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tv   Squawk Box  CNBC  March 17, 2015 6:00am-9:01am EDT

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>> live from new york where business never sleeps this is squawk box. ♪ >> good morning, everybody. happy st. patrick's day. welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin and the fed is in focus. an announcement is due tomorrow afternoon followed by a janet yellen news conference. before u.s. central bankers gather the bank of japan coming out with it's latest decision overnight. maintaining it's massive stimulus program but it cut it's inflation outlook because of the drop we've seen in oil costs. if you want to know how things are shaping up for futures this morning. we did see a rebound with the
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dow up 228 points. you're looking at a few red arrows with the dow down by 60 points. the nasdaq down by 13. >> a couple of other stories. let's take you through some of them this morning. february housing starts and building permits released at 8:30 eastern time. stocks expected to drop by more than 2% with the weather being a big factor. two well-known tech companies to post quarterly result afs the bell and then there's the buzz story of the day. apple tv and the wall street journal reporting this morning that the company is working with programmers to offer a bundled service of about 25 channels. now broadcasters as part of the bundle are said to include abc, cbs and fox but channels owned by cnbc's parent company comcast so far at least will not be part of the service. the price tag $30 to $40 for the bundle. they would include things like
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espn in that and the question that i have is whether the economics of -- whether we're actually seeing the true unbundling of all of that. >> it seems like it is the marketplace doing it itself. >> the cash -- >> it's been going on for awhile number one and comcast along with apple is going to do this and apple got the idea that comcast at the same time they were talking with apple they were developing their own platform to do it and apple was also talking to time warner cable until time warner cable was acquired by comcast and now they're not going to. how are you going to offer, even if it's a slimmed down bundle of programming that doesn't include any nbc assets. you see what happens when you try to offer something and you're not going to have final
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four. >> so there's the cost of the package and the content. >> they're not negotiating with whoever. you've seen it. the content provider always wins. you can argue against whether nbc can have an upper hand here if you'd like. but go ahead. >> i would make the argument. >> make your argument. >> that over time it is impossible to believe that the economics of cable tv and content continue in the way that they do especially, by the way, with the lesser channels and that's where all of -- that's where a lot of it happens to be. >> how would the lesser channel apply to something like cnbc? it wouldn't. >> it actually would though. >> no you can drop the smaller channels but you're going to need things like usa -- i was kidding about cnbc. it's not a lesser channel. you're going to need to offer cnbc in a bundle. >> you may and you may not. but that's the question. >> i wouldn't want to bundle without cnbc. >> i wouldn't want to bundle
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without cnbc either. >> let's wear it at that. >> but i think there's a larger problem here which is to say, first of all i think we saw and we talked about it a couple of weeks ago when we looked at viacom, they dropped cable channels and people just continued to live. >> wait until march madness. >> this might be a turning point. >> but there's people that don't even have cable. >> when there's been a disagreement between content providers and -- most of the time the content -- do you remember last time he was so smug about totally winning everything he wanted in the last battle. >> it becomes much harder. >> there's a lot of little different services. 30 to $40 for 25 channels versus 90 for everything else.
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>> but you know what this means, this means the cable companies are going to be doing things like charging more for your internet connection. that's going to be the only place. you're getting phone service essentially for free. >> much higher margin business. meaning if you're a cable operator i don't know if comcast or charter or whomever would want to admit this it's just as high a margin business in fact a higher margin business not to offer the tv services. if you could stop having to deal with the tv stuff you would do much better. >> most cable companies don't want to be a utility. >> one said it may be difficult for apple to launch a service without universal challenge. >> i doubt it. >> i don't think they would do that and blind quote that. >> i don't hi so either but i think this is one savvy media
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executive is all i'm saying. >> we watched this for a long time and this is a turning point. >> there's going to be a bunch of little turning points. it's not going to change. it will change. >> but the point is they're going to go out of business joe. that's what i'm trying to say to you -- >> right now i have hundreds of stations and i don't watch a lot of them. >> there's many channels that will disappear. >> the stain glass network. i've never even seen it. >> i've not seen that. i think you're making that up. >> did i? >> i think so. >> if you can learn how to make it it might be good. among today's stocks to watch, american airlines the company is going to join the s&p 500 and will replace allergan being required by activists.
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we'll talk to doug parker at 8:00 eastern. two new studies finds gilead's hepatitis c drugs are largely cost effective in the u.s. but researchers are cautioning the widespread use will be a significant cost for the nation's health care system they spent like 2%. >> does that surprise you. >> it was a frightening article. it was a 39-year-old man that needed a heart valve and he was waiting in the hospital for the heart valve. they said we have no surgical instruments or heart valves. you need to be discharged and go home. so he went home and waited and he finally died. but everybody has health care in venezuela. everybody is covered but nobody can get it.
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>> yeah. >> basically there's nothing down there because of supply and demand. hopefully we're never faced with anything similar here. >> other corporate news this morning, pinterest raising $367 million in it's latest round of funding. that brings it's valuation to $11 billion. it's still looking to raise more money. in other media news disney is in early talks to back draft kings. that site lets users legally wager real money. fortune is reporting they're in the middle of raising a new round of funding at a valuation of at least a billion. draft king's biggest rival is fan dual which has investors including comcast ventures and nbc sports ventures. >> uber cfo is stepping down. making that announcement in an e-mail -- i'm not going to know how to pronounce his last name
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there? an advisor to uber. >> four sil bulls. >> there's not a plan yet. >> currency swings cost companies last quarter $18.7 billion which we talked about a lot. it's real money. it's $18.7 billion. a report by currency risk management consulting firm fire apps says that the total negative currency impact was the biggest since the height of the euro crisis. earnings per share of north american companies were hurt by 6 cents a share on average and we have him on today. the man behind the report will be on at 8:40 a.m. eastern. >> let's get a check on the markets again this morning. as we mentioned the futures are indicated higher. take another look and you'll see this is a massive rebound we saw yesterday. it erased all of last week's
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declines ahead of the fed meeting setting up. the dow down about 80 points. s&p off by 10 and nasdaq down by 18 points. in europe looks like things are mixed. not massive moves except in germany where there's a decline of over 1% in greece. that up by 2.75%. the shanghai up by 1.5%. take a look at oil prices. crude oil continued to struggle it. it dropped 2% of 4388. that was the lowest level many five years. now down to $43.18 barrel. check out the bond market. ten year at 2%. 2.047%. the dollar yesterday took a brief pause in it's rally. dollar index was down by .7%. that was the worst day in a month o. the dollar is down against the
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euro and yen again with euro at 106. gold prices up by just over a dollar. >> oil prices getting squeezed again. sanctions against iran would be lifted if a deal was reached would bring more iranian oil to hit the market here in the u.s. oil storage is now the major issue. our next guest says it's getting so full that buyers may soon be storing it in church basements and schools. my thing is leaving it in the ground which they're able to do now and they can get it almost immediately, right? that makes a lot of sense. is anyone going to store it in a church basement? >> well you know if it goes deep enough it's probably worth it. you'll pay it back later. >> explain the technology and
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how rev lent it is so far. >> the principle here is if you're going to spend money well, if you don't do the fracking and then come back to it later. not just when prices recover but when services companies weakened as a result of the stagnation and are willing to cut you a deal. the idea would be instead of having to wait for a supply response it would be right there in the pipe. it's a matter of days or weeks rather than months away. >> how long would people leave it there do you think? would it only finally come up if prices recover or would eventually say look we've done it and we might as well bring it up anyway? >> the idea is eventually to bring it up anyway. that's the point of drilling the well in the first place. one of the reasons you would do that is you would see declines in your other production. where we are the price versus been falling and production keeps going up. it's been only so long is that
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going to continue and we're probably nearing a turning point pretty soon. you'll start to look at production coming on to replace supply so companies can keep making revenues. >> so do you, in the last month, have you got more bearish? we're getting more and more people on here talking about 30 and even below that? >> yeah it's hard not to get more bearish when you look at the state of inventories right now and where is the demand response going to come from? probably not very many places. one place it can come is later in the spring. the saudis start burning oil for power in the summer. at this price they might be willing to burn more of it. a couple of hundred thousand a day relative to expectations. on the supply side things are starting to tighten up. if you look at north carolina as the most volatile and price sensitive of the areas in the u.s. we're starting to see retracement in production. you'll see 30,000 less in april. if you look at the producing
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counts by their break even prices there's about 100,000 barrels a day right now coming out of the ground that is above that break even -- rather let's try that again. the break even price is essentially above the current price and as a result you'd expect that to be a little bit -- that's not going to last too long. >> so i lost my train of thought here. so in terms of the iran sanctions, if those were to be lifted how much is that? do you expect that to happen if there's a deal and how much would that bring on the market in terms of supply? >> we do think a deal is more likely than not but the deal is probably going to -- >> more likely than not. what happened just recent developments? the letter or the inability to do it. it's almost bipartisan that some people don't want to do it. >> you can't get the majority to
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override it in the congress. the obama administration has been going for this since 2009. it's going to be part of their legacy. we don't expect them to back down so that it's lousy. so better than 50% odds. >> is that factored into oil prices at this point? this is the story on the front page of the wall street journal this morning. do you think it's factored in or will this add to more pressure on oil prices? >> it might be bearish for the prices right now because the deal they have won't bring back crude exports to their level right away. it's going to be a series of gates and steps. a process where iran has to do some things. the first step in sanctions relief probably won't be to roll back the sanctions that came into force in 2012. that's one of the hardest things to restore if they do. it might be 6 to 12 months out if you get those. on the other hand if they let more western investment back
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into iran in the interim they'll have more potential. the longer you wait the more you get. >> so you were saying that to stop it you need to have a veto proof majority to stop the deal. >> essentially yes. you're not seeing that right now. you might be able to pass a bill but when the president vetoes it the question will be where do dem cats democrats stand. >> they got fired up with the letter and netanyahu and everything. >> yes, sir. >> thank you. we'll see you later. >> thanks for having me. >> the airline well-known for cheap fairs across europe and things like charging to use the bathroom. now they want to come to america. ryan air coming to america. we'll tell you about it when we come back. ♪ can it make a dentist appointment when my teeth are ready? ♪ ♪
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can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ the answer is yes, it can. so, the question your customers are really asking is can your business deliver?
