it's monday, march 21st, 2016. "squawk box" begins right now. >> announcer: live from new york where business never sleeps, this is "worldwide exchange." >> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernin and drew ross sorkin. check out the u.s. equity futures. last week the dow was up by 2.3%. you can see green arrows. these are modest advances. the dak up 28 points. s&p is up by under a point. nasdaq but by 2.5. oil prices were up, ended the week below $40, you can see they're giving back today. down by 1.27%. brent is above $40 at $41.01. overseas, nikkei was closed. shanghai rose more than 2%.

kospi closed out flat. right now the dax is up by 1.2%. the cac and ftse 100 each showing gains of .25% and italy up. president obama is in cuba marks the first time a u.s. president has set foot there since calvin coolidge back in 1928. today he's going to sit down with his cuban counterpart, raul castro. the president is joined by officials and a host of ceos. we'll hear more from michelle caruso-cabre caruso-cabrera. apple supposed to launch a smaller, cheaper iphone product. aimed at markets like china. plus a midsize ipad, new bands for the apple watch if you're into that kind of thing. we'll talk to usa's personal analyst at the bottom of the hour. also the corporate story,

$8.9 billion merge of sherwin-williams with valspar. >> new bands? >> new bands. you know what i'm hoping for, just so you know, i'm hoping for, there's rumors about it, nobody is into it, member that mac book 12 we saw, came in with it about a year ago. >> oh, yeah, how could we forget. >> to upgrade that and i'm waiting to buy it. >> you hint of irony. smaller? new bands? >> the baby iphone. that's what it is. >> okay. >> no one's left -- >> no this is not that exciting. i agree. >> there you go. developing geopolitical story, south korea's news agency reports that north korea has fired a missile and several other short-range projectiles

into the waters off of its east coast. this comes just three days after south korea said that the north had fired a medium-range missile into the sea for the first time since 2014. the futures indicated slightly higher. remember last week, the dow was up and nasdaq up, wti over the course of the week, added about a dollar last week. closing at $39.44. you can see wti is down $38.94. brent at $41.04. take a look at the treasury, the yield has pulled back a bit from where it had been last week. and if you check out the currency markets you'll see that the dollar is up against the euro. it's down against the yen trading at $111.53.

gold price right now, they're down $8.40. >> oh, boy. this is going to be good. this name i have to pronounce, andrew, coming up. i'll leave that to you, my friend. holiday shortened week, but it's not short on economic data. today look for february existing home sales. on wednesday, we get new home sales. then thursday, its weekly jobless claims in february, global goods, the markets may be closed on good friday. wait a minute, is that this week. >> it is. four-day week. >> it's early this year, isn't it? it's march. easter is like the 27th? that's as early as it gets. we'll still get the final revision the fourth quarter gdp that day. the dow riding a six-week winning streak into trading.

here to get us ready for the week ahead, simeon himan. look at that, it does fit on one line, alan recshocken. >> that was very good. >> perfect, huh. >> that's why they gave it to me, it had nothing to do with market expertise. you're an nyu law professor? >> i am, i am. i actually just got promoted to instructor of laws. i don't know what that means. >> pretty cool, if you get sued by clients for losing all their money, you can defend yourself. >> hopefully that doesn't happen. >> all right. who wants to start? do you feel good about -- do you feel good about the six weeks of gains that we saw? is that lower highs or lower lows that we're seeing or is it ready to go to new highs? >> i'll tell you what i see

happening is the market is being somewhat manic. if you remember what it was like in january and february, it was scary and now all of a sudden, everyone is happy. it's such a change of events in the past few months. what you're seeing, the federal reserve is acknowledging that and they're saying they want to hear what the market is saying and they're listening. >> they are. it's not just our market. it's any market anywhere in the world suddenly may cause them to hold on with what they planned to do. t ki don'w if that's how you manage a central bank. >> i think they've redefined what data dependent means, i think that cnbc has more insight into what's going on in the world than they do in some ways. >> the fed had the mandate they were supposed to focus on unemployment and focus on inflation. start worrying what the dollar is doing and chinese stock

markets are doing. you get to the point, how much can central bank actually do. >> right. the textbook isn't always right, but it's always the textbook. but they have to incorporate what's going on in the real world. if you look at the unemployment numbers and cpi, people should be celebrating in the streets as opposed to making noise and political things that don't happen when you have such good numbers coming out. i think the fed's reacting to that. >> well, the celebration was not so strong coming out of q4 earnings. so corporate earnings -- they kw weren't terrible, but they weren't great. so i think we may need to get back to needing to focus on separating the wheat from the chaff because it wasn't a great end to the year for corporate. >> so that's going to be the most important thing, earnings? >> i think it's going to resurface as important. i think we've gotten through

this period where people are focused on macro events. the fed goes through it's not a big driver anymore. >> what's the real inflation right right now? >> it looks like it's somewhere in the 1s. >> i thought it's 2 now. the deflationary fierce should be over now? >> i'm not so worried about denatiod deflationary. the 2 may be a little high. even if it's 1 1/2, that doesn't mean it's suppressed naturally. one thing to keep if mind if you're make, for an example, a planned dor ened corporate cred. if you made that bet, you lost a church of that benefit because interest rates went up. it's important to keep in mind, the factors that would improve

the economy even at these levels of inflation can still bring up the 10 or five-year interest rate. >> is the market still off? adversely correlated -- >> correctly correlated. >> i think the impact of oil is going to be a little muted going forward. in fact, one of the things that i've been taking a look at, if you look at the uk stock market, you have brexit, headwind, and you've.headwind of a much large energy and financial sector compared to the s&p 500. that might be a little bit of an opportunity because you have valuations that look like continental europe. >> one of the big worries, the jnk, you look at that etf, that's come back. or commodities, all of those worries of sort of impending doom. >> i think that's the whole point. people are nervous.

>> not as much as they were, right? >> i don't know about that. do people seem happy to you. we have low oil prices that should be a dividend for everyone. people should be thrilled. people are nervous about it. that's the whole purpose of the fed broadening that. fed is our friend, so walking us along here. >> we've got to go. i'm just noveling at -- look at that knot, andrew, could you in your wildest dreams tie a tie like that. >> i made it tighter this time. >> i can't see the shirt on either side. it's almost -- it's a full windsor, right? >> full windsor. even the euro guys that we have on, it's like a baby -- it's like the size of a baby assess fist. >> it's a bullish signal for stock market. >> a bullish signal, wider knot

correlated with s&p. >> i don't tie the full windsor but then i usually have it centered. it's just me, you can do what you want. just trying to help. >> bullish. >> bullish. okay. >> you go right into the neck, it's bearish. >> it's not that it's not tight enough. look at the size of it. >> give him credit. >> you know, monday morning. >> talk about -- the size of a baby's fist. >> baby iphones this morning. >> that's going to do it. >> you made them bigger, eureka, let's make them smaller. >> you know what, give the company credit. >> i give the company credit. >> you hate that company. you've been against them -- >> it doesn't mean i don't love them. >> you've got a strange way of showing it. >> this is tough love i'm giving them. you can't expect them to wow the world on new watch bands on something that people don't even

wear. >> what about if it makes it impossible to outdo yourself? >> i'm been talking to tim about you. >> i like the smaller one. >> for guys to stick it in your pocket, you don't want a huge phone. women, you stick it in your purse, you don't care. i know what you're thinking. >> i know what i'm thinking. republican front-runner donald trump blaming professional agitators for violence at his rallies. he also said he would not attack supporters who would attack protesters. john harwood joins us. john, good morning. >> becky this is more of a pattern. we've seen it over the weekend at a donald trump event in tucson. you had a protester trying to disrupt the rally, that's been happening consistently on the way being led out and punched and having an altercation by

somebody. you even had an altercation between the campaign manager for donald trump, who grabbed the shirt collar of a protester. later denied that was done. nonetheless, it was part of the pattern. donald trump this week said everybody was criticizing him and his aide but what about the protesters. >> disrupters. and it's really stopping first amendment rights, if you think about it, george, they block the road. they put their cars in front of the road. we have thousands and thousands of people wanting to come delayed for an hour because of the protesters. at what point do you blame the protesters when signs are lifted up with tremendous profanity. the worst profanity, and you have television cameras all over the place, people see these signs, i think maybe those people should suffer is blame also. >> i understand why donald trump

is concerned about profanity bus that's something foreign to his world but today he's going to be in a much more genteel environment, he and other candidates including hillary clinton are going to be addressing washington. that's going to be a calmer campaigning. guys i would be remiss if i don't give condolences to joe for what happened over xavier last month. that was rough. >> so that was sarcasm, you're still doing it -- >> well -- >> no, not about that. about how profanity is a stranger. still doing it. that was an african-american supporter hitting a guy in a ku klux klan outfit. >> yes? >> that might be relevant to the beating up the protester story. i think, i can certainly give him a pass on that.

>> well -- >> and, you know -- watch what i do to becky with her collar. >> ow. >> i do that to her probably every day. >> i do it to andrew. >> i'll man handle you back. >> all right. harwood, now, i wish i had duke going farther. you know, there's something about teams that destined that -- xavier was -- i didn't see it it was a 15-4 run. >> you have seen the highlights? >> no i read about them. i read about the fadeaway jumper in the corner. was it a charging call. was that a bad call to make in the last five seconds of the game, do you know? >> no, there was no charge. >> no i think they called a charge, didn't they? and that gave the ball back -- i don't know, i didn't see it. i thought that's mawhat i said. >> i was just focusing on the two jumpers.

yeah, they were down three. steph curry-range jumper pulls off and hits it. at the got the ball back in two seconds. one of the most unreal last second shots. when you watch the face of bill murray who, i guess has got a kid who an assistant coach -- >> yeah, luke. we're big xavier fans. it's very painful. a lot of games are like that. that's what this tournament is about. it can be the craziest stuff happens. it's amazing. how about poor texas who i had. did you see that one? >> yeah, poor texas, they lost to northern iowa on a half-court. and then last night, did you see what happened to northern iowa? >> i heard, though in double overtime. >> oh, my goodness, they were up 12 with 44 seconds, and they lost the game. you cannot help but feel for those kids. >> you saw what happened in

cincinnati, that was a tenth of a second. ellis, he was crying. anyway. >> it's a heartbreak tournament, man. >> anyway, it's been great. it's still going to be good. i'm out of the finals but i've got a lost teams left. i've got 45 points which is still pretty good. sixth or something. >> well, that -- >> that button was the wrong button. >> i should have hit "b." >> are you like 12th or something. >> i'm really far down. >> i need some nobody team to win it all that nobody has picked to have a chance. >> right. xavier. >> i still got kentucky, i've still got a chance. >> you're following this closely, i see. >> no, i'm joking. i'm just saying i don't have a chance. i'm done. >> you knew they lost to indiana. >> how far can i go, that's my

question? >> once you lost -- >> it's a serious question on brackets. >> never mind, you should stop right now. >> my question is once you've lost, is there any way to come back? >> you can get enough points and if someone that has the team wins. and there are still teams left that nobody has. >> i've studied this. there's no way that i can win. that's why i've been trying to figure out -- >> okay. >> that's what i don't understand. we have a merger to tell people about. $13 billion menner. do you even know what it is. $13 billion merger just crossed the tape. business analytics firm. ihs, actually a big information company combining to markit to combine for mergers of equals.

ihs currently based in colorado. markit shareholders would own the rest. >> they're buying it over there. is this another one? >> that's an interesting question. you'd think for a data analytics company that would not be an issue. just crossed the tape. in the meantime, a wild weekend in college basketball. upsets, buzzer beaters and busted brackets. we'll talk march madness after the break. and later, talking politics, our guest start at 7:00 a.m. easte eastern.

