and freddie mac, nobody wanted them to lend any longer, so that was a big problem, but again, those problems are behind us. europe's still working through them. >> greg, thanks, great to have you with us. and paul, thanks for spending the morning with us, and congratulations on the new job. >> professor, right here. >> see you, dude. >> thank you, everybody. make sure you join us tomorrow. "squawk on the street" begins right now. good thursday morning. welcome to "squawk on the street." i'm karl quintanilla with jim cramer at the new york stock exchange. draghi surprises the market with rate cuts, expanded q nenk both size and breadth. euro's at a six-week low and futures are higher. europe's gains in the 2% range. watch the bond market. jobless claims hit the lowest level since october. even china cpi overnight surprised on the up side. our roadmap begins with the ecb cutting rates, sending ripple effects throughout the global markets. draghi speaking now and we'll brick you the latest. >> presidential candidates not pulling any punches.

donald trump calling for an investigation into china's import taxes just moments ago on cnbc. also, bernie sanders saying he's proud goldman sachs thinks he's dangerous for wall street. >> and what jack dorsey says about investors' lack of confidence in squares stock right now and why he's not worried about the short sellers. but we'll start with the markets. we mentioned draghi expanding their qe program to 80 billion euros a month, consulting the refi rate, cutting the marginal lending rate, the deposit rate, adding, jim that risks to growth remain on the down side and trimming their gdp forecast. >> what can i say, he's got the bank stocks going -- i mean, if they wanted to, they could issue equity. we all know that worked here. the liquidity he's throwing at this is amazing. this guy, sum total, dollar going higher. so, i know everyone's very excited. i know our futures are up big. when will people realize that these are not necessarily positive for us?

now, i had a ceo on last night, europe was very strong, tech data -- do a lot of that -- most of the ceos i have on air say europe will be even better, this will make europe even, but at the same time, if you're a cfo watchi ining this and you are sg here we go again. proctor and gamble, here we go again. the sum total of all this -- maybe it picks up business later on as these banks get more liquid, but the dollar, we don't need the dollar higher. we do not need the dollar higher. >> then there's the added pressure now on the fed, and certainly, on the boj to start getting as creative as draghi appears to be getting. >> what can the boj do that's more creative than what they're doing? >> buy cars -- >> they will buy anything. >> they will buy anything. >> in fact, some hoped draghi would open it up even more in terms of what they'd be willing to buy, not just, i guess it's some investment-grade bonds. >> right. >> but whereas, the bank of

japan will already, i think they'll buy real estate, they'll buy your old clunker, if you want to sell it to them, they'll buy you new wallpaper for your house. >> this guy will stop at nothing. really? >> i'm just making sure you're paying attention. i thought you were sort of fading out for me. >> thanks, yes. >> but maybe they will. >> look, i mean, we can get all excited and be thrilled and the pajama traders can say, if the italian bonds are yielding 1.3 and europe is up and france is up, let's buy united states. wait a second! it's at our expense! it's at our expense. and you know there was someone who's running for president who spoke earlier today, president trump, right? he calls himself president already, right? isn't he skipping that whole election process? >> he's president of the trump organization. >> well, i listen and i say, well, look, you know, if you want to play fair, don't keep bashing your currency. and these have the effect of

bashing the currency. but i do think that down the road, if these italian banks which were so hobbled, the spanish banks, their stocks are up. they should be pricing secondaries the way our natural gas and oil companies do. they should be out there. >> like all day, all night. >> all day, all night. buckle down! listen to me! because notice how i speak that is. >> i haven't heard that in a while. >> they should do 100 million, whatever they do, right now. i mean, they need capital, all right? they need capital. and you know what, and these other -- the countries, could they please start borrowing? would it kill these countries to start borrowing, taking care of the refugees who are -- >> actually, draghi mentioned refugees a few moments ago. >> what is he saying? is he saying that these people are fighting to save their lives? that these little kids don't want to be in syria because, like, they don't want to be killed? >> right. >> help them! geez, help them! >> very difficult political and economic question -- >> yes. >> -- for the ecb and for merkel. >> how about humanitarian? not a difficult humanitarian question, but yes, the other things, yes. >> right. >> my bleeding heart?

okay. >> no, i'm just trying to get a sense of how bad things are in europe, because i feel as though we've sat here for the last couple of years and we've said, oh, they're pretty bad, and then sometimes you've said, actually, they're not as bad as you think -- >> people told me -- [ everyone talking at once ] >> draghi doesn't seem to think they're too good. >> well, i'm not getting that read from the companies that do business over there. i'm getting a very positive read. look, i'm getting a positive read. the auto companies, they're all doing much better there. but what's i think internal lending versus, say london. i can understand why london wants to leave this thing. london, uk is doing great versus these guys, but i do think there are real issues here involving the need for the italian banks and the spanish banks to have more money and feel more confidence that they can lend, and this is a chance for them, if they take it. if they take it. i don't know if they'll take it. >> yeah. by the way, the gentleman speaking right now at the ecb is the vice chair. we'll keep track on what

headlines are coming out of the meeting. in the meantime, are we going to liesman, talk about draghi and what happened earlier this morning? teev liesman's been covering it all morning long. steve, what strikes you as the most important thing right now? >> you know, i think two things, carl. first of all, he delivered exactly what the market was looking for. that contrasts with the disappointment in december. and he seems to have gone a bit further. you know, the headlines i'm reading from the analysts right now are talking about draghi dragging out the bazooka, and that, of course, is what the market was looking for here. and you did get a rally in the dollar versus the euro. coming back a really bit, let me go through the four points he did. lower the deposit rate by ten basis points to 0.4%, lower the refi rate by 0.05%. it is now nothing, zero, as in nothing. expanded the monthly asset purchases to by 20 billion to 80 billion euros and going on until march of 2017, rather than the earlier stop this fall that had been discussed, and a new series of long-term refinancing

operations. he's including nonbank corporate debt into the qes that can be used there. so, everybody got everything they wanted here. and he was asked about this issue -- how low can rates go? he said i'm not saying there isn't a bottom to this, but he's suggesting they haven't reached it, they could yet go lower, and he said that he expects rates to be at the current level or lower through the time that qe is in operation or even further beyond that time, and that's march 2017. so, we didn't get the disappointing draghi. we got the draghi who delivered today, carl. >> steve, thank you very much for that. not the last we'll hear from you today. >> no. >> quickly -- >> wow. >> wide picture of the white house this morning. canadian prime minister trudeau coming to town for a state dinner. last time the white house hosted a canadian state dinner, 19 years ago -- >> really? >> -- under bill clinton, so, it's been a while, even though they're really not that far away. >> you know, i'm going back and forth with simon hobbs, speaking of english-speaking people and

other parts of the empire. >> yes. >> he was saying, look, these bank -- eurozone bank stocks rallied 7% shortly after mr. draghi started speaking and measures of bank credit performed strongly. banks will be able to replace expensive bond financing with long-term loans from the ecb. if you're an italian bank and you've been frozen? wow! i mean, you know, these countries' banks, they are solvent, but they're not really doing anything. he's forcing their hands to do something and making it so you can get cheap financing. i don't know. i mean, the guy is doing everything. he's doing everything except for buying the wallpaper -- what was it, the wallpaper? >> wallpaper for your house, yes. if you need new wallpaper in any one of your new homes -- >> he's not an elected guy. yes. >> wallpapering all your homes could actually add up to something. >> that would be an economic expansion for many different countries. >> yes. >> but this is a very, very big deal that is not going to have any impact on the united states, other than negative. but you know what, people buy

futures because they see the futures over there, they think whatever's good there -- >> we're going to have the conversations again about policy disparity, particularly with the fed, even though they're not going to move now, maybe in june, and the dollar is the key differentiating mechanism now, isn't it, jim? >> yes. >> mine, and what are, we are going to be revisiting that? >> we were so close to being year over year that we wouldn't have to talk about the dollar, that ibm's statements would be about -- when i watched ibm creeping up, i thought about that because they have huge debts, the company i use to really suss out the dollar because they had the worst exposure, and it's not working. canada. >> there's trudeau with the president. >> he should be talking, the canadian -- >> the looney has not been doing well. >> we're thinking of buying some property up in canada. >> i'm with you, let's get a compound. >> prince edward island. >> if they would let us. i like it. we can do the show from there. carl can come with us. >> trudeau and the president

kindred spirits politically speaking, both very progressive. they're expected to talk about climate. that will be at the top of the agenda today. >> right. >> along with the tpp. canada is a signatory to the trans-pacific partnership, and whether it's lumber or oil or what have you, a lot goes on between canada and the u.s. >> i'll tell you, the united states right now should be selling its bonds. the fed should be selling its bonds. there is a world shortage of bonds right now. what a chance to lighten up. then we wouldn't have to hear about how the fed is gigantic about a long-term debt. sell, sell, sell! i mean, if i run the fed right now, sell, sell, sell! >> here's draghi now, says ecb doesn't see any need to reduce rates further, and euro's gone from 1.08 to 1.09. >> oh, okay. >> is this it? is he signaling that's all we've got? >> what else is there? i mean, chemical weapons. i guess he could do chemical weapons, right? he did the bazooka analogy -- >> terrible. >> let's go beyond the bazooka analogy, thermonuclear war. the guy, he's giving -- the