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the board of ireland based ryan air approving a plan to come to the united states. it plans to sell some seats for less than $15 each way. $15 each way. don't get too excited just yet. the official launch of the service will take several years. we have had the ceo with us plenty of times and some of
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these things are publicity stunts too. charging people for the bathrooms and other things. some of the seats will be very hard to come by. >> it's $15 for a one way ticket but it's 1500 to use the bathroom bathroom. >> take your chances. >> you can't make it 6 hours. >> i absolutely could. for $1,500 i could make it 6 hours. >> double layer of depends. >> we sit here for three hours and i don't go to the bathroom for about three hours before that. but if you don't drink anything the whole way across might not be pleasant but you can't do it. >> people that can afford to are at an age where they can't make it 8 hours. >> so it's fair pricing then. >> i don't want to be on the flight with people that haven't paid for it because you never know. >> you get charged while you're
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up there for a credit card with food. total market prices at that point. >> what else could they charge for. >> i like when some people claim it's a gimmick and not possible to charge $15 each way. >> yeah it's got to be. >> $400. >> no much more. >> yeah. >> probably is. >> you can get some fares for $400. >> but you're subsidized by the first class people. >> if every seat is a coach seat. >> you're much closer to $1,000. maybe 7 or $800. >> it's pricey. >> yeah maintenance, crew jet fuel. >> remember there were airlines that would do this but they would offer three seats for $15. >> right it's a gimmick and you can't use the restroom. anyway coming up a key election
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in israel today. plus why an nfl player is retiring at age 24 and the controversial debate that it is sparking this morning but first as we head to break here's a look at yesterday's s&p 500 winners and losers.
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welcome back this morning. it's election day in israel and
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it could have a huge impact on how the u.s. deals with a key partner. tracie potts joins us from washington this morning. >> one of those candidates was just here right here on capital hill two weeks ago benjamin netanyahu with the antiiran speech. the polls in israel are telling us his job could be in jeopardy. >> benjamin netanyahu cast his ballot this morning. so did his opponent. he made a last minute push for support promising no palestinian state on his watch. two weeks ago today he was on capitol hill criticizing u.s. negotiations over iran's nuclear program. >> it doesn't block iran's path to the bomb. it paves iran's path to the bomb. >> negotiations continued in switzerland. the u. s. and partners have two
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weeks to come up with an outline it. it could allow them to resume nuclear production in a decade. >> if you think the islamic state is dangerous a nuclear armed islamic republic is also. >> that's tom cotton. he wrote the letter that 47 republicans signed warning iran the deal might not stick after president obama leaves office. a senior u.s. official says iran brought up that letter twice so far in negotiations. >> so far israel's prime minister is against the negotiations but that could certainly change. we're watching at the election going on right now in israel very closely. when their polls close it will be mid afternoon here and we'll be watching about an hour after that for the results to start coming in. >> yeah okay. tracy, thank you. we're going to go to another part of that in just a second but i did brackets yesterday. try to change them 15 times.
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i've done rpi. >> do you still have the four number one seeds in the final four. >> no and i didn't even have kentucky winning anymore. i read a wall street journal piece that if it's 49% probability. 49% means 80% of people are going to choose them. >> oh. >> so the difference between 49 and 80, there's 41% of the people that are going to be wrong and the likelihood that they could make it. for you to win when you pick kentucky you have to have all the other games -- you have to be really good at all other games. it's hard to assume you're going to do that. i'm doing all kinds of different stuff. >> i already filled it out. i went to silver. i went to the upshot. >> did you take kentucky. >> we'll talk about it. >> i was just doing statistically. i wasn't trying to get tricky. >> i've done well in previous
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years. i'm going with my heart on a couple of things. i love iowa state. like the way iowa state place. we'll talk more about this before the tournament starts. this is a classic article about americans that go over and play in iraq. play basketball in the iraqi league and it's government funded and hugely popular and they say the worst american player is better than the best iraqi player. a good player can make as much as 20,000 a month and they say hey it beats working but they said they did have to prepare to go over there and when we pulled out troops in 2010 money is a little bit shorter now so -- is a little bit tighter now an one of the guys said it made it tough because money is kind of tight and it is difficult traveling to the games when you have to cross over islamic state controlled regions.
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>> what? >> the competition is difficult because of the cash crunch and the difficulty of traveling for games across territory held by isis. >> so you just have to hope you're not going to get kidnapped on your way to the game. >> the other bad thing, no night life for the guys. >> i'm sure. >> and food. >> who shows up? >> fans absolutely love it. do you know what -- like we watch guys dunk and we just think that's something. it's easy to do. when you go and look at where the basket is these guys are incredible athletes and it's great to watch but he played in syria, dubai and libya and he says oh yeah iraq is much more stable than libya. >> how long is the season? a couple of months? walk away with 80 grand or 100 grand? >> they won last year the super league champs but they dropped out this year because i guess
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it's too hard to travel across the isis held territory. i don't know how long the season is. >> i'm going to stop talking about my commute to new york city. >> if you average between 4 and 10,000 but there's like 29 american players over there and they're earning a living. they love playing basketball. >> that's great. >> that opens your eyes to. >> i'm not going to complain about my commute into new york city. >> opens my mind about traveling because i would be petrified obviously. >> not worth 20 grand. >> reading about jihadi john and what he says. the knife is going to be cold when we do this and he describes each feeling that you're going to feel and then i'm going to put your head in the middle of your back. anyway on that note. >> i was going to do a different sports story. >> the liberals love this story.
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>> chris borland from the 49ers. he's 24 years old. he's leaving football. leaving the nfl. he says i want to live a healthy long life and i don't want to have neurological diseases and die younger than i would otherwise and he's basically making the case and the decision to leave the game worried about his health and the question of course becomes is he just -- is this just the beginning. is there a way for the game to change? there were some articles yesterday that talked about whether there should be no helmets or a lot less padding. >> the problem is you can't make better helmets because that makes them battering rams and they hurt people. it's still your brain getting knocked around inside yourel skoo. >> boxing used to be a huge sport in this country. >> it's still huge. >> but if you look at where it is today. >> football isn't going to go
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away. >> you think it's not going anywhere. >> how much are they charging for a 30 second spot this year. >> a lot of money. >> used to charge for boxing too. >> do you think football changes. >> no. >> no. >> it has been changing. you're not allowed to deliberately -- >> and you don't think 25 years from now when kids don't -- >> i don't know what additional things they'll put in but the liberals love this story. every time something like this comes out. >> you don't think generationally today -- >> parents are more concerned about their kids so is nfl and football broadly as big a deal as today. >> these guys are modern day gladiators and most of them know exactly what they're in for and the offset is living the football players life and life style and the money involved and everything else and these guys most of them don't want to retire because they love the thrill of the game so. >> but you have people like
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lebron james, he won't let his son play football. think about where the world is in 25 years. >> plenty of people will. >> everybody will have a robot, no one will be employed. we'll be down the toilet. new york will be completely overcome by a tidal wave from global warming and what else will happen and there will be no football. >> you did pretty well there. eating kale salads and no meat. >> can i add one more story to that? i'm drawn toward the stories that creep me out. the one that moved me is raw milk. people are drinking raw milk. i'm talking about unpasturized milk. >> would you say it's disgusting? >> yes. it's a big movement. this past week west virginia joined a movement where you allow people to kind of do this contract with a farmer.
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they buy shares of the cow and get the milk in it's raw glory. however we seem to have forgotten. while we're worried about that what that does maybe you're not getting the nutrients we seem to have forgotten why it came around. in the 20th century it was credited for largely knocking out all of these milk borne illnessst illnesses and if you listen to one of the doctors on the american academy of pediatrics said you shouldn't do it. people want to be more responsible for what they're putting in their body because natural doesn't always equal healthy. >> once again the notion that any additive is bad is sort of in the popular culture of -- >> that's just heating the milk to get rid of diseases. >> complaining that american
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cheese kraft singles have been put on the recommended list by some agency so the whole article was looking for the money trail to see how kraft paid off someone to get it done and the people they interviewed said most nutritionists say anything added is bad so kale is good. you can't call it cheese. the reason you can't call it cheese is because it contains whey and vitamin d and some things added to it but there is cheese and it's fine for you and it's good -- you get vitamins and it's not going to kill you but the modern day progressive. >> and i wouldn't drink anything not pasturized. >> an when you're pregnant you're not allowed to. just be ware. the pediatrician makes a good
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point. >> the left supposedly is so science based on everything they do. >> you know me with my thing, this was the story i instantly gravitated toward. >> come a long way in terms of food safety based on it being inspected and preservatives. >> there's some reasons for why we got to that point. we should tell you when we come back picks from mark mahaney and plus we'll see what he thinks about the apple tv buzz this morning. stay tuned. squawk box will be back. we're live from new york city on st. patrick's day. we'll see you in just a moment. ion kids everyday in our country lack access to healthy food. for the first time american kids are slated to live a shorter life span than their parents. it's a problem that we can turn around and change. revolution foods is a company we started to provide access to healthy affordable, kid-inspired chef-crafted food. we looked at what are the aspects of food that will help set up kids for success?
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making sure foods are made with high quality ingredients and prepared fresh everyday. our collaboration with citi has helped us really accelerate the expansion of our business in terms of how many communities we can serve. working with citi has also helped to fuel our innovation process and the speed at which we can bring new products into the grocery stores. we are employing 1,000 people across 27 urban areas and today, serve over 1 million meals a week. until every kid has built those life-long eating habits, we'll keep working.
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♪ ♪ i'm almost done. [ male announcer ] now you can pay your bill... ♪ ♪ ...manage your appointments...
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[ dog barks ] ...and check your connection status... ♪ ♪ ...anytime, anywhere. ♪ ♪ [ dog growls ] ♪ ♪ oh. so you're protesting? ♪ ♪ okay. [ male announcer ] introducing xfinity my account. available on any device. welcome back among the stories front and center. a battle of heavyweight shaping up for may in utah. it will feature a real champ and former serious contender. five time heavyweight champion holyfield will face-off against mitt romney. we need names for mitt. i don't know what it would be. probably wouldn't be nice given people are still unhappy with what happened a few years ago.
