolitical terrorist event is unpredictable by defrgs. that's not why the market is down right now. >> got more dangerous, these guys. we never had a terrorist group that had their own country. >> but we had a whole country called russia which had nuclear weapons and called the cold

ware. we had a cuban missile crisis in 1962. >> the russians at their worst weren't islamic jihadists. >> islamic jihadist is a exotential threat. >> talking hypotheticals. a dirty bomb -- >> atom bomb. >> that's not, a thousand atom bombs and one. as bad as that would be. >> what a biological agent would do at a theme park to the economy? >> what i'm surprised at sue haven't had more terrorist type events that can terrorize people like the snipers did in d.c. which shut that city down with two guys in a car. and that could happen in every city in the country but we don't see it. we haven't seen it yet. >> if we're talking purely financial events, nothing on the

horizon seems to be built up to the level where it cube systemic popping -- >> in my person opinion which has a history of being wrong from time to time, i think what we're seeing is a lollapalooza event. three things unrelated by the market has them correlated and that's china then oil and the fed tightening in to a declining nominal gdp and widening credit spread. those things are creating great fears what the economy might do in the u.s.. as lloyd said and as we've seen in data, the data this morning, there's nothing in the data which supports that. and so there's a disconnect. now could the market be right? i agree with ray. if prices go down enough that will cause a problem. sources talked about reflecti

reflexivity. this is a great buying opportunity. much better than 2011 which was a great opportunity. there was a real problem there which draghi, in my personal opinion if draghi was not running the ecb could it have been a problem. this is one of those corrections you see to give you and opportunity buy things cheaper. >> bill miller is here. when we come back can yahoo! be saved. the company say it's looking at strategic options as it deals with renewed pressure from activity. we'll find out what marissa mayer should do next. first a huge morning for news makers. here's part of our conversation with blackrock's larry fink.

>> i do believe this represents value today. equity markets are properly priced now. i think they were a little high. we'll still have global growth this year. whether it's on the low end of 2.5 to 3.5 we'll still have global growth. i'm here at the td ameritrade trader offices. steve, other than making me move stuff,

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among today's top corporate stories yahoo! the company cutting jobs looking for a spin

off. paul meads is with us. >> what do you think? >> the market has been wrong. they've been focused on marissa mayer and this was a company that saw its best days regardless of management back 250i7b9s. this is a company that has missed the transition, unfortunately from being a desk top browser based company to a world where it's smartphone applications. so what i think they should do going forward because i never felt there was much value in the core business is take advantage from an offer from private equity or from a publicly trade strategic partner, sell the company. i think the stock might be under valued but only because i believe that it's alibaba's stake might be undervalued at this point. what i heard yesterday on the conference call, you can't grow a technology company to success through cutting costs and we just see more of the same.

>> paul, we have an analyst who told us he thought the core business for yahoo! was worth $6 billion to $7 billion if sold to the right buyer. do you agree with that? >> i don't think so. the problem is the right buyer may not want the business because you think about it. who are the obvious candidates? maybe alibaba with a reverse take over. facebook, google, microsoft who made that bid that they probably should have taken back in 2008. but all those companies are doing fairly well on their own and so you would have to have still pretty deep pockets to buy yahoo! and why with those obvious candidates want? >> all right. paul thank you for joining us. we'll see you again soon. also a programming note for you. yahoo!'s ceo marissa mayer will be destroying "squawk on the street" at 9:00 eastern time. when we return the big movers of the morning plus jim cramer will join us live from san francisco. we'll get his take on the day's

top stories. first here's goldman sachs ceo lloyd blank foofeinblankfein. >> if it's a slow get world and the multiples are shrinking, you kind of get to an s&p that we're approaching now.

at ally bank, no branches equals great rates. it's a fact. kind of like grandkids equals free tech support. oh, look at you, so great to see you! none of this works. come on in.

joining us no from san francisco jim cramer joins us now. power to power jim of cnbc, i think. really. we had bill miller, we had lloyd blankfein and we had larry fink and you have all kinds -- "squawk on the street" has the same kind of show coming up. >> look we're lucky because everyone you listened to this morning is not saying oh, oh, oil futures are down we got sell everything to have bill miller on talk about value and lloyd blankfein talking about how he might be sanguine. if you think this is 2008, there's a housing crisis, a

