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tv   Squawk Box  CNBC  June 3, 2015 6:00am-9:01am EDT

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live from new york where business never sleeps this is squawk box. good morning, everybody. welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin that doesn't like this song. >> this is a morning show host nightmare. i was late for the show about three years ago now and you guys had the camera right on me when i showed up and this was the song you played. >> sorry catchy anyway. ten more billionaires are signing on to the giving pledge. this was to encourage the wealthy to give away the majority of their worth to
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causes. that list started with 40 families and now stands at 137 pledgers. we'll bring you the list of the latest names including a couple of squawk box guests later this hour. first down to business u.s. equity futures this morning after a slightly lower finish for the equities market yesterday. s&p futures up by 2 points and nasdaq up by 3.5. >> a couple of big market moving events this morning. the greek prime minister is traveling to brussels for a key meeting with european commissioner. athens submitted a bailout plan. they need to agree on a deal for that to unlock the remaining bailout funds. meantime the ecb is meeting in frankfurt and a rate decision is set for 7:45 eastern time. president draghi will host a news conference about 45 minutes later. economists are looking for the ecb to raise it's inflation
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forecast and suggesting that the asset buying program is already paying off. here in the u.s. jobs are front and center. the economy likely added 215,000 private sector jobs. >> among today's other big stories opec ministers are gathering in vienna. >> is that a central location? >> no they have a lot of money so it must be nice. i'm going there. i'm happy because it's on our little one that's nice. they always like to go to vienna. he's quoted as saying there's consensus among gulf countries as others to keep the production ceiling unchanged. in washington president obama signed into law the usa freedom act after the senate passed a house bill. this extends three expiring provisions of the patriot act
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while overhauling some of the most controversial provisions including the bulk collection of phone records and a government investigator says the irs failed to upgrade it's computer systems ahead of the cyberattack. they suggest that some of the upgrades could have made it more difficult for hackers to steal information from more than 100,000 people. that's the story from earlier this week. >> let's take a look at stocks to watch this morning. reuters is reporting that teva is poised to raise it's stake in mylan. it's positioning itself for a possible legal challenge to the drug maker that rebuffed it's takeover bid. it will be effective on november 1st. they're splitting the computer and printer businesses from the faster growing corporate hardware and services operations. a mixed quarter from guess.
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earnings beat the street but revenue missed and the current quarter guidance is light. >> we have a couple of other headlines catching our attention this morning. joe mentioned it earlier, jp morgan getting rid of voice mail for half of its 136,000 consumer bank employees. these are people that don't work directly with customers. each line costs about $10 per month and savings of about $16 million a year if the service is eliminated for all the workers. jp morgan isn't the only company recognizing that voice mail is being replaced by text messages and e-mail. you might remember late last year that coca-cola gave employees the options to get rid of voice mail. >> when's the last time you checked your voice mail. >> i read ahead. >> you checked your voice mail? >> i read it very clearly and then when i said you know i'm going to check my voice mail -- >> i try to avoid voice mail but i have a service that actually transcribes all my voice mail. so i have probably not listened to a voice mail in five years. >> i know there's messages on my voice mail at work that i
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haven't checked. >> however. >> i should just shut it off. >> by the way, cut out the greeting. you'll save time if you say -- on the greeting i say do not leave a message here here's my e-mail. >> people leave you messages anyway. >> but those are randoms. one comment on the voice mail thing yes it's going to be helpful in terms of being more efficient but if you have legal issues, much more harmful. >> if they don't. >> the legal issues that e-mail has key yatcreated for so many people because of this long trail. that's never been the case with voice mail. >> voice mail could be worse. >> but if they save the voice mail. when's the last time you were in court and you listened to them. >> you can hear the tone. >> alec baldwin.
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you little big and -- i don't know either way it's bad but voice mail is so 80s. even i -- >> even you. >> we have no voice mail -- we have it but we don't know how to check it. >> you have a home phone? >> yeah. >> but the landline is obsolete. i only get calls from people that when i try to call them back to yell they say this line doesn't work. how do they do that? >> tele marketers. >> how do they do that when you do call back and it's never this line is not in service. >> i like to tell them sure i'd like to hear more. keep them on the phone as long as you can can. >> the other day i got one for your lincoln navigator. your warranty is expiring. i was like i didn't know that really. they said miles do you have. >> 20,000. two years. oh never mind. >> they're lying, they're lying. they're just canvassing and they try to sell these but they take a --
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>> i was a telemarketer for ten years. >> as a broker. >> i was. >> you were good at it. >> i'm here. i one that good. >> you needed them to call you back. you didn't figure out a way to spoof. they spoof their number. that's what the actual technology is. >> they what. >> spoof their number. so the number they send into your phone is not the number that you actually call back. >> i'm a mooch. i don't -- but they really are and i'm afraid that they have a recorder and i'm going to end up like espn and say something to them like -- >> watch yourself. >> here you are without a college degree -- i'll say something horrible. i don't know what i'll say and i'm on -- >> i'm going to prank you and get you going. >> you say some of these things during three hours anyways. >> i do. >> other news this morning, tim cook he is in the headlines this morning. the verge is now reporting the apple ceo isn't happy about how
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some big tech companies are using your personal information. he was saying in part our privacy is being attacked on multiple fronts. i'm speaking to you from silicon valley where some of the most prominent have lowered their shurs. they're gobbling up everything they can learning about you and trying to monetize it. we think that's wrong and that's not the kind of company apple wants to be. cook didn't mention names but of course the reports suggest he was taking shots at companies like google and book and twitter. all of which are collecting this. >> here here to somebody speaking up against this. >> a agree with him. >> i'm glad to hear somebody in silicon valley speaking out against this. it's bothered me for a long time. maybe if people start speaking out it will be heard. >> his economic model to work he needs to sell the devices.