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holyfield is 6'2" inchtall and romney is 6'2" tall and 58 years old and he can hire a couple of people to kick the crap out of holyfield if he wanted to. with his money. >> might be tough. >> is there a way to give a couple of points to romney early? >> i don't know i'm worried about this. >> yeah i don't know what goes into the idea. i would not step into. >> no way. >> one punch. >> i don't care if he's 52 or 62 holyfield. >> no, one point from that guy. >> he'd be dead. >> my jaw would have to be wired probably. >> he could try to bite off his other ear. >> that might work well. >> we're going to talk about the internet for a moment. much talk recently as a bubble brewing in the tech sector. our next guest says there's
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three major differences between internet stocks in 2000 and 2015. here's the lead analyst at rbc capital markets. before we get to that i want you to indulge us because we have been talking about apple and the new tv plan and what it does to cable and bundles which is to say what? what do you think this all means? >> so another word for the internet over the last 15 or 20 years is deflation. it created transparency in retail pricing and advertising and travel and all the sectors have been inflation. we're on the cusp of it now. we're adding together things like cord cutting. the ability of people to select the content they want to pay for and apple coming out with a bundle half that of regular industry pricing. >> my friend says the content is king. content cannot only not be killed but is so valuable -- >> if it's king why has it been force bundled to consumers. >> just saying the demise of all
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of this is greatly exaggerated. maybe it will take time. maybe it will come slowly. i'm saying that this particular service without having sports without nbc it's not going to be very viable. >> i think that's true. >> thank you. >> and like cbs, remember when they didn't have cbs, it wasn't march when they didn't have it. is there anyway that you could sell that to someone -- normal men that are, normal people that love basketball are going to want to see march madness and if you don't have it there's going to be a problem. >> i'm not saying big broadcasters go out of business tomorrow. >> i'm just saying if you're missing something it's not going to work. >> but the question is what happens to all the smaller channels. social kwat associated with big broadcasters or not. >> a lot of content in the past
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is sold inefficiently. there's clearly really key important content packages. >> sorry to interrupt but how much can espn charge down the road? >> almost anything they want. >> anything they want thank you. >> to certain audiences. >> so content is king. >> certain part of content are king and it's being sold as all content is king. that's the change. that's the disruption you'll see. >> stain glass network falls by the wayside. i have 900 channels and i can't find anything to watch. some of those will fall. >> i've never seen the guys remodelling houses. >> and millennials are cutting cords. some of them never started with a cord. that will have an impact on ad rates overtime. >> if you're no longer talking about just automatically getting in on something. if you're talk about getting paid for performance on these issues it will change how a lot of things work. >> and for some it will be great because you'll get a much
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broader audience. a lot more people will watch the show but you better have the right content. >> some people could charge more than they're getting right now. >> does the margin come down even for the biggest players? >> no they'll get more distribution. so the best players will get more distribution because of the internet. >> it's not the newspaper business. you look at the wall street journal. i don't know what you thought of it ten years ago but the wall street journal today which i would put up there as one of the major broadcasters of the print world, by default, the margin on that business even though they still reign supreme in what they do with the new york times or ft or whatever you decide they're still in business but the margins still come down materially. >> if they have good content that more people want to watch and weren't able to watch or read before in the past they give you more capabilities. these are fixed cost businesses. more distribution means better margins. >> and the wall street journal was smart early on about making
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sure they're getting paid for the distribution on the internet too. others struggled with that. >> there's clearly a move toward ten years ago everything was free on the internet. that's not the case. we've shifted which is a good thing for businesses. >> there's going to be 75 inch screens or bigger. high def. paying for the same content as now and it's going to be expensive. you're looking at $5 million for a 30 second add. >> is it $10 a month? $20 a month. >> 15. >> so 15 for that. 30 or 40 for that. if you're somebody that watches a lot of content, netflix is another thing you can get back up. >> real quick before you go because we promoed you to talk about whether there's a tech bubble and then we got distracted. is there a tech bubble? >> i know bill talked about there being one. probably right in the private markets. in the public markets, no. not when the leading internet
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assets are trading at 15 to 20 times earnings. >> should we be worried that the private markets now are the public market which is is to say that you hear all of these players who traditionally would have been considered public are now getting into these private deals putting public shareholders into them already. >> that is the risk. there's two or three factors that are causing these bubbles in the private market. that's one that the public players are now in there and secondly you have strategic buyers because you have apple, google, et cetera with a lot of cash looking for ways to put it to use. so they invest in the ubers. that's a lot of demand for the private sectors. >> thank you for coming in and allowing us to get distracted. >> i will go long comcast at $151 billion and i'll go short apple -- >> he's not going short. >> short apple $730 billion.
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>> you go long apple at $730 billion and short comcast. >> no. >> i'm going to bet on the valuations. 150 for one and 750 for other. >> silly and i'll tell you why because you have a great hedge of comcast -- >> not comcast. pick somebody else then. >> you take viacom and call me. >> versus 730. i'll do it. versus 730 billion. >> who is going long? >> i'm going short apple and long viacom. long apple. >> i'll take that any day of the week. >> i'm not surprised. coming up on st. patrick's day everyone is irish. i have a fan in ireland that i said i would mention. he and his son. i said i would mention him. and it's good news for irish whisky maker. we'll talk to that company next. >> ten years.
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. as irish whiskey soars in popularity a craft movement is burgeoning. steven tilling is a top executive at tealing whiskey company. thank you for joining us. happy st. patrick's day. >> yeah thank you for having me guys. happy st. patrick's day from dublin city. >> i know you come by this
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honestly. this is something your family has been doing for centuries, but you didn't come by it easily. this is something you had to kind of restart on your own. why don't you tell us a little bit about your journey. >> yeah like our family we've been involved in whiskey for generations. myself and my brother are the most recent generation to get into distilling. as anyone who's been involved in it it is intensive. my brother and i are excited to bring distilling back to our city. the pot stills are working for the first time in a hundred years here in dublin. as an independent, it is a tough job to try to get these big pots back into the city. so phenomenally exciting time for us. and also for irish whiskey. >> something like 70% of the whiskey that's drank here in the united states is jameson. so how do you break into this
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market? >> yeah. like with every spirits category, there's always a market leader. so what the bigger mass market brands do is they go out and recruit. what we're trying to do is i suppose offer the next generation of irish whiskey drinker a lot of flavors and expressions. that they can trade up to and trade around to. so we're undergoing a huge amount of growth within irish whiskey. with any category you undergo segmentation. we want to be the next discovery brand for irish whiskey drinkers. it's been drunk by a quite a young demographic who potentially are looking for more contemporary styles but also probably focusing more on what we're doing now. and that's why it was so important fortous get distilling again in the city so people can see what we're doing.
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the demographic who's drinking irish whiskey as well would be 30 to 40-year-olds. myself and my brother being in that demographic feel there was a gap in the market to potentially do things on a smaller scale, potentially put a bit more craft into irish whiskey and try to get people an expression of whiskey they haven't seen before. >> stephen, i'm not a whiskey drinker. i admit that. but i have a glass of it sitting in front of us. joe and andrew have their own glasses. >> great. >> maybe you can tell us what's different about this? >> yeah. so i brought my own glass as well. it being st. patrick's day. with our flagship brand, the teeling small batch finish. we hand select the casts of malt and grain. we blend them and we actually finish them or marry them in a rum barrel. really different than what has been done before in irish
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whiskey. what we were trying to do is not alienate what people like about irish whiskey. but try to bring more flavors and taste profiles into it. so on the nose straight away versus any of the other irish whiskeys you'll pick up a signature molasses sweetness from the rum barrels. but then what we tried to do is recreate a thing called a dublin sipping whiskey. so it's got grain and malt in there. so it pours rain in ireland, so we get a lot of citrus fruits from our malted barley. it depends to be quite sweet on the nose as well. >> cheers to you. we'll like to thank you for joining us. we're running to a commercial. but thank you very much. >> i want to try this. go for it. are we going to do the whole thing? >> ready?
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market buzz over the next two days could be largely driven by one word. >> i'm here to tell you all about the word of the day. today's word is patience. >> new data from cnbc's exclusive fed survey on how patient the central bank is likely to be. >> the word patience means to wait in a calm way. look at elmo. he's waiting in a calm way. so he's showing -- >> patience. >> that's it man. there you go. oil prices falling down more than 11% over the last week. we'll tell you what could drive crude even lower over the next six months. data miner raising $100 million. they company uses realtime data from twitter that acts as an early warning system that could move markets. the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box."
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>> welcome back to "squawk box" here on cnbc first in business worldwide. happy st. patrick's day. we're on 6th avenue and 5th is one block that way. and it's crazy. joe kernen along with becky quick and andrew ross sorkin. i was scheduled to have breakfast on the other side and i changed it. there's no way to get over there. >> better move. >> no way to get over there. u.s. equity futures at this hour are not cooperating. we're supposed to be happy. we're supposed to be feeling good. becky's feeling good even with just one sip of that teeling irish whiskey. but we're indicated down 86. had a good day yesterday which i didn't really understand. >> all i can think is that people are now expecting that the fed will remove the word "patient" but it doesn't mean anything. that's what every single guest we spoke with yesterday said. >> are we back to bad news is good news? >> yeah i think so. >> god, these guys.
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>> it's really hard to break an addiction. >> didn't have a green tie on. anyway, overseas in europe, take a quick look. see what's happening over on the continent. nothing really. germany's down but germany was up yesterday. greece. greece did go down well below 800 at one point. wow. and take a look at crude. we're going to talk to an analyst this hour about the impact from a potential nuclear deal with iran. and what's on the wall street journal today that it could put further additional pressure on crude. but we're at 43. only $3.01 away from a 39 handle. >> below $43. >> nice. some other stories we're talking about. apple in talks to launch an online tv service. this according to "the wall street journal." service would include a bundle of about 25 channels that broadcasters are said to include as part of this bundle abc, cbs,
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and fox. but the channels owned rather by cnbc's parent company comcast will not be part of the service. we'll see where that ends -- what the whole package looks like in the fall. also the senate foreign relations committee expected to vote on a bill next week that would require president obama to get congressional approval with iran. he has threatened to veto the bill. and a new study getting a lot of buzz this morning finds the currency swing costs u.s. companies nearly $18.7 billion last quarter. the total negative currency impact was the biggest since the height of the euro crisis. north american companies were hurt by 6 cents on average. we're going to talk more about this at 8:40 eastern. but given the strength of the dollar and everything else puts the fed in a bind too. >> it sounds like something they're paying attention to. patience is a virtue for many
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but many believe the fed is beginning to run out of pit. steve leisman has the results of the cnbc fed survey. good morning, steve. >> yeah becky. and the cnbc fed survey says pretty definitively the fed has run out of patience. take a look at the data. 38 economists fund managers and analysts responding to our survey in the month of march. 69% saying the word "patience" will be removed from the statement. you can see that's a pretty good change from the prior survey which was in january. where you needed to get to april to get 50%. then there was a good chunk down in june. but i think it was that strong jobs report that really changed things around. let's take a look now at the fed timeline per our respondents to the survey. the word "patience" comes out here in march. then when is the first rate hike? it had been september. now it's seen as august of 2015. so a little later in the summer. the balance sheet begins to
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decline in april of 2016. that's the same as it was prior. and then when does the fed get done hiking rates? it was in the first quarter of 2013. so these are averages. moving back it doesn't matter all that much. the terminal rate the fed stops hiking this cycle at 3%. so we'll take a quick look at the lines here. the red line is the current line of the trajectory of interest rates. you can see, folks, by december 2016 the fed is still under 2%. and it gets to a final place of a below-normal rate. at 3% a touch under and maybe a touch earlier where it was last time. the commentary is all over the place. and i think that's emblematic of this volatile market. the fed is too worried that the economy will suddenly accelerate when there's no reason to expect it. the fed has moved into a period of policy irrationality.