italian banks and spanish banks, their stocks -- i couldn't even look where their stocks were, they're so bad. get their stocks up, it's just an equity. use the ecb loans to be able to make better loans. now, how about some demand? how about some projects? how about something to do? i mean, when i was over at uk, there were -- in london -- i counted 40 cranes. i actually sat there and i counted 40 cranes. i don't know. look, i had some time on my hands. >> that's a lot of cranes. >> that's a lot of cranes. we've got eight cranes in brooklyn, i see. >> there's plenty of cranes if you walk around, even down here. they're just hidden. >> well, but these cranes were working. >> no, these are working, too, they're just in little spots. they're building a lot of stuff right here, all over. >> yeah, $50 million apartments, but aside from that -- >> yeah, that will be empty. >> i looked at a $5 million -- >> chinese people, but never actually visited. >> those are for sale. manhattan, don't get mad at me, brokers, but manhattan real estate peaked and there are very big reductions in manhattan real

estate, and that's in part because -- >> the russians aren't buying anymore, the chinese aren't buying, the brazilians aren't buying. >> pricing is lagging lower housed pricing. >> yes. >> it is. >> a lot of people blame the stock market. >> brooklyn's still going up because there is a big differential, but brooklyn is still strong. not to be too local here, london cranes. you talked about the crash in the shake shack. i thought that reduced us to a completely new york granular show. >> sorry. i'll go national now. >> sports and weather after this. >> yes, right? sports and weather. anyway, look, i just want to caution people that if you buy stocks up here, draghi's not going to speak tomorrow, and what you're probably going to hear is there's going to be some guy who comes on air, a gunlocke type, and says, hey, listen, this means that the fed has to raise rates, so just be aware you're buying on top of what's going to be a negative set of chatter in the united states. >> yeah. when we come back, we'll get to square, the first earnings

report as a public company. jack dorsey with our kayla tausche last night on the record. we'll talk about what he said. then, these primaries entering a key phase. steve agoland with the committee for economic development will join us later on. take a look at the premarket stocks, on track for being up for four straight weeks. haven't done that since november. more "squawk on the street" from post 9 in a minute. opportunities aren't always obvious. sometimes they just drop in.

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square earnings out after the bell last night, a wider loss than expected, but revenue well above estimates. the company also out with a pretty bullish 2016 forecast, which has shares up about a percent in the free market. here's jack dorsey addressing skepticism last night talking to our kayla tausche. >> i think we need to constantly show we're focused on the right things. we're focused on building great tools for sellers and that they value them, and we continue to see that growth, and i think we're not only a first mover in a lot of areas and innovator in a lot of areas, but also we have the best experience. and we certainly compete with a lot, but what we find is that our competitors are only going after one part of the equation,

whereas we're looking at a cohesive end-to-end of what a seller truly needs. >> to that point, hardware sales did double. revenue up 49, was better than most thought, and so is this earnings guidance. >> i thought it was a very good call. one of the things i thought was really interesting as a small business person about a lot of things, i do a lot of stuff on quickbooks. this thing works really well with quickbooks, which is what small-medium really loves, because you don't really have a big infrastructure for payments. and profitability's going to come from these new products and jpmorgan says it will be profitable next year. it was a good call. it was a surprisingly good call. and wow! software and data increased 52%, underlying strength here. this was a remarkable kind of unexpected series of positives. there is an ecosystem, and it's working. it was a very coherent call, too. >> stock's up 40% from the low. >> well, it could be a

profitable company. they were right to come public, and they ended up doing a good thing for shareholders. i like the call. i mean, i was kind of -- there were two calls last night, the box call, aaron levy, and this call. they're both young companies and the calls were terrific. they were great. they were very uplifting. you know, i haven't been feeling that well. i got on these calls, i felt much better! >> that's good. of course, box doesn't need to share their ceo. did you hear anything on that front that satisfied you from dorsey? >> you know, look, dorsey is still -- he has a lot more time than i have. i mean, i'm up 18 hours a day. i guess he just, maybe he's on some sort of drug that makes it so he doesn't have to sleep. >> i don't know. interesting story today in the "wall street journal" about the challenge of falling stock prices for companies such as twitter and how they're meeting that challenge while trying to basically make good, if you will, on the stock compensation part of that by -- >> twitter paying more as a

percentage of revenue -- >> than almost anybody at what, 30%. that was a very high number in terms of the stock compensation in terms of revenue. >> $200,000 to stick around for another 6 or 12 months. >> why don't you make money? that's a great solution having a stock go up. >> remember when we reported adjusted ebitda for these companies, it doesn't include stock compensation, so why not pile it on? >> does not include plant and equipment. >> right. >> does not include advertising and marketing. >> we're a restaurant company, but adjusted ebitda doesn't include opening restaurants because that's not something we do. >> look, i'm not going to include what we pay people or food costs, that would be ridiculous! >> focus on the adjusted number. don't worry about the other number. >> yeah, as a matter of fact, i'm only going to talk about people who walk by. they don't have to come in. my walk-by ratio is unbelieva e unbelievable! people just walk right by. i'm counting them. it's adjusted. >> you're talking literally traffic outside. >> yeah, they don't have to come in. it's adjusted. >> it's adjusted. i au adjust for that.

>> i adjust for no sales. >> when we come back this morning, we'll get cramer's "mad dash," count down to the opening bell, look at the premarket and we'll see if the gains in the futures are sustained as the euro makes a big reversal before the open. back in a minute. can a business have a mind? a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive? in new york state, we believe tomorrow starts today. all across the state, the economy is growing, with creative new business incentives, and the lowest taxes in decades,

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the opening bell. trade this morning. >> you can watch anything you want, but you know what the key to this market is? >> tell me. >> it's a company, gpor, gulfport. you probably don't think of them as a key to this market. this is a natural gas-based company with marcellus in utica. that is pennsylvania and ohio. now, natural gas, david, is 1999 levels. it's so low, no one's making money in natural gas. literally, they could burn the stuff. there's way too much. there's no place to put it. this company needed to do this deal and they're doing it. 4.7 million shares, upsized at $25.25. in the year 2525, this stock's got to go higher. why is this so important? because natural gas companies were reluctant to come to market, mostly because, you know, it's oil that people want. natural gas is -- you know, oil moved from $26 to $38. natural gas is going down during that period.

>> $1.77, something like that? >> we are seeing new numbers out of rba. what's shocking is that natural gas production is still going up in this country! it's like this! i mean, we have february and march figures, it's -- >> why is that the case? >> we found too much of it! there's just too much in the utica and marcellus, and -- >> and they're obligated to take it out of the ground? >> well, they're not even capping it. the utilities are using more and more of it. the coal, the rails, although i like the rails because consolidation. but rbn's data showed me -- i was blown away that natural gas is still on the increase in terms of -- i mean, oil's come down, but look out. this deal has to get done. there are other companies in the queue, like southwest, swn. now, if they would listen to me, they need to do 100 million shares right now. >> yep. >> david, natural gas is the weak, weak link in the whole system. that's where the equity has to be raised, and these guys are smart to do it. >> all right.

we're going to be talking a bit later on ete and what's been going on there. >> oh, i can't. >> right now, we've had a lot of movement. the dollar's actually been getting stronger this morning, because mario draghi -- >> no, weaker, stronger -- >> sorry, weaker. >> just got weaker, yes, than when we first spoke. >> weaker than when we spoke. the euro getting stronger. you know what, let's go to steve liesman to bring us up to date on what mario draghi's actually saying in frankfurt. steve. >> yeah, hey, we're getting some conflicting comments from draghi, and the market, the euro is rallying again and is now above where it was before the statements came out, and the reason is because mario draghi said he does not anticipate further rate cuts. that, however, is one of only three things that he said about the future of rates. as i reported, he also said that rates will stay low for a long time, longer than march 2017, when qe stops. the second thing he said is we can go as negative as we want, although that suggests there is some lower bound, wouldn't give a number from what i could hear.

