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tv   Squawk on the Street  CNBC  June 12, 2013 9:00am-12:01pm EDT

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"stock of the day" cooper tire and rubber being acquired by apollo tires for $35 a share. we are about $21.5 billion rupees. "squawk on the street" coming up next. ♪ i look extra fly for the day i die ♪ ♪ i'm going to touch the sky good morning. kayne west says he is going to be the next steve jobs. >> i was waiting to know who it would be, and now i know. >> welcome the "squawk on the street," i'm carl quintanilla and david fab earer on the new york stock exchange streets. today's data is relatively tame,
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and today, protests in istanbul quiet at the moment, and the euro production is better than expected. a road map begins with markets and the bounce back after the dramatic drop into the close. pimco saying it sees a 60% chance of global recession in 3 to 5 years. >> jpmorgan ceo jamie diamond lets an expletive fly as he passionately defends the bank's exposure of the london whale. and creating one of the largest master partnerships in the united states. and what is up with housing? despite a spike in interest rates, mortgage applications on the rise. and lenar getting a rise. >> and the market is poised for a sell-off after we saw the dow bounce back and go into the positive territory, but it was brief. the selling resumed until the blue chips closed down 116 and yields meanwhile on the 10-year treasury note hovering 2.2%. whether it was istanbul or
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whatever, jim, the journal today, global tumult rocks the markets. and even though we are 3% off of the intraday high. >> what i like with the headline is that they should run it every couple of weeks. global tumult, and that is a great headline, right? and this is "the new york times" today, and the interest rates are rising. >> i have heard that. >> these are all shockers. i used to have a stop-trading s segment. holy cow, stop trading, the market is uncertain, and interest rates are rising. yesterday the market went down because we had a reporter in a square or whenever you have a square in the middle east yorg u will see a riot, and turkey, and get up and it is calm in turkey, and why did we sell? because of turkey? >> well, turkey is asia. and i don't know, i mean, i don't know the jeeg geography. >> do i have to cut you off at the knees be before the beginning of the show. but when i see "global tumult" did some headline writer get up
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on the wrong side of the bed and say, it is tumult today. i'm calling it tumult. what happens when the market real hi goes down, souper tumul? tumult squared. >> and everybody is using that now one of the new into the lexicon, super is in front of everything. i expect it will be super tumult. >> i heard good things about the super tumult. >> where is that line? 1600? the level at which you are braced for a meaningful pullback? >> we had a 5% pullback last week, and we need to take out the thursday pivot low, and i will tell you that is the whoosh, and if we can test that and buyers come in, fine, but if we take it out -- look, i use the paper of record is "usa today," because lately they are not trying to frighten you out of your life. mortgage applications were up says that there is another aspect here which is even if they are tapering or whatever they are are doing, the 2-year
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goes up very badly and suddenly the home prices haven't, and it is working. >> well, let me paint the scenario that you hear about a lot which is a, the fed will be unable to artfully exit qe whenever that is, and therefore the risk assets are going to deflate quickly. however you want to define risk assets whether they are equities, because people moved into them without finding yield or lending money to ghana at 6% which is true or tanzania. >> well, ghana has minerals. >> would you want the own that 10-year paper with 6% on it to an african nation. >> there is not a piece of paper i want to own in the world, and that is a big issue. >> that is a big issue. not the mention the commodities doing down and the dollar strengthening and china, questions there, and maybe new spending from the new municipalities and the cities and things of that nature, and europe is europe.
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>> europe is not europe. did you see the production numbers? >> and the jobless in the uk not as high as thought. >> keep going for it, guys. >> well, i say they get there in time. >> okay. very well. >> you are going from the zulu dawn, and one of the great movies, and you are going for the kidster thesis, and i'm saying that the cal vavalry is coming, and i'm going for the ft. apache of the bronx, and we aret ta crossroads and could go down 5% what you are saying and down 5% if housing goes back down. i'm not painting a positive scenario, but the negative scenario does not get you down 10%, but gets you down. >> 5%? we could do it in a day and be over. >> what do you think we are, thailand? >> no, beautiful country though. >> and thai cobb. >> and the nikkei is down 0.7.
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>> that is like betting 2, 9, 7, and in roulette and what a genius i am. this is a fulcrum moment if we go back to thursday. the news is not good, but the european news is better than expect and the china news is always worse than expected and the mineral, and the commodity segment. >> the emerging markets are getting hammered and a dollar lower commodity prices. >> yes, but the euro was stronger the other day, and still takeovers and i come back to the bristol-myers conundrum as they were in the black for most of the day, and general mills in the black, and pfizer. >> yes, pfizer was, but there is an exchange offering that may have something to do with it. >> and keva with the court settlement pays them $2 million, but when you are looking at the individual stocks, it so much harder to get a thesis saying they go down and stay down, okay. that's my, you know. >> i think that is a great place to move on. >> micro versus the macro, and
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all i'm saying is that the macro guys don't know jack which i used yesterday as jack in the box which almost hit a 52-week high, and the macro guys don't know the individual stocks and the micro guys don't care about the thai back. >> i am saying yesterday was a micro day or macro day. >> risk on, risk off. my tho ther, my sister. >> don't you go chinatown on me. >> okay. one of my favorites. >> he thinks that i don't know the movies? >> of course, i know you nknow the movies. >> i like breathing through it. it is one tof the great lines from that picture. >> i love jack. jack is so not at the heat/spurs. >> no, he is not. >> and neither is lebron. >> oh, no. >> what a game last night. >> not a single foul? come on, refs. give me a foul.
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>> still 113-77, fouls wouldn't have helped. >> well, still. >> and let's talk a little jamie diamond, and a blunt comment from the ceo as he defended the bank's disclosure regarding the london's trading loss, and listen to what he had to say in yesterday's conference yesterday. >> i sat in those meetings myself and said make believe that the pope is over here, and the chairman of securities savings over here, and what is the right thing to do, and that is what we are going to do. you have a million people second guessing what happened after the fact, but we did everything that we thought was the right thing to do. there was no hiding, no lying and no [ bleep ], period. >> wow. >> same thing. and listen, it is enough already talking about this, and he is obviously tired of talking about it, but the one thing that he said, if you are going to sue us, bring it on. which brings us to where we are lawsuit possibilities and things
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like that. >> you remember when i said that the world is scary and he said that the corporate world is safe with the consumer. david, the ceo had several board members resign, scott, and he cursed and does that count? >> well, we mentioned phil schiller earlier in the week using a word that is not tv-friendly at the apple developer's conference and maybe things have changed. >> maybe it is time to revise what can be said. what can't be said. >> that is probably -- >> because people are saying it. >> people are saying it. >> and jamie has always been passionate, and -- >> candid. >> yes.lets it fly. >> i am learning a lot. i have never spoken these words, david. >> those virgin ears. >> and i have never been angry and always a man of peace. >> meantime, a new development in the world of natural gas. spectrum energy says it is moving the u.s. nat gases over
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to the llcs and cramer broke the news on "mad money" last night. >> what is new in the pipeline? >> we have just decided at the end of the year we can put all of the pipelines and the storage in the united states into the mlp, and it is one of the largest mlps in the united states and about a billion enterprise and with a billion of opportunities ahead -- >> bingo, 10% on the stock. all you need the to do is to break the news and wave the magic wand. but with hess and other companies we are hearing them say, we are bringing out value. you don't value the stock right, and we have value, and that stock is going to higher because it enables them to raise the dividend and i like the talk of
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the individual stock to do things in an environment, david, where i wake up and fred about turkey. >> and you fret. >> does he care about the global tumult? did he use tumult or tum-ult? >> well, i go tumultuous. >> yes. >> and there are stories written today about a glut and soon to be glut in inventory in the next three to five years. >> geez, the energy organization comes out every other day saying that there is a glut, and meanwhile, it won't come in which is a license for the energy to come in, and the energy in the united states is dramatically cheaper. >> you think that it brent's coming in? >> well, i believe they are being manipulated by the shaikhs and nothing to do with the coal coming down and not with aluminum going down and all of the metals and it is a commodity and never comes in, and what the heck is that about?
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>> are you still mlps overall you favor? >> i like them. they have come down very hard, because every time the rates come up, people say, i don't need that price risk, and so i sell kinder morgan even though it is tremendous value, but it is a place where -- you go to the conference of mainly a rich people recently, and mlp conference and people were all rich in the audience and they are using them to buy a municipals and they look at them as municipals, but i suggest that you look at the illinois gos because they remind me of the obligation bonds when they were having trouble in california so the state that obama is from is offering good interest rates in the gos. >> and there is muni exposure to the lowest levels in a long time. >> you get a state like that, and not the revenue bonds, but the government bonds and a lot of rich people watch the show, and i don't mind calling them rich people, because it is what they are, and it is not a derogatory term where i'm from,
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but that is what they buy and the mlps and they will go after the illinois gos as something to buy. >> back to housing, and jim will fill you in on the upgrade and also a wall street review on cramer's radar. >> and the accelerating growth and for money managers, that is the holy grail of investing. >> hallelujah! >> it is going to have a small initial public offering that i expect to be red hot. >> oh, man, i wish we had a sound board. and now gigamon's ceo will be visiting us. and we will look at trying to get back some of the futures that we lost yesterday. almost to the point if you look at the futures. more "squawk on the street" post 9:00 in a moment.
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the tepper rally in a few moments. >> do you consider yourself a monopolist? >> there are some businesses bigger than others. >> is the fed out of ammo gear? >> i don't believe they have an exit strategy ever. >> people lost fortunes they could not unravel and you guys are fools, idiots. >>
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♪ ♪ caught up in the middle ♪ i cry a little a lot of news on housing today. lenar to outperform the market as they say that more sellers present an attractive entry point. and mortgage ap xlagss up for the first time in one month. that despite the 30-year fixed
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at 4.15 which is the highest level since march of 2012. this upgrade is not that great, but this story you talked about is the number of underwater borrowers is below 10 million. >> that is significant, because frank blake said that when your house goes from being underwater to above water, you will spend three times at home depot than what you would. $1,000 on under water, and $3,000 above water. mortgage numbers are the first time today people said, i have to go buy before they get away. >> and the refinancing boom may be over. >> over. >> and over and done. >> and interestingly as of december, the share of mortgages that are 5%-plus, 45%. most people still have relatively high, and there is room if you were going to re-fi after fees and who knows if it is worth your while, but 4.15 is still a lot lower.