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for google's economic devices to work they need to sell the software and the software now is powered by the ads. >> all of my personal information and everything i've ever looked at. >> some people are willing to accept that trade off. >> not a fair trade. >> the futures are looking better this morning. you'll take a look and see right now the dow futures are up by 29 points. s&p futures up by 2 and nasdaq up by five. yesterday you saw the dow down jux fractionally. decline of about 28 points. take a look at what's happening in europe. obviously greece is still weighing heavily on the markets but the story has been more positive and that's why you see the positive arrows there with the dax up by .5%. the ftse is sitting flat but the greek market at this point up by 2.9%. in asia overnight, the nikkei was down by one third of a percent. the hang seng was higher up by .7%. crude oil settling up nearly 2%
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yesterday. that was the highest settlement since december 9th. this morning it's giving back the gains. down to 59.87. in terms of the ten year the ten year yield has made a couple of strong moves over the last couple of days. it's been up by 17 basis points but you're still looking at a yield at 2.277%. dollar had a rough day yesterday. the dollar index was down 1.6% and that was the worst day since october of 2011. euro at this point, 111. bad news for anyone heading to europe in the next two weeks shall we say. >> it's fluctuateing, a little pull back only to see new lows. >> the euro rallied amid the weak talk. the idea that there would be a settlement reach. that's where you really see the currency pinging off of those talks at this point. 12443 and quickly let's move to gold. looks right now like gold is
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down by about $570. $1,180 $1,180.70 an ounce. >> we got a guy here we never get to see in person. yale university holding a major ceo summit in new york this morning bringing together titans of industry and political power players alike. how can corporate america protect the free flow of information. here with us now is jeff. we see him all the time. senior associate dean of executive partners at the yale school of management. we see you all the time but usually through the box up in newhaven. it's nice to see you. you say free throw of information is the theme. what does that mean? >> we toss out a broad umbrella theme to respond to today's news. we have people who the head of the electronic privacy information center you just
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quoted with the tim cook piece will have ash kartdercarter coming to us as secretary of defense. secretary of transportation joined us on infrastructure but through the idea of free information flow brings up a lot of geo political issues in terms of who controls the information. gets it to trade issues. gets it to cyber security issue and things so we try to find themes that will get a wide array of constituents there. we have a lot of start ups in the room. we have a lot of fast growing companies and a lot of great old legend companies there. >> here's the question. talking about free flow of information, this is the big story in nsa land and one of the big issues in the new ruling is that companies are going to voluntarily be saving this information and providing it to the government rather than the government taking it themselves however it's voluntary for them to actually keep the records. do you think that they will? do you think that now that the
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shackles are not on them that they will cooperate with the government the same way they did historically? >> it's a great question because there was a period of time when the government was working through the phone companies just a couple of years ago and the ceo of one of them companies said we're not going to do that. it seems unethical for us. unfortunately the guy wound up with legal problems on a different front and wasn't celebrated as the hero that in some ways he was. but what i'm hearing is for the data transfers they don't have the horsepower to do it so whether or not ethically they keep it in store. you wonder about that. at one point they were using third parties to try to manage it for them. jet blue used to do that and they had big data breaches who is accountable then. >> we always talk to you about activism and corporate governance and board room issue. you were very involved in the dupont -- >> how did you notice that.
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did i do okay? >> aparentally you did. the question is is there a knock on effect from what happened with dupont? do you think activists will be more going forward. >> if i knew you better and we western on air i would show you the e-mails i've gotten from activists themselves that distance themselves from the practices that took place in the number of rekren battles. issues of tone, target topic that came up on that one. dan lobe will be with us today. a regular we have that's an activist we'd have them together with megawhitman whitman talking about how they can be fantastic partners. mayer is on the program. they can be fantastic but when
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you have 6,000 private equity firms, 6,000 activist funds of one sort or another in the hedge fund world, 6,000 publicly listed companies we're running out of space for people to still get these enormous sums that they're making in running these hedge funds so they're looking now at healthy companies going after apple, netflix, dupont and it's just really silly. >> in some of these sif wagstuations either the activist or company gets distracted by this situation. there's times you need to think like an activist and other times it's a complete distraction. >> that's exactly right. there's some where their conduct is always admirable. they work quitely with boards: i'm not sure that microsoft appreciated that right away. i told them they shouldn't be so resistant but there's others that are regular flame throwers and some of us got involved as
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complete independent objective experts in the field and we found that some like nelson or others were going for these crazy diversionary tactics instead of answering the questions about their own performance. that's a big backlash. most are trying to distance themselves from that. that doesn't work well for them but also you see firms deciding to do what they said last week you should do is roll up your sleeves and do the analysis work yourself. don't rely on the rating firms. you don't need college sophomores scoring your proxys. >> i have one other issue we have not discussed this. i'm curious what you think. just yesterday i don't know if you saw he lizelizabeth warren go after mary jo white and we always talk about governance conflicts. there are now a number of companies that have come in front of the sec where they have come and hired him potentially
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in part to force her to rekuzcuse herself. what do you make of that? >> there's a large firm where the managing partner of that firm would usually wind up on all three sides of a two sided deal who was deeply conflicted many times with people in his firm working on that board that a lot of times the lawyers have not addressed these issues. for mary jo white it's a surprise that she didn't exercise more restraint. i think now the sec is going through a temporary highly points higher political period. >> should she be in the job? is there a way for her husband to be walled off? what should happen here? >> you would expect she would recuse herself. >> she is but it's making it much more difficult for these cases because you get two democrats and two republicans and she can't be the deciding
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factor. >> you wonder why that hadn't come out in the vetting for the position. she had active roles when she was working for the stock exchanges and in other regulatory rolls as a prosecutor that you thought somehow this would have come out before but it's really disappointing and we haven't seen the end of this. just like we have seen board versus gotten from the ceos we'll see people have courage to start raising questions. taking on the sec a lot of people are afraid to do it until now. >> thank you. good luck with the conference today. i'll be seeing you after the show. >> we'll see you in a little bit. >> thank you. >> when we come back this morning many of the news makers joining us today will raise the
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proof roof but first here's a look at this date in history. you probably know xerox as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies
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simplify the way work gets done and life gets lived. with xerox, you're ready for real business.
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welcome back everybody.