then he said this other thing, he doesn't anticipate further rate cuts. so, that seems to have been the spark that led to a rally in the euro. and now the last i checked, guys, you probably have a better check than i did -- we started this whole thing at 1.09, came down at 1.08, now it's back about 1.10 right now. but up. >> and steve, clarify exactly what he said. this notion that there is no need to cut rates further, but he did add that new facts can change the situation, right? >> that's right. and you can take that both ways, carl. obviously, if the economy and inflation are stronger than expected, they could pull back or they could do more. but in terms of the outlook for further rates, i wonder if the market was, when it saw this news of really meeting and exceeding the expectations of what was in the package today, that built into that was an anticipation that, hey, they're at minus 0.4 on the deposit

rate, they can go further. now for the immediate future, draghi seems to be taking that off the table, that they want to at least stay right here right for the immediate term. >> if you're yellin or kuroda today, what's going through your mind? >> what's going through my mind is how far can i get away from where europe is right now and where japan is, if i'm in the united states. and i think this issue of the limitations of divergence of policy -- how much am i willing to look for the strengthening of the dollar versus these other currencies and let my manufacturing sector continue to take a hit? by the way, i have to think some of the political rhetoric would weigh into the fed's thinking right now because the dollar trade is a huge issue on the table. free trade has become the whipping boy, so to speak, of this political season. it's seen as the villain that is responsible for much that is wrong with the united states and donald trump out there with a strong, essentially antitrade

message, certainly a message that is against some of the agreements we have in place right now with mexico and with china. so, this issue of the dollar is one that the fed has to believe is going to be watched very closely from the political standpoint. >> yeah, certainly splashed across the top of the "journal" this morning as free trade becomes maybe the main political dynamic. steve, thanks. >> globalization under attack. >> you heard trump on air this morning talking to joe and becky. >> i was looking over nafta figures from commerce, and geez, you can make this argument. now, i've been saying that this is -- you know, a lot of people watch the show and say, hey, jim, you're anti-nafta. and i have to tell you i'm anti-nafta. >> you are anti-nafta. >> i'm anti-navigate j ya. >> you were looking for the net effect on jobs -- >> it's horrendous. and literally, you cannot make cars here versus there. you just can't. you can't compete. >> nafta, of course, passed

during the clinton administration. >> right. >> and certainly will be an issue for hillary clinton to be dealing with, even though it was her husband's administration. >> republicans and democrats have all agreed, it's a very good thing for big business wants it, but not if you're ford or gm. that's why that michigan vote -- bernie sanders won! >> yeah, he won, and a lot of question now about the transpacific agreement that they're looking for ratification for. >> oh, geez. >> very much unclear that's coming. >> and i'm just waiting for trump -- my writing colleague, matt -- a piece -- when is someone going to say 17% of the pollution comes from china? they export pollution, okay? they export -- they take away jobs. i mean, this is such a natural issue. and now both parties -- you know when we did our debate, they weren't even talking about this. i mean, the antiglobalization thing is happening so quickly, and draghi is -- you can just say that if you're mercedes or bmw, you need that euro down again. >> at the same time this morning, reuters with a headline

that a meeting between opec and non-opec members now unlikely to happen in march because iran has yet to commit to -- >> yeah, i saw oil going back down, which is another reason why you've got to be careful in this market. remember, there is no opec anymore. there is no opec. different countries try to talk up the price of oil by saying these things. all you have to do is listen to saudi arabia. they're the only ones with the excess capacity. there is no opec. there is none. >> right. you said that. there is no opec. >> well, just trying to make the point there, trying to drive it home. >> saudi arabia -- >> there is just saudi arabia. >> there is the opening bell. >> wait until they start fracking there. holy cow. >> s&p on your screen. at the nyse, bailey house, providing housing and services to people with aids and hiv in new york city. at the nasdaq, it's politico hosting america's fiscal future at the nasdaq. and mohamed el erian, chief economic adviser at allianz and ben white, cnbc's political

contributor, doing the honors today. >> things are happening very, very fast. we've had reversals in gold. we've had reversals in the dollar. i just urge people, don't make -- this is an emotional moment for stocks. i would not take action right now if you feel like the market's going to soar off of -- you know, i just -- i'm not saying i don't trust them. i'm just saying just wait, just wait. very emotional. the big cross trends in oil, in the dollar. this market is not set up -- it's better than it was when the dollar started going down, but just be careful. all i'm saying is be careful. if you want to -- look, go buy home depot is what i'm saying. go buy kellogg, the natural organic campbell's soup. >> still high in sodium, though, right? >> well -- >> salt is natural. >> do you use -- >> salad dressing? >> well, we touched on his wallpap wallpaper, but i'll bet you his refrigerator is just as processed as ever.

>> it's not there. >> you know what my grandparents passed down to me? velveeta. >> velveeta, yes. >> velveeta. >> i go for more kraft singles. >> aren't those great? isn't it amazing that cheese is orange? >> mac and cheese. >> or an omelet. forget cheddar, man. why go cheddar when you've got kraft singles? >> totally agree. >> we have not done dollar general at a nine-month high this morning. >> oh, and it should be. and you know what's doing great there? tobacco. like the tobacco stocks, philip morris. have you seen that? >> yes. >> you know, i was over in europe. they're still smoking. they smoke like chimneys over there. i mean, it's crazy! but dollar general, they added more candy. they added more food. and they added, you know, tobacco, too. very strong. very strong. >> cvs did away with tobacco sales? >> yes. >> they took a little share there. >> that really did help them. i don't know, tobacco -- i don't know a lot of smokers, candidly,

but it sells well. it sells well. >> wanted to, as we often do, mention valiant. why? well, yet another piece of news this morning involving that company. you may recall back on january 6th, the committee on oversight and government reform of the house of representatives wrote to valiant's chief executive officer on an interim basis, howard schiller, saying we'd like documents regarding your company's decision to dramatically increase prices of two heart medications. well, in a letter dated this morning, march 10th, they have said that they haven't gotten the documents that they've wanted. valeant has produced all of the nonprivileged documents that has been identified as responsive to the itemized requests, but the committee goes on to say, we're still waiting for a lot of stuff that we asked for that you haven't given us, and so, we'd like to understand why you've withheld what you withheld, valeant, and we'd like a description of each document you withheld, the total number of

pages you withheld and the reason you withheld those documents, and then we'll evaluate based on what we hear when you respond to those questions. so, there's a back-and-forth going on here between the house oversight and government reform committee and valeant and the production of documents related to those price increases. >> all right, so, let me get this straight. were they subpoenaed? documents? was that a request? >> no, it's a request. >> so, now they'll subpoena them. >> it's a request. they have subpoena power, but i don't believe -- it was a request. >> okay. because you know, you can't withhold documents from congress -- >> well, you can, when you say that they're privileged. >> are you in contempt? >> no, i mean -- >> privileged -- >> yes, that's right, you can say that they are privileged. that's absolutely right. and i guess you could say that there's, under testimony, that there's -- >> not impacting valeant's stock price at all, so -- it's up. >> because nobody's reporting it. you just reported it.

>> no, we've been reporting this. >> okay. >> who's about the easier return, pearson or munoz? that's a big question. >> it is. well, munoz hasn't even come back yet, i guess, officially. monday is his first day back. they got some support today. i believe it was from the pilots -- i have the statement here. yeah, the chairman of united's master executive council air line pilots association said the united pilots have grave concerns about the sudden attempt by two activist investors to gain control of united's board of directors. this soup attemcoup ateam -- th release -- being done for their own benefit without publicly stating their intentions for the future of the airline, unnecessarily distracts all employees from our commitment to improve customer service and grow united airlines, that a statement from the pilots this morning in regard to, of course, that attempt by two owners of the company's stock, owning

about 7.1% of the company, but six board members, or six new people on the board, including, of course, gordon bethune as chairman. that fight's just begun, but we haven't heard about what's the plan here, you know, give us more specifics. and so, we are awaiting and expecting that at some point, they'll put a white paper out or something like that. >> david, do you know what was the 13th best performer from the bottom? >> i don't. >> 13th? >> 13th. >> lucky 13. >> was it united airlines? i figured that was -- >> i mean, i guess these guys, they're just not happy with success. >> which, you know, in a proxy fight can always be the key. even if you've underperformed your group. if you've outperformed the s&p during any meaningful time frame, a la dupont, remember, when they did win only to lose -- >> right. >> you can beat back a proxy fight. so, it will be interesting to see what these guys really want. >> yeah, what is it?

what is it they want? when is it enough? >> how many yachts -- >> how many mexican restaurants can you own? >> let's see, jim mentioned some of these european banks. let's get to simon hobbs on the floor, who's got more on the move they saw today, simon. >> listen, guys, we have got a game-changer, potentially coming through from the ecb here. remember that for much of this year, we've been concerned about the european banks and the net interest margins, the money they make from loans as they cut further into negative rates. the ecbs being very clever here. it's going to pay the banks to take money from it and lend it into the economy. what they're saying is there are big chunks of fresh money available for the next four quarters, ostensivably broadly unlimited in many instances. to take from the ecb, lend that money and cut the interest rate that's agreed on from 0% to

minus 0.4%. in other words, the ecb is going to pay the banks to take money from them to inject into the economy. the other thing is that by the ecb saying that they can borrow large amounts of money now at zero interest, it basically means that their refunding problems that they have go away. the bonds that become due they can borrow from the ecb for four years in order to repay those. this, therefore, puts a lid on the volatility that we've seen on the bank bonds in europe. what mario draghi described as volatile and uncertain. so, as far as the banks are concerned and europe is concerned, of the four things that he's come through with, that is the freshest and the most powerful. one of the reasons why the euro may be rising today is because they think that this could actually turn the european economy around -- invigorate lending, soften some of the problems that we have with the european banks, and at the same time, cause inflation. guys, back to you.