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>> people come off of the sidelines saying, oh, my, it is going to get away from me, and i know talking to the mortgage broker, and it is going to get away from me, and i have things to do and i'm worried so i feel like you have to plunk the money down now, because the housing affordability is still fabulous and the best in years, and it does go away if the rates go up. >> right. there are a lot of things that perhaps are motivated by a fear of rates going up and not just housing, but to corporations locking in and borrowing and does that have to be done or do they pursue the mna and given that the cheap financing may no longer, and we say cheap, and we are talking incredibly cheap s historically, but not what it has been. >> and the one thing about the banking chatter, the net interest margins going up, and did you know that the certificate deposits on the five-year, they have less and down 10 basis points and at the same time a bank can now pay you 0.81 on the five-year cd and
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invest it at 1% on the yield curve and have a huge net interest market, and gigantic, and isn't that what we were looking for, and now what we are looking for a new metric? no, the interest margin is going to explode. >> they don't make that in interest margins from keeping the mortgages on the balance sheets and those are sold to fannie and freddie and car loans, too. >> when you can get to the depositors next to nothing and invest the money and this happened in 1990-1991 when greenspan wanted to liquefy the system, and this is why despite the negative stuff yesterday and i won't quote the story which talked about the giant loss at citi, because i can refute that nine ways to sunday. >> and still a downgrade from granite equities, but a downgrade of wells fargo today, because the mortgage business has been strong, and the consensus is relatively high. >> yes, i saw that atlantic equities an i want to know what pacific equities have to say,
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and sometimes you say, what about toe pic toe pea -- topeka >> and i cannot overemphasize how the housing can punch its weight with home prices going higher. it is a feel-good story that i think more than makes up for whatever is happening in that square that we now care about so much in turkey whose name i can't remember. >> not a good scene by any stretch, and i don't want to make light of it. >> no, it is horrible and i don't want to make light of it, but put it in context. we know what happened in egypt, and it did not affect the country, but initially it did. they have to calm down, because the turkish growth story has been a remarkable one. >> and the sixth most visited
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country globally in terms of tourism. >> yes, i have so many friends in turkey. >> and the geopolitical ramifications. >> yes, they have to calm down. they have to calm down. >> and we will get to the opening bell and jim's mad dash in a moment. ♪ i don't need to fight >> tomorrow, the future of entertainment and interviews with george lucas. i want to make things more secure. [ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪
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about 6 1/2 before the opening bell and a mad dash here on wednesday. what are we talking about? >> macro and micro, and we talk about the repurchase of the third leg of the stool, and they have a drug for breast cancer and turns out that a drug is good against certain arthritis and maybe rheumatoid arthritis, and this is gigantic. i'm going to take the $10 estimate in 2015 up to $111. this is the stock to say pfizer. >> that is what is so interesting about the stocks in biotechnology is that the multiples are lower than the old pharmas. >> how can it be? >> how can it be, i ask you this for the same reason that ulta blowing away numbers that were reduc reduced, and this thing had been shorted nine ways from sunday and look at this, david.
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ul ta delivered the high comps. these are my two favorites. 15 years ago i would come on with david faber and talk about the key to the market, and it would be some insane growth stock that everybody is chattering about, and ulta is a stock that people chatter about, because it has high growth and people were worried about the management stumbling and shorts, but it is not true. it keeps going on. >> it is an ulta phenomenon. >> yes, and they will move up growth stocks that people are short, because people will cover this. this stock was hit again on lululemon, because it is a cohort. and the growth stocks are a cohort, and lululemon still reeling from christian day stepping down and it is still transparent, and that is a joke on the yoga pants, but cellgene and ulta are the stocks trumping the macro. >> this is insane. >> and talking about insane, you
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don't want to miss this market open given what we are seeing in the stock market, and how will gigamon fare? >> it is not pokemon, but gigamon. they are all in orange, so that must be the key number. back after this. is helping withs expenses while he can't work,
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you are watching cnbc's "squawk on the street," and orange caps around here as we await the opening of gigamon, and another one pricing tonight is incotee and if you think that the markets are volatile, you are right. there have been 15 sessions since the fed meeting and in those the dow has gone five up, five down, and triple-digit moves in 7 of the last 11 sessions. >> well, i did some chart work last night with a fellow named mark sebastian, because he does work on the vix, and that is classic if you want the buy the negative scenario, this what the vix is doing versus what you talked about, it is negative. okay. just take it as ais bad.
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>> it is signaled down. >> and with that, the opening bell and looking at the s&p 500 at the top of the screen, and the realtime exchange on cnbc, and as we said, the stock that cramer is going to talk about is gigamon. software company celebrating its ipo today, and over at the nasdaq star series magic city celebrating the season premier. and the stock is off 65,000 shares. >> well, this is not like a lot of the dot-comes that have come out, because it is a profitable and really smart company and a lot of people use it for network filtering and one of the best technology companies out there, and i think that it is going to be red hot. >> clients cisco, our parent comcast, intel, nasa, target, the treasury. >> amazing company. >> they help to manage the flow
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of data traffic. >> yes. and visibility networking products, and they act as filters, and they reduce the traffic by keeping unnecessary or redundant data from the system. you know, in is one of the companies that why didn't they come public earlier? and the answer is that we look for companies that have a great track record and the revenue growth was superior this quarter versus previous, and this is kind of what you want to do when you come public, and a tech company that is profitable with a good track record. >> this is a strong year for ipos and anybody who watches the show know that we have seen them price behind us, and most of them higher above the expected range on day one and not so high, but to differentiate from the '90s certainly, most of the tech-related initial public offerings have been for companies that are profitable or very close the profitable, and certainly on the free cash flow basis. >> we had target ceo scott dorsey on, and he is doing a way to be able to regeneration, and do e-mail customer gains, and there is a company doing very well, and they got a bid for
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$2.5 billion from sales force. so these companies, and i'm surprised they didn't get a bid and i thought that somebody would take the company. >> and david, the company we know well is the first consumer products ipo this year. >> yes, competing with the likes of estee lauder and avon, of course. cote even though they failed in the bid for avon, and they did plant the name in our heads and helped at least in terms of the publicity, but they wanted to try to go public last summer, i think. it has been a while. it will be interesting, because half of the business, carl, from europe. >> and it has been bad. been bad, weak. >> and it is a selling shareholder here for cote and they are not using the money to use, but it is the family behind ben kaiser to use. >> they did d.e. master blend,
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and loreal, and others, but it is not best of breed. when you look at the market, where are the sellers from yesterday? what did they do, david? stay up too late to watch the game? the game was a given. >> remember that movie "50 first dates" with drew barrymore and adam sandler, and no memory everyday, and no short term institutional memory. >> i am trying to remember what we hated yesterday and what bothered us? do you remember? >> dollar strength, and e.m. not doing well, and japan, and the whole thing about the 10-year, but i don't know what the problem is there really. >> but really, both are wrong. we should not be up 100 and we should not be down 100, but what you said this volatility is back. we do have a very high dow number and the s&p is down 0.7, and like nothing happened, but maybe when nothing happens, it goes up, and when something does happen, it is going to go down. >> and how about cooper tire.
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>> and $2.5 billion deal, and india's apollo tyre, spelled e t-y-r-e. and you can see the stocks there, and running in front of me, and the synergys will make the seventh largest tire maker in the world, but interestingly here, apollo is much smaller than cooper, so they are going to be financing this baby with a lot of debt. >> you know, i don't know what the leverage ratio is. >> and it is working here. >> apollo tyre is head quartered in india, and has stakeholder value through the reliability of the products. the key here is morgan stanley, and deutsche bank, and joint financing for this acquisition, and much smaller apollo buying the larger cooper and $2.5
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billion all cash deal. >> people hated the tire business because of the chinese competition and the chinese come underneath everybody and wreck the profitability, and not unlike a lot of other industries and the industry has been in the doghouse, and goodyear tire once a good dow stock has not been able to get out from under because of the chinese. >> and they are talking about $80 to $120 million a year with the ebida and they are calling it value creations benefits and not just synergies. >> ecbs. >> and like pcp? it is bcb. >> there are no sinnynergys or anything else. there are valuations and assets. >> i don't know why they did this deal -- >> what do you mean, you don't why, 40% premium. >> and you are saying the indians in. >> well, they are a big company,
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that announced friday night that the tire business has not been good business historically. you know that. >> i'm aware of that. >> pu a halo today, and good year is up 3% and others, too. >> not a bad time to do a deal because you are not as confident, and those tend to be better deals sometimes, the deals done as opposed to those done from the background of euphoria. >> yes, a fbd you sell 16 million cars, and ssar then you want to be in the tire business, but i want to know if the chinese are going to be stocked just like they are blunted in solar. and don't forget solar is secondary. >> and speaking of which, yung, the china sales down 21% in may. >> and yung, remember, yeah, it is off. this is one where novak is pulling off the ceo and everybody doubted him and just like mcinerney is doubted at boei boeing. why do you doubt the invaluable ceos who have done over and over again remarkable things. the man or the woman at the top is very important.
