♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. u.s. equity futures at this hour, right now green arrows across the board with the dow futures indicated up by 18 the dow finished up finally after several down days by 115 points yesterday but the s&p 500 yesterday and the nasdaq were both down slightly this morning you can see the s&p is up by 5.5 points. nasdaq up by 14. overnight in asia, you can see that the nikkei closed down by 0.6% shanghai was down by a similar amount stocks in hong kong, the hang seng off slightly, just down by 0.1% in europe this morning where

trading is already under way across the continent, there are some mixed signals the cac slightly lower dax is up 0.3% gains for the other major averages as well up 0.2% in london and italy. on the treasury market front, treasuries, ten-year is yielding 2.815% caught in that range between 2.8 and 2.9 that we've been watching for a few weeks now. >> okay. lots of news to bring you including this late-breaking story yesterday. a lot of head scratching over this nike conducting a review of its hr practices after receiving complains about workplace behavior the news came out in a memo sent by mark parker to employees. it also said that nike's brand president, trevor edwards, is leaving his post effective immediately. he was seen as an heir apparent to parker. parker did not specify the

nature of the workplace complains or whether they involved ed wars or other executives edwards considered a potential successor to nike's ceo. he will now retire in august, which also has some head scratching going on. if he's leaving today, but he's retiring in august, what's happening between now and august >> there was something he did wrong and he should leave or he didn't do anything wrong and he shouldn't leave and he should be allowed to do what he wants in august i don't get it >> confusing i'm not sure don't know if we'll get answers on it. parker will stay on as chairman and ceo beyond 2020. shares of nike up 20% over the last six months. don't know if this will dent that >> totally unrelated, but about executives and such, how bizarre is that john skipper story >> former ceo of espn. left in a confusing state, and

clearly he said drug abuse at the time, didn't know he was being extorted >> substance abuse the reporter said i assume it wasn't alcohol he said, no, it wasn't i assume it's coke he said, yes, it was he said i was always careful where i got it now i am getting extorted. it was interesting, he said i was at rolling stone, trying to be counter culture i thought recreational drugs were okay, and i got caught up in it. he's a 62-year-old executive it's weird nobody is immune nobody is immune to substance abuse. a bizarre, sort of a sad story >> i thought it was very sad >> i guess he's better now looking to do something not with a big corporation but maybe get back in the game just not running a major corporation. it was a crazy story >> it was an emotional story

>> it was. because he was so frank about it i don't know if i would give that interview >> when he first left, bob iger put out nice statements about him. he left abruptly everybody inside espn thought it was sexual harassment. they thought it was strange. they purposely -- he said by the way in the article that the reason he said it was substance abuse was so that people were clear it wasn't something else still it never made sense. >> the abruptness of it. he was at a meeting the wednesday prior, talked about the future of the company for years. >> right >> genuinely and that friday the beginning of whatever this extortion attempt happened he said i have to tell my family i have to tell bob igerment i put bob iger in this terrible position, there's no way out except to go out >> by being so frank and so open about it, i give him huge kudos, that's the type of thing that

maybe warns others from thinking you can dabble in these things and it will be okay. >> he said i was a pretty good employee it never affected my work except a couple of missed planes. >> missed planes and missed meetings >> early morning meetings. that's like saying you can still work and use i don't think that's good advice >> i appreciate the candor >> we have to either stay up all night or it's not a good lifestyle. i go to bed at 8:00. that's the way it is i have to. >> keeps us all on the straight and narrow >> like ben franklin, founder of penn -- >> university. fine institution we'll be getting housing starts for february at 8:30 this morning. at 9:15, the industrial production numbers will cross. at 10:00, consumer sentiment data for march >> we are going to drink some

irish whiskey this morning what an example. >> on our straight and narrow path triple play of chip stocks to watch today broadcom, so many things swirling around. results topped earnings. this comes days after president trump blocked the company's proposed $117 billion bit for qualcomm on national security concerns you have to explain this to me separately the "the financial times" is reporting that former qualcomm chairman paul jacobs is seeking funding -- with who? how? who can raise 1$117 billion >> masa son. masa son he's trying to talk that guy into it. >> yes what's happening here in this drama or soap opera is paul was pushed, now he wants back in his father started the company now he's looking to see if there's an opportunity >> would it be private >> you would have to take it

private. >> who takes a 1$117 billion company private? >> it has a great cash flow. you could make the numbers work if you put a lot of debt on the company. >> the ft says jacobs has approached several brokers, as you just said. shares are higher on the news. since president trump blocked qualcomm's bid for broadcom, there are rumors that intel may be wanting to make a bid for broadcom brian krzanich sat down with jim cramer last night on "mad money" and addressed the topic. >> i can't speak about rumors, i can tell you that we made two big acquisitions with altera and mobileye

they are growth engines for the future >> you can see more of that interview on cnbc.com. >> now everybody thinks people will just go buy broadcom. it's a complicated subject one reason the government was concerned is that there's a view that broadcom has either backed away -- there's a close connection to the chinese to begin with whether an american company is buying broadcom or broadcom is buying an american company, i think this will be a national security issue for a longer time broadcom is a target for the government there are worries that have come out because of this transaction, not just long-term worries about whether we'll be losing a great crown jewel, but all -- from all the speculation that you hear, there's more there in terms of

true national security issues. >> that's the third party. just say it. >> the chinese >> no, when they say we're worried about a third party. >> china >> yeah. you're still speculating >> i am still speculating, but i'm suggesting if intel is buying broadcom, that -- that unto itself will create some competition. >> if you buy it and slash the r & d, like the expectation was that the other buyer would do this, that leaves you exposed to arguments from a president who would not like to see jobs lost or innovation. >> >> new reports that another member of president trump's team may be on the way out. eamon javers, who has a little -- you keep a list every morning? >> i do. i have my list here. noting down who's on the short list >> mcmaster, another guy that would fit in at goldman sachs. the magazine cover has bald

people -- did you see that >> i did i did. >> are there head hunters who just stand outside the white house? >> it's a tough place to work, and the president seems intense to fire somebody adz frid it's a afrafriday today that's usually when they do it there's questions on whether h.r. mcmaster will be dispatched he apparently gives the president advice that he doesn't like or doesn't want to hear the "washington post" reporting that h.r. mcmaster is possibly going to be out soon saying that trump is comfortable with ousting mcmaster, with whom he never personally gelled, but is willing to take time executing the move because he wants to ensure both that the three-star army general is not humiliated

and that there is a strong successor lined up in the wake of that and other media reporting, sarah huckabee sanders took to twitter, went right into the oval office to talk to the president and says on twitter just spoke to the president and general h.r. mcmaster, contrary to reports, they have a good working relationship and there are no changes. the people who are on thin ice around this president include his chief of staff, john kelly, h.r. mcmaster, david shulkin at the v.a., accused of a number of types of political misbehavior jeff sessions who the president doesn't likecusing himself from the russia matter ben carson who apparently ordered a dining table set on taxpayer dime. he may be forced out, possibly today. you look at the people done but not gone from the

administration gary cohn resigned but still works at the white house hope hicks resigned weeks ago but still works at the white house. you have a number of people who are on the way out, a number of people who are out but still there. it's a tumultuous time inside the white house. >> yep certainly is you hear bolton, not michael, john bolton. >> yeah. that's one of the names floated around other names are out there as well it's not clear which direction the president wants to go. bolton has a strong card to play here the president likes people that he sees on tv talking about these issues it gives him an opportunity to see how they perform in public and an opportunity to see what their ideas are. they're more familiar to him than some other people from inside the bureaucracy >> larry is safe for now

>> larry is safe he hasn't started yet. i asked yesterday when he will start. they don't have a start date he was there yesterday he said he was going to a trade meeting at the white house larry kudlow we're talking about. he was on the campus yesterday, but no official start date no official end date yet for gary cohn. gary cohn has to get his stuff out of the office before larry kudlow can move in it's not clear when that will happen >> he will barricade himself in there from. >> the president said yesterday there will always be change, but very little. he also said i like conflict among my aides i like to watch them argue it out. but he said it's fake news that there's chaos and tumult in the white house. there is change, but very little change, and you want change. the president is very out there in his thinking about what he wants. he wants conflict and change >> yesterday we decided he was the decider. he decides things. he wants to decide things one

way. dubya was like that. >> he decides things, then undoods them and deci-- undecid and then decides them again. talking to a number of people yesterday, asking who is your boss who is your boss tomorrow? no idea. >> all right just worried about xavier today. >> you got your priorities straight >> how is creighton doing? >> that's today, too i have creighton not everybody is taking creighton. >> my school, colgate, didn't make it. >> no. you go to colgate? that's awesome >> great school. >> great place i had 14 out of 16 yesterday i was watching loyolloyola did you see that shot? >> did not >>awesome. four seconds left. three-pointer. >> eamon is a little busy. >> kind of working >> a lot going on. some of us work for a living

>> i was thinking that, you're down there trying to hear -- i was -- there's so much the minute the game is over, another one starts >> it's fabulous >> so good >> fabulous spending your day doing that i works for all day. >> starts at foon todanoon today >> i have to work at noon today. >> i have some irish whiskey coming and basketball. broader markets this morning joining us is ed campbell and chris cordero. do either one of you put the odds at a recession in even 2019, is it above 20%? >> for '19 i think it's close to that >> you do? >> 15% for this year, maybe 30% for next year. >> what would be the underlying -- what --

