we have been hovering around that level and energy markets showing slight gains for oil prices 53.6. >> okay. thanks, guys. >> fun. >> pleasure. >> i think whatting out. it was fun. thanks for coming over. in the meantime, join us tomorrow. we have bill belichick. that interview. see some of that. meanwhile, "squawk on the street" joins right now. ♪ good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. the premarket is slightly weaker as the market has more north korea tensions to watch. tillerson with lavrov in russia today. now the likelihood that tax reform is contingent on another run at health care. europe is pretty steady. the ten year yield at the bottom of a five month range and oil is going for its seventh gain in a row. our road map begins with the

united airlines fallout. oscar munoz speaking out. earnings season kicks off. and delta is up after mixed earnings. and ford's mark fields will join us from the new york auto show. how is his company adjusting in the trump era? first up, the united saga enters day three and munoz apologized saying that the company made a mistake and will fix it. now speaking to abc news this morning. >> united -- >> we're not going to put law enforcement officials to take them off the airline -- >> law enforcement official will never come on one of your planes again? >> to remove a booked, paid, seating passenger, we can't do that. >> do you think he's at fault in any way? >> no. he can't be. he was a paying passenger, sitting on our seat and in our aircraft. and no one should be treated that way.

>> goes on to tell rebecca jarvis that passengers will not be removed like this again. >> right. >> he has no plans to step down. and that the initial responses did not fully convey how the company was feeling. >> no, it was law enforcement that took the people off, we were talking with earlier with andrew sorkin, that's what he should have talked more about. this statement comes out around 10:00. i get it. listen this is not exactly where you should be going. but they didn't -- oscar comes from a different environment where he was trying to get labor relations better and this is one where he backed his people. i think what's not talked about enough is what oscar's background is. i'm not being facetious in that coal doesn't complain. he was from csx. he's a railroad guy. >> yes, coal is a passenger on their trains. that's your point. it doesn't speak up typically or get thrown off. >> grain and petrol doesn't

complain. he was csxs -- a fabulous operator. >> now run by hunter harrison by the way. >> coming as a vote on whether he should stay at the company. >> hunter would never remove coal with law enforcement no matter what. but the issue has been if you look at what oscar has done over and over again, he was trying to make labor relations right. he got it completely wrong. but to the people who work there, listen, you know, i'm backing you against whatever it is. it was obviously wrong because you should talk about the customer first. but the labor relations at that company were so horrible that i think he missed the mark because of that. it's not talked about enough this was the worst run airline because of the labor. he's tone deaf, now is it because he's only dealt with coal as a passenger before? no, that's too cruel, david. i think that -- about labor. >> that's the challenge of running a commercial airline. you have trade and unions and weather and customer interface.

>> customer is always first. i think that that was missed out. i do want to point out in oscar's defense, they had the worst labor relations and it was the worst run airline and now it will get credit as the worst run airline even though it was it was law enforcement -- i think the stock will go up. >> one point about the disagree to which -- to the degree you can give your gate agents power, take a listen to this bite. >> it was a system failure. we have not provided our front line supervisors and managers and individuals with the proper tools, policies, procedures that allow them to use their common sense. they all have an incredible ability of common sense. and this issue would have been solved by that. that's on me. i have to fix that. and i think that's something that we can do. >> do you think there's a chance that booking policies change and

as a result, revenue trends change? >> in indeed there are rival planes and they're not booked, there could. but that's not the way ur -- ever since united was allowed to merge with continental and american, the competition went away. it was anal oligopoly, but you can't switch coal and move it another way. we wrecked the competition in the industry by having a series of mergers under the obama administration and you have to repeal and replace those mergers if you want competition. >> yeah, listen -- >> they can't repeal -- >> maybe the story ends here finally. i'm not sure i want to see that guy's belly anymore. >> no. 220 million views. >> this is not a stock market story. it will -- thanks, guys. show it one more time. but it is a communications story. it is a modern business story. >> yes. >> and how companies have to deal with this and of course this is a man -- mr. munoz who

has gotten an award for his communication skills not long ago from pr week, starting to seem days late finally get on board. >> pr week said we would not give him the award as of now. >> look at that regret. >> delta beat 77, 75. >> merger -- the margins are very good. delta is doing quite well. i think the stocks have been in a lull. buffett -- he's got 8% of delta. the stock went up on that and it's come back down. i think one of the things that people have to realize in this world that we're in and the executives are all over, that the wildfire -- everything is filmed. there isn't anything you do that's not filmed. i mean, i walked outside and there was a bike almost clipped me. a million views immediately. >> well, you're accustomed to that -- >> i came back from egypt with the egyptian flu.

i lost 12 straight pounds and i threw up outside the doctor on a mailbox. that was another million views. there isn't anything you do -- that's why people wear makeup. i don't take off my makeup when i leave here. i get pimples. and don't forget i have international fragrances and flavors on tonight. this was not necessarily the tease but you have to look good. you know? >> well, they make all the smells for lake your hamburger at your fast food thing. fragrances. >> this is this society where everything is going to be filmed. oscar didn't know that. that was really an older guy. >> now he does. >> an older guy doesn't know that everything is filmed. younger guys -- what do you think facebook is about for heavens sake? >> let's take a right turn here, get to the new york auto show. our phil lebeau is there with ford's mark fields. good morning. >> good morning, carl. let's bring in mark fields the ceo of ford motor company.

we'll talk about lincoln and ford at the new york auto show in a bit. but we have been discussing with what happened at united airlines. as an executive, is there anything you're going back to your staff and saying we can learn from this? >> well, there's something we can learn from everybody. i think a couple of things to learn. first, treat customers with respect. because they're the ones that actually provide the ability for all of us to work. secondly is when issues arise, just be transparent, be real, be authentic. and be empathetic at the same time. >> let's talk about the new york auto show. this has always been an important show for ford overall. but particularly for lincoln. as you guys are growing sales now you're over last year's sales topped more than $110,000 continuing to grow from here. how much does the new york market drive growth and i know you introduced the new navigator. >> yeah. we're doing really well in sxhie

that -- china, and this is one of the biggest luxury markets that's why we use the new york show every year to talk about the next stage of the lincoln revival. that's why we're here talking about the new navigator. >> you have growth with lincoln. look at your profits last year. and yet, it wasn't long ago that tesla passed you up in terms of market cap. when you look at ford stock you can't make it move on your own, but there's no love at all from the investor for the old line auto stocks. as a ceo what do you do? how do you -- how do you go to the investors and say, what else can wie do for you? are you up at night thinking about this? >> well, listen, we are absolutely dedicated to creating value in the company for our shareholders. we keep reiterating, listen, we don't manage the company on a day to day basis but we create value. we're fortifying our profit

builders and growing into emerging opportunities. i think some of the things that the investors are telling us, your base been i understand that. i think we have the opportunity to dimension a little bit for them the investments that we are making in elect riffcation and mobility and what will that mean for our business going forward. we're doing that. >> do you need to do a better job in terms of how it will ultimately pay off? >> i think we have opportunities for improvement. and i think we have -- our investors really understand our strategy. i think they're looking at the costs that we're putting in. i think they're telling us, hey dimension that for us. >> a lot of people believe that for the established automakers, eventually there has to be some consolidation. that's the only thing that will drive the stock prices higher and investor enthusiasm. do you agree with that? >> i don't necessarily agree with that. i think scale that's important. you can work on projects with other automakers like we do.