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yung, and novak told you it was okay, and it is okay. mcinerney told you that the dreamliner would be okay, and it is okay. you see that yesterday, you point oed out that the boeing 20-year forecast got lost. >> some $4.5 trillion over the next 20 years. >> most companies don't have a 20-minute plan let alone 20 year. >> and we are waiting for the gigamon. >> and carl, i wanted to mention the hewlett packard shares up 3.2%. you heard meg whitman earlier on the air with becky quick. >> that was a great interview. >> do i get -- >> well, i said that you called the bottom, and many times on "mad money" i have cited the faber factor which is like the cdd, and the cvb, and what is that? >> value, creations benefits. >> vcb. >> well, i want to make my own
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vcb. >> i want some as well. >> and we got a good vcb this morning from becky who says that revenue growth is possible in 2014 and we talked to meg on may 23rd after hewlett packard reported, again, better than anticipated earnings, and this stock -- >> huge dow stock. >> yes. and it is up again. >> you look at spectra again, and hooper, and hewlett, and these are not insignificant. >> with all of that said, you have a history this year of saying that you don't like the big up opens. >> no, because the sellers come in, and they are so gratified that they can dodge all of the credit bullets that you talk about, and the buyers coming in later, because they say, wow, our market is up, and that will carry over, and really inside of a weird circular thing right now, and not a great, you know, trapped by this game of thrones, medieval porn. >> yes, and they cut back on that, and a lot more violence in
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the last couple of episodes. >> screaming violence and that is why i like "downton abbey." >> yes. >> and "madmen." >> yes. >> and let's get to bob pisani on the floor. hey, bob. >> yes, we are waiting for gigamon who priced 6.8 million shares and $19, middle of the range, and looking at $22.50 or $23 and somewhere around them and a very good debut for them. cody is the big ipo of the week, but the surprise ipo is one that we barely talked about. last week light in the box which is a chinese basically consumer manufacturing company that makes fishing rods and things like that, basic consumer items priced quietly here at $9.50, and trading now in the $14 range. that is a big surprise. we haven't had any chinese ipos in ages. one back in november, and why? because of the concerns of accounting issues that have stopped the essentially the flow of chinese ipos coming and the success of this one may change things a little bit and of
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course, you remember that alibaba is floating out there, and discussions of that going public and maybe the biggest ipo of the world, but the worry is maybe they will do it in hong kong because of the concerns of the accounting issues. so ipos are heating nup china. and everybody is talking about the capital outflows from the emerging markets, and big declines since may 22nd which is when ben bernanke gave the testimony, and the minutes came out. big declines, but here is something that is a real curveball late last night, and i don't know if you saw it, but msci which releases the indexes of the funds index ed to, came out, and they basically said that greece was no longer a developed country, and they have declared greece to be emerging market country which has implications for the people who are investing in the indexes or indexed to them. and more importantly, you have to pull out if you are in developed index, and you have to pull out and put greece in a separate category and that means that you have to move the money
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around, and if you are not in developed, you have the pull out to put the money the greece, and that is why they are the poorest performer in europe down 2%, and there is going to be a lot of debate in the politics of index construction, but it has a lot of people talking today. right now, one of the interesting groups this morning is the home builders and the home building etf has been down dramatically. i find it fascinating that lennar was downgraded but today it is up for the same reason, valuation. here is something that i didn't know, david, lennar is 135,000 lots in the inventory. 135,000 lots? h that means they have land for many years to come, and that is a great position for them to be in, and kbw pointed that out, and that is a great stat. i didn't know that. looking for the imo, here and around $22.50 the last i heard. >> yes, bob, that is a lot of land for lennar. i want to point out a mover, and hma is the symbol or the health management associates, and it
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is, as you can imagine, from the name operates a lot of the general acute hospitals and other health care facilities and generally in nonurban areas, and a shareholder in the form of glenview capital management, and run by a friend of mine i should point out to be fair, and that is larry robins who has had a significant stake or i should say always had an interest in the hospital-related companies, but in this one, glenview is getting active in part responding to some of the things that have gone on at the company for example putting in a poison pill when it said and by the way, in error when it said that glenview might go up at 75% stake, and that is not correct, they remain at 15.24%, and they said, get rid of the pill. we can't go up from here. now, they can or i should say any shareholders can act by written consent, and there is no stag guard for it. this is a company that no longer
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has a ceo at this point or he will be stepping saside. jim a lot of questions about the hma and the key one being is there or could there be strategic interest from like hca or tenet in what has been an area where there is talk of consolidation, and again, you have a very large shareholder that has gotten more active than they typically do. this is not a activist firm because it is a short-term equity fund with a good track record, but in this case, they are more active because in part management is almost forcing them to. >> and this is charles coalnik who is from a place called crt, who capitulated. >> upgraded the stock. >> i have to, have to, because she said, even if it causes us to capitulate on ourselves. bravo, david, this company is in play. >> and yes. glenview, itself, the idea of being, well, you can at least come, and they have 14.6%, and
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you are a banker and wanting to pitch it and they can be on board with any potential deal, we shall see, but that is one reason why at least the hma shares are up over 9% this morning. >> and not too late to buy. i would buy this stock. i think that glenview makes it happen. they are good. >> we shall see. it is a going to take a long time before you would challenge the board, and everybody among, and i'm sure that the base would be happier with a strategic merge, and a ceo on the way out, but we will see what develops here. >> yes, we shall watch. great review. i did not know that. shifting to bonds and the dollar and going the rick santelli at the cme in chicago. >> thank you, jim. if you look at a 24-hour chart of tens, you will see clearly that we have started to sell-off again. remember the conversation yesterday about how the market went hot in ten years when in the wee hours of the morning the
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night before last it traded through the important level of 223, but look at the two-day chart, it didn't do what it needed to do, stack staircase, because it went back into the range and the yields closed lower, but if you open up the chart year to date, and this is going to say it all. if you look at the low yield may 1st, and these are remember, 163, and we are up 58 basis points since then. and it is potentially a downer for stocks and how can you tell? because every stock trader is squawking about the story of the higher interest rates and you don't protest too much if it not an issue, and if you look at the interest rates of the jgb and it will not be implied volatility, but we did eke another print 90 basis points, and 100 to 102 is what you want to look at, and it is significant, and now if we
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look at the dollar yen, and the dollar has been higher today, so you are not getting that kind of carry crunch on the carry trade, but when you open up the dollar yen chart, something will jump out to you, because it is difficult to keep the trade at between 80 and 100 and the chart certainly looks like that, so we may be in for more carry kind of clashes with the marketplace. carl, back to you. >> all right, rick. see you in a little bit, rick santelli. here is a question, would you pay a couple thousand a month to fly as much as you want? there's an airline to allow you to do just that. stick around to meet the ceo as we go to break and look at the early movers. and dow up triple digits and now up 63. back in a moment. [ male announcer ] here's a word you should keep in mind. unbiased. some brokerage firms are. but way too many aren't.
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and 900 million dollars are changing hands online. that's why the internet needs a new kind of server. one that's 80% smaller. uses 89% less energy. and costs 77% less. it's called hp moonshot. and it's giving the internet the room it needs to grow. this ...is going to be big. it's time to build a better enterprise. together. today, we are keeping a close look at post 8 which is where gigamon is awaiting the opening trade. ticker is gimo, and a space that you will hear more about, jim,
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the data traffic management and essentially allowing companies and even cisco in their case to get more out of the existing infrastructure rather than simply buying more hardware and more routers and more switches. interesting play. >> it is like a turbo charge, and you get a little bit more out of the gasoline and the car goes faster. it is a remarkable company. >> and the revenue has been growing at a 40% clip. >> and accelerated the last quarter, and having intra-period after five years where you have the revenue acceleration, and coming public at a time where you should pay 25 and i can't believe you are getting it this cheap. >> why? >> because it has earnings and a multiple and when you look at it versus the comps, it is doing so much better than the other comps, and it is going to be the de facto name that people want versus riverbed or palo alto networks and pervis, and so much better company and it should not open up $22.23 and worth $25 for. >> i am glad you mentioned the
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peer group. >> it is trumping the peer group. remarkable company. >> we will keep an eye on that, and meanwhile at the conference, ceo jamie dimon let a curse word slip when he was talking about the london whale. >> i sat in those meetings myself and said make believe that the pope is over here, and the chairman of securities savings over here, and what is the right thing to do, and that's what we are going to do. we have a million people second-guessing after the fact, but we did everything that we thought was right to do. there was no hiding, no lying and no [ bleep ], period. >> dimon of course, the latest executive to employee an exploetive. we had scotts miracle gro reprimanded for letting go of an expletive, and what should ceos put in the swear ee eer jars?
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we will air that later. >> george carlin when i started "mad money" used to e-mail me about timing and how get it rig right. >> george carlin. bob? >> $23.08 for the opening. >> inexpensive versus what i think that the stock can do, i'm not kidding. this is a real one. >> it is trading up from the $23.08. >> and by the way it is interesting that jamie dimon had good things to say other than the b-bomb a bomb or more like a grenade? >> i don't think it is. that one, they you can let into the lexicon, because there are some other ones that are -- >> that one, absolutely. but there is gigamon, and we will get to it when we come back.
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we are going to power think "6 in 60" jim. >> yes. i discount it, i think they are fine biojen. >> and citi? >> well, it is about time because my charitable trust owns it and they have the cellular business on fire. >> and another $1,000 target on? >> well, i am using 1,001.
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>> and barkleys on rbs? >> this is my favorite spec i think it is going to go higher. >> and tesla? >> well, barons said to buy it, but i say sell it. >> nice. shaved 20 seconds off of that. >> well, to the flipside gigamon and i'm excited about this company. fresh from the opening bell and first on cnbc, and i can't believe -- thank you for coming on, because this is a big deal. gigamon debuting on the big board this morning and maker of data trafficking software and trading up even from when it opened and i said that $25 -- sir, i need to nknow this, wher have you been? you have been making money for years and i'm talking about full hooper and accelerated revenue growth, and we have had companies come public with neither, and why now? >> because we have a great company with great products and great solutions and great customer base. we have over 60% of the fortune 100 user technology and we saw it as a great opportunity to go
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into the market, and be able to offer what is a phenomenal company, and dep strait it by the way we are trading today. >> and what do you do for the likes of the company that we work for comcast or cisco, and you filter things that run necessary, and how do the unnecessary things get involved to begin with? >> well, so much traffic, jim, and so much information, jim, devices traversing all over the place, and people need to control the right information and we help them do just that. >> what is the traditional approach prior to your coming in and helping the enterprise customers? >> so the traditional approach is that you put multiple points of contact all over the network and try to watch everything, and fundamentally, you will miss it or the points are overwhelmed with the information and we sit in that space to make sure that the guy gets the relevant information. >> why so few shares offered today. and the $4.5 million from the company, and you had a offer, but why not a bigger offering? >> well, we decided to keep it a focused offering and give a nice presence on the market today, by
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we have kept a lot inside of the company. we have a great group of founders, and they have not sold a significant position in the organization. so our original investors are still very invested in the organization, and we all fundamentally believe in the future. >> and the original investors going to bleed the stock out or remain as significant investors? >> they have sold a small portion of the position, and they are all invest ed ed in th company just as we all are. >> and were you surprised about the nsa tapping into the networks and is that something that you could stop if you wanted? >> well, we were surprised. but it is something that we helped enterprises to look into the networks and work with service providers and work the federal government in certain spaces for sure, and help companies do the right thing and not the wrong thing. >> good, good. >> paul, thank you so much. congratulations. >> thank you. >> and gigamon, and jim, quick ly on mad tonight? >> well, we have -- and why am i wearing a skinny tie, because this is usually your province,
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because manny cher-ee coe is on, and maybe they can best it and get it right with the calvin klein acquisition. and then a san antonio and miami stock showdown. we have been picking prominent stocks from miami and pitting them against stocks in san antonio. >> the spurs are up 2-1 after game three. thank you, jim. 6:00 and 11:00 p.m. eastern time for you. and now blowing the whistle for unfairness in the market, and lit will have you upset. stick around to find out what we are talking about. they're not afraid to question the path they're on. because the one question they never want to ask is "how did i end up here?" i started schwab for those people. people who want to take ownership of their investments, like they do in every other aspect of their lives.
