31415. today it is pi day, march 14th, but 2017 doesn't work quite as well. ♪ >> live from new york where business never sleeps, this is "squawk box." good morning. 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. we have an update on the blizzard pounding the east coast. it's happening right here outside our windows. that's what we walked in through this morning. forecasters calling for up to two feet of snow in some areas. hard to say what will happen, but airlines have canceled more than 4,000 flights. several governors declared states of emergency including new york, new jersey and connecticut. schools are canceled in new

york, boston and philadelphia. we're here at the nasdaq. things are moving just as expected. the new york stock exchange is expected to operate normally. take a look at the u.s. equity futures. they are indicated slightly lower after a mixed day yesterday for the markets. the dow futures are down by 13 points. s&p futures down by less than a point. the nasdaq down by 1.7. overnight, in asia, there were some red arrows when it came to the nikkei, which was down by 0.10%. the hang seng was flat, the shanghai was too. in some early trading in europe, you'll see that tlinhings are relatively flat there as well. >> german chancellor angela merkel meeting with president trump, it's been postponed. i said we would give you headlines nothing to do with the snow, but this is because of the snowstorm. merkel was on the way to the airport when she received a call from president trump to delay the visit. she continued on to the airport

and told reporters on the plane the trip was canceled. that is not a joke. the meeting was rescheduled for friday. the itinerary set to include discussions on nato, isis. >> some irritation there? last-minute cancellation? >> maybe a little bit. i'm not sure. >> i think it's just we're on the plane, we're not going. unclear why she decision turn around. >> tweets, e-mails, texts. if you can't hear the way it's said, you don't know. >> just odd to have that -- >> you would deliver the joke, this is not a joke in a different way? >> i don't know for you. i don't know how it was intended. she seems nice. i'm wondering -- it's early. it's early. i'm in the show-me mode. >> you're questioning the weatherman? >> i walked over. there was like a dusting on the way over. >> it's more than a dusting. >> it's barely a dusting.

it's not two inches. it's not two inches yet, andrew. it's just that -- just growing up in the midwest, going to school in colorado, i know what a lot of snow looks like. we'll see what it is. these guys when they get egg on their face, it's embarrassing. >> jeeves told me it would pound starting at: 6:00. >> i looked out at midnight, nothing was going on. 1:30, nothing was going on it. could go for 24 hours, right? >> 3:30, 4:00, things were happening. >> we'll see. now i'm here. >> some people are downgrading the forecast. 4 to 8 inches. though i was still hearing 12 to 18 inches for new york city. >> have we gotten a bit soft? so much news, twitter -- >> there were two different models, a european model and american model and they both

sh matched up to show the snow. >> i love the models. >> you love the models, you love the polls, the analysts. >> love the consensus. i will say driving in, coming back last night t was a beautiful night. think about 100 years ago, god, it's nice. people with hurricanes had no idea they were coming. >> isaac's storm, the one that hit galveston. >> oh, it's nice. it's all quiet. we'll see. >> we'll go on and talk about the -- >> i'm surprised the stock market is behaving the way it is today given the cbo and its implications for tax reforms and whether this coulden sol be sol. >> i'm in a show-me mode. how about that? >> there's no free lufrmnches,

let it stay the way it is -- >> the trump white house has taken issue with the cbo. paul ryan was saying this shows we will bring down the deficit. >> i don't know if you saw the other report, the white house numbers, the internal white house numbers are worse than the cbo numbers. >> we'll get to all that. well -- >> did you like it when i did the show earlier? i said how do you get to four rate increases? i guess we'll explain what type of economic back drop there will be. >> let's back up. we had the tillerson thing we wanted to get to. >> you want to go back? you want to read about the two-day fed meeting? >> no, we'll go back to what we were talking about. >> we are? >> yeah. >> republicans defending their healthcare plan after that new report from the congressional budget office said that 14 million americans would lose medical insurance by next year. eamon javers joins us with more. those numbers, especially as you

get further down in additional years were greater than people had been anti titicipateanticip. >> you're right. this cbo worse than expected for republicans pushing the healthcare bill. there was reaction from the trump white house yesterday as well once the numbers came out. let me give you some headline findings here of what the cbo put out. they said in terms of the deficit, this bill will be good. they said the bill would cut the deficit by 3$337 billion over tn years. they also found that 24 million more people would be uninsured by 2026. that's a politically challenging number. average premiums will increase by 15% to 20% in the coming two years, though they'll decline by 10% overtime. there will be a sharp rate increase in the early years. for nancy pelosi and the democrats, that simply wasn't good enough. >> they're taking 24 million

people, pushing them off their coverage. and as they do so, they are implementing the biggest transfer of wealth in our history. 6$600 billion. in terms of insurance coverage, it's immoral and in terms of giving money to the rich at the expense of working families, it's indecent and wrong. >> now, tom price, the secretary of health and human services said yesterday at the white house that the trump white house disagrees with the cbo. here's what he said. >> i think it's important that we ask the question compared to what? the fact of the matter is this is about real people, about real peoples lives, about the coverage, the health coverage they have but also the healthcare they receive. the fact of the matter is that right now, current law, we have individuals who have health coverage but no healthcare. >> guys, goldman sachs had a note overnight, their analysis is that this cbo report will

make this bill harder to pass up on capitol hill. they suspect that it will need significant changes before it does pass, considering they're senate moderates waiting even if it does pass the house of representatives. >> is it fair to think this is a political hot potato? every side is a little kau shusz abo cautious about it? >> absolutely. nobody wants to be tagged with americans losing health care. that's the question. how many americans will lose healthcare and who will get the political blame for that. republicans have been very adamant that obamacare is a disaster, it's failing. they want to replace it, but they don't want to be left holding the bag politically in a position where they replace it with something that -- >> eamon, if there is no mandate, people choose not to have it. we have to factor that in. you know, maybe some places are not -- there are no personal --

>> this would amount to a surcharge. >> but there's still a choice. people need to choose to do the right thing, andrew. >> they do, but it's going to -- yes, but if you're older, it will cost you more. that's the issue. >> either way. >> the cbo report said the reason a lot of people drop off is because they would no longer have to. >> there's no question that people may not participate, then that will ab bbe a big question about whether this works or not. the other component is if you're an older person, especially if you're an older person depend de ant on medicaid, the credit will be much less. >> if the deductibles are so high, the premiums are so high, you can't afford to get the care or you have an insurance card, but you can't afford to use that insurance because the deductibles are so high, the

healthcare you need is crushingly expensive. >> two crappy choices, you either got what we have, and they did backend load this to explode in 2017 when he's out of office. >> that's what the president has been saying. now you see it -- >> now we have one crappy plan, trying to get a better one. >> the problem is -- you don't get something for nothing. >> i'm not sure barack obama wanted to sandbag hillary clinton who he expected to be president this year. . i wouldn't be so sure of that. >> which didn't happen. >> i wouldn't be so sure. i don't know. i don't know. who knows what goes on behind closed doors. this is tough. >> we try to find out. >> who knew it was this complicated. >> to quote the president. >> all right, eamon efing javers. you are effing today. >> i feel that way.

freezing. >> so i understand this word, i'm hearing out in new jersey people are messaging me that it's snowing bigley. >> yes. the roads are terrible. >> it's snowing big league. >> no bigley out there. rex tillerson taking his first trip to asia as u.s. secretary of state. probably been there a million times as ceo of exxon. scheduled to leave today for east asia and the pacific region. his trip will also include stops in japan, south korea, and china. tillerson will meet with senior officials to discuss north korea's recent missile tests and u.s. economic and security interests in the region and we're doing some exercises over there which are interesting in response to what north korea has done. sort of some sabre rattling. a bit disconcerting. worries me more than the storm. >> unclear what we'll find out

over there. given the back and forth that the press is not on this plane with him. >> yeah. >> that is something i think would care about, maybe not. separately, this is a fascinating story. rex tillerson used an alias e-mail address while at exxon to send and receive information related to climate change according to the new york a.g. office. he used an alias wayne tracker. wayne is tillerson's middle name. it was discovered as part of the attorney general's investigation as to whether exxon misled share holders and the public about climate change. they said the e-mail was put in place for secure and expedited communication between tillerson and senior officials. the issue is they didn't deliver the e-mails when originally subpoenaed. >> i was going to say, i know some people at nbc who have secret e-mail addresses --

>> people have separate e-mail addresses, but if there's a subpoena, you have to deliver the e-mail irrespective of where you were what fake name you're using. >> like hillary? >> excuse me. >> like hillary delivered all her e-mails? >> you a man of principal? if you are a man of -- >> you always bring that up. do you ever stay consistent on arguments you -- >> i try. >> okay. >> number one, eric schneiderman? total hack, number one, political hack. >> isn't every attorney general appointed -- >> not to this extent. >> then you know my feelings. the idea that -- what are you hiding? you're not hiding anything now. it's not settled. you know, hiding what? hiding that we knew something that we don't even know today? >> hiding e-mails. >> but the whole reason for looking at it is --

>> i don't understand. we spent two years screaming and shouting about e-mails, i would think you're upset about this. >> it's not about me. >> you're upset, you can be upset. >> it's interesting. >> i have too many other things going on. i have a family. i can't be upset all the time. joining us is mark grant, you are upset today? >> i would like to say this morning is it's 70 degrees now in ft. lauderdale, heading to 81. >> rub it in. rub it in, mark. thank you. >> 70 degrees here, two weeks ago. >> let me guess, you're on your boat. >> here on set is andy johnson head investment grade fixed income. a lot to watch for you. i think wilf will be on talking about the netherlands. the bond, ten-year up above 2.6

today. >> amazing. the fed will do what it's going to do. we know they'll go. >> they'll go. >> that's pretty much telegraphed. the question is what do they do after this? they've been promising three hikes this year, three next, three after that. market has not believed that. i think it's time for the market to start taking the fed seriously an almost literally. that is a change. before the market refused to believe. i think they're quite serious. >> fool me once. there were dot charts going back for the last five years, none of those dots were ever real. >> i'm a dotologist. didn't work. >> no, it didn't. you think it will? real change when we were at 10% for march, and we're doing all this fiscal stimulus, you have consumer confidence. stuck there at 10. then it moved. now we're up to where -- >> you know why? they telegraphed it. >> think tried to telegraph before, but we didn't believe them.

