Skip to main content
Internet Archive's 25th Anniversary Logo

tv   Squawk Box  CNBC  April 18, 2012 6:00am-9:00am EDT

6:00 am
it's wednesday, april 18, 2012, and "squawk box" begins right now. good morning, everybody. welcome to "squawk box." i'm becky quick along wi the 81-year-old ceo told the shareholders in a letter yesterday the good news is that i've been told by my docker tos that my condition is not remotely light-threatening or debilitating in any significant way. i received my diagnosis last wednesday. i had a cat scan, bone scan and on thursday following by an mri today. those incidents show no cancer elsewhere in my body. i spoke with buffett yesterday. he said he feels great. he does not feel worried about
6:01 am
this, guys. he sounds very upbeechlt his doctors have given him a very upbeat diagnosis for what's going on. he said that this was as if he was in northerlial excellent health. his energy level is stel 100%. he plans to take on a course of radiation treatment. the timing of the two-month treatment by pushing it off to mid-july, it was chosen to keep from interfering with previous commitments already made. he's investigate a lot of things coming including the sun valley retreat that happens in early july. after that he wouldn't have to worry about things on the books he'd have to cancel. he wants to keep his commitments to giving pledge and other thing. he says his doctors have no qualms about delaying treatment. they said they wouldn't have minded if he pushed it off to october or later than that. in his letter he released earlier this year, he said the board has chosen his successful. he said that person does not know that they are chosen. yesterday he said there's been
6:02 am
no change in the succession plan and that potential successor is still unaware that he is the person. >> did hee talk about why he was going to pursue radiation? one of the things i've been reading about is many people at this age, actually not at this age, many stages but stage 1, it's a watch and wait. >> we've read all kinds of things in the general news about whether you do anything, about how many men as they age are likely at some point to get prostate cancer, one out of three, and you heard sometimes at a certain age if you don't do anything, it doesn't really affect -- if you're 82 years, you wouldn't see an effect for 10 years or so. >> they don't even recommend a psa test over the age of 75. >> yesterday what i saw was fascinating. it was a taillight. it was from the "new york post."
6:03 am
it said something about an ultrasound that treats it. >> i read a little about it too. >> we know so many people. arnie, the king, he's done well, giuliani, right. >> we've seen a lot of people choose different ways which don't know as much as this guy does. joining us now, joining us now into prostate cancer and especially stage one. he's been name add top dodge tore by u.s. news and world report. he chairs nyu's department of urology. thank you for joining us. you've heard a lot of comment knowledge comments that we've just given that we've read in the general meet ya. it is good to have you here to clear some of this up. do most men for whatever reason if you live long enough, does that become an issue? is that true? >> it's pleasure to be here.
6:04 am
first of all, in terms of the prevalence of prostate cancer, about one in ten men will be diagnosed with prostate cancer during they've lifetime. i think one myth we have to be a little bit concerned about, and that is that prostate cancer is the sort of innocuous malignancy. what we have to realize is this is the second most common cause of cancer deaths in men. so while no doubt some men will be diagnosed with slow growing prostate cancers and if their life expectancy is within five to ten years, those slow growing prostate cancers will not be a problem and a watchful wait and active surveillance would be ide ideal. you know what? when they say stage 1, what that simply means is on the digital rectal examination, you did not feel a hard spot on the prostate. but you can have a very
6:05 am
aggressive cancer that's diagnosed because of an elevated psa, thabd can be a life-threatening cancer for even men with five-year life expectancies. so just because we hear that warren buffett had stage 1, we can't imply that this is necessarily and may even pose a threat for a very healthy 81-year-old man. >> doctor, one of the things you mentioned. in cancer statistics, you look at average life years lost. there are some cancers that come on much later in life that are not as -- that's all tragic obviously, but leukemia affecting chirp or people in their 30s. if you -- where would prostate be in that sense? it wouldn't be necessarily number two. it's usually elderly people, right? >> not necessarily. >> really.
6:06 am
it can be young, okay. >> yeah. the average person. i'm a pros at the cancer doctor. on the thousands of men i performed a radical prosectomy, 57, 58. there are no doubt men who die of prostate cancer, one, it's a miserable death and it's one that at any age you'd want to avoid. >> yeah. >> you know, doctor, i was going to ask you in term os testify radiation treatment that mr. buffett's going to go through, what that's going to be like, how that's going to affect his day to day. >> well, you know, he hasn't really disclosed -- i don't know all the details. it sounds like, you know, there's different options. one could have the seeds implanted. these radioactive seeds. that's really a simple outpatient procedure.
6:07 am
he will come in about five days a week for six to eight weeks and during the course of his treatment, he'll be able to resume his regular, what i'm sure is a very busy and active day. may feel a little tired. i mean some of the side effects that he may encounter are typically the bowel symptoms, frequency with bowel movements and urinary frequency and erectile dysfunction. i think for the most part, if this information wasn't made public, he might even be able to carry on his day without the fanfare. >> yeah. >> that's being -- that his diagnosis is being met with. >> this is all -- we're revi reviewing it in the prism of him being the greatest living
6:08 am
investor and it's about succession and about what berkshire that you would rnlt normally start immediately asking these questions, but we do -- in this case, the average life expectancy for someone who's 81 years old, is it true that once you make it to 81, you've got like nine -- i'm trying? you've about got about nine more or even ten. >> which is awesome. >> and it's great. it's great to the great medical advances we've made. does this change that? is it no longer nine or ten years with someone with stage 1 prostate cancer? >> again. let me clarify. he can have a stage 1 cancer. the way we grade or assess the aggressiveness of a cancer is, one, on the digital wreck tile exam dirkd we feel a hard spot that's gone outside of the prostate and we have a greasen score that's under the microscope. sfen, you can have a stage 1
6:09 am
cancer vrks a gleason 9, which is very, very aggressive, which has a very high possibility of threatening the well being of even someone who is 81 years of able. so we know it's stage 1, but that doesn't give us the complete picture of how aggressive is this cancer. >> okay. >> there's a recent study that showed that if you have sort of intermediate grade cancer and you undergo radical techniques which is another way to cure prostate cancer versus no treatment, and this was done in scandinavia, that for those cancers, by the time you have a ten-year time period, you do see an increase in survival. so presumably with mr. buffett, 81, we dodge know his status,
6:10 am
but if it's stage 1, there's a good probability. it's not just dying of the saner is. you know, you could then develop metastases that spreads to the bones. you have various treatments. and you can have a great deal of problems during your lifetime without actually dying of the disease. >> yeah. the quality of life. >> and that's what one would also try to avoid by intervening. >> yep, yep. >> doctor, just to caution our viewers and in the context of what mr. buffett said yesterday, he did say he believed there wasn't life tletzenning and his doctor doesn't believe it's remotely life-threatening. in this cop text -- >> and that he easing till july for treatments. >> you wouldn't imagine that even though it's stage 1, it would be one of these more severe versions that you discussed, right? >> if it's not life-threaten,
6:11 am
why would one intervene to treat? i think wait means is there's no imminent threat. it's like a lung cancer or pan cree alt ilk cancer where that diagnosis is going to lead to a mortality within a year or two. i think the reason why he's elected treatment is he views his life expectancy at 10 years or beyond and he doesn't want to die of cancer at 92 or 95. i think the indication is over the short or intermedial horizon, if he did not pursue treatment, then heouldive his life normally. he's invested in the future and now he's investing in his future by intervening at this time point. >> thank you, doctor, for taking the time with us this morning. i appreciate it. >> my pleasure. >> okay joobd warren buffett's health announcement, of course, puts a lot of focus on berkshire's investment planning.
6:12 am
good morning to you, jeff. >> good morning, andrew. >> i imagine -- i hope you had an opportunity to hear what the doctor said. i'm curious in that context whether you think from a corporate government's perspective it was necessary for mr. buffett to come forward with this news. >> i think it's a great model. it is a disease that can be life-threatening. of course, any surgical intervention is risky in itself and perhaps even a noncosmetic minor surgery should be revealed certainly to the board. to the shareholders, who in contrast, of course, steve jobs who was a genius vilgsa avision so many was a misfailing to actively lead investors about the subject of his health. buffett sharing the information.
6:13 am
yes, it's appropriate. a ceo like the rest of us would like provecy but you surrender that when you take on the role in paub lick company. it was interesting to note in a success front, this is a company's board where the average age is high in the 70s. rren buffett is by far not the oldest on the board. he's the fourth young oeflt or fifthi youngesioyoungest. >> jeff, you know, we're about three weeks away from berkshire's annual meeting. of course, succession always an issue. what would you want in sort of the corporate practice, good practices, best practices, what would you want to hear from him this year. >> you'd like a sense that the names that have been discussed where it's likely to be --
6:14 am
you'll hear this name. the b the berkshire girl ruru from ti time, theory so critical of the business they would stay if one of the others are selected. there are companies where you have rival warlords where you see an exodus when the failing -- the other candidates don't get the position. since there's only one warren buffett, we'd like to see -- if that whole team stayed in support for tim cooke. lieu hock mu it is soar. we'd like to see when we have another genius that won't be was together that the team will stay intact. we don't have those reassurances yet. dhienlts have to tell white house the final choice would be but in some sense there's a
6:15 am
great deal of respect for them. >> jeff, i'm going to ask what sounds like an awful question. how critical is warren buffett? i ask him in the contest that he's trying to create a business, con glom wrat of businesses that can literally on rate themselves without him. >> that's a have interesting question. you an some of it himself. he wish head texed the tex tooil company. he wound up buying the guy out, firing him and he found several hundred value if he had sold it sooner. whether or not it was us airways or coke which was down for a while or solomon brothers, he takes the personal blame for some of these. maybe it's just his generosity of spirit but he hanls been
6:16 am
infallib infallible. you know, neither have his lieutenants. he has people who have the courage too challenge him. munger, i believe, is a visa chairman, 89 years old, i believe. he can tell true to power. this is a teal. no matter what age you are, you have the peer gauging. i think that's remarkable. at the same retreat buffett was asking about retreat plans and murdock says i don't have any intentions go anywhere. buffett said i heard of managing outside the box bgs, but that's the extreme. >> jeff son enfelt, coming up. we've got earnings action. we've got a tech names.
6:17 am
our news makers of the hour. they're going to be on our show. steend. rage just crossed above the 20. tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 the spx is on my radar. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus. tdd# 1-800-345-2550 i can custom build my own screens tdd# 1-800-345-2550 or use predefined ones to help me find tdd# 1-800-345-2550 possible trading opportunities quickly. tdd# 1-800-345-2550 i can also bounce my ideas off their trading specialists - tdd# 1-800-345-2550 on the phone or face-to-face. tdd# 1-800-345-2550 and i can trade wherever i want, whenever i want. tdd# 1-800-345-2550 tdd# 1-800-345-2550 the kicker? tdd# 1-800-345-2550 i pay $8.95 a trade. tdd# 1-800-345-2550 that's a deal in any language. tdd# 1-800-345-2550 hey... a breakout on a head and shoulders bottom! tdd# 1-800-345-2550 that's what i'm talking about. tdd# 1-800-345-2550 open an account and trade up tdd# 1-800-345-2550 to 6 months commission-free.
6:18 am
tdd# 1-800-345-2550 call 1-866-222-5638 tdd# 1-800-345-2550 and start trading today.
6:19 am
welcome back. a multibillion-dollar takeover deal just moments ago. >> did you not break this? what about deal book? i thought you were breaking this news. i thought you were working -- >> i worked all weekend on this.
6:20 am
this is your thing. don't start putting it on me every time you miss one. sxc health solutions. how many are on your staff at deal book? >> i rely on you, jim. >> oh, my gosh. this wasn't on anyone's radar? >> i thought you would have had this one. >> it would have helped if i had heard of sxc health solutions. it's worth $4.4 billion. the transactions cat lilt at 28%, above tuesday's close. both companies specialize in pharmacy, benefit, management tools. oh, okay. >> the first ever intel-chip-based cell phones shipped this week. coming after the announcement that their first quarter results beat the street. stacy smith was on yesterday.