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spring home selling season is in full swing and stronger data points are pointing to a pick up in activity after traeding water for much of the past hour. our next guest runs the nation's second largest home builder by revenue. he's in town to attend the yale ceo summit we just talked about. shares of the company have been on fire this year. trading at levels not seen since before the financial crisis. stewart thank you for coming in today. >> nice to be here. >> how would you characterize the market right now? we know that there has been an up tick recently. >> the market has continued to be steadily improving. and that's what we have seen for the past year. steady improvement. >> has it been disappointing to you to not see a more quick rebound in term of the housing market? it was really crushed in 2008. >> look i think it's been disappointing to everybody. to the economy overall.
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economic recovery has been defined by a recovery in housing leading the way and that's been soarly missing this time around. as you interview people here in new york city talking about $95 million penthouse apartments it seems like the market is on fire and it's come back strong and the competition for these high profile, high priced properties is better than ever but for the average american across the country, outside of this city it's really tough to buy a home and homes are in short supply. >> is that they don't have money because they don't have a steady enough job or they can't get home loans because it's fighter credit? >> everybody is look to the answer to those questions and people are look to find of figure the reason. the fact is its all of the above. i think there's a little bit of psychological impairment that
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comes from the severe downturn we had. historically it's always been part of our business that when 20 something-year-old people move back home it takes 6 to 1 months for everyone to decide this is a bad idea. this time around that's not the case. the millennials are living at home into their 30s. >> not having kids until they're in their mid 30s or something. but if you're in a room talking to someone how much of it is government overregulation? >> there's a large part. >> you're not in a room alone. you're actually on tv right now. >> i'm aware of that. >> i was going to say we could talk after the show. i'd like to hear that. >> a large part of it is government overregulation. clearly the downturn was tied to
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the morgan market and probably the worst time to fix something. >> overshoot, which we always do. >> worst time to fix something is in the middle of a crisis. that's where you're going to overshoot. that's exactly what happened here. it's very hard for people the average american to get a mortgage loan and for anybody, even who is well qualified for a loan to go through the approval process we found it's too time consuming. we go will you the same questionnaire over and over and again. >> and we went from not asking for a address or place of business to get a mortgage which inflated the bubble and government indusments fanny and freddie and home ownership, all of these things and then after we get the bubble and destroy it then oh no you juan a house.
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>> we're saying we need to get back to what we're doing in 2007 which is not even asking for proof of employment. >> undecidedly not saying let's go back but i think what the industry has been saying and what rational participants have been saying is let's get back to the normal. held us in good staed foread for a decade. that's tied to people with jobs being able to qualify with a reasonable down payment and fair underwriting standards. a lot of people can afford to buy a home own a home and stabilize their monthly payment. >> what do you think is the next generation of mortgage lenders, the pier to pier lenders and lending club and all of that. has that changed the game at all? >> not the home building. >> do you think it will? do you think everybody will be getting a mortgage from jp
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morgan and wells fargo or a different paradigm? >> look the banks in today's world are really reluctant to face the consumer so are they going to come back into the home lending business? certainly not the way they were. >> it's a lousy loan for a bank right now when you're looking atmore gaj at mortgage rates of 2.25. >> for the banks the 30 year loan is basically brokering those. so it's not that it's a bad product for the banks. it's a good product. it's not the banks unwilling to hold it. >> when will companies like yours start buying land again and start developing houses. you said there's no supply of houses but it's a vicious circle. you're afraid to do it now because the land can go down. >> you're going to do it? >> we're buying land. >> that's the most volatile of
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all. >> as i said in the beginning the housing market is continuing to improve. it's just that it's a restrictive market. it's hard for more participants to get into the market and the smaller builders are the ones -- the small businesses are the ones that aren't able to participate we are able to get out and buy land and we are producing. >> i blame the millennials. get off your iphones and ipad. meet a nice girl. and go have some kids buy a house. >> it's not easy. >> move out of the city. >> it's not easy with a lot of student debt. >> you're out drinking -- your the closest i have to a millennial right now. settle down and help stewart out. buy a house. have some kids. >> we vn talked about the move in trend toward cities though. >> yeah. >> well look you don have to yell at them because at the end of the day. >> they don't listen. >> it's a practical matter. they're paying rental rates.
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they're going up. they're higher than mortgage payments. they should be migrating. >> don't be so nice. they have been -- we do need to shake a little sense into them. >> thank you for joining us today. we hope you come back soon. >> coming up the newest billionaires to sign the giving pledge and our morning just getting started. still to come we have obama advisor turned uber executive plus bill de blasio on the issue of income inequality and carlos ghosn will be driving by our set. but first a look at s&p 500 winners and losers. we're back with a lot more in just a moment. ♪ push your enterprise and you can move
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the world. but to get from the old way to the new you'll need the right it infrastructure. from a partner who knows how to make your enterprise more agile, borderless and secure. hp helps business move on all the possibilities of today. and stay ready for everything that is still to come.
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welcome back everybody. a little casual here today. we're in chairs taking a look at the stories that caught our attention today. we've had a lot of guests that have come on and talked about the giving pledge and signed on. this was the initiative started by warren buffet and bill and melinda gates to try to convince billionaires to give back a significant portion of their wealth.
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to join you have to give at least 50% of your money. you have to agree to give at least 50% of your money during your life or upon your death to charitable funds. >> you can't do it joe. >> no but so jay jordan our buddy billionaire? >> yes. >> he's like a nice down to earth. >> as opposed to all the other billionaires. >> two of our frequent guests here including jay jordan that made his money in private equity and gordon gund and his wife laura signed on to this. his money came from kelloggs but he has been very actively involved in investing. but these are the ten new signatories that have come on to this and that brings the giving pledge to 137 pledgers from 14 different countries. it's really phenomenal to see this amount of effort that goes into the fireworks philantropy.