but it's around the four elements, growth and we're not only growing the core business, but in the emerging mobility opportunities, with avs and things of that nature that opens more growth going forward. continuing to work on our margins. derisking our business like we're almost derisked our complete pension plan. then finally provide shareholder returns and we have provided over $3.5 billion in the last three years. >> hope that the auto market continues to at least plateau or hold up relatively strong. there's a lot of nervousness out there regarding the decline in used car prices and what it might mean for the overall retail market for new vehicles. are we a little bit too nervous here when we're looking at this? >> first off, we said about a year ago that the industry is plateauing but it's plateauing at a historically high level. when you look at consumer spending, supported by job and income growth. look at the consumer surveys even the business confidence surveys they're pretty good. i think one of the things we're

reinforcing is we are a very different business structurally now than before the last plateauing down turn. >> sub prime market worry you right now? >> actually when you look at sub prime it's not a bubble right now. the data is not telling you that in the industry. >> the headlines are. >> well, you have to get beyond the news and get into the facts. and from our standpoint, as a company, ford credit, we have been very consistent over many, many years as -- that is a percent of our financing. >> mark fields, ceo of ford motor company on a day when they'll be showing the latest navigator for a lincoln brand that continues to grow. back to you. >> good stuff, phil. busy week for you. phil lebeau. interesting to put those comments next to what toyota manager said yesterday, that some of the incentives are running at recessionary levels. >> yeah, the "usa today" said unsold new cars piling up. too many cars. discounts are draining profits,

loans are getting longer, production march is on. all reasons why the auto sells at a lower price to earnings multiples. not the industry -- or anything touches it. autozone. >> o'reilly. >> o'reilly. yeah, i feel what people have to recognize is this industry has been uniquely singled out as peak auto. it may not be the case. we thought we had peak airlines and it turned out there was better than expected. you can always get a revival but you know look it's one tough industry. a lot has to do with the idea that you didn't -- people don't get licenses until 25. and i know uber has some pr person, the pr person is gone. but uber and lyft have changed habits. >> now kkr taking a stake in lyft. we'll talk more about that and some of uber's executive departures when we come back, we'll get more on the united fallout. also, ahead, the head of the world trade organization on

president trump and the new state of global trade. look at the premarket. the s&p tech sector is down in eight straight days. that's the longest since november. we'll be back. we'll be back. this is the new new york. we are building new airports all across the state. new roads and bridges. new mass transit. new business friendly environment. new lower taxes. and new university partnerships to grow the businesses of tomorrow today. learn more at esd.ny.gov ♪ say hello to at&t's best, unlimited data deal and never pay overages again. so now the whole family can binge, surf, shop, navigate, listen, game, stream and more. all without the hassle of worrying about overages or running out of data. in fact, you'll never pay overages again.

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message from the white house on tax reform seems to be

shifting. the president says they needed to go back to health care first after black stone ceo steve schwartzman told this to kayla tausche yesterday. >> on the tax side it is being discussed. i think it will be slower because no one wants to make a mistake and have something not go forward. so they'll probably end up going back to health care because discussions in that area aren't really over. people still know that needs to happen. >> president echoed that in an interview with fox. arguing that -- essentially you need that base line if you're going to save as he put it hundreds and hundreds of millions of dollars. >> well, good luck. i mean, it was very obvious that paul ryan would make it so that it's inconceivable. i think these the guys -- this is the new trump trade which you've got to buy all the hmos that benefit severely from

obamacare. honestly, these guys are -- i didn't know the president was in a vacuum. >> you didn't know what? >> the president was in a vacuum. it took a year for obamacare with the complete mandate, complete mandate, to get it through. so i mean, this really sets an agenda -- if there is an agenda. >> listen, it's one of the stories, an interview that the president gave on another network. in which he did seem to say that they continue to negotiate on the health care bill and look for the savings there that they need in order to move to tax reform which you've got going on this morning amongst all the people who follow the possibility of this legislation. they're pushing it back. august seems to be off the table. >> oh, man. >> the idea is now late this year. >> trump -- >> you have something in '18 that perhaps would be retroactive to '17. but tax reform this summer, no way. >> q1 '18.

>> it's insane, ever since they brought up health care first, it's become -- at least you had gridlock amongs republicans and democrats and now it's republicans and republicans. the house passes no chance it will be with the senate. this is -- just forget about washington, as a form of help and hope that france and germany and asia continue to be a little bit better. italy, scandinavia. latin america. because it's not the united states to provide any sort of thing other than when it comes to deregulation and the ability to put pipelines through your home. >> so is this a turn for you on equities? >> no, i have been talking about the trump trade last night. that you have to buy gold because of north korea. that they can't get through any of the stuff that they said they they were going to do. they have to rethink their program because paul ryan is in charge. i don't i this they realize that self-styled academic and intellectual is in charge of this situation. if's the case we won't -- if that's the case, we won't look to washington. we have to look to april 27th,

the debt ceiling somehow they get through the debt creeling. >> i think it's seen as likely they'll get through that -- >> i don't even know anymore. paul ryan, is he on the same page as the president? not clear. >> no, it's not clear. we keep hearing this drum beat about doing -- trying to come back to health care -- to repeal and replace of the aca. ryan's press conference last week they spent most of the time on it. >> good luck. >> now we have the president talking about it as well, so clearly that's where the effort still is. >> they have no plan! they have no plan. certainly no plan that can pass the senate. i mean, i don't know about pre-existing. >> now they're trying to change the lingo from border adjustment to import tax. >> they should call it the national sales tax on the poor and lower middle because that's what it is. a national salespeople on the people who voted for trump. >> but the word doesn't like the -- the quote is adjustment means we lose, i don't like to lose. >> national sales tax. it's regressive tax on people

who voted for -- you know, the people who can least afford it. but let's start calling things what they are here now. the trump trade is it's switched. you have to hope the international markets fortunately the industrials have so much business international where there's a lot more momentum. >> wow. okay. >> cramer's "mad dash" in a moment. we have to get to some big calls on hp, on hog, on what mike jackson said about tesla's valuation when we continue. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

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the stock was down, the day after going up a lot. when they were gone after. >> what you taught me is the new era of activism, there's something to fall off on. they don't go after target that's can lose lose. and amazon was interested in whole foods, maybe kroger is still interested. i don't know. because if nobody took action or if mackie didn't want any action, i don't know why you necessarily will get to put it in play. but obviously, i think that there were footsteps. others thought about it. maybe jana knew there were footsteps so therefore it's likely if you get involved you can fix it or flip it. i don't know if mackie wants to flip it and he doesn't think there's anything to fix. >> there's reports that amazon had some interest last fall. >> yeah. >> which is what you're kind of referring to. does that make sense to you? >> you know what, i think amazon

is trying to figure out a strategy. remember amazon is doing a strategy for all things. do we do brick and mortar? if you look at wall street's news they're going to give you a discount if you go there on a million items in june, that's threatening to amazon. amazon is not going to rest easily. they may need a brick and mortar alternative. they're serious about using the heft to give you a discount that would be through amazon if you pick it up. so that makes it so, geez, amazon has to defend its flank. but is whole foods the way to do it with 400-plus stores not clear. amazon can put up a thousand stores tomorrow if they wanted to. >> yes, they could. we'll keep an eye on both of the shares. of course, amazon, whole foods, got a lot of activism related stuff. whether it's ppg responding and elliott getting involved or bhp billiton and elliott we'll try to cover it all when we get the opening bell in a few minutes from now.

say carl, we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab. you are the most fearsome warriors on the planet. well, not you roman. you just missed the cut. [ hip hop music playing ] yeah, missed my ass. why are you always yelling? rated pg-13. experience it in imax.

you're watching cnbc's "squawk on the street."

the opening bell in 90 seconds. a busy morning as basically on the eve of earnings season. a lot of banks coming out tomorrow. in the meantime, active analyst environment i would argue, jim. >> yes. >> we have covered some of the calls. hp is going to get some attention as pc shipments though positive for the first time in five years. >> this is a very big story, i'm glad you mentioned it. one of the reasons you're seeing the semiconductors do well is that no one really thought that the pc market would be anything other than moribund. it goes from the sell to the hold and they also say prints -- this stock is very cheap if all the things are happening. and i think they are happening. look, i've got to tell you that there was -- [ indiscernible ]. it's working. it's just not going down. don't give up on intel here, people. intel could be a real winner. >> that comes a day after the semis violate the 50 day for the first time this year.