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welcome back to "squawk on the street," and our road map begin s wi begins with the markets. the dow up 31 after being up triple digits a few moments ago, and of course, yesterday the markets tried to bounce back, but they could not quite do it, and the 10-year hovering 10.2, and pimco says they see a 10% chance of a global recession. >> and i will it sit down with c andreessen and meg whitman. and jamie dimon's comments at a conference call raising
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eyebrows. and you can get a bus pass for a subway card, but what about unlimited flight card? one company is taking a stab at that, and the ceo of surf air will join us. and keeping and eye on the markets after we closed down over 100 points the question is can we bounce back? is gordon and charlie, thank you for joining us. we are on a day where the vix are lower and the stocks are high, and people are talking about the hindenberg a couple of days ago? >> well, if you go back three or four weeks ago we had momentum markets and the momentum rolling upwards, but today, everyday is a different chapter of the book. one day up, and the next day down, and investors don't know what to focus on. we hung our hat on earnings season and good economic data, but now headlines are dictating the market, and talking about what is happening in china and in the middle east riots on tv,
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and the tension on the markets is clearly portrayed in the tape. >> it is overseas, gordon, the trouble or the trouble emanating from here at home, because you give me a hard time looking for the 10-year, but is this not a market that is nervous about the rates lately? >> elk wiwell, it is about the trouble, and people talk about the hindenberg, and people talk about the peek and inevitable that we have reached the peek, but if they pull back on the rates on some of the stimulus locally, how much are they going to pull back? how significant will it be? if they pull back a little bit and the interest rates start to go, it could be good for commercial real estate, because people are fosted to start buyi buyi buying -- are forced the start buying, and so it is a mixed bag because maybe the volatility is not here today. >> well, we are seeing the intraday volatility. >> no doubt about it, action is back, and the expiration and the russell rebalancing and the
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earnings next month. >> and fed next week with the next f.o.m. statement, and it is about the central banks here in the u.s. and has people stepping back all over. >> well, from the last statement, we got information that we have been waiting for and looking for, and it is going to be is interesting to see if they can follow up the transparency, but if they pullback and stick with the normal script, investors may be j jittery, but if they come out with the dates when pullback may occur, and they will take that and trade appropriately. we have yen and yan, because it is both sides want iing it to happen, but it is the process of how to get there. >> and the explags nati-- explanations of people saying, yes, it is going to be okay, and the charts, but then people saying, i don't feel good about it. and what about the psychology? >> go ahead, gordon. >> the psychology is playing a important part, an investors
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from main street to wall street have the kconfidence to dictate the markets. if you don't have the confidence, the money is not coming back n and if you sit on the sideline, only a matter of time that you feel that you have missed the bus or jumping in to invest. >> people are looking at japan and the amount of stimulus, and it is coming back and that is portending, and when people start to cut back on the stimulus globally and john alluded to the unrest in europe that people are starting the see, so reasons to be nervous, but the question is the same one we have had, where else do you go? where does a prudent investor put his money, and american block is still ahead. >> and okay. back to you, david. >> okay. we see the deals to talk about this morning. most of the time we see deals on mondays and the old merger
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monday, and that is in part because the boards are taking their good old time reviewing the trangs sa atransactions ande taking their time. and so they don't want to get deal done over the weekend, but this morning, cooper tire isb buying an indian company, and the interesting thing is not just the premium which is 30 days over the premium over a 2 1/2 deal, but they will be borrowing $2.5 billion to get the deal done so it is a levered transaction, and the stock is up sharply, and approved by both board boards. talking about value kraeation benefits of 80 to $120 million in ebitda, and talking about
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manufacturing and other improvements and that is a first. maybe we will see the value creation benefits identified in the deals. so here is an indian company buying cooper tire, and two weeks ago it was smithfield foods a pork producer bought by a chinese company, and none of the deals have closed yet, but it is interesting to note that cross border has been occurring for the somewhat larger deals. not talking about the big deals, simon, so it is not a merger wednesday or monday, but it is a deal of importance at least to mention. >> and the third wave of globalization from emerging markets to come in the buy some big names of western europe and the united states. jpmorgan's ceo jamie dimon addressing the london whale issue again yesterday. just how long will that trading loss continue to be an issue for dimon, and indeed for the bank? kayla tausche is become, and he
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would like it to go away. >> yes, he more than anybody. it is dubbed the london whale with that lost revenue stream, but it lost $6 billion and became a financial nightmare with the assets, but yesterday at the morgan stanley con freps, dimon speaking out after he was affirmed as the chairman and the ceo, and he proved that it is still a sore subject. >> i sat in those meetings myself and i said make believe that the pope is over here, and the chairman of the securities and savings over here, and what the right thing over here, and that is what we are going to do. we have a million people seco - second-guessing after the fact, but we did everything we thought we should do. no hiding, no lying, no bull n [ bleep ], period. >> those are his words and not ours and then he apologized for the trade, and one of the countless times he has apologized. and he says that the bank disclosed the size and manner of the trades and losses, and the
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fbi will look into those. and still at issue is what the bank executives knew and how they were marking the trades. they say that the markings were not ill intentioned but sloppy. they moved the portfolio to bank with fewer controls. so it is hidden in there, and on a call with journalists earlier in the year, dimon responded to that figure saying that the kimono is now closed. the bank continues the post record profits and the stock, look at that, up 57% in the last year, and 25% post whale. carl. >> yeah, and my favorite is his almost a dare for people to come to sue the bank, saying that we will defend ourselves to the end. keep that in mind. >> yes, and it is a litigious society, and he is keeping it on
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defense. >> well, to be fair, he is speaking three months to the day that they had found that they had misled investigators and dogged regulators so if you look at how he would have had it, at least in a lawyer's view, some cause there, kayla. >> yes, a situation ongoing and the senate report is the biggest piece of negative news to hit the bank regarding the london whale trade and spared no expense and given that the regulators are looking into it, the saga is not over yet. >> kayla tausche, thank you, back at headquarters. what do you get when you mix marc andreessen and meg whitman and our own becky quick? a great dinner party. we will talk about the insider deal making, and what they had to say about it. and the man who brought us the oscillator will join us, and tell us more about that as tom mcclellan joins us on "squawk on the street."
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the tepper rally as you been talking this morning. >> do you consider yourself a monopolist? >> in every business there is one bigger than others. >> is the fed out of ammo here? >> i don't think they have an exit strategy ever. >> people lost fortunes they could not unravel, and you guys are fools, idiots. >> ceo crist
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take a look at gigamon debuting here with a nice 35% up, and even though the company breaks my two-word descriptor rule which is if you look at how people look at what they do, it is data trafficking network company to network appliance vendor company and clearly in a space. even if the average guy on the street is not sure what they are doing, a lot of the investors love the story here, obviously, up 36%. >> meantime, our becky quick who
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has been all over the country, it seems lately as the hewlett packard discover conference where she sat down with legendary investor marc andreessen, and hewlett packard ceo meg whitman after doing a little gambling upon her arrival in vegas. good to see you, becky. >> good to see you, carl. i didn't doing a little gambling, but losing. i lost $10 immediately and i'm out. we are here at hp discover and we sat down with marc andreessen and we know he is a great tech investor and inventor on top of that and also on the hp board and we got the talk to him arnot the -- to talk to him about the turnaround and including the news driving the news in the last week and half and that is everything surrounding the nsa report and the washington post and the "guardian" that technology companies have been giving the government direct access to the servers, a it is something that a lot of the
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people in silicon valley have come out against. marc andreessen had not spoken about it before, but he came out today fired up about it, and he takes issues with the early reports. okay. in that clip, he said that there were big mistakes that happened in the original reporting and that the reporters involved did not understand the basic technology, that they did not have any facts or a lot of the facts right, and that is making him reserve judgment right now on all of the things that have been happening with any of the stories surrounding the nsa. he just says that there were very real problems, points out that the "washington post" has been walking back points and doing it without corrections, but changing things as they appear, and he is taking issue with that and reserving judgment at this point until he hears more, but it is another voice from silicon valley with strong words against these things, and
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it adds to the confusion out there. and now, we also spoke the andreessen about what is happening at hp. interesting to note that andreessen and whitman were both on the board at hp when things were going wrong the last ceo, and whitman made it clear that after ebay she was not interested in getting back in other ther ceo positions, but andreessen said he locked her on a flight for six hours, and he said that it is a good to have a locked audience, and he pushed her, and he said he believes she is the best ceo at the company because she is so hand's on, and you may wonder about what that means and as one example back in april of last year, hp was going up for business from bing and buying new serve evers and going up against dell, and the whole thing went down, and hp lost, and whitman wanted to know why.
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>> i called and i said, put me in touch with the person at microsoft who made this decision and i want the chapter and verse on what we could have done better and sobet better and so i spent 45 minutes on the phone trying to make the decisionsition of why we lost and i got the team together and said what are we going to do? how do we reorganize ourselves? how do we change the supply chain? how do we participate in a way that we will win. >> it was not just pricing for the reasons that hp lost out, but had to do with things like trying to be more responsive to the customer, and responding more quickly, and even thinking of ways to help microsoft that microsoft had not thought of itself, and flash forward to january, this past january, an bing contract comes up again for more servers and hp goes for the bid again, and this time they won. it is the first time in the last six times that they had bid for the bing business that they won, and that is just an example of
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some of the things that she is doing to try to turn it around at this company. now sh now, whitman, herself, when we spoke to her acknowledges it is a long road and still a lot of heavy lifting and 18 months into what she describes as a five-year turn around and you know what happened in the last earning report that the street responded positive ly, and guys she says that she is still thinking that there could be revenue growth in fiscal 2014, and that is certain sli somethi -- certainly something that the street is going to be watching. carl? >> thank you, becky. we will try to get the andreessen interview racked for later on. thank you, becky. >> okay. see you soon. staying with the subjective leadership, jamie dimon let slip a curse word when reponding to a question about the london whale. listen to what he had to say. >> i sat in those meetings myself and said, make believe that the pope is over here, and the chairman of the securities and savings over here, and what is the right thing to do?
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that is what we are going to do. you can have a million people second-guessing what happened after the fact, but we did everything that we thought was the right thing the do. there was no hiding. no lying, no [ bleep ]. period. >> period. dimon was the latest executive to employ an expletive, and recently, jim haguedorn the chairman and ceo of scots miracle gro was scoldled for swear i swearing. and so what should ceos put in the swear jar? we will air your responses throughout the morning. and the company that brought us the os sil cillator will hav technology to talk about. >> and plus, for the get all you can eat, because one airline is taking on the all you can fly motto. will that work? the ceo is going to join us live. oh, he's a fighter alright.
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♪ lennar getting an upgrade from kbw saying that the latest housing sales is sweetening that stock. we are going to break down the housing center with john. >> good morning, simon. most builders have been seeking shelter in stock, but some investors see that labor market is up in demand whether rental or purchase. the ebitda is up nearly 60% in the past 12 months, and d.r. horton more than 40%, and pulte and k.d. home, and this is why you should stay positive on the homes, because the prices are coming up, and lumber is declining and strong overhead control is a strong plus, and analysts telling bar clay that
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the spikes are premature, and they are seeing the long-range bound until the current fed level, and they say that it is ample to fuel the recovery for the next few years. others urge caution, and jack sus ka hannah saying that they are beyond reflection and siing they are the most optimistic of outcomes and for demand he points to the college student debt, and the 25-year-old to 35-year-old set doesn't have the income or the savings he says that they did in the last run-up between 2003 and 2007, and even a skeptic can find opportunity. masenco is a favor of taylor homes tmhc, and the price target is $31. kelly, back to you. >> all right. josh, thank you for that update. now, the risks of invest iing i
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emerging markets. protests in turkey are causing concern for some of the investors and we will talk to someone who says that the pictures are not changing his long-term point of view. you are looking at the last night's riots in turkey. we will be back to explain why.
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♪ almost an hour into trading
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and some of the stories are 7:29 on the west coast and 10:29 on wall street. indian maker apollo tyre has agreed to buy cooper tire. that deal will create the seventh largest tire company in the world. first solar is one of the biggest losers on the s&p, they plan to use the proceeds for general corporate purposes. yum brands is a 19% drop in china sales mainline, and that is because china is responsible for over half of the sales at yum. >> and they still believe they will be okay in the year end, because this is just lasting three months and they believe a recovery by the third quarter which is why the stock has not moved. >> and at $19 sounds bad, it is not anywhere near where it was in the past few months down in china. huge market for them.