6:21 am
>> we saw strong growth in emerging markets and that was offsaidset by relative invuftmentes? and craig becker, semiconductor analyst joins us. what was the thick that jumped out at you? is there a problem there? >> they guided to margins, which is about a point lower than the street was. >> these why it's up at 28 all of a sudden because margins have within really strong. >> they brought back a ton of stock over the last four to six quarters. they have a lot less net cash because they've reduced 20% of the share count so, that's really helped. the gross margin thing is pretty
6:22 am
much a bump in the road. >> over the last two or three years we made the point at 22 or 23 the company would have a great quarter and sell off again. it finally got through at the same time that we were hearing that ipads were replacing pcs and it should hurt intel. it's always counterintuitive. >> they bought back a ton of stock. >> really. that's why. >> so that still imbeds a lot of fear about smartphones hitting pc unit growth and tablets hitting pc unite growth, so the fear is still out there. there's not as much fear baked in. that sarksd smartphones and tablets are still impacting pc unit growth rate. if you want to own a meg ta chip growth maker, i prefer qualcomm. they're the intel of the global
6:23 am
world so to speak. and company. they're benefiting from 3g, 4g strength while intel is growing while you have the tablets eating up the market share. >> what did you learn more on the fact whether people are buying pcs or laptops. >> people are. the market researchers revised key one to be up 1% year ore year. so maybe pc consumption is a little bit better than 1% year over year. the notebook market is still growing but not growing terribly fast. >> in the intro to you, we talked about intel making some inroads into smartphone chips. can they do it in smartphones? can they do it in tablets? >> well, they're really trying.
6:24 am
they may try out intel chips in a phone or two. you know. what kind of -- assessment. these aren't mainstream. intel is coming in with their ultra books. they do have some advantages. they're trying to leverage those advantages and make it imtell-based tablets and ultra books and hybrid form factors with touchscreens. so those touch-screened based notebooks are coming late this year. so that could get some people excited. hopefully that spurs the market a little bit.
6:25 am
great. >> in 1995 hi was diagnosed. he's still going strong. >> he is. he lectures at sanford these days. >> did he undergo treatment? >> yes, yes. >> it was early. caught early. >> right. >> intel is doing a lot. it doesn't get as much attention but they definitely are powering next generation telk knollgy there. >> is there a growth platform for that. do you thing that will become a part of the bigger numbers down the road? >> it's hard to say. it's kind of lumping into an all other bucket. >> i wonder what kind of treatment they had at the time. it's 2012. thank you craig berger. appreciate it. >> thank you. >> in ore tech news, yahoo!'s first quarterly numbers beating
6:26 am
the street. portfolio manager of the jacob internet fund. 5% of the fund is in yahoo! shares and good morning to you. >> good morning to you. >> this was a good number. and surprised a lot of people. i must say, including myself. what was the big surprise for you? >> well, thank they showed revenue growth. i think that, you know, that is something that hasn't happened for quite some time. it's very minimal revenue growth so no one's throwing a big party. . given that the vast majority of yahoo! lies within their shane assets, whatever they can do only means core business. >> was there anything on the call with scott thompson the new ceo about the issue, what they're going to do with the alibaba and the structure going forward that gave you confidence or frankly undermining that confidence?
6:27 am
>> no. actually it was a relatively good call. i've heard good calls in the past. bartz came on spitting out curse words and change ling. we heard a lot of the same things. focus, reorganizing the companies, but he's been very aggressive in a very short time frame. with regards to the asian assets he made it pretty clear that it may happen with a year term. the yahoo! japan stake make take a little longer to monetize. there seems to be negotiations with that. again, another good thing is he made it pretty clear that any monies to come in through that transaction would probably go directly to shareholders instead of going to some unwise big
6:28 am
transaction. >> darren, are you supportive of the dan low proxy against the board? >> we are. we thing there's really no good reason not to support that investment. yeah, we are big fans of that slate, and we intent to vote for them. >> darren, right before you go, tell me what you made of this, display add revenue, decreased 4%. search up 8%. does that say anything about the larger advertising market or the health of the economy? >> no. unfortunately yahoo! hasn't been the growth of the economy or digital economy for quite some time. they're struggling, versus their main competitors, but the key issue forus or one of the things that we've seen in the recent quarter, recent months actually has been some deterioration in the search business, so we'd like to see that begin to stabilize. obviously they outsourced that
6:29 am
operation to microsoft some time and they need to get that house back in order. it's a key cap flow generator for the kpaechl but i would, again, aur that it lies within there. so the core business is relevant and i like what thompson said last night but it doesn't necessarily have much to do with the stock price of yahoo. >> okay. we're going to keep an eye on that. darren, thanks. >> thank you. >> "financial times," where you wouldn't necessarily expect it. outrage about what's happening in argentina. >> you're back on argentina. >> the mexican president -- it's an elite story. the mexican authorities called it lamentable and said who's going to invest? >> it probably scares all of these other nations. for mexico, it's a bad sign. you don't want investors worrying. it makes everybody look back at the u.s. and say that's where
6:30 am
you want to be. >> how about if you were spain and at the same time they were ready to sell 50% to china, ypf at $10 billion. they mentioned it to argentina. they said rrks you out of your mind. there's no way. the reason i bring it up is right beneath that we've got a picture of op. it says the administration of barack obama planning to stremgten the supervision of oil mortgages and crease penalties in an attempt to show the white house is standing up to these higher gasoline prices. but if he really wanted to -- i don't know why we don't exappropriate. do chevron. >> barack's on line two. i've got to go. >> he got health care through. >> hey, man, how are you doing? >> coming up we have a power half hour. in the next 30 minutes, two
6:31 am
newseums, one place. that's right here on "squawk." goldman sachs rock star jim o'neill tells us why his view of the world is a little less rosy right now. [ nadine ] buzzzz, bzzzz, bzzzz, bzzzz, you know, typical alarm clock. i am so glad to get rid of it. just to be able to wake up in the morning on your own. that's a big accomplishment to me. i don't know how much money i need. but i know that whatever i have
6:32 am
that's what i'm going to live within. ♪ ♪ only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz.
6:33 am
but not how we get there. because in this business, there are no straight lines. only the twists and turns of an unpredictable industry. so the eighty-thousand employees at delta... must anticipate the unexpected. and never let the rules overrule common sense. this is how we tame the unwieldiness of air travel, until it's not just lines you see... it's the world. in that time there've been some good days. and some difficult ones. but, through it all, we've persevered, supporting some of the biggest ideas in modern history. so why should our anniversary matter to you?
6:34 am
because for 200 years, we've been helping ideas move from ambition to achievement. and the next great idea could be yours. ♪ president obama proms to boost up plans. gop candidate responding on that plan to cnbc's kudler report last night. >> speculators, which is a word which obviously has all sorts of negative contagions are people who are investors who are trying to predict what the future price of gasoline will be.
6:35 am
and by virtue of being able to make assessments, businesses are able to prepare for the future. >> reacting to this and more is bart chilton. s he's commissioner at the u.s. commodities future trading commission. it's charged with regulating the futures and regulations markets. thank you for being here though morning. >> good to be with you. >> we see oil prices climb and ougautomatically we look around. how much of a role do you think it plays? >> manipulation is different from excessive speculation. the president talked about manipulation yesterday and said we need additional fines and authorities to deal with manipulation, but it's that excessive speculation that congress has told us and the president told us is part of dodd/frank that we try -- we need to try to get under control so that individual traders don't have an excessive amount of control where they can push
6:36 am
prices around and that's what's impacting it. >> do you think that's what's happening? you can look to federal reseven and say it's the easy money that's been there. when there's all that money floating around. it's got to find somewhere to go. >> no, i'm not saying that excessive speculation is the only thing. of course not. i mean the things that you and i and everybody's talked about all the time, there are a myriad of things that go into energy prices. these are global markets and the fed's policy, what's happening in iran, absolutely internals are determined, prices are determined by a number of things, but excessive speculation is one of the things because if you look at supply and demand, really prices are delinked from that right now. and even goldman sachs has said there's an added speculative -- there's an added speculative increase that consumers are paying and it works out at the pump, becky. if you have a civic every time
6:37 am
you fill up, an skploser, it's 10 bucks and if you have an f-150, it's $14. there's an added impact from added speculation but that's not the only thing. >> i don't argue 's not something going on and i guess easy money is part of that, too, if you've got extra money floating around. if you're a speculator. but, bart, how do they actually figure out this dollar for your gas tank, how much it actually works out to? how do you attract speculators? how do you figure out who's a speculative speculator and how do you stop it? >> what goldman did is they said for every 100 million barrels of speculative long interest there's an added cost and you take that extrapolation and look at the cost of oil and figure out that it's about $23 a barrel. you can bridget down to how many gallons of gas and how many
6:38 am
gallons of guess fill up a car. the point of law is we've got laws so traders can have no more than roughly 10% of marketst we're trying to put that in place, yet the wall street banks have taken us to federal court in order to stop that and that's hurting consumers and it's making them pay a little bit more. again, i'm not saying it's all due to this, but they're paying more than they should at the pump, and think that's why the president was so forceful yesterday and why we're trying to get this thing in place. >> bart, let me take the other side of that. speculators, as mitt romney laid out, these are people who are making market this is part of the everyday market. these are things that happen all the time. and generally people who take too big of a position who try to corner the market, they wind up getting crushed in the end because free markets are the surest cure for anybody trying to manipulate. >> i mean i don't disagree, you know, with the governor that speculators are important.
6:39 am
we wouldn't have these markets at all. if you said, bart, you talked about all that wall street speculative premium, would you take every bit of it away, the answer is no. you need speculators. ai i agree with governor romney. it's the excessive speculation that we need to get out of the market. >> that's a hard thing. >> you want to government to decide what's enough, what needs enough. that's scary. bart. you guys are splart enough to decide what's the right amount of speculation and what's too much speculation? >> no, we're not smart enough. we're government. we can't do it by ourselves. which is why we got over 10,000 comments from the industry, joe, as to what they thought was the right level and that's the level we picked which, by the way, is a level that's been used already in the agriculture commodities at the cme. >> for a size? >> yeah, if a size. so we probably couldn't have
6:40 am
figured it out by ourselves but with a lot of help we did. we're trying to keep it at roughly 10%. i've seen it, joe, in the oil market, in the silver market, in the natural gas market, where you have one trader controlling 25, even 30% of the market. i mean you've got to admit. if you do something there -- becky may be right. you might be able to get crushed but you can't push prices around if you have that concentration. >> they had the $300 call a cup of times on oil, remember? >> super spike. >> yeah. i like it. you hate goldman and then the government sites goldman. i like that. we're living in interesting times. >> what's the next step real quickly on this? >> hopefully we're going to get through the lawsuit. we're on the 5-yard line with getting limits in place. with regard to what the president called for, it will take congress to given us additional authorities if they want on margin.
6:41 am
additional penalty authority and additional resources for enforcement, oversight, and importantly for our technology so it can keep up with those hft cheetah traders, joe. >> the cheetahs. >> and the cougars. >> is that like the cougars? >> we've had this discussion. >> yeah. >> thank you, bart, very much. we'll see you soon. >> you too. >> another "squawk" newsmaker. we're going to ask jim o'neill why he's little more bearish. blackrock reporting current earnings of 16 a shafrmt revenue right in line. been a great stock to own over the last six months. "squawk box" will be right back. [ dog barks ]
6:42 am
appears buster's been busy. [ man ] yeah, scott. i was just about to use... that's a bunch of ground-up paper, lad! scotts ez seed uses the finest seed, fertilizer, and natural mulch that absorbs and holds water better than paper can. looking good, lad! thanks, scott. ez seed really works. so, how come haggis is so well behaved? 'cause he's a scotty. oh. scott: get scotts ez seed. it's guaranteed. seed your lawn. seed it!