>> i think it's time to believe. look at janet yellen's speech on the 3rd. it's the most clear and concise out of the fed. they are telling you what they'll do and what the response function is to the economy. >> what do you think, mark? >> i have two views on this, joe. one is we're at 2.62 right now we are right at the tipping point. if the fed does sound hawkish, we're at 2.75%, 3%. number two, the fed today is not going to be the fed of tomorrow. i don't put a lot of stock in this. mr. trump will appoint at least three people we know of to the fed and maybe more. i think we'll have a very different fed. and i just don't see the desire by the new members of the fed to

hike interest rates, stop lending, cause major problems for commercial real estate, r residential real estate. i think it's a real question what will happen here. >> mark, i come to you for everything. i have some ann landers, dear abby type stuff i want to send you, that we don't need to discuss here but i need advice on. what will happen with this aca stuff? do you think that -- you know that they're going to take that number, pelosi, media, everybody else, it's going to -- you already got some republicans who don't think it goes far enough. how will this play out? >> a lot of people are missing that we got a president that's embarked the country on a different road. they're putting out proposals, and the proposals will get refined. and i think everyone is focusing on here it is, that's it, that's

it. i don't buy that argument. i think we're in a process of figuring out what will work. i think they'll figure it out. >> you do? >> i do. >> the market, 12 dow points, if it was going to be, my god, 24 million, repeal and replace is off the table. tax reform is off the table. that would affect the market if it looked like they couldn't get it together. don't you think? >> absolutely affect the market. but remember, joe, you keep talking about show me. i grew up in kansas city, missouri, i'm from the show b-m state. i think we'll see a back and forth from the congress and white house until they reach a plan that's acceptable to enough people in the congress to pass it. i think it will get passed. >> this has got to be on your radar. it's not janet yellen, but infrastructure, too. >> it's absolutely a big deal. i think we'll get tax reform,

the question is how big it will be. the economy needs it. at the end of the day we need a more productive economy. productivity has been too low. to the extent tax reform can improve that fact, we got something. if it doesn't, it will be a sugar high, but not really that impactful on a persistent basis. we have to have that happen. i think it will happen. there will be give and take, back and forth. at the end of the day, some tax reform will occur. we'll have lower corporate taxes. will we have a bat? i don't know. but i think there's a decent shot, a bigger chance many people believe is the case. >> mark, what happens in the nether lands and what about le pen? have you said he will pen will win? >> the netherlands, we focus in america like they're geert wilders and one anti-europe party, there's really about five of them. i think they'll get more votes than people think. he will pen, you know, the

conventional wisdom is she gots into the final round and loses. a lot will depend on the populist feelings. you may have seen this morning turkey ended the agreement to hold the migrants in turkey. if we get another 500,000 people pouring out of turkey into europe. i think it's going to be a different game. joe, any time, if you within a me to be ann landers for you, just call me. >> they were sisters. i don't know which one i liked better. they were like the same person, i think. thank you, mark. >> thank you. >> thank you. coming up, a powerful nor'easter is blasting the east coast with snow and high winds. we'll get an update on the snowfall and the latest on business closures in new york and washington. we'll do it next when "squawk box" returns.

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live shot of times square there. the snow coming down. the blizzard of 2017 pounding the east coast this morning. new york, new jersey and

connecticut all under state of emergency. let's get the forecast right now from meteorologist angie lassman from wtvj. she braved the storm, she's now at hq in engle cliffs, new jersey. >> things are looking rough out there. we've seen some changes in the forecast. i wanted to show you what we're talking about as far as the snow potential. we saw the storm moving through overnight last night. we started to see some of that ramping up. right now we're seeing this change. we had a bit of a shift eastward, as far as that system goes. and that means the western portions definitely seeing the highest amounts of snow, especially when you go through portions of the catskill mountains. as far as the coastal areas, less snow for them, but not out of the woods. we're talking about areas where we will see coastal flooding, erosion and strong wind gusts. up to 55 miles per hour.

winter windstorm for much of the area. 72 million people will be impacted by this. it will be a tough one. we're already seeing issues as far as travel closures, road closures, airports. if you have those flights out, good luck. we're going to be seeing lots of closures as far as the airports go for the entire day today. timing-wise, talking about basically it started out this morning, we continued to see it into the evening. a couple things. really heavy, dense snow as far as what we're dealing with today. it will be wet. that means anyone heading out to shovel, it will be tough on the bode. talking about really some tough conditions if you're an elderly person, make sure you are asking those neighbors for help. we'll keep an eye on what we have as far as those potential power outtages. many of us dealing with outages here and there. where we are seeing the heavier storms, we'll be watching for the areas close to the mountainous regions to be

watching for heavy power outages. we'll track this storm. right now it is bringing heavy snow to new york city. that's a place you don't want to be driving. we will be watching for basically a tough day ahead and not a day you want to be on the road, not a day that you want to be out and about. definitely just staying home will be the best advice i have for you. back over to you. >> love a snow day. thank you for that. i should say, it's now coming down more than it was before. new york city expected to get hit with as much as two feet of snow. leslie picker is in times square with the economic impact of the storm, business closures and a peek of what the storm looks like. she goes from covering preet bharara's exit yesterday to the snow this morning. >> reporter: good morning. the snow is out, the snow shovels are out, the storm is here in new york city. in terms of transportation and

how it will affected your day and those trying to get to work, above-ground transportation has been suspended in terms of subways. express trains have also been sus suspend suspended. if you're trying to get from times square to wall street, you have to take the slower route in terms of coming back, the city says they may initiate further closures as the day goes on. it may be more difficult to get back uptown if that's where you need to go in terms of the economic impact from this storm, economics expected it this to be a net negative, but there are winners and losers. diy home stores may feel a little more of a pinch in this storm. they've already stocked up on spring supplies. the fact it's coming in march could hurt them a bit more than it normally would when people go and stock up on things to protect them against the snow. retailers such as apparel retailers and restaurants will

feel more of a muted effect. because this is taking place in the middle of the week and consumers don't eat out as much on a tuesday as they would on a saturday. the attorney general of new york warned against those looking to capitalize on the misfortunes of those in the storm saying price gouging on transportation, water, food will not be tolerated. but there's an expense to be bared by taxpayers. there was a study by the city controller which estimated that up to $2 million per inch of snow, that's what it costs to remove this stuff. for two feet of snow, upwards of $40 million. >> okay. leslie, stay warm. >> thanks. >> there's a starbucks open to your left. >> just over there. check it out. >> i hear it's crowded already. >> yeah. i saw crowds there at 5:00 this morning. we'll see you later.

>> crazy. when we come back, a key national election tomorrow in the netherlands. we'll tell you what's going on and why it matters for your money. and a new read on small business optimism in america. right now, as we head to break, a look at yesterday's s&p 500 winners and losers.

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♪ you're willing to sacrifice our love ♪ >> good morning. welcome back to "squawk box." we are live at nasdaq market site in times square. a live shot there of massachusetts. the snow also coming down where we are. want to show you what's going on in the markets. u.s. equity futures at this hour look in the red. dow jones off by 16 1/2 points. the s&p off by a point. bill ackman's pershing square selling its stake in valeant at a loss. he will leave the board at the next annual meeting. you're looking that the stock down close to 12%. toshiba filing a request to delay its earnings report as the company investigates allegations of impropriety at its u.s. nuclear subsidiary.

also looking to sell a majority of its overseas power business. ruby tuesday says they will seek alternatives, including a sale or merger. they have been dealing with sluggish sales and intense competition. is there still a ruby tuesday's in times square? ichblts was ju . >> i was thinking of that. >> maybe we should go there for breakfast. >> i had my eye on another place. junior's. >> junior's? i don't know if i have been there yet. do you have a place? >> for? >> for breakfast. >> you're still dealing with dinner. >> i am. anniversary dinner. >> big night out. >> whoa. >> if i'm not here, you know -- >> we know where you are. >> right now, let's get to an election that might not be on your radar. wilfred frost joins us with a run down of tomorrow's vote in the netherlands. >> much like the votes of 2016,

the dutch election is not shaping up around traditional party lines. the populist party for freedom led by the continroversial geer wilders is likely to win the most seats. he is the most extreme europe's populists, he stans against islam, against imdpramigrationi against the eu and has the slogan make netherlands ours again. and has been compared to donald trump. dutch politics is highly dial lig diluted. but it is unlikely to win more than 30 of 150 parliamentary seats. holland has the need for coalition government is, and other mainstream parties have ruled out a coalition with freedom. the favorite right now is mark rutte, pro eu. if the netherlands were to have an eu referendum, most suggested

it would be close, but an eu in and out referendum materializing is not likely since wilders will be excluded from any coalition formation discussions. the thing come thursday morning, he's expected to get 30 seats. if he gets 40, he still will not be prime minister, but it shows the polls wrong again. and that kind of swing in the french election means more. >> did you write this? >> of course. >> when you say he's against islam -- >> mm-hmm. >> could you be more -- he's against the religion? >> he's against the religion of islam? >> he wants to close all mosques in holland, remove all korans. >> so it's not islamic extremism. >> that's why i say he's the most -- >> it's rare to say you're against -- >> i wouldn't characterize anyone in the political spectrum here against islam.

this guy against islam? >> right. >> so you meant what you said there? >> yeah. he wants to close all mosques and remove all korans from across holland. he gets criticism amongst various political circles in holland and europe, five, ten years ago he was more anti-eu. over the last five, six years he tried to grasp all anti-political margins. some would say he's gone too far and lost credibility, that's why so vehemently other parties ruled out forming a coalition with him. >> not only ruling out a coalition, if he has more support than the polls d s indi, is there any way of working together? >> another reason why he is not likely to get the most seats, all of the parties are divided and split. there's lots of parties. if he did get more than expected, you're getting close to the 40, 45 seats out of 150,

then clearly he could demand things like an eu referendum. but it's so divided, the rest of the parties are so united against him, 30, 40 out of 100 seats means a coalition could be formed without him. the other factor, do we fail to get a coalition and go to another election and have this ongoing issue of european politics not having anything clear and delivering the fiscal reforms they need to see. >> there's a market for someone who is against islam in the netherlands? >> it's a big problem around some areas. >> they don't try to couch it in didn't terms? >> i think when people vote for certain candidates, they might be aligning with one part of the rhetoric and willing to put up with a part they don't totally agree with. as we know, the immigration issue is a big problem. it's a particular problem in -- >> his rhetoric on turkey has been extremed. turkey, you are not european,

you will never be european, we don't want you here. >> the developments around turkey and germany have fractionally affected him in the polls. in the last month he has lost ground and rutte has gained ground. mr. wilders got a bit of the margin over the weekend. >> we have to go, theresa may was given the power by parliament yesterday to declare the process beginning for brexit. >> exactly. the big headline there, the bill has fully gone through parliament, she hat power to invoke article 50 when she wants, and she has the ability to negotiate when she wants. the pound has fallen today, down about 0.6%. she is given a speech today, she will probably outline then when she's likely to invoke article 50. probably not today, but by the

end of the month. >> thank you. coming up, a blizzard shutting down much of the east coast, it's a big business generator for company generac. and the fed and the markets are in focus. jim grant from grant's interest rates, he gives us his read on the pace of rate hikes. and later, the gop health plan under fire. max baucus weighs in on the latest report from the congressional budget office. stay tuned, you're watching "squawk box" on cnbc. this just in. 50 million customers' data was not compromised this morning in a security breach that didn't happen.