>> oh. >> got some news on micron. >> people are backing that one. i think what happened yesterday, the dialogues semi, lost that business. and qualcomm also. [ opening bell ] >> there's the opening bell. at the s&p at the bottom of your screen at the big board it's netshoes ringing the bell in celebration of their ipo at the nasdaq discovery families. my little pony celebrating the premiere of their seventh season this weekend. >> all right. >> blackberry will be one to watch. >> geez. >> wins an arbitration case with qualcomm on overpaid royalties. its equivalent -- it's equivalent to the fifth of their market cap. >> yeah. it's a sum of the parts situation. qualcomm by the quay, just so we understand, that's a binding arbitration. qualcomm entered into it and

there's not like there's an appeal. and as fay become more of an intellectual property company gets interesting. qualcomm, i don't know. you have blackberry, you have apple. you've got the chinese, got the koreans. david, is there anyone we're still waiting for that's having a dispute with qualcomm that we don't know? >> that we don't know about, i don't know. there may be some in the wings but i don't think so. >> really? >> they're taking on all comers it would seem. >> they were making so much money. i guess if people are viewing this as an excess profits story. >> the stock was -- i think it did end down yesterday, this after qualcomm responded to the lawsuit from apple that was received late in january of course. apple also suing them in china and the uk as you say. they have got the fair trade competition bureau in korea after them. the ftc here in the united states. they have got a multifront war at qualcomm. how do you approach the stock?

you like the nxpi deal. >> yeah. >> 110 bucks a share. some say they're getting it cheap. it's moving through approvals though it has a way to close. there's not a lot of concerns it won't close. but the fundamentals of qualcomm and all this litigation, does it concern you? >> no, it's a law firm that makes intellectual property. this is really kind of -- i think that it's just a surprise. i mean, they are a pariah. but david, i thought that you should analogize for me, syngenta. the organization said yes. >> said yes to chemchina's purchase of syngenta. then you have monsanto out there waiting for the approvals and you have this close to fruition. now dupont and their agricultural businesses get

together. it's going to be quite a reordering. >> yeah. >> guys, united shares are uno higher than they were -- are now higher than they were prior to the pr disaster. >> amazing because it comes at a a time that people are surprised. i looked at sdel that -- delta note and people didn't expect much. the reason people didn't expect much just so you know, there's so much worry about foreign travel from the middle east and whether that has hurt the airlines. it looks like judging from delta, not that badly. but people ratcheted down expectations. united continental obviously worst in show in this group. but i do think that the delta news was all -- people have to go over the lines to realize how low the expectations were. these -- this group is almost valued as low as the autos. and you get 77 versus 75 again. first quarter there talking about margins going one to plus

three. that's a very nice surprise and delta is too cheap here. >> it's time to talk some activism because we have incremental news involving various efforts. let's start with gm. it was -- what was it a couple of weeks ago we heard -- the green light in their proposal to have two classes of stock and it was roundly rejected because the board met with green light and they're evaluating the proposal and they were concerned on a number of fronts including potential down grades of the credit rating. it's funny on day one of that i made the observation that green light typically doesn't engage in proxy fights. well, they're proving me wrong here. nominating three members to gm's board. leo hindry. he's still out there? >> wow, i thought he was more of a tv guest. >> leo. nice to hear that you're still around. great. >> yeah. >> sethi and thorndike, jr.

housatonics partner founder. green light goes after gm about this particular issue which is one of the crucial ones. because s&p and moody's came out and said we might downgrade you if you were to go down -- around and do this. separate, you know, into the dividend related security and one that was based on the growth of the company. if you're a board, how do you actually go about deciding how to allocate capital or management for that part and then a board in terms of how you decide about your classes. but green light says, listen, as part of the effort, they claimed it would lead to the credit rating. green light believes they relied on faulty information. after green light sent a term sheet, gm made numerous detrimental changes to the term sheet which it misrepresented as being the green light plan in the discussing with the rating agencies. see, this is continuing to rage on. >> wow. >> nominating -- >> well, if they had some customers buying cars it would

be terrific for gm stock. >> that would help, i guess. >> speaking of cars, tesla under pressure according to reports to add more board members who have less of a tie to elon musk. meanwhile, mike jackson speaking yesterday about valuation said it's inexplicable it's either going to work or it will be one of the biggest ponzi schemes of all time. granted, mike is a dealer and the dealer network arguably doesn't like what tesla is trying to do. >> well, i thought -- i mean, there isn't anyone who doesn't think it's overvalued on traditional metrics. if you value it like a semi-conductor company or like a cloud company and a technology company you are always allowed a pass. technology companies don't have to show earnings for years and that's how they're positioning the company. whether corporate governance -- solarcity, that's something that the chinese have cratered but arguably tesla -- i don't want

to call it a ponzi scheme. it's not a ponzi scheme. i mean, they're making cars. sold 500,000 cars -- >> i don't know why you'd use that word. they're not selling to the next guy to pay them -- to pay for the last guy. >> no. if i can jump in line for my 1 24 thousand dollars for the model 3, that's a not me paying another guy and then taking the $1,000 -- >> they should change the word ponzi. at this point it's a madoff scheme. >> if they can make the cars, theoretically it's worth something. >> back to activism if i can, quickly. elliott connected to two different situations. one is the pressure they're trying to put on the one group to talk to ppg. this morning ppg spornresponds axon mobile. and what's the relationship between ppg and them?

nothing. we melt with -- we met with a hundred of your shareholders including representatives from elliott, but there was no communication with any shareholders prior to making it public or you making it public and rejecting ppg's initial proposal on march 9th. no communications regarding our proposal as well. they have -- can we just stop? shticking -- >> ppg needs this deal for growth. interesting that valspar sold the wood coatings business this morning and maybe that valspar sherwin williams deal will get passed. any time you get one of the deals where you have to sell something badly to get it, something that's -- that's how constellation brands was formed. that's how coors moved up a lot because they got that coors

miller. watch axalta. >> right. people liked even that fmc deal remember -- >> dupont, a sweetheart deal. get the crop protection. look at fmc. philadelphia's only fmc. they won't be picked in the fourth round in the eagles like i will. but that's okay. >> to finish up here, bhp remember they came after them and they respond to elliott's proposals. don't have time to go through a lot of it, but basically remember elliott wants them to incorporate in the uk. collapse the structure from being australia and uk. but then benefit as an australian tax resident. bhp says the costs outweighs savings. no other material benefits to doing that. they said there would be a wastage, this is their word. i don't think that's a word, but i'll check. these are the credits they get in australia for the corporate taxes they pay and as a shareholder you can benefit from getting your dividend tax free