6:43 am
6:44 am
6:45 am
welcome back. joining us now on the line, jim o'neill, goldman sachs asset management chairman. jim, welcome. it's great to have you here. we also -- we've got one more day to throw into the mix, and i don't know whether that changes how you felt over the weekend because i was feeling it too after that weak employment report and then spain hit the fan big time again. but then we had yesterday, and spain looked not quite as frightening. it seems we're back to knowing urine doesn't get fixed any time soon but it doesn't implode. did you feel a little bit better after yesterday? >> you know, as an average lieu
6:46 am
man being, you're influenced by the latest day's move in the prier price, but what's kept me in the bull camp since last autumn, the clear evidence of marginal improvements in the u.s., so i think tomorrow is a big day. we've got the philly fat survey and the job plan. you know, all i was trying to say there, i heard you earlier. i laughed at it where i was described as bear. that would surprise a few people that that phrase was being used about me. >> i qualified that. i said less of a bull. we didn't know how to say it the last couple of days. i meant a little less optimistic. so did you -- here's the thing that we worry about. a replay of last year and the year before because it happened and also that maybe some of the
6:47 am
positive numbers that we got were weather related. does that all play into it? >> you know, the past two week, the job claims data definitely gives support to people who have thought that. you know, there are some people around that i respect that have said all along. i don't believe it. i think the evidence that i come across particularly picking up things from corporate america all the time and particularly with regard to the national competitiveness and the retail sails out earlier this week, i don't think it is, and so i amgen rally still very much with the more optimistic crowd but we receive a couple of key data points on the job plans we get every week, so it's really useful data. that's why it's always going to be pretty interesting in view of what we're seeing. >> so at the point you would think chances of a spring,
6:48 am
summer swoon compared to the last couple of years are below 50%? >> i think it's way below that, yes. you know, without a very -- without a big move, i've been in that camp, you've got to be careful. i'm certainly going to be looking at that myself. >> as good as the first quarter was for the equity markets, we've asked the question a few times which makes me think we're not the only ones asking it. have the s&ps seen the heise for the year? we've had strategists on saying the first quarter is going to be the best. if the economy continues to do pretty well, what do you think happens with the u.s. stock market? i think it's very unlikely myself. the first quarter seemed to peak. i mean it would be exceptionally surprising for the course to match the degree of gains we had
6:49 am
in qe1. but the start of the year, i believe, we've got 1,500 or beyond and i don't see any reason to change that view. i wouldn't be surprised if we have, you know, a bit of a sort of spring, early summer wobble as is often the case. . that would be part of the ups and downs. so long as it's improving. i think it would be quite easy for the stock market to make significantly higher levels in the upcoming months. i think when i look around the world still, greatly because of the european thing on top of the underlying caution of people, cash is king. you know, the most notable thing about the first quarter is how few investors really participated on it as much as the market shows. >> jim, we had a cftc commissioner on, and i understand what he's saying.
6:50 am
you know, all these things in a perfect world, if we could get just the right amount of speculation to keep it liquid and keep speculators in, but not too hot, not too cold. but he made the case that the government can set a good number for how big contract sizes should be in the oil markets. do you think they can get it right? are we -- are we treading down a dangerous path if we do that, or would it be productive? >> i heard -- i heard the back end of that discussion and kind of smiled to myself when i heard the reference to the owners. >> it depends on the day whether they're signing goldman sachs or trying to intigdict goldman sac. >> this is something that
6:51 am
intrigues me. it's hardly touched the past few years. you look at it. it's way above that. . is it because of speculation on one part of the market over the other. . >> what do you thing the >> what do you think the consequences could be whether they would limb you to owning 10% of the market? >> themarket? >> the great role that speculators play on a daily basis, is, of course, when you get, because of the frequency of the involvement that when you get surprising information, it actually makes it more likely the price moves less. if you really control the ability of individuals to play,
6:52 am
then when you get surprising information, it's much more likely the price move will be bigger. and presumably that should be ultimately what policy makers are interested in. >> is it a dumb idea to limit to 10%. that's what we were just talking about. >> i'm not sure i want to use phrases like that but it has be done with great caution in my judgment. >> jim o'neill -- >> before jim goes, i got a question only because i got a number of emails before you came on about this. the last time we saw you i asked you a question about your view versus some other views inside goldman sachs and strategists who had more negative views or more positive views and it got picked up in a couple of different places. i'm currious because i got emails from people who said what is goldman's view is it better they have multiple view or one house view? i'm currious from a corporate perspective how you think about
6:53 am
it? >> i'm glad you asked me that again, mr. sorkin. we're an independent asset manager. so my view is not relevant in terms of what the strategists for the sale side are. you know, they all happen to used to work for me. we have our asset management to manage money on behalf of our clients. >> do you share any of the same clients, jim? >> um -- >> that was unfair. >> that was unfair and uncalled for. >> as a point of business, guys, of course we don't. we have a fiduciary duty to handle assets on behalf of our
6:54 am
clients. >> we follow what happens in europe and some days it seems to matter here and some days it doesn't matter at all. what's the right way the stock market should be looking at this? is the market right on days when it looks at europe and say oh, my gosh it's huge or doesn't it matter? >> i wish i knew. it's fascinating. it's part of the positioning, but i'm of the opinion that the main drivers of the world for many, many years have been the u.s. fed policy bias and the great companies, particularly can champion. europe is not particularly important noufb a major driver unless what joe said earlier the absolute down side looks like a high probability. china creates another greece every 11 1/2 weeks. it creates another spain every year. europe -- all these things in a global sense are not that
6:55 am
important but yet there are days that people freak out about it. i think it's probably indirectly because the times when the european markets themselves get in such a difficult position is sort of when you get this bit of hopelessness not about policies in those countries but brussels and the ecb. it's no coincidence in my judgment the wobble started when the ecb started making noises about taking away some. it's too early for them to be doing that. as soon as we say these things, spain and italy start wobbling. they can't afford to have these places to be now risking. even if they, i don't think so. u.s. job claims way more important than anything to do with spain. >> interesting.
6:56 am
all right jim o'neill. thank you. >> good luck to you. >> appreciate it. >> i apologize for joe. >> oh, please. here's the thing, jim. sorkin, you're in this weird position where you're hoping the market doesn't go up 30% because of my call. so you hope adam parker is right. but that's counter to you wanting to re-elect -- so you're like torn between these -- >> i'm not torn. nuclear power plant the market to go up, even if i end up being right. >> it's good for the world. >> for the tlex. >> it's good for the world. it's good for the world. for the economies of the world. it's good for the public. it's good for families. it's good for your family. believe it or not "squawk" is just getting started this morning. >> still to come we have carly
6:57 am
fiorina. "squawk" will be right back. tdd# 1-800-345-2550 i'm constantly working my screens.
6:58 am
tdd# 1-800-345-2550 checking the charts. tdd# 1-800-345-2550 looking for support, tdd# 1-800-345-2550 resistance, breakouts, tdd# 1-800-345-2550 a few other tricks that i'll keep to myself. tdd# 1-800-345-2550 that's how i trade. tdd# 1-800-345-2550 and i do it all with charles schwab, tdd# 1-800-345-2550 bee thsmart edge platform tdd# 1-800-345-2550 helps me trade quickly, intuitively. tdd# 1-800-345-2550 staying on top of the market is key! tdd# 1-800-345-2550 and the momentum tool, tdd# 1-800-345-2550 it lets me do it at a glance, tdd# 1-800-345-2550 so when things shift, i'm ready. tdd# 1-800-345-2550 then to track the stocks i have my eye on, tdd# 1-800-345-2550 i turn to schwab's high/low ticker. tdd# 1-800-345-2550 so i can spot a potential breakout tdd# 1-800-345-2550 before it breaks out. tdd# 1-800-345-2550 and get this...i can even trade, tdd# 1-800-345-2550 change my orders or check out my positions tdd# 1-800-345-2550 right on my chart. tdd# 1-800-345-2550 my system works for me. tdd# 1-800-345-2550 does yours work for you? tdd# 1-800-345-2550 get streetsmart edge tdd# 1-800-345-2550 from charles schwab for $8.95 a trade. tdd# 1-800-345-2550 open an account and trade up tdd# 1-800-345-2550 to 6 months commission-free. tdd# 1-800-345-2550 call 1-877-430-4570 tdd# 1-800-345-2550 and get started today.
6:59 am
7:00 am
we're covering all the angles on the story that's shaking up the business world. this hour inside from the berkshire hathaway. >> delivering profits for the greater good. carly fiorina is our guest host. she will go inside the tech world, global economy and 2012 the election. >> creating jobs and balancing the budget. we'll get opinions from both sides. first eric cantor and then chris van hollen. second hour of "squawk box" begins right now.
7:01 am
good morning, everybody. welcome back to "squawk box" on cnbc. i'm becky quick along with joe kernen ear andrew ross sorkin. ibm beating the administrates expectations with quarterly profit, also raising its guidance but the shares fell in after hours trading as revenue actually fell a little bit short of what the treat had been expecting. fellow dow compointel beating estimates on the top and bottom lines but the stock also seeing an after hour selloff. and sxc is buying catalyst for $4.4 billion. the deal looks at catalyst at 81.02 a share. both companies specialize in pharmacy benefit management tools. the futures this morning after what we've heard from both intel and ibm, you can see at this point are a little bit weaker. dow down by 56 points. s&p is off by 6.5.
7:02 am
also in our headlines, legendary investor, warren buffett business closing to the public he's been diagnosed with stage one prostate cancer. he said the good news is that i've been told by my doctors that my condition is not remotely life threatening or even debilitating in anyway. i received my diagnosis last wednesday. i then had a cat scan and a bone scan on thursday followed by an mri. buffet said he feels great. this sass if he was in his normal excellent health. his energy level is 100%. he also says he plans to begin a course of radiation treatment in july. his doctors he says are very comfortable with him pushing that off not doing it right away. in fact he said if he wanted to push it off later they would have been fine with that as well. the timing of that two month treatment he said was chosen to keep from interfering with previous commitments he made
7:03 am
including travel. buffet said his doctors have no qualms about delaying that treatment and he says elves great. in his annual letter buffet said the board had chosen a successor. they had not named that person. buffet said there's no change in that succession plan. joining us right now to talk more about warren buffett and berkshire hathaway is whitney tilson and our guest host this morning for the entire show is carly fiorina. she's the new chair of good 360 an online donation marketplace that connects corporation donations with nonprofits. whitney, let's start off quickly talking about berkshire hathaway, because you do have a pretty large position in berkshire hathaway. it's a mid-teen position in your portfolio? >> yes, it is. >> what did you think of this news last night?
7:04 am
>> of course, immediately, we thought of him personally. our hearts went out to him and as we kept reading the press release we were very relieved to hear that he's feeling great and the prognosis is great, there's no other cancer in his body. we did a quick google search anthony. this is medically speaking a complete non-event. >> we saw the stock sell up a little bit last night. what do you think? >> buffet is 81. he's not going to live forever. it remind people of the succession issue which concerns a lot of people, doesn't concern us at all, but warren buffett is irreplaceable. he's one-of-a-kind. no combination of successors is ever going to be able to fully replace someone like buffet. but that said this isn't news to us. we knew this before the announcement yesterday. we didn't need a reminder. in fact, we knew all of these factors as we were adding to our largest position just in recent
7:05 am
weeks. so, you know, it's quite a remarkable thing. being reminded that in the investing world, using your brain and actually applying logic is a huge advantage and not responding to the whims of the market and people, you know, other investors overreacting to something that's really emotional but has no absolutely bearing on berkshire hathaway's value or where the stock will go in the next few years. that's what we care about as investors. >> you said a lot of people are worried about succession but you're not. why not? >> most importantly if you look at an actuarial table, it's highly likely buffet will manage berkshire for the next five years, maybe ten years and today or yesterday's announcement doesn't change that at all. that's number. when we value berkshire hathaway we don't include any warren
7:06 am
buffett premium. we take the cash in investment, put a pre-tax multiple on the operating earnings of the business that berkshire owns. we come up with almost $180,000 per share and the stock is trading a little under 120 pre-market. you have 50% upside in one of the world's greatest, safest businesses and the business is going gang busters. i'll remind you all the news and turmoil by steve jobs' illness and he passed away six months ago, apple stock is up 65% since then. what matters is the underlying performance of the business. >> we have talked about corporate gonks from this perspective. whitney just mentioned steve jobs. when i spoke to buffet last night i asked why are you putting this out if it's not life threatening. he said his criteria would be if you're hospitalized or incapacitated it's important to let shareholders know. but because of the c word, the
7:07 am
cancer word it has a lot of different connotations to people. >> warren buffett did a lot of right things. as cancer survivor myself i chose to be very transparent. i think he did the right thing. this kind of thing will leak out eventual when he starts going to daily radiation, people will comment on the change in his schedule. i think this is much more reassuring to shareholders to know the whole story right upfront and while a diagnosis of cancer is always frightening this is truly the most curable form of cancer there so. he has caught it at the very earliest stages, so i think this announcement should be very reassuring to shareholders, actually. >> whitney, doug cass has a point. doug, he has a love/hate relationship with berkshire. he points out that, you know, not this latest news, perhaps
7:08 am
with the stage one prostate cancer but the mortality of mr. buffet and the suck seg of mr. buffet which has been in all of our mind for the past couple of years that the price to book on berkshire has reflebed, it's 1.15, down from 1.16 which is averaged over the last couple of decades. there's something to that that there's concern that there won't be another guy like buffet ever again running berkshire. these guys are great but maybe he is truly irreplaceable. >> we are quite open that about the irreplaceability. i think the plan that he's laid out and the number of incredible people and managers that are in place to replace him on the operating side, he's already identified two people on the investing side, two great managers. but i think, you know, he'll be -- he can't be fully replaced by 90% or 95% replaced sure.