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>> they benefit toward some substitution toward other products. i still believe it is a macro-driven market, and you look at the 10-year, and the yen and stuff coming out of europe, and it is a grappling market to see if things are going to be stable enough to pullback. >> and we pay more attention to the 10-year than the doushgs becau -- dow, because that is what is wagging the tail. now over the sharon epperson. >> we are looking at the oil invento inventory, and we are seeing a build of 2.5 million barrels of crude supply, and a build of 2.5 million in crude supplies and looking at the gasoline supplies risen by 2.7 million barrels which is rise in gasoline supplies. and now, the expectation according to the analysts is for the crude supplies to remain unchange and why? because of a range of analysts with the divergence, that is the
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mean estimate is going to be, but we did hear from the petroleum institute last night, and we saw a huge build in that industry up nearly 9 million barrels so we have seen a bit of divergence here of what the analysts are expecting and the different reports are showing. what a lot of the traders are also paying attention to this morning ahead of the energy department report is the latest report from the international agency that showed that perhaps because of the rise in demand that we are going to see from the middle east, from perhaps asia over the summer that we may not have enough supply or supply may be tight over the summer, because of that. that is something that a lot of the traders have been pointing to as to the reason why oil prices were slightly higher this morning despite the huge build, simon n the american petroleum institutes we port, and we are seeing a sizable build here in t the energy report this morning. >> thank you, sharon. it has been a rough start of housing stocks, and the mortgage
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backed rates sending the index of home builders down the best part of 10% as they outperformed so well last year. but this is a buying opportunity accord t according to our next guest. tom mcclellan was prized for his moves in 2011 and 2012, and of course, the editor of mcclellan news letter. >> hello, simon. >> tom, what you are bringing from your point of view is lumber, and the fact that lumber has fallen so dramatically recently, and so many people are worried about that, and you think that they are misinterpretationing the relationship between lumber and housing stocks. >> that is correct. there's been a whole lot of discussion about what people are calling a huge divergence between the lumber prices going down so sharply that the philadelphia housing index is aloft for the most part, and they are saying it is warning of us big problems to come in
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housing, but the problems are not showing up, but it does not explain the true relationship between those two. if you look at them on a cowi e coincidence basis, you will see some of the changes burk i like to shift the lumber price plot by a year, and reveals that whatever lumber does now, that is what the housing sector will do in a year from now. >> interesting. >> so where does that lead you now then? where from that do you conclude about the housing stocks? >> well, we know that the lumber future prices topped this spring of 2013 and that means that we should expect the real topping for the housing sector in the spring of 2014 because of that one-year lag. so while lumber prices are already signaling trouble ahead, it is not for another year ahead. we have a lot more bull market in the housing sector left to do, and especially after a bottom for overall market that
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i'm expecting to come this fall probably in september. housing should lead the way up out of the september bottom. >> and then when does it fall in your view? housing stocks? >> housing stocks should continue the rise into february or march of 2014, and then the effect or the echo of the big dropf of the lumber prices can be felt in the housing sector, but it is a one-year lag. it is nice to have a one-year leading indication of what is ahead of us. >> and beyond, a physical reasoning as to why the relationship should exist or just a correlation that works? an old wives tale? >> not so much an old wives tale, but a correlation that works going back a couple of decades and at some point when you see enough correlation, you give up wondering why it is exactly a year. lumber sits at the intersection of demand from housing, but also supply from the mills, and lumber mills are terribly slow in being able to respond to changes in prices, because it takes a long time to bring back into operation a mothballed
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mill. so you have transportation, labor, electricity costs coming into play in lumber and housing demand and why it is a year, i don't know, but i celebrate that i get the answer a year ahead of time. >> and tom, we wanted the ask you about the hindenberg omen that people are going bark and forth and whether to pay any attention it to, because part of the omen is watching the mcclellan, as in your father, the oscillator, and do you have a view as to how this signal typically is? >> oh, sure. we just published an article about it on the website if people want to find it, it is out on the company's website. the hindenberg omen has correctly told us about every major stock market decline going back 30 years, and it has incorrectly told us about problems at other times. so you have to accept that it is going to cry wolf sometimes. i wouldn't call it a signal, but
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alert. it says to keep the ears up and watch for trouble and signs of a down trend. we are seeing those now, now that the hindenberg omen has triggered twice in the last week. it is new highs and lows both coming to a high level at the same time with a few other conditions being met and a sign that there is rotation going on. it is a good message to listen to. it is not a message that is full faith every time and can't be the only thing one ever watches, but it is nice to have a message to tell you that hey, something is different right now, and you need to pay attention. >> tom, before we let you go, i know that the other call that you wanted to put on the record was with gold and silver, and you believe that both of of those are set up for a substantial rally. why not different this time with deflationary forces coming from europe and china and a much stronger dollar? >> what we are seeing is the
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data from the commitment traders report, and looking at the commercial traders and the noncommercial and the nonportable traders and they break it all down. we are seeing the levels of commitment by commercial traders that have paired the shorts down to such a low level that we have not seen this reading since 2001 and you remember gold bottoming at $260 in 2001 and starting a great rally, we are seeing the same sort of expression of commitment from the commercial traders that we saw in 2001 and that says that we have a multiple year trend for gold and silver at a time when people are rallying and hating them, and saying that gold will nef go up gap and gold is for losers or sucker suckers, and that is the kind of attitude and muttering that is a great marker for a historic bottom which we believe it to be, and gold has a lot more years the go up. >> and the clear calls, tom. thank you for sharing them with us. tom mcclellan, editor of the mcclellan market report. have a great day. now, protests in --
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>> i was going the say, do you remember when gold bottomed in 2001? >> let's say i was not following the market as closely then as i am now. >> she was in high school. >> but probably, you were watching. >> i was still reading "the economist." >> no, i will tell you that i will take your word for it. >> from the old timers. >> i was working for cnbc at the time. let's not go there. >> and over to turkey, riots have sent the market into a tailspin. they have lost nearly 10% in a month as investors have fled the markets looking for a safe haven and higher return. and now joining us is david reit reitel. let's back up and ask you, what is happening in turkey any more intel or idiosyncratic case?
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>> well shgs s, it is an idiosy case. we see the protests occasionally. we have seen them in 2009 in thailand, and bombings in indonesia and turkey, itself, and they do provide buying opportunities. there is a lot of tension in that society today, so it is something to be careful about it, but it might provide a buying opportunity for aing in lore-term investor. >> and why is that, because people are looking at the current account surplus and so much reliant on the foreign infle i inflows, and people are saying, why would i take risk to this country that has structural problems and political problems and other markets in the u.s. are more attractive. >> well, turkey is in an interesting crossroads between europe and asia. and always has. for europe, it solves a problem for european manufactures looking for skilled workers on the fringes of europe to do the manufacturing of the automobiles and the white goods and things like that. they solve a very real
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demographic issue in western europe and not like the relationship of u.s. and mexico in terms of the mfing capacity. longer term, turkey has great demographic, and geographic location, and very extremely high management teams and good companies. >> david, the alarm bells are ringing across the emerging markets, and right now they have gotten used to a huge amount of money getting used to the central banks and sending the markets and the bonds higher, and now with withdrawal, you have a huge machination, and some of them raising the interest rates to meet the currency, and the south african rand is down 30% so far this year. what happens to the emerging market, and does ben bernanke has to delay tapering for fear they could implode? >> well, ben bernanke is not going to do that because of the
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emerging markets, but it is going to be slower than people anticipate. people are overly eager to read this tapering of the money. i think that the market is a number of months if not years early in the interpretation of this. what is going to help the emerging markets longer term is that you are seeing the growth in these markets and even out of china, you are seeing the exports grow. you are still seeing the good solid growth with strong national balance sheets across the markets. these are good and important economies that in the longer term they will prove themselves to be great drivers of earnings for the companies domestically, and abroad. >> david, david, did you say that the market might have gotten tapering wrong for years, and it could be years before they taper? >> that is correct. >> when do you believe that the fed will taper if it not this year? >> i am positive it is not 2013, but i think that you are talking about 2015 would be the first
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time they do it. >> wow. david reidel thank you for your thoughts across the globe this morning we should say. you have heard of all you can eat, but what about all you can fly? one airline is going toic mate a reality, and phil lebeau is testing it out. what do you think, phil? >> kelly for $1,650, what an airplane and airline for you. this is surf air to take off from burbank all of the way up to san carlos in the silicon valley. it is the all you can fly air service. can it fly as a business? we will ta uk to the ceo when "squawk on the street" returns. [ male announcer ] with wells fargo advisors envision planning process,
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here's a question, what if you could pay a couple of thousand a month the fly as much as you want? would it be worth it? one airline is testing the strategy out. our phil lebeau is live with the ceo of surf air. phil? >> hey, carl. we are out here at fairbanks airport and i'm here with the founder and ceo of surf air and
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a lot of people are looking at this plane behind us, wade, and what is this all about? >> it is a flat fee subscription airline, and so we are to air travel what netflix is to movies or a country club is to a golf course. >> you are asking people to pay $1,650 a month to fly as much as they want, and is it worth it to fly on this plane between burr banc and the silicon valley? >> absolutely. if you are going back and forth three or four times a month, it is amazing on the price and the specifically on the time that you will save. if you leave your house in santa monica where you live and over to silicon valley, you are four hours door-to-door and us, two hours, and four total hours is amazing what it does for the life and the efficiency. >> and you and i have talked about the long legacy of the failed startups in the airline business and we talked with gordon bethune about surff air and the plans for success and this is what he said.
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p.t. barnum said a sucker born every minute to invest in this, and in is a tough, tough investment, and highly speculative and the history says that most of the airlines that start up won't work, so i don't know whether they come from, but i would not put my pension in the idea, but maybe some other people have more tolerance for risk than i do. you have venture capital firms putting t$11 million into the airline, and what about what mr. bethune has said? >> yes,are trying to do the same thing in a broken market, yes. but when you buy a ticket, you are buying, you know, it is a fine time share and one-off purchase and four-square feet for 109 minutes, but what we are providing is something different. we are giving you access to the aircraft and opportunity to go when you want and different value proposition. >> so you believe that 53
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markets, and the last question, 53 markets around the country where you could potentially have service like this? >> absolutely. 53 markets and six planes in each one. ize en heisenhower has put a ai every small town in america for a defense, and it is the most underutilized infrastructure, and we plan to use it. >> guys, we will be on the first flight, the first revenue flight from burbank to san carlos later on and we will let you know what it is like to be on surf air. back to you. >> let's hope he doesn't get too crowd crowded. still ahead, we are blowing the whistle on the unfairness in the stock market that will have you outraged. "squawk on the street" will be right back. ?ñ?h
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i have that song in my head for a week. let's get to the cme. hey, rick. >> hi carl. there is very little doubt that any of you viewers or listeners on the radio, if you talk to anybody that's a proactive trader whether they're strategic or intraday, they're talking about interest rates, and rig rightly sow. even though we know the market isn't what it once was, there still is my analogy. you drop a brick on a geranium it's probably still going to grow, maybe a little crooked, but it's still going to grow. to that end technicals, it's all about trying to find the great moves that are like staircases. you know, 205 was an important close in tens and the minute we close through it, we basically
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beelined and had some intraday high yields around 223. i talk about when a market goes hot, it ends up in one of these moves, these trend moves. in this case the upside in yields. but a funny thing happened yesterday. it didn't hold its momentum. momentum, there's a lot of time relativity to it. a snapshot. so intraday it might have lost momentum. on a close it lost a bit of momentum because it didn't close above 2.23. we have to look at weekly close, monthly close. keep a close eye on 2.03 and 2.23. dodd/frank. i always like to give credit where credit is due. gary gensler and thec ftc they probably didn't really volunteer to be the people writing much of the regulation of dodd/frank, and they weren't very timely, years late, but we have gone through phases where many life insurance companies and hedge funds and traders have to comply with a lot of these rules
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regarding putting their derivatives, their otc swaps, on an exchange and then margining them. we're going to talk with john brady later today about what that's done to the market. but exemptions is what i want to talk about. "the wall street journal" today, banks get the lay on swap rules. i don't know about you folks but i'm tired of the exemptions whether it's in health care. the too big to fail banks listed are at the epicenter of the problem. there was a study that basically and you see it on your screen, it says firms lobby and for in this instance the american job creation act of '04 have a return in excess of $220 for every dollar spent on lobbying. 22,000%. do you know who the biggest lobbyists are in this country? too big to fail banks. they were partially responsible for the credit crisis. i'm done. >> you can certainly say the roi on lobbying far too high. thank you. it's tweet time now. it's always tweet time as far as
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i'm concerned. at a conference yesterday jamie dimon letting a curse word slip when responding to a question about the london whale. we're asking what should ceos be putting in their swear jars? tweet us @squawk street. clients are always learning more to make their money do more. (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies."