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time for the executive edge. the national federation of independent business releasing the latest survey of small business optimism. this has been interesting, these measures, since the election, kate. is that continuing to be the case? >> absolutely. main street's outlook post election is holding at historically high levels according to independent business. while the reading dropped 0.6 points to 105.3, it remains

above the historical average of 98. but the lobbying group said this sentiment is not yet translating into small business growth. the report states enthusiasm has yet to be translated into an equally impressive increase in spending and hiring, this will require progress on the agenda that business owners voted for. so small pancompanies need grea action on tax and healthcare reform before expanding. a top issue for small companies remains finding skilled workers. another bright spot, capital spending among small business rose to 62%, the second highest reading since 2007. it appears smaller companies may be gearing up to invest in the future. i spoke to bill dunkalberg yesterday who said healthcare and tacks remain two big fronts. if there is not action on those fronts soon, this study may be

fading. back to you guys. >> we'll keep seeing that. as long as it stays like that, i can understand valuations in the stock market and everything else. but it's something important to watch, i think. will you watch that? you'll keep watching that. >> i'll keep watching. one thing to point out in terms of healthcare reform. one thing i did hear from the small business advocacy groups is the employer mandated is not part of that. i know the cbo score yesterday said premiums would fall, but that mandate being out, that could help keep optimism higher. if and when this gets passed, u how this all shakes out remains to be scene. >> very intractable problem. there's single payer, there's a national health system where everyone has it. then there's do we want to do that? some people will lose coverage. it's very difficult. we have to decide as a country where we're headed. there are offsets. we heard it yesterday, plenty of

companies will not go above 29 hours. >> it's true, one thing to point out is that these companies did have to offer health insurance under the affordable care act. it then becomes a competitive advantage. it's hard to take away something that you have been mandated to offer. that's something they have to consider, do they want to lose these workers. >> the other thing is they're not giving them more hours because they don't want to offer them healthcare. >> that's true. that's right. >> so, in this country -- >> his point was the temporary workers. these are the temporary seasonal workers. but the question is as a country if we're not going to offer it in some way through the government, which i understand that position, you do want to offer it within the context of the private sector. the private sector doesn't want to pick up the slack. >> they have over 300,000 employees who do get it.

these are the seasonal workers. you won't offer somebody healthcare if you're there three months. >> beyond the temporary workers, this is happening all over the country. >> this was my concern about the affordable care act from the beginning. the employers who -- for 50 years, 60 years, we've been a nation where employers really did provide healthcare. this gave them a reason not to. at the beginning i talked to some people, they would get off that and get on to a national healthcare. i think -- >> i have heard both ends of it. >> kate is waiting around. >> the debate continues. >> thank you, kate. >> when we come back, i'm excited about this. men out there, if you wear leather shoes, you got to see this. >> is that you? >> footwear in focus. >> this is not me. >> this is for you, joseph. wolf and shepherd mixes dress shoes with sneaker performance.

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welcome back to "squawk box." running a half marathon is hard enough for most people, but imagine winning a 13.1-mile race in men's dress shoes. a graduate student at syracuse university set a guinness world record averaging 5:53 per mile in wolf and shepherd shoes. they use performance sneaker technology, but they look like dress shoes. the founder joins us now. i've been looking -- all men, i feel like, with these leather shoes, you'd think the shoes would be much more comfortable. you used to work for new balance and adidas. i'm now wearing them for the first time. they do feel sort of like sneakers. not completely. here are the shoes. i don't know if you can get

them. cole hahn has shoes that are a little foamy, but they look like these weird hybrid sneaker shoes. this looks like a real shoe. what have you done inside here? >> well, we've done a lot of things that you typically do in a traditional running shoe, like we've reduced the way -- when you're a footwear designer, you're thinking, how do i make a sure lighter, how do i make it faster looking? how do i inspire athletes to win? we tried to retain the classic craftsmanship and quality you'd get in a premium dress shoe but offer that with relevant technology. so we on average have been able to reduce the weight of our shoe by about a pound. we take the wood and nails out of the heel construction and replace that with high density eva or a running shoe foam. we've made them resoleable in the forefoot and heel with one of our proprietary patents. >> why has it been such a long struggle to make shoes like this? >> i think a lot of people have

tried to do it, but from a marketing perspective, you're always looking at ways to show indicators of performance. you have a guy that works at a serious law firm and says, hey, i need my shoes to look great and i want to feel great too. >> what do you think of the cole hahn shoes? they're trying to do this too. >> i think cole hahn is a fantastic company. they've targeted a specific market that's more of a mass market appeal. we kind of fall in this mid price point. >> these are not cheap. >> not at all. >> how much does this shoe cost? >> entry price point is 325 for our loafers. we go up to 425 for our chelsea boots. >> for a pair. >> we do offer a pair at 185. >> you're a slick guy. >> you're offering a driver for how much? >> 195. those are going to be released at the end of april. >> oh, the little ones with the nubby things? >> not the nubby things. those tend to be uncomfortable. it's going to have more of a flat-soled driver. it's going to have a waterproof suede as well.

>> what is that, a driver? >> like a driver shoe. >> a casual dress shoe. it's something you can wear with slacks or khakis. >> the thing is you work on the bottom part to make it cushioned. i understand that. but as long as it's leather on the top, that's the problem, isn't it? to really look like a shoe, it's got to be leather. if it's leather, it's hard to break them in and they're not sneakers. >> so we actually had this issue. we were manufacturing our products in central america. we moved to portugal to be closer to these luxury italian tanneries. one of the biggest complaints that we had is we were using a very traditional leather that didn't have the stretch and flex that we've now accomplished in our shoes. we did something called veg tanning. we use more vegetable oil to give the shoe a little more elasticity. >> you said you're doing a whole new technology in the future. what's the next thing? >> i can't speak completely on this right now, but we are reducing the weight even more. we're going to be doing

something in our dress shoes that has never really been done in a dress shoe but we feel is sophisticated and would appeal to our customer right now. >> and are the folks at adidas and new balance, are they ever going to get into this business? >> they may. they're always looking for ways to expand. this is a horizontal market where i think they could tap into a new customer base. >> and you're only 28 years old. >> yes. >> wow. >> and he's friends with kayla. >> she's great. >> they went to high school together or college? >> we went to high school together. she was someone we could all look up to when we were in high school. >> you went to notre dame. >> yes. >> both in the tournament. >> yes. justin, thank you. >> of course. >> congratulations. i may have to buy a pair of these things. >> you still go out and pretend to be like a business person. >> yes. >> no one sees my shoes. >> joseph needs them. he wears old cole hahns with rubber soles. >> anyway, coming up -- >> can you help him? >> absolutely. next time you are in los angeles. >> coming up, the northeast, i

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the fed set to begin a two-day policy setting meeting. investors widely expecting the central bank's third interest rate hike in ten years. a breakdown of what's to come is straight ahead. democrats pouncing on a cbo report that says millions would be uninsured under president trump's health care plan. the details and reaction from one of the architects of obamacare. former senator max baucus is straight ahead. plus, the blizzard of 2017. the east coast getting slammed this morning with a major nor'easter that's causing travel issues all over the country. the latest on the storm's track and how much snow will fall is straight ahead as the second

hour of squawk squ"squawk box" 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. i'm andrew ross sorkin along with becky quick and joe kernen. take a look at the futures. s&p 500 would open marginally down. check out the european markets. you're looking at a bit of a mixed picture there with the dax up a little bit. cac off a little bit. the ftse 100 up just marginally. here's what's making headlines a in the hour. one economic report ahead today. the government out with the february producer price index at 8:30 eastern time. economists are expecting the headline number to be unchanged

with the x food and energy measure up by 0.1%. small business sentiment fell slightly in february. the monthly index from the national federation of independent business was down 0.6 points to 105.3. however, the nfib points out sentiment remains near a 43-year high. and one of the world's biggest business software makers has patched a security flaw. a security firm called onapsys uncovered the flaw. s.a.p. has 87% of world's biggest 2,000 companies as customers. german chancellor angela merkel merkel's meeting with president trump has been postponed because of the snowstorm. merkel was on the way to the airport when she received a call from the president to delay the meeting. the trip is canceled now, and that is not a joke. the meeting was rescheduled for friday. the itinerary is set to include discussions on nato, isis, and

the ukraine. and the fed kicking off its two-day meeting to chart the future course of interest rates. the results of the cnbc fed survey are in. our own steve liesman joins us from washington, where he's braving winter storm stella. how's the snow there, steve? >> it's kind of slushy. as you hear the grateful dead play "stella blue" in the background. thank you very much for that. let's take a look at our 50 respondents to our fed survey. they're pretty well aligned. not just a hike this time but a flurry of rates coming. take a look at the results of the survey. 100% looking for a hike in march. 69% say they're going to do it again in june. 86% saying that they're going to start to reduce that $4.1 trillion balance sheet by june 2018. as for the number of hikes this year, this is where it gets interesting. 60% say we're going to get three. but another 25% are counting on four. that's their bet. so rather than a two or three

discussion, we're really have a three or four discussion. the question is whether the market is prepared for that. take a look now at where the outlook is for the funds rate over the next couple years. here's what's interesting. the fed right now and the fed survey are aligned in a way that has not been true for a while. you have the cnbc fed survey below it. the fed kept coming down to where we said the fed should be. now we'll see what the fed does tomorrow in its outlook for rates. right now they're pretty well on top of each other over the next several years. some of the commentary, we had jim bianco writing in, be careful what you wish if, rising rates might not be the bullish event. peter boockvar says the fed is now in a position they don't want to be in, having to hike quicker than they want to. a lot of hawkish commentary out there about this notion of the

fed needing to do more faster now, in part because of what's happening on the fiscal side, but also concerns about inflation inside the survey. becky? >> steving thank ye, thank you . let's turn to the markets. joining us is the senior market strategist at voya investment management. also, richard steinberg, president and chief investment officer at steinberg global asset management. karen, we just heard from steve about some of the comments some are making about you should be concerned about rates rising faster than http:ad been expect. are you someone who fears the fed or no? >> no, i'm not. i think a lot of poem aeople ar rattled by what the fed is doing, but there's been a dramatic role in the fed. the market is taking off on its own. we're seeing reflation. now the fed is reacting to it. it's actually a good thing. if the fed is raising rates because the economy is moving faster, i don't psi why investors should be so upset by

that. that's what we've been looking for, for the last ten years. the market is going to move ahead because economic data is better and because companies are making money. we have potential for pro growth policies, which will be the icing on the cake. we'll see more economic activity. i'm not really worried about the fed too much. >> richard, how about you? you think we're at the point where good news is actually good news and we're happy to see the economy improving, even if it means the fed starts raising rates? >> i do think good news is good news, becky, but i think it's already been baked into this move somewhat. in order for the market to go higher, earnings are going to have to go higher. we're starting to get the fed out of the way. i was one of the survey participants for steve's survey. i think for the most part, people are on track of, you know, let's say three moves. that's predictable. the problem is, the first quarter already 78 companies have guided down. only 30 have guided up. since the beginning of the year,

earnings have come down from 11.4% growth to under 10%. the real question is, to the other guest's comments, will investors start to bake in 2018 earnings instead of looking at 2017 earnings. for us, it's too early in mid march to be there. i think the market at close to 18 times earnings needs a bit of a rest before we can grind higher, unless earnings start to pick up again. we're just not seeing that data yet coming from earnings. >> rich, why do you think companies have been downgrading? is it something with the economy? what's specific? >> well, the largest downgrade problem was in the consumer nondiscretionary area. 19 companies downgraded. only two upgraded. there's retail in there and things like that. i think there may be some policy issues to that degree. the next highest was technology. 18 companies downgraded, but 18 companies upgraded.