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john donaldson writes in the fomc is ready to answer the question. does the economy still warrant zero interest rates? the answer is no. and their desire to normalize and create dry powder trumps all. they will move in june. i've got just as many people saying they're going to move in september or august or some other time. i'll be back at 8:00 with more on whether or not our respondents think it's behind the curve and the impact of oil and the strong dollar on fed policy. you can read all about it on as well. >> all right. we'll see you in a bit. thank you. for more on the fed's impact on the markets we are joined now by jim o'shaughnessy. he is the ceo of o'shaughnessy management. what do you think about all this? is the market hoping that the fed hangs in there longer? >> well i think that ultimately the market would prefer a slight
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raise in rates. we basically have been going on as he put it irrationally for quite some time right now. >> but when you say ultimately, that doesn't mean there's not going to be a knee jerk reaction. that there is not some irrational money in the market right now. >> i'm sure there is. and basically we've looked at the periods where the fed raised rates gradually and raised them during periods where there wasn't excess inflation. in other words they felt that it was time for rates to be higher than they were. they've been negative for a long long time. i think also they think a bit about the idea that if you've got $2 trillion in euro base bonds giving negative returns, it could be a wind fall if suddenly they can put their money into something that
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returns money to the investor. >> and then you could see -- if you see that rush of nunds into the u.s. treasury couldn't that put pressure on the yield anyway? >> absolutely. yeah. >> just watching it. >> if you've got all of this money waiting on the sidelines to come into the u.s. treasuries that will materially affect the rate that investors enjoy. so we think, though that most of the time benign rate increases particularly in the environment that we're in right now do not have to derail the stock market. they definitely don't have to negatively impact a lot of things that investors are investing at. >> i mean i look at the -- steve just said okay we get to 3% and he knows when it's going to be and he's got a nice straight line. and i see how they figured it out. i think there are 11 quarters
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between now and 2017. you'd get to somewhere around 3%. but is there any way we can assume it's going to be a linear move? the economy is going to cooperate perfectly -- >> i don't think the fed wants to do that anymore. they're trying to telegraph -- >> i agree. it's not a linear move at all. >> this is like we're never going to have another slowdown. but what if we have a recession at some point and we're at 2%? where's the powder at 2%? >> then you get the fed caught flat footed yet again. >> so the one guy that said they need powder that's the preeminent thing this need we can't be -- you know no arrows. >> if there's nothing there and something like this. >> except for qe which we saw what accomplished in japan. if you saw this. all it did was cut the income for every japanese citizen. >> yeah. listen.
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they're doing an experiment with things they never have before. right? and so i think the idea of a linear movement in rates is absurd. i don't think that that will happen. >> jim, do you think the way you're speaking sounds a little sanguine that you think maybe prices aren't too high here for u.s. stocks. is that -- >> well obviously u.s. stocks particularly the large companies. so for example over the last four years, the 25 largest stocks in the s&p went up 77%. the s&p went up 64%. you've got to remember how rare that happens. it very seldomly happens that way. in fact if you look over the last 50 years, you see the biggest stocks generally are a lag between 2% and 3% per year on the s&p 500. so one of the things is it's much better to identify stocks
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that are cheap on a variety of factors. because there's always cheap stocks. even if you're in a fully priced market environment. much of that pricing can happen at the very pricey end. right now that happens to be the teslas of the world. that happens to be some of the large cap names that dominate the s&p 500. that doesn't mean there aren't a host of other companies that are very cheap, have good balance sheets, have earnings quality which means they're not monkeying with the earnings. you know no enrons, no world comps. then we suggest you buy those that have the highest shareholder yield. which is dividend yield plus buyback yield. buyback yield is a fascinating factor. in and of it right now. take away the cheapness. take away the things that make it much better. we were able using the crisp data which is the chicago research and security prices it goes back to 1926 that
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particular factor has beaten the large stocks universe in every decade from the 1930s through the 2000s. >> we are out of time but tell us one of the stocks you found. >> bed bath & beyond. you know it's a name that is not going to strike joy into anyone's heart. and yet right now they're at a 12.8% shareholder yield. >> all right. well, thank you very much for coming in today. always a pleasure talking to you. >> my pleasure. >> you think you can walk around today and say my name's o'shaughnessy, i don't need no stinking -- i'll lend you this. i'm embarrassed for you. >> i may even break out i'm o'shaughnessy o'shaughnessy. which is the way they say it in ireland. >> that's a difference. >> i'm in ireland and go to order something on the phone and i say so-and-so o'shaughnessy. the guy comes on the other end
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and says i know how to spell. >> i think i could come close, i think. maybe not. >> well that was the great achievement when we were in first grade. we could spell our own name. >> so you don't want this. i'll give you this. >> i've got one. it's in greenwich. >> off place here too? >> i do. >> you've done well. awesome. a lot of green. >> by the way, remember, we couldn't get to the rest of jim's picks but he is a member of our squawk platinum portfolio and can go to to have see his picks. coming up getting voefld in m&as and deals perhaps. then we'll talk about what's going on in israel. we'll get a live report of dan senor. he's in tel aviv. and then data monitor users using twitter as a warning.
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we're back in a moment.
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welcome back to "squawk box," everybody. we've been watching the futures this morning. after a big rebound for the markets yesterday, you can see they are giving back of the gains this morning. the dow futures indicated 87 points below fair value. s&p off by 10 and nasdaq down by
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15. also look at crude oil prices this morning. crude is actually continuing its decline. it was already at a six-year low this morning. now down another 82 cents. we did briefly watch wti touch $42 and change earlier this morning. and let's talk a little m&a this morning. 2014 was a banner year for financial ipos with nearly 40 firms coming to the market in that sector. deal flow has picked up steam. and since record volume on the m&a front. our next guest runs the top bank firm and lead player in bank ipos. he expects the momentum to carry over to 2015. on the set is thomas misho. good morning. >> good morning. >> what kind of deals are we going to see now? >> well the banking industry has been consolidating for some time and the question is how fast does it do that. last year we had about 5% involved in a banking merger. the average is about 3.5%.
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the reason why people didn't really feel like there was a lot of m&as is because a lot were smaller banks. going to be involved in m&a. we think it's going to move up market cap. >> the big banks -- are he big banks in a position they can do deals? >> so what's interesting is the industry is as segments as i've ever seen it. you've got these companies that are the globals. they have different rules and regulations. they have different capital requirements. >> and that puts them out of the m&a business? >> many of them are going to the other way. they're getting smaller. and the power alley right now in banking is the $5 billion to $50 billion range. these are companies with real market caps. >> what are you talking about, for example? >> there have been acquires in the shares. they've been an acquirery. so east/west bank has been an acquirer.
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bank of america, circa 1990-something. >> i am not sure we're ever going to see the consolidation and concentration. i think the regulators believe the areas over-consolidated. they had 80% of the industry's assets. too big to fail. >> you talk about how the regulators don't want to see the consolidation, but they're responsible for much of it. the smallest banks in particular said forget it. we can't continue to fulfill this sort of regulatory need. >> that's right. that is true. that is a factor we hear quite often. and really it seems like you don't really hit the performance takeoff moment until you get to be about $5 billion in assets. so the banks smaller than that for a variety of reasons just aren't as profitable. i think that's part of the reason. >> all of these upstarts out of silicon valley that want to get into the banking business.
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what happens to the lending clubs of the world or a firm or a wealth front or any of these guys? does anybody old traditional say we actually need this? >> i have to tell you. the one thing i think the regulators have done a good job at is being the guardians of our banking system. given all the attention to who is accessing the banking system bank secrecy act. my opinion is they're just not going to let anyone show up and start accessing it. so the gates that are there for the banks are going to be there for the technology. and i think eventually the consumer protection laws are going to get there. >> to silicon valley? >> to anyone involved in the lending business. i think over time to date it has been something that has slowed down the business. hopefully we'll reach an equilibrium where that won't be the case but today it's been something that slows. >> and therefore makes those businesses less attractive? >> maybe less attractive to
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where they are today. but still might be attractive longer term because there's a lot of big expectations in some of those companies. >> and real briefly, ipos whab do you expect to see this year? >> they're going to be more. i think they're cheap. but when you have strong stock prices you've got a good market. >> you believe the big guys ultimately break apart? >> they will be smaller. they will be smaller. you look at citigroup. that's a real company. i don't know if you remember the associates they acquired. that was one of the biggest companies in the financial services industry. they just sold it to spring leaf financial. so you're going to see this happen at a steady pace. i don't think there'll be a big crescendo moment. >> thanks for coming in this morning. appreciate it. coming up the world's highest paid model is stepping away from the catwalk. that's coming up next.
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it is st. patrick's day. brazil getting in on the occasion. christ the redeemer has been lit in green for the holiday. that must be something to see in person. and big news from the modeling world. the world's highest paid model, gisele bundchen is set to retire from the catwalk after almost a decade in the fashion spotlight. the 34-year-old brazilian model took home estimated earnings of $47 million during the past year from contracts and other business ventures that makes her the highest paid model for the eighth consecutive year. she's expected to stay involved in the fashion world and she has contracts with h & m and chanel among others. just about topped out the market for euros when she said i want to be paid in euros. >> i'm guessing she's not getting paid in euros these
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days. >> i don't know how that would feel taking it at 1.40. >> my guess is she didn't keep it in euros for long. right? >> i suspect the catwalk is not a very profitable enterprise. >> not compared to the other stuff. i'm sure to even get her there, you've got to pay her. considering she can make -- i don't know what she makes in a day of shooting or something. a ridiculous number. >> yeah. but she does a lot of things. i've seen commercials with her all over the place. >> in the old days it was like $10,000 was a lot of money to go on the catwalk far day. now i guess it's probably $100,000. when we come back this morning, we're going to talk about crude oil. it is falling once again. it is down 12% for the last week. take a look. below $43 this morning at $42.88. when we come back we'll check out the factors that could drive oil prices lower in the next six months. and an election in israel that
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could mark the end of the netanyahu era. we'll be joined from tel aviv. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
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welcome back to "squawk box," everyone. in our headlines this morning, foreign investors sold u.s. treasuries for a third straight month in january. the government says that that pushed outflows to the highest level in at least three years. boeing says it could do a satellite deal with the technology giant this year. those companies want to expand internet access around the world. and the tech story of the morning. "the wall street journal" is reporting that apple is working with programmers to offer a bundled service of about 25 channels. it could launch by this fall. and check out this. an internally flawless 100.2 carat diamond. it's not 100 as you can see there. it's a 100.2 carat diamond.