>> all right. great report by simon. just really nailed that. >> thanks, simon. we'll see you again in 22 minutes. all right, let's get to a report here this morning on ete, energy transfer. of course, reported on it many times, the continuing drama between that company and its merger partner, williams. well, it doesn't get any less dramatic. in fact, it keeps getting more so. yesterday late in the day, 5:15 or so, we get an 8k from ete saying, hey, we just did an offering. it was privately done, not publicly. we wanted to do a public offering, or at least make this exchange offer available to all of our shareholders, but williams wouldn't let us, so we went private. what do we do? we're going to issue $329 million of convertible units to insiders, 18% going to kelsey warren who owns 18% of the company. and he's going to exchange, as will other insiders. i think it's basically all management coming in.

and they're exchanging their current units for this convertible that gets them more senior in the capital structure but vastly reduces the dividend payments they will receive over the next nine quarters. what does that do? well, that dramatically reduces ete's dividend payments over those next nine quarters to the tune, at least according to some analysts, let's call it about 300 million bucks or so a year, $840 million in total is where jefferies comes out by their math in terms of what will be saved on dividend payments. but again, they do become senior in the capital structure, and they will be getting something, and then they convert at the end of this period, and there is the possibility, of course, that, in fact, you will see a dividend cut more broadly on the common that they will not be a part of. williams didn't agree to this offering. they didn't consent to it. and there is some debate as to whether in the merger agreement itself williams had the right to both say no to a public or

private offering. the people advising ete say, no, that's not the case, there is specific agreement that says below a certain dollar amount we're allowed to do an offering, and this fits that. we are not in breach of the merger agreement. i've heard nothing from williams this morning. i can't give you a sense to where they stand on this -- >> stock's down -- >> it will have the effect of reducing the yearly dividend payments made, but this company has a lot of stress on its balance sheet, as we've said many times -- $6 billion in borrowing for the $8 a share it will pay in consideration to williams in addition to the ratio of etp shares. you're also looking at a capex budget that's significant and the possibility that there will be an acceleration of debt at williams on the wpz side of williams that they'll have to make good on very quickly. so, the bigger question is, is this enough? and if it's not enough, they don't say anywhere in their 8k

that they're going to preserve the dividend overall for common shareholde shareholders, so it doesn't mean they'll have to cut the dividend any further. although the people who participated in the exchange offer won't be subject to that cut, although they're giving up their dividend payments for the next nine quarters. it's curious, jim. it's curious for any number of reasons, including, of course, the key one being, is it enough? what is williams' response going to be? if they believe they are in breach, will they do anything or just sit silently by? ete does not believe it is in breach of a merger agreement. and clearly, you have two partners who are not seeing eye to eye. when you speak to ete, they'll say this makes it more likely and puts us in a better position to do this deal than would otherwise have been the case. >> i'll tell you, i've worked -- i was on this for about an hour last night and finally said i just don't understand how you can just be the insiders? and i don't understand how they

can get a dividend ete -- >> listen, it was the insiders because you wouldn't let us go to everybody. so we're at least doing it. we're trying to put the company in a better position financially. >> have you ever seen a deal like this? >> no. i've never seen anything quite like this. >> and williams was down big. >> never seen anything quite like this. and again, i'm waiting for williams to give me some sense as to their beliefs and their concerns here, if they have any, in terms of where this deal -- >> why would you own the stock of ete? >> because you believe that it's going to benefit from the results of the combination and be able to withstand many of the financial pressures on it? >> at the right price, this was a good deal because they were putting together this fabulous natural gas network. so, when things were better, it made sense. but geez. i've got unbelievable people on this thing who are just saying, could you please explain it to me? and you did the best of anyone. >> it's about 12% dilution is what we're talking about.

all right, we've got to move on. let's get to -- >> why? this is impossible to understand. it is like calculus. remember when you got into calculus and said, i'm switching to art. >> i barely made it out of algebra one. bob pisani's on the floor with more on what's moving. >> well, draghi checked all the boxes -- expanded qe, extended qe, included corporate bonds. let's show you what happened in germany. now, remember, this was widely anticipated. he did exactly what people were anticipating. you see the initial move up, then the move down there, and i think there were some issues about, number one, he was talking about no more rate hikes, at least for the time being. i think that took a little wind out of the sails. but also, take a look at what germany has been doing. europe has been rallying since mid-february, essentially, and there's been a lot of talk that he would do exactly what he did. we're up about 15% in germany in the last month or so. so, a lot of this was baked in. and as i said yesterday, the risk was to the down side. had he not done this, we would have been down 3%, 4%, 5% today. bare that in mind.

european bank stocks, i hope you're listening to simon, they're all up here today, even though we're looking at negative interest rates. you can see the nice moves up. extended quantitative evening for corporate bonds is going to help. and deutsche bank was, what, $14, $15 just a while ago. it's up almost 30% in the last month or so. so, they've had a big rally. banks here are generally on the up side, not as much. we saw rates move up just a little bit here. i think that's helping some of the regional banks here in the united states. so, zions, huntington banc shares, comerica, pnc. and oil turned south about an hour ago, weighing on the major sectors. energy stocks are to the down side, but fractional gains in the other sectors. and news stories here. i mentioned they last night. nasdaq is buying the international securities exchange. this is one of the biggest options platforms in the world,

$1.1 billion, mix of cash, bank loans and bonds. it's important for two reasons. first, nasdaq will be the biggest option player in the united states. look at this list here. nasdaq owns 25% of the options business right now. international securities exchange owns 16%. put them together, they'll be 40%, twice the size of the cboe and twice the size of i.c.e., which runs the new york stock exchange. the second important issue is they're going to attempt to merge with the new york stock exchange and will likely make an offer in the next week or so. don't have a formal number, but i.c.e. also has indicated they are interested in buying the london stock exchange. we don't know if cme is, but they are a potential bidder as well. this is a very rare occurrence. a big exchange like the london stock exchange does not come up very often. happened a few years ago. there was a flurry of merger deals. this is the first one in a long time. we'll keep a close eye on that. finally, we have a lot of debates about active versus

passive management. can active management outperform here? here's a recent survey, large-cap managers 66% of the time do not outperform. the mid cap managers do not outperform. small cap. the russell 2000, 72% of the time. still tough for active management. right now the dow up 57 points. guys, back to you. >> bob, thank you very much. bob pisani. a lot of activity in the front end of the curve. let's get to rick santelli at the cme. hey, rick. >> hi, carl. well, you know, the conventional wisdom everywhere, all i've heard since the decision and some of the press conferences, that's it, man! mario's fired the big bazooka. great. it's like a game of poker, he's all in. all his money's in the kitty, supposedly. he's antied everything, merchandised every raise. what next? what's the encore? because that's what the markets are probing! that's why it's like chicago at midnight, u-turns everywhere! let's look at a two-day of u.s.

rates, okay? yeah, the two-year popped up a bit, and it's coming off a little. further down the curve you go, actually, the more they come off. look at a two-day of 10s, back slipping under 1.90. 5s are back under 1.40. let's look at a two-day of european two-years, minus 47 basis points. less negative. let's look at a bund. 0.19% right now. not a lot of activity, but what we want to watch is how much more negative they go. many say watch the 13 to 15 area, that's going to be critical. isn't this all indirectly all about two things? it's about weakening currency -- yeah, ra, ra, more exports -- and it's about equities. nobody cares really if it's full, if it's test tube, if you slap it and it doesn't cry, it's still test tube, it's still alive, right? but in the end, what are we getting out of it? think dax, the most important level there is 10,000. not quite there and also losing

a bit of steam. when it comes to currencies, we all know what's going on. we did it, the chinese do it, the japanese do it, it's weakening currencies. but after a while, it's like running around in a circular room banging against the walls. how much is it really going to do? it keeps ping ponging back and forth. currency contagion, policy contagion. you can't outweaken your currency if everybody's out in the same game. so, there's your two-day euro. let's look at it since december 1st, pick some macro levels to pay attention to. consider, looks to me like live trading's around 110.25. it's been above 1.11 on the bounce, but the key levels on a closing basis, it's not about the ride, it's about where you get off. watch 1.08 to 1.10 on a closing basis. carl and the gang, back to you. >> nicely put, rick. see you soon. when we come back, more on the ecb, what draghi said and the market's response. the news conference is just wrapping up.

deutsch's joe livonia will join us in a moment as the dow holding on to a 72-point gain. sir ridley scott, legendary filmmaker. are you a film buff, watson? no, but i am studying the visual storytelling in your movies. you know, it's amazing how much information is contained in a single image. one visual can make or break a film. i am analyzing images for factory managers, sales people and healthcare professionals. that's good watson. but not exactly movie material. perhaps the healthcare professional could be played by matt damon. you're learning, kid.