crisis in 2011 you're wrong. i love that because i think that people who have bep in this business a long time really just have a perspective while other people come on and say holy cow have to sell. they have to be sent to another quadrant, they are losing you mondalely. >> you have a big show yourself tonight, jim. unbelievable. tell me who is coming up on "squawk on the street" and then also on "mad money," you're out in tech heaven. >> sure. we have yahoo! i think marissa mayer will try to -- i don't know. it's a little opaque, your previous guest pretty much said it all, we will come back with questions he asked and issues he asked. fitbit, we have. intel. fitbit is doing everything they can, the stock can't get out of its way. intel, doing so many revolutionary things, only getting credit for being a pc

company. and salesforce.com, new software yet -- it is really enterprise genius, i love it. that stock has been getting hit, 52-week low. we have a lot of things where the high multiple stocks just keep getting crushed, to the point where i wonder whether bill is not looking at high multiple stocks that are no longer high multiple. >> we'll ask him. i have to let you go. we'll see you right at the top of the hour. >> i loved your show this morning. it is changes things. >> is kyle around, too? is bass on or -- kyle bass? >> no, i got kyle ramoli, he knows more about biotech, stage manager. >> we're looking forward to seeing you in the 9:00 hour.

fed president bill dudley speaking right now. he said continuing tightening would weaken things, and dudley believes that financial conditions are considerably tighter than at a time -- than at the time in december during that meeting when the fed hiked rates. look at equity futures before we go to break. looking right now at things looking up in a big way. dow looks like it would open up higher, the nasdaq up about 23 points. >> bill miller and larry fink. >> lloyd is an us. >> the show. >> all right. when we come back, we'll have bill miller's take on twitter. stick around. "squawk box" right back.

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>> one stock we have not gotten to this morning is twitter. people wondering if it's going to get bought, picked up by somebody else. you think at $16, there's a lot of value here. >> i love twitter at 16 dollars.

anything that can go wrong with twitter has gone wrong. that means there's room for improvement and things can get better. with twitter, while monthly active users have stalled out at 300 million -- >> not just stalled out, the number of tweets have been dropping significantly. >> again, that's why it's $16, right? so what's interesting about twitter to me is that it is by far the best aggregator of important information that we have. the west wing in the white house keeps twitter on all the time. first responders listen to twitter. >> news professionals use it as a news tool. >> yeah. people say instagram could have a news feed. larry summers will not go to instagram, he will go to twitter. 300 million monthly active users. facebook is 1.5 billion. >> i'm using it right now. i'm breaking some news. rand paul is out. >> okay. >> suspending his campaign.

>> you got that off twitter. >> from rand paul directly? >> no, breaking news from just stuff hitting. >> oftentimes people are bypa bypassing news sources. >> no, just citing cnn. >> 1.5 billion on facebook, five times the users on facebook. facebook has 30 times the market cap that twitter has. >> is part of your message, it sounds like you're saying influential users are the people who stay with twitter. twitter is a network of interests, facebook is a network of friends. it's easier to monetize larry summers than faces on the beach. i'm not recommending this, i don't have a view on in.

netflix in 2011/'12 reed came out and said we will have a digital company, a mail-in company, and people flipped out. they lost 10% of their subscribers. the stock went from -- went from 300 to 50. what if twitter went -- 300 million monthly active users if twitter said, guess what, you guys that tweet all the time, 3 cre cents a day to be on twitter, a dollar a month. how many subscribers would they lose? 10%? maybe. what if they lost a third, 100 million said no, way, we're not paying 3 cents a day. that would still be 200 million paying 3 cents a day. it would be $2.4 billion of cash flow to twitter on a 10 $1/2 billion market cap.

that's before they go to cnn and say you have 35 million people. let's charge you 10 cents a thing. >> though, one of the big problems with yahoo! they have a billion unique visitors who come a month and they haven't figured out how to monetize that. >> one of the issues with yahoo! yahoo! i do think is moderately undervalued, the issue with yahoo! they don't own anything. it doesn't stand for anything. twitter is a unique property. it is something which is, in my personal opinion, not replicatible at its current scale. yahoo isn't. >> you don't care about the growth at all of twitter? >> no. twitter is hard to use.

i tried to tweet out something, and i thought it was going to the next person, no, it's going out to everybody in the world. >> i don't know how to do it. i don't do it. i just read stuff. >> it's been fabulous having you here today. thanks for inviting me. >> join us tomorrow. "squawk on the street" is next. good morning, welcome to "squawk on the street," i'm david faber along with kelly evans live from the new york stock exchange. jim cramer is at one market in san francisco, carl quintanilla has the day off. always well earned. in just moments from now, we'll have a live and a first on cnbc interview with marissa mayer, looking forward to speaking with her. let's look at futures. a few minutes before that interview. you can see we are set up for whatpp