>> the recession happens in 2020 >> that will be the longest recovery then. >> so maybe 60%, 70% odds that happens. >> it's brewing inflation. wage inflation will start creeping up. tariffs will be inflationary and it's creeping up inflation it will keep brewing >> meaning -- not the inflation but the fed raising interest rates? >> to control it right. >> we have employment rate -- unemployment rate down to 4% that will continue to move down. eventually that will head back up once that does, like any time we've seen the unemployment rate increase by 20 basis points or more, a recession was soon to follow that sets off the vicious circle of confidence that results ultimately in the recession. >> chris, in addition to the

macro stuff, you can talk intel. you have some stocks you think we should boy regardless why intel? >> because servers they made the transition from pc to servers selling at a great price, even though they've hada nice run up i think they keep going along with great earnings. >> we were talking about intel >> yeah. i don't think broadcom is in play for them. the most important thing about doing acquisitions is the integration. they have to work on that integration. if they can get all that done, they'll really continue to do well >> do you see the ten-year going back finally above 2.9 and then above 3? is that going to happen? if you think there's a recession coming from inflation, it can't come in at under 3% on the ten-year, can it >> i think we're in a trading range for now. what is? the ten-year >> the ten-year. we had the big move up, now 2.8

to 3% is the trading range for a while. i don't think the inflation risks will emerge for a while. ultimately before the cycle is over we will shoot decisively above 3% on the ten-year >> okay. all right. i'll get to your other stocks, but i want to mention sister jean we have to go to break in a second sister jean, the matriarch of loyola is 98 years old cou courtside yesterday. president obama called and congratulated loyola major people are watching this >> major people who don't have jobs >> sister jean 98 years old she's there. everybody is playing for er. she is still active at the school they interviewed her, she said our guys, nobody cares who scores the points, that's why we

pass so much i was watching it. >> awesome >> it was classic. >> 100% engaged with the game. >> totally sharp every player goes over to her and talks to her after it was cool. i wish we had that final shot. it was great i had loyola you know why because any time chuck todd is interested in a game, i try to take the other side. >> i'm so glad your needling skills are paying off. >> he loves miami. he's a miami grad, i said i'm taking lie yoel e ining loyola. coming up, we have the ceo of zscale erzscaler and at the top of the next hour, we'll talk to scott gottlieb about his agency's plan to try to cut nicotine levels in cigarettes alerts -- wouldn't you like one from the market

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welcome back cybersecurity provider zscaler will start trading today on the

nasdaq the ipo marks the first unicorn in cyberkusecurity firms to go public this year joining us right now is jay chaudhry, ceo and cofounder of zscaler. thank you very much for being here >> thank you >> i realize this is the first cybersecurity company going public this year in a big ipo. i know there are some things different about your company you're a pioneer in cloud security, but explain how. a lot of companies explain they do security over the cloud how is this different? >> i was flying from california to new york earlier this week. half the people were working on the plane. probably connected to the internet or cloud applications you think what security they were using, probably not much. security is in the data center the old security protected your office and your data center. it assumed you sat there the world has changed.

people are mobile. applications are sitting in the cloud. so we had to build security in the cloud. what sets us apart is that we started with a clean slate it's born in the cloud for the cloud. it's a perfect build just like workday and sales force had to build applications for the cloud. we did the same thing for security >> i guess when you look at the numbers of companies still using the old way of doing it, sitting on the database, it's because they're locked into these systems that they built up over the years. how difficult is it to make a transition from a data-based system to a cloud-based system >> in some ways you can leave the old system sitting in the data center. the new security can be put in place for employees so they go to the cloud, they go to the internet safely. the data center eventually will go away. like mainframes used to

dominate, you didn't have to say i need to replace all frames new applications came. the focus shifts to where the users are, applications are, so transition is not that hard. >> who are your biggest companies? >> siemens, ge these companies have employees in every part of the world siemens has 350,000 employees across 185 countries and thousands of locations in the old world of security, they'll have to buy and deploy security boxes in every office protect users in there in our world they point the cloud-bound traffic towards the zscaler, we have 100 data centers around the globe your traffic hits zscaler as a security check post, make sure

nothing bad comes in and nothing confidential leaks out >> i wish we had more time you have an interesting background you're called a serial entrepreneur, grew up in the himalayas and studies here for grad school. would love to have you come back >> thank you >> good luck >> appreciate it the world has changed. it's not moving back security is still stuck in the old-time, and we have a big opportunity to provide security in the new world of cloud and deliver value to shareholders. >> thank you for your time coming up, do you remember where you were ten years ago today? >> jpmorgan chase is buying bear stearns at a rock bottom price, $2 a share a crisis in confidence that continued to build as the week went on. and ultimately crescendos late yesterday. essentially it lost its ability to finance itself. when you're an investment bank

and levered significantly, you need to finance yourself these things can happen like that we had the federal reserve step in, basically opened up the window for investment banks. treating them like commercial banks. investment banking will never be the same >> nobody has aged a bit we'll talk about the legacy of bear stearns and lessons from the financial crisis next. right now a look at yesterday's s&p 500 winners and losers what's critical thinking like?

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welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning, everybody. welcome back u.s. equity futures on this friday morning have been higher for the s&p and the nasdaq dow just turn the negative nasdaq still up by 11 points the s&p is up by 4 yesterday the dow was the big winner, up by triple digits. the s&p and nasdaq gave up some ground >> okay. today marks ten years since jpmorgan bought bear stearns wilfred frost joins us with a look back at the best and worst deals done at the peak of the financial crisis in the banking space. >> let's start with the jpmorgan acquisitions first bear stearns for 1$1.2 billion, and washington mutual for 1.9

million six months later bear boosted their investment banking particularly in trading. if 3.1 billion was the full price tag, these would be good deals but it led to about 70% of jpmorgan's $40 billion in litigation costs in the following years. in 2015 jamie dimon said i don't think we would do anything like bear stearns again, in fact, i don't think the board would let me take the call bank of america, $50 billion on merrill lynch, but that has taken a full decade to integrate and deliver. countrywide meant to boost market share but failed and cost tens of billions in credit and legal costs. that wasa terrible deal. wells fargo for wachovia, huge east coast geographic expansion for the retail part of the bank. good deal, but didn't deliver for them improved investment

banking which was a small intention of the deal. the best deal was morgan stanley's 2.7 billion for 51% of smith barney, adding scale and retail exposure in wealth management which differentiates them from goldman sachs in recent years there's a theme here, the later the deal the betterment prices had fallen further but deals were done less hastily with more due diligence. the total litigation costs, not including the credit costs, highlights how bank of america and jpmorgan got the worst, the big deals they did at the time were a contributing factor to those extra litigation costs >> what jamie dimon said is significant. he may have said it tongue and cheek, but that the board wouldn't let him take the call at the time what would have happened that's part of the question if they had not stepped in. >> absolutely. clearly what happened with lehman six to ten months later was allowed to go bust

would that have happened earlier, we don't know on that particular one, on dare sterns, it did add significant banking capability you look at it now, trading they're about number ten in equities back then past number 10 in commodities. commodities they got rid of the hard commodity sales, but up at the top. it's taken a long time to integrate. but helped them. bank of america with countrywide, brian moynihan does not talk about it as freely. he said it was a bad deal, but wouldn't go as far to say whether or not they would do it. >> you miss getting up in the dark you're back? >> that's the reason why him heri' here >> how is the 3:00 >> enjoyable great fun. >> kelly's psyched she got her heels out again. she can wear her heels you're like 6'11". >> almost. almost >> you're 6'7"

>> 6'5". >> i take off a couple years, you add a couple inches. >> so you're 41? >> yeah. thanks >> he's sticking around. chris whalen is here do you think -- i'm curious, jamie says the bear deal was terrible do you think the bear deal was terrible >> for shareholders, y but they were the lender to bear. they had all of bear's collateral bear filed bankruptcy. they would have been talking to a trustee. it was secured they would have come out okay, but that's why they did it they were afraid of the impact on confidence, having a broker go down into the arms of bankruptcy and bear had that relationship countrywide and bank of america. bank of america was the warehouse lender so they talked about growth. the reality is they already owned the company. they had the assets. >> here's the question today, if this were to happen

again, jamie didn't take the call, if you will, are you a believer that everything that's taken place since then in terms of the regulatory program, that these living wills will work >> well, the living wills are irrelevant when the fdic acts as receiver, they don't look at that stuff. they do it themselves. they have the legal authority to come in and cash a company that's failing they would put it in conservatorship. they wouldn't liquidate it you stabilize it and then sell it like gm, like aig >> that's not true of every bank out there. let's say jpmorgan were to go down now >> yes fdic would catch them. the industry would stand behind it >> via the fdic. >> yes it's a mutual insurance scheme the treasury is behind them but the industry stands in front they cleaned up the mess themselves, other than citi. >> when you say other than citi what do you mean >> they funded the resolution of

those dead banks >> when you think now about when jamie says i won't do this anymore, does that matter? >> look, he's saying from a shareholder perspective it was a bad deal certainly a bad deal for bank of america. >> bank of america absolutely. i would think on the jpm side it's more complicated. it was not a good deal, but i'm not sure it was a terrible deal. >> jamie dimon and the shareholders did all of us a favor. they exercised ba nerenevolence you see what happened there, city wanted to buy wachovia's bank and put the whole thing into bankruptcy. wells fargo shows up and says, no, no we'll take the whole thing. >> jamie said he was extorted by regulators -- >> that, too >> that was after the fact >> let's say regulateders didn't extort him, would it have been a good deal then >> no, he would have said put is

through bankruptcy and i'll buy it then. >> if you remember at the time of the transaction, literally we wrote articles with headlines about jamie dimon's heist. that he had stolen bear stearns. >> they did us all a favor, all of these firms, they caught insolvent firms. the street has always traditionally cleaned up its own messes the same way insurers in each state -- >> they did us a favor and got fined $40 million. government at its best >> did they even know what they were getting >> my point is at the time -- >> the lender -- >> no. no from a psychological perspective, you're about benev. maybe today it looks a s nice, r

was nothing altruistic about it. >> jp couldn't just stand there and watch this client, this secured creditor or debtor go down they were the owner of the company. they had all the collateral. >> one other quick point, clearly we can debate which u.s. bank did better, the key takeaway is all the u.s. banks did better, despite being the epicenter of the crisis, they have grown so much versus european banks jpmorgan market cap from the start of 2007 to now has gone up 140% deutsche bank is halved. the american banks came out of this so much better whether they did deals or not >> there's a longer conversation about why that is the case >> of course >> that's a large part of the way the regulators approached it in the u.s >> yeah. but you can complain they got this litigation cost versus that litigation cost, but they faced up to the problem, took the medicine and came through it

>> wilf, getting up early for a change >> always fun. >> coming up, a shakeup at nike. we'll get you up to speed on the moves that were released as nike announced an investigation of inappropriate workplace behavior then scott gottlieb will talk about his agency's new move to reduce nicotine in cigarettes. then jack lew will be our special guest on the squawk set. and irish whiskey for $5,000 a bottle what's a little shot worth i guess i have to take one just ay get my money's worth. st tuned . well wait. what did you think about her? it's definitely a new idea, but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so, multiply that by her followers, speaking engagements, work experience... credit history. that more accurately assess a business' chances of success.