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welcome back. did want to update our viewers. we got a lot of questions about the special committee of their wire. they are likely to recommend the current dish proposal to acquire the company or as much as they can at 440 a share as being superior to that of the current offer from sprint for clear wire. again, that special committee will meet later today. no to prejudge, but the expectation is they do believe the current bid from dish is superior to that of sprint. now, sprint itself, of course, as we learned earlier this week is going to hold a shareholder meeting on june 25th in which its shareholders may approve its being acquired or 78% of it being acquired by softbank. there's an expectation perhaps that after that vote if, in fact, softbank does take control
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of sprint, it may consider raising its own bid to compete with that of dish tp tomorrow clearwire shareholders were supposed to meet. it is expected that that meeting will be adjourned tomorrow and postponed until after the sprint meeting. again, we'll see what happens from here. if, in fact, softbank and sprint do not raise for clearwire the minimum conditions on charlie's tender offer for clearwire are met, he will end up owning about 25%, perhaps as much as 30% of clearwire and certain to be a thorn in the side as they try to transform this country. >> have you seen this? not a winning face on by any means. >> but none at the table have any idea what he's really doing nor do his bankers, advisers, or anybody else who is involved in this. >> it's the seinfeld ending as he has said. you don't know what it all means but it's going to dove tail.
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at least that's what charlie would say. good stuff, david. the dow has gone in the red even after the futures and the opening looked pretty strong. we'll talk some europe, simon. if you're just joining us, here is what you missed earlier this morning. welcome to "squawk on the street." here is what's happened so far. >> we sold our positions in both zynga and groupon once they went public. we're not in the public investing business. we generally get paid to be on the private side. i think both companies have a tremendous amount of potential. i think it could be argued both companies went public prematurely. >> i would say we're a bit ahead of where we thought we would be. we're 18 months into the five-year turn around and we're about right where we have to be. we have a long way to go. there's a lot of heavy lifting ahead. >> i'm not painting a positive scenario. i'm saying the negative scenario doesn't get you down 10%. >> just 5%, we could do that in a day?
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>> what, do you think we're thailand? >> i hope not. >> why choose now? >> because we've got a great company with great products, great solutions and a great customer base. we have over 60% of the fortune 100 use our technology. we saw it as a great opportunity to go into the market. >> investors have that psychology that really helped dictate our markets. if you don't have the confidence in our economy and the markets, the money will not come back in. if you sit on the sidelines, it's only a matter of time until you feel like you have missed the bus or made the right decision. >> housing stocks should continue to rise into february or march of 2014 and then the effect or the echo of this big drop in lumber prices can finally be felt in the housing sector but it takes a one-year lag. good morning. we're live at post nine at the new york stock exchange keeping an eye on markets which after another triple day open are now
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lookinglower. so for the second week running we have triple digits after a period of relative calm for markets. the vix is up this morning by about half of 1%. in fact, the realized vol seems to be higher. shares of gigamon are soaring. debuting after pricing at $19 a share. currently trading over $25 for a gain of 33%. biogen falling sharply after getting hit with a downgrade. the firm citing concerns about prospects of one of its multiple sclerosis drugs in europe. a loss of 5%. ja let's get to the road map. cnbc blowing the whistle on unfairness in the market. we're going to find out how some people are getting a first look at market moving data before it's actually released for a fee. then just out in the last few minutes, a read on the state of
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the economy from some of the top chief executives in this country. john engler will tell us what some of the big name ceos are focused on. 234us news of spying and ha all over the internet. how can you make sure your information is safe. we start with some important new revelations involving early access to market-moving data. eamon javers is live in washington with more on this store. >> good morning. cnbc has obtained a document that shows a closely watched consumer confidence number that routinely moves markets is accessed by an elite group of traders for a fee a full two seconds before its official release. a contract signed by thomson reuters, the news and data feed service, and the university of michigan which produces the widely cited economic statistic stipulates the data will be posted on the web at 10:00 a.m. on ri lease days. five minutes before that at 9:55
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a.m. the data is distributed on a conference call for thomson reuters paying clients who are given headline numbers. it carves out an elite group of clients who subscribe to the ultra low lateen si distribution platform or high speed data feed offered by thomson reuters. those most elite clients receive the information in a specialized format tailor made for computer driven al gor rhythmic trading at 9:54:58.00. here is the real world effect. take a look at this chart provided to us by the an mist firm nanex. you see trading on may 17th. the red line on the right is 9:55 a.m. but you can see that trading exploded two seconds earlier at almost 9:54:58. more than 100,000 shares traded hands in the first ten milliseconds in the first burst of activitieactivities. details of the tiered release are provided openly to thomson reuters customers and the wider public and anyone wishing to
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trade on this data can pay for the service that best meets their data needs. thomson reuters also said it fully discloses the two-second lead time on the website. this is extremely valuable data. the contract shows that thomson reuters pays the university of michigan at least $1 million per year for the exclusive right to distribute it. back to you guys. >> wow. stay with us actually. we want to bring in steve liesman as well. and, steve, you have just heard what eamon had to say there. of course, the defense in this case is that there's nothing about this that isn't transparent to those involved. do you think that's a fair defense? >> i actually don't think so, kelly. i have been calling economists about this issue for the past couple days, and none of the ones who i talk to, these are some of the best known wall street economists who appear on cnbc, knew about this two-second delay. some of these guys pay to be on that call at 9:55. i feel like at least within the street that 9:55 call was reasonably well-known.
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this two second earlier heads up was not well-known on the street and i think it raises some questions about disclosure, about transparency. i tried to find this two-second disclosure on the reuters website. it's not easy to find, but, yes, it can be found, and some of the comments that economists gave to me were that this is unfair and it's disingenuous. >> wait a minute, wait a minute. what is unfair -- disingenuous, fine, maybe they were trying to keep it under wraps that some people were getting this data early, but, steve, the guys you talked to, we're lucky if they're looking at data week to week let alone carrying out if it's out two millie seconds. >> the guy i'm talking about are looking at it when it comes out, they're on the squawk box with the firms trying to tell them what they think of the data. i don't think these folks have a problem, kelly, if this information is disclosed that it's out earlier. they just didn't know it and it doesn't seem to have been widely known on the street that there
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was this two-second heads up. and i think the context is interesting. there's a lot of talk about whether or not we should be using more and more private sector data. government funding for data has been waning and it's been a tough thing to do, and so the question becomes if we do go to more and more private sector data, what are the rules surrounding it? the government for all its foibl foibles at least does not have a process where you can pay to get it early. there's no such premium or sias understand it, rules for regulation about this private sector data. >> i talked to the university of michigan about this and we should say the people who put this data together say that it's privately financed by thomson reuters and they say if they didn't get this private money, they wouldn't be able to do this survey at all and, therefore, the public utility of this data would be lost entirely.
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i think the question is -- >> eamon, can i just interrupt and tell you i talked to the conference board this morning which puts out a competing survey and they do not offer that. of course, they're member financed, whatever, but the notion you can't produce a consumer poll without this money i think is somewhat suspect. >> i think the key question here is what is it that these wall street firms are paying thomson reuters for? are they paying for a sense of what consumer sentiment is in this country? if they're interested in consumer sentiment, then presumably they could hire a polling firm to poll for them and figure out what consumers think. are they interested in a market pop that's about to happen that they could learn about early? that's the question in my mind is what's the motivation for buying this data. are you interested in how consumers feel or interested in what's about to happen in the market. >> they want a heads up on what the street knows. that's what they're paying for. they could, as you say, do their own poll. it would cost them $30,000 every month or whatever and they could get that for much cheaper but
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the heads up on what the rest of the street will be paying on, that's what they're paying for. >> what does it mean if you say everybody knew this, you have to kind of define everybody. if a lot of elites that steve was talking to were not even aware of this, then it's a question of how broad the transparency and disclosure really was. >> steve, we do polling here, too. you have your all america survey every few weeks, months. is there any price at which you could be bought and give people direct access to that number in advance of everyone else. >> me personally? >> yeah. >> for a fly fishing trip or -- no, absolutely not, carl. you know, and it's interesting, that is not market-moving data. i think it's important data and interesting data but it's not going back to the issue -- by the way, there are other companies that do this. the chicago pmi pretty obviously advertises on its website that if you pay a fee you can get it three minutes early. and i just want to come back to
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this issue because i have been doing a lot of work on whether or not cnbc could benefit viewers by providing private sector data but one of the big things and obviously i have been instrumental in bringing adp to cnbc and that kind of stuff. we do nfib but a big issue surrounding it is the sanctity of that data and whether or not it has the equity surrounding it of government data. >> it's a thorny issue. thank you for bringing those details to us. we will continue to gauge the ramifications of the disclosure. >> certainly on the pmis we see the market move well in advance every month. thanks, guys. the business round table, an association of ceos of the leading u.s. companies, is out with second quarter economic outlook survey this morning. show that is ceos expect a slight increase in economic output over the next six months. modest improvement in sales expectations and hiring. here for cnbc exclusive is john i think go
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ingor, president of the business round table. >> good to be back with you. >> last quarter they were looking for 2.1 growth, 2.2 now. nothing in spectacular but it's not going in reverse. >> it's four straight quarters. up the highest since the second quarter of '12. it's a slow road of recovery. too slow of a road to recovery but it's headed in the right direction. our long-term average. we do an index on sales, employment, and capital spending. the long term average is around 39. so it's slightly above that. it's okay but it's not -- it won't light any fires. >> let's walk through some components in terms of the change in percentage points of expectations. slight increase in sales over the next six months. 6% more sales. how encouraging is that? >> well, that's good. and i think, you know, you got sectors, certainly autos have been strong.