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they are trying to ut itse effectively. >> i think the money is much better -- i don't know about -- if there's a way that it can be spent with a private fill philanthropy rather than going into the black hole of government spending. >> there's some people that won't sign this. if joe could make a billion bucks would you sign it? >> i don't know how i'd do it. i don't know. i might do it myself philanthropically. >> they're not giving it away. all it is is a pledge to do it. it's nothing more than saying i'm doing it and trying to encourage others. >> warren said he would want
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to -- warren is still making money and gates is traveling to africa every other week to try to figure out how it should be spent. some people want to farm it out. that's what i love about wealth creation and that's why i don't hate the 1% because a lot of them -- >> having said that is even the money they're give agoway and billions of dollars it's no match to the government funds used for some of these. what they have tried to do is set up private partnerships because that's where the real money is if you want to tackle malaria. >> i'm sure the government can benefit from the private sector. >> a lot of them have their own thing. >> it would be nice if more than 20 20 cents actually made it for what you're trying to do. >> how is the tsa.
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>> i always told you that was security theater. >> we go through these phases in this country of privatizing. so we had to have a public agency for the tsa after 9/11. >> that's a longer conversation. i think you needed to do something. i'm not sure it's executed correctly. >> but now there's cries to make it private again. it's not fixed yet for guys that need it. >> this one you like though. you read the huffington post every day. we love ariana huffington. she runs huffington post. of course part of aol was sold to verizon. so she now works for a phone company and if you read the story in today's new york fascinating to see what she is going to do with that company.
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>> what's going to happen to the huffington post. >> when verizon bought the company they wanted it for the ad forum. she had tried previously and had many talks to try to buy the company out. the huffington post out of aol with a valuation of close to a billion dollars. now it's unclear of whether she'll be able to take it out of verizon or verizon is going to make her stay there potentially against her will. uncheer what's going to happen and -- >> she no longer has a contract. so if she leaves could we have a huffington post without a huffington? that's what the story says. >> i hook at all of the headlines and i don't click on many of the stories to read them. all i need to know is people are being schooled and destroyed and kernen schools and everybody
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is -- and i read who supposedly got schooled and i'm like they didn't get schooled or destroyed. that's not even valid points. it's annoying to me. it's very very annoying. >> what would you like the head of verizon to do? >> you want him to shut it down. >> no it should exist on its own. >> i like the content. >> you want to put them together? >> coming up the ceo of snap on. and later -- it used to be wrenches and stuff. do you know how many computers are in cars now? they need to figure out -- they have so much diagnostic stuff you have to be a surgeon. mike jackson is going to join us. first on cnbc plus a special squawk news maker. new york city mayor bill de de blasio will be our special
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>> shares of snap on surging to all time highs. stock up 14% this year. more than 250% over the last five years. unbelievable. chart was 20. it was 20. it's now like 156 or something. really amazing run. nick is the chairman and ceo. he's part of the yale ceo summit and looking at your average guy that is a snap on owner they go
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out and help people -- they have to be like computer geniuses now. >> well. >> you made 80% of new cars. >> 80% of new cars need a diagnostic to do the repairs. 80% of repairs on new cars need a diagnostic. the whole fleet, 300 million vehicles and they're 11.5 years old so one of the things that used to happen is some would buy laptops for cars. they'll tell you what the car said and how to fix it and they buy one for a garage and pass it around because you didn't need it that often. nowadays almost everybody needs them so they're buying a number of varieties of types of diagnostics an we're ready to sell them to them. >> explain your business exactly. how many trucks. >> there's about 3500 trucks. these are franchise trucks that ride around the country and call on the technicians. we're a conferrer that makes the
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tools. comes in the back of the factory and we go all the way through to hand it to the end user. we go on about 800,000 technicians and garages. what drives is business is interesting. it doesn't matter how many new cars are sold. it doesn't matter. what matters is how old they get. they have gotten older every year since 1980 and the changes in the car. you talked about it. aboutelectronics. we allow you to go out if you take the top of the line ones it will tell you to go out on the internet and we'll tell you if this car has 81,000 miles on it. it has a check engine light. it will tell you how to do that. it's a big shortcut. one other thing is with all of these changes new hand tools have been required because you look under the hood of a car and incredible amount of unique arrays are required just to get inside that little nook and cranny so we keep generating new
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hand tools. >> not just the electronics. >> so when i was a kid and i tried to change the transition on a fire bird and i had help and everything i could have never done it back then either but greece mon kissase monkeys can't do it themselves anymore can they? wouldn't the number shrink? >> they do shrink. they have to be more tooled up and we're ready to do it with things like diagnostics. >> tooled up is like -- >> we talk about it the same. >> where are you in the cycle? that seems like it's a complete evolution. >> just starting. >> would you say 20% in? >> i would say the diagnostic units only 30 to 40% of the people have them. so there's a long way to go and if you ask technicians what's the preferred form of diagnostic unit 60% say snap-on.
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if you ask about hand tools 68% snap-on. that business grew for us 12.9% in the last quarter organically. >> organically but you have dollar problems. >> business outside the united states. 40%. so our overall business was up 9.9% because we rolled the snap on brand into other places. >> 9.9 with the particular. >> no o, we do more things than the vans. we call on things like aviation oil and gas because the vans were people in auto repair. what we found, this is like teaching old dog new tricks roll out of the garage to places like aviation oil and gas, the military, they want tools that will be repeatable and reliable and snap on is synonymous with that name. that grew 9.8% in the quarter. a lot of it is outside the
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united states. total business was 99. 51 was the reported number. >> stock was 20th. >> it was. >> when we sell 17 million cars it helps. >> it doesn't at all. >> it doesn't help because it's the repair. there's 300 million cars on the road. so in good times, in high numbers and in low numbers people want to repair their cars. >> great to see you. >> coming up when we return fortune 100 companies at risk of going the way of the dinosaur. and then later we'll head outside to check out the jeep that's parked on our plaza this morning. auto nation ceo mike jackson is going to join us for that in the noex next hour. we'll be back in a moment.
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welcome back everybody. cnbc and singularity university university -- sauniversity. the author of "exponential organizations." he has applied the same model to the fortune 500 and come up with interesting results.