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i am proud that the gentleman who is head of goldman sachs -- he didn't give me $225,000 for speaking fees -- he said i was dangerous, and he is right, i am dangerous for wall street. >> bernie sanders at the debate last night referencing a comment that lloyd blankfein actually made on our air about him. he's dangerous, at least if you're coming from wall street's point of view. >> socialism is historically not been compatible -- when i worked at goldman sachs, i didn't feel like -- you know, trots kelly was out, marxism out, lenin, socialists, they didn't come into play there.

>> gus levy wasn't a socialist, was he? >> no, he wasn't. john whitehead, i never had him pegged as a socialist. socialists historically would be somewhat an threatical -- >> weinberg not a socialist? >> weinberg? no. i spent some time with him. he's definitely not a socialist. bob ruben was not a socialist. think about the top guys. maybe there was an echelon, you know. there was an echelon that maybe was more socialist -- >> some of them were with bernie sande sanders, maybe? no? >> i just -- >> different paths. >> we always talk politics, and not one of them revealed to me they were card-carrying socialists, not one. >> news you can use. >> i'm trying to think back. whole rolodecks of people, not one single socialist. >> how would donald trump be for wall street? it will be interesting because with hedge funds, he says he'll go after carried interest. >> yeah. >> has referred to them as nothing more than paper pushers. >> it would be -- yeah,

there's -- not any of these guys are really running with the intention of making lloyd blankfein necessarily treasury secretary, but hillary clinton -- hey, think about jon corzine was in the senate, and hank paulson, treasury secretary. >> yes. >> there was a long tradition of public service that everyone seems to -- >> bob ruben was the treasury secretary. >> goldman's the hot potato. i talked to my daughter, she says, how could you have worked at that place? i was really poor. it's how i made money. it was good. my father was proud of me. and i have to think -- >> how times change. >> not enough socialists there. i mean, we should -- don't you think for diversity purposes, there should have been a stal stalini stalinist, a socialist in this production? let's see if they can put some trotskyists in that report. >> we have to get to "stop trading." expedia updated by piper. this is an important goal.

this is the first one that said home away is going to be great. now, home away is a stealth airbnb. they did not do enough independently and expedia will do this. i love this stock, love, love, love. morgan stanley raised numbers sherwin williams, not because of sales but because of raw costs. i think pp sgnk a better way to play it, but sherwin williams is on fire. don't forget, the big season, the big season for all of these guys is the spring. and you know when spring really begins? >> march 20th? >> no, on david faber's birthday. >> oh, that's a good one! which would be today. >> hey, baby, 72 degrees, i'll take that. >> better than 72 years old! >> it is. >> i'm a young-looking 72. >> that's still a little ways away. >> yes, that is 30 years. >> how quickly the years go by, will be here in no time. >> happy birthday. >> thank you. >> what's on "mad" tonight? >> okay, we've got the hot stock of the nasdaq! we have box, we have aaron le

vink e, who delivered a great quarter and won decent business from home depot, a lot of nice contracts, 66 deals over $100,000, 13 deals over $500,000. great revenue forecast, cash flow positive. wow. >> wow. >> this was a great call. i talked with aaron many times, and this was the call that a lot of people thought he should have delivered before, but you have to have a business to deliver that call. so, that would be very, very exciting. i mean, i know, a birthday party's probably more exciting to you, but for me, that box in square, box in a square hole. >> you'd probably throw workday in there and ahavivago and a fe others. >> these guys, so exciting. instead of netflix, i watch square and box and abago. netflix, nothing, means nothing to me. house of box and square. all right? house of box and square. >> tonight, "mad money," 6:00 p.m. when we come back, more on the

ecb, on draghi, when "squawk on the street" continues.

good thursday morning. welcome back to "squawk on the

street." i'm carl quintanilla with simon hobbs and david faber at the new york stock exchange. what a morning. drag draghi's policy, euro rises and falls. oil, meantime, opec sources are out in force saying a march 20 meeting is unlikely to happen. dow down back to 37. >> so, coming into the hour, this is how we plan things, but obviously, that could change. the ecb out with some surprise stimulus moves, cutting rates and expanding its qe program, plus some goodies for the banks. all the details. plus, jack dorsey on running two public companies at the same time. hear what he had to say in an exclusive interview. >> and the bullish case for coca-cola. why rbc is expecting close to a 20% total return on that stock for the next 12 months. >> let's get right to those ecb headlines that are moving the market today. senior economics reporter steve liesman is in boston following all the details on that stunning euro turnaround, steve. >> yeah, it's very interesting, sara, what's happened,

especially if you layer in what's happened with the stock market. but basically, people are saying that draghi dragged out the bazooka, that he not only met expectations, which he didn't last december, that he exceeded expectations, but then he took some of the shine off of it when he said he doesn't anticipate that rates will fall further. then he came back at the end of the press conference, and i want to play you exactly what he said at the end to try to redirect the market. here's what he said. >> from today's perspective and taking into account the support of our measures to growth and the return to our price stability objective, we don't anticipate that it will be necessary to reduce further rates. of course, new facts can change the outlook. >> so, that's a bit of a problem. let's go through what he did or what the ecb did. cutting the deposit rate by ten basis points down to negative

0.4%, lowering the refi rate by 0.05% to 0.00%, expanded the monthly asset purchase by 20 billion euros to 80 billion. and he had said this would continue through march of 2017 and announced a new series of long-term refinancing options that essentially will provide liquidity to the market for a very long time right now. also lowering, slashing the inflation rate -- sorry, i need a better verb there. 2016, inflation rate now seen at 0.1%. that's down almost a full percentage point. then reducing 2017. and again, they don't hit their target until 2018. i think the effect on the federal reserve here is going to really depend on how the euro shakes outs out from all this. it was weaker. it came back and was stronger. it settled back down into that 1.10 area. if it does end up needing a

substantially weaker euro from here, it will give the fed pause. already the fed governor in my interview earlier this week discussed this idea of her concerns about divergence, and david lipton -- sara, you remember the first deputy director of the imf -- out with a strong message about the need for the advanced economies to coordinate policy actions. and this would not be coordinated if the fed continued to hike. >> steve liesman reporting from boston. we'll return to you throughout the day. i just want to flesh out what steve mentioned about the financing operations. from a european perspective, that arguably is the biggest surprise here. effectively, what the ec sbnk doing, and they've come out with this before, big tranches of money available to the banks. it's going to be effective in two ways. the first is, at 0%, you can borrow for the next four quarters. that means for the banks that have liquidity problems, if you talk to the italian banks, they wouldn't say we're insolvent, we just have potential liquidity problems. they're going to borrow huge amounts of money from the ecb to

replace bonds that are maturing, so it reduces their liquidity problems. more importantly, the ecb is saying, look, you can borrow at 0%, or if you lend the money into the economy, you could have that bought down to wherever the deposit rate is, currently at minus 0.4%. and if it moves further down, then you'll be able to borrow for the economy again at a lower rate. in other words, the ecb is saying it will pay banks to take money off it and push it into the economy. so, we've been discussing the problems with the net interest margin for the banks for some time in europe. it's why the stocks have lost still about a quarter of their value so far this year. this in a sense is a nod to them that they are going to help support their margins for lending and further encourage them to lend in the economy, sara, which, of course, is in many senses the holy grail for central bankers. >> it's helping our banks, too. the s&p s&p financials group is the second best performing. let's talk about how all this impacts the broader markets, your money. kevin kuron at steeple group and

joe from deutsche bank, if you're looking at the euro to determine how draghi did and whether investors were impressed, the read now is no. did he make a communications error? >> i'm not sure he made a communications error. the market was expecting him to do something so he felt he had to. the problem is really qe or this unconventional policy in the fact that we are certainly in an age of diminished returns. and i find it hard to believe that qe, either in europe, japan, the u.s. at this point will give us sustained growth, or what we used to call a skate velocity without some serious structural reforms getting made. and the u.s. is a perfect case in point. if we want faster growth, we should have a comprehensive tax policy, fiscal initiative, where there is already bipartisan support to get the economy going. too much rests on central banks. >> well, that's because -- i mean, politicians are fighting and they're not getting anything done, and so, central banks are the ones left -- >> but they made the mistake, though, by taking on the

responsibility of trying to get these economies to move, and i think they've gone past the point where it's useful. >> no matter what your thought about that is, kevin, i mean, mario draghi did manage to stir a rally in european markets, as simon just mentioned, european banks. this was far and above what the expectations were from him in terms of policy measures to ease. how do you think the reaction is playing out, and how long will it play out, given what joe just said? >> yeah, i think it has been playing out. i think joe hit it exactly right. this has been in the market for a little while now. the deliverable came today, but the market has been discounting a move out of the ecb for the last few weeks. and so, the strength we've seen over the last two or three weeks i think is at least partly attributable to an expectation for a move, now you've got it. but the point is, and i think joe hit it exactly right, is there are limits to what you can do with monetary policy. so, there was a whole line of questioning, for example, about how far can you go into negative interest rate territory.

