>> live from new york where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. happy birthday to the bull market. today marks eight years since the march 9, 2009 low. a lot of squawk viewers and cnbc viewers know it as the haines bottom after hark haines said on cnbc on march 10th that he thinks the market hit its low. look where we have come from then. 666 back to 2300 and change. look at the u.s. equity futures. the dow futures are indicated down by 14 points. markets have been down. the dow and s&p have at least for the last three trading sessions.

that hasn't happened since the end of january. s&p 500 has indicated down by 1 point. the nasdaq by 2 1/2. in asia overnight, nikkei ended up by a third of a percentage point. the hang seng and shanghai were down with the hang seng down by 1.2%. in europe, some of the early trading, there are red a arrows. >> a couple big stories we're watching this morning. in the last hour, crude prices swinging from modest gains to extend yesterday's losses. wti plummeted more than 5% in yesterday's session, hit by a record build up in u.s. inventories. and shell divesting most of its canadian oil sand assets. the oil major will sell a portion of its investments in fields to canadian natural. shell is also teaming up with

canadian natural to buy marathon oil canada for 1$1.2 billion. the ecb rate decision due around 7:45 eastern time. the central bank not expected to move on rates. mario draghi will hold a news conference at 8:30 eastern time. in u.s. weekly jobless claims and february import prices, all of that at 8:30 a.m. eastern. >> somebody is messing with you? we needed to know that's the oil field? >> just got back. they don't -- i think it's nice you honored that day yesterday, day without a sorkin? >> different day. it was a wonderful day. >> a day without a sorkin. what? >> yes. andrew was out yesterday. >> i was out yesterday. that's true, it was also a special day for an entire gender. >> right. right. international day, but also --

>> yes. >> i think it's nice you -- you -- >> we missed i. this is his round-about way of saying we missed you. some of us would like to honor that, but we feel like we should be here. that was part of the argument that you saw yesterday. some teachers were not there. >> right. >> parents didn't have day care for their kids. just -- so it was people had to decide, do i go in or do i honor the day. some of us chose to come in. >> i was doing work in an undisclosed location. >> okay. if that's your story. athabasca. what happened? really? that was that long? >> yes. that was too long. >> god. why? why even put it in there? why bother? why write it? why even -- this was a big story yesterday. wti yesterday -- >> no, the hawaii thing. is what we were going to do. now we'll do it next. okay. in political news, here it is. >> crude oil down again.

below $50 a best. so much supply. as a result we are seeing continuing four times as many supplies as we had expected with the latest supply thing that came out. look at this, it's down 0.2%. >> we had juergen on. that was my question. couldn't a great environment in this country, which is great for the oil industry, couldn't it be bad for the oil industry? you give them -- totally take the shackles off. and produce as much as you wanted t will hurt the price. >> price goes down. >> now they can make it profitable at $40 a barrel. >> we'll do the border adjustment tax. if you think we are. you see the front pages of the papers today. >> who is -- who is whimping out? >> a lot of smart people -- druckenmiller. >> a lot of people are for it. >> i saw kudlow yesterday say wilbur didn't want to do it. wilbur responded to kudlow's

tweet saying i didn't make a decision. >> i thought based on the discussion with wilbur last friday, i was thinking he was more inclined -- >> than i thought before. >> -- than i thought before. >> to do it. >> yeah. >> but larry kudlow had some -- that's what i thought, too, that he had reservations but was slowly getting on board. >> tepper said it would be done overtime. it was complex. >> yeah. >> his analysis. he thought in the end it might work. >> he didn't say he was thrilled with it. he was saying he wasn't worried about it. >> he thought it would help. he wasn't saying it would work in spite of it. he thought there were positive things about how it would work. state of hawaii requesting emergency court intervention to halt president trump's revised order on immigration. a hear hag being has been set fh 15th. a day before the order is set to go into effect. >> the ides of march.

the new order puts u.s. entry restrictions on refugees from six muslim countries, and hawaii's governor says it violates the country's constitution. he spoke to phil lebeau last night. >> the impact might be minimal, but for us it's about taking a stand. we don't believe the federal government can discriminate on the basis of natural origin or religion. >> governor says he is concerned about the order being extended beyond 90 days or including countries or selection criteria. former utah governor jon huntsman accepted president trump's offer to be the next ambassador to russia. nbc news tells us that. huntsman needs to be confirmed by the senate this would mark his third ambassadorship. i thought he was a -- ambassador to china. >> he was.

first ambassador to singapore, then for two years ambassador to china. >> doesn't matter the country. he's just good at being an ambassador. it's the role of it. >> let's get more on the political news of the morning. eamon javers joins us from washington. >> good morning. it was the early hours session for house republicans. wrapping up more than 2 1/2 hours ago. the house weighs and means committee pushing through its elements of the obama care, repeal and replace legislation that republicans are moving up on capitol hill. look at this very, very late-night session. some tired looking folks there. the final vote was party lines. 23-16. they did pass the measure. that sets it up for moving down to the house floor. but this is in opposition to the american medical association, the american hospital association and aarp, all of

those groups have come out in opposition to this legislation. so this will be politically challenging balancing those groups opposing it and also some conservatives who oppose this legislation as well. saying it doesn't go far enough. some criticized it as obamacare 2.0. we'll see where that goes. a major milestone in the he wou wee hours of the morning. yesterday some bipartsanship. two house democrats stood at the white house and praised donald trump. it dove tails with the president's proposal to roll back or significantly reduce prescription drug prices. the two congressmen said the president was enthusiastic about their new legislation and they said they will introduce that bill in two weeks. here's what elijah cummings had

to say about the bill yesterday. >> i must tell you the president was enthusiastic about our proposal. we were proposing to him a bill we will be filing in two weeks. we asked him and secretary price who was at the meeting to look at it, give us their comments. >> guys, that's not a proposal that is likely to be popular with republicans who have not been enthusiastic about the idea in the past of the government using massive purchasing power to negotiate on prescription drugs and drive some of those prices down. that's in essence what this bill would do. i was there in the driveway. i asked peter welch what he thinks this will cost the drug companies. he said it is too soon to tell if that were to pass, it would be some significant cost to drug companies if the government was allowed to do that. >> you mentioned this is not something that would be popular with republicans.

do you think they would get enough republicans to get it to donald trump? >> you might see something on this one that you haven't seen in a long time, a split ticket in the house, where you get a republican speaker moving it on behalf of a republican president and then passing it with democratic votes. you could see enough republicans coming on board for this, especially if the president puts his full weight behind it. a lot of democrats would like this idea. this could pass, if you're the prescription drug industry, you're watching this carefully and trying to figure out what you need to do. >> watching this healthcare debate is sort of a commentary on where we are in this country. i wish i had taken french in high school. is it -- you have people -- seriously. here it is. you have people that say, my god, this goes way too far! you can't do this! other people are like, what are

you doing giving all of this entitlement? what are you doing allowing this entitlement to stand? they're like this. they're so far apart. >> the question is, in american politics, is there anybody left in the center? >> there isn't. but you don't need the people over here saying -- it's -- you have enough republicans in the house and the senate to do it. the question is whether you can whip those guys that say it leaves too much intact into the point where you tell them, look, it's either this or we stick with obamacare. >> this is your only option pal. go for it. >> do you think these guys -- is it negotiating, number one? or does ryan really believe that he can eventually get that done and that they can get this senate done? >> i think ryan absolutely believes it. this is the gamble the leadership is making. you laid it out. they're saying to those conservatives this is your chance to repeal and replace obamacare. you've been campaigning on this for eight years. get on board.

vote for it. that's it. the white house is also sending mixed signals by saying this is the starting point of an negotiation. the president used the word negotiation in a tweet. that sends a signal to conservatives there might be wiggle room. and the president met with conservative groups yesterday who oppose this legislation. some of them came out afterwards and said that they were encouraged, that the president had said to them that he is willing to modify the bill, make some changes. that gets into tricky territory for paul ryan who doesn't really want to modify this bill. he wants to push this through as fast as he can. the more you pick it apart, the delicate "house of cards" can fall apart. that's the challenge. >> all right. you were talking about the middle of the road in american politics, there's a great old saying i learned on capitol hill. there's nothing in the middle of the road but yellow lines and dead armadillos.

>> yikes. >> i love that one. i trot that out every time i have the chance. >> thank you. we are counting down to the jobs data that comes out tomorrow and the fed's policy meeting next week. yesterday on "squawk box," david tepper of appalossa management had this to say about the fed and why he thinks it's behind the curve. >> it's crazy. janet yellen was saying again 1%. it's wrong if you get the good things happening. it's not wrong if there's no tax cuts, certainly if the french election goes the wrong way, it's not wrong. but it will be dead frigging wrong. wrong. let me not pull a punch here. wrong! if you get the good things to happen, which is a distinct possibility. >> joining us now is ed keon, portfolio manager from qma. and steven parker, who is head of the mattic equity at jpmorgan private bank. ed, tepper was blatantly saying

what he thinks about this, the fed is behind the curve and this will be an issue. they'll have to raise rates more than expected. >> he said they would be behind the curve if we got the good things, tax cuts and so on and so forth. i think they're starting down the path. i think it's clear they'll raise rates at this meeting. the question is do we get fiscal stimulus and evidence that inflation is going above the target. they're perfectly prepared to take further action. but they have been cautious so far because they don't want to kill off the recovery before it really gets traction. >> tepper feels strongly enough about this that he is shorting bonds. u.s. treasury bonds as a result. he definitely thinks good things are happening. he sees it. we saw it in the adp numbers yesterday. he has another guy who looks at people who get security background checks for job hirings before time, he feels strongly about this. >> he said you bet your heiney that i'm shorting bonds.

>> we are substantially underweight bonds in the portfolio. i think the ten-year bond yield will get above 3% before the year is out. i agree with his position. >> we just execute it differently. >> how do you execute it differently? >> we're short. >> but long equities. >> we both have the same thing, if bonds do doorpoorly, it willp the portfolio of our clients. >> steven what do you think about that position? >> i think it makes sense. i'm an equity guy, i don't have a strong view of the bond market. but within equities we're focusing on the sectors tied to higher rates, things like banks, we fla reflation trade, energy, technology. the growth momentum we're seeing plays into a world with higher rates, but the fact that markets have been able to digest this move higher in rates, the move higher in tightening expectations over the last couple of weeks has to be reassuring in terms of the broader growth outlook. >> tepper likes some of the

financials, like bank of america. when you look at energy, what's happening? yesterday oil collapsed. we're seeing it continue to drop today because of the supply situation. >> yeah. it's tough to figure out what the short-term moves are. certainly the supply upside in terms of inventories yesterday sparked some selling from what we heard a lot of this was technically driven. a lot of momentum traders were looking to short the energy market. longer term, if growth continues to improve, i don't think we're in a longer term downward trend for oil prices. if you think back to this time last year, if we had a day where oil prices were down 4%, 5%, the stock market would have been off 2%, 3%. and yesterday we were pretty flat. i think that's encouraging when you look at the prospects ahead. >> shorter term i understand your point on that. longer term, if we can produce energy here, produce oil that is profitable, crude oil at $40 on

the barrel from some of these bakken places and the permian basin, if they can produce it at that level, it's hard to understand how that is not going to continually put pressure. >> i think you have a give and a take. you have the lower cost, highdu produce at $40 a barrel, but that's not everyone. somewhere in this range-bound 50 to 60 doctor ran$60 range, that spot for consumers. that's where expectations are on the energy markets. >> ed, what are your favorite ideas now? >> we're overweight stocks globally. we've been rotating into non-u.s. markets because they're cheaper. but we're overweight stocks globally. we also still have a position in financials for reasons everybody knows. they're a big beneficiary of the policy changes and higher interest rates. so i still think that's a good place to have your money for the long run. >> where about outside the

united states? >> we own some positions in topix futures, efa futures. we own those position as futures because we don't want to be exposed to the currency. we continue to think the dollar will strengthen. by owning the futures we can harvest the gains from those markets without the currency exposure. >> thank you both for coming in today. >> thank you. >> you asked about the permian basin. want to ask him about the athabasca region? >> no. >> you can ask him. that's your thing. >> permian basin is where exxon can do it for $40 a barrel. >> the athabasca region is on everyone's lips because of this deal today. i thought maybe you would keep it relevant and timely. coming up, the irs cracking down on identity theft. i would like someone to pay my taxes and steal my identity. >> what? i would like them to pay my

taxes. >> steal your tax refund that you may be getting. >> that little refund, it's always fun to get -- it's always fun to get the refund. do you ever look at what you're paying? >> but when your identity gets stolen -- >> shy not be getting these flat tires. >> for what you're paying, absolutely. >> it's working. any way, it's working on new -- >> paved in gold for you. >> yeah. i think for everybody's healthcare. later the new administrator of the epa, yeah. scott pruitt will be here. he'll join us with a first on cnbc interview at 8:40 a.m. eastern. eastern.