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thank you so much for being here today. >> it's great to be here. >> talk about how you come up with this ranking. yesterday we spoke with your partner and talked about how things are changing so quickly and so rapidly. you took a look at companies that are scaleable and able to do with that and what did you find? >> we've learned how to scale technology pretty well but the organization structure has been painfully incremental and linear so we're seeing a new breed that can scale seamlessly where you came up with a score of how to measure that. >> in terms of who came out on top, many technology companies were there. you start with google amazon apple, ibm, verizon, disney and general electric. some of those are a little interesting to see disney and general electric but microsoft, cisco and oracle. i guess it makes sense to have technology companies there because these are new companies but why does ibm like ge like disney wind up there? >> disney and ge are doing some
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phenomenal things of aggressively tweaking the organizations to tune it more for adaptability and flexibility. we're in an ever-changing world and the org structure has to be more adaptable. >> ge i think of spinning off some of the units, like nbc universal which used to be one of the units, and more recently ge capital, big chunks of that getting spun off. you're not talking about spinning off units. >> no. ge has implemented the biggest corporate training exercise in history. they have put like 60,000 people through that program. >> does it translate into advances in the stock market? some of these stocks have not been the best performers. >> we partnered with holt business schools to do this analysis and we found there's a trailing correlation of this exo score with stock market performance. >> trailing how far? >> two years. >> so two years out you would expect these companies at the top of the list to have
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performed well? >> yes. >> wow. how far back did you test that? >> we went back two years but the world has changed so fast we're seeing radical market changes today at an accelerating pace. the companies like uber and irby are exploding out of the gate unlike anything we've seen before because they have learned how to drop their cost of supply and that's a new phenomena in business today. >> what you found was the companies at the bottom tendinged to be oil and gas companies. philip morris, marathon petroleum, hess corporations phillips 66 those were all in the bottom ten corporations. is that because these companies are basically commodity companies? >> yeah and they haven't needed to be that adaptable. itch you're pumping oil you want to do the same thing again and again and don't need to change very much. but with the advent of solar coming along, we predicted in 23 or 25 years, 100% of world energy supply will be deliverable by solar.
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deliverable by solar because -- >> it may not be the most effective or cost efficient. >> solar is on a doubling pattern where we're doubling every 22 to 30 months in its price performance. at that pace we will hit that point. more importantly because it's on a doubling pattern, in two years after that it's 200% and two years after that it's 400%. >> but you're not predicting the world will be powered solely by solar. >> the vast majority will because by then home small business, cars et cetera will all be powered by solar. i give a talk to all the ceos of the electric companies in the company and they're kind of panicking right now. >> that would panic a lot of people. it would be a great thing too. thank you. >> thank you for joining us. >> you're welcome. coming up global marketwatcher steven roach, why he fears a bad decision on greece could leave investors with a horrible case of deja vu. stay tuned, "squawk box" returns
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e financial noise financial noise financial noise financial noise
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the waiting game markets set to see how the greek drama plays out ahead of friday's key employment report. are the bulls prepared for a potential shock to the system? >> in a new york state of minding. >> concentration of wealth and power in the hands of a very few is actually pulling down the country. >> new york city mayor bill de blasio leading america's largest city tackling the issues of income equality infrastructure and crime. today he is our special guest from the financial capital of the world. happy birthday uber. the ride-sharing giant turning five. what's waiting around the corner for this disrupting phenomenon
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now worth billions and billions of dollars. david plouffe talks strategy. the second hour of "squawk box" starts right now. >> live from the beating heart of business new york city, this is "squawk box." welcome back to "squawk box," everyone. this is cnbc first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. greek prime minister traveling to brussels for a key meeting. greece and its lenders need to agree on a deal to unlock remaining bailout funds. the ecb is meeting in frankfurt and a rate decision is set for 7:45 eastern time this morning. president mario draghi will host a news conference later. economists are looking for the ecb to raise its inflation forecast. that would suggest that its
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asset-buying program is already paying off. take a look at the european markets ahead of all this and you'll see there are some green arrows. the dax is up half a percent. the ftse up by a quarter percent and in greece that market up by 4%. take a look at what's happening right here in the united states. after the down day yesterday for the markets, you see that the dow futures are up 38 points this morning. s&p futures are higher by 4, the nasdaq up by about 10 points. check out the dollar. it had a rough day yesterday. it was down the dollar index, by 1.6%. this morning it is higher. it's trading against the euro at $1.11. the dollar is up against the yen at 124.45. there's no consensus to keep the production ceiling unchanged. let's check out the price of crude, back above 60 but just barely because it's down this morning. it was up over 61 yesterday.
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so 60 almost reminds me of i don't know 1200 for gold and 18,000 on the dow. >> that's what we're watching right now? >> kind of. it goes above and below 60. we would have taken 60 long term a year and a half ago. we would have said yeah i'll take 60 but i still wish it was 30. maybe not. >> 60 works. >> 30 might mean -- >> bad news for the economy overall. >> and some bad things would get it there probably. let's tell you about some other news this morning. the senate has passed a bill which overhauls the nsa's phone surveillance program. it's now going to shift the storage of phone records to telecom companies over the next six months. authorities will then have to obtain then on a case-by-case basis and it's voluntary for the phone companies to keep that information so it's going to be interesting to see what information they do hold on to. los angeles may be the latest city to pass a $15 per hour minimum wage. the city council set to vote on a measure to increase it to that level by 2020 and we're a little
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over an hour away from the latest adp jobs report expected to show the u.s. economy added 215,000 private sector jobs last month. that's the number to beat and we will await that number. we've all heard that the situation in greece is small and likely wouldn't have a global impact even if the worst case scenario came to pass but our next guest is soundsing theing the alarm saying that is exactly what people were saying before the dotcom bubble and before the subprime mess. with me is c.j. roach, an economist now and senior fellow at yale university's jackson institute of global aaffairs. good to see you. over the years one thing you've been steadfast in is the weakness of the american consumer and there were times during the recovery where it looked like you were too bearish, but considering at 70% and considering we're still just sort of trudging along through the muck at this point.