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u.s. equity futures at this hour are around the flat line. up a bit down a little. up 11 now. s&p up 5 nasdaq up about 12 retailer tiffany just out with quarterly numbers company reported profit of 1.67 a share. 3 cents above estimates. revenue beat forecasts same-store sales increased time for the executive edge.

we had that news breaking late yesterday, nike conducting that review of its hr practices after receiving complains about workplace behavior, that news coming at the same time after they announced an extension for mark parker and announcing the retirement of trevor edwards courtney reagan has more what is this all about >> big changes in the executive ranks at nike. the change that would change the succession plans, and allegations of workplace behavior but it's unclear if and how the two are related. cnbc has seen a copy of a letter that nike's ceo mark parker sent explaining instances of workplace behavior that do not reflect our core values of respect and empowerment. as a result nike is doing a review of its hr systems and

restructuring its management team parker says to allow for closer management and a sharper focus on our culture the second part of that same memo says nike brand president trevor edwards is resigning from his position and then retiring in august. nice has not linked edwards to the inappropriate workplace behavior and parker thanks him for his significant contributions to nike after 25 years with the company edwards has long been viewed as parker's successor, parker says he will now remain chairman and ceo beyond 2020. elliott hill will step up to fill at least part of edwards responsibilities, and then report directly to parker. we still have some more questions about how or if these two are related. back over to you >> do you have any idea -- not to speculate, but we will

speculate. part of what we're thinking about edwards leiaving today bu not until later may have to do with shares investing, the timeline >> i'm not privy to that information. one thing that one considers, he's been with nike 25 years so it's possible he has some built up vacation days, there's some other things that sort of set that official retirement date >> we're in march. you know that's pretty good do vacation days roll over for 20 years >> there are a lot of -- >> we have some, too >> when you're dismissed with cause it doesn't matter on any of those levels. is there something to these allegations in which case you should be gone immediately or nothing to the allegations, in which case you should not be leaving. >> we don't know we reached out to nike they confirmed the details of the memo i've seen the memo they cover a lot of things in it they don't explicitly link it, there are a lot of questions

that remain. as you suggested, it leads us all to speculate since that's all we're left with. >> we tried to book mark parker. we got warby parker, though. >> yes, we do. >> we do >> that will also be a wonderful interview. >> exactly >> you just have go in a different direction. >> those guys have a cool view of retail. >> they do you love warby parker >> i do. i'm a fan boy. >> really? >> i think they've done a nice job. >> i have some glasses from them >> i was teasing the upcoming since we don't have mark parker. when we come back, celebrating st. patrick's day in style with a $5,000 bottle of e ghhe othisy. onrit ren e set with it's we have the founder with us next

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fon for instance running the trade surpluse snoitsz ♪ ♪ happy. early saint pat tricks day it's tomorrow.

saturday night, wow, that's good amanda stanley has been toasting in the proper irish ways founder of keeling whisky company. this bottle, how many are made >> this is a piece of liquid history. a single cast. >> 34 years. >> oldest ever there was only 43 bottles to have come out of it. >> you've opened one for us. >> one for us for st. patrick's day. a chance to celebrate in an elevated way, unique way >> $5,000 a bottle what am i looking at >> it's a relatively small measure because it's very early morning. it gives you the opportunity to

see what we've developed. >> you age it. >> it's x american oak barrels irish whisky has vanilla notes bourbon barrels can be used once >> i like how they can only be used once. >> what's unique is it is full maturation in one cask it produces a softer style of whisky because of the temperate climates in ireland. every year we lose 2 or 3% of alcohol that evaporates into the atmosphere it's called the angel share. this cask is very, very special. irish whisky has been on fire for the last 20 years. it's the fastest growing spirits category in the world.

it's very unusual to find very old bottles like this. >> single malt, too? >> single malt. >> there's nothing you can do to catch up with the demand that is outpacing supply at this point because like you said, it takes a little time to get through this process. >> well, irish whisky is going through this evolution ten years ago there was only a handful of distilleries. now there is 50 or 20 producing with many more in the pipeline we're ahead of the curve in that we're leading the revolution, the new age of whisky producers. people like the irish whisky. >> our producer this hour is from kentucky so he's an expert for a lot of reasons on alcohol -- no, kidding so there's an e. there's an e in this whisky. if the country has an e in t

ireland, united states, the whisky has an e, if it doesn't, if it lacks an e, scotland, it's whisky there's a reason, you want to differentiate it. >> in the 1950s irish whisky was a dominant force the difference with scotland, it was an urban city based production. >> you put the e in. >> the dublin distilleries lobbied to put an e in. >> what's the percentage of men versus women buying whisky >> very interesting question in ireland it was a very older demographic. a shot of whisky now it's 50-50. >> really? >> irish whisky, it's got an approachable taste it's suitable for crowd cocktails.

>> cheers. >> cheers. >> 5:00 somewhere. >> happy st. patrick's day. >> this is our 34-year-old i hope you guys enjoy. >> breakfast of champions. >> okay. >> wow coming up, fda commissioner scott gottleib this isn't regulated stuff, right? joins us next on the new plan to reduce the amount of nicotine in cigarettes later we'll talk banking regulations, tariffs with former treasury secretary jack lew ten years after the financial crisis began with bear stearns. "squawk box" returns after this. i'm not a bigwig. or a c-anything-o. but i've got an idea sir. get domo. it'll connect us to everything that's going on in the company.

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new this morning, nike's

second in command is leaving and the company says it is investigating workplace behavior complaints the full story straight ahead. a "squawk box" newsmaker fda commissioner scott gottleib tells us why his agency is looking to cut the nicotine in cigarettes. plus, ten years later, a decade after bear stearns was bailed out, we're looking back at the lessons of the financial crisis with the man that was in the room wall street lawyer ross cohen. second hour of "squawk box" begins right now live from the beating heart of business, new york city this is "squawk box. good morning welcome back to "squawk box" right here on cnbc we're live from the nasdaq market site in times square. andrew ross sorkin with joe kernen and becky quick ten years after bear stearns was taken over, no less, dow up at 16 points.

nasdaq up 14 points. s&p 500 up 5 points. ten years ago the market was down shares of tiffany are higher in pretrading this morning. the luxury goods retailer beating both estimates on the top and bottom lines tiffany saw a slightly better than expected increase in sales. busy week for economic numbers concluding with another batch of data we'll get february housing starts we have the latest industrial production time, fortune, money, "sports illustrated" magazines may be up for sale meredith corporation exploring sale of those. meredith acquired those when it bought time, inc the strength considered to be in women's magazines. the question is do they get sold off together do they get sold off separately? are they considered trophy

prizes for a wealthy benefactor. >> why didn't they want those? >> they don't make money it's a -- they're a tough business i don't want to say they don't make money, but i think relative to the other magazines it's a tough go but by the way -- >> when you mentioned it, trophy properties, that's what you think of. >> time is a great brand fortune magazineis a great brand and "sports illustrated." >> history >> there's been a long question, "sports illustrated" has been the most attractive. >> they've had to shrink the brand. >> people have speculated whether fox sports would want them, whether frankly nbc sports would want them, whether private equity player would want them. we'll see. also some news breaking late yesterday. nike is conducting a review after it received complaints about workplace behavior this news came out in a memo sent by nike's ceo mark parker to employees it also said that nike brand

president trevor edwards is leaving his post effective immediately. parker did not specify the nature of the workplace complaints edwards was considered a potential successor to nike's ceo he will retire in august even though he's leaving immediately. parker plans to stay on as chairman and ceo beyond 2020 shares of nike up more than 20% over the last six months. now to washington news, the white house is rebuffing reports that president trump has decided to remove national security adviser h.r. mcmaster. eamon javers joins us. just in washington speak, eamon, how long is the half-life of a denial so if you say that it's not going to happen, does it mean today but it could happen monday and they're not dissembling or do you know? how long does it --

>> it's a lot shorter than it used to be. >> could be telling the truth but he could be gone next week >> right nbc reported that h.r. mcmaster was on the way out a couple weeks ago, i believe it was. >> yeah. >> so there's been speculation about h.r. mcmaster for a while now. today is another friday where washington wakes up expecting that somebody prominent at the white house could be fired today. the speculation today centering on h.r. mcmaster see what the "new york times" wrote. they're reporting that mcmaster could be on their way out. one person close to the president said general mcmaster whom officials have described having never clicked with the president personally could be released as early as friday. after some of that are the roing last nig -- reporting hit the internet, sarah huckabee sanders said i just spoke with the president and general h.r. mcmaster. contrary to reports they have a good working relationship and

there are no changes at the national security council. how long does that last? it's friday. this white house tends to like -- we used to have the friday news dump, now we have the friday staffer dump. the expectation is if they're going to do something it would be today nobody at the white house that i talked to yesterday has any idea who could be on the chopping block. there's a long list of people on the chopping block, john kelly, h.r. mcmaster, jeff sessions, ben carson over at hud is somebody who could be on the chopping block as well, including a number of internal staffers we saw this week the president firing his secretary of state on twitter. the president's body man, john macantee ushered out of the white house complex. reports of some kind of misdeeds he's the person closest physically to the president all day long it's been a tumultuous week all

week long. >> i put it on ebay. in davos macantee was with the president. i have his card. maybe i'll put that on ebay. >> interesting fact about macantee, he was at the university of connecticut as a football player. he's a hell of a thrower with a football he can do all kinds of tricks with a football. the dominos pizza sign. >> gambling potentially. >> he can open a door with a football halfway across the gym. >> i want to ask you something else. >> yeah. >> mulller wants to know about the trump -- >> right. >> do you -- does it have to be documents related to collusion before the election or could it be any type of dealings over the

years with russia that might have violated some law is that okay >> mueller seems to have a pretty long leash here. >> you know who we're channelling then we're channelling joseph stalin's chief of the secret police who said show me a man and i'll find you the crime. that's not -- >> you might be channelling ken star might be the more appropriate example as somebody who went to investigate one thing and found another thing. look, often times as prosecutors are building these cases they have to go after a number of individuals. if you can find that individual committed an unrelated provable you can push them to get to the main crime you're investigating. sometimes that pyramid is necessary to build a case. >> you don't know if this has anything to do with collusion? >> we don't. we don't know. this comes from "new york times" reporting yesterday that mueller team had sent subpoenas to the trump organization remember, that's trump's private company as opposed to the white house and the political