and the answer is very unclear. the point is that you can't get the economy moving the same way from the 0% interest rate starting point as you can if you're starting at 5% or 10%. so, there are limits to what can be done and other reforms that need to be made. >> kevin, just on that point in fairness to mario draghi, what he's saying is the ecb doesn't see any need to further reduce rates beyond march of 2017 is what they're talking about. and then he says, we don't want to further hurt the profitability of the banks by lowering rates. so actually, this is the listening bank. all that conversation that we've been having or that bank investors have been having over the last two or three months, the guy is listening to them, which is why you get the response that you do. >> yeah, moving the rate -- you're right, moving the rate is really going to provide a subsidy to the banks. you've got a large part of that banking system that is now going to enjoy negative interest rates on their loans, and it's going to improve net interest margins.

there's going to be a multiplier on that based upon a leverage factor. but ultimately, it's going to be the size of the subsidy to the banks times the duration of the time that it stays in place is ultimately going to be what's going to be the subsidy to the banks, and they do need to rebuild capital a little bit here. so, this is helping the banking system from that point of view. but in terms of the overall economy, there's a real limit as to what they can do with negative interest rates. that's all i'm saying. >> let's talk about the economy back home for a minute, joe. you've been, i think, net negative for a while. and yet, we've had upside surprises in course epi and durables and factory orders and jobs, even. >> right. absolutely, sure. >> wages notwithstanding. second thoughts or no? >> no. the reception probability has come down because the equity markets rallied and your forecast partly becomes indodge nous to how financial markets behave. but i would say to bullish people, look at the survey.

almost every component saw acceleration in terms of where they see sales, capital spending, employment. there's absolutely no evidence of wage and price pressures there. it was very downbeat. >> just a small point, though, ubs has pointed out that there has been a political element to that in the past. >> there has been a political element -- >> in an election year, there are many people who hold strong views here. >> you're absolutely correct. however, simon, this is against a backdrop, where i've said this before, nominal gdp is three. even if we take energy out, we're sub four. this is not like a very strong aggregate demand backdrop. and when you look at what small businesses are saying, there might be a political element here, but the breadth of the declines to me is broad and wide enough that it's telling me something that things aren't really great, that if we're lucky, we'll muddle through this year. >> let's talk about the election, the economy and the markets. kevin, i'll ask you about it, but first i want to play for you some sound from last night's debate where senator sanders was asked about ceo lloyd blankfein of goldman sachs coming on cnbc,

saying that sanders would be dangerous for wall street. here's how sanders responded last night. >> i am proud that the gentleman who is head of goldman sachs -- he didn't give me $225,000 for speaking fees -- he said i was dangerous, and he is right, i am dangerous for wall street. >> referencing there what lloyd blankfein said on cnbc, kevin. is that a concern for wall street and for investors right now? >> well, bernie sanders has been talking a big game about breaking up the banks, but remember, he is on the election trail and he is lagging behind the leading contestant. so, the idea that, you know, this is something that makes for very good sound bites, but there's a huge distance between a promise leading up to an election, what happens after you get elected, and then ultimately, what can be delivered through congress. so, you're miles away from

actually having any kind of reform along the lines of what he's talking about, which is basically breaking up the big banks. >> joe, would you re-evaluate your position on the economy based on who becomes the candidate on the republican and democratic side and who gains momentum in the general election? >> i have my candidate. i'll keep it private. i'm of the view, though, whoever it is -- this is my optimistic nature -- is that he or she will pursue a policy of a fiscal significance, bringing back something like simpson/bowles, again, had bipartisan support. that to me makes me optimistic longer run. so, i'm optimistic without saying anything in more detail. >> thank you. joe lavorgna and steven klein. jack dorsey on the record after the break. hear what he had to say about what it's like to run two companies in such a time of volatility. dow's up 74 points.

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square reported better-than-expected revenue in the first earnings report since going public. kayla tausche spoke with jack dorsey in an exclusive interview and she is in san francisco this morning. hey, kayla. >> reporter: hey, carl. the narrative jack dorsey is running two companies, that changed when they reported a jump in fourth-quarter revenue

and payments processed despite a wider loss than expected on ipo charges. software and data is the portion of the company that encompasses cash advances, food and delivery and payroll. that grew 52.%, but they attributed its path to profitable to core square, the hardware sales of the white chips that process the payments and transaction fees on those payments. dorsey in our conversation called that business stable and predictable, so stable, it seems the company is now forecasting a profit this year, which could for now put critics to rest. the critics drove the stock to below its ipo price this year and i asked dorsey about managing through volatility for not just square, but for twitter, too. >> i'm really proud of the company for the transition it made from private to public. you know, we had a lot of conversations as a company of what this means for us and what we should focus on, and there's going to be a lot of noise. we're entering into a market

that is turbulent, that is a little bit confusing, and you know, certainly has as many negatives as it does positive, but we're doing it eyes wide open and we're doing it with an understanding of what matters. and what matters is we're building a tool, and do people want to use it? and if they want to use it, the value of our company increases, and we're taking a long-term view of that. but the only thing that we can control is what we ship. and if people love that, and if we're learning fast on that, then they'll continue to use it and continue to pay us, and that's really what we have to optimize for. >> one of those negatives, those negatives he said which are actually greater than the positives in the payment space is competition with his scrappy up-start competing against big incumbents like visa and jpmorgan chase. both investors in square, but both are tackling merchant checkout, and chase is even taking over square's starbucks deal later this year.

they're also tackli p-to-p payments, too. so i asked if he was worried that invoestors are becoming a threat. >> the relationship doesn't change. chase is a big partner to us, as are many other financial institutions, and our focus is on our strengths. our strengths are simplicity on speed and cohesion of the tools that we provide to our sellers so that they can provide a great experience for their buyers. if we can do that, their business grows. and if their business grows, our business grows. >> a cohesive ecosystem where sellers are engaged in the product, that is what he and cfo sara fryer have been saying makes growth reliable. couple that with twitter, where user growth, as we know, is barely breaking even. retaining talent is becoming harder by the day. but dorsey is not concerned that he's spread too thin. on the call, he said he has a consistent schedule and a consistent structure, but it was clear, guys, when we asked him about both companies, when we asked him about his time and his

schedule, he said company, singular. he wanted yesterday to be about square. he was staying on message. and that, if anything, was very clear yesterday. >> kayla, thank you very much. kayla tausche there in san fran. up next, a big second-quarter beat and a boost to the dividend of vail. the stock's up more than 10% in the last month and did really well last year. what is ahead and will they be buying snow resorts on the east coast? we'll talk to the ceo after this. turns romantic turns romantic why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away

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ski resort operator vail beating analyst expectations on increased visits to its properties along with steeper prices, but the stock is losing, as you can see on the session so far. the ski resort operator also increasing its dividend by 30% while also raising its outlook for 2016. joining us now by phone from vail is ceo rob katz. welcome back to the program. >> good to be here. >> the commentary seems to be there's a problem that you don't get so many tourists from the uk and canada and brazil, but in this country, at the high end, the consumer stays strong.

is that your reading? >> yeah, absolutely. we're seeing a very strong u.s. economy, and we're seeing a terrific result in terms of bringing u.s. travelers into our resorts across the board. we actually also saw some real strength from australia, which was counter to a lot of the other trends, and that was primarily because of our acquisition in paris and the introduction of the season pass that connects both australia and the u.s. so, those two things have driven our results for the year. >> interesting. of course, people often talk about the international opportunity for you as a banker with more m&a. we have to say, of course, that you have much better snow this year on the west coast, at least at the beginning of the season. how did it pan out? where are you now on that crucial element? >> absolutely. i think last year was a very difficult year in tahoe, and so, this year has, certainly at the beginning of the year it was very strong. and now i think we're seeing just good conditions all around, and that certainly helps. but a big driver for this year was really our season pass sales. we went into this year with

double-digit increases on season pass sales. and you know, in an industry that's fairly mature, growing only 1% or 2% per year, to see a big chunk of our revenue come into the season up double digits, that's going to help tremendously. and of course, we just put those season passes back on sale for next season. >> right, so, in your commentary, you praise yourself for your sophisticated marketing efforts. is that it? why is it so sophisticated? >> well, not everyone in the united states or around the world skis. and i think for us, the key is to find those people who are interested in taking a ski vacation and send them the right message, a personalized message, based on who they are, to get them to take that extra ski vacation with us or to choose one of our resorts. and you know, we've really built up a lot of information and sophistication around this. and in our kind of business, which is not a mass media marketing approach, you know, targeted and personalized is everything. >> 25% of skiers, of course, are on the east coast. that's around 13 million annual

ski visits, potentially, according to credit suisse, who is upbeat about the stock. they think as a result of the poor ski weather on the east coast, people might be willing to sell their resorts on this side of the country and you might be a willing buyer. are you seeing movement on that front? >> i think we're always out looking for opportunities. and the big driver for us when we make an acquisition is how will it help the value we offer through our epic pass, you know? how will it help that season pass? will guests from around the world see the fact that we've added this resort to our network? and that's really going to drive business. we recently bought wilmont, the ski area just outside of chicago, a relatively small ski hill, but chicago is such an important market for us that that's why that acquisition was so important. >> hey, rob, it's carl. we're beginning to see some real signs of pricing power in leisure -- disney adding some resort fees, raising the price of their food program. how is that playing out on lift tickets? >> well, i think one of the