or tax advantaged. >> weren't you surprised? paul poolman is willing to chance the unilever, what's with bhp? >> they say -- it wouldn't benefit them. it's not -- it's costly. and there's no material benefits. they would waste the tax benefits they get in australia. this one is going to go on for a while. i don't think it's going anywhere. elliott seems to mount attacks. you have a path. >> how about -- >> sometimes they mount attacks that it's unclear -- >> is iconic, did they have a path there? >> but they won't win. >> any charitable trust -- my charitable trust owns iconic. yesterday you saw morgan brennan after 3-d printing for industrial they have to do a lot of stuff to ramp up to keep that multiple price earnings multiple. >> j&j and intel leading the dow. pepsi within a dime of an all

time high. >> pepsi is a positive note. like looking for optionality maybe they're mergers. that's not been going their way. as ceo, they have got organic growth. they're the last -- i saw pinnacle foods recommendation yesterday. that says pinnacle foods, you have to get in it. it's got minus 1% growth. that's not growth. that's like negative yardage, what does that mean? that means you lost yardage. negative yardage. >> you miss the nfl, don't you? >> i miss it big. that's why i'm picking the fourth round for the philadelphia eagles on saturday. >> within a month of the draft. >> yes. >> the dow is down 20. let's get to bob pisani. >> good morning, carl. 2-1 declining to stocks and that dollar to yen thing is a real problem. europe mostly on the upside. let's look at the sectors here. this is the reflation trade off again here. banks just went positive. they were down at the open. industrials materials have been down. energy finally went positive.

53 -- solidly over 53 for oil. not a lot of gains for energy stocks today. gold up again. new record for the year for gold. i want to show you iron ore, steel stocks. iron ore prices tumbled around the world. they were down 8% in china overnight. you can see the big steel and iron ore stocks to the down side. look at iron ore prices they're down 25% in the last month. there's been some talk demand in china may be lower. but remember, iron ore went up rather dramatically six or seven months ago around the trump election. maybe on global optimism, maybe for other reasons. you can see it's been trending downwards, it was down notably overnight. the other issue, the other talk is bank earnings starting. we have been talking about it all week. there are a number of problems with banks out there. interest rates are up year over year that's good, but they have been trending down and that's been a major problem. credit issues are out there, auto loan issues, a few other things maybe with sub prime

credit cards that are starting to float around. the most important thing is that loan growth has been generally anemic overall. look at what i'm talking about. we were anticipating much healthier loan growth year over year. total loan growth up 0.4%. these are susquehanna's numbers. commercial industrial, very important number, only up 0.1%. essentially flat year over year the economy is supposed to be getting better. this is a big mystery to a lot of people. why aren't we get better loan growth overall? i was told yesterday, for some reason that corporate america is sitting on the hands. the optimism we hear from the bank executives has not find its way into the corporate behavior. this is the big topic here. that's why the comments from the ceos are going to be really critical in the next couple weeks for determining exactly what's going on. they're going to be asked about this very aggressively on the corporate calls. there's the bank index, the kbe. the bank etf. down about 10% in the last month

but it's up about 20% since november. remember, down recently, but up in the last six months. look at the big banks since their highs. most are off 6, 7, 8%. and fifth third, some of the regional ones are on the downside. david, i mentioned the ipo here, netshoes. $8.3 million. $18. still waiting for that, no indications. right now the dow is down 30 points. david? >> all right. thank you, bob. i want to quickly hit another contested deal out there. there aren't that many deals out there. money gram, i know the market cap is not large but the battle is an interesting one. it pits the jack ma controlled servi services giant in china and the fight here is not just about price, they have a far higher offer out there. by the way, that is expected to

soon be deemed superior. that will force ant to come back with a higher bid. that's going to happen here. hence why money gram's stock is trading well above that bid from eu euro net. and then the own press release, attacking euro net and talked about the fact that in fact while it may style itself as a u.s. company, 85% of the assets are outside the u.s. only 150 employees here in the united states. nearly all of the data centers are located outside the u.s. and it derives 38% of the revenue from the u.s. why? in the current environment you might imagine the chinese company coming in. perhaps would be disadvantaged. and so they are firing back. but the key here may very well be the national security review that euro net has urged take place for the potential purchase of money gram. if they want to buy it, they're going to buy it.

they're in a position to pay more. they'll go higher once this is deemed superior as i said it will likely be in the not too distant future. and the question becomes, well, is there really a national security risk? euro net would say, there is. they do a lot of business for u.s. service people for example. they contract them. they can know where they're moving to. as a result of where they're sending money back and forth from. more to come on this but certainly wanted to get that out there. as this is an interesting deal. size, not that much. well known name though. but certainly involving one very important player. >> i never thought of that national security angle at all. soldiers. >> well, they have done their part in trying to raise that at euro net. let's get to fixed income. rick santelli. >> thanks, david. you know, everybody of course is talking about how treasuries are trading at the bottom of their

four month range. how you have things like the vix popping a bit. and the latter, i'm not a huge fan of vix being a directional. but it's a bit lagging indicator, but it's a quick one. i do like option volatile that it is premised on. it's very important, because low volatility is one of the fundamentals of the moves since the election, pay attention. so you see the two day. we're holding at 228, 229 area. open it up to november 1 that was the last time we were at this zone. open it up to december of 2015, we settle that year at 227. it took us 11 months of 2016 to overtake that level. and now we're testing it. huge level. let's look at tens minus twos. everybody is talking about the yield curve being flat they're right. let's start off with a five year chart. it's 180 basis points flatter than it was just five or six years ago. but when you really tighten it up it takes on a different

presence of course with regard to the year to date. hovering around 106 basis points and it's tie and correlated to how banks trade. the steeper the better they get more spread. it's slow growth on the long end mostly of late. that's keeping that spread the way it's poised in that chart. now, let's look at the foreign exchange markets. we always talk about things in terms of the dollar. so let's continue. dollar yen. if you're a little island with not a lot of natural resources you don't have an export economy this is not the chart you hope for. if you're crowder orred a day. look at the euro/yen chart, they're at disadvantage going back to november. back to you. >> thank you very much. a lot more on united including the ceo's message and then two auto industry heavyweights former chrysler ceo bob nardelli and bob lutz from gm.

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some modest losses, the dow is down 28. s&p down 3. ten year though, yield below 23 and gold, 1281. the highest since election week. we'll get stock trading with jim in a minute. in a minute.

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it's time for cramer and "stop trading." >> only a matter of time that someone said lulu came down enough, time to buy it. there's a change of seasons, exposes merchandise, leadership they can fix that. chasing the color, they can fix that. what's really interesting about this, this is one of the patterns we have seen in this market. in the last -- well, last few months which is there's forgiveness. why did we sell lulu, what was that about? people are backing lulu. i think that this quarter is going to finish stronger. therefore, you have a trade. but remember it is apparel and apparel is fickle. too fickle for me. >> now, are you going to continue your tradition of leaving us guessing about what comes on -- >> no no.

that was very controversial. i think they were like the ones. no we have iff tonight. i think that this is very -- international flavors and fragrance. this is one of the most exciting stories in the world. they made a smell for me last time when i saw them. they made it artificial dollar bills. which i think is right. i'm just the dollar sign represented by a man. that's pretty much it. now that i have reached this age, like there's nothing else cooking. so i just spray that stuff on when i go out. and it's a chick magnet. am i allowed to say that anymore? no. i take that back. no. that takes the heat off of oscar. right? took the heat off of oscar. >> and spicer. >> there you go. you're a chick magnet who smells like money. >> yes. yes. coal, you had me david at shtickling. >> see you tonight on "mad money." more on the timing for tax reform, the implications for the

markets when "squawk on the street" returns. street" returns.