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>> seven and a half years. >> i think you were right. >> i don't know about that but seven and a half years of 1.4% average annual growth in real consumption, we haven't seen something like that since the 1930s. the consumer is still struggling. >> so your point is an economy like that which is above stall speed but -- >> barely. >> like 2 miles an hour above stall speed that any kind of shock, especially something like greece, we shouldn't maybe underestimate the -- >> that's the point, joe, is that weak economies don't have cushions to withstand the inevitable blows. so i remember you know 1999 dotcom was 6%. the story was don't worry if dotcom goes the rest of the market is okay. after dotcom went the whole market went down by 49%. fast forward to 2007. subprime don't worry --
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>> 5%. hardly anything. >> well it was 14% of the secure ties mortgage debt outstanding. don't worry about it. and we know what happened. >> but here's the issue. it's not that we don't need to worry about it it's when do we need to worry about it. people also said that in 2005. so the question is what inning we're actually in. >> well 2005 andrew subprime had not -- the housing market -- >> but people started talking about it in 2006. i think maybe late '05 -- >> started talking about the kpesz in the mortgage market. once the housing market went down and dragged subprime the rest is history. here's greece 1% to 2% of eu eu gdp and population. people say don't worry about it. but look at the exposure of french banks, german banks, u.k. banks to sovereign debt in greece. i think it's complacency once again. >> and then you've got italy and spain and who knows what
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depending on how this works out -- >> it may make it a better deal. >> things aren't completely fixed. >> it's a vulnerable situation. >> the article on spain, people have got jobs a lot of people have come back spain is bragging things are a lot better making half what he made before he was laid off. everything has been ratcheted down. expectations all ratcheted down for the type of recovery that they're experiencing. >> europe feels very japanese-like right now. japan is still 23 24 years into a 1% post-bubble recovery. europe is basically clocking the same trajectory right now. >> andrew happy ending i know that will get your attention. happy ending eludes a europe success story. it is rough over there. you know maybe we should be happy here. maybe our consumer is pretty good here on a relative based. >> the consumer in the u.s. has
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grown 1.4%. maybe 2% in the first half of this year. that is not terrific. that's not the type of cushion that you need to withstand something out of the blue. >> do you think that greece would have a knock-on effect not only in europe but here in the united states too? >> it could. we just don't know becky. contagion but trade flows, capital flows, even labor flows has ways of mutating and causing unexpected developments. so we can't pretend that we can just ring fence a small country from having an impact on a broader region or on the world when the world is growing some sluggishly. >> what's the fix, though? these europeans are in a bit of a pickle with this because the greeks cannot pay this back. they probably never should have been allowed into the european union to begin with. what do you do at this point? >> the fair point is to bite the bullet, both greece and the lenders, and really go after the structural issues that need
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addressing. without the structural fix, the short-term kick the can fixes are just not going to do it. >> but the greeks have not gone along with any of these structural changes. they don't want to do these so if they refuse you say, okay if you're not going to agree with us you're gone. >> cut the cord. there's going to be no resolution of the greek problem without greek going through -- greece going through a significant adjustment. >> really only germany should have been allowed into the union in terms of all the debt to gdp and economy and everything so it would have been hard to form a union with just -- >> one nation. >> just germany. you don't know at this point how many currencies are being held artificially high and should be half of what they are just to spur exports. quickly on china, just summarizing what i think you're feeling, you don't deny that there's a property bubble but you might say that we've already
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seen the bottom and the negative effects we've already experienced over the last five years and it probably doesn't get worse from here it probably gets better from here? >> the thing about property in china, joe, unlike japan or the u.s., there's a demand side underpinning to property in china through urbanization. they move between 15 and 20 million people a year from the countryside to the city. they need a lot of new cities. there are excesses in many property markets right now, but the demand underpinnings i think will be very helpful in providing fundamental support that's been absent in other speculative property bubbles around the world. >> so you figure these islands, they have every right to build as many of those as they want and staff them with a bunch of tanks and everything? >> probably not, probably not. >> don't you get some kind of retainer from them on all this? >> the last time i checked the bank account, nothing there. nothing there, joe.
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nothing there, joe. look, there's a lot -- china has got a totally different approach to its global strategic policy than it has all the 35 years. before it was keep your head down booidide your time never claim lordship. now it's all about the rejuvenation of china under the china dream. this is a much more contentiondtious approach. >> we have de blasio on later, even china and the socialist experiment that was really started flourishing when market base reforms went in did it not? >> it sure did. >> there's no denying that. history is littered with failed social experiments and yet no one seems to learn. they keep wanting to try it again. >> the chinese did a long time ago and they're still pushing ahead.
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>> thank you, stephen roach. >> thank you, joe. >> good to see you. when we come back this morning, what's behind the surge in auto sales. autonation ceo mike jackson rolls out monthly results first, right here on cnbc. and he has a big surprise outside as well. then the ride-sharing revolution turns 5. uber senior executive david plouffe talks strategy. plus the challenges facing new york city mayor bill de blasio as he leads the nation's largest city. he is our guest on the next hour of "squawk box." stick around. mmm-mmm. we are never moving to the suburbs. we are never having another kid. i'm pregnant. i am never letting go. for all the nevers in life state farm is there.
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welcome back everyone. u.s. auto sales on the strongest pace in almost a decade and they're even stronger when it comes to autonation. mike jackson the ceo joins us right now with their may numbers. mike, it's great to see you this morning. >> becky it's a nice morning to be here. >> your may numbers are the strongest in how long? >> well since i think year 2000 we retailed new vehicles just under 32,000. i can sum it up. it's all about trucks it's all about premium luxury cars and florida is absolute low booming. and the industry had a very good
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month, just under a 2% increase. and again if i look at the year-to-date increase for the industry plus 5% trucks are up 11 car sales are flat. and to describe the american consumer, joe, nirvana is a big comfortable truck with a command seating position that drives like a sports car and has all the comforts of a luxury car and has reasonable fuel economy. >> we don't ask for much. >> but here's the surprising thing, becky. the industry is getting very close to delivering that. the driving dynamics of the trucks today are completely different than ten years ago. the innovation and comfort that are in trucks you can run your office out of a truck now. and the fuel economy is reasonable. and it's going to take $4.50, $5 a gallon of gasoline to get the american consumer out of their truck, let me tell you that.