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it's good to see it. the field is set for college basketball, sweet 16er the story so far about the acc six teams from that conference survived the tournaments. joining us now rob simmelkjaer, nbc sports. you have kentucky? >> you're still in it? >> k.u. >> i thought you said kentucky. >> you know how the great player is. famous fashion name. >> perry ellis? >> yeah. i'm not a perry ellis guy. >> you like the basketball player, just not the clothes? >> those clothes aren't fashionable -- >> this guy, i didn't see that last night. >> saw the texas a&m game.

>> last night, i think of all the sports comebacks of what i've witnessed in my life what happened with texas a&m and north carolina ranks up there. you had texas a&m, fans are walking out of the arena, and they score again and again and again. what really allowed this to happen was four turnovers by northern iowa. remember this is a northern iowa team that beat it it it two days earlier with the buzzer beater at half-court. they were relying on a miracle and victimized by this 81 believable comeback by texas a&m. give them credit. they didn't just foul which is normally what you see teams do, settle for fouls in the three-point shot but they didn't do that. instead of shooting threes they went right to the basket and had layup after layup. what's amazing, northern iowa

didn't score a basket. it was actually a 14-2 run in 40 seconds. then to double overtime. texas a&m won it. unbelievable. >> i was all ready for thursday night games, too. i was ready for xavier. >> and then go to work on friday. >> that was everything. >> xavier victimized by wisconsin in the unbelievable three-point shot. >> fadeaway. i don't want to see it. >> tremendous shot. >> didn't they do a bad call or questionable call in the last five seconds? >> yeah, i think there was a call. i was sort of going back and forth. the northern iowa game was happening at the exact same time. it was a low-percentage shot. that's the best shot you're going to get in a situation like that. wisconsin which is -- they're now playing without the two seed. they've got a chance to beat notre dame. this is a team, wisconsin was

not a sure thing to make the tournament halfway through the season. they lost their head coach. they've got a brand-new head coach not assured to be in this job next year. >> that was a 12-5 run -- i think xavier was up by 8 with three minutes to go. who's is really good? villanova looks good? >> villanova looks good. but kansas looks very good. i like oklahoma. buddy heel, their star player. >> he took it in the second half. >> especially in the second half he stepped up and played like a star. and north carolina, you know, it's been a topsy-turvy seen, when you look at who is still in the tournament, all one seeds in the tournament. uva struggled to convert. they're in that bracket of michigan state. they don't have to play michigan state now. they're looking to play a

syracuse. i like uva's chances. i think all the one seeds look pretty good except i'd probably take oklahoma over organize in that region. i like oklahoma. >> when in oklahoma city, too, when they're in oklahoma, those people are crazy. >> which isn't even fair, if you think about it. >> but it's amazing how the great teams win and again and again, during tournament time. you can't ever count north carolina or duke out. >> i like to bet on coaches and great players. it didn't work out with item tom izzo. >> are you on this thing? >> i have a bracket. >> you're not on soour bracket. >> here's what i'd propose a second chance bracket for those

out of it. the second chance bracket. >> doesn't espn have them? >> absolutely. >> i think we should still win. nobody has got texas a&m going all the way. nobody has got notre dame going all the way. if i'm still able to get points just because my team is out -- >> you're saying there same as chance. >> it's just hanging on to the reason to keep watching. thank you. always a pleasure. >> you got it. when we come back, a milestone in foreign relations with cuba. president obama becoming the first sitting president to visit the island nation in 90 years. michelle will join us next. here's a quick look at the s&p winners and losers.

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♪ welcome back, everybody. right now it's time for "the executive edge." this morning, we are talking cuba. president obama making history becoming the first sitting president to visit cuba in almost 90 years. michelle caruso-cabrera is live in havana with more. michelle, good morning. >> reporter: good morning, becky. yes, president obama landed yesterday. air force one pulling into

havana a little after 4:00 in the afternoon. an event that millions in america never thought they would see, a sitting u.s. president arriving in havana even as the economic embargo in the unites against cube is still in place. his entire family is with him. his daughters, his wife, even his mother-in-law. they went on a walking tour of old havana last night. he's going to meet with the leader of cuba. dissidents and new entrepreneurs now allowed to work on the island. along with the trip there was an announcement that starwood is going to manage three hotels here in cuba. they signed a deal with the cuban government. by default, it has to be with the cuban government, remember, this is still a communist country, controls 99% of the country. going to be three hotels that they manage. one called quinta.

and an iconic hotel near the capitol that's going to be called a luxury collection. that's going to need renovations. and santa ysabel, also part of the luxury collection. a great location in historic havana. we ran into one the americans traveling here today. and i think he said it best, what it's like for the hotel, to stay in a hotel here in cuba. >> this sounds terrible, if i wanted a really nice hotel, i'd go to cancun, i'd go somewhere else super americanized. i don't come to cuba to be comfortable. i come here to be challenged when i travel. >> reporter: so the hotels have suffered underinvestment here for decades. in fact, fidel castro did not want tourism here. there's a catch-up that needs to

happen here. what the cuban government calls a five-star hotel is really a two-star, at best a three-star european hotel, guys. they've got a lot of work 0 do to the cater to the american client. >> michelle, how much tourism is on the island right now, and how quickly do they expect that to quickly ramp up? >> reporter: so, there's been a dramatic increase in the last year since december 17th of 2014, when the announcement was made. theres been dramatic rise in the number of americans coming. as many as 1 million tourists. it's secretive. 60,000 max on the entire island. it's a very small number. they are like this with tourists. the strarestaurants are crowded. i wouldn't say the streets are crowded because they don't have many cars on the road. it would happen faster if they have the capacity.

it's not clear that they want it. remember, is this still a communist country. they've been slow to sign deals. i know from my reporting at least 100 s&p companies have come down for exploratory talking. some have put forth proposals. almost none of them have been approved. starwood is the first one. >> what did starwood have to give them? >> reporter: that's a very good question. we don't know how much money. we know very few details about the actual deal at this point. i do know that was a deal done with the cuban government by default. like i said, they control everything here. that's going to be controversial. there are people who argue that is a violation of the u.s. embargo. you saw marco rubio, the senator from florida, over the weekend calling president obama's trip the most disgraceful that a u.s. president -- one of the most disgraceful ever made. this event, as you know is controversial. and that deal very well could be controversial. >> is it the chinese starwood that is managing the hotel?

>> reporter: that's a very good point. starwood gets bought by the chinese, it will no longer be an american deal. it will be a chinese deal. >> you don't know, you haven't done any -- i mean, is mary rio going to come back. >> a lot of people telling marriott not to. >> i think they had plans. michelle, thank you. by the way, we're going to see michelle in the next hour with the owner of the tampa bay rays. that team will be playing the cuban national team later today. coming up, political checklist for the technology. ceo of trust ventures, on net neutrality and regulating a share of the economy. we'll have a quick break. here's a check of the european

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investor wilbur ross just announcing an akwa condition, his w.l. ross is buying nexio solutions. seller is the private equity firm pgt. wilbur ross will join us in the

next hour to talk about the latest deal. in the meantime, let's take a look at how presidential candidates stack up for voters in the technology community. rob tusk is here. the ceo of investors. it's not released a report card judging the candidates on everything from privacy to ip to broadband access. >> good morning. >> how did you do this and walk through what the record card said? >> no, what we did, the current candidate, rubio was in the race. we said let's take a look at where they stand. what we were seeing what i was seeing is that the debates, lots of dialogue, very little substance on anything. issues that matter to tech are willfully being ignored. at the same time, just like every candidate who comes through new york city for money but rarely on issues that matter to new yorkers, same thing for

silicon valley. >> big head line. i'm curious to hear what everybody at the terrible thinks. trump gets an "f." hillary gets a "b"-plus. trump is supposed to be good for business but hillary clinton is supposed to be terrible for business. >> supposed to be. >> explain. >> so, to me there are a couple of key issues one will make sense on the trump play which is immigration. probably the number one issue for the tech community is high-skilled workers to come here and create jobs for engineers here. hillary will be good on that issue. trump, everybody watching the show knows, very much does not want to see that. happening. >> why did you give bernie sanders his? >> he's good on s.t.e.m. we looked at five or six different issues. i will say it's funny. we did all the grading and we said, it doesn't stack up to political experience, right? we wanted to stay true in actual

analysis, not just a reflection of our viewers. >> doesn't it change -- where is trump on that? >> he's flipped back and forth. >> we're not talking about building a wall. >> from a tech standpoint, i'm concerned about high-skilled workers being able to come to the u.s. >> okay. because as you know, it's been conflated between anti-immigration and anti-illegal immigration. it's if it's just a knee jerk oh, he's against immigration, it's h1b. >> my goal is for it not to be on just one. >> the last flip-flop was against h 1 b. >> it's not about the wall?

>> about a racist and big jet. >> the tech issue that trump has taken any sort of positive stand in any way shape or form. >> i'm looking bigot, racist, anti-immigration. that's everything if you just take the knee-jerk media coverage. >> for my concerns, everything you said doesn't matter. >> where is bernie on business? >> bernie on business is terrible. i'm not going to say in any way way that he's not. overall in in business he may be specifically tech -- >> how do you weight them, do you say immigration is worth more than privacy? >> no in this particular case we averaged out. >> trump's latest position on donald j. trump.com, he would like to pay american workers first. he would like to see income brought up to higher levels.