7:09 am
that's a question of what's already in the stock price. as doug points out an incredible businesslike birk shier should be trading at one and a half times anyway and it's trading at 1.15 times book and giving you and opportunity in our view to own the stock. it's safe, cheap and rapidly growing. we can't find anything out there in the investing world that offers this much of an attractive risk/reward equation. >> doug's other point is that you're not going see someone who is able to come up with a great deal that warren buffett has been able to come especially when things were happening in 2008. preferred shares he was able to get. he was able to do that because he's warren buffett. >> absolutely. no successor will have the same
7:10 am
sort of white knight ability as a buffet investment carries and no successor can pull the trigger that quickly and make attractive investments. buffet's ability to act quick sleigh huge advantage particularly when financing companies that are in a crisis and need capital quickly. so no question that that will -- it won't go away completely but it won't be as big a source of value as it is today. so that's one of elements of buffet's irreplaceability. when we value berkshire we assume zero value as to any fush value and we get a stock that's a $65 today. >> among the names that are speculated about in terms of succession shrone you prefer over. >> >> no. i haven't gotten a chance to know all of the operating managers super well. and this is one area where i completely trust buffet. as charlie munger joked a couple
7:11 am
of years ago he said do you really think warren buffett who has made so many great decisions over 50 years and made all of you here in the audience rich in many cases do you think he's going to screw up the most important final decision of his career. >> did the focal situation give you any pause? >> it was troubling to see a guy go off the rates like that. it's very sobering for any high-profile person to see how a lifetime of build urge reputation and then a five minute brain freeze or one day brain freeze you can destroy everything. you can lose your reputation, our job, your career, et cetera. so, it was as buffet said, it was inexpliable and inexcusable. but he was never was the successor. he never was. that's what buffett said. there's a deep bench at
7:12 am
berkshire. >> carly, you brought this up. you had experience with cancer. no cancer is the same. being in a very public position and disclosing this is not easy. >> it's not easy but certainly the right thing to do on mr. buffett's part. the truth is the unknown is always more frightening than the known. the more people know, certainly the patient themselves the more they know. but the more people who depend upon them know, i think the better. you know when all of this was going on with steve jobs it was an overhang on stock. how ill is he. what's the roger no sis, et cetera. i think looking back the board may have chosen to do that differently. i think it's interesting what whitney just said. what does it say about your morkts. our average investor holds the stock for four months, not exactly long term. what does you want say about the market when warren buffett's unique and irreplaceability
7:13 am
revolves around his ability to make logical decisions, unswayed by the ups and downs of the market. that's a paraphrase of what whitney said. it's too bad that that's so unique. making logical designates not swayed by the detail i ups and downs of the market. >> seems common sense. >> it seems that's how you make money over the long term. >> carly will be with us for the rest of the program. whitney thank you for joining us. >> and eric cantor will talk about job creation and much more. here's a look at futures. "squawk box" will be right back. between black and white answers... ...and 1,000 shades of grey duff & phelps finds
7:14 am
the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. introducing gold choice. the freedom you can only get from hertz to keep the car you reserved or simply choose another. and it's free. ya know, for whoever you are that day. it's just another way you'll be traveling at the speed of hertz. between listening to the numbers... ...and listening to your instinct. duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services.
7:15 am
7:16 am
welcome back, everybody. csx delivering better than expected first quarter results. the company earning an adjusted 38 cents on revenues of about $3 billion. the stock jumped in after hours trading. increased merchandise and intermodel shipments more than offset weakness in coal shipments.
7:17 am
michael ward is joining us. michael, great to see you this morning. >> good be with you. >> we like watching the railroads. should we take away from this that the economy is improving? >> absolutely, becky. we're pleased with the results we delivered. our car loads were up about 1% but that was a little bit deceptive. there were some challenges in the utility coal with the extremely warm weather in the east this year as well as the low natural gas prices. if we exclude our utility coal business our other businesses were up about 6%. we're very encouraged with what we're seeing in the economy. >> the coal business it, the coal to utilities that was down because of the warmer weather around the country. >> warmer weather and low natural gas prices displaced some of the more ploor begin alcoal production. >> that's two different issues. warmer weather is one off, we're not expecting that every year. but the natural gas prices, if
7:18 am
they continue to be so low, does that worry you about the longer term what that means for csx because you're a huge shipper of coal. >> we are. becky, you're quite right. they stay low. that will impact our utility business. utility cool is earning 10 ps. we have diverse portfolio of businesses. our automotive shipments were up 18% in the quarter. our intermodel which is continuing to grow. we move a lot of products in this economy. while there's challenges in the utility coals the diversity of our portfolio allows us even with that challenge to produce record first quarter earnings up 23% on our eps. >> if we're using you as a gauge of the economy and you have intermodal car shipments doing so well what does that tell us how the american economy is doing? is it firing on all cylinder,
7:19 am
slow and steady? >> i would categoryize it as slow and steady improvement which we've seen for the last six quarter, slow gradual improvement, not firing off cylinders but continuing to progress in a very positive way. >> does that tell us 2 to 2.5% growth? >> we think we'll grow faster than the gpp. we said that. our service levels are at extreme high levels right now. we have resourced up with both people and locomotives. we're investing record capital investment this year of 2.25 billion. with the service and the investments we're making we think we'll grow even faster. new said last night that the company is off to a fast start in a year that's going to be dynamic and challenging. what are the challenges? >> clearly for our business the utility coal business will be challenged throughout this whole year. as well there's still some uncertainty in the economy. so, we're trying to stay very flexible. we're adjusting to some of the
7:20 am
challenges in the coal by parking some locomotives and furloughing a few employees but still going to be hiring 3,000 employees this year, becky, the high paying good jobs. >> in america? >> in america, yes ma'am. >> 3,000. what happened in terms of the layoff over from 2008. all the railroads as shipments dropped were forced scale back. how does that get you back to where you were in 2007? >> most of the people who were furloughed during the recession have come back to work and a lot of our hiring is for attrition that we're seeing. our workforce, we're seeing pretty good retirements, because in our industry at age 60 you can retire with a full retirement. we're hiring people on. great jobs are not exportable. high paying with good benefits and we get a very good applicant pool for those jobs. >> coal challenges have been one issue, but railroads overall are much more efficient way to send goods versus trucking. as oil prices have climbed has
7:21 am
that helped out in pushing more business your way? >> it absolutely has. when we look at our intermodal business in domestic, taking businessest move long haul with truck and put rail in the middle that's been growing 6%, 7% a year for the last six or seven years. there's higher fuel prices. we have greater fuel-efficient more than trucks, the trucking companies are coming to us say let's partner. let's do the local pickup and deliver and you move between the cities and it's a true win-win situation. >> if coal really went into a bear market that would be bad for you, wouldn't it? >> joe, let me put perspective on it. our peak utility coal shipments were back in 2006. we're now running about a third down from that. so about a third of that business has disappeared. yet five of the last six years we had record earnings. the diversity of our portfolio allows us to have a weakness in
7:22 am
one market that we more than overcome with the other markets. >> the truckers could compete with you better if they did natural gas. >> bigger problem if the power plants start switching over to natural gas instead of coal. we have seen some news just in the last couple of weeks about companies watching natural gas prices for so long are starting, i think it was royal dutch -- >> but they count be as competitive to superior to trucking if trucking was cheaper as well ingood for everybody? if our btu costs were to be averaged down to where natural gas is right now. >> you know, there's always -- i think it's very good for the economy with these low natural gas prices. it opens new markets for us moving frack sand as part of that hydraulic movement. overall it's great. >> solar panel transportation business might weaken a little bit although you may be moving them into storage somewhere.
7:23 am
they have to go somewhere where we can keep them if we need to use them due to the glut. >> very clever, joe. i it's earth week. >> dude you're looking at me? >> who else would i look at. if i take a shot of something to tweet. every year we get a beautiful bird's nest where we can watch. we go crazy. it's above on our front porch above the light there's a beautiful nest of eggs. and we cry. and for earth week that's my thing, my gift to you. >> what we'll do for earth week is we'll continue to move things very efficiently, very economically all year long. >> you notice he has a green tie. >> he's wearing a green tie. >> michael, tranquilize very much. congratulations on the earnings. >> thank you, becky. >> still to come this morning on "squawk", house majority lead eric cantor on why his plans to provide business owners a tax break will improve the job
7:24 am
picture. later chris van hollen ranking member of the budget cheat. he'll be our spectacle guest. "squawk" is right back after this. >> time now for aflac's trivia question. what name is given to the methods for making an aircraft hard to detect? the answer when cnbc's "squawk box" continues. [ thlurp! ] aflac! [ male announcer ] help your family stay afloat at aflac.com. plegh! the chevy cruze eco also offers 42 mpg on the highway. actually, it's cruze e-co, not ec-o. just like e-ither. or ei-ther. or e-conomical.
7:25 am
[ chuckling ] or ec-onomical. pa-tato, po-tato, huh? actually, it's to-mato, ta-mato. oh, that's right. [ laughs ] [ car door shuts ] [ male announcer ] visit your local chevy dealer today. now very well qualified lessees can get a 2012 chevy cruze ls for around $159 per month. e.p.a. estimated 36 miles per gallon highway. and now i build them. i am a bigger is better kind of guy. i absolutely love building locomotives. i knew i wanted to design locomotives from when i was very young. [ jahmil ] from the outside it looks like such a simple device. when you actually get down into the bare bones of it, there's so much technology that's submerged. [ rob ] my welds are a signature, i could tell my welds apart from anybody's. you lay down that nice bead and you look at it, i love it. they don't go together by themselves. there are a lot of little parts, and everyone has their job. [ scott ] i'd love to see it out there on the open tracks. and when i see it, i'm gonna know
7:26 am
that i helped build that thing. [ train whistle blows ] here she comes! [ bell clanging ] [ train whistle blows ] wow! [ charlie ] well, it's one thing seeing them built, but then to see them out here, pulling freight across america, it makes us proud. ♪ sadly, no. oh. but i did pick up your dry cleaning and had your shoes shined. well, i made you a reservation at the sushi place around the corner. well, in that case, i better get back to these invoices... which i'll do right after making your favorite pancakes. you know what? i'm going to tidy up your side of the office. i can't hear you because i'm also making you a smoothie. [ male announcer ] marriott hotels & resorts knows it's better for xerox to automate their global invoice process so they can focus on serving their customers. with xerox, you're ready for real business.