so that's really kind of the winners and losers of a stock picker market. the final one is health care, also probably somewhat policy driven, where 14 companies have downgraded. only four have upgrade. it's a mixed market, becky. i think it's going to have to see after this quarter if we start to see earnings pick up again. from 2017, we're at $131 in earnings. we started the year at 133. investors are at $147. that's a big leap of faith for 2018. >> it does take two sides to make a market. i think we have multiple view points expressed here today. karen, you think earnings are doing pretty well and justify a lot of the gains we've seen and potentially additional gains to come, right? >> right. i saw 5% growth for the fourth quarter and 10% growth sounds pretty good to me for the first

quarter. right now we're in a reflation trade, but we haven't actually seen any new policies from the administration. there's a smorgasbord of policies that could really boost earnings. any kind of tax reform, any kind of change in regulations, repatriation, any kind of immigration reform, new energy projects. there are so many things throughout that could help earnings. we haven't seen any of that yet. earnings companies have been moving forward on their own just based on the fact that the economy is getting better. if we get any kind of policy changes, any kind of fiscal stimulus, then we are going to see earnings go. those consumer discretionary, especially if any kind of tax cuts, that's going to be a huge beneficiary of that. i think that we can expect earnings to go higher. even if they don't, if we don't see any policy changes, things are still moving better than they were. i still see the market moving up from here. >> steve, you want to jump in here too? >> yeah, i wanted to ask rich a question. you know, rich, i wonder how aware you think the market is of

where the fed appears to be going, whether or not they believe it. we have a forecast here showing that by 2018, the fed will be north of 2% on the fed funds rate. duds the market wake up and freak out one morning and say, you know what, i was investing at 25 basis points, now i'm investing at 2% police whlus wh comes to the fed funds and get scared of that kind of interest rate structure? >> they could if it moves too quickly, steve, but this fed has always been data driven and very incremental in their thinking. so i think, you know, the market sees this first move and the first reaction would be, okay, let's jack this faster. i think yellen will raise again in june because the market will give her that opportunity. but i don't see all the sudden a jump from going from a quarter of a point to half a point. the real question will be once the ten year goes over 3%, does that become competition for stocks, especially in the

endowment and pension area that typically have a 4% spend policy. and the trend in earnings are better. the stock market, it's just baked in, in our view, at 17 1/2 times earnings. you get a pullback in the market for this year. 17 1/2 times earnings next year, you have a 10% plus upside. the fed, i think, will be looking at the market in these regards. i think it becomes what's competition for investors against equity market. >> great. richard, karen, thank you both for your time. steve, what are you doing in d.c. today? >> i came here a day early. usually i come down tuesday night for the wednesday meeting. i came down monday to beat the storm. >> good idea. all right. thank you, steve. see you soon. >> planning. coming up, a blizzard is slamming the east coast. we'll have a live report. i need to see this live report coming up. >> as you glance skeptically over your shoulder. >> better be big. >> there's no snow.

it stopped. the snow is finished. is it finished or just a reprieve? it's a pause? >> there's mack. he's outside. >> 3 to 6 now? supposed to be 24 inches. school got closed. >> delayed opening for tomorrow. unbelievable. >> the weather outside might be frightful, but it's big business for generac will join us. stay tuned. you're watching "squawk box" on cnbc.

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.

welcome back to "squawk box." the blizzard of 2017 pounding the east coast this morning, sort of. right now it's not pounding behind us at all. there's no snow behind us. >> this was written yesterday, wasn't it? >> we all thought this was what was supposed to happen. in the meantime, we're going to get the latest forecast from our nbc affiliate wtvj. good morning. help us here. there's no -- it stopped snowing behind us here. >> yeah, there's a couple things we have to talk about as far as our radar goes. you see the live picture right now of the radar.

first of all, those of you in rhode island, we have a little bit of a snow hole. you can see where we're missing some of the snow. we will start to see that come back up and be watching for snow about 8:00. give it about 45 minutes and you'll be seeing that again. areas of new york, big changes there. we're seeing sleet out there. a little bit of warm air tries to nose its way in, especially with it so close to the coast, we are watching for that warm air to make big differences as far as what we're talking about for snow accumulation. so watching the sleet, we're going to continue to be keeping an update on those snowfall accumulations. the winter storm alerts right now, still seeing the blizzard alerts, the blizzard warnings. we're going to be watching for these to be updated. these are our late etst, but i' expecting in the next hour those will change, especially because of what i said about the sleet happening in new york city. this is the time where we should be seeing the heaviest amount of snow. the big picture with this is over a very short amount of

time, we're going to be seeing those stronger snowfall rates. keeping an eye on maybe the lurch period over until about the 4:00 hour especially for the main cities. still, even if we're not seeing the snow right now, we will be watching for it all the way through the afternoon hours and into the mountainous areas, we're talking about up to two feet. >> angie, just to clarify. if you make it through 4:00 today potentially in this area, in the city, then you're okay for tomorrow? >> you know, we're going to continue to see maybe some lingering effects from it, especially power lines, outages. we will be watching for those. of course, travel is not going to be great. but we'll start to see that storm moving out and we'll see better conditions into the evening hours. maybe lasting closer to 6:00, 7:00. things will really start to taper off, especially in the city. >> so tomorrow morning's commute shouldn't be bad. >> tomorrow morning will be better, but of course it just really depends on the snowplows. >> all right. thank you very much. we'll check in with you in a

little bit. joining us now on the squawk newsline is the ceo of back-up generator manufacturer generac. you heard us just talking about this. maybe in some areas not getting hit quite as hard as expected. what are you tracking in terms of how you see the east coast, how things have been shaping up? >> well, for us, becky, we're watching where there's wind. obviously the snow is going to have an impact on travel, but it's really the wind speeds that have an impact on power outages. you get the snow and ice on the lines and as the wind picks up. we're watching very closely. we have a lot of product that is rolling towards the east coast and in distribution centers out there should power be interrupted. >> were there any sort of a rush to get to retailers yesterday to get some of these generators out? is it so late in the season that people may not react the same way they would if this storm had happened in december? >> yeah, winter storms are

interesting, especially late winter storms. obviously, as you pointed out, it's kind of a transition period between the winter season and the summer storm season. there's probably a little bit less inventory in some of these areas than we would normally see. it can get there very quickly if it needs to be there. >> and have you had sort of a call up of demand, or are you still waiting to see? >> it's a little more of a wait and see approach. i think what you guys are seeing -- there's a lot of hype around these storms. in terms of real outage activity, we actually saw more outages last week in michigan and ohio and parts of upstate new york. there were over 1.2 million people without power because of a wind storm. not much reported on that, but still a couple hundred thousand people without power from that event last week. we're seeing more demand from that than we are advanced demand for this storm. >> aaron, what do you think of the conversations we've had recently about infrastructure? infrastructure is not just bridges and roads, but can

include things like internet access and even things like electrical grids too. what do you think when you hear that sort of become part of the conversation? >> yeah, i think it's a really relative part of the conversation. infrastructure powers infrastructure. those things get interrupted by weather events and ageing grids. the american society of civil engineers issue a report card on infrastructure. they gave the u.s. a d-plus. if you look at the energy part of that, which we play close attention to, that was also a d-plus. there's a serious investment gap, as it's referred to in this report. what's been really great for us as rate payers, both businesses and homeowners in terms of deregulation, it's kept utility rates relatively low the last several decades. the problem with that, the flip side of that coin, is it's dampened long-term investment in things like power generation and distribution. obviously that leads directly -- it correlates directly to reliability. you can see that in basically

every statistic that's been published over the last 20 years by the government and other agencies. power liability is a lot poorer today than it was 20 years ago. >> right. aaron, we want to thank you for your time this morning. let us know if you hear additional demand that comes up as the snowstorm continues. >> great. thanks, becky. >> we have a takeover battle possibly brewing over money transfer firm money gram. euronet offering $15.20 per share. moneygram already has a deal in place to be acquired by china's financial. moneygram has not yet responded to the new proposal. the big issue here is not just the price but also the review. euronet is based here in the united states. when it comes to alibaba, there have already been a number of calls for a tough review from

two congressmen. this change in the game. we'll see where it heads. coming up, stocks to watch ahead of the opening bell on wall street. then jim grant talks markets and the fed ahead of this big two-day meeting. don't you love that? we say it, but do we really think about it? the third increase in ten years. >> oh, no. time to worry. >> yeah, i know. "squawk box" on a snow ky tuesd. kind of snowy tuesday morning. we'll be right back. ♪ hi, i'm frank. i take movantik for oic, opioid-induced constipation. had a bad back injury, my doctor prescribed opioids which helped with the chronic pain, but backed me up big-time. tried prunes, laxatives, still constipated... had to talk to my doctor. she said, "how long you been holding this in?" (laughs) that was my movantik moment.

my doctor told me that movantik is specifically designed for oic and can help you go more often. don't take movantik if you have a bowel blockage or a history of them. movantik may cause serious side effects, including symptoms of opioid withdrawal, severe stomach pain and/or diarrhea, and tears in the stomach or intestine. tell your doctor about any side effects and about medicines you take. movantik may interact with them causing side effects. why hold it in? have your movantik moment. talk to your doctor about opioid-induced constipation. if you can't afford your medication, astrazeneca may be able to help.

welcome back, everybody. a couple stocks to watch this morning. bill ackman's pershing square selling its entire stake in valeant. shares were down on this news. i think he bought in -- most of his stake in 2015 was around $19 of a share. telling is at around $11 a share. it is putting some pressure on the stock. just knowing ackman is out of the picture. also, ruby tuesday says it will explore strategic

alternatives. the restaurant chain has been dealing with sluggish sales and intense competition. the stock is up by 15%. that's 27 cents. i'd say last night was pie night. today is pi day. pi day is celebrated every year on 3/14 in honor of the trillion-digit number. why are we saying it's a trillion-digit number? it's a trillion, trillion, trillion. about 3.14159. 2015 was a cool year. nasa issuing a pie in the sky challenge. a series of math problems that nasa engineers and scientists might solve by using pi. many pizza shops and restaurants around the nation are offering deals, including pizzas for $3.14. whole foods is offering $3.14 off all of its large pizzas.

okay. coming up when we return, day one of the fed meeting kicking off today. we're going to talk to jim grant about what to expect and what yellen is going to say and do next. take a quick look at the futures right now. we are in the red across the board. dow would open up about 25 points down. "squawk box" returns in just a moment.