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♪ >> talking shoes this morning and also talking about the irs. the irs is striking back. the tax agency reports that the number of identity theft victims fell by 46% last year. it says 376,000 tax payers had their identities stolen by criminals who obtained fraudulent tax refuns.

that's down from a peak of 766,000 back in 2014. the decrease comes after an agency crack down on identity theft. the irs says it stopped nearly 1 million fraudulent refund claims last year totalling 6$6.6 billion. and both chambers of congress passed a bill to approve nasa funding. nasa might ab different abe a dy now. it gives it new mandates including the creation of a roadmap to get humans near or on the surface of mars in the 20s or 30s. >> wow. in the 2030s. >> yeah. >> not 20s or 30s. >> in the 2030s. okay. yeah. it calls for nasa to continue developing the space launch system, and the orion space capsule in order to eventually go to the moon -- to actually go

this time. >> watch out, you'll get punched. >> i know. buzz, "buzz lightyear." to mars and beyond. the bill goes to president trump for a signature. a veto yesterday -- >> would you sign it or would you veto it? >> i'd sign it. definitely. yesterday -- >> i wouldn't want to go. i'm happy we're doing the exploration. >> this day and age of private aviation, elon musk, baesos -- >> you always tell me the government did the internet. >> it did. that's why i'm surprised -- >> don't be me. hold on. >> don't be you. >> yesterday they say that -- >> i agree. potatoes really can grow mars. >> like matt damon did? i want to show you one more thing. the time is right to go to mars.

this is from the "l.a. times." the ice age ended on mars, it's gotten much more tropical. >> is that because of solar flares? >> who knows why climate changes, on mars it's changing and getting -- >> you already have scott pruitt coming on. >> for you, andrew. we did put a mars rover up there. i think it had an internal combustion engine. it's possible that thing has been driving around and co2 -- it's possible. >> can we go back -- can we go back to the uber story. we wanted to try to do uber. >> we'll do it after the break. you used up the time. >> good. it's a good time to go to mars. a lot more tropical. >> coming up, we'll talk to a china bull. he will tell us why he thinks bearish calls are way off base. we'll have a debate about it. peter alexander joins us next.

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getting your quarter back. fountains don't earn interest, david. you know i work at ally. i was being romantic. you know what i find romantic? a robust annual percentage yield that's what i find romantic. this is literally throwing your money away. i think it's over there. that way? yeah, a little further up. what year was that quarter? what year is that one? '98 that's the one. you got it! nothing stops us from doing right by our customers. ally. do it right. let's get out of that water. hello, my name is watson. i am helping 8 million taxpayers get the largest refund they deserve. one million people can benefit from precision cancer care. 197 million passengers can fly with less turbulence. i am on my way to working with one billion people. i look forward to working with you. i am on my way to working with one billion people.

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in times square. good morning. u.s. equity futures at this hour are indicated a little bit lower. yesterday until the last hour or so, it was kind of unclear what would happen. earlier in the session we moved between negative and positive before the open of the market with tepper, when he was speaking. it moved into positive territory. oil called the shots the closing minutes of the session. it was down. down again this morning. that would be four straight days. not huge moves yet. below 21,000 on the dow again. but we need to have katie stockton coming up. you know that. we'll talk about whether -- there are some things on the horizon that could really either go right or wrong. >> we'll see. >> i was so rudely interrupted before the break. with your ub >> with your uber thing.

we just didn't get to you. >> you sucked the oxygen out of the room. uber says it will stop using greyball technology against regulators. that program helped it evade authorities in cities where authorities banned it. it made fake screens for who they thought were regulators. it changes the view of the app to show no cars available at a look, and uber says it was really to prevent fraud and to prevent violations of terms of service. uber announced the existence of the service last week. this will create all sorts of problems. you may see criminal probes from this. >> because they were trying to evade authorities? >> because it was -- yes, they were trying to evade authorities

to prevent them, and they were showing fake screens with fake cars either not moving -- literally animations were running on the app because they thought you were a policeman. >> this is the latest in a series of issues for uber in trying to go from a young start up where, you know, it was scrappy, trying to do anything to exist, to where if you're going to be a real company, you can't do this stuff anymore. >> wells fargo and uber should put their heads together. fake accounts. when did you first hear the term greyballer? >> i was not familiar until last week. >> i heard of freeballing. remember dillon rhadigarhadigan? >> yes. >> it was explained to you, greyballing? >> mike isaac who wrote the story in the "new york times" explained what greyballing was. >> was it a term that's been around for a while?

>> never heard of the time before. >> okay. wondering the -- >> the origin? maybe it's a travis calkalanick phrase. i don't know. china. david tepper who was on the show yesterday, bill ackman and kyle bass made bearish bets against the chinese yuan. our next guest says their short positions and analysis of china is totally off base. he will say it again right now. joining us is peter alexander. take these gentlemen on. what's your problem with their bearish bet with china? frnlg>> we want to look at the history of all the bets made. it goes back to the global financial crisis. jim chanos got most of the press at the time with the treadmills to hell, dubai 2000, he was betting against the property market that it was overleveraged, all these negative narratives that people

look for, and whether or not it is accurate. we found that the application of various floebl mglobal models t against china, while it's not necessarily wrong, it's completely inaccurate in terms of missing pieces. you have an economy -- i think the financial times or the journal said given the growthxp they will grow the size of germany this year. when you look at the debt numbers, it's not measured on a relative basis. at the same time. >> it's china. you're talking about uber and the things they're doing behind the scenes. china does the same thing. they have amazing ways to -- >> china is greyballing people? >> not greyballing. but there was a big -- >> thought i would try to use it in a sentence. >> that's right. >> there was an argument a few years ago, there are a number of

different ways that policymakers can address what they see as issues that we don't think are factored in to what the hege fund managers are doing. >> you speak to this, we talk about the border adjustment tax, we've been debating whether wilbur ross is on board or not. the implications for china and what you think china will do about it if we do implement a border adjustment tax. >> again, it comes down to what is being talked about verse what the actions will be. at the time trump was being aggressive with regards to china. yet we have not seen anything material come out from the administration since he's been put into office. i think there's a recognition that there is a somewhat of a symbiotic relationship between the united states and china. it will be difficult for them to move forward on anything that would be restricted. >> when people say, for example, that china could hold some of our u.s. companies hostage, gm,

apple, boeing, what does that mean in practice? what do you think they would do? >> i think holding people hostage is a hyperbolistic point of view. making things more difficult or making things more competitive is what has happened. the chinese have been more supportive of local players, which made it more difficult for the firms you're mentioning to gain market share or build businesses. it terms of holding them hostage, we're not talking about individual people. we're talking about organizations that can make choices for themselves. >> right. could you see a situation where they actually make apple's life more difficult in a meaningful way? >> right now it doesn't have to be the policymakers. apple is having a hard time in china but of home grown competitors. they have their one apple, high-end phones. whether it's local players, they are coming in and finding local

niches that apple is not competing in. >> did you see the headline yesterday about the trump organization getting these trademarks in china? >> i saw one for a toilet bowl. >> 38 trademarks in a row. then questions about whether the government was doing that to appease him. apparently typically the government doesn't -- it takes a long time to do these things. it happened all at one time. >> yeah. >> it's the quid pro quo argument. >> is it? >> i don't think so. what will he get if trademarks on some of his products and are they products that the chinese want? i don't think so. will it belead to a different tt that the u.s. will react to china? i don't think so. last past weekend at the npc meeting there was a clear movement in terms of what xi

jinping will do in his second term. right now it's completely lip service. i've been there 20 years. it's the frog in the boiling water. it doesn't happen overnight. when you stop for a minute and look back, you can actually see there's been significant movement on market access and opportunities that happen. >> thank you. >> thank you. >> i will start greyballing people. i don't even know what that means. bla blackballing. gr greyballing. >> blackballing. >> maybe that's what it comes back to hidden blackballing. >> all colors have different meanings. if they're using a fake -- >> blueballing. >> always taking it to a different level. >> if you talk about -- just -- redballing. that's a -- >> redlining. >> this squawkard moment has been brought to you by joe kernen. >> i already said freeballing. that was a seinfeld --

>> this squawkard moment brought to you by joe kernen. >> i'm embraiembracing that. i wanted a couple of those an hour. >> stay tuned, people. don't miss. the ceo of the cleveland clinic, toby cosgrove will be joining us. then tom ridge will join us to talk signer secur cybersecure t. heity, and later, scott pruitt. stay tuned, you're watching "squawk box" on cnbc.qu k box" o.