>> yeah. we didn't particularly weight it. i may say it's immigration, and you may it's digital privacy, right? everyone is going to have different views as to what should be most important. to your point, andrew, if you look at hillary, she does well on the issues that we have. when you sake the economy, a lot of donors from labor are going to say that and i don't know if she'll stand up and do the right thing. >> you do recognize that bernie sanders is a "b." hillary clinton is a "b" plus and an "f" to trump. >> well, that's where we get actual analysis, we look at each issue and graded. i was surprised, too, the way it ultimately came out. i'm independent, right, i really don't care. >> will tech companies ever need to raise any money utilizing the

crooks on wall street that actually have a fraudulent business model? according to both hillary an bernie. >> clearly with bernie, i think hillary tends to waiver. >> i told agree. >> but look at the end of the day, the idea here is to try to make the candidates focus a little more on tech issues. >> what are you hearing in the debate from the democratic side, in terms of business and throw technology in there? that looks like a "b"-plus grade to you? >> no, overall business, not great. but, but, the whole point is not what the overall effect on the economy, what are they saying specifically. our concerns are they were avoiding and ducking the positions specifically. >> it's totally anti-net neutrality. >> that's a problem from my standpoint? >> you want net neutrality? >> absolutely. okay, the 1934 --

>> i thought you -- he wants net neutrality. and protect privacy. >> okay. >> can you believe that donald trump and i agree? >> we didn't agree on a lot. >> we're going to let it go. thank you. >> thank you. when we return, apple expected to reveal a smaller iphone model at today's product model launch event. we will talk to "usa today" tech conference about the new offerings. that's right after the break.

welcome back, everybody. we're a few hours away from apple's big product event. the tech giant expected to go small this year. rumor has it that the newer devices are smaller versions of the iphone and ipad pro. let's bring in our personal technology columnist at usa today. we'll talk about a lot of things but let's start with the product's launch today. you are not expecting anything big. >> no. you called it a big announcement. i'm not sure how big it will be. we're going small, obviously, with the iphone. that's interesting that you sort of -- >> who does that appeal to? >> not everybody -- i personally like big phones but not everybody does. there are still people out there who think big is too big. so that's one thing. and there is also some expectation it will appeal to places like india and some emerging markets. i'm sure it will cost less.

i do talk to people, you know -- i have the bigger phone, and people say, isn't that too big? some people still feel that way. >> do you worry if it's a lower price point about eroding margins or is this a game of getting into places where they haven't been to this point? >> i think it's more that. apple has to be careful. they want to protect their margins. i don't think it will be rock-bottom pricing. i have heard $450, in that range. we'll see. >> you are a fan of the -- i always call it the iwatch. the apple watch. you are a fan of the watch. and it's been something that still has people who are kind of sitting on the fence about it. >> i am a fan. i sort of ask myself a year later would i buy the watch now, and i gave myself sort of a qualified yes. i have gotten -- >> you're wearing it. >> i am wearing it. i've gotten used to the notification. it's nice to glance -- oh, that's my boss. i better deal with that. oh, i can ignore that one. i don't do a lot with third-party apps or with the

fitness. occasionally we'll pay with apple pay which is actually very easy with the watch. but mostly it's about notifications for me. >> so a qualified yes. >> a qualified yes. >> should we not -- joe was saying we shouldn't be excited about anything today. >> as you're reading it, give it a little color. >> i was trying to be excited about what was going on. >> that's impossible! >> i do love apple. we're on different sides of this other debate, but where do you stand on just the excitement factor? is there anything in your day that's going to -- >> no. they've got to move the ball down the field. >> this is the undercard to what happens tomorrow with the showdown with the fbi. >> game that out. the court ruling tomorrow is going to be the big event. >> i think so. >> how much do you think he talks about a tape? >> we were talking about it in the office. i can see both sides. i think he'll mention it but not dwell on it. >> he doesn't want it to overshadow the product. >> i think apple is even sort of

underplaying the event today. >> no surprise. i want an upgraded mac book 12. >> so would i, by the way. we could see that. i don't think so. i think we're going to see the smaller phone. we're going to see a refreshed ipad. the 9.7 inch ipad pro, a smaller ipad pro. new watchbands maybe, maybe some software tweaks. for product stuff, you're looking at the fall. >> game this out tomorrow, the court decision. what does it mean for apple one way way or the other. >> it's been the big story for weeks. i don't know how it's going to come out. but you know -- >> is it going to be the next thing and no matter what happens we don't particularly care because it will be appealed to the next level? >> that's one way to look at it, certainly. yeah. >> all right. >> they were iwatch -- oh. >> it was taken. the website you're always on.

iwatch.com. huh? >> thank you. >> thank you. >> is that really a website? >> no. yeah. is that a -- >> you discovered that in your incognito mode. he was checking out some sites. >> i can't not call it the iwatch. >> little lady, that name is taken. >> that name was patented. >> joe knows something that we don't know. >> of course. >> don't protest too much. >> looking it up right now. >> look it up. >> white house.com. >> i remember that. >> coming up, a new -- i asked for the porn music. it's been a while. i got disco stuff. >> it's not. since we played the -- yeah. that's right. that's why you're tack looking -- a new investment from wilbur ross tells us why he is sinking money into a plastics industry. wilbur joins us on the set on "squawk box" after the break.

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on the campaign trail the focus heads west. primaries one day away in arizona, utah and idaho. those states could play an important role in moving the frontrunners towards the nomination. but the opponents of hillary clinton and donald trump are hoping to move this game towards the campaign trail stalemate. aei's kevin hasset is here to break it down. global markets and great risks. the former governor of the bank of england joins us for an interview to talk about central bank policy and the potential for a brexit. an historic visit. president obama traveling to cuba along with a host of american business leaders. a live report plus a look at what's on his agenda. the second hour of "squawk box" begins right now. ♪ live from the beating heart

of business, new york city, this is "squawk box." welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with rebecca quick and andrew ross sorkin. the marriott came back. >> marriott and star wood hotels signed a merger. now talking about $13.6 billion and 79.53 per share. still getting headlines on this. they look at the total share value of $85.36 with the separate ilg transaction consideration. so $85.36. >> the original -- starwood had not signed it. >> correct. >> did starwood -- okay. but starwood had signed with marriott. so signing again, does it mean

anything. >> the board of directors tomorrowed the revised terms for marriott was a superior proposal. >> they had a period of five days -- >> it's not just whether about it's stock or cash. >> revised the exchange ratio of .8 shares of marriott common shares for each of the starwood common stock. sounds like that was brought up too. >> mind you, the game might not be over. they can come back. i think the expectation from day one was this would be a battle. >> they're announcing this with starwood signing on ahead of time instead of playing it out entirely in the press. wilbur ross is here. you have been watching this. what do you think about it? it's been a little interesting. >> yes. >> can you not talk about it? >> well, i think the whole thing about hotel chains and acquisitions has gotten completely wild, and not just the giant ones, even with the smaller level. >> because you think that when you say "wild," you think they're all paying prices that are too high?

>> i think what it reflects is the hotels are one of the first things to recover when the economy gets better, so i think it's kind of a bet on a stronger economy. >> all right. let's talk a little bit more about what else you're doing. again, billionaire investor wilbur ross is here. as we told you earlier, he reached a deal to buy chemical and plastics distributor for a little over $1.5 billion. it's currently owned by tpg which is bought in 2011 for about a billion dollars. joining us right now is wilbur ross himself, the chairman and ceo of wl ross holding company. wilbur, this is a pretty unusual deal because you're not just buying it from tpg. they're staying on and holding a stake in this. >> yes. i think that's the interesting part about it. they'll end up with around a 38% interest in the combined company. a special purpose acquisition corp., as you know, is one that raises capital, goes public, but

has no business at all, and then it has to go find something to merge into it. this is the solution to this company called nexeo, which is one-stop shopping for everybody's chemical and plastic needs. they serve 1300 suppliers. they have over 20,000 customers. and they're a global operation. they are the number one in plastics and number three in chemicals in north america. >> they're a supplier. does that mean they don't actually make anything? they're a middleman who gets the product to the customers? >> the way the deal will work is that the public shareholders will remain as they are. the tpg will get a bit over a billion in cash, get $350 million in stock and will assume some debt. so, altogether, it's 1 billion

575 purchase price. >> why is tpg doing this? what do you bring to the table? >> i think it's a couple of things. this is for sure taking the company public, taking it public in a controlled fashion, in a large way. because the -- basically the $500 million of cash in the spac sn now will go to tpg along with loans we took from deutsche bank, bank of america and geoffrey's. so it's a combination of cash and stock. the interesting part is they'll become the largest single shareholder in the combined company, and i think that shows their faith in the ongoing business. >> you'll be the chairman? >> yes. >> the ceo will remain the ceo? >> i will be the chairman, the ceo of nexeo will continue to be the ceo. >> again, just the business itself. it's a supplier, which is -- what does that mean? >> what they do is this.

the chemical industry has become very, very complicated. as i say, they handle some 23,000 different products. if you are a company that needs chemicals, you may need only a limited amount of a certain one at a certain time. the big chemical companies aren't set up to handle small needs. >> a dow or dupont. >> dow, dupont, people like that. that's why the 1300 big chemical companies are the vendors that we distribute for. >> your customers would be people like, what, auto parts suppliers? >> auto parts suppliers, plastics companies. injection molding companies, people of that sort. but also some of the very large companies occasionally need small quantities of this and that for some ancillary product. also, sometimes you need to blend a couple of chemicals to make the desired result, so for

some of their customers they provide technical advice as well as distribution of product. >> how does this company's fortunes -- how do its fortunes rise or fall based on commodity cycles? >> they only keep a limited amount of inventory. so it's not basically a spec on commodities. a lot of the products are delivered within 24 hours of the order because people don't order chemicals months and months in advance. and to provide that service, they have over a thousand vehicles themselves. >> it's not directly tied to the fall in commodity prices we're seeing? >> no. everybody in a commodity business is better off with higher prices than lower, because while your margins stay around the same, there could be a larger base against which the margin is computed. >> wilbur, let's talk a little bit about markets overall. the beginning of the year, first six weeks, horrible. we've come out of that and we're

back near highs. do you feel comfortable with that? >> we feel comfortable enough that we're doing a very large transaction. so i think that speaks for itself. >> why aren't you doing anything in oil yet? >> pardon? >> why aren't you doing anything in oil or energy yet? >> we are, just not in this particular entity. the way that a spac is set up is to do one transaction as opposed to a portfolio. >> right. >> so we have been buying a number of distressed bonds in oil and gas people separately from this, but this is not a portfolio type -- >> so you have been doing that? >> oh, sure. >> wilbur, i wanted to ask you about this story on the "wall street journal." banks turn down m&a debt deals. suggesting a lot of banks which used to offer debt to folks like yourself for transactions like this are scaling back. do you feel that? >> some of them are. we didn't have trouble with this