operation, to the trump organization for documents including documents related to russia we don't know the entire scope of that subpoena and we don't even know exactly when that subpoena was issued. it could have been a while ago the trump administration put out a statement saying that was old news and they've been cooperating since july of '17. they could have discovered subpoenas from sometime in the past. >> eamon, there was a syrian red line if mueller went here from the president. the last syrian red line didn't mean anything from anybody -- >> right. >> -- but the scuttlebutt about a possible firing could reee merge on the left. everybody on the left, that's what they want they want a sat night maurday n massacre that could start that he might fire mueller over this >> the president has been mulling about firing jeff sessions calling him disgraceful. the question is who does he fire in this world of the department

of justice. >> right >> you know, the political -- the hard political question for president trump is as angry as he is about the russia investigation, as much as he says there's no collusion, as frustrating as it is that people call into question the legitimacy of his election as president which is what this is all about, he faces a tough political decision if he fires sessions, if he fires mueller. if he takes those dramatic steps, would the political blow back and consequences be worse for him than the existence of this investigation that's a tough decision for the president to make. almost everybody, almost everybody in politics would say that the political consequences of those steps would be worse for the president than the consequences of leaving this investigation in place but he might not see it that way. >> and you have to consider that if that -- if mueller doesn't get collusion but brings some other charges, how's that going to play in terms of whether you actually remove a president for something that you didn't have even with clinton it didn't

happen obviously. >> depends on the blue dress but then it didn't happen. >> depends on the charges. >> right exactly. >> if it's obstruction of justice, blatant, you have to have the facts on the table. we're a long way away from that. you can see a republican congress looking at a referral from mueller and saying, that's just not enough to impeach and we're not going to rely on that. it depends on the circumstances. the news of that subpoena indicates how little idea we actually have of what mueller is doing and where he is. we don't leak over there so we don't have transparency. >> thank you got to talk nicotine now. >> that's right. >> other news out of washington, d.c. the fda is moving towards regulating nicotine levels in cigarettes for more on all of this, let's bring in dr. scott gottleib. thank you for being here today >> thanks. thanks for having me >> i know this is part of an effort you began last summer to regulate nicotine.

what's the latest step in this >> right so we're trying to reduce nicotine levels in combustible cigarettes tononaddictive levels we took the first big step yesterday in issuing an advanced notice of proposed rule making it's the first step in the rule making process to try to pursue the regulations that will ultimately read to the reduction of nicotine levels it's the first big step. the next step after a comment period is issue a notice of proposed rule making and then a republican administrations and you think of less rule making. why is this important to you >> we're trying to move them to less harmful products. we see there might be modified risk ways to get less nicotine

by regulating this, we think we can more quickly migrate smokers off of combustible tobacco on to ecigarettes. it's not the nicotine that causes the cancer, it's all the toxins in the combustion it's the combustible cigarettes that's the problem. >> i've seen ads that run on television lately that are saying things like -- this is from a group that says let's make sure we do modify nicotine levels they say the cigarette companies intentionally concocted the levels of nicotine in these levels of cigarettes to try and addict people in the highest possible levels. do you think that's true >> the cigarettes have certainly been engineered over time to have the high levels of nicotine what makes them so deadly, they deliver the nicotine so quickly to the brain that's part of what makes them so addicts and makes the nicotine so addicting. the cigarettes have been modified over time, we know that

now, in order to be better nicotine delivery vehicles that's what keeps people coming back and gets people addicted. >> scott, the big question on ecigarettes, you want to take people smoking combustible cigarettes and obviously migrate them off ecigarettes may be a way to do it the other question is is it a way to get people to start smoking. the question is long-term from a culture and society perspective, would we be frustrated and upsell the if a whole generation started smoking ecigarettes? >> particularly with teens. >> right the youth access is going to be a big concern. we're going to take other steps to try to better address some of the youth use we see the youth use is a major concern to the agency. if all we do is end up addicting a whole new generation on nicotine by ecigarettes, we will have done a bad job. we'll be targeting the youth use

as we address the adult smokers. they're getting access to the ecigarettes and some will get access we're looking at net health benefit. in looking at that we overweight the youth use. if we can get ten adult smokers to quit but one new kid gets started, we're going to over weight the assessment of that one kid who's going to become a smoker because of what we've done. >> the long-term negative effects ofening could he teen aren't that bad, scott it's very weird to induce a dependency for no reason it's not like alcohol. some people think they enjoy relaxing is nicotine a stimulant a little bit? >> it's not a completely benign substance for sure. >> what's good about it? >> well, it -- you know, it's a legal substance. right now it's a legal substance. >> what's the thrill of using it is it just, you know, all of us maybe have an oral -- sometimes it feels good.

i don't know why kids want to do the vaping thing maybe there's an -- you know, an oral thing that's sort of satisfying or something. nicotine itself doesn't seem like something you want to induce a dependency for. get rid of it completely what good is it? >> i'm not in a position to say that it is a legal substance. >> what good is it >> in an adolescent brain it does have an effect. it's not a completely benign substance. >> how does it compare to something like caffeine? >> far more addicting than caffeine certainly you do see some co morbid psychiatric illness in people who are heavy users of nicotine. there is something that nicotine is doing to the brain to some people where it is providing some effect. not a completely benign substance. adults have the ability to get access to nicotine if they want it the preferable route if you

can't quit nicotine is to get a medicinal product. we're trying to increase the pathway towards more medicinal nicotine >> like a patch or gum >> right or other routes where it might be more satisfying to an ex-spoker. we want to see more product innovation or medicinal products. >> you are expecting push back what do you expect from the industry >> we haven't had a lot of push back from the industry most people recognize we're still at the beginning of this process. it's expected to get more difficult as we proceed through it we're pretty committed to the pathway we set out on. i plan to get the notice of proposed rule making out after a reasonable time period and we recognize the best time to go forward. >> commissioner gottleib, want to thank you for your time always good to visit with you. >> it gives you an opportunity to see cnbc is hosting our first

health care conference coming up on march 28th. healthy returns, investing in healthy innovation we'll visit with commissioner gottleib who we were just speaking with. you can go with cnbc.com/healthyreturns. >> time to slip in a break futures indicated up about 7 points on the dow. nasdaq a little stronger up 11 s&p up just under 5. this hour he's been called the trauma surgeon of wall street. rodg cohen joins us after the bailout of bear stearns 12 years ago. you're watching "squawk box. starting with advanced manufacturing that brings big ideas to life. and cutting-edge transportation development to connect those ideas to the world. along with urban redevelopment projects worthy of the world's top talent.

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welcome back to "squawk box. joining us now gabrielle santos. jpmorgan asset management. late cycle, not end of cycle does that sum things up? >> that's pretty good. stay long. still a story of not swinging the pendulum pretty long we don't want to say put all of your eggs in the equity basket

it's still equity is relative to fixed income as we go through the next couple of years of late cycle. >> still you'd split it evenly, domestic and elsewhere or easier to do domestic have to go into emerging markets? >> it is easier. people tend to feel more comfortable with their home country. the reality is if we are late cycle in the u.s., the returns are going to be a little bit more moderate, right if we think about other countries that are mid cycle or emerging markets which we consider even early cycle, then those are really the markets scoped for outside returns. >> you really think increase at four rate hikes this year. nobody else believes it. >> they don't? after the inflation data you think four >> i think honestly all the federal reserve is looking for and all they were looking for was for core inflation to make its way back to 2%

that's still the story, right? we had swung the pendulum a little bit too far in february towards all of us being worried that inflation was getting out of control we were right to bring that back towards the center but we're still charting the course of the fed was expecting. acceleration in growth, core inflation back and unemployment continuing to fall. >> that makes you think four rate hikes >> that makes us think four rate hikes, once every quarterly meeting. perhaps it's a little bit too early to expect that signal at the march meeting next week, right? they're going to want to take their time, see if things are evolving as expected i think there is a desire to get that policy normalization further along as we were just saying we are late cycle so there is a limited amount of room here to get back to normal. >> we might be late cycle. where do you think europe, asia, emerging markets are >> we could consider the eurozone, let's talk about the eurozone as more mid cycle.

>> okay. >> the way to think about that is how far for example their unemployment rate has fallen relative to what they would consider as normal, right? >> right >> kind of the neutral rate. so it's come a long way, but it's still a little bit of a ways away from that 8% normal threshold. so probably mid cycle. emerging market's a different story. they only really started rebounding in early mid 2016 so i would call that more early mid cycle. >> the trepidation that we've seen since the end of january in the markets, seems like it's all fed comments, fed what are they going to do? powell says something, bullard says something it matters in your view, central bank confidence is the most important thing. how do they get confidence do they get it from going for it or not going for it? do you feel more confident if they're tough and they normalize more quickly or do you feel more confident if they're attuned to not cutting this short >> i actually think they feel

more confident that they can get this process really underway of normalization. >> is that what the markets want, too? >> i do think so look, at the end of the day we liken this emergency medicine to get a patient overly addicted to medication, right? all we're doing is removing -- >> or nicotine. >> or nicotine all we're doing is removing that stimul stimulus that's still where we are. coming up, why peter teal says he is betting on bitcoin. we'll talk about that. time now for today's aflac trivia question. what car was marketed as the people's car e answer when cnbc's "squawk box" continues and a gentle wave-like motion... liberate your spine... aflac! and reach, toes blossoming... not that great at yoga ya but when i slipped a disc, he paid my claim in just one day.

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now the answer to today's aflac trivia question. what car was marketed as the people's car the answer, the volkswagen beetle when we come back, legendary wall street crisis lawyer rodg cohen. and then the founders of warby parker it's valued at $1.8 billion.