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ath a welcome back. oil prices tumbling this week threatening to drop below the $50 level this morning. let's turn to jackie deangelis. she has more on the recent slide in crude. yesterday was something to watch. >> was volatile. you're right. another 2% slide this morning. that's giving us a sense of the direction we're going in. yesterday a 5% drop. testing that $50 level. and traders always tell me we test it, then we break. the market has been seeing some support from the opec deal, but we also have been pointing out some downside risks for some

time. u.s. inventories have been building. production going up, over 9 million barrels a day. it's just slightly off its peak, which was 9.6 million. a couple other troubling factors. the opec deal, providing support, no guarantees it will be extended from here. also commitment of traders report showing that the specs were loaded up to the long side here and as we know sometimes they can be wrong. finally we point out two weeks ago how the xle and wti were diverging. xle and energy stogoing down, a stocks going up. now both are pointed in the same direction. what happens after a move like this? our partners at kensho say it's 50/50 on whether we move higher or lower. now we're moving lower. they reminded me of this testing pattern we've seen before there's definitely a desire to

break that $50 level here and we have. miller taback says the saudis will do anything to keep prices supported. so we dip into the 40s, you get an extension of the cuts that could be a buying opportunity for wti futures and energy stocks. >> it was interesting what the saudi oil minister was saying earlier this week about how opec can't be the only players doing this, as if they expect the u.s. energy producers to work in tandem with some sort of a resistance to go back in and start drilling. i thought the show they all put on at cera week was phenomenal. the saudis saying they didn't think the russians were complying fast enough. the russian energy minister saying we're working as fast as we can. everything is fine. there's so much coordination that needs to happen here. the u.s. is not even part of these talks. this is really a historic time. at the same time you have a lot of people who didn't want to cut that were part of the agreement. they may say in march we don't want to extend from here. everybody is not keeping up their end of the bargain.

we don't want to give up market shares. then the saudis saying we need to keep this price over 50. so many competing interests now. >> jackie, thank you. coming up, people have been riding this rally, some. i don't think it's been that crowded. but we'll ask technical strategist katie stockton if now is the time to start worrying about a lull or a correction coming for stocks. as we head to break, a quick check of the european markets. down, they're in the red. ey're . this car is traveling over 200 miles per hour. ey're . to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every

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welcome back to "squawk box." let's talk technicals. joining us now is katie stockton, chief technical strategist from btit. we had a big run up, 18,000 to 21,000. how do you know when you're a technician and you get into one of these periods where we've

been the past three, four days, that it looks tired or hitting resistance, how do you know that as opposed to consolidating to moving higher. >> it's a matter of differentiating between the short-term, immediate term and long-term indicators that you use. right now we have positive long-term momentum behind the s&p 500, positive intermediate term momentum but negative short-term momentum. i think the right assumption is is that a new bull market?

>> there's cycles within different markets. important to identify the length because it doesn'to give you a sort of predictability. >> if they p die of old age, it would be nice to know. do they die of old age? >> ideally, we see that in the momentum indicators. so these overbought conditions would start to matter a whole lot more than they already do. when you see the momentum indicators gettu tired it on a long-term basis, that's when we get worried. this is relatively new in terms of long-term positive momentum. we talked about it last time i was on, the momentum indicators turn positive late last year. it's relatively new in terms of that. >> how long does it take for the momentum indicators to weaken? i can't do it in three days. when will you know that momentum is weakening? how long? time, no doubtag about it. most of these momentum indicatorsst are based on movin averages. they're historical prices. you have to realize that. to me, they're going to capture ofha a move, the tradeable portion of a move.

on a monthly bar chart, it would probably be two months late, three months late. we have other sensitive gauges, overbought, oversold measures, we can all enhance. >> so where is the next objective, intermediate term, for you onnt the s&p? >> we're at new all-time highs essentially. i think in the near term, several weeks or so, we'll see a deeper pullback, looking for maybe 2280, something like that. >> hold on. 2280, okay. >> for the s&p cash. really, because of that loss of short-term momentum and also breadth. we've seen more of a loss of momentum in the small and mid cap bench marx and emerging markets, areas that are higher beta in nature. i think that needsr to run its course first. >> if you were disciplined, you would see 2280 and buy there because you just said that's where it could go before it resumes its uptrend, but that's

not the way it works. when you hit 2280, you think it's going to hit 2200 and you don't buy and miss it on the way back up. are you saying buy at 2280? >>0? it tends to scare people, right, when we get these pullbacks. in fact, that's really constructive. the sentiment gauges come down from these overly bullish extremes where they have been as recent as three or four days ago. so that shakeout that you get tends to be bullish. we have indicators that tend to be these market internal measures. breadth, leadership, sentiment, and volume. they tend to reach these oversold extremes. whether it's 2280, 2270 is less important to me, but rather to see these oversold conditions registered, which we saw at the three major lows last year. >> i want to l get andrew into this market. if wise get down 2270 -- becaus he missed this. the train on the way from newark to -- >> train has left the station. >> no, it's on the way to d.c. you're only in philly. now you're going to be hitchhiking all the way down. maybe you can get on at delaware

or baltimore. >> it may back up. sometimes the trains back up. >> she just said that. at 2270, i want you to embrace this. >> she said 2280. >> she said maybe 2270. >> but if you wait. >> i'm scared. at 2280, i'm thinking it's goig to be going to 2270. >> it's not easy to do. ideally, we'll be there for it. >> so if i say to you bumps in the road on the way to tax reform, you just look at me with a glazed look. you don't even care. >> none of it matters to her. >> no, no, no. that's not totally accurate. >> they seem to coincide with things happening fundamentally. >> there's always event risk. macro, fundamental, otherwise. that's not my area of expertise. i respect the headlines and obviously it'sec important. these areou the drivers of the trends, right.f to me, my job is to identify not

the drivers but rather the momentum andiv how long these trends might last. >> i know every good technician has a way of being right regardless of what happens. if it goes below 2280, when is the intermediate and long-term trend broken? >> i wish it was scientific. it's really when we see a lot of breakdown. >> in the momentum stuff? >> from a bottom-up perspective. if you see levels taken out, that's where we get more bear ush. >> joseph, what's if we've gotten on the wrong train? on my way to see wilbur ross in d.c. last week, i accidently got on a train that started moving and they said we'll be in new haven in 82 minutes. >> you're kidding. >> i kid you not. is it possible we've all gotten on the wrongll train? >> did you get stuck all the way to -- >> i was on the train.

i literally ran on the train. i was late. i was supposed to take the shuttle. but they canceled the plane. i ran into penn station, sat down on a train. i was actually in thea quiet c. >> andrew, i don't think this says anything about the overall market. i think itov says that you shou not invest in the stock market.a >> i'm just suggesting you could get on the s wrong train. that's all i wanted to say. i should not have admitted this. >> you had to go an hour and a half one direction andou an hou and a half back. >> we'll talk about it more. they're playing us out. great to have you here. >>av thanks. >> this is now a god lesson in selling. you would get off the lesson before you got all thee way to new haven. >> w you can't. it's the express. >> that was the problem. i was stuck on the train until i got to new haven. then i had to sit in new haven for an hour and get on the train. >> all the way to the wrong place. that's t h pathetic. >> oh, my gosh. >> oh, my gosh.

oil, the ecb, and jobs. investors sitting tight ahead of tomorrow's big jobs number. what you need to know for today's trading session is straight ahead. saving social security. james lockhart offering a plan to help save the system from failing. and the new trend in high-end watches. why black is the new gold, as the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box." good morning. welcome back to "squawk box" here on cnbc.

we're live at the nasdaq market site in times square. let's take a quick look at the futures this morning. right now the dow looks like it would open off about 8.5, 9 points. nasdaq off close to a point. the ecb rate decision just about 45 minutes away. the european markets right now are all marginally in the red as well. in our headlines this morning, crude oil extending yesterday's more than 5% slide. in fact, if you check crude out this morning, it is down once again, dipping below $50 for the first time since mid-december. that decline began yesterday. it was prompted in part by larger than expected inventory numbers. we say larger, we're not exaggerating. it was four times the amount that was expected. wti crude down to 49.40. zplmpblt t the labor department will be out with its report on weekly jobless claims. economists are looking for

238,000. and 911 emergency service has been restored to at&t's wireless customers. a nationwide outage yesterday left some customers unable to use 911. at&t didn't say what caused the problem or exactly how many customers were affected. political news, former utah governor john huntsman has accepted president trump's offer to be the next ambassador to russia. why does that sound familiar? russia? a lot going on, right? am i right about that? can you imagine being the ambassador? >> it would be tricky. >> a lot of baggage with this position. huntsman now needs to be confirmed by the senate. this would mark the republicans' third ambassadorship. he was also ambassador to singapore under h.w. bush and later tapped by president obama to serve as ambassador to china. on our show yesterday morning, david tepper talked about why he's short bonds and why raising interest rates do not matter, he says.

>> let's say we're 2.5% on the ten year. you're sitting with an 18 multiple. wake me up at 4%. just wake me up. you can call my number, wake me up. so we got a lot of room until we have to worry. now, if they do the tax stuff and you get a lot of things and inflation looks like it's picking up, it's kind of one of those things. the long end of the market is going to go when it starts really behind the curve. i think this fed has to get really nervous at some point if you have some of the fiscal stimulus you're going to get. >> okay. joining us now, the chief investment strategist at raymond james. on the set, peter hayes with blackrock. you're sitting next to me, so i'll start with you. is mr. tepper correct? >> i would agree with part of his premise and disagree with part of his premise. i think the fed may actually do more this year and go sooner than people expect. >> how soon? >> i think they're going to go

to the march meeting. it's a matter of whether they go a quarter point per quarter. clearly they have an opening. the market is betting that fiscal policy will come to fruition. i think that's giving the fed some cover to finally move the economy from one of relying on monetary policy to perhaps relying on fiscal policy. >> what are you doing as a result of that? >> if we're right, we're being a little defensive in terms of duration. we think the market may be underappreciated, what the fed will do this year and its impact on rates. so we're being a little short duration. we're staying away from the fron end of the curve where most of the impact will be from the fed, migrating towards the intermediate part, and avoiding a bit of the back end. we're seeing a little bit of a move higher in rates. i disagree with the 4% premise. how do we get there in a low-inflation environment? >> jeff, you want to agree or disagree with this gentleman here and mr. tepper yesterday? >> i think the fed is going to raise rates, but i think it's going to be very slow paced. i think you're on track for maybe three rate ratchets this year. i don't think it disturbs the

equity markets all that much. >> so what are you doing as a result of all this? and would you short bonds? >> no, that's a trading operation. you can't make five or ten times on your money on the short side. our models nailed this rally. telegraphed it the week before the election. they've been off the past three or four weeks. they were looking for a window of downside vulnerability beginning the first week of february. so far, that's been a bad call. i'm still sticking with a cautious stance here, given the upcoming budget ceiling. there's a number of metrics at work on the hill. i've talked to a lot of people on the hill over the past few days. there's some things that have me nervous. >> what does the model say now? and to the ek tent there was something in error, if you will, in the last couple weeks as you just described, what was wrong with it? >> models aren't always right. it's kind of like dow theory. it's right more than it's wrong, but it's subject to interpretation. the long-term model flipped

positive in october of 2008 and has never flipped negative. the intermediate and short-term models flipped negative at the end of january. i'm honoring that signal. like i said, so far it's been wrong. >> if you were to tell us what the model suggests now, is there still a pullback on the horizon in your -- according to this model? is it a straight shot ahead? >> oh, it's still telegraphing a pullback. you've had five consecutive lower highs. that hadn't happened since the election. you've had five down negative breadth days. that hadn't happened since june. there's a number of cautionary signals in the air right here. >> just so we understand, the pullback would be what kind of margin? >> maybe 5%. could be as high as 10%. i don't see any major pullback occurring, however. >> ten will get your attention. that's a full-fledged correction. we just had katy stockton, the

technician, on. i don't know if you were watching. she said 2280 on the s&p. she calls it short term. intermediate and long term are both still positive. could that fit into what you're saying? >> absolutely. she's a sharp lady. >> nice to get fundamentals and technicals to match up. still doesn't mean anything. at least that gives us something to talk about. >> what i don't understand about your thought, jeff, and you can speak to it as well, you think that we're going to move quicker and more with the fed. he thinks the opposite, yet he thinks the equity market is going down. you think the equity market is going to stay at least flat, right? >> you're asking a bond guy about the ek quity markets. >> i understand. >> but i think the market is expecting a lot of this fiscal stimulus to come to fruition. so this risk-on momentum -- momentum moves markets. i think that's going to continue for the time being.