particular transaction. i think the reason is nexeo is a well-established business. it's in an industry that's going to be rolled up more and more and more. so it's one of the three largest in chemicals there are but alreh flow. >> are you hearing that across the board for other transactions? >> yes, i think the speculative type deals are very much in danger. and i think what started it was the oil and gas people. banks and high-yield bond funds had very big exposure to oil and gas. that got bad and that makes people more cautious about things in general. >> in terms of what the federal reserve has done with putting things on hold, do you think that was the right call when you look at the dollar? >> well, going back into ancient history, namely last year, i felt that they should have started raising it sooner than

they did. in order that the tool box won't be relatively empty when we go into the next recession. >> do you still feel that way? >> given where things are, i think they're probably right to be cautious. i think they don't want to be seen as manipulating the economy as we go into the presidential election. >> you were a jeb guy, right? didn't you give money to jeb? >> at one point, yes. >> then who did you give money to after jeb? >> i think we all better get used to donald trump. >> you would vote for donald trump? >> yeah. i believe in the two-party system, and i think, if you believe in two-party system, you should vote for the nominee. >> don't you know trump? >> yeah, sure, i know him. >> do you think he would pick good people? do you think he could be a -- you see the way he's characterized by certain entities, right? he is supposed to respond to being compared to hitler, mousse l mousse lieni all in the same

newspaper. >> i thafrink that's a little silly. >> you know him. when he says i don't want his finger on the button, you say? >> i think it's an exaggerated worry. who was his chief financial officer when we did the bankruptcies of the casino, steve bollen beck? he went on to be the ceo and turned it around and sold it for a fortune. >> it's a caricature. >> i think you'll see a different donald if and when he becomes the nominee. >> okay. >> wilbur, thank you. >> thank you. still to come when we return. more reaction to the news just out a few minutes ago. mare yo marriott and starwood hotel signing the amended merger agreement. shares up 2% on that. who is a bigger threat to the u.s. economy? bernie sanders, hillary clinton, donald trump? results of a new poll and reaction from guest host kevin

hasset. that's next. later, former governor of the bank of england and the baron of the king of loft bury, mervin king. on "squawk box" in a moment. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities.

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president obama is in cuba on the first visit there by a sitting president since 1928. he plans to meet cuban president raul castro. there will be -- didn't meet him at the airport, though. that was disappointing. a lot of people getting rounded up down there too. rounding up the usual suspects. it was an official state welcome and a bilateral meeting between the two leaders that will be later today and despite deep differences on policy, the president is looking to make progress on relations. the president will speak to the cuban people and attend a state dinner this evening. many see this as a crucial first step toward easing he relations and frictions. michelle caruso-cabrera is there. she'll join us with a live update and a special guest in the next hour. tampa bay rays' owner stuart sternberg will join us. his team will play the cuban national team tomorrow. i don't have a high degree of

confidence that it will be 18-0 t tampa bay. because those guys -- >> they know how to play. >> there's not a whole lot of other -- >> music. music is an export. >> fixing cars. >> yes. they're very good at that. keeping the cars running for 50 years. politics. all but one of the candidates in washington today speaking to a pro-israel conference. bernie sanders is not on the agenda but he is the only one. he is in utah today ahead of tomorrow's primary there. donald trump is reportedly meeting privately with nearly two dozen top republicans calling for party unity after another weekend of violence at one of his rallies. a recent yale ceo survey found that 62% of the ceos polled believed that a bernie sanders presidency is the biggest threat to the economy while 34% said president trump would be the biggest threat. joining us to give his take on how a trump presidency might

impact the economy, our guest host kevin hassett director of the american enterprise institute economic policy studies. we had quite a few guys on that are de facto or at least nominal gop types. and the best that i thinking of tony fratto. the best he can come up with is hillary will be president and all the money and effort nieeed to be spent on trying to keep the senate, that that's the best republicans can hope for. he is in kind of a dark place. are you guys in the dark together? >> i am not a person who gets into dark places. the thing i think that's interesting -- >> are you in a fetal position in a dark room with the rest of your aia guys? >> no. certainly -- >> your voice went up about six octaves when you said no. >> no! you cut me off. i think the interesting -- >> i caught you off guard. >> i just want to go on.

the point about trump that's interesting is, if you go to his website and click on the links to the things he says he'll do, they look similar to the things other republicans says they'll do. the bush tax plan times one and a half. the anti-trade thing is around declaring china a currency manipulator which is something pretty much everybody else has threatened to do in the campaign. the thing is why has trump gotten people so upset and emotional. it doesn't seem to be the substance of his policy proposals. >> someone should do a study of what he says during the rallies relative to what's on the piece of paper. what he says in the rallies oftentimes can differ from what's being said on the websites. >> and it's what we know about more. nobody knows what's on the website. >> while this is going on, one of the most interesting things is the university of chicago, steve davis, has a measure of policy uncertainty and mostly it goes up during presidential election campaigns because

everybody is wondering who is going to win. this year it's gone down, it's gone down a lot. that means the markets think clinton, trump, it doesn't much matter for policies. policies won't change that much. >> it's crazy because i also keep seeing scuttlebutt -- i don't know how much credence to put in it about what the fbi director is thinking, about whether he's convinced now that the law was actually broken and, you know, that there is going to be some resignations at justice if it doesn't -- if nothing happens. i mean, we're right in the middle of this unbelievable intrigue that is going on with -- with the supposedly the person who is now a shoo-in, if it's trump, because he has all these -- >> something could really happen. >> it's unbelievable. >> on the hillary thing. it's gossip. that's why you bring people from washington. the gossip is that the petraeus deal might be a guide to people. pleading guilty to a misdemeanor, paying a fine, that

something like that might happen to try to get this behind mrs. clinton. >> you know, if there were ever a teflon couple, i mean nothing ever really sticks to the clintons, right? because people i think are at this point, hey, we've seen it before. we don't really care, i think. could that happen this time? a misdemeanor with a fine? >> i am not an expert but that's the gossip i am hearing. they're trying to work out a deal to make it go away before the election. >> the toronto guy. marion barry came back and got -- >> that stuff is crazy. >> i'm just saying. >> marion barry didn't have access to all this information that our enemies could hack into. on an unrelated but related topic, privacy topic. apple tomorrow. >> aei doesn't have positions. the foreign policy people would like to sort of, you know, have law enforcement access to just about everything, and there are a lot of libertarians on the economic team that would rather not. i think the interesting point --

>> what's the kevin hassett view? >> i lean more libertarian. i recognize that if we move to a world where everything i do is enencrypted and i pay in bit coin it's hard to run a society. >> reading from the paris attacks over the weekend, based on the 55-page report put out by the police. it's terrifying when you think of the encryption things they're already using. >> they are only going to get better at it. we have to stop them some other way. >> it's something to legislate and figure out. it's a hard call. but just letting the companies decide to make everything invisible is something that we didn't do when we invented telephones. >> we couldn't, right. >> did you see the piece that london is -- not that it's imminent but they're prepared for ten different simultaneous -- >> you are just coming back from there. i read that. >> yeah. it's a dangerous world.

we'll talk more about -- aei doesn't really sort of make handicap how this is going to turn out. is cruz a possibility still? a contested convention -- >> he needs 83% to get there without a contested convention. >> does mitt still have some juice in utah? >> he does. >> he does? >> this is what did it, what cruz got cruz up the -- >> writing about the -- >> glenn beck is supporting there too. he is a mormon. >> they're writing about the betting markets. the betting markets tell an interesting story, saying trump and clinton are the nominees almost surely but the interesting thing is that, while trump has been increasing his chance of being the nominee his odds of being president have been going the other way. so that right now the market -- >> still liquid. >> the market looks pretty tight right now. it's moving around in response to news -- >> could be a reflection of the people who actually put money on

these things too. >> the thing that's interesting is that trump has reduced the probability of every republican getting elected, while he has been out there and all this stuff has been going on, his odds of winning, conditional on being the nominee, have been going down. >> where are the senate and the house now? >> the senate is close to a tossup and the house still looks very republican. >> all right. kevin, great to see you. >> thank you. pot sales surging when we come back. the big semi-legal, rayiking in billions. the numbers will astound you. check at the futures at this hour. looking marginally down about now. "squawk" returns in a moment. ♪

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when we return, the allen green span of england. mervyn king, former governor of the bank of england joins us. a big day for the u.s. and cuba. a live report from havana just ahead. right now, though, heading to a break, look at the u.s. equity futures. they're flat as we look forward to a monday morning right here

on "squawk box."

welcome back, everybody. among the stories front and center this morning. marriott coming in with a revised bid for its rival hotel chain starwood. starwood signed off on the offer worth $13.6 billion in cash and stock. looks at an evaluation of $85.36 a share. chi a merger in the financial information services business. ihs is combining with market in a $13 billion deal. ihs shareholders will own 57% of the new company which will be called ihs market. market's shareholders will own the remainder. apple kicking off its latest product event at 1:00 p.m. eastern today. expected to introduce an updated version of the smallest sized iphone as the iphone 5 s and an updated ipad expected as well. talking about updates. it's time to update your kindle.

amazon warning customers with older kindle reeders need to update by tomorrow for they'll no longer be able to access the e-store or sync devices with the cloud. pot is becoming a bigger business in the u.s. legal marijuana sales hit $5.7 billion last year. four states and washington, d.c., have legalized recreational use and 23 states allow some form of medical marijuana. california will vote on legalizing pot this fall. a new report forecast sales of recreational and medical marijuana could triple by 2020 to nearly $23 billion. after a big week of central bank decisions, investers wondering if monetary policy makers are losing credibility. steve leishman joins us with a special guest to talk about the economy and much more. >> you would agree a very special guest, wouldn't you? >> this is the biggest. >> let's get to it. joining us is mervyn king, governor of the bank of england

from 2003 to 2013 which included the financial crisis years. he is author of the book "the end of alchemy, money, banking and the future of global economy" going on sale in the u.s. today. in this become he argues another financial crisis is certain without reform of the financial system. thank you for joining us governor king. >> thank you. >> start with what the u.s. federal reserve did last week. they were on a process of what seemed like normalization. they were going to raise rates. now it looks like they're going the other way. you make a strong argument that low interest rates themselves are part of the problem. >> they certainly are not part of the solution. the problem is we've all got into the mindset that as long as central banks cut rates, keep rates low, inev taably we'll get back to normal and we won't. they're having to pedal faster and faster up the hill. >> is the solution for the fed and other central banks to raise rates? it's sort of a weird question

when everybody in the world is going negative and the u.s. is desperately trying to hold on to its 25 basis points of positive rate. >> that's not the answer. that would lead to another downturn. we have to put in place other policies that could eventually enable the fed to raise interest rates back to where i'm sure they'd like them to be. >> you say boost poverty. promote trade and exchange rates. when you look at what's happening in the united states, the debate over trade today, seems like we're going the other way. not just in the u.s. but also overseas in europe. >> the united states has been both the political and moral leader of the western world since the second world war. trade was crucial to growth and especially growth of productivity. i think it is very, very important that united states takes the lead in trying to promote further liberalization of trade in services now amongst the industrialized world.