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welcome back to "squawk on the street." i'm carl quintanilla with melissa lee and david faber. sara remains off. dynamic remains losses for the markets in the early going. some depressed bond yields below 2.3. vix within earshot of 16 for the first time really since mid november. road map begins with united's pr problem and oscar munoz is apologizing for that passenger removal incident. says it will never happen again. >> the markets are largely flat as earnings season and geopoliticals are keeping investors on edge. we'll break down safe havens for your portfolio. and the investors are steering clear of stocks, we'll take you live to the new york auto show and hear from the executives. united airlines is still trying to cope with the airline fallout after they forcibly dragged a passenger off the plane last weekend. oscar munoz offered a new

apology and spoke to abc news. >> as i think of our business and our people, the first thing i think is important to say is to apologize to dr. dao, his family, the passengers on that flight. our customers. our employees. that is not who our family at united is. and you saw a set of -- saw us at a bad moment and this will never happen again on a united airlines flight. that's my premise and my promise. >> jeff sonnenfeld joins us from the yale school of management. jeff, always good to have you. good morning. >> thanks, carl. good to be with you. >> we should point out stock is above where it was prior to this whole debacle. but we don't know what traffic patterns are going to be like in the coming weeks. how are they handling this at this point? >> better than yesterday. but it still is disappointing.

as he just said on abc, the segment that you played from that interview this morning was the first thing that should be said, why wasn't that the first thing he said? he didn't say that. you know, what the top trending comment on this on twitter of course still out there now is not enough seating, prepare for a beating. the way that the viral video has gone anywhere, the number of e-mails i swear to you that i gotten from china, it's a major issue. look at others in transportation that had the opposite instincts like david kneelman who had a problem when they had the valentine's day problem with bad weather. a lot of planes didn't take off and on the runways for a long time at jetway. he apologized on 17 different shows from early morning to evening. took a look at repairs. he didn't look to scapegoat. he didn't blame the victims.

and passenger bill rice set a high water mark, his instincts were all wrong, carl. his instincts wither to protect the bullies and not correct the bullies. >> you know, jeff, what's interesting that this story has taken such dramatic turns since the video was released. i mean, there were huge arcs and now the stock is back above the levels before the video was released. at this point, you might think that united's in the clear, but what else do they have to do make sure they're in the clear? how important are the say next 24 hours for oscar munoz? >> just as we see munoz stepped in off the board because of public relations and operational failures that the company has recently suffered before under the ceo jeff smiez act with operational failures in the continental merger. they had a spotlight on them. it's something new that's not discussed anywhere and that is they have a new service. the polaris international

service where they're offering for business class seated three abreast. that's all the advertising. you see it three abreast, but they have only one plane that offers that so everyone who buys that is seated eight abreast. that kind of stuff, you have these kind of -- it's going to look like bait and switch. but they have credibility issues in one place, it's going to spill over into credibility problems elsewhere as they had under smizak. the instincts, the come pax wasn't there and they're wondering if munoz had a heart transplant last year doesn't have a heart. >> what else does munoz have to do while falling on the sword, does he have to for instance address the chinese market directly since there are threats left and right of boycotts mainly from the founder of jd.com? >> you know, you're asking the right question and i diverted

only just to point out that going into the chinese market, they have misrepresentation in the service they're offering which is this polaris international, they're offering three seat abreast, but it's really eight seat abreast. they have to show this isn't going to happen again. that's what david neilman did with jetblue. we don't know what the fixes are, other than we're not using police authority in order to remove people. what is the process for overbooking and for bumping people? and the language of react come discrimination. he said he's ashamed. he said this morning, yesterday, he said he was protecting his employees. his employees felt the shame yesterday he feels today. he has to address his employees. he had to address the customers and say this shouldn't have happened. look at how wells fargo handled things earlier this week as they came out with a candid report, what the leadership did wrong.

we don't see that contrition here. what does he think he did wrong and how is he not going to do it again? >> well, it is early. i mean, comparing it to a fraud scope of wells fargo, come on, jeffrey. that's little far. >> compare it to david neilman at jetblue. general contrition. >> he was with us yesterday, taking his new company azul company public. successfully so. takeaways here, the world we live in, everybody has a camera. social media obviously, facebook, snap, whatever you call it. are these guys who run these companies, are boards are they aware of the power of image at this point? and the damage to a brand that can take place given the ability to communicate in a way that really not that long ago was simply not something that was used quite as much? >> david, i think our generation of leaders is still waking up to the viral age. it's a great question. it's that if you don't know the

facts, then don't walk out there and state, if munoz maybe misspoke because he didn't realize this passenger was not in fact a disruptive passenger. he shouldn't have said that. if he did know it, he shouldn't lie. but either way he was either misinformed in the viral age or he lied. you have to get the facts. a simple apology -- i'll tell you one more thing. why is he on abc instead of at dr. dao's hospital room, the victim, this pulmonologist, he's in chicago where munoz is, he should be over there apologizing personally. it would make a big statement. >> munoz said he didn't meet with him yet, but expressed interest in doing so. chris christie has a letter to elaine chao, transportation secretary, asking her in the context of the president's deregulation push to suspend the practice of overbooking until a more thorough review can be done. does that hold any peril for the industry?

>> well, you know, i think there is a pretty high cancellation rate. i think the idea of overbooking as passengers we all hate. i don't know that has to be eliminated. i think they can continue to do it, but be more generous in how they deal with people. they certainly can be a lot more generous, they say there's a cap of $1,200. there's no cap. they can pay the people as much as they want. there should be -- they should be a lot more generous in dealing with the overbooking situation. they should never jerk a person out of their seats. >> a lesson for every airline. see you soon. >> they should listen to the song "i'm sorry" by brenda lee. coming up, we go live to the new york auto show.

ian robertson joins us next. look at the markets right now. we'll talk best trades ahead of big bank earnings tomorrow. "squawk on the street" will be back after a quick break. hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade

welcome back to "squawk on the street." let's send it over to our phil lebeau at the new york auto show with a special guest. >> hello, let me bring in ian

robertson from the gm board. we'll talk a number of topics including manufacture in the u.s. but i have to start with the 5 series which you guys are giving us the latest version to look at here at the auto show. >> absolutely. this is the plug-in version. the latest range, seeing a lot of sales growing all around the world. last year we did over 60,000 electric cars. this year $100,000. the 5 series is going to be a big part of it. i'm delighted that it will get into the multioccupancy lanes in california. >> i know you and others continue to talk about the demand for hybrids. electrification out there. but the broader market looks at it and says, i'm not -- is it really growing that much? what's your perspective there? >> you know, it's growing, phil, that the government and the local incentives are making a big pace. norway's the example we always use. well over 25% of the total market is now electrified.