>> i think he thinks you're marga mario gobelli. we got a muni bond guy. i want to know. sometimes advisers will say buy some unis. someone a year ago was pushing those. i was like r you o, are you out mind? does it make sense? there are tax advantages, but you got to -- are you worried about credit risk and default risk with munis? >> i think caution is warranted. one is the interest rate environment. the second is the policy overhang, what's going to happen with tax rates. does it lower the value of the tax exemption? >> did they pull a rug out of muni bond investors with a change in tax policy or would it be grandfathered? >> when you say change in tax policy, are you talking about taking away the tax exemption? we don't think that's possible. we don't really benefit a lot by

doing that. it would hurt municipalities. i don't think they do that. by grandfathering, it doesn't do anything on the revenue side. >> okay. so do i buy a floating rate muni? do they still have thouse? >> if you're looking for income, which most investors buy for income and preservation of capital, seven to ten years, we think. you take away some of the uncertainty. ten year atriple. >> this is why you buy equities. >> poor peter. got to sell it to someone. tough times. >> when you look at dividends long term own stocks and say i can get a 2.5% dividend, sure, i get that argument. but i think you got to understand the nature of the municipal buyer as well, what they're looking for that i do. t they don't want that equity like risk.

they want the lower volatility. they want the steadiness of income. 2.50 is not great, but we're in a low-rate environment, probably for a long period of time. >> taxes may be coming down. we may be in a period where overall taxes are declining rather than going up. >>s that right. it does seem like that's the momentum going forward. >> i don't know, jeff. >> give jeff the last word. >> you wouldn't buy a muni bond if they gave it to you. >> you'd give it back. >> yeah, i don't have a whole lot of interest in fixed income. i think the bull market and fixed income is over. >> wow. >> okay. >> sorry, peter. >> that's okay. a lot of other arguments against that. demographics, demand, et cetera. >> you got to like media, pet companies. >> peter and jeff, thank you so much. i'm not going to out our viewers, but a friend of the show just e-mailed to say that

he once had an experience trying to fly to toronto, ended up getting on the plane, sitting down, and it went all the way to los angeles. >> is it noah blackstein? >> no, and i wouldn't say if it was. we're all in good company. have you gotten on the wrong train? >> i have not done that. >> he's looking at you like, no. >> it's one of our less successful guests on the show. most guests would say, can you turn around, please, and go back? right? just tell the pilot, you're heading the wrong way. >> write a new flight plan. up next, dr. toby cosgrove, the ceo of the cleveland clinic, talks health care reform and the gop's plan to repeal and replace obamacare. he's one of the 16 ceos on the president's strategic and policy forum. later, another piece of the jobs picture. the challenger releasing their latest data on who's hiring. those numbers straight ahead. we're also going to talk

about the state of social security with james lockhart, who says the system will go bankrupt in just a few years if something didn't done to fix it. stay tuned. you're watching "squawk box" here on cnbc. here on cnbc. dearthere's no other way to say this. it's over. i've found a permanent escape from monotony. together, we are perfectly balanced. our senses awake. our hearts racing as one. i know this is sudden, but they say...if you love something set it free. see you around, giulia hey ron! they're finally taking down that schwab billboard. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity...

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the american medical association is the latest group to come out and reject the gop health care plan. this is happening as lawmakers begin to debate the details in that new proposal. joining us now is cleveland clinics president and ceo dr. toby cosgrove. he also happens to be one of the 16 ceos on president trump's strategic and policy forum. toby, thank you so much for being here today. >> pleasure to be here. thank you. >> you have laid out some of your concerns about the affordable care act in the past, things you thought needed to be changed. what do you think about this new plan? >> first of all, i think it's important we realize what we're talking about. first of all, there are about four ways that health care gets paid for in the united states. the first one is employers. that's not really changing at all. the second one is medicare. that's not really changing significantly. the things that are changing is the individual payment and also

medicaid. probably the most important one is medicaid. that is what has expanded the coverage across the united states with about 15 million more people being covered, and the changes in medicaid could have substantial impact on everybody in the health care industry, including patients. >> you mean the new plan from republicans that would limit and effectively freeze the roles for who's allowed on medicaid? >> exactly. >> states would get block grants. hasn't there been too many people that you wouldn't think of as medicaid suitable patients? haven't too many be added that it wasn't created for? are you just glad they're covered by anything at this point? >> i think you have to look at the total amount of how people are getting paid and the people who are providing them. one of the things i think most people don't realize is that we are now getting paid for people that we didn't get paid for in

the past. hospitals are running at very thin margins. across the united states, 52% of the hospitals lost money on operations. >> i see you have skin in the game, but is this the way to do it? it was medicaid designed to -- i mean, hospitals get paid, but is that the way it would be done in a perfect world? >> we all have skin in the game. >> but would you do it that way in a perfect world? >> hospitals start to fail across the country. we got a problem. >> the problem with the medicaid expansion has been that it has moved up medicaid's insolvency by a number of years by having so many more people on it. i think there's still the question of how do you bend the health care cost curve. >> and we've talked about that in the past, about how you're going to be able to bend the curve. the cost is going to go up over time because we've got more people who are older. we've got more things we can do for them. it's going to cost more. >> two questions. one on hospitals. question, low margin, or thin margin.

>> or no margin. >> but also relatively terribly managed. too many beds. >> yes. >> inefficient. >> yes. >> all those things. you said will hospitals go out of business, and i'm thinking, yes, they may. but for possibly not always the wrong reasons. it's a terrible thing to say aloud. >> it's interesting. the hardest thing to do is close a http:ospital. the number of beds in the united states has gone from a million to 800,000. so we're decreasing the number of beds. i have closed two hospitals or participated in closing two hospitals in cleveland. very hard thing to do. very unpopular. you have to make these tough decisions. >> separate question. to the extent that all of this rests on trying to save a trillion dollars over ten years, the tax plan and everything else that the trump administration wants to do, do you see a realistic way to take a trillion dollars of cost out of the system over ten years and be able to score it that way? >> i don't know how it's going to get scored.

i think none of us know right now. >> but is there a way -- if the trump administration came to you and said, look, i got to get rid of a trillion dollars, you would tell them, it's impossible, it's very possible and this is how you do it? what's the -- >> we're talking here just about the payment system right now, the insurance system. we're not talking about how you regulate hospitals and how you encourage them what to do or how you manage people. >> i'm just talking about the math now. >> a lot of that is just the taxes. you're going to have to find a different way to pay for it, obviously. and will these credits add up to a trillion dollars as well. >> for all of the other things we're talking about, whether it's forms of deregulation, all of the things, tax, everything else, somewhat resting on getting this. >> but that's a different issue. becky always talks about bending the cost curve is not where you save the trillion. we're just saving the trillion from the assumptions here and in the aca.

you're talking to him. what will you tell him about this new proposal? does it take too much away, or does it keep too much of the aca there? that's the big argument we're having. some people say it's obamacare-lite. they don't want that. other people say we need even more stuff. >> it's really hard to understand right now until the cbo begins to evaluate and we begin to understand how many people are going to lose coverage and how much savings or cost we're going to -- >> do you really think the cboe, given what they told us last time -- those numbers are like voodoo economics. >> i'm not an economist. >> no one is. even the ones that say they are. what would you tell trump to do with this bill that it is right now? do you have modifications? >> the bill that it is right now, i'm concerned that it's going to wind up costing the actual patients. they're not going to get the

sort of coverage they need, and i'm concerned about that. i think the things we have understand is we need to have good care, people covered, and -- >> we should do single payer then. when we did the -- that's the argument. we already gave in entitlement out. in your view, everybody should be covered for as little as it costs. that's what the conservatives are saying. no, this entitlement should have never been -- that the train has left the station. we got tricked into it. now there's no going back on it. you want to expand the entitlement. you want to expand -- >> no, i don't want to expand it. i think what we need to do is manage it the best we can. expanding it, we do not have a politically viable opportunity to go to single payer. it's just not going to happen. >> and we can't go backwards. we can't just repeal it and say you're on your own, right? >> no, we can't. >> some people want to do it. >> hospitals made concessions in the early years of the affordable care act, hoping they would make up for it on the back end with people being covered. if this gets changed like this,

did the affordable care act in the end put hospitals in a much worse position? >> if this gets changed, it clearly puts hospitals in a much worse position. >> but because of the concessions they made the early years of the affordable care act and the give backs they gave as a result? >> i can't really comment because looking backwards, it's hard to know exactly what we gave back. >> toby, you got no answers, man. this is very complicated. >> it's very complicated. >> someone just said that last week and we made fun of them for that. but it is. do you have the answers for me? you're not helping me. you can give me a damn good physical if i come there, right? like a 24-hour deal. >> an executive physical. was that just in "the wall street journal"? >> i'm worried about false positives. they'll find something and try and remove it and cause something. seriously, do you have -- can you tell me how to fix this or not? >> i think what we have to do is look at the total cost of care. that's the big issue we're not getting to. we're just talking about paying for what we got right now.

that is not going to be done without causing an improvement in how hospitals deliver care and also keeping people healthier. >> much more radical changes than we've tried to attempt. >> changes hard to do over a short period. >> stay at the cleveland clinic. your problems there are less than trying to do something with the government. the government, it's impossible. these intractable problems. who needs it? you've got enough problems at the cleveland clinic, right? >> i have plenty of problems at the cleveland clinic, and they're tough problems as well. i think you have to be terribly concerned about the country and taking care of people in the country and how we do that needs to be thoughtfully done. it can't be rushed through. it's going to have to be a lot of debate, a lot of data to understand. you have to realize -- >> when do you head back there? next month? >> when do i go back to cleveland? >> washington, to talk more about this. >> on the 11th of april. >> dr. cosgrove, thank you very

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now the answer to today's aflac trivia question. what was the original name of the app snapchat? the answer, picaboo. coming up, james lockhart on the nation's social security system, plus jobs in america. the latest numbers from the challenger jobs report. later, the nation's levees are falling apart. a closer look at how the president's infrastructure plan could help save farms, towns, and even cities from being flooded.