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good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square and among the stories that are front and center this morning, hong kong's richest man is retiring 89-year-old li ka-shing is stepping down as chairman of c.k. hutch chin son holdings his eldest son will take control of the company. a new bidder may be in the works for kwaul cqualcomm this comes days after broadcom dropped the bid for qualcomm after the white house moved to block the deal and a negative week for stocks hasn't hurt investo appetite for equities.

u.s. stock funds saw $24 billion at close that is the most since late january. peter thiel betting on bitcoin because he argues one cryptocurrency will become the online equivalent to gold. >> i'm not exactly sure whether i would encourage people to run out right now to buy these cryptocurrencies, but the technology that people like to talk about is the blockchain technology i'm somewhat skeptical about how well that translates into good investments, but the one use case of cryptocurrency for the store value may actually have quite a bit of a ways to go the question about something like bitcoin is whether it can become -- whether it can become a new store value, and i think the thing it would replace is something like gold. >> okay. take a look at bitcoin prices right now.

let's show you what's going on, such a debate, by the way, going on, even within the silicon valley community right now about bitcoin and about the blockchain we're hearing peter thiel saying maybe the blockchain isn't it. he's a bitcoin believer. there's a whole other troop that's an aethereum believer because there's a whole people in the valley building applications on top of aethereum. some of the valley guys always say wherever the developers go is where they go we will of course watch all of this. new this morning, vecto investiga investigators are looking into companies that design and built the pedestrian bridge that collapsed in florida robert frank joins us with that. >> good morning, joe the $14 million bridge was built by mcm construction. that's a miami-based construction firm. it was designed by figg bridge engineers. both companies have a long track record with big public works

projects mcm is on the other hand by the munia family it's done big projects like miami shipping terminal, miami airport. it's done $130 million worth of projects for the defense department and guantanamo bay where they're building a bay at fiu, mc mf helped with the expansion of the football stadium. the owner is a graduate of the business school and he's a donor to the university and director of the foundation. the company was sued this month in miami-dade court by a tsa employee who said at the airport a make-shift construction bridge that mcm built has collapsed the company issued a statement and said we will conduct a full investigation to determine exactly what went wrong and we will cooperate with investigators on scene in every way. the five brothers who own mcm have made more than $600,000 in

political donations since 2000 much of that to state and local politicians. figg group was sued by the delaware department and in 2012 a 90 ton portion of a bridge that the company was assembling in virginia, that collapsed while under construction figg in a statement said, quote, our entire team mourns the loss of the life and injuries associated with this no indication that either of these companies did anything wrong but you can sure bet the companies and the process that led to them winning this contract will come under scrutiny. >> what concerned me was additional details was they were stress testing the bridge when this happened and if that's the case, i don't understand why they didn't stop traffic at that point. was this something to make sure that we weren't causing anyone any delays in traffic or any issues along the way i don't get that. >> they were very proud of how

quickly this could go up without disrupting traffic using a new technology to do that, and obviously they're going to be looking at how quickly this went up, whether that process went -- and, look, you had a crane operator that was involved in putting this together very quickly. everyone was so proud of this when they launched it because it was started on friday and it was -- traffic was reopened on monday, which for a bridge is amazing. >> right >> if it works. >> thank you, robert. a decade ago this nation experienced one of the biggest free falls in our financial system >> if you haven't heard it yet, j.p. morgan chase is buying bear stearns at a rock bottom price $2 a share. >> really a crisis in confidence that continued to build as this week went on and ultimately crescendoed late yesterday. essentially it lost its ability to finance itself. when you're an investment bank and levered, you need to finance

yourself this can happen like that. >> we had the federal reserve step in, basically open up the window for investment banks, treated them like commercial banks. investment banking will never be the same. >> financial crisis -- this wednesday the senate passed the fwhal would roll back several portions of the dodd-frank bill. joining us on the squawk news line, rodg cohen, one of the most influential men on wall street and somebody who is intimately involved in what took place in september and what took place ten years ago today. rodg, great to have you. >> pleasure to be with you. >> take us back to that moment when did you realize that bear was in trouble and tell us about maybe some of the quick phone calls that you got and what took place that weekend. >> well, the problems had obviously been brewing for a

while, but late one evening i received a call from senior officials at bear who said they were having difficulty funding and were not sure they could keep afloat until the following week that led to calls to the federal reserve and then direct communication between bear and the fed and bear and treasury. >> so let's fast forward now because there's been a lot of back and forth about the role that all of these banks and the risk that banks took to buy bear in this case jpmorgan obviously stepped in in a very, very big way. but then the legal costs were so high, jamie dimon has said he wouldn't have done it again. would you have done it again do you think that a big bank should do it again, would do it

again? >> i think you will not again be able to do what i would call a whole bank transaction where you acquire the institution liabilities and all. you have pointed out quite correctly the negative aspects one would have thought that the government would have given jpmorgan a pat not for anything it did but for what bear had done because there's no time to do real due diligence. these are hurry-up transactions over a weekend, and there may be a theoretical liability. i'm not sure it should have ever been realized. so i think it will be very difficult to do, if not impossible, a whole bank deal. you will have to see the institution go through some form of resolution first to wash out the -- particularly the contingent liabilities. >> are you a believer that the resolution laws that we now have

in place will work one of the big questions has not been that we don't have laws now in place that should help mitigate a situation like this, it's whether they will work, whether people will even want to test them. >> actually, i do believe they will work. certainly on a u.s. basis. these have been very well thought through, both legislatively but even more practically because a number of banks and the government agencies have worked together to create an actual structure this isn't just a series of statutes there have been substantial table top exercises, substantial implementation of the approach and i have a lot of confidence that the current resolution regime will work >> when you look at the banking system today and you look at the

laws that are in place, some of which are getting rolled back. we just referenced and eluded to them earlier, there has been some worry among critics that in fact leverage is starting to sneak back into the system some of the rules may allow for a little more loosey-goosey practices, if you will do you think that's true >> actually, i don't i think the division line needs to be clear. the major institutions which can put the country at financial risk, there is no change in the much more robust regulatory regime which applies to them the changes in senator crapo's bill are predominantly for banks which are not systemically important. there had been a widespread view that regional banks do not have

systemic importance, and that is the focus of the crapo bill. there is no change in the regulatory regime for our major institutions. >> rodg, anything keep you up at night these days >> yes because i think there's one change in 2008 it was an internal threat what the banks and investment banks had done and today it's external if you look at what the external threats are, one has to start with cyber security and the risk of cyber attacks and the second would be bank secrecy act and any money laundering, the ability to penetrate institutions and the third is a phenomenon known as ring fencing, which has been called out in the most recent treasury study on resolution

ring fencing means that while international bank may live internationally, they would die nationally and that would harm resolution i think those three external threats -- >> rodg, no systems internally work is it even conceivable to you that we could wake up and look in your bank account and not just mine, lots of accounts, literally be sitting at zero is that even conceivable to you given the cyber security threat? >> i think that at a number of the major institutions which have poured tens of billions of dollars into this, it is highly improbable, but there are so many ways to penetrate the system, so many different avenues, i do not think that an area is inconceivable, and

that's why i put it at the top of the list. >> rodg cohen, the dean of wall street someone who literally was moment by moment in virtually every weekend during the weekend of bear and later in september of 2009 i hope, rodg, hopefully before september but i know for sure we'll be having more conversations. >> i want to know more about the cyber security does that mean printing out bank statements and keeping paper copies or does that matter >> i don't know. on that note, when we come back the men behind warby parker, the company has been revolutionizing the eye wear space. it's now worth nearly $2 billion. the co-founders will join us next stay right here. and the wolf huffed and puffed...

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for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online. welcome back, everybody. eyeglass retailer warby parker has a million funding round by t rowe price joining us right now for more on all of this is neil blumenthal

and dave gelboa. thank you for being here good to see you both. >> thanks for having us. >> good to see you. >> let's start off you guys are an eyeglass company. what are you going to do with research and development that's not exactly what i would think of when we talk about it >> one of the biggest differences between warby parker and other retailers is we try to create a holistic experience we think of our web experience, two apps now, but also the holistic experience includes vision testing and eye exams we now have an app that you can download prescriptions, it's called warby parker prescription check and you can do a vision test. >> what. >> >> how does that even work? that sounds amazing? >> we've patented some technology where we can pair your phone with another device like an ipad or a laptop, and then we know how far away you are. we serve you up vision tests and you cover your eye and you use

your phone as a remote, i can see, i can't see go to a network ophthalmologist. they ship it to you. >> that's great for somebody who hates going out to make sure i can get my eye test. i'm never getting a claw coma test if i don't have to. >> this doesn't replace a comprehensive eye health exam so we still recommend that all our customers go in periodically to see eye doctors in person, but this is an opportunity for people to get a new prescription if you know that you can see well out of your existing pair of glasses but you want to update your style, this is a way that you can do that in less than 20 minutes for $40 from home. >> how big is the adoption rate of this? it sounds kind of amazing. >> we just launched this a few months ago we're seeing really great feedback from our customers. it's still really new but we're rolling it out

it's now available in 30 states. >> can you speak to this you just raised new money, at a new valuation. i think the plan is eventually to go public why not go public now? why take more money now? what's the strategy? >> so this was an opportunity where we could do -- we could raise some capital from existing investors quickly and easily as we grow. we continue to see really massive opportunities to invest against. and in our future this is an opportunity to accelerate a lot of those investments in areas like technology and we continue to see details >> this is a glasses company capturing a technology silicon style technology

>> yes, we can categorize in different buckets but ultimately this is a big market $130 million for eye wear we're looking to capture we think about market penetration much like a software company would and we're seeing that, you know, no matter how we sell, whether it's online or through our stores that we have great contribution margins and have the ability to scale for years. >> do you want to go public? >> so far you've obviously chosen the other path. >> so we have a big vision for the company. we want to build one of the most impactful brands over the next 100 years. we think the best way to do that is to remain private we do think that's in our future but no immediate plns right now. >> contact lenses, that was my final question this morning. because that's in your area

but -- and there's some amazing companies that have sort of stepped into the fray. they're doing these prescription services and things. >> we get a lot of our customers asking us about contact lenses we're constantly thinking about products or services that can solve customer problems but we have no -- we have no immediate plans. >> dave, neil, want tothank yo guys both for coming in today. >> thanks for having us. >> always good to see you. coming up, former treasury secretary jack liu stay tuned he wears glasses stay tuned you're watching "squawk box" on cnbc you can't predict the market, but through good times and bad at t. rowe price we've helped our investors stay confident for over 80 years. call us or your advisor. t. rowe price. invest with confidence.