things we're trying to do is we really orient our best value to this season pass. and if people buy the pass, i think it's really known worldwide as truly one of the best values in all of travel. and then, yes, if people want to -- they don't want to buy a season pass, then they could buy an advanced lift ticket, but if they don't do that and they just want to show up and make their decision very last minute, that's where we take up our price the most, but we're really trying to push the advanced purchase concept. >> the other part of the business, i suppose, is real estate. and obviously, the hotels and the chalets that are out there for buy and obviously for rent. how is airbnb affecting what you're doing? because i guess in many instances, simply because of the landscape, these are supply-controlled areas, which arguably you would have a monopoly on in certain instances with accommodation, unless those people that are there are increasingly using airbnb. maybe they buy more of the apartments you put up for sale if they can rent them out. what's your view? >> yeah, i think we're seeing a big increase in airbnb, and of

course, brbo, across our resorts, and it does present more competition to our lodging business, but it's a huge opportunity to the mountain, because now there are more opportunities, more choices for people to stay when they want to come visit vail or breckenridge. so, we actually see the air br b & b rbo trend very positive for our company overall. >> i see the stock's up 23% over the last few months, not bad. rob katz joining us from vail resorts. coming up, donald trump going after china on "squawk box" this morning. >> you should do an investigation of how much china is taxing product going into china. well, free trade means we're not taxing each other. you can't have one nation being taxed and the other nation not being taxed, okay? so, you know, there's a lot of things wrong, and i believe that i will be able to straighten it out. >> so, will he? we'll have steve odland, ceo of

the committee for economic development, former office depot ceo, right after the break. man 1: i came as fast as i could. what's up?

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it's not just security, it's defense. bae systems. welcome back to "squawk on the street." i'm jackie deangelis reporting from the nymex. the department of energy out with its weekly natural gas storage report. we have a drawdown of 57 billion cubic feet, a little higher than expectations, a little steeper drawdown than we were expecting but still well under what we saw

this time last year, well under the five-year average of 118 billion cubic feet. the total stock's about 50% higher than they were this time last year as well, and that's been the nat gas story. we are very well supplied. we were trading at 1.78 before the report. we're still in positive territory here but slightly lower at 1.77 at this point. traders are telling me we could go down to the 1.50 level, if temperatures continue to be mild and stay in that in-between where you don't need heat and you don't necessarily need to turn on air conditioning either. so, look for nat gas prices to possibly go down. remember, 12% decline this month in nat gas alone, 35% decline in the year as well, so, these prices are very depressed when you compare them to what we've been seeing for nat gas. meantime, i want to send it over to sue herera with the "business news update." >> thank you, jackie. good morning, everybody. here's what's happening at this hour. the president and first lady welcoming canadian prime minister justin trudeau and his wife to washington. a large crowd was on hand for

the arrival. the two leaders will meet privately to discuss efforts to combat terrorism and improvements in trade and environmental issues. vice president joe biden arriving in jordan, the last stop on his mideast trip. he met with king abdullah, the second in amman. jordan is a key member of a u.s.-led coalition that is waging the fight against isis. five people are dead, another three injured after a shooting in a neighborhood outside pittsburgh. that shooting happened during a backyard party. police are searching for a pair of gunmen. and john good gutfreund has died of pneumonia. he was hailed as one of wall street's most brilliant and innovative players, but his wall street career abruptly ended in 1991 when he was forced to resign after solomon became embroiled in scandal. nicknamed the king of wall street, gutfreund was 86 years old. that's the cnbc news update this hour. carl, back to you. >> sue, thank you very much. jeb bush meeting with the three remaining anti-trump gop

candidates in florida this week, this as bush considers whether he will endorse either ted cruz, marco rubio or john kasich before next week's delegate-rich winner-take-all florida and ohio primaries. ted cruz picking up another major endorsement yesterday from former hp ceo carly fiorina, but front-runner donald trump told "squawk" this morning that cruz still has no chance. take a listen. >> the problem with ted is that he'll never get anything done, and the bigger problem is it's impossible for him to get elected. he'll never be able to get elected. he's very strident. he'll never be able to get elected. he has no chance. and he'll never win states that you have to win. you can't because of his views on things. >> joining us this morning, former office depot and former autozone ceo steve odland, now a cnbc contributor and ceo of the committee for economic development. steve, it's good to see you again. good morning. >> hi, carl. good morning. >> this notion of free trade. trump this morning on our air called it stupid trade.

it's speaking to a lot of americans. can you blame him? >> no. you know, look, i think one of the things that's happened here is that both parties have underestimated the amount of anger and frustration that americans feel towards washington, and this has led to the rise of what i call the extreme outsider candidates in sanders and trump and cruz to some extent. and so, what you see here is you see these positions being taken that we've never heard of before -- you know, no trade, you know, we're going to make mexico do this, we're going to make canada do this, and this is appealing to american instincts here that we have been taken advantage of. so, you can't blame them, but we need adults here to come back and say, look, everybody take a breath, because there are some real benefits here to trade. and with the wrong actions, we could break the very economy that we have put in place here over the years. >> do you disagree with the notion that we've come out a loser on some of these trade deals? >> well, you know, look, i think that you have to take in the

balance the cheating that goes on, you know, the intellectual property theft and things that we're seeing from some of these nations like china and russia and so forth. and i think we need to take action on those. but if we cut off all trade, which is literally what some of these candidates are saying, we're going to stop all trade deals, we're going to stop all free trade, we're going to -- you know, that will kill american jobs because, you know, that trade happens both ways. i think that free trade around the world has lifted people out of poverty, and there's plenty of evidence that billions of people have raised their living standards. so, i think we have to be careful in all of this rhetoric. now, the question is, where will these people govern and how will they enact these kinds of things? and you know, i think that the american worker, while it's cathartic to think about, gee, we're going to take action and we're going to fix these things -- the american worker needs to be patient and understand, and our politicians

need to teach our people the importance of trade and the policies that we have in place. so, there needs to be a little moderation here while we're still -- while we're whipping up the base, you know what i mean? >> so, steve, with your corporate background, which of the two front-runners, donald trump or ted cruz, would be better for business? >> you know, it's hard to say, because donald trump is such an outsider. he's never served in office before, you know. he's a great deal-maker. he's got great instincts and so forth. but you don't really know what his policies would be. and you know, he said, well, i make deals, and so, therefore, i'll come from this angle and i'll come from that angle and i'll get along. you know, on one hand, that's appealing. but then he says some things that are, you know, you scratch your head about. on the other hand, cruz comes at it from a very ideological standpoint. you know where he's coming from. you either like it or you don't. but then, you know, he's brought things to a halt. and on both sides, you've seen this action recently where it's

been my way or the highway, and you either do it one way or you do it the other way or you stop everything. and that isn't good for business either. i think what business is calling for is for people to just sit down and to moderate this conversation and to come up with solutions that are in the nation's interests. and that's what we're calling for. and to get along and to come up with, you know, with policy that makes sense. and i think that, you know, we haven't heard a lot of that from either side or any of these candidates. and i think that that's what we've got to, you know, we've got to force them to come to. >> steve, i think it's probably useful to understand that this is not just a united states phenomenon, this desire to chuck out the old is being repeated around the world, certainly in europe. i mean, let's not forget that the united kingdom is talking about leaving the european union, which is in its very essence a free trade block zone, you know. that's what it's set up to do. so, the uk is similarly thinking that it might just smash all the trade deals it's had for 40 or 50 years against the wall.

my question, and i'm fascinated by the language that you use about the requirement to have adults in the room, to teach our people the benefits of what's going on. i'm not sure with that type of subjective view of where we are that there's really anybody in the room to correct the misgivings that people might have. i mean, who comes forward and argues for the center? this is an election without center. is it hillary clinton? >> you're making an excellent point. and you know, over the years, it's always been the business community and business leaders who have played the adults in the room, who have said, now time out, you know, let's not get overheated here, let's understand that we need some level of moderation. we do need policy to move ahead. we do need these deficits dealt with or else we're going to have a budget crisis, a currency crisis, a debt crisis. >> but steve -- >> we need to deal with our entire entitlements -- >> you're preaching to the choir here. >> i know, i know. >> on this network. my question is who steps forward to do it?

who are those personalities? >> what i've been very disappointed in is that the business leaders are not stepping up and they're not talking about, you know, they're not teaching people, they're not saying, look, we understand the anger and we understand all that, but trade deals are good for the country. and because there's been no voice of business in this, we're seeing these extremes dominate and whip up a frenzy here. i am calling for the business community to stand up and say, time out, we need to take a breath here and we need to have moderate policy. otherwise, we're going to destroy our system. >> steve, it is the primary season. let's get that straight, right? >> true. >> we haven't moved to the general. but when you talk about getting in a room and getting along, that has not been the precedent for the past eight years, and arguably, beyond that. why would you possibly think that would happen now? >> you're exactly right, carl, and it's been going on for 20 years, really, with the gerrymandering that started in 2000. and as we've made safer and

safer districts, the candidates have become more and more extreme, the center has gone away. and so, it's been, you know, further and further left and further and further right. so, there is no reason. there's got no catalyst for it to start now, which is why it's even more important for the business community on whose, you know, their entire fortunes ride on this. it's entirely important for the business community to stand up and say, okay, guys, you know, whether it's the primary or the general. you know, if you've got these extreme outsiders in the general, it's the same thing. so, the business community's got to stand up here and say, guys, we have got to have a moderate view of trade, we've got to have the rhetoric, you know, moderated here, because we've got to grow the economy. we've got to grow out of this debt situation. we've got to start raising wages and dealing with the inequality, but through -- not through a redistribution and not through greater government, but through growth. and that's where it comes back to the business community. >> yeah, well, to the extent they start to speak up, we will be listening. steve, it's good to see you. thanks. >> thank you.