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i think have a very nice outlook through the rest of the year. i think some of the other sectors are a little more mixed. the one that is most troubling, capital spending, is basically flat. it's actually negative one. so that's just -- in other words, we're just sitting and waiting, and we ascribe a lot of that to sort of the political uncertainty and the unresolved long-term fiscal situation in the country. everybody is waiting to see. >> yeah. and on top of that you have layered what's happened to at least the short term deficit outlook and what some argue is less urgency in washington, governor, to do some sort of grand bargain because the fire is not in the living room some argue, at least right now. is that true? do you believe that? >> well, that grand bargain sure seems a ways off this morning as we're talking. it's interesting that just this week the defense committees are marking up bills and they're substantially above sequestration levels. so they're certainly hoping
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there's going to be a grand bargain and they will be a part of it because if the sequestration caps which are already in law kick in on october 1, they're tens of billions below where they would hope to be on the spending side, and some of that they're going to argue i think is essential for national security reasons given our global commitment. so there is a pressure that exists, it's persistent, to get something done on a long-term basis, but, boy, there just hasn't been the leadership or the coalescing of the leadership to get us there. >> yeah. and with midterms, of course, looming, it's hard to imagine that's going to catch fire soon. >> you would think -- >> the survey, governor, doesn't seem to poke around into expectations on specific global regions, china or europe, but i'm wonder wag you'nindering wh hearing on that. >> there's enthusiasm to really getting serious about the trade
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talks, the transpacific partnership or the looming u.s. conversation about what we can do. we think there's an awful lot of nontariff barrier that is could come down and facilitate trade. increasingly, there's concern about currency and how that might be affecting trade flows. >> oh, yeah. >> as you start getting into that, then you start to see barriers come up. you've also got intellectual property protection that is sort of closely related to the whole cyber security question because we want to be a nation of innovation but you have to be able to protect your innovation once you figure it out whether that's a pharmaceutical treatment or a medical device or a sophisticated computer software. >> interesting numbers, governor. we'll see if our viewers nod in agreement with them. it's good having you, as always. >> thanks. great to be with you. >> john engler. forget the nsa, we found a
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tech startup that has as much information, if not more, about you. first, rick santelli keeping an eye on global markets. rick, what are you watching? >> you know, on the 22nd of last month, chairman bernanke was in front of the joint economic committee. on that day repos changed dramatically. listen, 1984, great movie "repo man." i have john brady, he's my repo man. in ten minutes we're going to talk about repos. with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies...
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talk about repos. welcome back and with the dow down about 19 points, take a look in particular at the consumer staples sector, bottom left of the chart, down about a 0.1 of 1%. seema mody has more for us. >> consumer staples one of the key laggers in this market. shares of dean foods, the worst performing stock in that index, in an ak filing says morningstar reaffirming its 2013 eps guidance of 45 to 55 cents per share. consensus estimate is for 53 cents per share. dean foods also got hit by a downgrade to market perform from outperform at sanford bernstein. you can see the stock down about 3% on the day. carl, back to you. >> see ma, thank you for that. cyber attacks on your personal information not going
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anywhere. those attacks are increasing. the president of hack if i mcafg to give us some details on cyber criminals and who they're targeting. we'll be right back. [ male announcer ] frequent heartburn? the choice is yours. chalky... not chalky. temporary... 24 hour. lots of tablets... one pill. you decide. prevent acid with prevacid 24hr.
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dow is dancing around a flat line up seven. >> repos, it's an area insiders deal with constantly. most viewers and listeners may not be familiar but that's okay. first of all, i want to give a shut out to i cap for supplying john and i with some of the data. john, the ten-year note has been on special in a huge way, but the real tipping point was may
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22nd. can you expand? >> that's right. rick, first of all, the ten-year note is a very small issue right now. so in the repo market, it's extremely difficult or expensive to borrow because the pool of available collateral is just not there. >> let me stop you right there. what is a very large reason why there's so few ten-year? >> because the fed has been buying do shall. >> that's it. fed has been buying. so another unintended consequence of this brilliantly thought up program. continue. >> surrounding issues like 9 1/2 year issues, there aren't enough of them between insurance companies, global central banks, and the fed. there's just not enough of them. it's creating distortions within the market. what we've seen since that may 22nd date, the market being forward looking are anticipating tapering. >> so the negative repo being on special between ni my news 4 and
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minus 13. >> treasury will reopen that issue today and there will be another $13 billion, $14 billion issued and that should alleviate some of the specialness of this note come monday the 17th of june. >> isn't it kind of a catch 22? you're the expert repo man and you really are. everybody in the community seems to have all reached the conclusion they want to sell treasuries. so one would think, wow, there should be treasuries everywhere. why can't the repurchase structure find these securities? can you give an explanation? >> the fed is holding them and the market is forward looking. and this chatter about tapering, the market is confused. what does tapering mean? what exactly does it mean? and then how does it lend itself to tightening eventually somewhere down the road? when you don't have enough collateral and the fed is disrupting markets and not allowing markets to function freely and openly, then you're going to continue to have distortions like you have today. >> here they are doing a lot of
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purchases but yet on the other side of the ledger, what are they doing to try to liquefy the overnight repo market? >> not much. not much. in fact, they're sending distourting signals to the repo market. you have a number of new regulations coming down the pipeline which most likely will fall on money market investors. >> and this is some of the collateral issues. >> some tax issues. on the backside of it the fed wants -- >> even while they're buying tens, thnt rethrowing $13 billion, $14 billion in -- without the overnight repo structure the gears are having a hard time meshing and turning. >> that's exactly right. >> why is this a big plus for all those out there that may own cme stock? >> there are a number of different things but a long story short, ten-year treasury futures trade the seven year curve. given the distortions and the regulatory push from dodd/frank
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and the fed, these instruments are all eventually going to land right here. >> so as opposed to getting involved in all these questionable structures, having all these fails because the security you borrowed you can't find to replace, they just do the easy short which is -- >> ten year treasury futures. >> hit a bid. >> and for sophisticated losers like insurance companies and central banks, use deliverable swap futures at the exchange. that's where it's going to be. >> john brady, thank you. you're my repo man. harry dean stanton, eat your heart out. back to you. >> great to see j.b. on the air again. bell is about to sound across europe as we bring their trading session to a close in 3:30. we'll get their close and details on how it might impact our afternoon in just a moment. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to.
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just moments to go before the european market closes. >> i want to take you to the german constitutional court. we've been watching this argument between the germans about the role of the ecb, and it would appear that we have had a clash there that may have market resonance. there was a discussion between the two germans, one for the ecb, one for the bundesbank about whether powers should be redefined when the president directly asked them whether it should be regulated better under german law. it was the inevitable clash you might expect but reuters is reporting that sources close to the german government are
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concerned that the court might attempt to get a renegotiation started on the ecb's mandate and demand some sort of treaty change. this is all way off but it casts marge jal doubt on the do degree -- >> the european markets are closing now. >> which has been the long promise from mario drage. we're down for a third day today. it seems that the banks have been leading us in a negative direction towards the close. it's interesting we had an auction right at the front end of the italian bond market today, one year paper, which is kind of the area that thee ecb has indicated it might intervene in the market. there's up to a three-month high. you have rising yields around the world. certainly the data on industrial production and uk unemployment is indicating we may be bottoming out. inevitable that rates should rise but there are still just
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those marginal very slight questions over the ecb agenci's readiness to intervene in the bond market. that's a two-year chart. we're nowhere near the funding crisis we had before. it's not a contagion effect but it's worth noting at the margin. the other thing we need to keep talking about is greece which clearly is getting itself into further difficulty. yesterday the humiliation of being downgraded by msci to emerging market status. that's difficult if you're running a country that's part of the eurozone, and that is the judgment that it's on the front pages today. greece just be aware, all the problems with the privatization and selling off the gas assets which we spoke about, over the last one month has seriously underperforms the dow jones industrial average. that white line which is the stocks 50 around europe now they've attempted to shut down the state broadcaster. when the tv screens go blank across greece, that may also be a very difficult moment to keep
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a coalition together when it cannot balance its budget and it needs a further bailout from the rest of the european union, the haircuts on debt which the likes of germany may not be willing to go forward with. >> a lot of those journalists at greek television are refusing toto go home and insist on putting their newscast on the web for nothing. >> but the issue is they need to cut the jobs to hit the target, public sector cuts. >> amazing. >> thanks, simon. we'll watch that closely. bob pisani is on the floor watching what's moving on the dow down almost two points. >> kind of a frustrating day. it started off well, dow was up 100 points. there was some stability in an important area of the markets, in commodities, for example, and in material stocks. so we saw today and you still see today put up these sectors, materials and energy stocks are on the upside but they quickly came off their highs. that's kind of the disappointment we've seen.
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and we've had defensive names, consumer staples and health care generally help hold the market up. they're now negative territory but they were positive earlier on. a little bit of a frustrating day. put up the dow jones industrial average. we moved slowly south talking to traders, there doesn't seem to be much conviction. you might get rallies but there's not a lot of reason why people feel they need to hold onto the rally. we have the yen trade. moving down on the chart means the yen is strengthening. yen moves down -- rather the yen strengthens, you see the stock market moving to the downside. that's happening again today. we've also seen interest rate sensitive sectors weak. real estate investment trusts. down about 13%. the bond etfs been under assault for a wile. that's also moving to the downside. want to point out gigamon pricing $19. look at the stock. $26. they provide data traffic analysis to companies. folks, to give you an idea how
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happy the people i talked to this morning who owned this stock, the average insiders price is 98 cents. stock is trading $25. there were people who were owners down here who were crying, i'm not kidding, they were so happy. >> i heard the applause. i definitely heard that. you couldn't miss it at about 10 of 10:00 this morning. >> imagine that. >> they didn't need a 30% pop today. $19 would have been good enough. >> 9 8 cents and it's trading at $25. cyber attacks on your personal information are not going anywhere. in fact, they're increasing and this according to mcafee's most recent data on cyber threat trends. michael deceaser is press of mcafee and joins us here. welcome. >> thank you. >> interesting time to be talking about cyber attacks because it seems even legal data collection is a problem of late. putting that aside for a moment though, can you tell us what you're seeing in the latest quarter about the threats that are coming down sort of the data pipeline? >> absolutely. i think we see both an increase in the volume of attacks as well as the sophistication. i think in the most recent
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quarter, we have seen a strong explosion on the android operating system relative to malware. >> what is it in particular that's happening? >> i think as the platform begins to get more users and more people do business critical things on their phones, it becomes an attractive place for the cyber criminals to go after as well. >> i have heard some apple long as hard hit we should say in the last couple months but nevertheless arguing it's actually the open infrastructure of be a droid that could be a problem longer term and that apple is relatively more secure. is there any basis? >> i don't think there's anything about the platform itself that makes it more secure. i think the more users that use android, the more attractive it is for cyber criminals. it's more about market share than it is about the technical sophistication of the platform. >> you also say in the latest quarter we've seen almost a back to the future trend emerging with regard to the way the cyber attacks are occurring. what was it, spamming is on the up, and this i loved because it's almost a market indicator. you're saying a lot of it is
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driven by pump and dump stock trading schemes. >> it's pretty interesting. spaniel is the concept of kind of e-mailing everybody you know and seeing if you can get somebody to click on a link. over the last year we have seen an increase more in targeted attacks. people going after specific information. but i think as social media lends itself into this and you can gather more information about your targets off of things like facebook and others, the concept of phishing and going after folks that way becomes more prevalent. >> are attacks originating from a certain corner of the world more than they used to? is that shifting around? >> you know, it's interesting. when we look at the big targeted attacks, they come from multiple countries. it isn't any single country going after anybody else. i think the other thing you have to keep in mind is the technical sophistication of the bad guys is growing exponentially and they are very good at covering their attacks. when you think an attack is coming from one place, it's more often than not the adversaries covering their tracks and making it look like it was somebody else. >> how does that change the way you engineer security?