>> couple of stocks to watch adobe systems. they're beating the top and bottom lines. kroger has a standing, $176 million remaining. ulta missed estimates by 3 cents. quarterly of $2.75 did have an 8.8% increase of same store sales that was short of what the street was actually hoping for. when we come back, former treasury secretary jack lew will join us in studio.

we'll talk to him about lots of things, not only looking back at bear stearns but also looking ahead. stick around, "squawk box" will be right back. take a look at the futures you'll see that the dow is down by 10 points this morning. s&p indicated to open up by 5,2. nasdaq up by 7.5 we'll be right back.

where were you ten years ago from today if you haven't heard it, jpmorgan is buying bear stearns at a rock bottom price, $2 a share. we will talk about the lessons learned since the bear stearns bailout with former treasury secretary jack lew. third 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 live from the nasdaq market site in times square, i'm joe kernen along with becky quick and andrew ross sorkin futures indicated down finally. some stories that investors are watching this hour here's what's happening. nike conducting a review of its hr practices after it received complaints about workplace behavior the question is whether this is really connected a lot of head scratching this morning. company's brand president, trevor edwards, is leaving his

post effective immediately parker did not specify the nature of the workplace complaints or whether they involved edwards or any other executives trevor edwards was considered a potential successor who retired in august which raises more questions because if he's leaving today and retiring in august, does that mean that this is related, isn't related, if it really wasn't. >> this is weird. >> a harassment claim now, you wouldn't think he could stay until august parker plans to stay on as chairman and ceo beyond 2020 shares of nike up more than 20% up over the last six months and hasn't really affected the stock in premarket this morning. in political news the washington post reporting that president trump is replacing h.r. mcmaster. the move not happening immediately. the reports say candidates to replace mcmaster include john bolton and keith kellogg of course, we heard from sarah

huckabee sanders just yesterday that he was announced. >> this explains -- >> this doesn't -- >> no, but after that that may be the explanation she said -- >> that's what i'm saying. >> nobody wants to embarrass anybody. but i think this whole thing is embarrassing. on today's economic agenda, we are less than 30 minutes away from february housing starts then at 9:15 a.m. industrial production numbers cross 10:00 a.m. we get consumer sentiment. a few stocks on the move this morning apple supplier jabil circuit beating estimates. revenue for the company also topping estimates for th contract electronics manufacturer it gets about 1/4 of its sales from apple that stock is up by 3 1/3% check out shares of fireeye. the technology news site, the information, reports that both semantic and cisco are

considering whether to make a bid for the maker of cyber security software. that stock is up over 2%. >> you don't want to ruin your weekend and you're embarrassed by what's happening to mcmaster. cbs is reporting, major garrett, that john kelly could depart as soon as today. chief of staff so i don't want to make -- >> it's friday. >> but i don't want to make you more despondent. >> i feel bad for all of that. >> if it's a friday, somebody's going to go. >> i don't want you to -- you know what, it doesn't mean that providence is not going to play today at 12:15 that game is still going to go on so you've got that going for you, although you did lose two more games than i lost >> you're at 12? >> jack lew, do you fill out a bracket? >> i leave the brackets to my son. >> your former boss is pretty good. >> he is good. >> he called loyola. >> you have to choose where you compete. >> the senate has approved a bill that eases banking rules. it now heads to the house.

financial chairen hensarling says he will not approve it in the current form for more on dodd-frank, let's bring in jack lew. he served as white house chief of staff and omb director. mr. secretary, it's good to see you. okay, since i introed you with the dodd-frank stuff, we'll do that then let's go to tariffs after that let's even go to gdp and tax reform and whether you think there's some cause and effect there and whether some of the bonuses and some of the positive things that have happened, whether you attribute it to that let's start with dodd-frank. right move on bear stearns on the anniversary? >> i think as we start this season, tenth year anniversaries, what i remember, ten years ago we didn't see what was coming we passed financial reform to get visibility into the system there was always concern that small banks shouldn't be overly

burdened, but the question is what do you need to know in order to see a crisis before it's beyond the ability to address it you know, i'm concerned that defining the threshold at $250 billion is too large major sources of failure countrywide was less than 250. indie mack was less than 250 the idea was never systemic if you were 50. the idea was if you were larger than 50, regulators need to know what's going on so they wouldn't be surprised i hope this doesn't leave us exposed. in general one of the things i'm worried about, we're late in the economic cycle we know at some point there's a speed bump on the horizon. we're taking our eye off the ball a little bit. on leverage we'll see banks can get more heavily leveraged consumer protection we're saying let's roll back. now we're saying let's make it smaller -- larger banks only that get extra scrutiny. i just hope we don't miss the next crisis. one of the lessons ten years ago was you need to look ahead, you

need to see what's coming, you need to react before. >> is there any semblance or indication in your mind of how another crisis would manifest itself within the financial system >> i think one of the realities is you don't know in advance afterwards it's crystal clear. >> is there any path that you see? >> look, i think that we're in a different world now than we were ten years ago. there are -- there's much more influence and algorithmic trading. it's not just for the automatic trading, but how quickly things move i heard a little earlier you were talking about cyber security we have a whole new level of threats that ten years ago people weren't even fully cognizant of i think that the challenge is always to keep your eye on is their radar up so you can see what's coming at you not so you can predict we used fstop, financial

stability oversight council. where are the areas that risk could come it wasn't because we said we asked a question about area x that area x was necessarily going to be the problem, but you have to keep looking where are things changing? what's happening i hope that's going on i'm not confident it is going on. >> the problem that you've heard from so many of the small banks in particular is that this was just such onerous regulation and for small banks that would have to hire multiple people to try to keep up with the rules and regulations, it almost made it so that it couldn't exist as going concerns anymore that was bipartisan support in the senate. >> yeah. >> when i was still in office the debate was should you go from 50 to 100 i think the debate going 50 to 100 kind of addresses that issue. once you're over 100 there are very few banks between 100 and 250, very few. they're large institutions they're not in the category of they don't have the compliance

capacity >> fewer now than before because many of them got bought up because they couldn't afford to keep up with the regulations. >> that was happening before the financial crisis that there was consolidation and it continues i don't know if the cause is and effect is real you have to break apart the different aspects of it. you take something like the volker rule, applying to banks under $10 billion. no one could object strongly to that because banks under $10 billion aren't burdened by that volker rule now. that's recognizing reality not having the ability to see what's going on in banks at $200 billion is a different issue i worry about that it's just -- it's an anxiety that late in the cycle approaching the speed bump, and if i can jump to the third thing that, you know, joe you haven't talked about, if we have the crisis right now, if we had whether it's a financial crisis, business cycle recession, we don't have the fiscal capacity to respond or the monetary

policy it's quite scary when we were in the great recession after the financial crisis, if we had not put $1 trillion into the economy, we wouldn't have had the recovery that we had. if the fed hadn't been able to lower rates and do qe, we wouldn't have come out of the recovery. >> right. >> we now don't have a fiscal arsenal because we spent it on the tax cut and on the spending agreement. we've kind of spent the fiscal resources. >> mr. secretary, gary cohn left if president obama had said, you know, jack, i just can't -- i can't stand seeing some of the inequities that people are taking advantage of and their tariffs are much higher, develop something for me that you could live with. could you have developed something or would you have to leave? is there some way to do this without dismissing out of hand >> i didn't agree with a lot of

things gary cohn oversaw when he was at the nec i think the way the tax bill was advocated was not factually accurate >> what about tariffs? >> i agree with him on policy on tariffs. >> you would have left, too? if president obama asked you to do it you would have -- >> let me put my own words out there. >> okay. >> i think that the challenge on trade is nobody disagrees that there has to be fair trade we cannot let ourselves be victimized by unfair practices the question is what can you do effectively to deal with it? i think that the tariff decision that the administration made is very ineffective and it undermines u.s. leadership in the world. we built the international architecture we have to be honorable in the way we do it, and that means base it on facts, base it on law, base it on principles we believe in i think the national security argument that was put out is a very weak one. i think to say that it's china and then have most of the impact be on canada is not credible in the world.

to ignore the spillover effect that you're going to lose more jobs in autos than you gain in steel is just bad economics. whether you stay or you leave, i can't imagine embracing what this administration has done from day one i couldn't imagine being in it after, you know, some of the policy decisions, some of the moral decisions like, you know, charlottesville. so i can't imagine being in this administration what i do know is that the process you run at the nec is important. it is the way that a president knows whether the two sides are equal or one side is actually a stronger argument. i don't know how well that was done before. if the message now is i don't want to hear dissenting views, i don't want to hear the facts, that's kind of scary. >> the eminent economists, i'm sure you've heard of him, steve liesman, cnbc, has now gone to 3% for the year. i guess you're going to tell me that the obama administration

cultivated the soil to the extent that this was going to happen anyway. >> you know the recovery we're in >> don't you wish you had cut corporate taxes or something like that? >> joe, we are not in the first year of recovery late in the cycle. potentially going to be the longest recovery which means that most of it was in the obama years. let's remember, we inherited an economy that was going through the floor and put together a recovery that -- >> i know. you say this every time you come in wouldn't you have liked a one year -- wouldn't you have liked 3% we did it, every other president got one year of 3% now it looks like it's going to happen don't you regret not cutting corporate taxes to get here? >> i actually don't believe that the potential gdp has changed. i think in the shosrt run what this tax plan did, it threw oil on the fire. it gave a flash. we're going to pay for it and pay for it quickly the fed is going to force earlier moves. it raises the risk of

miscalculation interest rates are going to take away from the economy the kind of short spurt of growth that comes from throwing a trillion dollars on to an economy onto it this is a dangerous experiment we have never put a trillion dollars of stimulus into the economy at full employment. >> didn't you say, that's great. it was at a low when we came in. not just old people, 25 to 54. now you saw how great that news was. maybe we're not at full employment maybe we can bring back some of those people and get above 63% >> i hope that we bring more and more people back. >> then wages start coming. >> let's remember that the labor force participation rate is going down for a number of reasons. part of it is like all of us at this table, would era he not younger -- >> 25 to 54. >> more people leaving the work force. >> a lot of people at 25 to 54 were discouraged, disenfranchised and they're coming back. >> let's remember in 2008, 2009 young people graduated from school, couldn't find a job

because the economy was in the tank. >> right >> we had a catchup period to get people back into their first job. i think we delivered an economy that was moving in a very strong direction. i don't think that we're going to see 3% growth as the new norm i really do not believe it i don't know any economic forecasts that are showing that. i haven't seen steve liesman's forecast but i respect steve and i'll take a look at it. >> i was joking. it was ten years since bear stearns. so you know how quickly time passes we're going to test whether we can do 3%. there may come a time when you're in here and it may be more difficult to poo-poo this because it happens. >> the basic argument that this was the tax cut, the corporate tax cut is going to create jobs was that the money was going to go into wages. >> right >> morgan stanley did some analysis that i heard on your greater network described yesterday morning, 70% of it is going into stock buy backs. >> some will go to buy backs, wages, it's going somewhere.

at least it's coming back. >> 70% into buy backs and mergers. 13% in wages that is not going to lead to the explosion -- >> unless demand picks up and then it goes into wages. you don't just, you know, hire people if there's no demand. it's a chicken/egg thing. >> sure. the thing that we need in this economy, not just in the united states but globally, is more demand. >> this might help. >> i don't think tax -- >> don't hope that it doesn't happen just so that you're right. >> i root for success. >> okay. >> i always root for success. >> i know you do. >> i think the facts and the analysis, the argument that this tax bill will pay for itself -- >> did you go back to your old signature or keep the new one? >> we've talked about this before i've had trouble with my handwriting. >> did you go back to your old one? >> we got to hear the music. >> when you're at a store and somebody gives you money back, do you look to see if it's your signature, paulsen's. >> it's hard not to notice.