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good morning. welcome back to "squawk box" here on cnbc. we're live at the nasdaq market site in times square. among the stories front and center at this hour, just a few minutes away from the latest policy statement by the european central bank.

ecb expected to leave monetary policy intact this time around. mario draghi will hold a post-meeting news conference at 8:30 a.m. eastern time. also, akzo has rejected a takeover bid by ppg industries. ppg made an unsolicited $22.1 billion stock bid, butt compa t company says it's undervalued and it's in the best is interest of shareholders. sears posted smaller than expected losses for its latest quarter. also completed the sale of its craftsman brand to stanley black and decker. challenger just out with its monthly report on jobs in america. the number of layoffs actually falling by 19% with retail continuing to lead all sectors in job cuts. joining now now is andy challenger, the vice president at challenger, gray, and christmas. andy, breaking news. i thought they got the name wrong. it's not john challenger. it's andy. welcome. >> thanks for having me. >> so this is your first time to

roll out. >> it's my first time. thanks for having me on. we actually saw the job cuts all in february to 36,957 job cuts announced by u.s. employers. that's 19% lower than earlier this year in january and 40% lower than what we saw in february last year. >> so those are numbers that match up with the other trends we've been seeing recently, like adp, that was much better than expected yesterday. what do you think is driving that? >> yeah, we certainly have seen really good numbers coming out of all these employers recently. in fact, we saw a record number of new hires announced in january and february this year. 162,000. that's the most we've ever seen. we know employers are optimistic about the future economy. they're willing to hire new employees at this point in time. >> andy, 19%. seems like a big drop. that must be seasonal.

i guess there could be seasonal factors there. is that a big drop? does the 40% drop describe it even better since that's the same -- we're talking about the same month from a year ago. have you seen numbers that big before? that's not common, is it? >> you know, we actually do see a lot of volatility month to month, primarily the reason we've had so many fewer cuts this year compared to last year is because of oil prices. last year with low oil, the energy industry was seeing a lot of extra cuts that we weren't used to seeing. and this year it's really kind of evened out. >> even year over year. you couldn't have seasonal factors month to month and year over year. it's hard to factor those things out, i guess. >> yeah, it's always different sectors. this month it was let out -- all sectors were let out by cuts in the retail sector. 11,889 job cuts there. at the end of the day, we saw just about as many new hires announced from the retail industry this year as we've seen

job cuts. we know that industry is going through a transformation, kind of moving from brick and mortar retail to e-commerce. we're seeing job cuts in some areas and new hires in others. >> that's an interesting point. most of us would take that headline and say, oh, my gosh, retail industry is plummeting at this point. do you measure the e-commerce jobs in that same sector with the retail jobs? how are you able to do that? >> yeah, it's not measured in exactly the same sector, but we do know the bulk of new hires that have been announced this year were in january when amazon announced 100,000 new jobs they were adding to their work force. so that speaks volumes about what's happening in e-commerce. >> you got any brothers? are you the man? are you the guy when john decides to hang it up? i would. great family business like that. my name right there on the door. you got any brothers?

>> i'm actually the oldest of five. there's a lot of challengers running around chicago. >> uh-oh. you're the man. you're the oldest one though. >> i am the oldest one. >> is this what you're going to do? you're better looking than john, and younger. >> but tell your dad we said hi. >> or not. you can keep coming. we didn't really miss him today. >> well, i appreciate you having me. i'm looking forward to coming back. >> andy, thank you, and tell john we said hello. tell your father we said hello. >> i meant brothers and sisters. i didn't mean just brothers. god, after yesterday -- >> you did a great job. >> well done, andy. thank you. >>, no, he did do a good job. some new blood. >> oh, my gosh. what am i dealing with, with these people. >> exactly. geez, dad. despite republican calls to adjust mandatory programs like social security, president trump has held his campaign promise, leave retirement plans

untouched. joining us now is james lockhart, vice chairman for wl ross and company. he's also a former principal deputy commissioner of the social security administration. president trump is unlike conservatives and republicans in a lot of different ways. this is a very notable way. i don't know whether it helps to try to talk him into it. the people that elected him, part of why he got elected was because they don't -- they've paid into social security. they don't think you ought to mess with that or medicare. that was part of his appeal. >> yes, exactly. good morning. >> hi. >> i think the key issue is that he's said no cuts to social security, and we will have cuts to social security if you believe the cbo. in 2 yea12 years, we're going te a 29% cut across the board. the key thing to me is prevent those kinds of cuts. >> we could raise -- take the cap off. >> at the bipartisan policy center, we had a series of

proposals on how to save social security. actually, we created a solvent system for 75 and beyond years. the shortfall is $11.4 trillion, present value. >> nick mulvaney agrees with you probably completely on this, and he's tried to do things in the past. he just comes out and says it. someone asks him, are there going to be any cuts this year, any means tests, any raising the age? he goes, no. >> no, but he's said he wants to continue the dialogue. i think that's important. >> with the president. >> with the president. >> you know this guy wilbur ross. >> yes, i know wilbur very well. >> you work at w.l. ross. you could talk to him. he's commerce secretary. he could talk to president trump. >> i definitely have talked to wilbur. i've been working on this project for a couple years. >> what do you say to each other about this? >> i do not know. he has so many other issues. >> have you tried to get wilbur to talk to him about it? >> not yet. now that the dust has finally settled and wilbur is in place,

i hope to go down and talk to him. >> jim, this whole dialogue continuing, that's something we've been doing for years and years and years with every administration that comes through. everybody seems to think, okay, it's not going to be on my watch. let's wait. 12 years. >> we're getting there. it's the baby boomers, let alone their children and grandchildren that are going to be cut. it's really time to start thinking about it. our program -- actually, one of the things we do that i think is very beneficial is, yes, we slow down the growth of benefits, and yes, we have to increase revenue somewhat, but we also improve the benefits for the lower income. in fact, the bottom 60% of people actually get as much as they would get under the present program. what we're trying to do is create a program that's very balanced. this was a bipartisan group. so we actually got about 50% of the savings from revenues and 50% from benefits. >> do yo do means testing, where after a certain point -- >> well, social security itself, the higher income get a lot less

percentage of what they put in than lower income. we increase that over time. we also increase the taxes. once you retire, if you're really well off. so there's some back doors mean testing. and we increase the retirement age because people are living longer. >> right. how much and how quickly do you increase the retirement ages? >> it's very slow. one month every two years. so it's like 50 years. >> but if you're a 40-year-old, for example, what would be -- when would social security kick in for those? >> we're still keeping the early retirement age at 63. 40-year-olds today would be the retirement age of 67. we move it up gradually to 69 for the full retirement age. >> so we do have some time. >> all our proposals are very gradual. that's the key thing. but they do save about a trillion dollars in the first ten years of implementation,

which is a big number and will help offset some of the other things they're talking about. >> i just don't understand how that's even going to happen if he's said it a hundred times. >> he said he's not going to cut benefits. we don't cut benefits for the lower income. that's really the important thing. >> but it's weird. it gets political. i don't know -- of well to do people, i don't know which of those wouldn't be okay with this. that social security check for well to do people is a drop in the bucket. there are some. even democrats don't want to make it means testing because then it becomes an entitlement for poor people. if it's everybody, then it's everybody gets it. it becomes less prone to being -- >> i just think it's hard for president trump to do it given what he's already said. >> again, there are going to be

cuts if he doesn't do anything. that's the point that has to be made. >> and this is easily fixable compared to medicare. >> it's math, but it's also people in politics. >> medicare is our bigger problem. >> yeah, but social security is our bigger program. >> bigger program but easier to fix. >> over 9 t00 billion last year. it's a giant program. we need to figure out how to fix it. >> why can't the reality of people living well into -- i mean, i've seen things saying that in not too long a time, 90 will be the average age. so 65 is no longer a realistic number to use. >> 90 is the new average age to die. >> that would be the life expectancy. some day it will be 90. it's not yet. but some day that may be the average age given all the advances and healthy lifestyle. 65, that's anachronistic. >> the other thing we need to do is increase retirement savings outside of social security, which our proposal also does.

50% of the american people don't have a pension. we need to set up nationwide pool systems for small companies. >> by individuals or through small companies. >> yeah, the small companies go to a pool, national system. >> jim, great to see you. >> thanks. when we come back, the ecb rate decision, the new trend among pricey watch buyers is to buy a gold rolex then spend thousands more to have it blackened out. we're going to talk about it. robert frank will join us after the break. the break. ( ♪ ) i moved upstate because i was interested in building a career. i came to ibm to manage global clients and big data. but i found so much more. ( ♪ ) it's really a melting pot activities and people. pplause, cheering) new york state is filled with bright minds like victoria's. to find the companies anantalent of torrow, search for our page, jobsinnewyorkstate on linkedin.

welcome back, everybody. we're just a few seconds away from the ecb's decision on interest rates. no change is expected. let's take a look at the futures this morning. we saw yesterday the dow and the s&p a 00 down for the third day in a row. that continues. steef liesm steve liesman has the decision right now. >> yes, looking at this right here, it looks like they've left them unchanged. unchanged at zero for t. today's meeting of the governing council decided interest rates -- yeah, this is just unchanged. what we're looking for here regarding kn

regarding nonstandard poll temo policy. core may be a touch lower. unemployment looks to be coming down a little more. the question that people are asking is draghi going to say risks are moving to being balanced. i want to show you the extraordinary chart which shows the difference between u.s. ten-year rates and german ten-year rates. we're simply -- well, figuratively in unchartered territories. we're going to chart it for you in a minutes. there you go. we had been around this 1.75 percentage point difference. that steep cliff there is the election of donald trump. it is now up in the 2.20 area. the question becomes in this globalized world how long these kind of spreads can remain this wide and how and when they come together. do they come together with the european central bank eventually raising rates and going the way the fed is going, andrew.

>> okay. thank you, steve, for that. in the meantime, going to talk about watchings and great wealth. when it comes to high-end watches, black apparently is the new gold. i did not get the memo on this. now i have. it's part of tonight's "secret lives of the super rich" with robert frank. we want to take a look. >> reporter: when a shiny new rolex isn't quite cool enough, some of the most discerning time piece collectors spend thousands more to have them tricked out by london based watch customizer titan black. if you have enough cash, titan's artisans will change every marker on your watch face to the color of your choice. but that's nothing compared to their most elaborate transformation so far. it started off as this, a white gold ro lerlex. a middle eastern royal asked titan to give this a whole new look. first, titan carved on the face a family member's name in

arabic. next, they made the name glow with a microlighting system in the housing that's controlled by the chrono button. it cost their client an additional 40k, taking the cost of this swiss time keeper north of 70 grand. quite a price to see your name in lights. >> blacking out watches is the new trend among the wealthy. we have actually three of them here. we brought two and actually joe has the coolest one. >> you know, the wealthy. yeah, right. >> let's take a look. this is one of titan black's most amazing pieces. they blacked it out. they used a special chemical process. it's called diamond-like carbon, where they actually transform the metal. this was an $8,000 rolex that was then transformed with a solid gold face that was carved. you have an $8,000 watch with a $12,000 modification.

>> same thing with that watch you just showed. $30,000 watch with a $40,000. >> just like when people buy a lamborghini for 250 and spend another 250. this is another one i'm wearing where they got a rolex explorer 2. it's got a platinum bezel, took 35 hours to carve. again, it's not enough anymore just to buy a $10,000 rolex. but joe has the coolest one. i love this, that you blacked out the face on this watch. >> it's not that you black it out. you have a choice. i started with -- it had a gold face. then i went to a pearl. then i decided -- you can't rel tell. then i decided to go -- but that's not a big deal. couple hundred dollars to change it. >> rolls royce just launched the new black badge program. it's all part of this stealth wealth, under the radar. if you watch enough "billions," you'll see -- >> can you see it says quarter

to 5:00? you can see i really take it seriously. it's not even set. >> it's happy hour soon. >> i don't use the watch for time usually. >> black is the new black. absolutely. >> do we have time to show this video? this is a house we're showing on tonight's show. it's a $25 million party pad. a swimming pool in the ceiling with super models included. this house is the ultimate party pad. it's got -- >> where is it? >> bel air, california, where the market is exploding. >> how much is it going for? >> $25 million. this house was built for major parties. you walk in that house, and you see people swimming in the pool. so a lot of great stuff on tonight's show. watches, models in the ceiling. what's not to like? >> we will make sure to watch it. >> thank you, robert. don't forget to catch the season finale of "secret lives of the super rich" tonight. it happens at 10:00 p.m. eastern time. >> that's crazy. you can't even -- it's too small to even swim a lap.