>> steve odland. still ahead, you know him as doug stemper from "house of cards." michael kelly will be joining "squawk alley" to talk about the blurred lines between fictional and real-life politics. also, taking a look at the dow, it's flipped negative, down 18. the draghi celebration has worn off. united technologies, microsoft and exxon are the biggest laggards. >> arguably was wholly unrealistic to think draghi could further boost the markets with what people were expecting. what could he have come up with that would have actually sent us rallying off to the skies? >> we'll discuss it further. we're back after a quick break here on "squawk on the street." [bassist] two late nights in tucson.

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welcome back to "squawk on the street." checking out what's happening with markets here. just about flat, but gold's rebounding and the materials sector is seeing gains today, trying right now to be the top sector but still trying for that top spot, health care there right now. among the nation's leading materials higher. sherwin williams, nucor and praxair, newmont mining all higher on the trade. the sector briefly turned positive for 2016. now you can see there just down marginally, very fractionally, sim simon. in general, people have sold the rally in equities in the wake of the ecb over the last hour. up 12 points on the dow. rick santelli has this morning's exchange. >> thanks, simon. well, conventional wisdom and expectations, i don't know, i think they're both slightly dangerous areas to pay too much attention to, so expectations were that he would do "x." maybe he did two times "x,"

maybe he did 1 1/2 times "x." but conventional wisdom states he did more than they anticipated. and one would think they want the euro lower -- what's the euro doing? it's overtaken the 1.11 handle. let's talk about all of this, bazookas or just bazooka bubbles? what are we looking at here? yra harris my guest today. >> as long as you're talking bazookas, we're talking about a war. this represents the war between the bundesbank and mario draghi. and they rotate on a monthly basis. jens vigman did not vote today, and draghi went as far as he could before he ran into the removable object called the bundesbank, because he went to 20 billion more and the ten basis points. simon hobbs has it directly right, this is a bailout of the european bad banks. >> reload the paper! roll over the paper! >> no question about it. because that four-year toutro.

first of all, let me say, i've played in more honest street card monte games in central park than i've seen here from draghi, okay? let's get that straight. because what they're going to do is take all this bad paper -- sovereign debt paper! >> like italian paper! >> italian government paper, because what can they buy? they can't guarantee, as you pointed out many times with bernanke, what they're going to do with this money. so, the money's going to go to buy italian sovereign debt -- >> this is a key point, so i want to stop here for our viewers and listeners, okay? in the end, bernanke thought all the things he would do would put a stash of cash with the banks, they'd lend and we'd be rocking and rolling. >> right, right. >> the miscalculation is the behavior once the money gets into the banking system. now, you think it's potentially the same erroneous kind of human behavior logic with mario draghi. continue. >> correct, because those models, that's what the models say. but unfortunately, the models aren't reality, they're merely models, and they're good at aggregating data, they're just bad at predicting human

outcomes. that's the bottom line in this. so, draghi's hoping this takes place now, that they're going to buy all of this italian government paper, because why? it's a zero risk-weighted asset. now, i'm going to tell you what, the most interesting thing going forward -- >> think rating agencies here. >> you want to talk about a bazooka? the biggest bazooka in the game, the one with the nuclear weapon is the bis. because if the bis says, no, these are not zero-risk-weighted, you have to start to higher cut these debt, the whole draghi plan falls apart. so, i advise everybody who's watching for the next two, three, four weeks, watch what comes out of the bis, because they can attack this program -- >> bank international standards. >> so, you just watch what happens here. but draghi is so dishonest and he gets away with it, but it's all coming to an end. >> but everybody's playing the same game. and what i find humorous today is all this talk about what's going on with closed borders, isolationism and trump. first of all, there's bernie, but forget that. why did they get this?

why are people upset about it? they learned from central banks. aren't central banks the beginning, the middle and the end of an isolationism -- you know what, we're out of time. let's carry this into cnbc.com. simon and the gang, back to you. we're going to keep going. >> okay. thank you very much. up next on the program, the bull case for coke. rbc out with a new note, calling it their biggest, their best megacap idea in the space. the analyst that wrote that note will join us next to discuss. before the break, a look at where we are with the dow intraday. we'll be right back.

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>> rbc out with a new moet calling coca-cola it's favorite mega cap idea. he says 20% total return over the next 12 months. coke is actually trading at a record high right now but so are a lot of the other defensive consumer staples. why do you think coke will out perform that group? >> i think there's a couple of things. from a valuation perspective if

you looked at mcdonald's and the other fast food companies you have seen multiples inflate because you're going to a higher return on invested capital type business but on top of that the market is underestimating coke's volume growth potential over the next couple of years and there's a couple of things behind that. so you are seeing volumes turn to double digit growth. the second thing is marketing. very impressive. they have the right marketing message now for the coke brand and coke is getting a lot more serious about costs and they have a lot more pricing power now. when you think about coke, a 12 ounce can of coke is 31 cents a unit. you can go to starbucks and pay 3 to $4. there's a nice pricing umbrella there. >> they have the mini cans. they're able to squeeze more money out of smaller cans. the volume story might be surprising. especially when so many people that have been talking about your note today are actually

looking at the graph that shows soda consumption in this country is falling off a cliff. so how do they see volume fwroeth? >> i would argue that the reason it's declined is not because people are walking away from the category. think about monster, red bull, mountain dew. they're all sodas. coca-cola and pepsi-cola's brand marketing has been less relevant and that's dragged down the entire category. that's why i think marketing and discussing the marketing changes at coke is so important. think about it, you could take a farmer out of egypt and the queen of england and put them in the same room and the one thing they'll have in common is that brand because they probably consumed it. >> but there's also been obesity concerns, obesity awareness, sugar awareness. diet is falling faster than regular cola and it's correlated that with that awareness as well. >> i would flip it on the head

and say if you hook at monster, for instance, the sugar content is higher. the caffeine content is higher and calorie content is higher. >> kids buy monster because they want a caffeine boost. >> people used to drink coke. >> it doesn't have the same volume of caffeine in it does it? >> equivalent so monster when they were having issues a couple of years ago highlighted they have the same amount of caffeine in a monster as a same -- that's equivalent from a coke. >> can i get the same caffeine boost from coke as monster. is that what you're saying? >> effectively. >> simon doesn't need more caffeine. >> i don't. this price target, is it 51? >> yes. >> what multiple should it trade at? >> we're going to a high 20s. when you think about roic for coke going closer to 20 to 40%

overtime. find me the company that has the consistency of this business. coke has still been generally consistent relative to a lot of industries. your have a return profile that high with an accelerating volume curve. >> will it be at the expense of pepsi? >> i do think coke is going to accelerate it's share gains versus pepsi in the carbonated soft drinks side of the business. >> 60% over the next five years. >> correct. >> thanks for talking about it. >> over to a man that never needs a caffeine injection. john forte with a look at what's coming up on squawk alley. >> good morning. well, maybe occasionally the market could use a bit of the caffeine injection. it's holding on to gains but the major indices had been about flat. turning lower. we'll look at what that's all about. also square earnings. kayla had an interview with jack

dorsey after that company's first report as a public company. we'll see what it means going forward and we have one of the actors from house of cards that's going to join us to talk about that political drama and over the top tv and entertainment. coming up on squawk alley. who do you work for? your boss? yourself? your family? our financial advisors are free to realize a plan to fit your family's unique needs. we'll listen. we'll talk. we'll plan. baird.

we believe in the power of active management.management, by debating our research to find the best investments. by looking at global and local insights to benefit from different points of view. and by consistently breaking apart risk to focus on long-term value. we actively manage with expertise and conviction. so you can invest with more certainty. mfs. that's the power of active management.

>> it's 11:00 a.m. on wall street and squawk alley is live. good thursday morning. kayla is live in san francisco this morning after her exclusive interview with square's jack dorsey. john forte and myself here along with henry. good morning to you. >> great to be