>> how do you say that when you look at the united states and think about some of the policies advocated by, say, donald trump who wants to redo existing trade agreements and you have a lot of anger over things like the closing of the carrier factory in indianapolis. how do you respond to that? why does it seem like we're going the other way? >> i think we need to restructure our economies. the united states, united kingdom. some european companies need to export more and consume a bit less. germany and china the other way. they need to spend more and export less. unless we're prepared to tackle that problem head on then we shall just continue down the path of ever-lower rates and no growth. >> if consumerism were to be reined in in the united states -- that's what's been keeping the he economy afloat. if we consumed less we would be looking at a lower gdp. >> only in the short run. what we did after 2008 in most industrialized countries was to

cut interest rates, fiscal stimulus, persuade people to spend more. that's like a painkiller. when you see a patient in agony you need to administer a painkiller but a good doctor always believes the painkiller can mask the ultimate problem and you have to diagnose it and put in place the write prescription for the longer term recovery to health. >> in terms of trade, and i think everybody is probably a free trader, but i have actually -- i haven't changed my view on it, but i now am at least empathetic to the notion that corporations going very well because of trade, with cheaper labor abroad and the corporate tax rate too high, corporations can flourish in the united states and yet labor can move offshore and i can understand where a lot of this feeling comes from. so i think maybe we need to look at how we structure some of the trade deals. the reason i am using this as an intro to your view on the brexit where you say you won't say whether you think is the right

thing to do but it's telling that you said the sensible position would be that there should be two types of members in the eu, those who are in the euro area and those outside. and that's a huge statement for you to make. that's -- that's -- for everyone to rush into the euro currency and all of a sudden cede authority to unelected bureaucrats in belgium, that's a horrific notion for most people in the u.k., i think. >> it is. but the united kingdom is not in the euro area. >> that's what i mean. >> and it will not be. >> but staying out of it -- you might as well brexit then. >> what follows it all, two distinct things. euro area, which i think has been a -- a major problem, not just for the european economy but for the world economy. >> right. >> one of china's problems is the weakness of demand in the euro area. and the european union is a different project altogether. i mean, the tragediy of the ura area is germany went into this

trying to bind itself into europe so that no european country would again be frightened by the power of germany and the deutsche mark, they sacrificed it to get to this point where germany would be accepted in europe and the result, germany is more powerful politically and economically today than it was when the euro started. >> they've been helped by being tied to a weaker currency. >> this is a problem. >> your solution is germany should leave the euro zone. >> the simplest way of dealing with it would be -- >> people laugh but it's what makes the most sense. >> indeed. that would be the best way forward. i would hope that many of my american friends would stop pushing the europeans to throwing money at the problem and say, we must make the euro successful. i think it has been a major difficulty in the last decade or so. and we need to face up to reality here. no, it's not for me to tell the euro area what to do. but their choices are pretty limited now. >> how safe do you think the

banks are? >> they're a lot safer than they were before the crisis and they're safer in the united states than in most other parts of the world. one of the lessons of the crisis was if there is a banking crisis anywhere significant in the world then we all suffer the consequences and we ought to be concerned about the banking system in the euro area and in china. >> do you ultimately want smaller banks? in the united states that's the debate. >> i don't think the issue ought to be about size. in the book i propose a method by which we can make banks safer so we wouldn't see bank runs again. i would like to do that. it's essentially making banks take out insurance before they're allowed to operate as banks in just the same way we insist drivers take out insurance before going on the roads. >> what about the fdic? what kind of insurance? i think about the insurance for deposits that's already there. >> it only helps depositors after the bank failed. we need to get to a point where there is no incentive for anyone to take money out of a bank as they did in 2008.

not so much ordinary people in 2008 but big financial institutions like money market funds. >> i want to make sure, governor, i understand your views on the current central bank policies around the world. do you think the european central bank and the federal reserve, should they be raising rates right now? >> no. the problem they've got is that no one central bank, i think, can easily get out of this. most countries in the world could now say, if only the rest of the world were growing normally, we would be fine. but since it isn't, we aren't. so the temptation is to say, what's left? let's push down the exchange rate. we saw it in asia, particularly japan. we're seeing it with the european central bank trying to get the euro down. there is no doubt that through this year the federal reserve will be concerned about the strength of the u.s. dollar. and this is a zero-sum game. if everyone is trying to push the exchange rate down, there is no winner. >> what's the solution? i know you're critical of your former colleagues at the g-20 and the g-7 who come together,

and put out communiques and addresses nothing? >> they've not been particularly productive. i don't think there are quick fixes here at all. where you do need cooperation is some agreement about the timetable over which we are going to rebalance our economy. there is no way in which even the united states economy can easley rebalance unless the rest of the world is also doing its thing. that's the extent of the cooperation needed. we had it in 2008, in october. and even in the spring of 2009 in london for the g-20 summit. after that it went away. >> you make a very strong case in the book about solvency versus liquidity and that involves forcing the bad loans to be recognized, forcing companies to go out of business. you're essentially saying the central banks have saved them for far too long. >> yes. but i think, just as important, over the next ten to 15 years we can put in place a process that would prevent bank runs ever

happening again, building on what we did in the crisis. i call is the pawn broker role of a central bank. and this is something which is feasible. it isn't a dramatic revolution, unlike many of the other reforms that have been proposed. it will work. and i think at the end of it we could then remove a lot of the detailed costly regulation that we've imposed on banks that isn't working. >> if you want his solution, buy the book. "end of alchemy ". >> thank you for joining us. mervyn king. marriott and starwood hotel signing an amended merger agreement. shares of starwood up more than 2% on the agreement. we'll speak to an analyst about that deal. president obama arrives in cu cuba. 40 law makers and a dozen ceos. the owner of the tampa bay rays who play an exhibition game there tomorrow joins michelle

caruso-cabrera next. "squawk box" will be right back. accelerating innovation. accelerating next. hewlett packard enterprise.

welcome back, everybody. in cuba news, price line struck

a deal with cuba to make hotel rooms there available to u.s. customers on its booking.com website. that's the first travel agency to strike a deal with cuba. americans previously had to reserve hotels through travel agencies or tour groups. separately president obama says google will announce it has struck a deal to set up for wi-fi and broad band access in cuba. michelle caruso-cabrera is in havana live and joins us with a special guest this morning. hello, michelle. >> reporter: hello, becky. here with stuart sternberg, a former goldman sachs partner. the reason he's with me here in havana is because he is the owner of the tampa bay rays, the mlb team to play an exhibition game tomorrow against the cuban team. thanks for braving the weather. >> it adds to the elements a little bit. >> how do you mount a baseball team in a country where you have seen there is very little or very poor infrastructure? it must be tough and expensive? >> we try to do it on a major

league level. it's not like sand lots or single a team. the players are used to the creatures of comfort and all the professionalism that we need. you have to bring a lot of bats, balls and a lot of gum. >> you're footing the bill yourself, right, the tampa bay team is, not mlb. >> thank you for noticing that and recognizing. it's purely on us for the whole expense. >> how much is it? >> seven figures. put it that way. >> very expensive. >> for us it's extremely expensive, yeah. >> are you glad they picked you? >> yeah, yeah. i got a call in november, early december from the baseball commissioner and he said you guys have won the lottery. teams had been asked to put in. i didn't know if 30 put in or we were the only ones. i said, that's great. what does it mean that we've won? he started to give me a little bit of the downside and everything. initially the baseball staff was not excited about it. it start of breaks up the routine of spring training and it's not the best thing necessarily to do but it was clear to me, for our organization, our fans and

anybody involved with the team it would be a fun, unique experience. >> to prove that all things come full circle, one of the few big sports stories that i've covered ironically enough was when vince namoli got the tampa bay -- back then the devil rays for st. petersburg. a huge deal. it was controversial back then. people said we're not sure this area has enough economic growth and strength to actually support a major league baseball team. they're still asking that question now. >> 21 years have passed. you think over the course of 21 years you get an answer to a question. it has yet to be answered but i'm focused on trying to get a new stadium there, put it in a pitch-perfect spot. whether that be on the tampa side or in the st. pete side where pinellas is in hillsborough county. the area is doing well. the area is not contracting or anything but we need more fans to come out to the ballpark. >> even when you went to the world series the numbers did not go up that much. >> back then -- we did that in

'08. second or third year of ownership. we went from worst to almost first. the phillies beat us in the series. then obviously in '08 and '09 there was the terrible recession and everything which came along in 2010. so people, sort of, the recession and money -- we tried lowering prices a bit. when things picked up a little bit, there is no public transportation to speak up down in tampa bay or in st. petersburg, and then the gas prices went crazy. so then it's like, to leave the house and go to a ball game -- not true anymore. >> now the economy is doing well. real estate prices have gone up down there. the city of st. petersburg is exploding and tampa as well. people coming in. i am an optimistic guy. we're going to keep trying at it. >> there was talk you would move them to montreal. is that a possibility? you still considering that? >> i am not considering it. there is talk about where baseball could end up. we'll try to make it work here. >> last question. you used to trade on wall street.

he ran options, goldman sachs partner, like i mentioned before. lack of liquidity in the markets. >> it's a problem. >> how big? >> it's expensive. i don't think we've seen -- it's going to be a problem when the point when the vacuum comes. we've seen it once. we've seen a little bit of it another time but we're going to have a vacuum. that will create greater pockets of vacuum. prices all of a sudden down 8%, 16%. nobody knows why. no person to ask anymore. things are spread out all over the globe in all the alternative market places right now. i -- it's -- i'm fearful of it. >> wow. well, let's hope you're more optimistic about the game tomorrow, mr. sternberg. >> i am. thanks for having me. >> stuart sternberg owner of the tampa bay rays. back to you. >> thank you very much, michelle. i know we'll see a lot of you throughout the day too. when we come back on "squawk box" more on the global economy and how the election style could play out with our guest host kevin hassett.