>> nice to see you. >> thank you very much. coming up, public health experts say universal lifetime flu shot would be the holy grail. we'll tell you about a company that's making some progress on that front i want to know whether you keep the bill or hand it back later, corporate culture problems in the news we'll talk to adam grant stay tun, u' wchedyoreating squawk right here on cnbc.

today's edition of modern medicine focuses on the flu. meg tirrell is going to tell us about human trials. >> it was a particularly severe flu season and that prompted calls for a better flu vaccine take a look. >> universally a flu vaccine is one which would last lifetime hopefully but at least we hope it works for 20 years or even

longer. >> reporter: the flu vaccine is the only one we have to take every year dr. peter palese at the icahn school of medicine is one of the scientists searching for influenza's holy grail this nan this enabled the work to accelerate. >> we realized that there was a part of the virus that doesn't change from season to season once we recognized that, the real problem and the stumbling block is how do you get the body to preferentially make a response against that molecule >> reporter: palese's team funded by the national institutes of health has one approach. >> we are building a virus in the laboratory, a new one, which isn't out there and then you make it from that vaccine. >> reporter: it's going to make a response to protect against the flu. it's being tested in the

earliest faces funded by glaxosmithkline and the gates foundation initial results expected within a year there's still a ways to go to prove this technology. dr. palese says it's years away, not decades. they do say we should get our seasonal flu shots. >> one of the big issues that people like bill gates have worried about is a global pandemic like we saw in 1918 right after world war i, the spanish flew 1919. >> 1918, yeah. >> the idea of that happening, would something like this preclude that? >> that's the hope if you could find a vaccine that could work on any strain of flu, it could prevent a possible pandemic from happening as well as lessening the burden. >> of the awful flu. >> which is pretty severe. we get tired of it, not think it's a big deal. hundreds of thousands of hospitalizations. >> and deaths, too. >> absolutely. >> meg, thank you very much. by the way, folks, this gives us an opportunity to let you know that cnbc is going to

be hosting a first ever health care conference coming up on march 28th called healthy returns investing in health care innovation we will be featuring top government officials, ceos, innovators and investors you can go to cnbc.com for tickets and more information. coming up, a long range shooter that didn't make the march madness field. the basketball player of the future that's next. and then later, morton school of technology adam grant will be here to talk about corporate culture problems "squawk box" is coming right back obvious.

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march madness is officially underway, but there's one shooter that might top anybody in the tournament. toyota debuting a basketball shooting robot called q. it's saying every single shot beating two japanese professionals. it's a glaring hole in q's game though the robot is completely stationary. >> might be a problem. >> reminds me of rodney dangerfield had a putter in "caddyshack" where every time he -- >> yeah. yeah. >> remember, it was sort of the same -- >> this is like setting up a

catapult you don't move anything. >> anyway, andrew and becky, just -- you guy have stuff you're doing during the day. i did see this next shot this is the way this ended, becky. i told you there was a -- there was a free throw that was missed there it is. that's the only reason they had the ball was because of a one on one in the other end there he is. running down, passes it up to him. way out there. that's what won the game i guess we won't see the miami coach. he was in shock. it was kind of bad. >> eight seconds left. >> there you go. yeah, down at the other end. they had a one and one and they were up. they had a one and one and missed it. i think we have a shot of sister jean who -- she's 98 and she totally analyzed the game like she was there. she's like the coach one of the freshmen went into -- in, you know, to talk to her

he thought she was going to say a prayer she goes, you have to box out number 23. >> nice. >> just classic. >> i like her. >> so many great things. >> and she said a prayer too. >> she said a prayer she told god, we'll take care of what we need to do and if the refs call a good game >> yeah. right. >> classic you we'll talk more about a lot of things coming up, but we have breaking economic news coming in a few minutes. the data on february housing starts instant reaction right ahead we'll be right back. oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? ...no minimums. schwab has lowered the cost of investing again. introducing the lowest cost index funds in the industry with no minimums. i bet they're calling about the schwab news. schwab. a modern approach to wealth management.

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with pg&e in the sierras. and i'm an arborist since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future.

welcome back to "squawk box. wreaking news. february housing data on the start side disappointing. down 7%. 1.236 million seasonally adjusted annualized units. last month a subtle revision if we look at permits, down 5.6, 5.7% 1.298 million seasonally adjusted annualized units and the same is -- starts, permit revision it was a bit bigger. we went from a whisker under 1.4 to around 1.377 on the revision. the difference is, of course,

that those revisions are still both positive, so sequentially what you're looking at on the headline number is going from 1.329 to 1.236 pretty big. permits, from 1.377 last time to 1.298. so no matter how you slice it, we still have industrial production, utilization. our preliminary read on university of michigan sentiment. dollar index gave a chunk of that back today. you want to watch 90 in terms of interest rates, yes, it really could be number 16, 1-6 in terms of how many days ten-year note yields settle in the 2.80s as we hover at 2.83. >> rick -- >> yeah. >> -- will you do me a favor and have steven roach on today with you so you can actually talk to him when he's -- man, he was -- he was in a bad mood he really hates this administration, does he not?

seathing yesterday. >> you come back yesterday and your restraint was amazing really nice. i don't know how you did that. i'd like to see you two guys together that would be fun. >> yeah. no it's funny you said that, joe. listen, everybody is entitled to their opinion. if he wants to give it, certainly that's fine. in hindsight his notion is correct that, hey, it's a great thing. we export a bunch of things and basically what we get is -- we give out ious. so basically we owe other countries for our capital. imagine you're a head of a household, joe, and you keep outspending what you make and you keep financing the big deficits in your budget with trading deficits see, too much of a good thing is never a good thing that's the problem with economics. they say, oh, my god, this is a great deal you're importing capital, it works great, which was his

argument the problem is how much does it cost to service debt on debt anyway, that's all right, joe. thanks for noticing though. >> i thought navarro was pretty interesting. he certainly believes what he's saying, i'll tell you that much. >> listen, he certainly does i'll be quite frank, i agree with much of what he says. his heart's in the right place and i do think that we have to address the fact that how can we look at ourselves in a very nonpure system, pretend it's pure and say, aha, tariffs are a sin when everybody we're trading with have tariffs and they're all much higher than ours. to me, don't concentrate too much on the zero sum game of the numbers of trade deficits. count on the notion that you have contracts that are obsolete, need to be revised. >> rick, thank you have a wonderful weekend. >> you, too. thanks, becky. thanks, joe. >> loyola, rick. loyola how did you like that? awesome. >> oh, my god, shocking, wasn't it >> great

awesome. the ramblers named after a car. >> yeah. hey, yeah, the car's not around but at least loyola is >> all right steve liesman is here with more on all of this, too steve, what do you want to focus on for the numbers >> real quick, january upward revision february coming in below expectations single family was up it was the multiple family, multi-family that was the decline. that's like very, very random in terms of the month -- the permits were down a little bit i think we should talk about the overall housing market guys, if you have that chart in the back, it's not updated to show the current data, but it doesn't matter i mean, there's the story. the story is we were going hog wild for many years. another little part of the story, speaking about ten year anniversary -- >> yeah. >> -- look at the decline in housing and when that began to happen '05, '06 there was a red flag that was raised. certainly was yellow for a while before it became red then it fell

it crashed a variety of government programs including the fed slashing interest rates harp, hamp, they did all of these programs now you have this long, slow ride back. >> in fact, it's been such a slow ride back that it's impacting pricing. you talk to diane olick or anybody else, held' tell you it's housing you're getting pricing too high because they're not building enough to keep up with the millennials. >> what i didn't have a chance to do, i made a chart this morning, didn't have a chance to make it for tv, as a percentage of the population. that chart, you can do it in your brain you say the population is growing like this, that's a patented air chart, folks, and then divide it by the number of housing starts there's many fewer housing starts. >> not just growth of population and millennials who put this off because they were burdened with the student debt they hadn't been into the work force. jack lew talked about how so many didn't have jobs when they

graduated in 2009 and so far they are finally getting to the point where they are having kids and need a house. >> it's a lack of confidence in housing, right >> yes there's a push me/pull you on fixing that chart. you talked about one this morning, which is the dodd-frank reform. >> right. >> it is possible that removing easing, some of these regulations on some of these smaller banks could create more incentive, more demand, more lending for buying these homes for the millennials. >> that's interesting. >> possible. assuming that's one of the things holding them back the other though is what's the fed doing. they're raising interest rates now my father, probably your father, and joe probably bought homes in the '70s. i'm just joking. economic humor >> if it's -- >> economic -- bought homes in the '70s. >> look ten years older than me even though you're not. >> i deserve that. if you want another one, i'll

give another. >> may i have another? >> bought homes in the '70s with 10, 12% -- >> we're not even at 5%. >> but relative to where it was. so there's this race going on. better regulations make more money available but perhaps higher rates cap some of the ability of some of those people who want to buy to get in. >> did you see yourself on the bear stearns. >> i did. >> all dark hair on the sides. >> was it dark on the sides? >> joe, i don't like looking a myself yesterday let alone ten years ago. >> i feel like barbara walters oh, my gosh, my hair styles. >> you haven't changed a bit, becky. >> faber -- >> looks the same. when we return, our corporate story of the morning nike's corporate heir resigning. citing workplace complaints. unclear whether it's related we'll talk about that with adam grant and new podcaster. we'll talk to him right after the break.

a lot is going on. former qualcomm chairman paul jacobs wants to take the company private. he's sent the communication to the board about his intentions we have more on this development during "squawk on the street." the news coming after broadcom talked about it.