>> there's two pools. >> oh, there's another pool. okay. >> that's the display pool. >> it's a voyeurism thing. >> exactly. >> seems kind of perverted. anyway, levees on the brink of failure, putting farms, towns, and even cities at risk of flooding. >> levees. look at those. >> the president's infrastructure spending plan looks to fix that. a preview of today's infrastructure report card is next and how much it could cost the nation if the problem persists. persists. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

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joseph. >> oh! >> welcome back to "squawk box." >> many times the show gets in the way of things we're doing. more than 100,000 miles of levees across the country. according to the american society for civil engineers, they're in dire straights. what does that mean? well , it puts farms, real estate, and entire cities at the risk of flooding. president trump has promised massive infrastructure deals in an effort to fix them along with a lot of bridges, roads, and other projects. we go to sacramento with more on the levees and a preview of today's infrastructure report card. we all remember a couple weeks ago everyone was worried about more than a levee. i think it's sort of similar, just on a different scale, right? >> reporter: that's right. it all goes towards that water infrastructure topic. good morning there, joe. i'm actually standing on a levee

that's been around since the 1900s. it's ageing. it's not up to code. and back during this winter, severe storms, it was being monitored 24 hours a day as neighbors watched nervously. levees is just one component of a major infrastructure report card that's going to be coming out in about an hour and a half. that report issued by the american society of civil engineers comes out every four years. the organization grades 16 types of infrastructure, including roads, bridges, ports, and dams. the nation's levees got a d-minus during the last report card in 2013. of the levees in the national levee database, only 1.8% are rated acceptable. sacramento is one of the most high risk places in the country for flooding dangers, making it critical for the state and federal government to invest in refurbishing levees, which the government has started to do. doling out $2 billion in repair work with another 2 billion expected on the way. >> there's a cost to fix this

levee. but there's also potential cost of not fixing it. that is a very real possibility, a calculatable percent chance that you're going to have a great big flood in the next five years, ten years. if you don't make that investment, the cost to those people, all these tens of thousands of people on this side, is very, very tangible. >> reporter: and in that last report card back in 2013, experts said it would actually cost $100 billion to bring the nation's ageing levees up to speed. back to you guys. >> thank you very much. when we come back this morning, a special hour of "squawk box" with tom ridge, the former secretary of momentlahom security. we're going to talk bio terrorism, cybersecurity, and immigration policy. plus, epa administrator scott pruitt will be our special guest. don't go away. "squawk box" will be back after a quick break. a quick break.

various: (shouting) heigh! ho! ( ♪ ) it's off to work we go! woman: on the gulf coast, new exxonmobil projects are expected to create over 45,000 jobs. and each job created by the energy industry supports two others in the community. altogether, the industry supports over 9 million jobs nationwide. these are jobs that natural gas is helping make happen, all while reducing america's emissions. energy lives here. all while reducing america's emissions. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom?

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market alert. oil under pressure again. crude sliding below $50 per barrel. the epa agenda. the agency rolling back obama-era regulations. a first on cnbc interview with

epa chief scott pruitt straight ahead. plus, america's cyber threat. we'll tell you why one organization is sending ceos back to class to protect companies from hackers. the final hour of "squawk box" begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box." good morning. welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square. i'm joe kernen along with becky quick and the really youthful andrew ross sorkin. >> thank you. >> you are. the futures right now are -- >> i thought you were calling me the future. keep going, keep going. tell them about the future. >> the future of this show. it's a long way off, but you

are. oil prices again have been keying off. it's been a while. we were in that 50 to 55 range. now we're below 50 with that big selloff yesterday. that kind of took everyone by surprise. the magnitude of the supply. >> four times as much as had been expected. >> some people say that opec is still trying to put our guys out of business, frackers out of business by dumping stuff. >> the problem for opec is that technology has changed and that many of these oil and gas company can make money at $40 a barrel or less in some cases. good luck with that. >> okay. in the meantime, let's get you caught up on the beg headlines this morning. the ecb keeping rates unchanged, as expected. president mario draghi will hold a news conference. the challenger report

finding job cuts dropped 19% month over month. that happened in february, down 40% compared to the prior year. a little bit of washington news this morning. there was a marathon late session on capitol hill last night as house republicans pushed their bill to overturn obamacare. earlier this morning, the house ways and means committee passed a measure that would repeal tax penalties on people who don't buy insurance. the beginning of that taking place right now. in a changing world where vital information can be easily accessed with a click of a mouse, the threat of a cyber attack is very real, especially for large corporations. while reports say that executives are confident in their cybersecurity efforts, our next guests say not so fast. the national association of corporate directors is teaming up with former u.s. homeland security secretary tom ridge to try and educate executives on protecting themselves and their companies. secretary ridge joins us this morning for the hour as our guest host. also joining us now is the national association of corporate directors ceo peter

gleeson. welcome to both of you. >> thank you for the invite. >> great to be here. >> let's talk about some of this information. first of all, we know that cybersecurity is a huge issue. when you talk to ceos and cfos and ctos, the word back you get from them is they think their own organization is safe. is that fair? >> i think it's understandable that they believe it's fair. it's a fair assessment on their part. in reality, they're not as well protected as they need to be. playing offense in the digital world is easy. playing defense is really tough because the challenge is permanent, and it changes every day. that's why we're really thrilled to team with the national association of corporate directors because the responsibility for managing risk inside your business is not the government's. it belongs to the ceo and the board of directors. >> i think boards are probably slowly waking up to that or maybe rapidly as the case may be over the last year or two. >> i think they have to rapidly wake up. i think that's a great point. when we look at our surveys, when we survey directors and do this on an annual basis, only

19% of them are telling us that they're confident or have a high level of ability around cybersecurity. when you realize that's less than 20% of our boards feel confident in what they have in front of them in terms of cybersecurity, that's why we teamed up with governor ridge to put this program together, to educate. the education is the key element of getting the boards up to speed and getting them conversing around the topics. >> secretary, governor ridge, looking at this, when you look at companies, what do you think their biggest weak link is? what's the most important area they're missing? >> i think -- first of all, i think education -- the acceptance of the notion from the management and the board is not the cto's problem. the ultimate responsibility is a governance problem. that's the ceo on down to the board. many of them don't have an enterprise-wide strategy. so what we've done, and the other partner in this enterprise is carnegie mellon university.

we have a globally recognized cybersecurity university. so we want to lay out an online education program to help the board of directors interact with the management, interact with the i.t. team because information, security, and data management and cybersecurity -- there was a case a couple years ago, the wyndham case. a bunch of class-action lawyers out there. there was a lot of learnings in that. the learnings were if the board takes precautions and is engaged on a regular basis, it becomes part of their risk assessment protocol inside the boards. it helps develop some immunity potentially in a very litigious and heavily regulated environment. >> let me ask you about the risk. a lot of companies are moving everything into the cloud. as they move into the cloud, they're moving on to one of three platforms, right. either amazon's platform, microsoft's platform, or

google's platform. in the end, i could make an argument that these three companies are going to be responsible to some degree for the security of all of corporate america. these are, at the moment, unregulated institutions. they ultimately may turn into utilities. how do you think about that? are they more secure being in the cloud with those three companies than they are separately on their own servers? >> i think -- >> go ahead. >> if you think in terms of the potential vulnerability of the data in the cloud, that's a point of access, but there's other points of access too. it's not just third-party access. it's insiders. it's so much more than just securing the cloud. it is building a culture, almost like you take the total quality management where you have to think in terms of total resiliency management. every connection into your enterprise, you have to understand, is through the internet. every connection is a potential vulnerability. the boards of directors need to understand and appreciate it.

it's not a bunch of 0s and 1s out there. it's your hr, your finance, your intellectual property. that's why it's important for them to meet their fiduciary duty. >> peter, what do you tell companies? how do they set up proper incentives to make sure every person is going to be equally vigilant? in any of these situations, you're only as strong as your weakest link. >> that's a great point. this is an enterprise risk management issue. when it really comes down to it, you can't focus it only on i.t. it has to be broader than that. the education has to go down through the entire organization. it has to start with the board of directors and setting the right tone, making sure the right procedures are in place, the right oversight is in place of the management team and really driving this down through the organization. >> unless you work for a technology company, you're probably not going to be all that tech savvy. >> and that's true with the boards too. that's exactly true. that's why we're creating the education program and have created the education program to

try to drive this lexicon. this is a relatively new phenomenon we're talking about. really, we've been connected to the net for 20 years. when you think about board of directors and their experience, they've got deep experience in finance, deep experience in management, deep experience in a host of issues. how did they get that deep experience in a 20-year period when it wasn't even taught them in their earlier careers? >> what do you think these days the danger is of an insider playing a role? i'm thinking of this in the context of this morning we were looking at the cia story and the contractors and this idea that somebody's working inside the company who's going to leak out all this material. >> right. i've spoken to so many cybersecurity experts who say you think about leaving your house in the morning and you lock your doors. maybe you got a front door and a book door. you lock those two doors, you think you're secure. when you're in a company, you have 100,000 doors. everybody has two, three different device that can have access. how do you secure that from the inside? that goes to education. it goes to responsibility. it goes to enterprise risk

management. >> i think that's one of the reasons we tried to design this program with carnegie mellon using nacd's handbook for cybersecurity oversight along with the technical expertise from carnegie mellon so that the 16-hour course is really to upgrade the generic knowledge and give them specific points of inquiry and help them build that ongoing relationship. it's interesting in the case i referred to, which actually led me to go contact nacd several years ago. the board had been really involved. the audit committee had been looking at this on a regular basis. they had regular reports from the cto. they were somewhat immunized from ftc. that's the other challenge. you have the ftc looking over your shoulder all the time. in notion that let's just educate the board. it's their fiduciary duty to the company, to the shareholders, to the employees. we think it makes a lot of sense. >> peter, thank you very much for joining us to talk about

this. and governor ridge, you'll stay with us. we'll talk more through the hour. >> a lot more to talk about. >> every day i get more nervous. hacking a car to kill someone we saw in some of the cia release. the other day, you weren't here for this, hacking heart devices so you kill someone with their pacemaker. this is serious. something big could happen, then we're going to go, what the. >> john chambers said it right. it's the internet of everything. 50 billion devices potentially by 2020. over 3 billion people connected. every point is a vulnerability. that's why amazon and google, that's a point of vulnerability, but you got the insider. a lot out there. that's why we want to educate the world. >> just in case anybody was having a great morning, look out. >> exactly. >> car comes straight at you. anyway, breaking news from aig. the insurance company has announced that chief executive peter hancock is stepping down.

he's going to stay on the job until a successor is named. he's been ceo since september of 2014. seems like a recent ceo following the sad -- we had ben on quite a bit. now he's leaving. any insight on that, andrew? they don't have a successor yet. if it's orderly, don't they get the successor first? >> usually they do. but he actually -- remember, carl icahn, he pushed back against carl. we'll see. we got to do a little work. >> you need to. we're going to break. got your phone? >> i have a phone right here. we'll call. why don't we call him right now. >> going to remain as the ceo until a successor is named. >> yeah. if there was a real problem, you wouldn't let him stay the ceo. >> maybe. this is you. >> it is me. coming up, today marks eight

years since march 9th, 2009. it was the low, but the bull market may not be as old as we think it is. an explanation next. plus, former senator joe lieberman is going to join us. he's calling on the trump administration to tackle a threat that could exceed the impact of nuclear bombs, bioterrorism. later, a first on cnbc interview with epa head scott pruitt. he's going to join us live at 8:40 eastern time. stay tuned. you're watching "squawk box" here on cnbc. here on cnbc. today, i am helping people work better... and also feel better.