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unveiled for display in dubai. it will be auctioned next month by sotheby's. the diamond was discovered a decade ago in the de beers mines of south africa. you'd have to be like married to david koch -- >> i would not believe anyone who wore that would be real. >> unless it was david koch's wife. >> maybe. but watching that on anybody's finger no way. >> it'd have to be a rich person. >> really rich. >> somebody with a security person at all times. somebody will cut your fingers off. >> at some point it becomes obnoxious obnoxious. you can't do anything. >> i would have cut off the last .2. just make it 100. >> nice round number. >> right. make an earring out of the other. can you do that out of .2 carats? probably not. that's not much.
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>> not much but you can do something with it. right in your nose. >> i've seen those. yeah. i thought about that. >> attractive for the show. attracting the millennials. >> that's right. we've got to do something. >> there we go. >> they're gone. they're doing what you say everybody is going to do i guess. and more and more people are going to become them aren't they? >> this is true. >> there will be a bigger and bigger part of the population. >> i still have hope for them to come around and become normal. >> apparently they do -- >> they do watch us and like us. >> they do. >> except when we don't call them normal. let's talk about oil prices. as we mentioned they're falling below $43 a barrel this morning. our next guest points to the market for that slide. joining us is matt smith, he is analyst at schneider electric. it's great to see you this morning. >> happy st. patrick's day. >> and to yourself.
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i know you think the strong dollar is part of the problem we've seen with oil prices but the dollar has at least leveled off a little bit. now we're looking at oil prices continuing to decline. what's happening this morning? >> well, that's right. i think it's just a temporary distraction today for the euro. we had a decent german sentiment number. but the key thing is the strong dollar has been pressuring crude low since the highs of last june. but then focused in the last few months and weeks, it's shifted to higher inventories here in the u.s. not only on a total basis which is 450 million barrels in storage there which is is the highest level in 80 years, but the key thing is that cushing inventory. we could run out of space there in the next few months. >> so this is not an irrationally low price as far as you're concerned.
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there are real fundamental supply reasons for it. >> yes. very much so. in the near term that's where there really is this risk given that yes we are seeing the rate count drop. we've seen it drop 46% from the high last october. but we're still seeing production growth continuing. and so that's likely continuing to tick up through this first quarter into the second quarter. and once that production growth starts to level off, once we see a demand response on a global scale, we are actually already seeing that somewhat in the u.s. here. we're going to see the market somewhat start to balance out a little bit. but until that point, we're going to be under downward pressure here. >> there's also a longer term issue that the front page brings up this morning. it talk about how this deal with iran could end up meaning we could see more oil coming to the market once sanctions are dropped if this deal goes forward as some are expecting. >> very much so becky. i don't think that's going to happen in the near term. they are making progress but
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they would lift other sanctions first before the oil sanctions. iran was producing sort of 3.6 million barrels a day prior to sanctions. now they're down to 2.8 million. so they could put the 800 back on the market but that's going to take a gradual process. it's not sort of going to come back straight away. and indeed these sanctions may not be lifted until early next year. >> so what do you think happens next? i mean momentum is certainly pushing crude prices lower. how low do you think they'll fall? what's the floor we're looking at now? >> everyone is looking at the $40 level. and we're likely to go and test that. it's really going to be key over the next couple of months how those inventories look in the u.s. here. whether they start to get to those tank tops and then it's a case of whether we see refining picking up driving season driving on demand for the products. and therefore easing those inventory levels low again. near term weakness, potentially
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rebalancing later in the year. >> all right. matt, thank you. happy st. patrick's day to you. >> thanks becky. turning to the election in israel today. benjamin netanyahu fighting to remain israel's leader continues to travel in the polls. he cast his ballot early this morning in what is expected to be a close election that could take months to settle. here with more on this is dan senor. he joins us this morning from tel aviv. a lot of what we've been reading we don't understand everything as much the way coalitions are forged et cetera to see who remains in power. what's your best guess to the outcome at this point? >> my -- look. they stopped polling here -- public polling about four days a egg. so based on just the most recent data and then anecdotal evidence i've been gathering, i think that hertzog, the zionist lead
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serleader is ahead. whether he's ahead by four or eight seats is the question. netanyahu lost by about a seat at the time which was headed by libney. he was the only one to form a coalition government. so if it's a tight margin for hertzog this time one to four seats, netanyahu stale may be able to cobble together a coalition. because a larger segment is on the right than the left. the problem for netanyahu is the segment on the right is divided up amongst the parties. if he could cobble together a coalition, even if he comes in second, he can hang on. but if hertzog is experiencing any kind of surge as he may be over the last few days if his
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victory is four to eight seats, i think it's going to be very hard for netanyahu to hang on. >> so that explains what you're saying if it's at least a majority or at least a plurality to the right then by making the comments yesterday about no palestinian state under his watch, he was trying to bolster support with that group of israelis. >> yeah. i think the statement netanyahu made about the palestinian state was, you know a political reality he had to address. which was he had come out for a palestinian state. he had to reassure the right. the right here has been bleeding in the recent polling. so he had to reassure the right he would not deliver a palestinian state to israel in e the hope some of those thinking they can support a right wing party and not have the opposition and power, meaning not having hertzog in power, he's assured them that "a," that
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was a foolish strategy and "b," he wouldn't let them down. it was partly politics. but it's also a reality. the political reality or the policy reality in israel is there is not going to be the establishment of a palestinian estate here any time soon. there is nothing on the other side to deal with. there was no one who could deliver on the peace side to enforce it. certainly after the war with gaza and hamas last summer there's not a real appetite for taking big risks for peace right now in israel. so the reality is no matter who wins, even if hertzog wins i'm highly skeptical that there's going to be a palestinian state. what netanyahu said yesterday was a statement to the obvious. >> dan, did it help or hurt with the people he needed to get support from in israel did the address in front of congress help or hurt, number one.
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is he less bad? or obviously it didn't put him into the clear cut winner. and number two, what percentage of israelis do you think would say i'm solidly behind the effort to get a deal with iran by the united states and some of its european allies? >> two things. i think the drama, the netanyahu/obama drama right before the speech to congress did hurt netanyahu politically in the country. not with his base but generally. i think with right of center voters, it helped. because obama is very unpopular inside israel with the general electorate and especially with the right of center voters. but since the speech was delivered well it didn't help it doesn't hurt. it was just this sort of neutral factor. i don't think it made a big difference. and it didn't really generate that much support for him on the right. as for the iran deal i think there's a lot of skepticism here
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about what this actual deal was going to look like and whether or not it would be a good deal for israel. and the irony is even if hertzog wins the obama administration has this attitude as though netanyahu is such a troublemaker for them. if they could get him out of the way, they would have much more policy success and diplomatic success. i'm not so sure hertzog at the end of the day is going to have a dramatically different position on the deal. so the white house may be in a situation where they get the guy they wanted. they get hertzog as prime minister. and then hertzog is as confrontational, maybe in a more diplomatic way. but is as confrontational to the deal that the obama administration is pursuing. now, with netanyahu, the white house can dismiss him as intransigent, hawkish. all the characterizations they describe for netanyahu. how are they going to say that
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to hertzog? if he expresses the sentiment here in israel which is highly skeptical, how are they going to trash or even dismiss hertzog's concerns? after all, he was the guy the want to get in office. >> yeah. okay. when will you know? will you let me know when you know? >> i'll let you know when i know. but the polls close here at 10:00 tonight. it's going to take a few hours before they start issuing formal results. if it's close, which it will be it could be a day or two before we really know. but rest assured, as soon as i know, you'll know. i'll e-mail you right away. >> okay. if there's hanging chads, i don't want to know dan. until we know don't even -- all right. see you later. thanks. >> take care guys. coming up when we return a new round of funding for one of the top names on cnbc's disrupters list to watch.
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a way to give movement events. head to a break, take a look at the dow looking like it would open off 85 points. nasdaq down 15 points. and the s&p 500 down about 10 points. back in a moment. can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪
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welcome back to "squawk box." dataminr is one of a handful of companies with access to the fire hose of data with twitter. you see it on your screen right now. dataminr gets first access to the tweets about a refinery fire and then for example it funnels that info to its clients. like the commodities trading desk of a hedge fund or big bank after the first. unconfirmed i'm told. supposedly $700 million. has notable backers to tell you about including bank ceos john mack and vikram pandit. and then wellington management and credit suisse and others.
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>> thank you very manager the. >> you're back. we were saying during commercial break it's better than you going out of business. so this is good. >> i'm happy to live up to the disrupters quota. >> here's the question about this. this business has grown like a weed. you are dependent largely on twitter twitter, right? this lives or dies whether people are inputting information into twitter that can be a sort of signal to you. there are questions about the future of twitter. >> i am extremely bullish on twitter. i do not own stock in twitter. it's important to understand that twitter is really the nervous system of the internet. it's a platform on which people publish in an open forum what they see and hear around the world. so while there are many social media platforms, twitter really is the place where information breaks. because individuals take it upon
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themselves to be sensors out there like the example you showed earlier. so i think that quality of twitter is incredibly important in terms of its long-term ability. >> what about pros tect pekts? >> it's easy to spot things that aren't necessarily real. like for example, when there was the ap hack and there was an account that said there's an explosion at the white house, there was no tweeting activity around the white house which was an unbelievably tell all signal. >> so your algorithms did not send out that information? >> we sent out a signal from someone in the basement saying i'm here and an explosion did not happen. twitter is on the one hand -- >> and that's all done by the computer. >> we are not a news organization. we are systemic in detecting all of this information. >> own solely using twitter as
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the host? >> no. >> using facebook? >> we use over 30 data sets. we found twitter is by far the first trip wire for the process. but to ascertain if information is actionable you need to contextualize it. so we use market price. we correlate with different news feeds. and that gives us the picture as to whether or not the information is actionable. >> and how quickly do you think you are ahead of the news organization? if you to some degree are waiting to confirm the news. or don't you know? >> i think it's important to differentiate what news is and what we do. we're a company that finds an early signature in massive amounts of public data. we ascertain that it's relevant. we proactively deliver that signal into the work flow of clients and in the news industry themselves and now in risk
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management watch centers along with a suite of contextual analytics. >> your clients are using that information. humans are taking that information and doing something with it? or is there programatic trading. equipping individuals to have the information they can take better decisions upon is of itself big. >> what is it? >> we don't disclose pricing but we have a package that helps all to afford the product. >> we've got to run, but last question. is this a company that will go public in the future? is that something on the horizon for you now that you're worth $700 billion -- million.