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original tooffer last week. arne sorenson joins squawk on the street this morning to go over the details and whether it's over. it's not over till it's over. >> it ain't over. >> are they going to come back? >> why wouldn't they. knowing there is another bidder that you have to top. >> is christopher flowers involved? >> he is involved withenbang. do you know how to pronounce is, kevin? kevin hassett, our guest host for the morning. no view on that? >> no. >> a different question related to this deal. do you worry about china in terms of their economy and companies like this? one of the big issues around this insurance company is the type of loans they're making people with, you know, five and six and seven percent interest rates. >> for sure. we started talking about this, i can remember, about last august here on the set that at some

point it was a jobs friday and i said however bad you think china is, it's way worse than that. i think the problem is that they've had a really big credit bubble that's bigger than the credit bubble that we had in the u.s. before the financial crisis and it's not unwinding. they're buying time but they're not using the time. that doesn't always end well. i think that the difference between the chinese credit bubble and the credit bubble that we saw in the u.s. is that a lot of the firms that have been borrowing like crazy are state owned. like fanny and freddie the state is using their liquidity to keep these things going. i think there are about ten months of liquidity left to keep the thing going. >> you think a tipping point in the next ten months? >> if they don't show us something that convinces us that they're turning it around -- >> what has to happen in the next ten months? >> in you look at the capital outflows it's a hundred billion a month. that's enough so that they really start to run out of cash in the fall.

right now i think everybody has calmed down. last september and october we thought for sure we'd have another asian financial crisis. now everybody has calmed down but i haven't seen anything that convinces me that it's over. you remember the moment where the feds said we're not going to lift rates because we're worried there might be something going on in asian or developing markets and then the next statement they withdrew that but didn't tell us why. we're kind of in the dark right now but china is a big risk. there is also the risk they do something adventurous in asia. they built the air base. the economy is not doing well. they might take a shot at something. >> the free wheeling hang in the conversation. you mentioned fanny, freddie. what's going to happen long-term. what's the kevin hassett view of the world? >> fanny and freddie should probably not exist and i think there have been a lot of people in both parties that have had that view for a long time.

enormous amount of political power and nothing changes. right now they don't have an enormous amount of political power. i live in washington, d.c., and every mansion has someone who used to be working at freddie or fanny. i'm not sure what will happen. i think, because the political power is gone, if you had a republican in the white house in control of congress, it might be that they would just be put aside. >> if a democrat? >> it might even go back to being the way it was. it was pretty good for democrats back then. >> we're going to have a lot more from kevin hassett who remains our guest host for the remi remainder of the show. the dow is riding a five-week winning streak. we have blackrock's rick rieder joining us next. later, donald trump leading in delegates but the rnc chairman bracing for perhaps the first brokered convention in decades. we'll talk to a delegate who supports the frontrunner. "squawk box" will be right back.

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big things. and spur of the moment things. sheraton. ♪ new this morning a deluge of deals. sherwin williams buys val spar for $9 billion. marriott in with a revised bid for rival hotel chain starwood and ihs combines with market in

a $13 billion tie-up. an apple a day keeps the bears away? the tech giant getting ready to take the wraps off new products at its major event today. live report from company headquarters is straight ahead. a spring storm. a foot of snow headed for new england today as the final hour of "squawk box" begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box." ♪ welcome back to "squawk box." here on cnbc. first in business worldwide. i'm joe kernen along with rebecca quick and andrew ross sorkin. our guest host this morning, kevin hassett. director of the american enterprise institute's economic policy studies. and at this hour, less an 90 minutes away from the opening bell on wall street. the futures, um, that's a meh a word i have adopted now because i hear is constantly at home. nothing is great anymore. >> teenagers? >> yeah. >> teenagers?

>> yeah. everything is meh. 12 down on the s&p. down on the nasdaq. a couple hundred point gain last week and up six straight weeks. a much different place than a month and a half ago. european markets are mixed as well this morning. i think china has been okay. back above 2900, aren't we, on the -- i can't believe i know that. i think that's where the shanghai markets are. and gold has had a brief spurt last week on the fed. >> down a little bit this morning. >> the lack of any -- you know. the feckless fed i like to call them. that always precedes fed when i use it now. you even heard mervyn king. those guys don't rush into anything and he thinks they're behind the curve at this point. let's talk about other headlines making news this morning. valspar bought by sherwin williams for $113 per share representing a 35% premium to valspar's closing price on friday. business analytics firm ihs and

market are combining in what's being billed as a merger of equals. more than $13 billion that deal. wl ross is buying nexeo, solutions for $1.6 billion in cash, stock and assumed debt. the seller private equity firm tpg retains a 35% stake. wilbur ross breaking news of that deal here in the u.s. on squawk. >> altogether it's a billion 575 purchase price. the interesting part is that they are going to become the largest single shareholder in the combined company, and i think that shows their faith in the ongoing business. the other deal news of the morning, starwood signing off on an approved takeover deal from marriott worth $13.6 billion in cash and stock. the deal after enbeng insurance topped the deal with its own

offer last week. don't miss marriott international's ceo arne sorenson live from cuba on "squawk on the street." >> we don't need analysts. we have andrew here. i'm going to set it up for you. the original offer from marriott was beat by onbang. they got to 76 all cash. >> right. >> now, this is -- people said they've got to go up in the cash portion. they did that. it's $79.53 now, which is 69 -- i don't know. it's more -- more -- >> $21 a share cash and .8 shares. >> you think china is coming back? >> where would they have to go? well above that or because it's all cash -- >> they don't necessarily have to go above that per se. >> can they stay where they are? >> no. they can't stay where they are

because already starwood and marriott are agreeing to this deal. two things have happened. they have now three days, onbang, to come back. they made the offer. there was a five-day period. they've come back with this particular bid and agreed to it. they now have three days. the breakup fee, which was $400 million now goes to 450. that's part of today's transaction. three days from now we'll find out -- or within the next three days, whether they go up or not. >> up to where is my question. >> i would suggest to you they would either have to get to this number or marginally lower, all cash for starwood to take it. >> other people say the synergies of having marriott and starwood together long term with having the stock is a better deal. >> that's what the shareholders decided. >> some people say they need to go higher. >> they might have to. >> starwood will decide. >> the board. >> the board will decide which is the better deal. shareholders will ultimately decide and the question is do

you take the cash and call it a day and are shareholders happy about that. by the way, tax implications on the cash deal. >> interesting point. >> or do you want to roll in -- into the future of whatever the combined company is. >> what do you think would do it unequivocally with cash. >> a couple more dollars from the 81. >> shares for shares, you don't have to pay capital gains tax. >> the other piece of this, by the way, is if you're starwood you might -- this could continue to keep going. you might want to accept the bid thinking that you'll then get a higher bid from the next guy. >> why don't we ask kevin hassett about this too. >> after onbang comes back? >> do you accept it immediately or how do you play it is the question. >> let's ask harry curtis, an analyst. you have been thinking about these things too. this looks like a better deal. starwood has signed off on it.

to the question put on the table does onbang come back again? >> i think the merry-go-round keeps going, yeah. >> how much do you think marriott is eventually willing to pay. wilbur ross was on earlier this morning. he called these deals wild at this point because he thinks the prices are getting relatively high. >> i am not sure i would call it wild. it's 10% above marriott's original bid. and marriott's original bid was, i thought, an excellent deal for marriott shareholders. >> jim cramer said he thought they were basically stealing the company at those levels. >> i would never disagree with jim cramer. >> harry, do you think on bang comes back? i misspoke on the three days. if onbang were to come back marriott has three days to match and starwood to make a decision about what to do about all that. do they come back? >> yes. as far as where they come back,

i would guess it's a game of bid and raise. and so i don't think it's over. as i said before. i think that onbang comes back two, three dollars higher. i don't know. i am not privy to any of the discussions. but it makes sense. think about it. it's a chinese company that is sitting on a lot of cash. there are some uncertainties in china. and here is a company that wants to grow its hard asset base in the u.s. this is a perfect way to do it. and they are going to be probably under less shareholder scrutiny than marriott. so i think they've got more flexibility to go higher than marriott does. >> if you are the board, what's the takeout price? what would you accept on a cash

basis to say, you know what, there is no risk. let's take it but also take the ca tax hit on the cash deal. >> they've accepted one lower bid. now they're playing with the house's money. the next bid is probably -- again, i don't know, but if i were in their shoes, up two to three dollars. and then it remains to be seen whether or not marriott follows suit. >> is there anything to be said for synergy with starwood being put into marriott? is there a premium on that deal or is cash always a better deal? >> you know, the synergies were just raised by $50 million. i don't think that that is -- that that probably suggests that there is more in the tank. but you have to be careful because, you know, the integration is not always easy in these transactions. >> is it wrong to want marriott to win, to keep it a u.s.-based

company? >> you nationalist, you protectionist? >> i didn't say that. is it wrong? i already saw stuff on certain websites that says, chinese are buying -- >> build a wall. >> they have a wall, in case you weren't aware, over there. a big, long one. you're agnostic to that question, harry? >> he's gotten off the phone. >> he's gone. >> no. i just love listening to you guys banter. >> everybody does. >> i think from the perspective of the u.s. lodging operators, the smaller ones, they would welcome onbang because it's -- they -- onbang, by owning strategic and the waldorf and this set of assets is less of a competitive threat than a marriott. >> yeah, okay. >> -- starwood transaction. >> harry, just one thing.

does onbang have to have this deal because of weakness in china? do you think they have to get the cash out because they're worried about what might go on in the next year and a half? >> how long would it take this deal to close? >> that's a -- it's an interesting question because i would guess that foreign companies or chinese companies with that strategy would have a -- maybe a menu of companies that they're interested in so that, if they don't get this, they move on to the next. >> right. >> but i do think, going back to my original comment, that they probably are -- the fact that they're playing with cash is probably appealing to the shareholder base. >> one last question before you go, harry. does the board have to consider whether onbang -- they can afford it right now in cash, but long term, if you worry about

the health of china and worry about the health of insurers like this and the idea that they may one day have to liquidate all of these francois hollandes hollande hollandes -- these portfolios, does that matter? >> i don't think so to be kind of callous about it. the objective of the board is to maximize the value of the starwood share. >> arne sorenson apparently getting on the conference call from cuba. this might be the first deal from cuba. >> i'm pulling for arne on this. i know where you are. >> where is that? >> you're with the group that's going to guarantee the free wi-fi. >> yes! whoever is guaranteeing free wi-fi, i am for. >> which put spac vision out of business, the free wi-fi. >> that's not why i am calling for free wi-fi. >> why do you like free wi-fi so much exactly. >> it annoys me to pay several

hundred dollars for a room and then have to pay $14.95 for the wi-fi? >> why do you need the wi-fi. >> so i can send you emails. in the middle of the night. we have a question for you this morning which is could this morning's deal news give the stock market a boost today? futures at this hour. i would say they've turned around but everything is marginal. dow opened a little higher. nasdaq and s&p off a little bit. rick rieder is here. i think i mispronounced your name. >> you're not the first. >> is this animal spirit? should we take this in a positive way? >> there are a few things happening. what the fed did last week and the ecb the week before. we're going through a dynamic where central banks are trying to drive financial assets higher. it's interesting when you think about chinese investing in other parts of the world. the risk to the markets, going back a month and a half or two months ago was the capital flight out of china. it's extraordinary in terms of

how we have done this 180-degree term from where we were. >> are you in agreement with him, by the way, on that? he think it's ten months of china -- >> ten months of cash flow at the rate the capital is flying out, they're going to start to run out of capital. >> no, i don't think it's necessarily ten months, but i do think that the capital flight issue is a significant deal. i do think they've made a cognitive decision today to do capital controls to let the leverage and liquidity build as opposed to devaluing the currency which i argue takes some of the shock risk off the system. >> when your investors call you this morning after the show and say, what do i do? what do you tell them. >> we actually think this is the year of carry. where growth in the world will be moderate. if you can clip carry into your portfolio. emerging markets was the big winner of what the fed did last week. if you capture carry in the emerging markets and carry in the high-yield market we think that's a better dynamic today

than some of the growth markets. >> and then the other question, did you see mervyn king? >> i did not. >> did you see the governor? >> i did not. >> do you worry about brexit as a real issue? he has a very interesting philosophy about what should happen there. >> you have to worry about it. so the -- i think particularly up to the june 23rd date, you know, whether you watched it in scotland or you watched it in quebec years ago, in a world of social media we're going to be the more and more headlines about why the departure vote wins will get a lot of attention. it will impact markets. you have to be worry about it. the impact it could have on the rest of the world. >> final question. the election cycle. has it mattered in the markets yet? >> the markets tend to focus on one thing at a time. i find it remarkable. it's oil. what the fed will do. the election is not on the markets in terms of the front page in terms of the markets you're thinking about today. i thinks you get into the summer we'll get post-brexit.