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>> let's talk about how the american consumer is feeling because woe talk to people all the time who point out that the consumer is not feeling as strong as you would have expected five years, six years after the great recession. that we have not gotten back to the point where we're spending. that's not what you see at all, though. >> yeah, but i think the insight i would give you is on big ticket items that have a long cycle, the american consumer is stepping up and buying. so whether it's housing, autos or other big picketticket long-term durable goods, the american consumer is willing to spend on that. on discretionary spending i think they're caught between this sense that their savings are not worth what they thought they would be they don't produce any income you know with interest rates where they are. it devalues the savings they have so then they think they need more savings. and so they're not spending on a discretionary basis as they would. but on big ticket items, housing
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to cars to durable goods, the american consumer is willing to spend money. >> let's talk about what you said in terms of gas prices. it would take $4.50 to $5 a gallon before american consumers will give up their trucks that they love so much at this point. how likely could we spike back to those prices? we know we think we're looking at great prices right now. we know that $60 is where we think it's going to stay but we have seen changes that have rolled through pretty rapidly in the past. >> yeah but in the past the balance between supply and demand was very tight that could lead to very volatile swings. i don't see that this time. this decline in price of oil is all about change in supply. the american innovation machine, entrepreneurial machine has done what everybody said was impossible and we're producing -- we've doubled the production of petroleum in the u.s. going from 5 million barrels a day to 10 million barrels a day and they could do more. the innovation and the cost effectiveness in fracking --
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now, i might call it something other than fracking if i was naming the baby to be sensitive to the environmentalists, but it's an amazing american success story and completely changed the equation. all this capital is staying in america and all the jobs there are $75,000, $100,000 jobs around fracking. you can turn this switch on and off pretty quick, depending on supply and demand. i think we'll have reasonable gasoline prices and reasonable interest rates for the next several years. >> not if crazy gas tax fanatics have their way. >> the industry has been mandated to sell fuel efficiency. >> why don't you just take my bait. >> i'm going there, joe. i'm going there. i'm just point out the irony that the regulators have insisted that we sell fuel efficiency. and the industry is investing countless billions and let me
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just finish. and the american taxpayer is spending billions to subsidize electric cars. >> we talked about the subsidy and what was said yesterday. what's been the interest. we're going to see you after the break, but hybrid cars. >> they're less than 3% of the marketplace. >> and it's going down. >> it's going down. >> we asked you last time if you brought one. you didn't bring a hybrid vehicle this time? you said that last time. it's throw% andrew. he didn't bring one again. >> trucks are up to 54% of the mix. 54% of the mix. >> we are going to continue this conversation in just a moment. mike is staying with us. guess what we have something very special planned for autonation's 10 millionth vehicle sold. it involves the jeep wrangler that's parked right outside and the mom and daughter right here who are kicking the tires. a big surprise is next right here on "squawk." ah! aflac?
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big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.
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welcome back to "squawk box"
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this morning. we're outside in front of this 2015 jeep wrangler. this is the 10 millionth car sold by autonation and we are again joined by autonation chief mike jackson. two of his customers are here with us daisy and nicole gomez of miami, florida. daisy has a surprise i'm told, for your daughter this morning. >> yes, i do actually. this is for you. >> graduating from high school today. >> wow! you're graduating today? >> yes, at 7:00. >> and this is the present? >> part of it yes. >> i'm also told that mike jackson, though has a surprise for you. >> daisy you have a great american success story coming from cuba at the age of 4, working in health care for 30 years, raising two great daughters. and to help us celebrate having sold our 10th million vehicles, we're going to give you this for free and we're ripping up the check you wrote that you worked
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so hard to earn to pay for this marvelous jeep. it's on us. >> can i hug you? >> yes, you can, absolutely. >> can i also? thank you so much. >> and actually my other daughter, she made me a grandma now. >> her entire family is at our dealership in pembroke pines, who sold the 10 millionth vehicle and wooerge're having a great celebration across the nation. >> we're giving away cars on "squawk box" now. >> you've really ripped up a check? >> i ripped up checks. >> wow, man! >> you were in on the initial surprise. were you in on this other surprise? >> no. i didn't know anything actually. >> it's amazing. you thought you were here for a broadway show or something? >> i don't know. she kept me in the dark the
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whole entire time. >> there's a daughter that does this, she's told and she's here today? and it worked. lessons for life. listen to your mother. you have to get back to florida to graduate tonight. >> yeah. >> congratulations, mike. thank you for doing that. that's truly awesome. congratulations to you on the 10 millionth -- >> thank you to all the associates at autonation. we sold them one at a time. >> the autonation store in pembroke pines was amazing. everyone there, the financing, the sales associates, they were amazing. they were going crazy because i didn't know which car to get or anything like that. >> thank you guys. >> when we come back we are not done with cars because uber is celebrating it's fifth anniversary. they are now in 311 cities 58 different countries around the world. david plouffe will join us after the break. then we've got new york city mayor bill de blasio. he's going to join us in the next half hour as well. we're back with "squawk box" in just a moment.