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or do you imagine and i'm surprised have people approached you to try to buy you? >> do dataminr does have the ambition to be a large independent company. this is one of those rare opportunities to be an iconic large company that dominates a new niche. while we have no specific plans yet, that's definitely something that we'll seriously consider. >> all right. thanks for coming in. >> absolutely. thank you. when we come back this morning, we have your list of stocks to watch in pre-market trading. alibaba just one of today's movers. we'll tell you why right after this.
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let's take a look at a couple of stocks to watch this morning. shares of the nation's biggest airlines are rising in early trading and that is due to the drop in oil prices. the most recent drop has been good for sentiment. there you can see $42.68 now. down almost 3% and many think the bottom is going to be tough to find. alibaba was upgraded to buy from hold. the analyst cites long-term benefits from improvements to the online retailer platform. and argues it compares favorably to competitors included amazon.
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and shoe retailer dsw beating the street on the top and bottom lines. the company also raised its quarterly dividend. earnings and revenues at burlington stores also beat estimates. the apparel and accessories retailer reporting it rose 7% from a year earlier. coming up the squawk ceo call will continue with doug parker from american airlines. we'll ask him about falling fuel costs and why he's mad about -- angry, i think, is probably a better word. about subsidies for foreign airlines. then details from a new survey that says currency swings cost u.s. corporations more than $18 billion in the fourth quarter and why it can get even worse. stick around. llo. i am technology that is changing investing forever. i am a fully automated investment advisory service. i can help you choose the right portfolio. monitor it.
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our members with everything from investing for retirement to saving for college. our commitment to current and former military members and their families is without equal. start investing with as little as fifty dollars. will investors see green this st. patrick's day? the fomc meeting and rising tensions in europe. we have our assets covered as we get ready for our big trading day ahead. plus apple on demand reports this morning that the company could launch a subscription service this fall. is this the product that will
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change tv? and tesla is looking to end drive range anxiety. >> we did it! we pulled it off! i can't believe it! where's the needle? >> it broke off baby. >> but will the conference call end in investor anxiety? a peak under tesla's hood. the final hour of "squawk box" begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" here on cnbc first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. with just about 90 minutes here the futures. let's check things out here. dow looking down about 93 points. s&p futures down by 10.5 points. and the nasdaq down by 14 points. oil prices also dropping once again this morning. in fact, you are looking at a 42 handle. it's below $43 at $42.67 right
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now. among the top stories we're focusing on this morning, apple reportedly working with programmers to offer a bundled service of about 25 channels. "wall street journal" saying broadcasters will include abc, cbs, and fox but so far not channels owned by comcast. we'll talk about this with walter isaacson in the next half hour. also in other headlines with pinterest raising in funding. that brings the valuation to $11 billion. and uber's cfo is stepping down. the company making an announcement in an e-mail to investors. they don't have a backup plan just yet. so sounds like something may have been amiss. few stocks on the move this morning weight watchers was downgraded to underperform to neutral. says that weight watchers is over valued given its earnings
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outlook. actavis has been reinstated by the buy list at goldman sachs. will be bolstered by its acquisition of allergan. the exclusive cnbc fed survey is out and for the first time more than half the respondents think the fed is too accommodative. steve leisman is here and he has details. good to see you. >> good morning. more than half think the fed is behind the curve. first i want to remind you of the headlines from the last hour where we showed you 69% of respondents think the word "patience" coming out tomorrow. and then the first hike comes in august. i want to get to the data becky was talking about. notice the next screen here. 50% over a long period of time thought it was accommodative. that's changed now. where for the first time a majority more than 50% think that the fed is behind the curve
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and just 32%, a big drop think the fed is just right. so increasing nervousness that the federal reserve is behind the curve. want to show you more details from the survey. is the market ready for a hike? with well b they thought they were in the last survey. but now 47% say no. the difference there coming from those who were unsure. so could be a surprise in equity markets and in bond markets when a rate hike does finally come. another big debate the impact of oil and the dollar on gdp and inflation. what you see here is oil cuts both ways. on the one hand, it's a positive for growth but a negative for inflation. and the dollar goes this same way. a negative for growth and a negative for inflation. if we take these blue bars and add them up it takes about half a point. meaning the fed is going to be moving further away from its 2% inflation target. and you could read all about this on where we have the full results of the survey.
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but it's certainly something the federal reserve is going to have to factor in. the impact of oil and the dollar on on the trajectory of federal reserve policy. >> thank you very much. steve leisman again. folks, we've been talking about the major airlines watching what's been happening with them as oil prices dropped. the major airlines coes are in the naugs's capital this morning for the 14th annual aviation summit. joining us with more is american airlines group ceo douglas parker who is in d.c. for the summit as well. and doug it's great to see you this morning. >> nice to see you. >> the news that we're actually seeing america getting added back into the s&p 500. it's going to be replacing allergan. i know the stock was up about 4% on that news. some people saying that was great news for the industry overall to now see the third carrier that's being put back into the s&p 500.
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>> it's good news for america. we know that. we certainly with over $40 billion of revenue here made over $40 billion of profit. we certainly knew we would be in the s&p 500 at some point in time. it's good news. good news for shareholders. good news for america. >> let's talk about what's been happening with fuel prices as well. just this morning we're looking at wti falling back below $44 a barrel. this has been a steady downward decline. in fact, a lot of people would say this has been an absolute plunge. what has that meant? lower fuel prices for you and how are you dealing at this point? trying to lock up as long as you can in terms of hedging? >> no. we've been very successful since 2008 actually. not having -- not entering into derivatives, not doing any hedging. and the result has been we've paid much less for fuel than competitors. we're happy where we are right now. the falling fuel prices helps.
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we're seeing more of that benefit than competitors because we're not locked into higher prices. and it's the fuel price this year versus last year at today's prices about $4.5 billion lower than what we paid last year. it's a supply driven fall. so demand for air travel remains very strong. so it's certainly helpful to our earnings in 2015. >> you know i'm always looking out for the customer why are you not passing on the savings to the customer? prices on tickets have not fallen frankly at all for the most part. >> well, revenues are slightly down. our revenues are down slightly. so it's hard to say where they'd be if fuel prices were higher. the fact of the matter is this is a supply-driven fall and demand for air travel remains strong. this is a business that has never been able to pass along costs in the past. so when our costs fall that
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goes to our shareholders as it should. so long as demand remaining strong for air travel which it has. >> you mean you don't want to go bankrupt when oil prices go to 120 and you should be giving the money out when it goes back down. >> not sure shareholders agree with that. >> shareholders smareholders. who's getting subsidized? getting subsidized over in the gulf. and this is a clear violation of open skies policy. >> well, it's certainly not -- we don't believe it's fair trade. we have produced evidence to the united states government that the governments of the uae and qatar have provided over $40 billion of subsidies, the largest subsidy we believe that's been presented to the u.s. government. and all we're asking is that we have a conference about this consultations to talk with those governments and our government
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about making those agreements more fair. the agreement is already in place. we simply want to have them enforced. and they call for consultations. that's all we've asked for. and we're looking forward to that happening. >> it sounds like a no brainer. are you getting push back? is someone being slow to respond to this? >> no no. we're in regular contact with our government officials. they have been responsive and we expect we'll make progress here. but they're being a thoughtful as they should. this is not a small issue. it requires some diplomacy but again the agreements are in place. you're right. it does seem to us like a no brainer. but anyway we're in regular contact and feel good about our prospects. >> doug, when you look at those airlines and i agree you want to have a fair system. some people would argue, though that those airlines have done an amazing job actually forcing all the other airlines to catch up
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if you will when it comes to services and product. do you agree? >> to be clear -- look. to be clear, if an airline doesn't need to make profit it can -- that can be good for consumers in the short-term. just as dumping steel can be good for consumers in the short-term. because it lowers prices. but that's not what free trade's about. a basic tenet of free trade -- >> let's talk about this. this is not just american. delta, american united have been looking into this. what have you found? >> solid evidence of over $40 billion in subsidies from those governments to the airlines that -- to three airlines in those countries. and, you know, which allows them to provide service not at a profit. to provide service at a loss.
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something that we're not allowed to do. something we can't do. again, something we think should be remedied. >> doug do you have any outstanding issues with contracts or labor or flight attendants or pilots or anything residual from the merger? >> yeah no. we've -- since the last time i think i talked to you, we've gotten joint collective bargaining agreements with both our pilots and our flight attendants that provide them the highest hourly rates. we still have other contracts to work out. but we again one of the nice things about our financial success is we are able to pass that on to our employees as we should. so we're looking forward to getting contracts with the rest of our boys in 2015. >> and computer issues everything's all together now everything's done? >> we're not done yet. this is a two-year process. we're about 15 months into it. by the end of this year we will combine our frequent flier programs and so far everything looks great.
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>> one thing i'd heard is you're in the process of checking out some new uniforms for the people as well. and i'm just wondering what the feedback is you're getting. there's been social media pickup that some people have a complaint with it. are you sticking with these ones or looking for new uniforms or making changes? >> we had a wear test for new uniforms for employees. we got feedback from that so we're going back and incorporating that feedback. we'll come back with something different from the wear test. the wear test went well. >> what are the other major issues that you're hoping to address while you're there at the summit today? >> well there are a number of issues going on right now. faa reauthorization is a big deal for our industry. we believe there's an opportunity to do some real reform of the air traffic control system. but mainly most of all we'll be talking about how america is
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doing. how well our merger has done for our employees and shareholders and also talk about the gulf carrier issue. >> okay. one more quick question for you, doug. one thing we talked about today that we pointed out is that ryan air is now looking at making transit flights available between european and the united states. they're doing what they traditionally do which is to do a marketing ploy where they talk about some of the cheap things they're offering. one is some of those seats will be $15. how do you respond to that? >> and is it easy to match? >> we compete. which is what this gulf carrier is about. we love to compete. we'll compete with anybody so long as the playing field is level. we want it to be level with everyone we compete with. we will compete aggressively and our team will do well in that competition. >> we laughed how they charge you to go to the bathroom. >> 1500 for oxygen while you're up there. you can either take it or not.