i am helping hospitals personalize treatments using billions of data points. and working with medtronic to predict the highs and lows of diabetes, hours in advance. and i am working with orreco to use biomarker data to boost the performance of athletes. hello, my name is watson. working together, we can help everyone live healthier.

welcome back, everybody. take a look at shares of aig. as we told you the news that the ceo, peter hancock, is going to be stepping down. he'll stay on as ceo until a transition plan is developed. but he's stepping down and says he's doing this -- he says, i believe this is the right decision to make for the company and all its stakeholders. a protracted period of uncertainty could undermine the progress we have made and damage the interests of our

policyholders, employees, regulators, debt holders, and shareholders. one of these key shareholders would be carl icahn. if you look at his twitter feed this morning, he says, we fully support the actions taken today by the board of aig. the board goes on to say they are going to be staying with the plan developed by peter hancock to deal with repayment of aig's obligation to the u.s. have iss -- treasury. they're also standing by the numbers they've already announced in terms of profitability. that stock is up by 1.7% on this news. >> wow. sort of taking credit for it. >> it's an interesting move from the company. the company says they're staying with the plan peter hancock developed. >> we'll see. >> right. until they don't. in the meantime, we're marking the bull market's eighth birthday today, but there is a lot of debate about when exactly the bull market was born. mike santoli joins us now. >> there's no debate the bear market ended eight years ago.

today there's a little bit of argument as to whether the bull market we're in right now should be defined as one that started on that day eight years ago. essentially, the argument is that really, it's younger than that because potentially it got going in a genuine way later. here are some alternative birth dates for the bull market. september 2011. you remember the nasty selloff. european debt crisis, standoff in the united states. the s&p 500 went down more than 19%. some people say a 20% decline you use to define an interim bear market. it was kind of close enough for a lot of folks. then of course 2013, early 2013. the sa&p 500 first broke to a nw all-time high. that's when people restart the clock and say that was a long-term, structural, secular bear market that just ended in 2013, in which case you're talking about four years old into in new run. much more recently, a year ago, 2015, 2016, the s&p 500 went down. not really a bear market.

two-thirds of all stocks went down more than 20%. people say again that was a cleansing kind of downturn that perhaps means we're in some kind of a new environment. i guess, guys, the question is what does it matter? one, bull markets don't just die of old age. they have to be kind of euthanized or put to rest by something else. but also, it doesn't really change the fact that this has been one of the best eight-year runs in history, whether it was at the start of a bull market or not. so maybe that's going to restrain forward returns, but there's nothing that says the clock is ticking loudly because we reached eight years. >> nothing like a 40% selloff to make the next bull market look even stronger. >> without a doubt. an amazingly depressed starting point. >> ge was $6. >> citi was under a buck. >> crazy things. >> the first 20% low happened off that in 20 weeks. >> just since the lows, it looks huge. we go back to '99, and it's

doubled in 17 years. >> even if you go back to 2007. >> we had this discussion earlier. i guess you could say secular versus cyclical bulls. but 19% definitely counts. >> you would think. that was really kind of a relapse of the financial crisis. really, the whole era had not ended really by that point. >> it's weird to be so strict. >> you know what it reminds me of? people say we define the '60s as starting the kennedy assassination, the cultural moment of the '60s. it's kind of like that. it didn't feel like a bull market. >> the younger we date it, the less we have to worry about it. >> except that you can go down to the old high, 15 whatever, and you're still technically in the long-term bull market. >> well, you're going to get bailed out, i think. that 2316 don't change tse the call. >> now i'm nervous.

>> because you might be right. that would make me nervous. >> going to have to make a decision. >> about whether to buy at 2280. >> figuratively buy. >> because we don't do that. coming up, today's top stories. later, epa administrator scott pruitt going to join us ahead of his first address to the industry. first once since he took office. that's at 8:40 a.m. eastern. stay tuned. "squawk box" will be right back. .

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still to come this morning, the fight against bioterrorism. joe lieberman is calling on the trump administration to step up its defense. we will talk to the former senator next.

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welcome back to "squawk box" this morning. a blue ribbon study panel on biodefense is out with a new report renewing their call for the new administration to strengthen national biodefense policy. the panel says while some improvements have been made, they're simply not enough. joining us with recommendations on improving the nation's bioterror preparedness, former senator joe lieberman, and of course our guest, secretary tom ridge. they're the co-chairs of this blue ribbon study panel on biodefense. dare i can yask you to scare thk out of the audience, but when people talk about biodefense and the threat of bioterrorism, what

is the thing that keeps you up at night? >> well, actually, two things keep me up. one is that a group like isis will develop a synthetic form of a flu, powerful flu, and move it into our population. the second, which is probably more likely, similar effect, is that there be an infectious disease pandemic. we have zika growing in our country now. no vaccine. we had ebola in west africa. it's still there. if you want to really scare people this morning, in 1928, there was a global flu epidemic, pandemic, that killed at least 50 million people. i must say my father's mother was killed in her 20s. he hardly knew her. of course, i never knew her. it changed history. so this is real.

it could happen any time in the next few years. >> so what do we need to do, and because we're a money show, how much does it cost? >> frankly, with senator lieberman and i, and the bipartisan panel, before we even discuss additional appropriations to deal with it, one of the recommendations is let's tell somebody take a look at the $6 million already spent on biodefense. it's not spent according to any strategy. there's no comprehensive plan. there's no one in charge. it is a very controversial recommendation the blue ribbon panel made, but we suggested the vice president should be in charge of overseeing the development of the strategy and a comprehensive plan in making sure that the dollars go out and the research is done. there's some strategy associated with it. >> are you suggesting it's being misspent, misprioritized? >> i don't think it's misspent, but it's like anything else. in washington, you get silos.

they get an appropriation and spend it on what they believe it the best priority. but no one is setting national priorities. >> tom is absolutely right. the 6 billion number we use is a guess. nowhere in the federal government can they tell you exactly how much we are spending on biodefense. >> seriously? >> that's the truth. that number comes from the university of pittsburgh, which tried to put it together in a group they have on biodefense. interesting, one of the encouraging developments, bill gates and his foundation have now taken a real interest in biodefense, setting up a public-private partnership. he estimated that the -- in the speech he gave in mu ninich a couple weeks ago, that it would take about $3.5 billion a year globally to get prepared for the next infectious disease outbreak or bioterrorist attack. if we're spending 6 billion now, and we don't exactly know where it is. >> he says it could kill more people than a nuclear war. >> it could. it's a terrible thing to say,

but when you think about the reality that the flu epidemic of 1918 killed at least 50 million people -- >> in a much less populated globe at that point. >> exactly. and much less densely populated. we're talking about airborne pathogens, disease that travels in the air. >> there were some reports out that the cdc -- there have been these incidents where certain things have come out. congress is now asking for information about what's happened. is it possible that effectively the cdc could get hacked or some of these diseases could be emanating from their own labs? >> one of the many recommendations we made, and senator lieberman and i decided we would co-chair the panel but not for another study. there have been four or five studies over the past 15 years. we said we'll stay, but we want short-term and long-term specific recommendations. one of the very important and serious recommendations addresses that very problem.

how secure are your labs. part of it is physical security. you have natural infectious disease, potential terrorism risk. every once in a while, human e error. >> how do we separate out natural born zika and what we should be doing about that, for example, and how zika could be used for alternative purposes by a terrorist or somebody else. >> so the good news, if you can call it that, in this bad news story is that our response to infectious disease outbreaks and bioterrorist attacks and our preparedness to deal with them is pretty much the same. part of it is getting organized. that's probably the most significant thing we've accomplished. in addition to trying to raise people's awareness of this threat, they actually adopted legislation in december to call for a unified plan across all

the federal agencies. >> the problem has been the cdc has come on and complained that we're always chasing the last epidemic. we're not preparing for the best practices. >> we got to get ahead of it, and there have been enormous breakthroughs in biotechnology. we're not using them to develop vaccines, most importantly, or countermeasures. we don't have a vaccine for zika. we don't have a licensed vaccine for ebola. i go back to the bad news. in the last several months in china, in part of china, there's been an avian flu outbreak of a strain of flu where it's affected about 450 people, 40% of them died. that's birds to people. so it hasn't really started to move from people to people. of course, that's the next

threat. >> i don't know if you're going to invite me back on. senator lieberman thought maybe we should go home and hide you should the bed. i don't know. >> what has been the response from washington to the proposals you've put forth? how can we expect or hope -- what can we hope to see next? >> we've actually found some great champions on the hill, both republican and democrat. last year we had -- toward the end of the term, we had a very constructive conversation with then-vice president biden. it was a little too late in the administration for him to take any effective action. so we're finding that part of our campaign is awareness and then advocacy for action. we've got nearly three dozen very specific recommendations. we're identifying different champions on the hill. the monitoring capability we have now with biowatch goes back to my time as secretary, 15 years. it doesn't work very well. the intelligence community, they're focused on a lot of risk, but we think they need to

beef up their intelligence gathering capability with regard to what other countries are doing in the area of bio research and development. so there's a series of very substantive risks. we're not asking for a lot more money, but we want a strategy. we want it in the vice president's office. we want to put some -- >> how integrated is this within the government? is everyone talking to each other? >> it's not. >> no, and that's why what governor ridge said before is so important. a lot of money has been appropriated for different agencies, but there's not much collaboration. that's why almost by default we said how are we going to organize this so we're getting our money's worth in protection, preparedness, and in the end we thought the vice president is about as good as we can do. so we're going to try to meet with vice president pence and see if we can convince him to add this to his growing portfolio of responsibilities. >> i would think that you need people to think like terrorists to try to figure this out.

i'm wondering whether al qaeda or isis -- do they have ph.d.s on their payroll that would know how to transport ebola or isolate ebola? >> first of all, we know that al qaeda had been experimenting with pathogens on animals. frankly, even though isis appears to be on the run from mosul and other places, they do have access to scientists. if you've got an infrastructure and potentially modest manufacturing capability, there are people in the space that say it gets a lot easier to play offense than defense. >> that's why containment won't work. >> exactly. >> if they're contained where they're developing these things, someone is going to slip out and bring it over. you're not going to have a gieger counter that detects a dirty bomb. there's no way to detect if someone has a pathogen. >> i think that's one of the reasons why the senator and i feel strongly that encouraging the government in some of its programs to take advantage of the private sector to innovate, to develop medical

countermeasures, to develop search capability, to take a look at the list of threats we know exist and say let's prioritize those and start doing research on vaccines, on the threats we know presently exist. right now we're not going that very effectively. >> this is a really important point. if you're the executive of a big pharmaceutical company, you're going to devote your research dollars to diseases, illnesses you know exist in great numbers, like diabetes or cholesterol or whatever. this is an unpredictable event. you're going to be a little more reluctant about investing in countermeasures. but that's where the government has to create some incentives for the pharmaceutical companies to do this. bill gates cited a statistic that there was a reasonable probability in the next 10 to 15 years that there would be an infectious disease epidemic or pandemic that would kill millions of people. that's not a certainty. >> developing a vaccine is

different than making enough to use too. it takes a lot of -- they don't make them in a factory. you make them with eggs. this is very daunting and horrific. >> it's daunting. and getting approval for drugs takes a long time. you have to create some leeway now. you have to create an abbreviated process if you're trying to develop a vaccine for this kind of outbreak. >> very scary. you're right over here, right? with like 15 floors above you and with you and around you. >> i feel very safe. >> don't show up out at my house. living on top of everyone like that. >> we have a great police department here. look around. we're protected here very, very well. >> we love these guys, we do. >> the nypd is probably the best in the country, if not the world. >> all right, fine. >> it's a beautiful city. >> i tried to help. >> senator, thank you. >> great to be with you. governor ridge. >> always a pleasure, buddy. >> this is the beginning of a

great new future in broadcast. >> thank you. coming up, a "squawk box" news maker. epa chief scott pruitt will join us life from the ceraweek conference in houston. stay tuned. we'll be right back. ht back.♪ the things you say ♪ ♪ oh♪ ♪ ♪ ♪ you're unbelievab♪e ♪ you're unbelievab♪e the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.