what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

♪ good morning, everybody. welcome back to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. snow or no snow, we are here. among the stories front and center this morning, as we mentioned earlier, the february producer price index is out just about an hour from now, but it may be a few seconds late. the snowstorm has canceled the usual gathering of reporters at the labor department. instead, those figures will be released on the bls website. the weather will not affect the two-day fed meeting. the fed has just issued a

statement saying the meeting will go on as planned. its latest policy statement will be out tomorrow afternoon. and new york city is suing verizon. the city says that verizon has breached a 2008 agreement in which it promised to make its fios service available to every home in the city by 2014. an audit found that more than 40,000 requests for service are still pending. verizon is denying the allegations and says that it has invested $3.7 billion in the rollout. okay. also a strong nor'easter impacting millions of people from washington to new england this morning. morgan brennan has more on some of the hardest hit areas so far. good morning. >> good morning, andrew. 70 million people are in the path of this mid-march more nor'easter. states of emergency declared by at least six governors from the tri-state area down to washington, d.c. public transportation in many areas have been suspended or scaled back dramatically. amtrak isn't running trains between boston and new york and

only limited express service to d.c. thousands of flights have been canceled. fedex and u.p.s. warning some customers may experience service delays. norfolk southern has warned services may be backed. home depot saying it's seen the expected demand for winter supplies. also, generators were really popular last week. lowe's keeping a close eye on storm related inventory. both of these companies are moving into more of their march, sprint centric inventory. coned telling me it has additional contractors on stand by. moody's analytics saying it's highly unlikely this will impact gdp in a meaningful way, but it will likely dent the march jobs report. that is because this week is the week that the bls gathers its monthly data for nonfarm payroll. if that happens, you could expect later revisions, but this is where we could see this turn

up in the data. guys? >> okay. thank you. >> all right. federal open market committee kicking off its march meeting today. it's widely expected to raise its target interest rate at the conclusion of the two-day gathering. joining us now is jim grant. it's a hundred, i think, liesman said, the probability. they're going to do it, huh? >> 101, i think. >> i think janet might do it because it's 100. she might have the wherewithal to not worry and wring hands. maybe we get a bad number in a couple weeks, but maybe she'll do it because it's a hundred. >> i think she will. i think the fed enjoys being in the consensus and being safe. >> they do, don't they. >> there's one out of consensus number that's quite interesting.

that's the inflation number that is scraped, as they say, off the worldwide web. some call it the billion prices project. what the m.i.t. people meant to do and have done is kind of disrupt the bls, the bureau of labor statistics, and to derive an inflation measure by what is posted on the worldwide web. they do this to the extent of literally millions and millions of prices. the reading for february came in not at two-something, which is the government's version of inflation, but 3.6, which is a post crisis high. the graph that describes the latest several readings on this billion prices thing, if it were a stock, you'd want to own it. it's going up fast. >> that's shocking. i thought you were going to say it was lower than the bls number just because you tend to get so many cheaper prices and people who are basically giving away stuff. >> well, the economists who have invented this thing say that it's supposed to lead the

government data. i think that's as much a hope as an observation. to be the 3.6 number underscores how vulnerable our fixed income securities worldwide for some sort of disruption. or today we're having a weather description. unscripted events are the spice of life, the alchemy of finance, what moves markets. so everyone is look at a two number. >> yjim, in your analysis or wht you think, i think there's two narratives. it takes a long time to change ingrained opinion. i go back to when we had hyper inflation. i always thought inflation was going to be the thing to worry about. it took years to resist the idea that it really isn't something to worry about and it's actually deflation. now i'm finally at the point

where i think we never need to worry about inflation again. takes about 20 years, i think, to ingrain something. >> if you go back to the zeitgeist around 1980 when paul volcker was being demonized as they called the fed structurally inefficient or structurally hopeless, inflation was ingrained. it was something innate in society. that was the narrative. bond yields would not stop at 15. so they said it would go to 20 and beyond. that was plainly in excess. what we don't know is whether today is an excess or not. we'll know more in 20 years. >> so the way -- this is what i think now. i think now there's so much deflation or lack of inflation that we can -- it's a big hole. before we get back, we can fill it up. there's plenty of places around the world that still need some inflation, and it's not going to be a problem right away. >> very good investors argue exactly that.

>> but i feel too sure of this. could it really spike? >> here's my call on this. we don't know the future. outdoors we don't know the future. snowflakes aren't animate. the ten year dutch sovereign bond is priced at 57, one half of 1% more or less. that's the protection you get for something really adverse. in france, le pen might win conceivably. those securities are priced similarly for some gruesome outcome of all of 90-something basis points, less than 1%. in this country, the ten year note is priced at 2.6%, which is scarcely above the government's version of inflation. so yes, the deflation story is

now 30-odd years old. we mow it to be true. it's visceral. except it's priced for it. we are priced for it collectively. there's this risk parody thing, this invention that you lever up bond and match them with stocks and you get some elevated return. this is a thing that ray dalio has pioneered. stocks and bonds are not correlated. they're anti-correlated. i think the world is set up for something benign, but oftentimes, the world is not accommodated with that hope. >> so if interest rates double, should i look at that as 100% increase or should i look at it as historically very low? >> yes, you look at that as big trouble. the government is paying an average of 1.8%. >> so even though it's still low -- >> 1.8% today.

if we're going to 5%, that's a public outlay for interest expanse that's bigger than today's defense budget. >> which is why a lot of people think even though donald trump has said he doesn't like janet yellen, thinks she's too soft on things, he'll put in somebody who will be equally reluctant to raise rates. >> so mr. cohn, the president of goldman sachs, was on another network this sunday saying that the fed is swell and that janet yellen is doing a mighty fine job. as recently as the first debate with hillary clinton, donald trump said of the stock market, a big fat ugly bubble. since then, 1.6 trillion of market cap has been added to this big fat ugly bubble. now the bubble is beautiful. the bubble is fantastic in the eyes of the administration. so i think what the administration wants is nothing more complex than to win. how do you win? lots of money. low interest rates. i think the next fed appointee is going to surprise people. >> does that upset you? >> i'm a journalist, andrew.

i don't have an opinion on these things. >> that's not true. we had you on before -- >> i was kidding. i think it's the wrong thing to do. apart from my preferences, i think what he will do, mr. trump, is appoint the second coming of, say, g. william miller, who proceeded volcker. >> does that mean you think we'll wind up in a similar position where you need a s volcker to come in? >> let's first see the whites of the eyes of a 3% inflation. i think that's one thing we're thinking about. we're seeing also there's a deceleration in the rate of growth and money. there's a deceleration in bank lending. what i think most of all is that ultra low rates mean trouble. this is the most ancient observation. go back 160 years, economists

were saying that periods of low interest rates induce temptation and facility. temptation to speculate and facility with which to do it. seven years of this. there's bound to be trouble. >> just to ask, though, prior to the election you were supportive of donald trump. were you supportive because you thought interest rates would go up under him? >> i was supportive of donald trump because i believe that he was the less horrible alternative on election day. actually, i voted for mike pence. >> okay. >> trump was on the same ticket. >> that's true too. >> jim, thank you. >> great to see you. coming up when we return, the budget office saying the president's health care plan reduces the deficit by billions, but would leave millions uninsured by 2018. we'll hear from one of the architects of obamacare after the break. "squawk box" returns in a moment. kevin, meet your father.

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welcome back to "squawk box." the congressional budget office score of the house health care bill is now out.

according to the cbo, the plan would reduce the deficit by billions but leave mid-to-latll uninsured. for more, let's bring in max baucus, former u.s. senator from montana. thank you for joining us this morning. >> you bet. thank you very much. >> so i imagine you're unhappy about this plan. the question is what would be the right plan, and if we leave it the way it is, what would happen? >> i think cbo is by and large accurate. a lot of people will become uninsured. in addition to that, a lot of people are going to get hurt because they won't have health insurance. add to that, there's a big transfer of income, reverse robin hood, under this bill from the poor to the wealthy. i don't think that's the right

thing to do. the answer is you got to slow down a little bit. i had a sign in my office which said -- had four rules. number one, remember the people you serve. number two, do it now. number three, do it right the first time. and four, make it fun. i think the republican plan is just too rushed. it was devised in secret. it's not rocket science here. you have to work together with groups as we did back when we wrote the bill almost ten years ago. all the major groups came together. they agreed to the bill we proposed. the groups are not with the house republican plan. republicans should just slow down and figure out a better way to solve some of the real legitimate problems of obamacare. >> let's talk about what those problems are, recognizing that what was put in place to some degree did not work. >> and was rushed and was not bipartisan. you violated every rule that you just went over with the original way that obamacare was done,

senator. that's why we're in this soup right now. and it was a brilliant move. >> i take issue with what you just said. our bill was not rushed through at all. we spent two years on it. >> we didn't know what was in it until we passed it. you didn't have one republican vote for it. you had to bribe people in nebraska. >> no, no, no. >> ted kennedy's state, you lost that seat because people were so disgusted with the process. >> no, no, no. i don't agree with that at all. it's worked pretty well. it's not perfect. >> poison the atmosphere of politics in the united states. >> well, let me address that. when we started out working on the bill, it was totally bipartisan. i was chairman of the committee. chuck grassley, the ranking member, we worked for almost two years, the whole committee, trying to figure out health care in america on a bipartisan basis. it worked really well, cooperate i have, trying to put this thing

together. then what happened? unfortunately, the republicans decided to make this very political. they poisoned the well by just demonizing it. that's when it became political. they didn't like president obama. they didn't like the health care approach that would be more inclusive and more encompassing. they demonized it, and it helped them win some elections. they were not interested in solving the problem. they're interested in winning politically. >> i'm interested in solving the problem. rather than relitigating the past, what i would love to understand is what you think needs to happen now. >> they have got to sit down, the republicans, because they're in charge. they're the majority. and find some democrats they can work with. because there are a lot of democrats who want this bill to be better. people generally want to help their constituents back in their home states. that's legitimately and honestly what they want to do most. so sit down, find some democrats, and then listen to each other. look at where the current aca is

most efficient. look to where it's really good. whatever you do, you don't want to have more people uninsured. you don't want to hurt people. >> ambassador, is there a way to improve the plan and make it cost less? given that this has now been scored at saving $337 billion over the next ten years. as you know, the president would like to save a trillion dollars because of some of the other tax cuts he would like to pursue in the future. >> well, it gets a bit technical, but there are provisions which i think are too rigid, cost too much money. to be honest, some of the form lairs in the plan are too lijd. they can be cut back. i think some of the provisions, the requirements on health insurance companies are a little too rigid. they could be cut back. there's a list there. but you have to look at the list. reasonably, that is, keep an open mind, both sides, as you're starting to cut back. >> but there's nothing specific that you look at the plan having

written it and drafted it yourself where you say, i wish we had done this part differently and this is what i would do now. >> well, individual mandate, i think, can be turned around. get people who do not -- the so-called young invincibles to buy health care, not a penalty for not getting health care. i think that's a change that we should look at. >> yoe receivjoseph, what were ? >> no, no, go ahead. >> i think the big issue, of course, in all of this is how you're going to pay for it. given where we are in this country right now and given the way this country has voted, whether they're actually prepared to pay for this. >> that's a good question. when we wrote the bill, aca in 2010, it was budget neutral. it didn't cost one thin time. it actually cost a trillion dollars over ten years, but it