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i don't know how that works. it's ridiculous. i mean it's ridiculous. i said $15 for the ticket but you get charged for oxygen if you want to breathe while you're up in the plane. >> it's a different model, that's for certain. >> all right. >> we're happy with our model. we have a great service. our team's done a great job. we couldn't be happier. >> doug thank you very much for joining us today. we appreciate pit. >> thanks a lot. >> got me with the holding it for eight hours. you can't hold your breath for eight hours. >> no. coming up when we return former indiana governor turned president of purdue university, mitch daniels joins us after the break. we'll talk higher education and much more. then later key economic data. we're going to get housing starts numbers. plus media guru walter isaacson will join us to talk about the buzz about apple tv and also
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talk about tesla today ahead of an elon musk appearance. stay with us. "squawk box" begincontinues in a moment. sometimes the present looked bright. sometimes romantic. there were tears in my eyes. and tears in my eyes. and so many little things that we learned were really the biggest things. through it all, we saved and had a retirement plan. and someone who listened and helped us along the way. because we always knew that someday the future would be the present. every someday needs a plan.
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this morning. take a look t aat the futures. dow looks like it would open 73 points off. and the s&p 500 off about 7.5 points. also let's look to the oil boards. wti crude all the way down to $42.94. the u.s. hitting the debt ceiling again this week. competing budget blueprints from congress. joining us now mitch daniels. he's now president of purdue university. unfortunately, governor that first round matchup against cincinnati is not going to go well for the boil makers, i have a feeling. >> well we can make a little wager off the air if you like joe. >> that's illegal. actually, your team did hit its stride, didn't it? february? beat ohio state, iowa, and indiana. >> good. you're paying close attention. yeah. it's a very young team. got steadily better during the year. you wouldn't want to draw us in the tournament. >> yeah. okay. but gave penn state a run too.
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i watched that game. penn state finally prevailed, didn't they last weekend? >> no. actually they didn't. they played us tough twice. they played very, very well, penn state. but we did win by five. >> i didn't see the end of that. let me ask you. you're watching what goes on in washington. business as usual. makes a university job look pretty good at this point, i guess, doesn't it? any reason for hope with the latest budget wranglings? >> oh hope springs eternal. but really this affects universities like it does all of us americans. and one hopes that eventually our decision makers in both parties will get serious about the debt we're piling up and planning to leave the next generation. you know one of the obvious problems is that the explosion in entitlement spending is eating the discretionary part of
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the budget. that means less money for investments in education and basic research. things that are really important to our economic futures. so let's hope for some progress. but we've hoped before. >> you know lately and i have seen indiana on certain rankings in terms of unemployment job growth all those things. the mainstream media doesn't have much. you started there. isn't illinois right next to indiana? >> yes, in fact your geography is correct. indiana on a relative scale is doing very, very well. disposal income i think was second to north dakota in the most recent year growth i should say. yes. indiana i just read has added in the last few years 50-some-thousand manufacturing jobs while illinois lost 41,000.
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so you can do certain things as a state to make yourself more attractive. >> why can't you look at some of the simple things you did as governor and then those will work on a national basis. i mean you can make certain -- draw certain conclusions on what our national policy should look like on certain issues. would you agree with that? >> i think there are extrapolations you can make. and yes, i mean certain basic pro-growth policies i believe would be good for all of us. and, you know one day maybe a different viewpoint will prevail. >> 90,000 difference in manufacturing jobs. something, you know -- something's right in indiana. something's wrong in illinois. what can we do about college? it's too expensive people say, number one. and number two, when you get out
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you can't get a job. so those are two pretty dim results. >> well i think first of all we ought to celebrate the fact we have the finest system of higher education particularly our research universities in the world. and we need to protect and strengthen that if we can. as one university purdue university where we talk about higher education at the highest proven value, we've frozen tuition last year this year. it will be frozen again next year. we reduced the price of room and board by 10%. meanwhile we're making major investments in what is already one of the world's finest engineering programs. national commission says we need 10,000 more engineers a year in america. we at purdue plan to supply 5% to 8% of that just as one school. so i think it's a really important time to affirm the importance and the value of higher education even as we do
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address some of the very real problems of cost accessibility, and accountability that have grown up over the last few decades. >> is it difficult to get students to apply to be engineers? do you turn them away? are they not qualified? i don't understand where the breakdown first starts. >> i think it's really changing. we have an all-time record number of applications at purdue this year. it's up more than 15% than any other university we've talked to. a lot of those are for engineering, computer science. we had the first computer science department in the world. 50 years old last year. i think there's a lot more interest at lot more awareness now among young people the importance of science technology and math. and that great careers await those who do develop some mastery of that. you know, somebody's got a list of the 12 best paying
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occupations for new college graduates. and at our school for instance we teach 11 of the 12. so we are seeing a lot of interests. i hope it's a manifestation of a national trend. >> governor do you run -- i mean, can you run purdue? you were quoting saying guess what we spent less than we took in and that actually works. can that be done at college and universities? >> well, sure. you know i think in our commitment to get off the tuition increase escalator purdue like most every other school tuition had gone up 36 years in a row. we said let's try something different. i was saying let's try to adjust our spending to the budgets of our students' families instead of requiring them to do the opposite. and it hasn't proven that difficult so far.
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it's a bit like having an arbitrary limit, let's say a balanced budget amendment in a public responsibility and a governmental responsibility. if the limit is there, people begin to become a little more imaginative about how to meet it. so it's -- as everywhere else the decision making has to be shared. but i think we have common purpose at our school. and our students and families are responding. >> and you are -- you're truly a bipartisan college president now, i can see. i won't even ask you about the republican field and who should run. i don't think i'd get an answer. i couldn't even get you to brag on the pro-growth policies of indiana that much. you want all kinds coming into purdue. everybody can be an engineer. you better work hard though. >> i got plenty to keep me busy. that was then and this is now. >> okay. all right. i'm sure off camera i could get
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good stuff out of you. anyway, we appreciate it. >> thank you. when we come back this morning, is housing on firm footing? we'll find out with the latest read on housing starts. plus a couple of tech names to keep an eye on in today's trading session. we'll keep an eye on apple and a streaming service. plus we'll preview the conference call at tesla. stick around. "squawk box" will be right back.
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welcome back to "squawk box." breaking news. starts and permits for february out and there's a big miss. 17% drop on starts to an annualized unit at the pace of 897,000. below 900. and last look actually revised higher somewhat exaggerates the move. 1.56 million now stands at 1.08. and if we look at permits, completely different scenario. they're actually up several percent. last month stands at a slightly revised 1.06. from there we move to the current number 1.092. so slightly over a million. units in terms of permits. when was the last time we saw a sub-900,000 starts number? we had exactly the same number
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in january of last year. but we have to back to september of 2013 to find a smaller number at 87363,000 spopz we will have to factor this in. one of the interesting things today is equity markets are down in europe. why? twofold. they have data in germany they weren't enamored with. but here's the interesting one. on the spread between u.s. and europe, they're now looking at our markets and our data and thinking maybe janet yellen is not going to be rushing to remove accommodation. thereby narrowing the spread. this is a dynamic we better start getting used to as we handicap one central bank versus another while we push paper and ignore our structural reforms that are much needed. back to everyone at the desk. >> thank you, rick. we're going to talk about apple tv. reports right now that apple is in talks to launch an online tv service this fall appealing to
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the millennial generation. what does the new push say about the future of cable and how we consume it and consume content? walter isaacson is former ceo of cnn and a cnbc contributor. and of course the author of the great biography about steve jobs. and you hinted tv was coming. we might finally have it now, walter. >> yeah. steve jobs never really talked to me about the physical tv set. he was always interested in an integrated product that makes it easy to get the content through good content management good software, good piece of hardware. the tough thing about tv is getting the content. when steve jobs was alive, he could push cajole sometimes brow beat the kmuk companies to put their songs as single songs on the itune store. it's been harder to get the television content providers and others to play along.
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especially since the cable providers want to keep control of that pipeline. >> walter what's the future of tv content? so far it's felt like the golden age for television. but tell me with apple jumping in here and we've seen sling with this other package, you're starting to see the unbundle. does this start to look like the music industry? or do you think it holds on and is stronger in the future? >> well, i'm talking to you from austin where i'm at south by southwest and there's a whole lot of people going into content. why is tv entering the golden age? because they're new models. you start getting a real rush for content. and i think that if apple does that, it's not just going to be streaming video. they're just going to have a library of great content and allow people maybe even people like down here at south by to sell it so they can get what
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they want when they want on any device they want instead of being tethered to a linear tv. >> that sounds like what we already have with netflix and hulu and a host of others. is apple getting involved at a turning point or is this just another drip in the bucket that eventually gets us where we're going? >> i think it's more of a big splash in the bucket when apple gets into something. and you're right. this is a trend. i was on your set a couple weeks ago when we talked about hbo saying it was going to do this. i think now people have always said the unbundling of the cable model will happen soon. but, boom it's happening this year. it gets even into the net neutrality debate. i know joe and i talked about it on your set a couple weeks ago. but it's important for apple at least that they can have some cable providers say to them we're going to give other people fast lanes and your content is going to be slower.
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the notion nobody can get a fast lane means a whole lot of people can splash in this bucket to keep our metaphor going. >> the thing i'm trying to understand is the economics of content. when i say the golden age of content right now, it's not only that the content has been great. it's that the economics have been spectacular. and the question is in an unbundled world, are the economics still spectacular? >> yes. i mean i live unfortunately in a print journalism world where it got unbundled but nobody paid for it. all you had was advertising support. if you look at netflix, amazon whatever, they're charging the consumer 25 30 40 bucks a month. so there's going to be a lot of consumers paying money, buying content. and i think it's a golden age for it. it's like the music business people were giving it away for free for awhile or stealing it. in this model people seem willing to pay a monthly fee to get a great package of services.