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in the developing world. making cars go further with less. fueling the global economy. and you thought we just made the gas. ♪ energy lives here. "squawk box." quick update on mario draghi giving his press conference. right now really sticking to that dovish line the ecb has pursued. saying we're going to keep to

our plan to reduce from 80 billion euros monthly down to 60 billion. but if things go badly, we stand ready to increase those purchases. not a lot of talk about the possibility of things getting better. he did say the cyclical recovery may be gaining momentum. the staff has very marginally upped the forecast for 2017 and 2018 by a tenth. it looks like they're keeping the inflation rate for 2017 -- they upped by 0.4. still, the bottom line here is the european central bank, despite some german opposition, sticking to its guns and remaining really with a wide-open policy, guys, for the rest of the year, despite what's happening here in the united states. >> i don't know if his ears were burning yesterday. tepper talked about him a lot. i like that though. i love central bankers. everything that's going well over there is because of the policies of the central bank. what do we do without them, steve? anything that's going well is because they're doing the right

things. >> you and i would only have the music to agree on, joe. we wouldn't have the central banking to disagree on. so it's really provided us with some quite good television. >> i guess that's true. you and santelli too. got to get that going again. >> i remain ready to resume the sparring. >> i'm going to cause that. >> fisticuffs. >> i'm going to instigate that. now to our news maker of the morning. scott pruitt, administrator of the environmental protection agency. other guys get called secretary. do i call you administrator pruitt? you know what i saw earlier? epa chief scott pruitt. i don't feel right calling you chief, chief. should i? >> good morning, joe. and whatever you want. scott is just fine. >> you know what, don't say i can call you anything i want. a lot of people are calling you some things you probably don't like, as you know. you're going to be speaking to cera soon. can you give us some highlights of what you're going to be

saying to that industry group? >> you know, for the last several years -- and it's great to be in houston, joe, and good to be with you this morning as well. for the last several years, we've adopted this mentality you can't be pro growth and pro jobs and pro environment. that's never the way we've done business as a country. one of the things i think we need to do is have an attitude that says we can be pro growth, pro jobs, and pro environment. we've had a 63% reduction in air pollutants since our program. we have opportunities to improve that across the country. this idea if you're pro environment, anti-energy, is something that has to change. we're working on that very much. >> two weeks and two days you've been there. so far you've done some water stuff. you've done some methane stuff. what do you plan on doing to the standards, and why were they, in your view, detrimental and how

are you going to change them? >> well, the issue there really was more about process, joe. that's something i've also tried to start sharing with those at the agency to reignite a belief or a passion or commitment to rule of law and process. what we've seen in the last several years is regulatory uncertainty with respect to the markets and growing our economy. fiscal policy, tax policy, very, very important. i think one of the factors that's often missed is regulatory uncertainty. those in the finance sector, the health care sector, the energy sector, not knowing what's expected of them or as rules are passed, they're changed midstream after infrastructure investment is taking place. one of the things we need to focus upon at the epa is maintaining a commitment to process, making sure that we hear comments from industry, to hear how rules are going to impact them, citizens, health concerns, environmental concerns. then adopt rules and make sure that they're enforced appropriately, fairly, equitably across the board. regulatory certainty is something we need to focus upon at the epa.

that's what we're trying to reinstill in the agency presently. >> administrator pruitt, try to incapsulate my question here. in recent years, critics would say the epa has been too focused on co2 and maybe things like hazardous waste sites, particulate pollution, strip mining, what's happening to the oceans. there's so many things that the epa could do productively that maybe have been diverted from the single-minded focus on co2. are you consciously changing the direction of the epa to emphasize co2 emissions less and emphasize these other things more? >> i think that's a fair criticism, joe, because you've seen water programs particularly take less of an importance. as you know, the epa is involved in giving grants across the country to ensure our water infrastructure is strong and safe. we have super fund sites across

the country that really need attention. we have the brownsville program that's been a great economic tool in the inner city to go in and remediate areas that need to be remediated. all those need to be focal points. with respect to the issue of co2, there's going to be an announcement on that soon. what's concerning to me and i think to the president is how that process occurred, comments taken through the end of last year and within ten days they accelerated their decision to say those standards should be adopted or continued and increased. so that's something we're going to address very, very soon. you mentioned methane. you mentioned -- you know, there was an information collection request that was sent out by the agency before this administration that tried to collect from 15,000 oil and gas producers across the country information in advance of regulating methane under section 111. we've withdrawn that after hearing from industry, with respect to that issue. we're taking steps to instill rule of law process, and also

making sure we're listening to those in industry and how it's going to impact them as rules are passed >> the clean power act, if you were to roll that back in some way without going in to the original ruling about endangerment, the obama administration ruled that co2 -- and it's controversial that co2 is a dangerous pollutant. will you try to roll that back, or will you try to -- do you think that needs to be addressed about whether you can classify co2 as a pollutant? >> you know, it's interesting about the situation with co2, joe. we've had a supreme court decision in 2007 and then the endangerment finding you're making reference to in 2009. nowhere in the continuum, nowhere on the equation has congress spoken. the legislative branch has not addressed this issue at all. it's a very fundamental question to say, are the tools in the tool box available to the epa to address this issue of co2 as the court had recognized in 2007.

the decision in 2007 was not that the epa had to regulate. the decision in 2007 was they needed to make a decision. so i think all those things need to be addressed as we go forward but not least of which is the response bit legislative branch with respect to this issue. i don't want to miss, joe -- last week the president did something very, very important, talking about regulatory certainty. he rolled back the waters in the united states rule that was literally a power grab by the epa recently to assert itself in jurisdiction to make decisions locally in land use decisions with private property owners, cities, and towns across the country. puddles and dry creek beds were being regulated by the epa and put a paralysis on economic development. the president did a great thing last week by sending that executive order out. within eight minutes, we started that rule making process to roll it back. i anticipate the same thing will happen with the clean power plan. i anticipate the same thing will happen with the methane rule as

well. >> administrator, couple questions. do you think that fuel efficiency standards matter? you think we should have fuel efficiency standards? >> i mean, i think that what has been broken in that process is, one, not a recognition of the great progress that's been made with those standards, but two, those in detroit, those that are manufacturing autos this in country expressed to the epa that they wanted to evaluate the impact of the previous standards. that was largely disregarded. that is a breach of the process. that's something that as we do our business at the epa, we want to have a collaborative process, make sure that the rule making process, issuing notice, taking comment, responding to that comment, and issuing rules in a way that takes everything into consideration needs to be respected. as you know, joe, that rule or that review of the standards was not supposed to be completed until november of 2018.

so they accelerated that by almost 18 months. that says something. that says there was an outcome predetermined to achieve certain things. >> the next question -- and the last one was andrew. what's your next about private e-mail servers or something? >> no, i'm not asking about i'm private e-mail servers. >> go ahead. >> i think there's a larger question. you're talking about the uncertainty that you think this department has created historically a lot of these things were set and a lot of companies were already moving to try to deal effectively with what the new rules are. they're now getting in some cases peeled back and then there are going to be lawsuits on either side. isn't there to some degree around whether more uncertainty is being created? >> well, you mentioned lawsuits. when you look at the lawsuits filed over the last several years against the epa, they've largely been centered around two things, one, a disregard of the statute, the framework, or two, they've not met deadlines. i think in the rule making

process what's important is that the epa respect the timelines established by congress and then play within the framework that congress established passing those rules to give certainty to the marketplace. partnering with the states not as adversaries, under the obama administration under the clean air act alone there are 56 federal implementation acts from president bush, president clinton and president bush 2 there are only five, that reflects something. reflects an attitude we know best from washington, d.c. that's going to change. we're going to partner with the states to ensure we hear from them and industries as to adherence to the rules. >> it's being said mr. president is being buffeted about what to do with paris. that tillerson wants a stay to be at the table. have you urged him to withdraw? do you have a personal feeling yourself on whether the u.s. should stay in the paris climate deal or not? >> well, as you know that's largely a decision if not

exclusive decision of the state department. i happen to think the paris accord, the paris agreement if you will should have been treated as a treaty. should have gone through senate confirmation. that's a concern. i also think it was a bad deal. >> yeah. >> it's one thing to be talking about co2 internationally, but when you front load your cost as we endeavor to do in that agreement and china and india back loaded their costs from 2030 and beyond, that's not good for america. that's not an america first type of approach to these issues. >> okay. let me ask you one other thing, just to get to the nitty-gritty, do you believe that it's been proven that co2 is the primary control knob for climate? do you believe that? >> no. i think that measuring with precision, human activity on the climate is something very challenging to do and there's tremendous disagreement about the degree of impact. so, no, i would not agree it's a primary contributor to the

global warming that we see. >> okay. all right. >> but we don't know that yet. we need to continue the review and analysis. >> it's a -- when i hear the scientists settled, it's like i never heard that science actually gotten to a point where it was so that's the whole point of science is that you keep asking questions. you keep asking questions. but i don't want to be called a denier. so scares me. it's a terrible thing to be called. anyway, administrator pruitt, i know you don't want to be called that either. thanks for being with us this morning. i appreciate it. >> thank you very much. >> when we come back, we're going to talk a lot more about what's been happening with the futures this morning. also tomorrow on "squawk box" richard le frak will join us after his meeting with president trump first on cnbc. we'll be right back. 'll be righ.

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our guest host today has been former homeland security secretary and former pennsylvania governor tom ridge. governor, we've talked about some scary stuff today. is there a final thought you want to leave us with? >> well, becky, i appreciate the opportunity to share some of these thoughts with you. a couple things, we talked about global risks, cyber security's one, infectious disease is another, but as a country we can manage these risks. sometimes the private sector has to take the lead. many instances it's the public

sector and the private sector working together. we can manage it. let's identify it. this is a reality. understand we can deal with it. let's not be breathless about it, just confront it and deal with it. we can do that. >> perfect. we'll leave it on that optimistic note. >> absolutely. >> come back soon, sir. >> if we're still alive. [ laughter ] >> we will be. that does it for us today. make sure you join us tomorrow. right now it's time for "squawk on the street." ♪ good thursday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. happy birthday to the bull market. we remember the s&p's cycle low on this date in 2009. his attention is now focused on the ecb keeping rates unchanged. europe is relatively steady, more pressure on oil though after the worst day in 11 months, below $50 a barrel for the first time