i know the norwegian made the bus lanes available, putting the free charging in. and then you reach the critical demand level that people understand its. imagine if the u.s. government had done in the market. you'd have 3 or 4 million electric cars a year. it will come. i'm sure that more and more of this is going to happen around the world. >> a number of the states are pulling back their incentives when its comes to the electric vehicles. you have a plant in spartanburg. your largest in the world. you're expanding that plant. how much of that is in response to the change in political climate here in the u.s. and how much of that is this is the smartest move for what your global footprint is? >> i think it's a very clear strategic position for us. by the way, you know, we made that confirmation about a year

back. so it's nothing to do with what might have happened in recent months. the spartanburg facility, our biggest plant we did 411,000 cars there last year. large part of that is exports. $10.5 billion worth. i saw you at the port recently seeing all the cars being loaded. we'll take it to 450,000 plus. bring another new model the ex 7. so the investment in spartanburg will be approaching somewhere around the $8 billion since we actually started there. and there's a big highlight coming up. we have been there over 25 years now. this is a bit strategic move for us. it's something we continue to do. >> if the trade policy changes and relative to vehicles being imported here, would that prompt you as the board to say, okay, maybe we need to look at another manufacturing plant in the u.s.? >> you know, what we have with our plants is they're very flexible. so if something changes that we have to look at something, then the plant could make other

products as well. but i firmly believe and i think this is a situation we see all around the world that automotive plants need to be export oriented. because you get the economies of scale. then you can enable the plants to look at overseas markets. makes them more flexible and efficient and ultimately it's good for the country too. >> you released global sales for bmw overnight. record first quarter. for the year, where's the greatest growth for you coming right now? is it continuing to be china and asia or are we looking at europe finally coming out of the weakness that we saw over the last five years? >> you know, europe has been good in the first quarter, in the southern european countries, still what i call recovery mode. in the north it's a bit more stable. the uk is good, but china is definitely back on a growth trail. you know, we have over 10% growth there. we need 520,000 cars in china last year. i can see that rising up during the year. really, really at a highlight

for me was the march number where we did over a quarter of a million sales in a month. for me, that's just a few years ago would have been almost an impossible dream. >> ian robertson from bmw. see you over in shanghai in a couple of days? >> you will. >> a long flight in front of us. >> phil lebeau at the new york auto show. americans are more upbeat about the stock market than in a decade. steve leishman has exclusive results. the dow is down, a narrow range to start this morning. we're back in a minute. in a mi.

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where's jack? he's on holiday. what do you need? i need the temperature for pipe five. ask the new guy. the new guy? jack trained him. jack's guidance would be to maintain the temperature at negative 160 degrees celsius. that doesn't sound like jack. actually, jack would say, hey mate, just cool it to minus 160 and we're set. good on ya. oh yeah. that's jack.

markets watching the fragile geopolitical balance closely as well as keeping an eye on the white house' domestic policies. the earnings season about to get under way. some big banks report tomorrow. guys, good morning to you both. brian, we talked a lot with cramer this morning about this notion that to get tax reform you have to go back to health care. does that market turn in that so-called trump trade? >> i think it has on a near term

basis. remember when markets are led by momentum and not fundamentals, you're going to have this back and forth short term moves in either direction. most of what we saw in april. so at the end of the day, the proof is in the pudding and the president and congress have a lot of work to do. but there's still -- remember, this is a president that has been in office less than 100 days and we're a marketplace and a media that wants things right away. we need nor patience and perspective to see how things roll out. that makes things worse though, because you're talking about the financial sector up 18% since the election. a market that's up double digits since the election. so that's why you're seeing a lot more of this wishy-washy trading on wall street. >> on top of that, we've got the vix at the highest level for this year. we've got the gold the highest level since november 10th. we've got the yen the highest level against the dollar since november 17th.

alexandra, we might be impatient in getting things done, but the markets are positioning themselves already for volatility ahead. >> absolutely. you know, i'm sort of struck by this we need to go back and get health care done. the market is looking and waiting for what's going to get jobs created, what's going to get business going. that's the tax reform plan. in terms of, you know, where we are in terms of volatility, what i find very interesting is where credit spreads are right now. and the yield curve flattening and flattening. if it gets to the certain point then you have the fed uncertain about what they can do. >> yeah. that uncertainty seems, brian, to have spread to europe and we are seeing the spreads between french bonds and bunds at the highest levels. they're pricing in the higher in the europe. what are you telling clients? >> well, we're telling clients to stick with the two primary themes in investing which are number one, value investing because value investing is probably the truest of all

equity strategies. number two, melissa, dividend growth. dividend growth outperforms in the raising rate environment. at the end of the day you're talking about two very high quality fundamental strategies that we think will be tremendous. not just defense, but wherewithal to kind of go through the periods of excess volatility which we think 2017 will be all about. >> we were talking during the break about mulvaney talking to john harwood today. and well known as a budget hawk who's a lost a lot of his hawkish feathers saying he's not interested in what infrastructure or tax reform would do to the deficit. how surprising is that? >> very surprising. i'm frankly confused by many of his statements going back to meals on wheels doesn't work so we have to get rid of that. it's also interesting because he made comments on social security this morning and the president said he won't touch it.

and yet at the same time, you have had talk about getting rid of the social security tax which will actually be very bad in the long term. it's very confusing and loud. >> the bell that you heard, the trade going through on netshoes. it looks like it's 1675 right now. >> brian, does europe and japan, do they like more appealing given this apparent shifting environment we're in here in the states? >> absolutely not on the europe side. you know, one of the biggest arpgmentes we continue during -- argues we continue to hear is that it's cheap. i don't know if i believe the denominator with respect to that over there. we're dealing with declining aspect with respect to growth, got negative population growth and just the geopolitical risks in europe.

we think the most strong is equities. japan had a nice move. time to take a little off the table there. but from the global perspective we continue to believe that north america has the strongest, most consistent earnings over the long term. we need to see how we get through the earnings environment in the next few quarters. >> despite germany on fire, you have pmi there 71 month high. you could -- others have argued you're looking at a political situation in which le pen does lose. >> yeah. at the end of the day how are the polls working out for everybody? right? so you have to be kind of -- you have to be careful on that. until proven otherwise, the polls are going to be wrong, so prove me wrong. europe is again from the fundamental perspective, a nice trade, thank you. congratulations. but what are we going to look at, what is europe going to look at three to five years from now? >> we have been pointing out the warning signs in the markets,

whether it's a flight to safety warning sign. at the same time, on the flip side, the argument can be made that the markets have been extremely resilient. we're a couple of percentage points away from record highs. how defensive do you want to be? how much is there a floor in this market? >> you know, it's funny because we keep going back to mixed signals and messages from the white house and so much depends on where they go from here. talking about europe, what's going to happen with border tax. so i think that i'm somewhat cautious at this point. earnings obviously were starting -- or in the midst of the season. i think that's go to really give us a story of where we're going in here. >> by the way, one last thing. on loan growth, right, year on year change, real estate, cni, consumer. is there one big explanation for that? the journal took a crack at it yesterday. >> yes. i don't know there was. i was reading the same article.

i happen to believe that loan growth particularly with small to mid sized businesses is critical to the economy. a lot of people don't realize how many employees, small and mid size and women owned businesses employ. how critical that is to the economy. >> we have to look for more data. >> all right. get more clarity most likely tomorrow. thank you, guys. sticking with stocks, the results from the economic survey are out. steve leishman has the results. hi. >> hey, melissa, thanks very much. fascinating results from our survey. 800 americans around the country. margin of error 3.5 percentage points showing a large rise in optimism about the stock market. 47% of the public believes this is a good time to invest. 38% said it's a bad time. the 47 is the best number we have had in ten years and this number among the lowest. the spread between the two among the highest that we have seen here. that 20 point spread showing mom

and pop investor are pretty bullish on stocks. i want to remind you of the overall findings. donald trump -- president trump's approval rate at a low 39%, but economic optimism at a record high, in the ten years of our survey. let's take about why stock sentiment on the surge. you see a huge change before and after the election about views on stocks. not much change in democrats. massive swing among republicans who were very negative before the election when it came to stocks. now much more positive. and some change, a meaningful among manage the independents as well. what are the best investments? the number one spot is real estate. then we had this back and forth between gold and stocks over time. gold just a little bit up within the margin of error. call them equal now. gold and stocks, 25%. stocks are the best investment followed by things like cash. a barometer of risk on risk off here. 11% saying savings account and cash.

you can read this online as well as people's views on donald trump and the economic agenda he's put out as well as what them the priorities ought to be. david? >> all right. steve, thank you. steve leishman, back at hq. when we come back, mick mulvaney, he speaks to our john harwo harwood. we'll have the highlights straight ahead. straight ahead.

i'm contessa brewer. secretary of state rex tillerson is meeting with russian foreign minister lavrov amid rising tensions between the two countries. washington and moscow have traded sharp accusations about the chemical weapons attack in syria. >> our meetings today come at an important moment in the relationship so that we can further clarify areas of common objectives, areas of common interests. even when our tactical approaches may be different.