7:27 am
now the answer to today's aflac trivia question. what name is given to the methods for making an aircraft hard to detect? the answer stealth technology. i overthought that one. got comments, questions about anything you see here on squawk shoot us an e-mail. squawk @cnbc.com is our address. still to come market reaction to warren buffett's announcement of stage one prostate cancer. david roth will join us at the top of the hour. and congressman eric cantor and congressman chris van hollen
7:28 am
will both join us when "squawk" returns. zap technology.
7:29 am
departure. hertz gold plus rewards also offers ereturn-- our fastest way to return your car. just note your mileage and zap ! you're outta there ! we'll e-mail your receipt in a flash, too. it's just another way you'll be traveling at the speed of hertz.
7:30 am
7:31 am
welcome back. among the stories we're following this morning, warren buffett disclosing to shareholders he has stage i prostate canner. he emphasizes his condition is not the least bit life threatening. he's going to begin two months of radiation treatment in july. and mark zuckerberg struck the deal toby instagram without consulting his board. and amazon.com is calling on agent 007 to boost book sales. it acquired exclusive rights to all 14 james bonds novel written by the late ian fleming. digital copies are only going to be available at may zone's kindle ebook store.
7:32 am
>> in the movie. >> is there any reason that this should surprise us? is there any truth -- if there was any truth to the movie. >> carly and i were whispering to each other. if you're a ceo about the board. the board is talking. there are people who are talking. >> somebody very close in. >> you don't get the "wall street journal" there's something there. >> carly, he knows something about that. >> but, when you read that story, someone fairly closed in has said a lot. >> is that a problem? does that mean they are unhappy with other things going on? >> i would have a rubber stamp board if i'm mark zuckerberg. it's my company. i've done this. >> i don't know a lot of companies that operate like this. >> it's not surprising at all. >> we were talking about warren buffett. >> when he does a deal he does it in 24, 48 hours and brings it
7:33 am
to the board. designee doesn't want anyone to know. this whole idea they bring it up in the "wall street journal" article a company will hire a lot of bankers and lawyers. his point is you don't need him. it just adds to the cost. >> maybe when we get to 10 billion. zuckerberg is at a billion. >> how much of it was angry lawyers and bankers. >> think he told his buddy what's his name, spiderman. do you think he told spiderman i'm buying instagram. . >> it raises legitimate question as they are about to launch into their ipo how is valuation set. 12 employees. >> do you think a billion dollar deal is material in the context of a $100 billion company. >> personally do, yes. on the other hand i think this is why facebook and mark zuckerberg have been reluctant to go public because the formula has worked exceedingly well and
7:34 am
that formula is we do what our visionary founder thinks is the right thing to do and it's paid off. >> keeping the leader. he's a leader. >> our next guest says cutting taxes for small business will help the u.s. job picture. joining us now is eric cantor. interesting conversation. leader, we always have you on, doing all this other stuff you can come in to the studio and sit here. you're so busy. >> just waiting for the invitation. >> we would like to have you in here. we'll talk about the jobs thing in a minute. i don't think you've been on since romney became what we really are calling the presumptive nominee at this point. what's your feelings, thoughts about that? i guess you're happy? >> no question. i mean i'm thrilled to see that our party is coalescing behind mitt romney. i believe he'll be the next president of the united states after the the election in november. and i've always said that, you
7:35 am
know, mitt romney is the only one out there with a pro growth bold plan to get the economy back and people get back network. he has a demonstrated track record of doing it. i'm excited as are my colleagues here in washington to get on with this campaign. >> i know we'll talk about a jobs plan. i'll tell you, we're not getting a whole lot of less cynical here on this desk or the american public. we see a budget introduced that gets zero votes. that side is not serious about doing anything between now and the the election, i'm talking about the democrats. i'm not sure that your side is serious about getting anything done. should we not try to do anything until november? >> listen, i think the last time we were on we were talking about the success we had in the jobs act. and, you know, that was a bill signed into law by the president a few weeks ago and although it wasn't the be all to end all it's a huge step forward to help
7:36 am
entrepreneurs and inventors try and access capital to launch their businesses. we know over the past three years there's been a 23% decline in small business startups. that bill went right to that question. that's similar to the kind of thing we're bringing to the floor tomorrow. we want to go to the point of job generation which is small businesses in this country that have for too long been penalized by washington and not been back in the game and we're trying to get job creation through small businesses back in the game. >> what's going to happen tomorrow? will it pass? >> it's going to pass the house. we got a strong support. >> what about the senate >> the president has issued a veto threat against the bill which is puzzling. the president has continued to say he's for small businesses and the middle class but he's denying any help to small businesses who, frankly, could use a 20% tax cut as a step forward, as a pro growth measure to try to jump start the
7:37 am
economy. >> eric, it's not going to go, right. we're doing all this. we're doing all this stuff the other day. you saw him, his move with the buffett rule. he knew it wasn't going to go. we went through all that with him. then afterward he and his administration get to talk about it and schumer and all the democrats talk about it. you guys blocking help for the mi class. this isn't going to work in the senate. you guys get to talk about the president not helping small businesses. that's problem. >> listen, it comes down to whether they will get serious on the other side of the aisle to embrace pro growth policies. if you look today steve forbes is out talking about the small business tax cut as a first step towards pro growth policies and we all know we've got to go about reforming the tax code to broaden the base, bring down the rates for everybody, get rid of the loopholes that actually put washington in place of picking losers and winners to the tax code. we all know that.
7:38 am
we also know any kind of tax reform that's been put on the table is rejected by the president and harry reid in the senate because it doesn't raise taxes. all they have done is don't say we got raise taxes. now look i'm as frustrated as you are and i think there will be some issues that have to be resolved through this the election and taxes is certainly one of them. ate question of whether the american people will think hey we have a revenue problem in washington or a spending problem. most people say we have a spending problem. >> why can't it be a combination of both? that's not to suggest that the democrats, by the way, have approached it in that way. they talk about balance but it is for them about tax on the wealthy without talking about entitlements. >> andrew, i think the issue is this. if it is so important for the other side to raise taxes, then at least let's sit down and talk about how we fix the problem of the spending, because if you don't address the problem of the
7:39 am
deficit and debt, raising taxes is like throwing good money after bad. how can you go and ask people in this country to pay more into washington if you're not going to retire the debt, if you're not going to fix the problem. that's the fundamental point of disagreement. they have never come forward with a budget nor have they come forward with a determined plan to fix the problem. and that's where we believe we've been very straightforward and clear. we want to fix the problem here in washington and we want to grow this economy. >> what's going to happen at the end the year? >> well, the end the year is certainly a problem and what we're doing in the house is trying to prepare for what many people are calling taxmageddon. what we're doing right now is we're laying out a vision for the kind of tax reform we want to see. again, this small business tax cut is a step in the right direction. overall tax reform means bringing rates down for
7:40 am
everybody. we've also got this threat of this sequester that's coming, and this is something that actually will threaten our ability to defend this country, the officials at the pentagon have said they cannot endure this kind of across the board cut and we're trying in the house to prepare for that. we'll put forward a bill in may that will actually substitute out the kind of cuts to the pentagon with other cuts that we believe reflect sort of the common sense vision of how you take the country forward, how you save some of these programs and accomplish efficiencies and get rid of the waste. >> good morning, eric. it's carly fiorina. how entrepreneur >> hey, carly, i'm fine. nice to hear you. >> nice to be with you as well. one of the thing you and i have talked about in the past and i certainly have talked about on other occasions on this show is the need to restore the entrepreneurial foundation of this nation and in particular focus on small business and one of the things we saw encouraging by the jobs act and encouraging
7:41 am
by the legislation you're putting forward tomorrow is a focus on small business. stepping back, what do you think are the chances in november after the the election? in sort of reorienting washington's point of view to focus on small business instead of big business and big labor and big government? think about the tax code from the small business owner's point of view. think about the regulatory regime from the small business owner's point of view. we have more small businesses failing and fewer starting than any time in the last 40 years and that's a structural problem we have to address. >> it's absolutely right on point, carly. we've got to adopt the mentality in this country that we're going to be a start up country again. it's what built the country. if you think about it, most people, not everybody, but most people and their families came here for a reason because they were in search of a better life. and they came here because they
7:42 am
took a risk. and so our small business culture in this country is premised on the fact that entrepreneurs are willing to put their capital at risk, are willing to go out there and attempt to earn their success. that's what is the back bone of the american marvel of the economy. and you're right. we've got to get back into that mentality. ate progrowth competitive mentality that will end up attracting global capital here and allow entrepreneurs to flourish. right now we have too much regulation in place, we have high tax burdens and the threat of even higher tax burdens so it's holding back entrepreneurs. you're right, we gosht what built this country and so many people who have been successful in this country tell me if they had to do it over again right now they couldn't because of the uncertainty and the price of risk being imposed by
7:43 am
washington. >> i lost my train of thought but i got another one for you, eric. do you have a preference for -- when do you think we'll know, romney said yesterday we'll know before the convention but wouldn't say when, he's got one of his people looking it, beth meyers is doing the search. do you have a top five you want on the ticket? >> i know mitt romney will make the right decision. he's going to be the standing bearer of our party. he'll have a message and have a running mate consistent with that. it's my desire to want to see and emboldened and strengthened majority in the house and to reflect, really, a growing republican party that is an inclusive party and one that is really open to all comers, and that i want to rally behind a pro growth small business message. >> just remembered what i wanted to ask you.
7:44 am
like on in trade and i don't know, in trade with obama is still at 60%, for the house it was much higher for republicans keeping the house. that's come down quite a bit. are you on a daily basis in tune with how all those races are going, the key races. do you think you'll keep the house republican? >> yeah. i'm confident and we're working hard to make sure we take nothing for granted. because, you know, we picked up 65 new seats last cycle. and i think it's been demonstrated that we, in our new majority want to affect the kind of reforms here in washington to bring the country back to a growth oriented future and we're fighting very hard. we got some great candidates that are stepping up and playing offense as well as having many incumbents that are much more solid footing after we've been through the redistributing process and facing this the election. >> all right. we'll see. a lot of those guys said i only care if i serve two years i'll
7:45 am
shake things up. when you do things like that we saw what happened to some of those guys in the '08 that vote forward the affordable care act and they are back working at jiffy lube or something. leader cantor we appreciate your time today and hope to see you again soon. >> absolutely. >> up next we'll hear from the other side of the aisle on the jobs, economy and the race for the white house. congressman chris van hollen is our guest and a quick stop to watch. st. jude medical out with earnings. the company earning 86 cents, beating expectations. revenues were in line for the first quarter. more on the earnings and the stocks to watch throughout the morning. "squawk" coming back after the break. ♪ [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional
7:46 am
how lincoln financial can help you take charge of your future. ♪ departure. hertz gold plus rewards also offers ereturn--
7:47 am
our fastest way to return your car. just note your mileage and zap ! you're outta there ! we'll e-mail your receipt in a flash, too. it's just another way you'll be traveling at the speed of hertz. dave, i've downloaded a virus. yeah. ♪ dave, where are we on the new laptop? it's so slow! i'm calling dave. [ telephone rings ] [ male announcer ] in a small business, technology is all you. that's why you've got us.
7:48 am
at the staples pc savings event, for a limited time get up to $200 off select computers. staples. that was easy. back on this wednesday morning. big question how can the nation make the most efficient strides to reducing the budget deficit. joining us from the other side of the aisle is chris van hollen, ranking member of the house budget committee. good morning to you, sir. i don't know if you got a chance to hear what eric cantor said but i'm going to pose a question to you this way.