the chinese news is big today. global growth is big today. i thinks you get into summer and people start to think about the idiosyncratic risks people will think about it. that's when the markets could become volatile. >> do you want to pick a side? >> i think volatility will grow. as we get into the summer months. whether it's brexit, that, where china goes in terms of capital flight, i think it will grow. >> bet on volatility. he didn't want to take a side. but always bet on volatility, not a bad bet. thank you for being with us. oil prices under are youpre. we'll talk supply uncertainty next. [dad] i wear a dozen different hats

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welcome back to "squawk box." prices at the pump are moving higher. latest lundberg survey shows the average price of regular unleaded jumped nearly 25 cents in the past four weeks under $2.02 a gallon. if she ever sells that firm, andrew, we should just buy it -- >> lundberg firm? >> buy it and call it the

sorkin-kernen survey. it's not even hard math. you add it up. divide it by the number. >> forget about buying hers. >> you know she is never in the office. somebody can do this. they send it in. she is all over the place making money. every week we say the lundberg survey. >> i hear it on the morning every day. >> it's a great business. >> you think there is a lot of money in the business? >> it's addition and long division. >> at some point there probably was. >> seems like a really -- when you think about it, lbo from me and you -- >> bingo! >> i read the "journal" this morning. harder to get a loan. >> to buy? >> you think all cash? >> i think all cash. we'll see. anbang might try to beat us. brent crude prices up for four straight weeks. >> i didn't like the bacon deal. i don't like them owning our bacon, especially with a bunch of dead pigs in the river out. god knows what we're eating

right now. >> the oil survey. >> now with hotels. i don't know. >> worried about who is watching you? >> who knows! uswti. abc. up for a fifth week in a row. our next guest doesn't put too much faith in the recent rally and thinks there is more pain ahead. co-founder and managing partner of intervale capital. not even a 50% retracement. not much better than a dead rock balance, charles. you don't think it necessarily holds up near 40? >> i do not. first fact, there is about a 17 to 1 ratio of derivatives to underlying commodity talking about oil. a lot of short-covering and trading going on here that doesn't have a lot to do with fundamentals. if you look at fundamentals, the story is still extremely bad.

that is, we're producing about a million, a million and a half barrels a day more than we need globally. inventories are at record highs. and growing. so from a fundamentals perspective there is not a lot of support for the recent rally in prices. >> that fact about the 17 times, what -- was that the same ratio on the way up through 100 and to 110? we heard back then it was all fast money and trading and nobody was making money in stocks so they were trying to gain that market. but has that increased on the way down, or has it been that way for years? >> no. that's a great question. it's increased dramatically since about 2005 when it was probably about a five-time ratio. so it has been exceedingly high for the last couple of years. there are very crowded trades going on, sort of in hedge fund land, that caused a lot of very sharp, short-term movement in prices. it really seemed to be

completely divorced from fundamentals. >> wow. >> what we know is that it's going to take years to have supply sort of balance with demand, number one. and number two, it's going to take years for that excess inventory to slowly work its way through. so the short-term movement in prices is note worthy but not particularly rational. >> charles, in terms of the -- we've characterized it as really a supply -- mainly a supply issue that changed the dynamics. but if you think of demand, you don't even need to have a global slowdown. aren't we getting better at caèe standards? using less, thinks are more efficient. we get better at saving and being more efficient in general. i mean, are we over-hyping how demand grows over the next ten years? >> i don't think so. demand has been a very predictable trend. in the last 25 or so years there

has been one down year. that was 2009. you are right about cafè standards, et cetera. when you say "we" that's an oecd phenomenon. it's a developing world story. it's not just china. it's all of those places with low income, growing middle classes, relatively high growth rates. people want cars. as a transportation fuel in the developing world, there is a huge, steady driver for oil demand that's going to be there for the foreseeable future. >> yeah. >> so even though oecd is sort of more efficient that's not really what drives global demand. >> not a lot of teslas and priuss in the third world at this point. >> not quite yet. not even in the u.s. for na matter. >> i would ask you about the riggs could be turned on and off -- that's something we talk about. they're already ready to go.

>> the problem is you lose all your employees. >> bear in mind that we're talking about the u.s. market. really, we've lost about half a million barrels a day in supply since the downturn started. more to come. this is really a global story. >> okay. >> if you look at opec, their production will probably be up half a million to a million barrels a day this year. >> charles, thank you. >> thank you. >> okay. coming up, spring storm hits the northeast. some of us waking up to snow. we have the pictures next.

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♪ ♪ ♪ hold your horses now ♪ sleep until the sun goes down ♪ welcome back to "squawk box." here is what's making headlines. one economic report on today's calendar, existing home sales out at 10:00 eastern. economists expect a drop to 8.53 million units. office supplies retailer staples in court today in a faceoff with the ftc with its planned purchase of rival office depot. the ftc wants to block the deal on competitive concerns.

think about that. >> please. >> like those two will be so formidable if they get together. neither one will be around much longer, will they? we talk about this thing. what's the h thing, the stupid formula -- >> the antitrust formula. >> risenberg. >> heisenberg. whatever? >> heisenberg is from "breaking bad." >> disney's "zootopia." is that different than "zoolander"? topped the weekend box office for the third straight week. took in $38 million in ticket sales and that brings the domestic total to nearly $202 million. people never get sick of cute animals talking. i mean, being -- voiceovered by famous people. it never gets old for people. right? why? >> the kids need new content constantly. >> do you think the kids know the famous voices? >> no. >> i always wonder about that.

that's for the adults. >> a wink at the parents. a little bit more news. spring snow storm battering new england this morning. more expected throughout the afternoon there. a nor'easter tracks off the east coast, parts of connecticut, massachusetts and new hampshire. got more than 5 inches of powder overnight. high wind gusts are expected to cause sporadic power outages. but if you want to go skiing, this coming weekend, i believe they're still open. >> mad at punxsutawney phil? >> no. this is okay. we had warm weather for a long time. this was a one-off. it will be back in the 50s. >> we had snow on the first day of spring. >> it's been mild. >> six more weeks of winter, though. >> it was not. it was in the 50s. look, i stopped wearing long johns. a big business story, actually. a jury in hulk hogan's invasion of privacy suit awarded him $115 million. he sued gawker for posting a nearly two-minute segment of a sex tape back in 2012.

huge implications for first amendment issues. gawker, of course, appealing the ruling. it was a jury that awarded this money, so it's unclear what a judge ultimately will do. it's a fascinating case. >> we know way too much about -- >> agreed. >> -- this guy and his buddy the sponge whoever he is. the love sponge and his wife. i don't even want to know that there are people out there like that that can even think about things -- these like -- it's like cheering him on and stuff? i mean this is -- right? >> yes! >> i thought penthouse -- >> we're better off without it. >> i thought penthouse made the letters up. remember? >> what letters are you talking about. >> they have letters where things are going on that don't really happen. they're written by people. this really was going on. >> joe, since you have taken such a strong view on other legal cases -- >> yes. >> -- and becky. >> are you really doing a segue here? >> i really want to know.

are you giving the money to hulk hogan or voting for gawker. >> defending journalism? this is ridiculous. >> i want to crush gawker. that's the sleaziest -- >> they're so mean. haven't we had the guy in there. >> the jury clearly hated him. >> there was a snail trail when he left. >> nick dentin. interesting guy. >> so you would take gawker's side? >> i think it's very complicated. there are other instances in which stolen material effectively has gotten into the hands of journalist and that information has been published. >> afraid to say anything about gawker because they'll write stuff about you. >> pretty much. they will. pretty much. >> there is another outfit where you were afraid to say because you were so -- oh, yeah. david brock's thing. >> i live in fear, yeah. back to the business of economy and politics and where those two intersect. the promise to bring manufacturing jobs back to the united states generates a lot of applause on the campaign trail. but can any of the candidates

actually deliver on their promises? phil labeau joins us with more on that. >> this is at the heart of the discussion when it comes to manufacturing in the u.s. remember when barack obama was elected to a second term he said he is going to create one million manufacturing jobs in his second term. well, it's come back a little bit, but he is nowhere close to creating one million jobs. it's around 400,000 that have been created in the second term. donald trump is focusing in on this repeatedly on the trump. here is what he has to say about jobs in the u.s. leaving the u.s. >> companies are leaving our country rapidly, rapidly, whether it's carrier air-conditioning, whether it's ford, whether it's eaton. i was in cleveland, and eaton corp., they're leaving. so many companies are leaving. frankly, i am disgusted with it and i'm tired of seeing it. there is no reason for it. it's just gross incompetence at the highest level. we should not allow it to happen.

>> well, let's make some clarification about what's going on with ford. ford is not leaving the country. ford has a manufacturing facility in mexico. by the way, while it does build cars that are shipped to the u.s. and canada, it also ships cars to central america, south america out of that plant down there. about 433,000 vehicles built last year. however, ford is expected to further expand in mexico, and that's at the heart of trump's criticism. but it's also the democratic candidates who have been zeroing in on manufacturers producing outside the u.s. >> i want companies to know, if they walk out on america, they're going to pay a price. and if they ship jobs overseas, we're going to make them give back the tax breaks they receive here at home. >> i say to corporate america, you want us to buy your products, start manufacturing those products here in america.