>> republican ron estes won a special house election to replace mike pompeo who left kansas to become cia director. the margin of victory though, 52-46%, much narrower than expected. president trump tweeted out it was a great win up. melania trump is accepting an apology and $2.9 million in damage from the publisher of the daily mail newspaper for reporting rumors about her time as a model. they retracted the statement that she provided services beyond simply modeling. that is our cnbc news update. carl, back to you. >> thank you. the debate over tax reform shows no signs of cooling. our john harwood sat down with mick mulvaney and made some real news today. >> hey, carl, everybody is wondering in the wake of the failure of the repeal and replace act to -- for obamacare exactly how that's going to change the white house going forward. here's what mick mulvaney had to say with respect to tax reform.

>> here's the message across the board from the health care -- the fact that we have not been able to pass helicoptalth care . i think you will see the white house take more -- you will see a more policy assertive white house going forward. >> that's going to slow down tax reform, right? because the house had been preparing to move their bill. now they're waiting to hear from you. >> um -- that's going to slow them down. >> well, we will form late our own policies. >> we should not assume that the plan is going to resemble the house tax -- >> i think it's too early to say. >> because in the beginning of the year they assumed that you were going to sign on to their bill. now it seems like that's not happening. >> again, i think you'll see the white house have its own tax -- haven't gotten there yet. we're working still on the goals and principles looking at different modules. you can plug in this rate or this deduction or that deduction. this concept. but at the end of the process

you'll have a white house donald trump tax plan that we're going to take down to the hill and try and sell. >> will it be corporate tax reform only or individual as well? >> no, we're going to fix the tax system in this country. that means corporate, s-corporations, dealing with deductions, individuals, everything. it's a go big or go home type of attitude. >> now, we also talked about the administration's approach to the xm bank. mulvaney fought it as a house member. no more. >> we did talk about the xm bank because i was a fairly significant critic of that in my time on the house and i'm very comfortable with where we got with the export import bank. i believe i have a commitment from this president, he issed on putting people in there are who are informers in making sure they don't experience the mission creep that many of the critics have seen up. secondly he's given me and gary cohn permission to talk to other

export credit facilities around the world to see if we can lower the level of government interference in the marketplace from all sides. one of the cases -- >> but xm is going to continue to exist. >> yeah. it will continue to exist. >> now, this former member of the house freedom caucus is in the middle of the policy storm of the administration and he doesn't mind that one bit, guys. >> john, it's david. interesting to hear him on tax reform, particularly on the individual and the corporate have to go together. now the president on another network has indicated they seem to be firing away at health care reform. before they get to tax reform. did you hear the same from mulvan mulvaney? >> i think mick mulvaney is ready like most of the republicans on the house to move on to tax reform and the president has said that that was his intention as well. but it's very difficult because their base is resisting them on this. they have been expecting repeal and replace for obamacare. so i think it's going to be a

difficult dance. they're not really close to getting a bill that can pass the congress especially in the wake of that unexpectedly close kansas house race last night. the moderates are going to be very spooked about that. so i think if in fact donald trump insists on pursuing health reform first, that is going to delay everything and put in jeopardy the idea of getting either one of them done. >> mulvaney seems to have a fairly significant voice in this white house. can you figure out sort of who's taking the lead when it comes to the important economic policies? cohn, mnuchin, mulvaney, kushner, bannon, who? >> i would think on tax reform it's a combination of mnuchin, gary cohn and jared kushner. i think mick mulvaney because he's so fluent in the budget, he's very aggressive, he's a real hawk on cutting spending, his imprint is all over the budget proposal they came out with -- the skinny budget for

'18 and the big budget that will come later. i think on tax reform because he's got a lot of credibility on policy he's going to be in the room. i think those other guys are going to be more likely setting the direction. >> all right. john, thank you. john harwood in d.c. let's get to dom chu. >> we're watching the shares of time inc. you can see on the intraday chart, we have seen a dropoff in the shares. hovering near session lows. this is satisfy a reuters report -- this is after a roitders -- reuters report that says meredith had made a preliminary bid for time inc. that fell short of time's expectations. that again citing the sources fame your. and in the reporting they're talking about this idea that there's a gap in valuations. this follows edgar broncman and the investor attempts to buy it

last year. as we talk about time inc. and meredith that's the reason that the shares are moving the way they are right now. the story goes on to say that time is looking to engage still with what's happening with potential bidders. so we'll watch the time shares for sure. now off 3% on heavier relative volume for this time of the morning. we'll see what happens. we'll have that and more coming up after the break on "squawk on the street" so keep it right here on cnbc. here on cnbc.

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with earnings season right around the corner which bank stock presents the best opportunity right now? our traders will give you the picks on cnbc.com/trading-nation. more "squawk on the street" coming up. coming up.

let's get to rick santelli for this santelli exchange. >> hi, good morning, thank you. i'd like to welcome a special guest this wednesday morning. bill isaac, thank you for taking the time. of course former head of the fdic. so you know a thing about rules of the road.

representative hencerling is going to reintroduce another piece of legislation to curb the issues regarding dodd/frank. we heard the president yesterday talking about it. my guess are the two are connected. my question to you, specifically, is it possible in this politically charged environment to have good rules of the road coexist while keeping the economic traffic moving briskly, bill? >> that is very difficult, rick, as you know. it's -- the dodd/frank law in my opinion is one of the worst pieces of legislation that's ever been enacted in the banking industry's history. so it's a really bad law that is in desperate need of change. it's keeping the banks from really performing well and providing loans and, you know, of other forms of credit to people who desperately need it. the people who are being hurt most are the lower income

people. the people with lots of money can get along just fine in this environment, but the people at the lower end, say the bottom half of the economic spectrum, are really being treated very poorly because of the dodd/frank reforms. they just can't get a loan. >> you know, bill, now, this is interesting because lately, the narrative we seem to hear specifically from the federal reserve and some of the research and data is that the demand for loans isn't there. can you kind of square this issue? is the landscape just so bad that many aren't confident to request them? what's the issue going on with loans availability and demand? >> well, i don't think there's going to be a lot of -- a lot more demand for loans until you do two things. one, get the economy moving faster. the recovery has been very, very weak for a long period of time and people have converted a lot of their investments to cash. people have tried to be very, very liquid. so if you get the economy going, that will really help on the