>> news breaking late yesterday on a shakeup at nike courtney ragan joins us with that story. >> courtney ragan. >> unclear if the two are related. heir parent resigns. that's given to employees in the same memo that reveals reports of inappropriate workplace behavior cnbc has seen a copy of the memo that nike ceo mark parker sent to employees saying instances of workplace behavior have been reported in recent weeks but do not reflect our core values of inclusivi inclusivity, respect and empowerment. nike is looking at the hr systems and looking at the team to have a sharper focus on culture. they go on to detail changes trevor edwards is resigning from his position but retiring in august nike has not explicitly linked edwards to the inappropriate

workplace behavior but rather directs us to parker thanking edwards for his significant contributions to nike after 25 years. edwards has long been viewed for success. they're saying he will remain chairman and ceo beyond 2020 andrew >> thank you, courtney appreciate that very, very much. another corporate culture story in the news. united airlines still grappling with the fallout with the dog that died aboard one of the flights on monday. the airline misfired a recent employee rewards program miss fired on a recent rewards program. joining us is adam grant from the wharton school at the university of pennsylvania and a new podcaster. ted is your podcasting platform. >> yeah, work life. >> work life which is pretty cool i heard the one you did with ray dalio. >> thanks for listening. >> we really liked that.

>> ted it's called ted. >> we're the ted talks people. >> he was thinking bear. >> after the mark walhberg -- >> no, no, no. the guy is -- >> he's doing this really -- you would have -- joseph, you know how you drive the car back and forth? you -- i know you're not a podcaster, you would like this this is up your alley. >> take his word for it, not mine. >> wharton. >> carte blanche. >> so help us understand what you think is going on at united. is this a culture thing, a mistake, where do you put it >> it's definitely a leadership thing. how many leaders do you see saying instead of giving every employee the bonus, i'm going to enter them into a lot ri where one will get a mercedes and a couple others a vacation >> no, reward the hard work and reward the people. >> i guess the question is, is that management style trickle down to what took place with this flight attendant and dog or what happened a year ago

>> i think it has to, right? there's a tone set at the top. when leaders show a lack of concern for their employees that trickles down to affect customers. >> you know what, i've heard two things, that -- the idea that you talked about, the compensation one i think was the brainchild of the president. i'm kind of surprised more people haven't tied these things together given what we've seen over the arc of the last year. what happened? should the board be asking questions about this >> i would be. we've known for decades now that the decisions leaders make have a cascading effect when i look at my president or ceo, there's a systematic question of culture it's a lot easier for me to miss the boat this kind of behavior is contagious seeing one person act rudely makes people three times less likely to help someone else. >> also just going back to a year ago at that point the ceo's first -- when dr. david dao was dragged

off the flight the ceo's first reaction was to defend the employees you can understand that with a company that's had so many problems they didn't react exactly the same this time around but they are still defending this flight attendant, believing her word over the owner's that she didn't know there was a dog in that bag. >> that's a tough call you want to be loyal to your employees but you have to take care of your passengers. in this case i think it's reasonable for united to say, look, we're not entirely sure what happened and we want to investigate. >> all the of my carry on luggage needs mesh breathing holes for the stuff that i'm bringing my dog goes it's the clearest thing in the world what this case is and what's in it she's saying that she thought it was normal luggage. >> she didn't understand them because they had accents. >> you can see that it's a dog carrying case. they should know that. >> the people around them say that they agree with her. >> another management story i'm curious about is sexual

harassment in the workplace and also -- we saw this nike memo today and it's really unclear what's going on. is that good leadership, bad leadership what are you supposed to do in these situations by the way, it's a totally different situation but the john skipper situation is somewhat similar in that they come out with a statement that he's leaving. you only find out 2 1/2 months later why. >> i mean, i think there's a legal answer to this, right? from a culture standpoint what you're supposed to do in crisis management, one, very clearly acknowledge what happened. two, take responsibility for changing it. in this case, right, you have a bunch of lawyers i think in both cases saying we can't actually come out with the full story until we know exactly what happened and we've done our full investigation. i think that makes it tricky to manage and lead. >> that is a problem for a lot of leaders there's lots of timings where a leader wants to do something and the leader says, sorry, you've got to shut up. >> look, i get that. i would say, your job is to

lead manage your lawyers, not be managed by them. >> exactly exactly. i understand in some cases the privacy you want to protect some of these issues. i do understand the idea of trying to figure out what happened with your employees before you come out and do it. are we ever going to hear anything more about this >> i would assume so >> let me ask you a related question to this, which is there's a view actually on wall street, this goes to the me too situation, that one of the reasons you don't hear about this is people get laid off, or fired, or resign with -- and there is no acknowledgment of the situation one way or the other. then they go off and get jobs elsewhere. nobody says anything because of the legal issue because nobody wants to get into a lawsuit with them over this what is the right -- i mean, i know what the right thing is to do is there a way to thread the needle >> i don't know. i think that's tough in a lot of cases you want to avoid the p.r. disaster. you want people to leave as soon as possible. leaving quietly and finding a job is the shortest path

if we look at this from a long-term company culture, the stories get out eventually you worry a lot about the signal you're sending and your values and what kind of people you can attract and retain i don't know if there's a way to thread the needle. almost every decision is ignore the short term pressures and think about what's with the company for the long run. >> you've been in the podcast a bit. who's the most interesting you've interviewed >> so many one of them is trevor noah at the daily show trevor, it turns out, makes up about 90% of his material on the stage in improv. >> really? >> yeah. he says he wouldn't write otherwise. the kinds of jokes he tells in front of an audience are funnier than what he would make up writing. >> any unique management trick you've learned from them >> from the daily show >> no, from any of the people you've spoken to >> i went to a tomato paste company at morningstar run for decades with no bosses forever. >> how does that work?

>> you can ask whether it works everywhere one thing i love from them how many meetings have you been in wr the person in charge has no expertise instead, what if the person was run by the person who knew about the decision at hand that would be a cool practice. >> are you going to be studying that do you think that -- >> i've already started doing it in my own job. >> no bosses >> no bosses. >> have you told your bosses this >> i don't have bosses beauty of tenure. >> morningstar, that's the grillers company >> different morningstar. >> if you've ever had ketchup or pizza, they've probably made the tomato paste. >> thank you. >> thank you >> there's a student you may end up seeing in your class. >> eventually. >> definitely. >> definitely. >> you can -- if you're in arts and sciences -- >> you can go straight into wharton? >> you don't need to be part of -- >> there's a kernen headed to penn. >> i'm ready. >> not wearing off

december 13th at 7:00 p.m. >> the glow. >> for a lot of reasons. >> congratulations, go quakers. >> they go to the west coast and they don't come back as parents, the whole thing is -- you'll see traumatic. daunting. >> i believe you. >> if you get an early if you get an early decision, it is the greatest thing in the world. we'll show you pictures and you can look out for you can bring it out when we return, jim cramer live, from the yonew york stock exchange we'll talk with jim cramer right w. here are where the futures at right now.

see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool?

eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade with pg&e in the sierras. and i'm an arborist since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future.

he's back, get down to the new york stock exchange, jim cramer is joining us now you came back for the 10-yr anniversary, jim >> of course >> did you see your buddy faber? looks like the tape it was shot yesterday. >> i felt the nova game was shot two years ago. i don't know, a lot of history repeating itself >> yeah, i did not see a

bracket. did you do a bracket >> because of where i was, i am now piggy backing on other people's brackets. i did not get an in and two-minutes before a tip off, cbs, no way, didn't get it >> it is easy to mess up and you two finally got it under the water. >> i did it, a couple of years ago, i messed it up and missed the whole thing. >> jaim, i know david faber is sitting next to you but what would you do with qualcomm right now? >> i think qualcomm is too cheap. paul jacobs, i don't know, it is a nice thought there is not even a finding for nordstrom. that does not exist. i want to hear what david has to

say. give me a break. you own the stock for earnings, it is a priceless asset that the president likes. >> what do you do about nike right now? >> i like trevor >> i do? >> he always has the most to contribute about performance shoes and that's why i like nike this guy is -- he's the reason why you want performance shoe bases. we got to know more. i totally agree with your discussion, we got to know more. >> all right, you had your early call on larry, you spoke to him since it was totally official. i sent him an e-mail >> very exciting, is it? >> i think it is exciting, i do. yeah, we'll leave it at that >> i am proud of him it is great. >> jimbo, we'll see you in a

couple of minutes. >> when we come back, we have got more that we are going to talk about what i want to tell you about. don't miss on "mad money" of the ceos of united technology and "new relic," both of them will be on with jim talking about different things, we'll be right back cfa institute. of emerging markets obsolete? at pgim, we see alpa in the trends, driving specific sectors of out performance. where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential.

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stocks to watch this morning, shares of tiffany are sharp liloer, the retailer report $1.67 a comparable store sales increase of 3% slightly above estimates >> let's get a final check on the market >> the futures starting out with everybody in the green but you will see right now back to that, 41 points of s&p 500 value nasdaq is up by 16 the last trading day of the week the gain of the dow of 115 points take a look at europe, early trading have been taken place there. you are going to see there you

also see green arrows. these are modest and advances with the exception of italy. oil markets this morning, wti crude up by 13 cents, 61.32. that does it for us today. >> make sure you join us on monday, "squawk on the street" begins right now ♪ good friday morning, welcome to "squawk on the street," i am carl quintanilla with david faber and jim cramer who's back with us. welcome back >> thank you >> s&p trying to pose its first game of the week expect heavy volumes today on options of expirations and rebalancing. europe is mostly green