CNBC's Squawk Box

25 March 2003
9:32:03 AM

REBECCA QUICK
First of all, Union Pacific, the rail freight company came out yesterday and let us know they were lowering the outlook for the first quarter, saying there's an indication of that. Yesterday it went out at 56.66 And today is an indication of somewhere between 53 and $46. -- $56. Airborne went out and there's an indication of between 18.50. We're joined by the Secretary of Housing and Urban Development. Mr. Martinez, thank you very much for being here.

MEL MARTINEZ
Good morning, it's a pleasure. Great to be here. Ringing the opening bell this morning, coming down, there are a lot of things going on with the housing market. There's an awful lot to hear about and we're hearing about budgets in Washington, which has been the focus, of what the war is going to cost and what it means for other development -- departments as well. We are looking at a budget that is slightly up from prior years. We're going to meet all the commitments we have. It's not a year we can do the extra things or expand but we can take care of people who are the neediest. The president continues to insist for the domestic cabinet that we focus on domestic priorities. That's why I'm here on a Ginnie Mae conference. We're going to continue to do the things it takes for a successful America.

QUICK
What we've been seeing is what's with -- what's happening with the housing industry, yesterday we got information from the Mortgage Bankers' Association and that showed that delinquencies were on the decline. However, the foreclosure rates are climbing. What do you make of it?

MARTINEZ
It follows the market. The fact that delinquencies are down is good news. The foreclosure news is news from what was happening three or four months ago so today I take it as good news that delinquencies are down. We've been working hard with the FHA product to work with people in delinquency situations. I think it's a positive that they're down.

QUICK
The other question is we can't have you here without asking about the housing market. That's what everybody on the street is watching. We are waiting for existing home sales for February but with what's been going on with the slowdown in the housing market, what do you expect?

MARTINEZ
I expect it to be a little weak but it has a lot to do with weather. We had a couple of tough months in the recent past and that has delayed the resale market but undoubtedly, new home sales continue to be up, new home construction continues to be up and we look for the housing market to be a vibrant and constructive part of the economy.

QUICK
Secretary, thank you very much, Mel Martinez, here from the Department of Housing and Urban Development. We appreciate your time. Thank you. Dick Grasso is here, chairman of the stock market. Great to have you here. Thank you very much. Dick, any comment, Mr. Grasso, on what's been happening with Sandy Weill, with Citigroup, any comments following that up?

DICK GRASSO
I think Sandy's withdrawal and my statement pretty much summed it up and we're moving on to find a suitable candidate to represent 85 million great Americans who have a stake in this marketplace.

QUICK
Thank you very much, Mr. Grasso. Appreciate it. Thank you, secretary Martinez. Appreciate it.