liquidity front. secondly, the rules have become so difficult, so tough, so stringent that banks won't deem with people who don't have a lot of money. they have really cut back on loans to the people -- the second -- you know, the bottom half of the economy. the people in that half, they really have trouble getting loans. it's very, very difficult -- >> if i understand you right, bill, this is kind of a chicken and egg argument but almost worst. you're saying that conditions exist that have really taken away the desire to try to play in the entrepreneurial system. now that's becoming a fundamental excuse as to that's not the problem anymore. is that about the way you seem to see it? >> i think it is. and, you know, if you want to start a new business, that -- frequently or usually the banks have very important to that, helping people start new businesses and the banks are going to be very reluctant to

loan that under the new dd/frank rules so i think we're hurting ourselves and hurting the people in our society that most need the help. >> okay. let's switch gears in our last minute. you know, 2008 basically the gsc ceased to exist. they were quarantined and now they're running wild. granted we have seen an uptick in the housing industry since the crises. but there's another attempt by senators corken and warner to try to do something with the gscs. in the final question maybe you can answer what you think can be done or is this just kabuki theater and it's too hard to tackle at this point in the trump administration? >> well, i think something can be done. the problem is we don't have an agreement on what should be done. should fannie and freddie continue to exist, how big should they be, how much should we allow them to grow? and how do you get them reprivatized? the government owns them right now.

how do you get them back into the private sector. and if you put them back in the private sector, how do you regulate them so we don't have another episode? so i think -- there's a lot of really, really difficult questions. i think we can do it, but i'm not sure we have come up with the combination yet that will make it through the congress. there's a lot of different points of view on that. >> all right. real quickly, being in government you understand that it isn't like business. we're learning more and more about this every day. it's hard to get things done. it's hard to get legislation through. do you think the pundits are correct or the investors that the trump administration even though 100 days is almost here can actually make a difference in some of their objectives? >> oh, i don't have any question, rick, that they have the ability to make a difference. you have got some very -- trump -- president trump has really appointed the best

cabinet i have ever seen. i have seen a lot of cabinets in my mind. i think he's got a great cabinet. i think that he's got a republican house and senate. i don't see any reason why they can't get things done. but it's going to be a slow process. we have got fairly divided government particularly in the senate. >> you know, we have had -- one of our correspondents that's covered washington for a long time, john harwood, really when he speaks to these issues, it's almost as though there's a stencil. you have so much goodwill, so much currency after you're elected like donald trump that nothing gets done. can that be changed? i mean, realistically, bill, can that be changed? >> i think it can be. i'm not sure it will be. i do think that -- president trump has had a real problem because he didn't come out of the republican party and he didn't come out of the democratic party. he was supporting both at various times in his life, so he doesn't -- they don't owe him a

lot right now. but i think they're going to realize the republicans in particular, but also a lot of democrats that are on the edge politically, i think that they're going to realize that the best way for them to get re-elected is to get something done. that people are really impatient about -- basically had ten years of not any serious economic growth. and a lot of people have been left out -- left behind and i think the public's not going to have a lot of patience for people who are just trying to stall things and not let legislation and reforms go through. >> well, you know, when you speak about the public, this is really fascinating. i'm going to get in trouble here and go long. i hear many speak to the notion that the same people that stepped out to elect this president in the surprising fashion are the same people that are going to get hurt by the policies he's going to implement after being elected by them. do you agree or disagree with that statement? >> i think i disagree.

i think what we mostly need to do right now is to get the economy going again and getting a greater percentage of the population participating in the economy. so i think that if we can get this economy turned around and i believe we can, i think that everybody is going to come out a winner at all levels. so i really -- it's time, we really need to move beyond the 2008, 2009 recession and we haven't really haven't. we haven't moved along from that. we need to make some government reforms that will allow us to do that better. >> well, change is hard. bill isaac, been an absolute pleasure discussing the issues with you go. now i'll s to toss it back over to david faber. >> and now let's go to jon fortt. >> we'll talk with two bobs,

united, talk trump policy and more. internet preservation, does it need a special body to do that? we'll talk that other with moss burg and then jeff conrad, head of honda's u.s. business will join us as well from the auto show. carl? >> jon thank you very much. when we come back, the big banks are ready to kick off earnings season. regional banks taking a spill in the past few minutes. we'll look at what you should be watching. dow is down 57. back after a break. of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.

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. . . the big banks r kicking off tomorrow. jpmorgan and citigroup all out before the bill. will frost is with us with what to look for. >> banks come into the first quarter with easy to beat year on year but tougher month on month. the main focus, loan growth, which has slowed since the election, particular any in the last two months. three reasons, economic

uncertainty on policy has led to less activity in the commercial space. second, higher rates have driven less mortgage refinancing and, third, a seasonal slowdown in credit cards. it is very much the corporate side that has led to the loan growth slowdown, which is partly explained by high-yield bond issuan issuance being up 80%. debt capital issuance is the standout. equity standouts or ipos will be strong. mna could disappoint. on the trading side, fixed income currency and commodities still appear strong. the huge focus on interest rate and yield curves has insured that. equity trading will be soft. volatility has been lower than both q-4 and q-1 last year. finally, net interest margins should improve following the march rate hike, which is a timely reminder of the improving environment banks face on any medium or longer term horizon.

the first numbers will hit tomorrow at 6:45 from jpmorgan, followed by wells fargo and citi. both set to report at 8:00 a.m. the rest following next week. >> fixed income currency and commodities often is one of the bigger moves one way or the other. not as easy to predict as you might. capital markets activity which we can see. m&a, which we can see. any expectations how it has gone for the big banks. >> from the commentary we have seen, it seems to be shaping up pretty good. the last couple of quarters have been strong. not like it is going to be a positive surprise like it was in q-3. it looks pretty good. equities on the other hand, a little bit soft. more broadly for the investment banking businesses. the offset is, yeah, we'll see decent business there, decent business on the issuance i.p.o.s and debt issuance.

they seem to think it will trump softer mna performance. >> in terms of the march rate hike that won't be reflected in this quarter's results. it will be interesting to hear their commentary on how and why the yield curve is so vlad afla how that is impacting their business. >> we are going to see an improvement on a month by month and certainly on a year by year. december's rate hike will be factoring in. march's rate hike won't play a huge role. we have a chart in terms of the correlation we have seen between bank stocks and the yield curve particularly in march. yield slipped. stock price slipped in march. that level of correlation has been quite an extent of a surprise. commentary in terms of which way the yield curve is going to move. not necessarily that forthcoming for the banks. another chart to show you as well in terms of bank valuations off the back of this in terms of what we have seen. the figures for the universal

banks, the average is 1.3 times book. that compares pretty equally to where we were both from a snapshot of the end of last year and the ten-year average. if we rebound, it was more like one times the price had to work for the average of all of them. that just shows the way we have seen valuations move up. they are not necessarily ahead of historical averages. we are not likely to see much valuation metric expansion. we expect the epo growth to come through. >> thank you. >> pleasure as always. former g.m. vice krarman, bob lutz and bob nardelli are with us. we are going to get their take on manufacturing, autos and a lot more. stay with us. stay with us. [weather reporter]: governor has declared a winter weather emergency... stay with us.

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welcome back to "squawk on the street." markets are lower. materials lagging nucor, martin march prieta and vulcan are the worst in the s&p materials.

each down 2-3%. nearly every component is negative with the exception of monsanto, which is up about .5. material, still up about 4% for the year so far something to track and watch that materials sector etf, the xlv trading with relatively heavy volume. that does it for "squawk on the street." let's send it back downtown for the start of quack alley. it is 10:00 a.m. in chicago and 11:00 a.m. on wall street and "squawk alley" is live.