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they've obviously hit the ball and we have to hit it back. >> there is no doubt. the security companies have to keep up with an increasingly sophisticated adversary they're going after and making things like firewall and end point security and mobile talking together, trying to increase the level of security you have on those machines. there's a lot of emphasis going into it. it's a big war in front of us. >> is that adversary ever the u.s. government and have you heard clients expressing concern about the extent to which their information is looked at. >> it's interesting. we get asked this all the time. the adversaries are everywhere. there's no specific country that's more or less involved than anybody else. we see big attacks, as i said, that might come from seven places on the globe towards one -- >> i guess what i mean separate from the attacks, shift gears and talk about the nsa story in the headlines. is there concern among your clients that they don't -- that there are people the u.s. government is looking at their data? >> it's interesting. the balance between security and privacy is a big one to bite off on. there's not a customer i know
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that wouldn't -- that minds their private information being used if it's being used to keep them safer and not letting bad things onto the machines, but where does that line end? i think that's a constant thing we'll have to be paying attention to. >> final point on china, the summit between obama and xi. it was pitch eed as a cyber security summit. is that what it's about? >> there's the highest level of visibility on this being a big issue whether it's corporations or government assets or critical infrastructure, and you have two of the world's leaders that recognize its a a big issue and are putting a lot of time into it. how those things get 1068d, to be determined. >> michael, thank you for joining us. president of mcafee. >> when we come back this morning, the dow right now trading up about ten points. as bob said, been a bit of a frustrating day as we look for some direction. we'll talk some more about the markets when we come right back. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution,
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turkey but the situation remains volatile. we want some insight from a reporter on the ground. joining us on the cnbc newsline is daniel dombey. daniel, good morning. thank you for calling in. >> my pleasure. >> can you tell us what's happening there and why you think conditions might escalate again later today? >> well, really just in the last few hours prime minister erdogan says said he expects this whole situation will be resolved in the next 24 hours. that has for some been rather confrontational overtones. the protesters were expecting to gather in 15 minutes time in a place where thousands of people were tear gassed and water cannoned yesterday. and the suspicion has to be that we may well see some kind of
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reanswer ar re-enactment of those events unless someone makes a compromise. and i suppose that person would be the prime minister. >> daniel, what do you think the protesters want at this point? do they want elections called? is there a sense of the response from government that could help to have calm some of the violence that we've seen? >> to be honest this is just a classic example in bad crisis management. this initial dispute began about at tiny park. mr. erdogan wants to build a recreation -- a reconstruction of an army barracks there. the protesters wanted the park to stay. if he pulled that from that plan, i think he would diffuse a lot of this, he hasn't. instead this process has become more about what people think of
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the heavy hand of the government. his propensity to tell people what to do, how many kids they should have, what they should eat, what they should drink. it's become a polarizing battle in turkey. i think mr. erdogan is betting on the fact this he probably still has the support of most people. if there were an election tomorrow, i'm sure he would win it. a large section of turkey is aliena alienated. >> what about the support of the international community. turkey has been a key strategic partner and erdogan has in a region that is incredibly unstable. >> that's right. and to be honest many human rights people have said -- have criticized the obama administration and other governments for what they say was a major flaw, which is they said that turkey's strategic importance, the u.s. and others, that its strategic important was as a model for the middle east.
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and that, therefore, some of the problems, some of the domestic problems, whether rule of law or jailing journalists, those have basically been rel lated egateo the second tier. many human rights groups were saying that was precisely the wrong approach. that turkey if it really was going to be a model for the region, really going to be a force for good, had to be held to the same standards as other countries in western europe and elsewhere. >> daniel, briefly in a word has this belt a blow to turkey's hopes to jin the europe pen union? >> i think it's dealt a huge blow to turkey's international image. the image that we've seen in the last 24 hours has done great damage to turkey's image. >> okay. >> i think it's -- they certainly haven't been helped. >> we'll keep an eye on what happens as protesters regather in 15 minutes comes. daniel, thank you. when we come back, our next guest company probably knows more about you than the nsa.
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a quick look at dem component caterpillar with the dow now down 41 points. caterpillar adding to that although it's raised its quarterly dividend. currently down 21 cents. you may not know a lot about today's squad break through. chances are in knows a lot about
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you by collecting data on your online behavior for use by advertisers. pubmatic provides ad optimization. it helps publishers increase their ad revenue by aggregating ad services by finding the highest converting ads. we're joined by the ceo. good morning. >> thank you. good morning, carl. >> there's so much attention paid to user privacy for lack of a better word in the past week or two. can you describe the access, what types of information you collect and how you use it? >> absolutely. there's a fundamental technology revolution happening in online advertising. the industry is moving away from mass targeting of users to a much more personalized tailored relevant ad experience. we pioneered a technology several years ago called realtime bidding which allows us to deliver to any consumer a relevant ad that is great content for them as well as tremendous value for the advertiser and we do this by
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using anonymous data as opposed to a lot of what's happening in the news today. >> right. users, viewers are no stranger to the idea that an advertiser wants to target but give me an example of how granular this can get. you say on an anonymous basis, but how specific, how many different components of a personality can you tailor an ad for? >> absolutely. so we look at hundreds of different parameters, everything from your location, for example, you might be in new york city or you might be in san francisco, to the time of day to demographic information such as gender and income. and all of these attributes are statistical. if we know you're in downtown new york we might be able to infer something about your income, your age, your education level to deliver a targeted ad. a good example would be let's say there's a rainstorm coming into new york this weekend. based on where you are, we can
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target to you an ad for umbrellas, relevant rain coat whether you're male or female. all of that is anonymous without having any personally identifiable information about you such as your name or address or your telephone number. >> how about your history as a consumer? if say i have a history of buying a certain brand of umbrella in the past 12 months. can you go that far? >> absolutely. that's often something that is an interesting attribute for advertisers. a good analogy would be you see things like lease programs from auto manufacturers. if you're leasing a bmw they want to target you with an audi lease offer and so that is something that obviously is of high degree of interest to the advertising community. >> what do you make of consumers who are obviously bristling at the nsa news and suddenly shocked, shocked that their use of computers is subject to view by others? should people be surprised? >> well, this is obviously a complex topic and the good part
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is a debate is now happening between civil liberties on the one hand and national security interests on the other that really has very little to do with what's happening in the online advertising industry where publishers and advertisers are able to deliver a much more relevant ad experience that allows them to drive better consumer experience as well as better return for advertisers. >> so are you going to sell to marissa mayer? >> i think it's certainly no secret we've been approached by yahoo! and other large companies in the ecosystem. my focus is really on building a multibuilding dollar business focused on the technology and services needs of publishers. i'd love to have yahoo! as a customer. i think there's a lot we could do together. they'd be a tremendous partner. today we work with hundreds of leading publishers around the globe. traditional publishers such as hearst, nbc, your parent company, new media publishers like business insider zynga as well as ebay and target and we're really in the early
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innings of this technology revolution that's happening in online advertising. >> great stuff. fascinating, obviously timely given everything going on in the world. thanks so much for your time. >> thank you, carl. thank you, kelly. >> the co-founder and ceo of pubmatic. >> you see this home on your screen, a full spa, three pools, a man made waterfall and a four-story grand ballroom. this is the largest private home in the country and our own robert frank will give you an inside look next. thank you, kelly. [ kitt ] you know what's impressive?
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at a conference yesterday jpmorgan ceo's jamie dimon let a curse word slip between responding to a question about the bank's handling of disclosures related to that london whale. take a listen. >> we did everything that we thought was the right thing to do. there was no hiding, there was no lying, there was no bull [ bleep ], period. >> dimon just the latest executive to employ an expletive. the ceo of scott's miracle-gro recently reprimanded for using colorful language. aside from money, what should ceos put in their swear jars? james writes, corporate jet
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hours. party patriot writes the big gold coins in their swimming pools. zee writes politicians since they have so many in their pockets. >> i like the corporate jet hours with the theme of the day. work has resumed on the largest private home in this country. it's a 90,000 square foot mansion in florida called, shockingly, versailles. robert has all the details joining us from hq. >> the largest private home is rising again a sign of the times. four years after construction was halted on the florida mansion, work has now resumed. you're looking at the latest images of versailles just taken this morning. it's become the most lavish symbol of the real estate boom, bust, and now the recovery. it will have more than 13 bedrooms, 23 bathrooms, 10 kitchens, two elevators, two movie theaters, a roller rink and a bowling alley. it's also got a full spa, three pools, a man made waterfall, a
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four-story grand ballroom that's designed to host parties of 500 people or more. versailles is the creation of jackie and david seigel, the time share king of america. in 2010 i asked him why he wanted to build the largest home in america and he told me, quote, because i can. their dream was put on hold in 2009 when their company westgate resort was squeezed by a billion dollars in debt. the company had to lay off thousands of workers. versailles went into foreclosure and it was put on the market for $100 million. no one bought it and today thy s are back on top. the couple and their eight kids plan to move into versailles in a couple years. to get around they will have a fleet of segways. the documentary will air tonight at 9:00 on cnbc. also we'll have an exclusive interview with jackie and david on "street signs" later today. >> the first big story i did on
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the journal was on the death of the mcmansion. it turns out that was wishful thinking. >> versailles is such a great symbol of what we thought were the sort of outdated excesses of 2005 and 2006 and here they are, they're back. the mansions are back. the spending is back. the wealthy are back. >> it will be fascinating to watch. >> don't leave quite yet. we have a minute to fill and we're going to use you. we're going to get everything we can out of you. segways to get around. you could go for days in this house i imagine and not see anybody at all. >> well, you know, when it was in construction, i took a tour, and this was before the actual rooms were marked off and built, and it took me almost four hours just to get around the unbuilt inside and another hour just to get around the outside and the outside has all these waterfalls, man made rivers. they're going to have tennis courts. i was walking around an area i thought was the master bedroom and she told me, no, this is my dressing area. so i can't wait in a couple
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years until this is done. i'm sure we'll have our viewers inside once it's finished. >> we'll see you on "street signs" an later tonight. thanks, robert. we the dow is down 66. we looked like we were going to open with triple digit territory and we did. >> we've got another triple digit swing for the second week. >> 7 of the last 11 sessions have been triple digits. let's get over to headquarters and scott wapner and "the halftime." >> thanks so much. welcome to "the halftime show." hourtion to four hours to go until the close. here is what we're following. let's get cyclical. for get dividend plays. one of our guests says it's time to look elsewhere. still got game? it's been a great year for shares of game stop but what's the play with the big e3 event. our top story, playing the volatility. stocks up, stocks down, sto

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