was all paid for with fees that we've been discussing. the groups agreed to the fees. pharma agreed to the fees, hospitals did. they all agreed to it. why? because they'd be getting -- finding more people who have more health insurance. with greater coverage, those organizations felt that it made sense for them to, okay, pay for fees because they'd be making it up by providing more health care services to people because more people would be insured. more under medicaid and more in the individual market. it was all paid for. what happened, to be honest about it, the last couple years the republicans in the house started chipping away at it. chipping away at aca, cutting back on some of the appropriations that went to make the program work. that caused insurance premiums to go up. >> okay. ambassador, we have to leave it there. given that we've been talking about snow all day and you're in one of my favorite places, how is the snow at big sky right now? >> snow is terrific. in fact, a little bit of rain

down in the lower slopes, that is in the valleys. a lot of snow up above. it is good skiing this year. >> for some of our audience, i should ask how is the snow at the yellowstone club, right? >> yellowstone club, big sky, it's all the same. it's great. we have more miles of skiing here at yellowstone club and big sky than any other place in the country. >> fair enough. thank you, sir. great to see you. >> thanks. bye. when we return, we have stocks to watch today. plus, winter storm stella giving the northeast the blues. the latest forecast and snow amounts straight ahead. in the meantime, take a look at the futures. so far this morning, they've been under pressure for much of the day. just barely. dow futures still down by about 18 points. s&p futures off by two. the nasdaq down by four. "squawk box" will be right back. finally. 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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let's take a look at some stocks to watch this morning. dow component walt diz mi upgraded to buy from neutral at googen hiem. the firm is still concerned about the outlook for disney's tv networks like espn, but it's upbeat on new content offerings and new attractions at its theme parks. citrix is exploring strategic alternatives, including a potential sale. that is according to reuters.

toma bravo is among those reportedly interested in buying the networking software company. corning was downgraded following a 43% jump that shares over the past 12 months. synopsys will join the s&p 500 before trading begins on thursday. we haven't talked about this, but i saw it. you used to work for ge too, becky, but did you see nelson peltz peltz? they're saying something's got to happen. >> something's got to happen, something's got to give. >> about immelt. a jpmorgan report came out and said even if he did take an early retirement, the stock is still overvalued. it's back below 30 again.

>> as you know, the way this go goes, you act like you're a friend. assuming everything goes well, you can still be a friend. but they invest in their numbers. you misyour numbers and you know what happens. >> right. they named this two-inch storm. >> love it. coming up, we'll continue to talk about the blizzard of 2017, which is in full force, sort of. travelers will be to pay. thousands of flights have been canceled. we have a live report from chicago. rters. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.

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a blizzard pounds the east coast. a live record on the storm's path and how it's impacting business straight ahead. it's fed week. a rate hike is on the table. we have results from cnbc's exclusive fed survey coming up. plus, happy pi day. how nasa wants you to celebrate the trillion-digit number as the final hour of "squawk box" begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box."

good morning and welcome back to "squawk box" here on cnbc. we have a shot where they've shoveled a lot of it. if you look at where it hasn't been shoveled, it's about two inches, maybe. but okay. we're at the nasdaq market site. that really is what it look like outside our window. it's possible that it snows all day and turns into something that deserves to have a name. maybe it will. maybe it will. at this point, i'm not convinced this storm needed a name. but it's called stella. we'll see. it could go to midnight tonight. >> stella. >> we played "stella blues." >> it's back though. that's significant. >> it is. do you remember a couple years ago there was the -- >> there was a bad one. >> no, a couple years ago they hiked it. >> then it didn't show up. >> al roker had to apologize. all the weathermen felt like they had blown it. that was about three or four

years ago, wasn't it. i was thinking maybe it was going to be that. first i was thinking it's going to be 24 inches. they had me convinced. 36 inches. no, no, 100 inches. but walking over here this morning, it was like no problem. >> it's not done. we'll see. >> okay, we'll see. >> it's early. >> we're up at 4:00 in the morning. other people are getting up now. >> what percentage of people you think are going to work today in new york city? >> oh, slim pickings, right? >> slim pickings. a lot of people working from home. are you going to work today? >> i'm going to work today. first of all, i'm here. this is sort of part of work. but that's right. >> i'm joe kernen. becky quick is here, andrew ross sorkin. david bailon. you brought me a marty bailon cd. >> i wanted to make sure you knew everything you needed to know. he's a solo artist. >> but you're the real bailon. >> that's correct. >> he was marty bookwald. >> that's right. this is important.

>> this is mine? >> you can go home with that. >> i bet this cost like a dollar. he saw it on the way in here. >> 12.99, joe. let's be factual here. >> there's the futures, down 28 1/2 points. s&p down about three. nasdaq down six. these were all written yesterday. the blizzard that's been hitting the northeast -- >> it says pounding, relentlessly. >> it is forcing the airlines to cancel lots and lots of flights. phil lebeau joins us now. he has more on how long it will take to get air travel back on schedule and what the ripple effects are through the country. phil, good morning. >> reporter: good morning, becky. here at o'hare, it's a relatively quiet morning. yes, there are cancellations climbing on the board here, primarily to the east coast. generally speaking, traffic is moving here at o'hare. i want to show you the flight aware misery map. this is a map of the united states and the major airports. basically, you can see even

though it's on a built it of a , over time the number of cancellations continues to climb. 5400 flights already canceled for today. over 7,000 flights have been canceled over the last couple days. let's take a live shot of bradley international airport, which essentially is hartford's airport. new york, philadelphia, boston, hartford. this is where we're seeing most of the cancellations today. over 650 flights canceled already for tomorrow. so becky, that gets to your question about how quickly will the airlines be able to reposition aircraft and get back up tomorrow. cancellations for tomorrow, however, are expected to rise significantly. as you take a look at shares over the last three months of southwest, american, jetblue, and united. the reason we're show yog ing y these, the they're the most impacted in terms of the cancellations tied in with this storm today. when you look at the airlines overall over the last year, yes, they're moving higher. i get this question a lot.

how quickly can they reposition aircraft and crews? relatively quickly. you'll see more cancellations announced for tomorrow, but you'll see the airlines start to bring flights back into the end of this week. also, the airlines have had a pretty mild winter. so how much will this impact the bottom line? this is a one-off so to speak. it's a big deal for the 400,000 being either diverted or had their flight canceled. for the airlines, they're pretty much -- this is expected if they're going to have a couple of these a winter. really, i can't remember another big one this winter. >> yeah, we've been kind of scratching our heads thinking the same thing, phil. not even in chicago. there was no snow i think in the entire month of february, right? >> reporter: correct. it's been very quiet. we have a little bit of snow today. nothing like what you're getting out east. >> too quiet, in fact. phil, thank you. >> okay. we're going to head to d.c. to talk health care and also maybe the snow there. republicans defending their health care plan today after a

new report from the congressional budget office said 14 million americans would lose medical insurance by next year under the new proposal. kayla just spoke with hhs secretary tom price. she joins us now with more. good morning. >> good morning, andrew. you've been talking about the tenants of that cbo report that came out yesterday. i want to tell you about a quick conversation i just had today with health and human services secretary tom price here in our studio. you might remember yesterday at the white house, he said he disagreed strenuously with the cbo report, but today i asked him whether he agrees with the finding in the report that the deficit would fall by $337 billion, and he said, yes, that he agrees with that and the truth is, in his words, the truth is over the long term this bill would decrease spending. although, he still does disagree with the finding that 24 million people will lose insurance. that is something he still disagrees with. but there was a politico report

overnight saying that's the white house in its own figures estimated that 26 million people would lose insurance over ten years. that's 2 million more than the cbo estimated for that time frame. i asked the secretary whether he could confirm that that was the white house's finding. he said his understanding was that, that figure was what the office of management and budget was estimating where the cbo itself would come in, using the cbo's own methodology. the head of the omb office has frequently said that the omb is using its own estimates. it's still unclear at this point what those estimates are and whether those will be released. finally, i asked secretary price, what will be discussed on a phone call he has later today with the president and the ceo of anthem, which supports the bill. they have that later this afternoon. he would only say that they will discuss how the bill will improve access to insurance. that's something the secretary has said repeatedly is the aim of this bill, but we'll see if we get anymore details from that call. it is interesting he's acknowledging the deficit narrowing portion of the cbo

report while striking down the other parts of it. >> it's interesting but that makes sense, i guess, doesn't it? you have been down there a while. i think that sort of makes sense they do it that way. i just saw something from sean spicer. i wonder if you can add anything to this, kayla. he's saying that politico report, that the white house's own internal numbers were worse than the cbo, he's saying that was the white house's estimate of what the cbo would come up with. >> right. that's what secretary price said was his understanding of that figure. >> that's totally different than the white house knowing that it's going to be even worse, you know. >> the politico report also included a statement from the white house that said exactly that. the question, joe, is that in throwing grains of salt at this report for the last couple of weeks leading up to its release, the omb director has said

repeatedly that the cbo has its projeks and the omb has its own projections and has figures it's using internally to determine how it would impact the insurance market. people are sort of trying to square the circle and figure out exactly what those numbers are. >> you know it's impossible to square a circle. you know that, right? >> i know. i think we've had this debate before, actually. >> you know that's my favorite phase, kayla. love it. >> mathematicians have been trying to do it. i think it's -- >> on pi day no less. >> i don't think you can do it. it's impossible. >> not pie eating, but pi the number. >> i bet you could circle a square though. >> you can circle a square. >> but you cannot square a circle. >> you can't create the 90-degree corners the other way. >> got that, kayla? >> i guess you could if you took scissors and chop, chop, chop. you could do it both ways. >> easily. >> a 5-year-old can cut a lot of things at home. >> thanks, kayla. we're going to let david bailon

talk. you've impressed people with that little tidbit. i hope your market analysis is up to knowing about circles and squares. >> i hope so too. >> david bailon, global head of managing investments at citibank. you're in pittsburgh, mark. did you get anything? >> just started to get a couple flakes. nothing to show for it on the ground yet, joe. >> 3 to 6, icy mix. rhymes. >> and it's named. growing up in ohio, we'd have four named storms every week. we'd run out of the alphabet. anyway, last time you were on, david, you said a significant policy that could positive, but there's also policy that might

not be as positive. that was about two months ago. where are you now? market is ahead of itself? >> no, i don't think the market is ahead of itself. if you think about it, it sort of confirmed what we were talking about. the emerging markets have come back strongly. credit spreads across the globe and in the me earthquaking markets have gotten much tighter. you've seen appreciation of assets globally that confirms the idea that the changes that have been put forth by the administration and potentially by the congress are anticipated to be enacted. the risk part of this has gone up. i think that what the health care debate sheds light on is the fact that the process of legislation in addition to being complicated really requires a different kind of leadership. the congress has been leading this and trump has been modifying it. when it comes to the tax policies, which are much more complicated, i think it's going to create a much more difficult debate and discussion. i'll give you an example of that. you think about what the impact is of taking away insurance, whether it's 5 million or 10 million or whatever number of people we're talking about. that is a direct economic impact on their wallets.