7:49 am
we framed up this question around the debate on the budget. so franchise the democratic side seems to be about raising taxes on the wealthy. that seems to be ticket as opposed to dealing with entitlements and so much of the cost side of this equation. >> well, i don't think that's the case. what we've side is we need a balanced approach which is what every bipartisan group that's looked at the deficit challenge that's recommended and proposed whether it's simpson-bowles or ridland die mency. our republican colleagues have taken the position you can't take one penny from closing a tax loophole or one penny from asking folks at the very top to pay a little more for the purpose of deficit reduction. it's hard to take a position of balanced cuts. and revenue if you've got one
7:50 am
person that says they absolutely refuse to generate any revenue. >> when you consider the practical impact of the buffett rule is a gimmick? >> no. what is it is an example of the kind of things we should do as part of a balanced approach. you've heard the conversation. you heard president reagan raised the same sort of issues of fairness. look, it's part of an effort to deal with the tax code. we need to match that with cuts and other deficit reduction measures. it was an example of the fact that our republican colleagues aren't willing to do anything. >> examples are great, congressman but 47 billion over 10 years, i know you know what a drop in the bucket that is. so all this time and all this effort and all this rhetoric and visiting florida on the stump here, on the stump there talking about it and zero votes with the budget, wouldn't it be better to spend more time actually being
7:51 am
serious about putting a budget forward, addressing some of these things then all the optical setting an example for what we want to do with 47 billion? >> first of all, the president did submit a budget. the budget contains cuts, it also includes revenue. >> did you vote for it? >> i'm sorry? i support the president's budget. >> they got zero votes. >> you know what? you know that was a scam. that was most the president's budget. the president -- >> didn't know that. >> it wasn't. that was a talking point of the republicans. the democratic alternative budget that we put forward in the house and voted on the house was much closer to the president's budget, the white house indicated that. it got a strong democratic vote. it was our alternative budget. it took a more balanced budget. listen, i hear you sort of saying, poo-pooing what happened here in the senate. here in the house i heard them talk about tax cut bill. it will do nothing for economic
7:52 am
growth. it will add $50 bill thrown the deficit. how does that help anybody. all that is a wind fall for a couple of folks at the very top. >> to put it in context scoring that there's no additional revenue derived toss of a tax cut >> a tax cut will cost $50 billion and that's one year. >> how do you know it won't help small businesses. you just said as like a fact that it won't do anything for small businesses? >> because the nonpartisan groups that looked at this like the congressional budget office and joint tax committee have ranked this at practically the bottom of list of things you can do to try to get the economy moving. at the bottom. it's just not cost effective. it adds to the deficit and in that want sense it's a drag on longer term economic growth. so, you know, here you are saying that the $50 billion deficit reduction in the senate
7:53 am
is not enough. >> you were going to combine the buffett tax with getting rid of the amt. buffets t s buffett was going to raise it. >> the proposal we put forward in our budget and the president has in his budget, there are a number of provisions including making sure the amt fix, the fix to the amt remains in place. in addition to that fact we do ask that folks make being over a million dollars go back to paying the same rates they were during the clinton administration when the economy was booming. so the buffetf rule is one example of the fact that our republican colleagues refuse to ask anybody to do any more on the revenue side for the purpose of debt reduction. >> congressman, carly fiorina is here. she has a question for you.
7:54 am
>> one of the things that i think and talk a lot about and i think this is a bipartisan issue, i hope it is, is the need to restore the entrepreneurial foundation of this nation and really focus on small business and one of the reasons i was encouraged by the jobs act is that there was bipartisan support for a focus on small business. i think so much that goes on in washington is about big business and big labor and big government and where small business has created all of the net new job growth in the last 40 years. when you think about tax increases, how do you think about the reality that, i think it is the cbo that recently estimated that 93% of small businesses file as individuals. so, how do you think about that in the context of the plan that you and your party are supporting here? >> well, you're absolutely right. a lot of small businesses do file as individuals. the difference between our
7:55 am
approach and what our republican colleagues approach is we really do focus on the small businesses, because the joint tax of the cbo, the joint tax has also said that of those small businesses, overwhelmingly they are not making millions and millions of dollars and yet most of these tax breaks go to benefit the businesses that are making millions and millions of dollars. not the small businesses. and what we would like to do is work with our republican colleagues and we may start as you say in the jobs act, which i think was a beneficial but sort of a very, very small step in order to try and move forward on that agenda. look, i think if you look at other investments that we can be making especially in the infrastructure and transportation area that's an area we k-we should be able to move on. the senate was able to do it in a bipartisan manner. my goodness they had barbara
7:56 am
boxer and james inhofe agreeing on a bill and we asked that the republicans here in the house simply bring up that bill for a vote. but we're looking at a number of things, i think bonus, bonus depreciation for small businesses so people who are investing in capital right here helping move the economy move forward that's a positive thing we can do for small businesses. as i said the proposal that's been made by our republican colleagues that the republican leader was just talking about has been ranked at practically the bottom in terms of cost effective measures to get the economy moving again. >> congressman, ate debate i imagine we'll continue for a very long time and we'll talk to you about it i'm sure many more. thanks again. >> look forward to it. >> coming up billionaire investment warren buffett telling berkshire hathaway shareholders he'll begin radiation treatment in july for stage 1-prostate cancer. we speak to a berkshire investor
7:57 am
next. later budget with senator kent conrad. his committee will begin up a markup based on the simpson-bowles recommendation. "squawk box" will be coming right back. [ wind howling ]
7:58 am
[ technician ] are you busy? management just sent over these new technical manuals. they need you to translate them into portuguese. by tomorrow. [ male announcer ] ducati knows it's better for xerox to manage their global publications. so they can focus on building amazing bikes. with xerox, you're ready for real business.
7:59 am
8:00 am
warren buffett disclosing a cancer diagnosis. we'll talking to a torque with experience of this kind of cancer. >> inside earning central from tech names to big banks. major companies reporting this week. we'll look at reports from bank of america, stanley morgan and more. >> chris matthews will join us to talk politics, the economy and his new biography of john f. kennedy. the third hour of "squawk box" begins right now. welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernen along with kick kick and andrew ross sorkin. our guest host is carly fiorina former hp chairman. check being equity futures after kind of a surprise snap back yesterday a big one after on monday we were ready to say,
8:01 am
after last week that maybe we had -- how many people said we saw gains for the year, we saw the high. sell in may. andrew was gloating about my 30% call. >> i was not gloating. >> you were. a little bit. you're torn. you want me to be wrong but you want the market to do well. >> i want the market to do well. >> you're in a tough place. it's good for the 1 percenters. among the stocks we're watching, intel. >> they still watch you and don't like you. >> let's talk earnings. intel reporting better than expected earnings. the chip maker say sales will accelerate in the second half. the shares of intel recently high flying stock pull back in after hours. company caused costs associated with ramping up new production lines would hurt gross margins more than expected.
8:02 am
ibm's earnings also beating the street and the company is now boosting its full year earnings target on strong software demands. yahoo! reporting some very positive news for a change. earnings and revenue beating targets. the new ceo scott thompson said the company was once more exploring a simpler deal to monetize that 40% slice of china's ali baba. >> also another story we've been talking about this morning. legendary investor warren buffett disclosing to the public he's been diagnosed with stage one prostate cancer. he said his condition is not life threatening or debilitating in any way. i spoke with buffett yesterday. he said he feels great. his energy level is 100%. he plans to begin a course of radiation treatment in july. it will last for two months. he don't expect it to slow down
8:03 am
his activities. he won't be able to travel during that time. he doesn't expect to slow down. in his annual letter that was released buffett said the board has chosen his successor. he said that person did not know who he was. now buffett says there's no change in the succession plan and the potential successor is still unaware. >> get details of what diagnosis stage one prostate cancer means. dr. kaplan is director of new york-presbyterian weill cornell medical center. he's not treating warren buffett. stage one, we know it didn't, i guess spread anywhere else. a doctor we had on earlier said
8:04 am
it still doesn't give you any indication or invasive or aggressive it might be. is that true? >> well, sort of yes and no. stage one basically means that the cancer is confined to the prostate. apparently in the announcement that was made, he stated that he had some other x-rays and mri and a bone scan which seemed to suggest he had no distant spread. so i think as he said it seemed to be very localized to the prostate itself and that important tends a very good diagnosis. >> a doctor earlier said test how hard the prostate is to determine that even if it is stage one it can be in an aggressive form which would affect whether you waited for radiation, whether you -- what course of treatment that you might take. so we can't draw any conclusions because he's waiting until july that maybe this looks like it's a less aggressive form? >> well there's a couple of pieces to that and obviously we
8:05 am
don't know this whole situation. sometimes folks have hormone therapy right before radiation which can take a month or two. that shrinks the prostate. that may be what's going. there's different varyations. some people get treated right away. it's not unusual to have that delay a month or two to get the prostate primed for radiation. >> we have, unfortunately, we immediately put this in the perspective of how successorship at berkshire hathaway and obviously that wouldn't be normally the case. because of that, we ask these questions. between yesterday and today if you were a berkshire hathaway shareholder should this make a difference? i mean he's already 81 years old. you're already thinking he's not going live forever. he's not is going at berkshire forever. is an 81-year-old diagnosed with stage unprostate cancer should you re-evaluate anything? >> i wouldn't and i'm not.
8:06 am
at the end of the day it's his general health and highly unlikely the prostate cancer will affect his long term survival. we don't know his general health. that's more likely his heart status and other issues. he'll more than likely have a really good response, do sfrl the prostate cancer. i don't think it will impact the rest of his life. >> doctor, are you surprised he'll be pursuing the radiation treatment inthere have been other doctors who came forward and suggested at that age typically you don't, you can live 10, 15 years. some suggest over the age of 75 taking the psa test which is how he discovered he had this prostate cancer that they don't recommend doing that necessarily. >> that's a great question and a great point. it's absolutely clear that we over diagnose and overtreat prostate cancer. someone like warren buffett who will have all the information available to him and all the access available him to, and
8:07 am
probably is not going to want to think about having cancer without treating it. many folks, in fact, do much it and it's not an unreasonable therapy. the challenge for us as a medical community is to figure out which patient needs treated and unfortunately we're not there yet. we look at various parts of this but there's no absolute. this is a patient should absolutely be treated and a patient who should not. >> this is really a different opinion than what we had at the top of the show with a different doctor. i don't remember his name. he cited something, dr. kaplan, citing survival rates ten years in advance for an 80-year-old man if they had a radical removal of the entire prostate, and they had much better survival rates even if at 80 if you had a complete rehomoval of the prostate. he said mr. buffet should take this seriously. >> well, part of it again, the
8:08 am
challenge is if you have a hammer in your hand everything seems like a nail. when you're a surgeon and you want to do radical surgeries you think that's the cure. we need comparative studies of those patients who get treated as opposed to those who don't. >> one out of 36 are going to die from prostate cancer. a lot of folks who got it won't die. 2.5 million men in the united states with prostate cancer who are alive. we obviously -- there's a disconnect and, again, people hear cancer and they want to get treated. >> we heard it's the second causing death of men. >> sheer numbers. there's so many men who have it. it's driven by the sheer nichlts
8:09 am
rather than necessarily aggressiveness of every cancer diagnosis. >> you think this is a non-event. from your perspective somebody who treats this every day, you wouldn't worry about this. you would say that this is something that is very curable. >> i believe so. one other caveat is also treatments have side effects. assuming that he does well with treatments. he should. radiation most patients tolerate it very well he should do fine. again, seemingly from what we can gather from reports the disease seems localized and the fact that he's not treating it right away a good sign and hopefully a great result and do very well and live many years. >> dock, to to gate second opinion. in terms of mr. buffett's day-to-day during radiation treatment what will that be like his ability to manage the company at the same time?
8:10 am
>> you have to be he's 81. it does weaken you a little bit. some patients do have increase urination problems. we'll have to see how he tolerates that. sometimes the treatments themselves can knock you out a little bit. would knock you out at 50 or 60 years old much less 81. the treatment itself there may be some issues. afterward at least statistically he should do well. >> dr. kaplan, thank you for your time this morning. >> pleasure. thank you so much. >> reactions from a berkshire shareholder. joining us now on the squawk news line, the chief investment officer at wedgewood partners. good morning, sir. i'm curious when you read the news at 5:00 p.m. yesterday your first thoughts? >> well, i'm unusually sensitive to the news, unfortunately, about a year and a half ago i lost my dad to prostate cancer
8:11 am
and it was at the far end of the spectrum of mr. buffett. his psa tests were inaccurate and when they finally discovered it it was well advanced. but with aggressive therapy he lived for many years. so, that was my first reaction. there was that personal note. but, what we've learned over the past 24 hours is that, obviously, this is imminently treatable and as a shareholder i was hoping that mr. market would overreact to the big c word so we could buy more shares. it's a big position for us. the stock will not correct as much as we had hoped. >> in terms of your views about succession, is it something you think about a lot? we had someone on earlier who said it's a non-event fours. even if it's not a mr. buffett running it the businesses will take care of themselves.