>> great applause lines when you're out on the campaign trail. the reality is, the more complex products are really the ones that are built here in the united states. greater automation and leaner plants simply mean that the commoditized manufacturing jobs, they're gone and they're not coming back. regardless of whether it's a republican or a democratic in the white house. so many people -- guys, i hear about this all the time especially at the auto industry. people saying why are they manufacturing outside the united states? you build where you sell. so you build in china to sell in china. you build in mexico to export to central and south america and, yes, also some to the united states. this is going to continue to be a focus of the campaign, but the bottom line is this. a lot of these lines that you hear about bringing jobs back is just not going to happen regardless of who gets elected. >> phil, but the point is a very fine one. if you are going to be expanding those capabilities in mexico and if you are shipping to the united states and canada, then the expectation would be that

you are going to be losing jobs in the united states. and that's what really cuts to the heart of this. >> becky, in the ford case, if they -- let's say they do expand in mexico and move production of a small car from flat rock, michigan, to mexico, which is the expectation. they're going to be replacing that capacity in michigan with a small pickup truck. >> no one would lose jobs in michigan? >> no. no. but that's -- see, that's one of the facts that is -- is lost in all of this is that a lot of these plants that were shut down during the recession from the auto makers, yeah, a lot of those will not come back because there was too much capacity in this country. so what you have right now is a manufacturing base, at least for the auto industry, where they're pretty much at capacity. it doesn't get a lot of attention, but they're at capacity building and supplying here in the u.s. and in canada and most of north america. >> at capacity because the new plants they've built have been elsewhere, though, right? >> no, it's not that the new plants have been built elsewhere. it's that they shut down excess plants in the u.s. when they

went into bankruptcy in '07 and '08. they had too many plants. >> if they cut the corporate tax in the u.s. a lot of jobs would be created here. it's not just moving to mexico because of cheap labor. it's also go anywhere, ireland, because of cheap tax rates. donald trump wants to cut the tax rate. wouldn't that create a lot of manufacturing jobs in the u.s.? of course it would. >> in certain industries, likely. in the auto industry, no. you build where you sell generally speaking. you won't build in china to export to the united states. >> you just said they build in mexico to export to the united states and canada. >> well, becky, they do some of that with the small vehicles, with small cars where the profit margin is much smaller. where do they build trucks and suvs? in the united states. >> great. phil, thank you very much. expectations for a contested gop convention are on the rise. joining us is a member of the rnc who supports donald trump. diana, thank you for joining us this morning. >> thank you. >> as a delegate you've been on

the inside for a long time. as a member of the rnc you know how these things work. what are you seeing in this cycle? >> well, donald trump, as you know, has been the frontrunner since august, since the cleveland -- the cleveland first debate. and ever since that time there has been attempts from all sides to take donald trump out of the mix. and it hasn't been very successful. the more they attack him, the stronger he gets. he is resonating with america and the voters. >> rnc chairman raeince priebus was out over the weekend and saying things making it seem like he thinks a contested convention is more likely. do you think that's the case? >> it could well be the case going into the national convention. i can see it happening. >> where no one makes it to the 1237 required in terms of delegate count? >> exactly. that's just realistic. >> we have another delegate who joined us last week who is also

a member of the rnc rules committee. his point was that the party is the one that chooses the candidates, not necessarily the primary votes the way they go down and that these are the rules, it's very clear that, if it goes to a contested election, it could walk out and anyone could be the actual candidate who is nominated by the party, not necessarily the frontrunner or even the second place. what do you think of that? >> well, at the end of the day, you know, people are under the misconception that it's the results of the caucus and the results of the primary that determines who becomes the nominee. in actuality it's the delegates at the national convention that are supposed to pick the nominee. they're not always able to because of rules changes and manipulations that occur at the national convention, but that is the job of what it is to be a delegate to go to the national convention. it's to hash out the

differences, have several votes, as we probably will be having in this national convention, and to select the nominee. >> diana, do you have any friends that are delegates for somebody else? do you ever talk about what's going to happen at the convention with -- i know trump supporters may talk amongst themselves but do you have friends who are delegates for somebody else? >> i have friends who are cruz supporters. >> what do you guys talk about right now? when you are thinking about the contested convention? >> well, there's going to have to be, you know, justification for getting delegates together to support the candidate that they feel is going to be doing the best job in representing the american people and getting this country back on track going forward. >> do you feel like, if donald trump walks out, if he has the most votes, maybe not 1237 but if he has the most votes from delegates walking in and he walks out without the nomination, do you think it will

have been stolen from him? >> well, you know, there is all sorts of things that can occur going into this national convention. just as in the 2012 convention everybody saw the manipulation of the rules and microphones were cut off from the delegates down on the floor and delegates weren't able to be seated because they said that paperwork wasn't filed on time so the credentialing committee was, you know, doing some things that weren't necessarily on the up and up. and so a lot of delegates were eliminated, and at that time it was solely for keeping ron paul off of the ballot. going into this convention they're going to try to do a lot of manipulation to try to keep trump from becoming the nominee. there is no doubt about that. it's out in the open. a lot of political operatives in the republican party are trying to take trump out at all costs.

so that is what we have to watch out for, and we have to make sure that the rules and the seating of the delegates is done in a proper manner. >> tens of millions of dollars headed that way. diana -- >> absolutely. >> does anyone in nevada ever mispronounce the state in say nevada or is it just the people outside the state that don't -- have you ever heard anyone in nevada say nev-auda? >> no. >> i'm on a crusade. i really am. when i hear nevauda it kills me. you can confirm it's nevada. >> it is nevada. >> thank you! >> you're welcome. >> all right. see you later. appreciate it. coming up, a smaller eyephoiphone, new watch. different ipad pro. a lot of speculation around today's -- it says big apple event. i said it's not really a -- small apple.

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welcome back to "squawk box." a reminder on news we told you half an hour ago. valeant shares halted for news. we'll let you know about the news when it comes out. the stock in the premarket down almost 4.5%. the expectation these day ises alwa

days is always the worst. >> he went long valeant and short herbal life. it's like picking the wrong -- like i did with. >> xavier. >> yeah. >> he should have been -- should have been short valeant, right? >> yes, he should have. >> he made a mistake on the order. >> even if he just sold out of valeant. >> or not kept doubling down. switching gears. apple first media event of the year kicking off in a few yurs. josh lipton is live at the cupertino headquarters with a look at what to expect later today. josh. >> the star of the show today will be apple's new iphone. apple is expected to unveil a new, smaller iphone, and the specs will be a 4 inch display. a faster chip and support for apple pay. rbc analysts estimate it could generate $5.5 billion in sales

this fiscal year out of apple's total sales of $230 billion. so this new iphone will have a modest financial impact. at least in rbc's view. what, then, is the strategic importance of this new iphone to apple, though? remember, there are iphone fans who prefer smaller 4-inch screens. that's why they now use the iphone 5s which is becoming outdated. remember, that phone hit the market in september 2013. so apple could be looking to offer those users a new 4-inch phone with the latest bells and whistles and that way these users remain loyal to apple rather than jumping to a rival. apple also expected to introduce a new smaller version of the ipad pro as well as new bands and colors for the apple watch. and remember, tomorrow apple goes head to head with the u.s. government in a court room in riverside, california, over whether apple should be forced to help the fbi break into a terrorist iphone. so will tim cook use today's product announcement to again

make the case for his company? we'll soon find out. guys, back to you. >> okay. >> all right. thank you, josh. when we return, jim cramer joins us live from the new york stock exchange. his we'll get his exchange on the morning's top stories, including some big deal news. some cash back cards are, shall we say, unnecessarily complex. limiting where you can earn bonus cash back... then those places change every few months... please. it's time you got the quicksilver card from capital one. quicksilver earns you unlimited 1.5% cash back on every purchase, everywhere. doesn't get much simpler than that. what's in your wallet? something we'll show you.. through small things. big things.

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let's head down to the new york stock exchange. jim cramer joins us now. i want to talk to you about marriott. one quick point with this -- >> look what he's wearing. >> i want to make a point, with these brackets. you know not a single person in tv news that's left has villanova. only six teams that people have going to win it all, so there's six teams left. even though i'm out because xavier is out, i don't need the winning team. if a&m wins, notre dame, syracuse, i still have a chance. did you take villanova to the end? >> in my group one, yes. what bothers me, is when you look at some of these people that were supposed to run over

them, like a notre dame, some of these teams did not blow away people. but the nova first half was the most blow-away first half of anyone in the ncaa. look at that. >> the story of my life. i had villanova going all the way last year, they lost in the second round, i think, didn't they? >> yes, they did. they lost in the second game. jay wright is such a good coach. the team looks terrific. tough game against miami coming up. a lot of teams don't look real. we saw that this weekend. a lot of close games, they told me there were soft ones, soft threes. is the tournament not the greatest thing in the world? let's give it its due. it's fabulous. >> there's about 15 or 20 just unbelievable moments. unfortunately, i've been on the losing end of three of them because of northern iowa. texas, cincinnati with the tenth of the second. xu is what i wanted. how do you make that shot? >> i don't know.

how about the stephen f. austin. they gave you a game. the barclays center was rocking. the tournament is the most exciting sports event of the year. i will include the super bowl. >> even though i'm out, i'm ready for thursday and friday. we don't have to work friday, jim, so we can watch. i shouldn't hope marriott wins. for some reason i want marrioth win. >> i thought harry was correct. it could be a merry go round, and how little the starwood people thought of themselves at the beginning. they were literally an interim board, sell the thing at any price. look what they did? is that a corporate america sail down the river? long-term shareholders, yes. now this bid has nothing to do with the first one. anbang is a communist company.

>> we love these things. i can't remember one where it keeps going higher like that. >> it's been ages. it's exciting. yes. i just think people should be more focused. when you come in with a valspar deal -- valspar had a bad last quarter. they were losing business to lowe's. suddenly sherwin-williams going head to head against ppg. fantastic. they take it to lowe's. now they can take it to the big box. people should recognize there's so much good happening in the market. i know people are focused on the election. you can have villanova, i'm taking the rest. i'm taking the other 11. >> thanks to the administration at nova to give me and steve murphy some pretty good seats. >> see you. thanks. when we come back, an election prediction coming up.

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guys. welcome back. that news on valeant which had been halted for news. the news is out. valeant will be looking for a succession to michael pearson. he will remain as ceo while they

look for a new chief executive officer. looks like bill ackman is going on the board. again, just looking through. this release just hit. pearson saying while i regret the controversies that adversely impacted our business over the past several months, i know valeant is a strong and resilient company. >> isn't this a little late? >> listen to more from "squawk on the street" right now. ♪ good monday morning. welcome to "squawk on the street," i'm carl quintanilla, with jim cramer, david faber is off today a live shot of the valeant post. you heard becky bringing you the news that mike pearson is out. the president in cuba, starwood marriott, a lot more futures steady, and europe muted. oil contract rolls over today. our road map this morning, marriottwe