so, too, would the border tax, which could of course cause the cost of goods at walmart and every other retailer to go up considerably, especially imported goods. so there are things that are positive and things that are negative. clearly how this all works out will determine the amount of stimulus the economy gets. >> by the way, the snow just picked up behind you. >> wow. >> the bigger flakes mean rain. >> that true? that's real snow right there. >> it is. >> that's legit. >> all right. i don't know what to hope for at this point. i don't want it to be a horrible storm. we've played it up. >> my kids want to go sledding today. i have to root for snow. >> all right. like david said, there's some negative aspects. >> negative economic aspects. >> not the sledding. >> mark, would you be buying every day or not?

equities. >> joe, last time i was on, which was a few weeks ago, i said i was a little cautious, given the fact that i think perhaps the market has got an little ahead of itself relative to the enactment of some of those policies. while market friendly, they continue to look like they're going to be pushed deeper and deeper into the year and may not even be a 2017 event. i worry as i see consensus earnings now below $130 for the s&p 500. at 18 times falling earnings estimates, without the benefit of the windfall that could come from tax reform, the market is getting a little rich in here. so i'm certainly buying. i think there's sectors that look interesting. health care certainly is appealing this year. financials, particularly the asset managers and custody banks that withstand to benefit a bump from short-term interest rates. even energy, given the pullback here, which not so much for the major integrators but the downstream operators looks attractive. i think tlr thinhere are things. >> are either one of you in the camp that inflation could come back more quickly than we think?

mark? >> i'm not, joe. i still think there's enough slack both in terms of capacity and as well in the labor market, although tightening that doesn't necessarily warrant worry about hyperinflation. i think we will see the fed target be reached later this year. >> so that would be -- we don't need to worry about interest rates getting out of control either then. >> not necessarily. again, i think that some of the actual policies we're talking about can be inflationary. i think with where we are right now, that's exactly correct. >> inflationary, ten years from now or two years from now? >> take a look at what the ten year has done. you're talking about a rate that's moved from -- i know it's low, but it's not an insignificant change. 3% ten year. >> all right. thanks, mark, david. thanks for the -- >> any time. i expect you to listen to it before we get together again. >> people don't really use cds anymore. >> it's the only way i could get it to you in a legitimate way.

>> you could have found it on apple music. >> 1983. great year. all right. thank you. >> you're welcome. when we come back, the skills gap is to blame for one-third of the u.s. unemployment rate. we're going to look at how high schools across the country are tackling this problem next. plus, an update on snowmageddon. the blizzard hitting the east coast. a rundown of what's open and closed in our nation's capital. and later, market strategy with david booth. he's one of the biggest mutual fund managers. stay tuned. you're watching "squawk box" right here on cnbc.

welcome back to "squawk box." this morning, today's top corporate story, bill ackman throwing in the towel, selling his stake of valeant. david faber joins us with more. you broke the news yesterday. great to see you, david. good morning. >> well, and yrew, you follow ts story closely. certainly he's got a number of big losers through the years. one reason why his fund has not done particularly well, down 13.5%, i believe, last year. roughly 20% the year prior to

that. also quite a few winners. but this one may be the biggest amongst the losers, choosing yesterday as we reported to exit the stock, 27.2 million shares. sold at 11 in a trade that there was some demand for. of course, taking him out of valeant for good. the story goes back a while, if you recall. one of the reasons why the pershing fund he runs had such a great performance in 2014, up 40%, was because he was a partner of valeant when it went after allergan. of course, that's gotten him into at least some litigation. in fact, they actually signed a litigation cooperation agreement not too long ago. what it also did is allow him to participate in the potential

takeover of allergan. valeant did not succeed in that. he succeeded when activis came in and bought allergan at a large number. where he made his most significant mistake is in showing his continued belief in valeant's business model and rolling in many of the profits he made from the allergan investment into valeant. in march of 2015, he initiated the position when the stock was close to 200 bucks a share. in november of 2015, he increased his stake to then 10%. as you know, andrew, the wheels sort of fall off even since then. that was around 90 bucks a share. you had value act in there. you had the likes, of course, of the sequoia fund. we had valeant under attack from short sellers. we learned about this relationship with what we thought was an unaffiliated company, which was anything but

unaffiliated. its ceo mike pearson started to have health problems. he took a leave of absence. the stock continued to go down. their ability to do deals, which was so crucial to the strategy valeant had in place along with raising drug prices, not spending a lot of money on r&d and having a low tax rate all didn't work anymore. the stock, of course, continued down. ackman stepped on the board. he helped find joe papa to replace mr. pearson. now finally he said i'm done. >> dave, do we know -- clearly he was able to take fees when the fund was up back in 2014. now that he's realized this loss, do we know how under water he is and what the high water mark is in terms of his ability to take fees in the future? he clearly does have permanent capital. it's not like this fund is going out of business any time soon. >> it's not. >> there is a question about the economics of this fund for everybody who works there.

>> there are. and of course you raise the idea of the high water mark, which tells the investor i will not take the 20% of any upside until i get you back to even on your original invest pmt. the question is who pulled and who didn't. i don't know overall what it looks like for him across the entire group of funds that he manages. but one would imagine that if you're down 20 and then down 13 on top of that, you're going to have a difficult time getting back to even. as you point out, it can make it more difficult to pay some of your people as well. he does have that permanent capital, which is key. he raised it and it's there. even though -- where does it trade, in the netherlands? >> yeah, netherlands. >> david, it's joe kernen. you're familiar with my work. >> it rings a bell. >> the face is familiar but can't place the name. is that how you say it? no, this though, just thinking

about this, it almost looks -- i mean, it looks like spe shakespearean to me. it's like, really, you can do that? you can take your stake and then be part of the -- i thought everybody was going to do it. look how it turned around. that was the fatal flaw that got him into that crappy valeant investment in the first place. it's not easy to go 160 to nine or whatever it is. you got to work hard to ride something down from like 200 to single digits and hold it the entire kway. it's loom like karma. look, you're going to do it, you push the envelope, and this is what you going to get for it. it's really kind of a case study. >> i know, and he took a lot of criticism for that. you wonder whether, in fact, the investment in valeant was an attempt in some way to soften any of that criticism.

>> i like the business model. it's got nothing to do with me, you know. >> then he came back out and told everybody it was going to go up. >> you could not have picked a worse -- you got to look far and wide. that would have been the best short in history if he just messed up the ticket. >> without a doubt. but he was part of the group with valeant. remember, the litigation agreement -- sharing agreement -- cooperation agreement -- sorry, litigation management agreement they signed not that long ago is part of the this continuing litigation about that very charge that it really was insider trading. that still continues, that little gag litigation. it was given up by allergan. >> can you imagine if he gets caught on that for insider trading after all this? >> yeah, that would not be -- >> david, the most important thing we need to talk about this morning, tom farley may come after you. i thought you have to wear a blazer when you're on the floor

of the exchange there. does that rule go out the window on a snow day? >> not on a snow day, i guess. i don't know. i will put on my jacket. no the to worry. i'm going to rush back upstairs. i figured i'd do a sweater for you guys. >> they've softened that rule. it used to be women had to wear a jacket too. >> you're wearing pants, right, david? >> i'm wearing pants. i'm not doing a ted david. >> what? >> i like it casual. >> wait, ted david didn't used to wear pants? >> he had shorts on. jean shorts. >> jean shorts under the desk. >> can t >> cut offs. i can't unsee it. >> it's true. >> thanks, david. >> sure thing. >> stay warm. coming up -- well, it's hard when you're naked. it's pi day. instead of eating pizza or dessert, nasa wants you to celebrate like a scientist. details straight ahead. stay tuned. you're watching walk squawk on cnbc.

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look at that. >> i know mack is one of the two. who's the other one? snow angels in times square this morning. >> calling them squawk angels. >> stella, the snowstorm, takes over times square. >> people from places where it really snows, you can waribarel

make a snow angel. >> wait, what are they writing? >> that's a dusting. maybe it'll still happen. >> and you are laying on the ground in times square. ew. good morning, everybody. welcome back to "squawk box." oil prices are under pressure once again this morning. opec says world oil supplies continue to rise. it's raised its 2017 production forecast for non-opec producers. opec says compliance within the cartel is good. still, prices have hit another 3 1/2-month low this morning. crude oil prices down another 1.3% to 47.77. as that's happened, we've seen some additional pressure on equities futures too. if you want to take a quick look at the futures this morning, we were down by about 12 points earlier. now the dow futures are down by about 55 points below fair value. s&p futures down by six. the nasdaq down by 12. happy pi day. today marks the an july

celebration of the tr trillion-digit number. nasa wants yo uh u to celebratee a rocket scientist. they issued a series of math problems that engineering might solve using the ratio, like fining out how much of the earth would be covered by an eclipse. how far up can you go on pi? >> i don't know. i have a problem calling it a trillion-digit. >> all right. data. >> rick, what is the ppi? >> ppi, month over month, headline number up 0.3. we were looking for a number a lot smaller than an unrevised last look for january, which was 0.6. we end up with 0.3. if we look at ppix food and energy year over year, that's another area you want to pay attention to. that was up 1.8. now, if i try to find this month

over month -- all the data is coming out quite slowly. i will find it for us on one of these venues here somewhere. looks like it's up 0.3 there as well. let's put an asterisk there. what i know is headline numbers up 0.3 month over month. 2.2 on final demand year over year. there's something i can sink my teeth into. this is a relatively new channel for this number since '14. the highest number we've had was 1.8. you just jumped over that by 0.4. how is the market responding? we're seeing a response. we're seeing rates tick up about a basis point. the dollar index is solid. it's solid. now, it's still three-quarters of a percent down on the year, but that other 0.3, take the asterisk away. both month over month and -- both core and headline are up 0.3. sorry for the sporadic information as it comes out.