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>> so tv content's not like print? >> well, i will tell you that i really -- i'm older than you, andrew, by a little bit and i can remember when everybody 30 years ago say content is king. content is king. then the internet came along which said content was not king because it was really those who bundled it. those who created the internet package. now that you can get whatever you want on whatever device you want people who make good content will be in demand. people will be saying i need that movie, that show that house of cards. >> that was me joe, walter. but the point stands. you are older than me as well. >> oh, really. okay. can't quite remember. >> you're right. we may be close. we're contemporaries. but we're both very wise at least with our age. >> or we play so on tv. >> real quick before you go generationally are there people
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you think that are going to not just the cord cutters that will join up with an apple, but are there people who are going to cut the cord and then move to one of these new packages? how quickly do you anticipate that transition if you think that transition is coming? >> i think it'll come in about a week or two. there's nobody here in austin at south by who is talking about cable or signing off or whatever. they're talking about how do i get content on my devices. and i think, you know if you take 90% of the people walking around here in austin who are in their 20s, they're not -- they're going to be signing up for all sorts of content. but they're not going to be people who -- the real question and eric schmidt and i taubt it. will there be people trying to get into the home. that's the bottle neck bhop can get your broadband into the home. >> if you think it's great for content companies, it may not be
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good for the cable companies for the pipes except that they're still the only way to get in with the internet access. so for now they may still hold something of a draw there. but you think that's eventually going to get watered down. >> well if there's more competition offering broadband to the home and that's why the net neutrality debate is a complex one. you want to have incentives for other companies to build a pipe. the hardest part is usually that last mile or even from the curb into the house. those are difficult things to do. but with new types of technology even 4g, 5g, it's possible to have four or five choices of broadband into the home in a few years. but you're right. that's why the cable companies are still in the saddle. they're this ones that bring the cable cords into your living room in most places. >> okay. walter thanks so much. have fun at south by southwest.
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>> couple of years, walter. definitely i can see now. i looked it up. you got me by a few years. but you look young and look good. >> it's my gray hair that does it. up next the surging dollar hitting business abroader report by fire app showing $19 billion was lost by u.s. companies in the fourth quarter just on the translation. and the worst is yet to come. the ceo at fire apps joins us to explain.
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take a look at the futures this morning, everybody. you're going to see that we are still seeing these red arrows. in fact, they've gotten a little more steep as the morning's gone on. right now the dow futures down 90 points below fair value. s&p futures off by 10. nasdaq off by 10. this is after an update for markets too. housing plunging last month due to the harsh winter weather. february starts dropping 17% in january. meantime improved building permits rose 3% 37 and again you just saw the futures, what's been happening with that. we're also watching oil prices this morning. they've been under pressure as well. this is a steady downstream we've been watching. wti, $43.18. we broke through $43 earlier this morning. we were looking at $42.99. that's a decline of 1.6%. investors expecting big returns this year from exposure to european markets.
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they may be in for a surprise thanks to a drop in the euro. michelle caruso-cabrera is here to help explain. >> we spent a lot of time talking about the big rally we've seen in european markets for sure. and it's been a big one. but when you are an american which is to say a dollar-based investor to make those moves actionable to your portfolio is more difficult. let's bring up this full screen which show yous the year to date for the euro based stock markets over in europe. and then what the year to date return would be for a dollar-based buyer. big difference. france up 18% year to date. but if you bought it in dollars so you lost on that trade, it's only up 4%. spain, you're actually negative even though it's up 8% year to date if you're european euro based buyer. germany, big spread there. up 24% but only a gain of 9% based in dollars. this is why if you look at this performance of what we call the
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ewg versus the hewg. the ewg which you see there in white is unhedged. he hewg is hedged. here is the hewg. the thing is when you're going to buy an etf like this remember there's fees. they may not get the hedging right. it comes out of the cost of nav so it's not risk fee. this is a popular way to play it because people have become aware of this. but it's not for certain. >> no. as you point out, there's a lot of ways that they can get taken back out. >> something to keep in mind. simple idea. but people don't necessarily think about it unless they try to execute the trade. >> currency swings as you can see there just cost u.s. companies $19 billion last quarter alone. 63% of the companies reported. multinationals like google and pfizer and then helps the
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companies manage the currency exposure. let's get to the man behind the numbers. wolfgang hoster. >> what fire apps is is a technology firm that helps companies understand then measure and manage currency risk. it's more of a technology firm that helps companies understand. i had a call this morning where people were panicking saying i need to manage this better. how do i do that. and the first and fundamental question is what are your exposures. we help the companies understand their exposures. >> once you help them understand it they have to do something with futures. no? >> well, at the end of the day, one of the options are then to go look at either futures or the cash markets, et cetera to look at how one can hedge it. but there's some internal things people can do operationally. maybe shift expenses around. the fundamental question is when
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i go hedging is i need to understand my exposures. and right now the euro and the dollar is very much in there. the typical company has 150 to 200 currency pairs all over the world. it isn't just euro/dollar although a big impact for this quarter. but people are talking about what do i do with china? brazil? how do i manage all exposures? >> and i guess to comply with tax guidelines both here and in every other country you're dealing with to be able to manage expenses move things around, you need to be an expert almost everywhere, don't you? >> you do. and that's -- it's a very complex problem, or it can be if you're using manual processes and trying to support that with spread sheets. at the end of the day, in today's world like many other technologies, you're moving forward. there are technologies to help you understand that with a push of a button. you talked earlier about google. if you look at their earnings
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report, you say currency is a non-event. we have the technology to support it. no surprises here. so there are lots of companies who actually do this very well. yet you still have quite a few companies as you saw in that report. we look at roughly 1200 companies around the world as a sample size. then we look at who's reporting what. and the report talks about what they actually report. it isn't even extropapolateing anything. the important part of while the 19 billion is obviously a big number, the important number here is you have companies that are surprised by 6 cent earnings per share impact. the benchmark literally is 1 cent or less. 1 cent or less is immaterial. when you're talking about 6 cents as you well know on a quarterly basis that's often much more than the guidance difference between if you want low and high. so it's a major number that companies and therefore investors are getting surprised
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with. >> we've got to end, but wolfgang do you need as a company to have great forecasters in terms of fluxuations or it doesn't matter if you're good at that? >> if you're good at it you understand your forecast and you're able with technology to compare to it your actuals. so the problem is i'm going to forecast this and i need people to understand the forecast. but then i've got to look at what happened. >> we've got to go. should i stay short the euro or should i cover? >> you know what? i don't know. stay currency agnostic. >> that's what i mean. okay. so you're doing stuff at the margin not necessarily making it that way. we appreciate it. >> yeah. it's not our business to speculate in currencies. it's to run a solid business without surprises. >> would have been nice to speculate at 1.40. you know you wouldn't have to have a business. anyway, thank you.
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up next we've got jim cramer who's going to be joining us on apple, tesla st. patrick's day, and more. plus could tim tebow be thinking about a return to football? he was working out with jim's beloved eagles. we'll get his take next. the future of the market is never clear. but at t. rowe price we can help guide your retirement savings. our experience is one reason 100% of our retirement funds beat their 10-year lipper averages. so wherever your long-term goals
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let's get down to the new york stock exchange imjim cramer joins us now. tim tebow, tim, that's the answer i think. >> i think chip kelly's an open-minded fellow and will look at anybody. adam said that lasted a couple of minutes. people are trying to puzzle over what chip's up to. he took two ws away from dallas and i think he's building a defense and he's been the winner in free agency owe than the indianapolis colts. i just think that people don't get him. they don't get how smart he is. they continue to decide he's not as great as he is. i'm all in chip kelly the whole way. >> weren't you wavering with the first move. >> confused by mccoy. what happens you get attached. i mean i have three mccoy
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jerseys, i felt the organization loved mccoy. when you switch quickly, it becomes like what am i supposed to do here? but it all came clear when he decided to get a running back. look at all of it as a piece because i was confused. >> are you as bad as that de niro character in -- >> my father and i used to joke about that movie, it was about us, particularly the dallas game. but you know what? look, i'm a huge eagles fan, i will support them. in the year they won four games with andy reid i supported andy reid. i love the eagles. >> you throw a book through the window at 3:00 a.m. in the morning because you don't like the ending? no comment. >> there's been some problems securitywise coming out of games. thanks. >> people have talked to me about the show and it's a big mistake after the loss. don't come next to me do not talk to me about the show. >> mr. cramer "mad money."
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>> someone said a bad thing about mcnabb and my father said someone's going to hit that guy if he keeps it up dad was right. >> all right. cramer, see you in a while. >> thanks guys. tesla set to hold a press conference this afternoon. elon musk hinting the carmaker's about to end range anxiety. we'll talk stock price and the company's business model after the break. e financial noise financial noise
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here's today's watch list. the fed is in the spotlight as it starts a two-day meeting. it is widely expected the fed will drop the word "patient" in describing its stance on raising rates. key earning after the bell. adobe systems and oracle. investors want to watch shares of tesla. ceo elon musk speaking at nvidia's conference in san jose later today. we've got more month tesla now. joined by james albertine. what exactly do you think we're going to learn this afternoon, james? >> yeah, look i think a lot of folks are focused on tesla right now. we haven't seen many catalysts from the company, so folks are speculative around demand and
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the lack thereof in china and issues with respect to longer-term demand outlook. this is a very important opportunity for tesla to draw its attention backer to where they stand from a competitive standpoint with range. >> the magic technology? >> we were at the factory last week. i think we -- one 0 the things we saw with the transition from the fourth generation to the fifth generation battery cell technology, we think they're going to slow they have further extentded leadership with extone range. the most important catalyst for 2015. >> missteps in china, are you feeling okay about some of that? do you think it's worse than we know? >> i think it might be worse than we know worse than what tesla eluded to midpoint last year. that also assumes the rest of the global demand for model s is worse than we thought. i don't think that to be the
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case. plenty of offsets globally. one issue we're taking note of but we remain positive and believe the rest of the story's very strong. >> how do you get to $400? >> we're looking at a fully bakes model s and model x rollout, 100,000 units bridges 2016, 2017 time frame. at that point we think that rate will give confidence in 500,000-unit target for 2020 five times average auto manufacturers, 25 times ebitda. >> james, appreciate it very much. >> thank you. we have -- let's go over your brackets. we have nine seconds. can't do that. >> happy st. patrick's day. >> happy st. patrick's day. wear some green tomorrow. >> green tomorrow. >> join us tomorrow to see andrew in green. wore green so you could hide from me. "squawk on the street" is coming up right now. ♪
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good tuesday morning. happy st. patrick's day. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchangen david faber is off today. stocks look soft ahead of the open as we kick off day one of a two-day fed meeting. oil did fall below $43 this morning. talk of gasoline going back to $2 on average. ten-year yield, above 2. 05. ho


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