8:12 am
>> i hate to join the chorus on that score but i have to agree. we've owned the shares continuously for nearly 12 to 13 years. we've thought about it quite a bit over the past few years. we're very confident that mr. buffett and mr. mung alternative board have been very diligent in picking the eventual successors. >> i imagine there will be a number of questions about his prognosis and succession. is there a specific person among those that are often speck late about which you would like to see and is there a specific direction you would like to see mr. buffett articulate about the succession plan. >> in fairness to the eventually candidate, if mr. buffett was going step down in a year two we need to know the name of the person. hopefully he's around for another six or seven years. not unlikely the favored
8:13 am
candidate could be a different individual from a few years from now. at least in our mine we're pleased with the level disclosure so far. snuld like to see a name or okay without it? >> no. only in the sense that if mr. buffet had near term plans to step down, obviously within a year or two. in that event, we would like to see a name, but we're assuming he's going to be around for more than a few years. we don't need have a singular name right now. >> david thanks for joining us right now. >> thank you. >> when we come back we'll have more from our guest host, carly fiorina. busy week for earnings with major companies set to report in the next 24 hours including bank of america, morgan stanley, verizon and dupont. up next earnings central for a look at what you can expect. in the next half hour senate budget committee beginning markup today on a long term budget. committee chairman kent conrad will joins. he's planning to use
8:14 am
simpson-bowles as a blueprint. "squawk" will be right back. auto-bliss. with rent2buy from hertz car sales, you skip the lots... and pushy sales people... it's a fast, easy way to buy a used car. three days to try. zero pressure to buy. it's just another way you'll be traveling at the speed of hertz. what ? customers didn't like it. so why do banks do it ? hello ? hello ?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello ? ally bank. no nonsense. just people sense.
8:15 am
♪ ♪ ♪ [ male announcer ] not everything powerful has to guzzle fuel. the 2012 e-class bluetec from mercedes-benz. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services.
8:16 am
welcome back to "squawk" on this wednesday morning. futures looking down.
8:17 am
looks like it would open up down by 52 points. and we got a little bit of news. google ceo larry page will be back on the stand in san francisco. oracle is suing google. yesterday larry ellison testified in court. he said oracle explored developing its own smartphone and considered purchasing rimm and palm. said google the only corporation that didn't take one of three type of job licenses. just because something is open source doesn't mean you can do whatever you want with it. page testified google did nothing wrong and says oracle wants to get in on google's success. solid week for earnings with 75% of s&p 500 companies beating estimates. joining us now is stephanie
8:18 am
links. let's start with financials, wells fargo, jpmorgan, as expected, better than expected. >> these stocks ran up 30% year-to-date. i think on the whole, vix a little bit better than expected. net interest margin has been better at the regionals. set up is where we're favoring those names. >> anything in those results that portend trouble? >> you know what it is? how comfortable can you get with normalized earnings. that's why you own these banks. they are cheap based on tangible value. >> how should we look at those? >> we're making progress. again the regional banks probably had a better shot of
8:19 am
seeing growth. they've seen loan growth too. i think that, you know, there are winners and losers. you don't buy the whole group. i think you buy u.s. bank corp. japan morgan actually has lagged the big five. you know, i think that those are the two names that we would be focusing on. maybe suntrust, kind of a turn around story. not as high quality but certainly chaepg. >> what about the other one we got a couple of players that have reported technology. we had ibm, we have yahoo!. we have m tell. how does that look? >> i think ibm is getting slammed unnecessarily. i know that people were worried about services and signings and bookings and that kind of thing. the company is transitioning very well, very successfully to a software company and a services company away from hardware and i impressed with the margin, the margin improvement in the quarter. >> google and yahoo! --
8:20 am
>> ibm has come a long ay. >> it remind me of two quarters ago when we had, the stock had run up and down so much on the news and then it rallied back. so i think, you know, certainly you don't want to chase a stock that's up 30% off its lows. i do think there's some good things happening at the company. it's a 15%, you know, double digit earnings grower but a very low single double digit revenue grower. we know that about ibm. i think it's one you want to look at under $200 i think to buy. >> i think your assessment of it is exactly right. they have been executing well on a strategy to transition out of virtually out of all their hardware. incredibly valuable software business. i think that's paying off. >> do you think that's the right model for others that hp and others have tried to go in that
8:21 am
direction. >> the truth is all technology companies are not created equal. ibm made some very clear strategic choices to exit certain businesses. exited the consumer business. exited the pc business. exiting the server business. they are moving up the value chain in their view, building on their main frame software businesses. it doesn't make sense for hp which has a very diversified portfolio and has a totally different source of differentiation which, among other things huge supply chain and distribution channels. but ibm has executed consistently well and that strategy intel has executed consistently and well on a strategy to innovate and integrate into the chip, to invest heavily for differentiated manufacturing capacity. it's all paying off. yahoo! continues to be a company in search of a strategy. >> going back to hp are they too diversified. is there not enough focus.
8:22 am
one reason ibm has succeeded they focused on one piece of the business. they've gone in one direction. hp has gone in a lot of directions. >> this is the age old debate in hp. hp has made a strategic choice, certainly when i was there but it has been maintained since over the last decade to be in both consumer and business. that gives it huge power to be in both pcs and printers. i would argue hp's die certifica diversitiation is it's its main strength. there was a time ten years ago when people said the main frame business is going away. foolish. foolish assessment. main frame business isn't going away. it's an incredibly sticky business. most of that business is software and services so ibm is
8:23 am
doing everything to hang on to that and bolstering ingredient that's the right play. >> global multinationals? >> better growth. actually on the conference call the manager was indicating, hinting that second half commodity cost pressures to start toez which would then really turn the headwinds into maybe less so and you have better earnings power. volume growth across the board and this is like a company that has 80% of their profits overseas. things are still very strong. i think this bodies well for yum. yum reports tonight. it's 60% of their operating profits is international as well. >> bad news for companies that are u.s. centric on the flip side of this or look you're even better. >> i think that these
8:24 am
international companies, they are just, particularly the ones that have a competitive advantage the brand is so powerful. great management and execution and that kind of thing. but, you know, i mean in term of the u.s. there's still plenty of good things happening here in the states. it's just that people concerned about kind of the global slowing, we're not getting it from coke and i don't think you'll see it in yum. yum is quite a bit up. it's another one you put on your shopping list. >> what about goldman >> goldman, it was okay. expectations were high. you know, think bottom line if you compare jpmorgan to goldman, jpmorgan results were better than goldman. >> did they treat their mother better >> they do treat their clients better, joe. their clients. >> play along with me. >> i loved jim henson. what can i tell you. >> the late great. >> thanks. >> coming up more of today's top
8:25 am
stories and still ahead "squawk" will be playing "hardball" with our good friend msnbc's chris matthews. we'll talk politics, economy and his new biography. budget time in the senate. senator kent conrad will join us in the next half hour. "squawk" returns after the break. er ] this... is the at&t network. a living, breathing intelligence teaching data how to do more for business. [ beeping ] in here, data knows what to do. because the network finds it and tailors it across all the right points, automating all the right actions, to bring all the right results. [ whirring and beeping ] it's the at&t network -- doing more with data to help business do more for customers. ♪ laces? really? slip-on's the way to go. more people do that, security would be like -- there's no charge for the bag. thanks. i know a quiet little place where we can get some work done. there's a three-prong plug.
8:26 am
i have club passes. [ male announcer ] get the mileage card with special perks on united, like a free checked bag, united club passes, and priority boarding. thanks. ♪ okay. what's your secret? [ male announcer ] the united mileageplus explorer card. get it and you're in. how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. i have two products in front of you. we are going to start with product x. this is a very affordable product that will help save you a, lot of money. i like it..
8:27 am
i like it too. this is product y. this is a much more expensive product. you will not see a lot of savings with this one... harsh. you chose geico and you did not choose their competitor. was this your first car insurance taste test? erence. it can give you a fever, make water boil, even lower your heating bill. just turn your heat down one degree, and you can cut fuel consumption. you'll save lots of cash the more you know.
8:28 am
coming up, more from our guest host carly fiorina and the senate girpg for a budget battle. kent conrad will join us next. also still ahead we're going to play "hardball with chris matthews". "squawk box" will be right back.
8:29 am
8:30 am
8:31 am
welcome back to "squawk box". today the senate budget committee will begin a markup of a long term budget bill. kent conrad plans on using the simpsonson bowls blueprint for reduction. the senator from north dakota, kent conrad, your ears might have been burning on monday. david walker was speaking very highly you, you're trying to get it done and i said well he's not up for re-the election so he's doing the right thing. and i mean i hate to be so cynical, but i don't know, it just seems maybe there's some truth in that in this current environment. >> look it's a challenge. and what really has to be done, i think, everybody knows is we got to come together around a comprehensive ten year plan. we have a budget for this year and next. it was provided for in the budget control act passed last year. what we don't have is a long
8:32 am
term plan to get us back on track. that's why i decided to offer the bowles-simpson approach which is the only plan ten year plan that is enjoyed bipartisan support. at the end of the day, if we don't join together nothing is going to get done and here we are borrowing 40 sense of every dollar we spend at the end of this year the tax cuts expire. we're facing so kwefrt of additional 1.2 trillion in cuts half of it in defense. in addition $500 billion in cuts in defense that was part of the budget control act. so it seems to me this may be the opportunity, just like bowles-simpson was scheduled to be voted on after the 2010 the election, i think we got to take this opportunity to see if we can't get something done for the country that very much needs to be done. >> yeah. we had congressman van hollen on earlier, and we had a long
8:33 am
discussion about the buffett rule and the amount of energy and time being spent and also we had eric cantor on. he's got something that is going to be voted on the house today that he knows won't get through the senate. my point is both side, here they are -- teen administration, this fairness thing and the buffett thing senator it's $47 billion often years. as a democrat have you -- are you okay with that? are are you on board with that tactic or is it pure the election hearing? >> what i'm on board with is something i was part of which was. simpson-bowles approach. had 18 commissioners, 11 of the 8 agreed, five democrats, five republicans. >> is that a no you're not on board with spending all this time on going from swing state to swing state on the stump for the buffett rule? >> look, to me it's entirely reasonable we got to ask those who are more successful to do
8:34 am
somewhat more. look, i pay a tax rate that's much higher than people make and a whole lot more money than i am. that's a legitimate concern. but what we really need, and i think what almost any objective observer would say is we need an overall ten year plan to get this country back on track. we got find a way to do it together. bowles-simpson, look, it's not perfect. it has to be adjusted because changes have occurred since it was passed. at least 11 of the 18 commissioners agreed to it. we got to take this on. >> what kind of a reception are you getting from the administration. are they cheering you on. we're behind you 100%. what can we do to help you. this is great. have you gotten a single phone call? >> talked to the head of the office of management and budget yesterday to advise hum what i was going to do. you know, i don't speak for others. i only speak for myself. i learned long ago, joe, in this
8:35 am
town the only person i can speak for credibly is myself. >> david walker singled you out as someone -- we're in an the election year. i'm writing it off for that. but if we did have great leadership right now they would be on with you 100% -- i mean the budget got zero votes. didn't go much further the republican budget, no one is doing anything. we're not getting anywhere. >> joe, i don't think that should be a surprise to any of us. when we fashioned simpson-bowles it was scheduled to be voted on after the 2010 the election for a reason. because it gave us the maximum chance of actually getting a result. i think, look, we're in an the election season. neither side is going to get out of its fixed position until after the the election. so, my own belief is we have got to prepare for the moment when we really do have a chance. that moment will come right after the election. so right now we need to be doing the homework to get ready.