we thank all the agencies for getting it out at all. we know it's tough today on the east coast. feel sorry for you folks, but we're getting it here too. >> you're getting snow there too? >> pardon? >> how much snow are you getting there, rick? >> well, you know, out by me in the 'burbs, we got about 3 inches. the city got about 4, 4 1/2 inches. it's that real blowy, snowy kind. traffic really jammed up today. >> we're looking at a live shot of chicago right now. looks similar to what we have here. good luck. be safe. >> you too. thank you. >> i think the record of actual computation is 22,459, 157,718,361 fully verified digits. >> back to pi. >> now you're showing off. >> in the latest calculation, it

has added 9 trillion digits. so it is in the trillions. but we know you can go further. that broke the pi world record for both computation and fast storage. let's bring in steve liesman. he joins us from washington with more on the cnbc fed survey. my question, steve, was people that do this -- i don't know, what's the payoff? that's my problem. i know you can go forever. just finding a few more random numbers. >> what if there was a geek on a show called "squawk box" that would read out your accomplishment at some point in time? >> then it would be worth it. >> wouldn't it be worth it? if a guy like joe kernen were to sit there and say, i reached 22 trillion or whatever the number is. >> his computer had 24 hard drives, each containing six terabytes of memory, just to store what they had to do to get to the 22.5 trillion. >> maybe some day this will all

be worthwhile when we get into sequencing dna and all that fun stuff. >> andrew is an expert now on quantum computing. >> we could talk about that, or we could talk about the fed survey. what do you think? >> enjoy your day in the sun. pretty soon people are going to stop talking about this. >> it's what i came to say. i came to say my job horizon here is limited because if you look at the fed survey, the baton is passing as to sort of what's driving the bus here. fiscal policy or fed policy, take a look at the data. 49% are saying that fiscal policy is now the main driver for their growth forecast, and just 13% saying fed policy. 19% say it's both. so fiscal policy is now for the 50 respondents to the cnbc fed survey the main driver of the gdp forecast. now, getting to this issue that we were talking about earlier,

the ppi. the margin of those who disagree has increased in this survey compared to last time. 54% say no, we don't need fiscal stimulus because we're at full employment. 39% say, yes, we do, the economy is below potential. so there's a disagreement there, but it's sliding the other way as to not needing fiscal policy. what about those policies that president donald trump is proposing? pretty much we are where we were. they love deregulation. they love business tax cuts and individual tax cuts in that deskred descending order of love. they hate, hate, hate the trade policies coming. a lot of concern. what have they done on net when it comes to growth forecasts? take a look. kind of modest here but stronger. 2.4% expected for 2017. that's up 0.2 since the election, they say. then 2.6% for 2018. that is up 0.4. that's not the 1% or 2% perhaps

predicted by some of the administration, but it is higher, and we are getting to a better place when it comes to gdp from these policies. they're just worried about the inflationary implications of these fiscal policies. that's maybe why they're also, as we said in the last hour, predicting a more aggressive federal reserve. >> great. steve, thank you very much. >> enjoy the snow. >> we're trying. the white house has postponed president trump's meeting with chancellor merkel that was scheduled for today, but the fed meeting will go on as planned. diana olick has the latest on the federal government's reaction to the storm. diana? >> reporter: well, becky, not a lot of reaction because the federal government is open today, albeit on a three-hour delay. federal employees are allowed to take unscheduled leave. in fact, 75% of federal workers in this area are eligible for teleworking. so you may see a lot of that. we've seen a lot of people out this morning. we've been out a couple hours. the starbucks was open early. the krispy kreme was open earlying tha

earlying -- early, thank goodness. d.c. public schools are open today, on a two-hour delay. you do not want to be in my house this morning. really, people are getting to work, rushing in. one woman wie saw was using evey mode of transportation she could find. >> i'm meeting with students. i've got to get there. >> so you're a teacher? >> yeah. >> and you ubered to the metro? >> i'm taking the metro to the mark. >> now, we really didn't get a lot of snow here. just a couple inches. it is an icy sleet coming down, but it's all expected to be over by about noon today. the city is open. as you said, the fed meeting will go on. back to you guys. >> yeah, we're wondering the same thing here. not nearly as much as we had anticipated. oh, well. we're prepared. >> i want some cnbc me arch. i don't have a coat like that. >> i'm surprised. >> thank you, diana. the skills gap is blamed for one-third of the u.s.

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skills gap. contessa brewer joins us from wisconsin, far away from where we are, where it's snowing. i don't know. anyway, you're here to tell us -- >> there's been snow here too. >> yeah, they do get show to in wisconsin. these companies are trying to fill their own gap themselves, huh. >> yeah, so quad graphics is a massive printing company. in fact, it employs more than 22,000 people. it accounts for 7% of overall mail volume in the united states. yet, they're struggling to find skilled tradesman. they revived an apprenticeship program, then going to vocational and tech schools. then it started a youth apprenticeship program, targeting high school students. >> there's a lot of schools that you go to today, and you don't even see shop class available. we look at a lot of people who come in, who went to college,

but probably would have rather gone to a two-year college because they're good with their hands, they're good with mechanics. but they've been told to go this route. >> the high school apprentices work four hours a day at 12 bucks an hour. they get school credit. they get exposed to various trades and positions at quad graphics. then the company gets these young people in the pipeline who are hard workers, they're dedicated enough to give up after-school activities, and tech minded. then the job of the company is, of course, to keep them. they also need the buy-in desperately from the parents and high schools, not to funnel these kids into the college path. they say growth has been anemic, if we suddenly jump to 3% or 4% growth, the skills gap problem nationwide gets much, much worse, joe. >> yes. that's a tough problem. i don't know what we do with automation either and robots and everything else. we need to make a series of this, i think. maybe that's what we need to do.

maybe we can solve this together. >> exactly, yeah. >> all right. thank you. >> very cool. joe, you've talked about it before. my old sports magazine in high school, printed originally with a prototype by quad graphics. you always pay your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. and if you do have an accident, our claims centers are available to assist you 24/7.

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welcome back to "squawk box" this morning. we're joined by a special guest this morning. david booth, founder of dementional fund advisers. david booth is in austin this

morning at south by southwest. he just announced his move from ceo to exec chairman. i have heard about your company for many, many years. in fact, my sister has been telling me, if you're going to invest in passive, this is the way to do it. tell us what dimensional does, exactly. >> well, basically what we're trying to do is apply financial science. the finances of science really developed in the last 60 years. one of the ideas that came along were index funds. we think indexing is fine. but we improved on it a little bit in terms of execution. so it's a similar idea to indexing, only we execute differently. >> what does that mean, when you say you execute differently? >> well, we do some things -- to

have zero tracking error, which is what an index fund wants to have, they have to trade in a fairly mechanical way. trading mechanically isn't as good as trading with some skill. that sort of thing. >> and so is this about doing this more tax efficiently? is this about -- you're taking the index and improving upon it how? >> well, we do have tax advantage portfolios as well. but just -- i'll give you an example. suppose you have an s&p 500 index fund. the s&p adds a name today. it will add that name to the index at tonight's closing price. so if you want to have zero tracking error, you have to buy it at tonight's closing price. so in order to get that, to get -- people will guarantee you tonight's closing price at some

cost. we don't want to pay that cost. the cost then gets transferred into the index. so even though you have zero tracking error, you've paid significant trading costs. >> right. i wanted to ask you, in the great debate between active and passive investing, seth klarman wrote something i thought was interesting. he wrote, the inherent irony of the efficient market theory is that the more people believe in it and correspondingly shun active management, the more inefficient the market is like t ly to become. is that right? >> well, i've been hearing those stories for years. i mean, i've heard every excuse for active management. just go back a few years ago. every year for the last few years people are saying this is going to be a stock picker's market. that's what they always say. just hasn't happened in my

lifetime. maybe it'll happen in the next. >> you know, david, this idea that you have to be an index but kind of on steroids, be juiced up a little, not pay for things you don't think would make sense, that's something that i think you guys were about the first to do it or at least the first i know of doing that. it does seem that more people are trying to copy your method these days. what's it like? is it more competitive? is it easy to copy what you do? >> it's not easy to copy because like most fields, it's not about the ideas. it's about the execution of the ideas. in other words, sometimes people say ideas are cheap. academic ideas by themselves are interesting and helpful, but -- and they give you insights. but at the end of the day, it's about going into the marketplace and getting it into your portfolio. that's all about execution. >> when did it first kind of strike you as a thunder bolt when you were in chicago that

this was a way of doing things? this wasn't what you planned to do. >> no, this wasn't what i planned. like a lot of things, it happened somewhat by accident. we were confronted with the idea. we were going to start a small company type fund. we were the first people to treat small cap stocks as a separate asset category. and people and some leading academics said, you'll never be able to execute because trading costs will kill you alive. so we were thoughtful about, you know, how to approach -- take the basic concept of indexing but how to apply it in a little more effective way. >> david, would you ever give your money to an active manager? warren buffet suggests that you don't these days. >> yeah, well, i mean, who might argue with warren? i mean, yeah. no, the thing about active management is it is always tempting. hear the stories. they always sound good.

you have to look at the results. we've been doing the studies for over 50 years now and they pretty much always show us the same thing. the distribution of outcomes looks random before fees. after fees is worse than random. >> what is your take on the etf market? some think it is terrific. others think it is a crisis waiting to happen. >> well, i don't think it is a crisis waiting to happen. it's -- to a large degree, it is another way of doing active management. instead of buying individual stocks, you buy groups of stocks or indexes. baskets of stocks. so i think it is fine. it's -- for many people, it's an inexpensive way of getting access to the market. we don't do etfs because we

think that there's nothing better than being able to go into a mutual fund at net asset value at the end of the day, rather than paying a dealer spread. >> david, for those who don't know, booth school of business in chicago is named after you, after you gave the largest flan th -- philanthropic business out there. why chicago? >> i owe so much to the university. like a lot of people, i grew up in very modest background. great little town in kansas. lawrence, kansas. chicago, university of chicago is my transformative experience. when we started the firm, we have -- over the years, four of nobel lawyknonobel laureates wo helped us. bob murton, our resident scientist and so forth.

it's been just a tremendous amount of help. so it was time to pay back. >> david, how far -- do you take the jayhawks all the way to the final four? >> i'm taking them all the way to the final four. you know, i don't know if i feel confident about that, but i think -- >> i know. >> -- i'm pulling for them. i'd be embarrassed not to pick them and have them show up. >> bars in kansas, did you like the wheel or the hawk? a wheel guy or a hawk guy? i know lawrence a little bit. >> that's very good. that was more of a wheel guy. >> i was, too. okay. >> have fun at south by southwest. appreciate your time. come on the set here in new york next time you're in town. >> okay. love to. here in upstate new york. ( ♪ ) at corning, i test smart glass that goes all over the world. but there's no place like home. there's always something different to do like skiing in the winter, jet skiing in the summer.

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gold soared 9% in the first two months of the year. in the last ten months of those years, the metal tends to head lo

cnbc headquarters in jersey, where we find jim cramer this morning. i was talking about a couple things, ge and the jpmorgan call. even if nelson pelts got his way, is the stock overvalued at 29? >> what's happened is when you look at the cash flows, some people feel they're not as strong. when you look at what the plan is right now until we flush out more about what's going to happen to the baker hughes deal,

it is not clear. the possibility that the estimates are definitely too high. i think that's the case. but then again, jpmorgan has been a gigantic bear. i think there's a lot of people in the peltz camp that wish there had been more camp flow and, frankly, far more costs taken out. far more costs. that's not happened. >> yup. >> all right. stay safe. >> you, too. >> stella, we'll see what the final totals are. we got through it. anyway, we're here. >> thank you. >> see ya. join us tomorrow. squawk on the street is next.

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♪ cold enough to chill my bones ♪ ♪ feels like i don't know you anymore ♪ ♪ i don't understand lower manhattan, where snow totals will not be as bad as feared. although 70 million americans still face blizzard conditions today. good tuesday morning. welcome to "squawk on the street." i'm karl -- carl with david faber. a two-day fed meeting begins. oil is below 48 or ari