8:36 am
>> senator, i agree with you. it seems we're always in an the election season. as soon as the next the election is done then we're in the 2014 the election cycle. the biggest question is we're facing this fiscal cliff that's coming up at the end the year. what are the odds do you think this really gets pushed and this is an opportunity you can use versus just another kicking the can down the road, we'll get an extension for two months and we'll see what happens. >> the honest answer is i don't know. what i do know is that our best shot is coming at the end of this year and we've got to get ready for it. those of us who served on the fiscal commission, those of us who served in the group of six i think know how incredibly time consuming it is to put together a serious ten year plan. if we don't do the homework now we won't be able to seize the opportunity if it comes at the end of this year. >> okay. senator, godspeed. thanks for coming on. we appreciate it.
8:37 am
hope to see you again. keep us updated on your efforts if you get a single colleague saying they are happy with what you're doing. let us know. >> i've had dozens of colleagues, dozens of them call me and say, hey, this is what we've got to do. democrats and republicans. >> don't tell anyone i called you. don't mention my name. >> don't tell anyone after the the election i told you. >> senator, we do appreciate it. >> coming up, he is the heavy hitting host of msnbc's "hardball" and a good friend. we'll talk to chris matthews about mitt romney's chance in the presidential the election. "squawk box" returns after the break. only the twists and turns of an unpredictable industry. so the eighty-thousand employees at delta... must anticipate the unexpected. and never let the rules overrule common sense. this is how we tame the unwieldiness of air travel, until it's not just lines you see...
8:38 am
it's the world. all in one account. keep watch on the markets. or use our exclusive tools to help find ideas. it's powerful, easy-to-use technology for trading stocks, options, and futures. keep trading whether you're at home, in the office, or on the go. optionsxpress, the broker smart traders deserve. open an account today at optionsxpress.com. arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap. it's our fastest and easiest way to get you into your car.
8:39 am
it's just another way you'll be traveling at the speed of hertz.
8:40 am
why welcome back. we're talking politics and more with a special guest and a member of our nbc family, chris matthews who is the host of msnbc "hardball" and he's an author. his newest book is the jack kennedy elusive hero." >> it's thrill to be on. >> tribute to you. >> we are excited to have you. >> i'm trying to say something nice. >> high point of a long career. >> loved that interview with conrad. you nailed it. it's the the election. always the the election. it's always an the election year. >> chris, i want to talk about your book because it's an excellent read. if we can get you to weigh in on what conrad said. this has been a long debate back and forth trying to figure out
8:41 am
the buffett rule, what you make of that, the tax changes, simpson-bowles. what's your take? >> i think simpson-bowles was a great opportunity for the president. i think he may have missed it. there are elements woe have had to pay for like the very thing that we're arguing about now, fairness. according to simpson-bowles they were going to equalize the tax rates between earned income and cap kings and clearly the republicans weren't going to back that so i think the president felt he was being snookered. if he supported that they wouldn't have supported that so it wasn't going to go anywhere. i would argue you have to go painful territory, as joe's interview was getting there, you have to go to painful territory from both sides. you won't get any budget cuts through, i'm talking to conservatives unless you give the democrats something on revenues on taxes because they can't go to bases and cut medicare, medicaid and doing everything else by doing something revenues. you won't get the period louiecy
8:42 am
liberals but some democrats and some republicans. the only way to do this thing is cut deal down the middle leaves out the tea party, leaves out the democratic bases in san francisco and new york and chicago and then the black caucus, for example and basically say we're going to try cut something like that. that's going a really tricky situation but it can be done and it is the only solution, everything else is just talk, as joe's interview pointed out. they will reject each other's proposals over and over again until somebody decides no wheel expose ourselves to pain. >> it's not a coincidence that kent conrad is not running for re-the election. >> i don't know if you saw tom friedman's column. he says this about obama. by focusing his rhetoric on the buffett tax, obama is fumbling his best chance to win a mandate for intelligent reform, reform that ought to be the centerpiece of a second term. do you agree?
8:43 am
>> friedman is not running this year eater. the president does argue and he knows unlike columnists and thinkers he's not, he's anchor w ed with the electorate. he has get working people that are worried about all these programs spoipts easy to say it but to get the democratic base to turn out for you is another question. >> it's the public polls, chris. what are they 70%? he knows it's going play well but that's part of the cynical view you have the election years. we should be doing things that address our ten year problem. >> here's the way i look at it. i'm working on a new book. the way it worked back with tip o'neill and ronald reagan is very simple.
8:44 am
every deal is basically unfair. you usually favor the party that just won the the election. that way the elections matter. you respect each other's offices and you respect each other's parties and most of all you respect the electorate. after 2012 the deal should have been a 10-1 deal or 8-1 deal. they almost had that deal. we can blame it on the jockeying back and forth. they should have had an 8-1 deal that favored the conservatives. for example going back to when i was working in politics after the '82 the election it should have favored the democrats and it did on the social securitys is deal. so the great thing about reagan and tip o'neill they both were partisans but they realized there were the elections and they mattered. the party that won the the election should have gotten the deal. 60-40 is my way. whoever win, whichever party wins should get' 60-40 favor.
8:45 am
the other side should give. >> that's an argument against term limits. too many people in washington don't understand how to get things done. >> it's an argument for grown up politics. >> your words give me hope that there are enough people who are left in the middle who can actually reach an agreement. you really think -- >> it's always a 60-40 deal. it's never equally fair. it depends which way the tide is running. voting matters, the elections matter, cut deals that favor the way the voters are headed. that way the voters will respect the elections and vote. >> that means nothing can happen before the election. >> we need a decision. i hope it's not a 50-50. i hope it's not a squeaker for either side. both sides will claim victory and have hell to pay. i want to see somebody win. >> if the one side win will the other side respect? >> that's the way it should work. >> chris i want to ask you about your book that's why we had you
8:46 am
on today. jack kennedy, elusive her jobs excellent read. i thought i knew everything about jack kennedy. you had so many things in there that i had not realized before especially with his early years. what made you decide to write this >> i was inspired, we're talking about the secret service mess n-expired by a movie i saw years ago. we've seen this movie a few times. the clint eastwood movie. there's a great line in the movie that got me when they asked him why he covered up for the president when there was a girl found in the white house. one of higgs agents took the hit for that and said because it was different back then. he was different. i wanted to try to get to historically why a guy like kennedy would be so heroic that other men would follow him into battle and take the bullet for him. what is it about leadership? what is leadership and when i went back to even later is show what he did in the navy and when your pt boat is cut in half in
8:47 am
the middle of the night, no radar, no moon no, stars and you dive into burning water and save the lives of your crewmen. one of his crew members was badly burned and carried him on his back for four hours in the water to safety, this kind of -- then saved the whole crew at the end and kept them together and swam from island to island carrying people on his back. that kind of heroism gets around. people are looking for true leaders who really do stick out their guts and encouraged for their fellow soldiers. that's leadership. taking the hit for the team. and i think that's what the book is about. not perfect. jack kennedy was hardly perfect but and he was hero. >> the movie line is it was different back then. are there heroes today in washington? >> i'm looking. >> looking hard. >> yeah. i think the president can do it. he tried to do it last summer. boehner tried to do it. cantor was more a spokesman for the tea party people than a
8:48 am
leader. he may grow too. in times you have to take the hit and say this country votes in the elections, the the election should matter but just as important as the elections matter, grown ups who come to washington don't dome mail it in but to meet each other, find common ground and work towards a solution not just issue press releases. what happens in "washington today" more than ever is they stay home in their districts, go home every weekend, they pander and pander and no one says let's look at it from the other side's point of view. cut a deal that favors the elections so people really do vote and get something for their vote which is a deal that favors their point of view. >> chris, where do you put paul ryan in all of this? >> i think he's got the guts the lead. he's a future leader. when people ask me whose coming down the row i look to him. the democrats got to come up with women and men willing to go the table and say this will hurt
8:49 am
some. look we're facing this debt situation and we're look at europe, we're looking at these countries on the periphery. do we want to be on the periphery. do we want to be with greece and irl and italy. do we want to be like them or like germany. i think we do. i think america is much more like germany when it comes to issues like inflation. we're much more, much more worried about instability and loosey gooseyness than a few tough cycles. >> man, that sign behind you, it sounds like you work at cnbc today. >> i'm pandering to you, joe. i'm serious. i must talk to becky on this. my daughter who went to penn and graduated works for google. she worked on the debt commission. she wrote as an intern a good part of the report. she is so gung ho.
8:50 am
concerned youth of america and they are worried about the debt. ate bipartisan group of kids. they really care about the future of these young caroline real deficit hawk. i think the future is about people your age and younger actually, even in early 20s who really care about the debt because they know down the road it is going to matter. >> younger than that. my daughter is 12. peace love profits, check it out. you're a fiscal -- >> nothing wrong with backing the kids. >> you're a fiscal conservative. you better hide. >> i think they can favor the democratic values and it still makes sense fiscally. i think again two parties with different points of view about values but they can reach a monday agreement after an election. >> thank you so much for coming on. >> it has been done before. >> the book again, jack kennedy, elusive hero.
8:51 am
read it. hopefully we'll talk soon. >> coming up more from our guest host and we'll be right back. the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. monarch of marketing analysis. with the ability to improve roi through seo all by cob. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. i'm going b-i-g. [ male announcer ] good choice business pro. good choice. go national. go like a pro.
8:52 am
[ male announcer ] good choice business pro. good choice. between listening to the numbers... ...and listening to your instinct duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services.
8:53 am
more from our guest host and
8:54 am
squawk will be back after a quick break. [ wind howling ]
8:55 am
[ technician ] are you busy? management just sent over these new technical manuals. they need you to translate them into portuguese. by tomorrow. [ male announcer ] ducati knows it's better for xerox to manage their global publications. so they can focus on building amazing bikes. with xerox, you're ready for real business. a living breathing intelligence bringing people together to bring new ideas to life. look. it's so simple. [ male announcer ] in here, the right minds from inside and outside the company come together to work on an idea. adding to it from the road, improving it in the cloud all in real time. good idea. ♪ it's the at&t network -- providing new ways to work together, so business works better. ♪
8:56 am
only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz.
8:57 am
welcome back to squawk box. our guest host is carly fiorina, former hp ceo and the new chair of good 360, an online donation marketplace that collects corporate donations with non-profits. >> it is the largest online product donation marketplace in the world, delivered over $7 billion of donations to charities in need and the reason i joined this organization and so excited about it is it is kind of a no-brainer. it is an idea whose time has come. have you a problem in companies, called excess inventory, whether it is the computer sitting on the desks at j.p. morgan chase. they have partnered up with good 360 to deliver the computers to schools or whether it is excess inventory from home depot, excess inventory from johnson &
8:58 am
johnson, excess inventory from hewlett-packard. it can go to a landfill. this is earth month, earth day, earth week obviously. it can go to a landfill or it can go to somebody in need. this is an it platform that kpekts those goods with people in need. we have a great logistics and warehousing operation and i hope what i can bring to this already great organization is greater visibility, bring it to the next level, and really layout a challenge to companies. you have a choice. dump or donate. >> softgoods to just hard goods? >> depends what you mean by soft goods. >> food? >> we don't do a lot of food right now. there are programs that do that. think about something as basic as personal care products or diapers or computers. >> true. >> it has a huge benefit. one in six americans live in poverty today. we partner with 26,000
8:59 am
charities. we partner with 125 of the fortune 500 today, but there is an opportunity to do so much more. it is such a no-brainer. it is good for the environment. it is good for companies. it is better for their bottom line to donate than to liquidate or dump. it is good for charities. it is good for communities. >> it is good360.org. >> yes, and we would love to have more companies step up to the challenge. >> where citigroup. citigroup, what we heard yesterday, vote on compensation. >> i am always in favor of more transparency and more accountability frankly, so i like say on pay provisions. i think cheryl should have a say on pay. when i was chairman and ceo we put pay up for shareholder vote. i think it is a wake up call to say that, you know, shareholders want to see clear linkage between pay and long-term

327 Views

info Stream Only

Uploaded by TV Archive on