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welcome back to "squawk box" this morning. among the stories that are front and center mortgage applications dropping by nearly 8% in the last week adding to a string of declines. this comes despite a slight move lower in rates. a government investigator says that the irs failed to upgrade the security of its computer systems ahead of its cyber attack. the agency's inspector general suggests some of the upgrades could have made it more difficult for hackers to steal tax information. and jpmorgan is getting rid of voice mail for about half of its 136,000 consumer bank employees. each line costs about $10 a month. that would mean a savings of about $16 million a year if the service is eliminated for all of the unit's workers. uber celebrating its five years on the road and has since sparked a ride-sharing revolution. the app is now available in 311 different cities and 58 countries around the world with more than a million drivers behind the wheel. its latest round of funding could value the company at $50
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million. joining us is david plouffe, the former campaign manager and white house advisor to president obama. good morning how,, congratulations on five years. it's good to see you this morning. >> thanks for having me andrew. it's hard to believe. five years ago you couldn't press a button and get a ride so a lot has changed in those five years. >> here's what i want you to help us with though not just where we are today. i want to know what you think if we had you back on in five years from now, uber and ride sharing and what uber beyond ride sharing will be. >> well obviously given the pace of change it's always a cloudy crystal ball. our ceo will give a speech later today talking about where we've been but where we're going to your question. i think first of all, the core service which is just moving people around cities that's where the focus will remain. there's a lot more cities we need to enter. even here in the u.s. we've got a lot of growth. what's remarkable is you've got
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over 20,000 people in cities like chicago, los angeles, san francisco, earning a living on the uber platform and it speaks to the lack of mobility options in major cities. but we're starting to experiment with the delivery of food as you know so rather than pressing a button and getting a ride in five minutes, you get a sandwich or salad or a meal. we experiment with delivery of services. we look at this as an on-demand economy so there's a lot you can deliver to people in five minutes. >> when you think, though, about the valuation, for example, of uber at $50 million and the promise of what uber is supposed to be, is it just a ride-sharing vehicle or do you think of it as a logistics platform that's much broader, that we'll see not just deliveries of things like food. i know that's sort of an early experiment for you, but other things that you will be delivering and whether you'll be able to be as successful at that as you have thus far on the ride-sharing platform itself? >> well again, i think the core business will remain. there's a lot of people out there around the world who have
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trouble getting around their cities. it might be too expensive, maybe not reliable enough or accessible so that's going to be our focus for a very very long time. clearly the experiment we're doing with uber eats which is food delivery is going very very well. there's a huge demand for it. we work with local restaurants so it's also great for them it's more business. rather than in an hour it's five minutes. that's a big advancement. so i think that we'll continue to look at places where we can use our platform. these amazing driver partners to deliver values to people in cities around the world. >> what do you think of this free-lance economy that you have helped spur? some people would tell you it is great. i talk to certain drivers and i always ask them what their experience is like. some say it's spectacular and others say that they are just all -- you know really playing for pennies at this point. that it's -- we've created an economy, a much broader sort of sharing economy where people are doing this and all sorts of other businesses and it's made
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things actually more difficult? >> well i think, you know we released a study not too long ago with a former white house economist, kind of an authoritative look at our driver population. the vast vast majority of them are excited to partner with uber, love the opportunity, love the flexibility. and think about it most of our drivers are part-time in the u.s. most of them have full-time employment or their spouse does. so let's say a family might live in des moines iowa or milwaukee or detroit. maybe they're making $38,000 or $40,000. you drive 10 or 12 hours a week completely on your schedule. there's no hours. and you're able to put another $12,000 or $14,000 on. that's life-changing for people. so i think there's nothing like it in our economy where completely on your own schedule you can dial up your income in a way that works for the rest of your life. >> having spent all the time that you have in washington, how do you see the regulation
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though, playing out? there have been calls for making these people employees as opposed to contractors. issues around insurance. obviously in certain cities there's been regulators who haven't wanted you to come into the market. >> well i think, andrew a year ago there wasn't a single state or city that had passed new laws around ride sharing. now almost 50 have so the debate has moved. what those regulations are is they enshrine in the law things like background checks and other safety processes, insurance, things we already do but enshrined in the law. i think the debate here in the u.s. has moved swiftly to how to enable services like uber and lyft and other competitors, because i think what you see with city officials is they see it's a lot of income it's a lot of economic opportunity, and we serve the whole city. in new york i think statistics show that only 5% of taxi trips take place outside of manhattan. and for us it's almost 35%. so we serve underserved parts of
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cities. people who want to get around in an easy way. so i think the regulatory and legislative discussion has swiftly changed to how do we enable these services to serve cities. >> as you may know i don't know if you watch the show i am an uber lover, i use it daily like crazy. however -- >> thank you. >> i talk to drivers about this. a potential conflict coming up maybe not this year maybe ten years from now. i know you recently poached 40 researchers from carnegie mellon talking about robotics and driverless cars. at some point are you going to be in conflict with the people you employ. which is to say if in ten years we move to a driverless car world, what are you going to do about all of the people that are supposed to be driving those vehicles? >> well, i think that is a very long-term issue. as you said we are doing some work in pittsburgh we have an events technology center working with carnegie mellon. there's going to be a lot of short-term advances that come out around mapping and safety that's exciting. you talk to ten different people and will have ten different
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answers about when autonomous vehicles will be on the road. our issue is how do we get as many drivers as possible on the road to serve their cities because demand is huge. it's hard to believe because uber gets a lot of media attention, but even in new york san francisco, chicago, london paris, places we've been for some time there's still huge parts of the population that aren't familiar with it so we have a lot of growth potential there and that's where the focus will be. obviously as you know, our drivers -- it's fascinating because they come from all walks of life. you know particularly in cities that enable uber-x which is a lower cost option. it's veterans it's stay-at-home parents, it's retirees. it's kind of the city is reflected in who's driving folks around and i think that's a terrific advancement. >> when are we going to see an ipo? and how important is an ipo for
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your company? >> well listen we've been very fortunate to have the confidence and su sportpport from so many investors around the world that have allowed us to invest in india and china, in the advanced technology center in uber pool so we have the ability to grow the business but also invest in new areas of growth. so we've been fortunate to have a lot of confidence from investors. i think that continues today. so in terms of an ipo, i certainly don't have any news on that today but that's not where our focus is right now so people should not be anxious about us making news on that any time soon. >> david before we let you go we've got to ask you about the political race the democrats specifically. hillary clinton, are you surprised by o'malley coming into this seeming to make some headway? >> right. so i'm retired from politics so i get to watch this from afar this year, which is kind of fun. listen, i think hillary clinton, she was such a strong candidate in 2008 when senator obama
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defeated her. she's probably twice as strong today. so you know it's great. competition is good in the transportation sector and in politics. i think that she's a very strong candidate. i think she's extremely likely to be the democratic nominee. it's fascinating on the republican side you have probably 300 candidates now, could be 500 by the end. you know none of them with huge amounts of support, so that will be a fascinating race to see one or two of them i'm sure will capture voters' imagination and that race will begin to settle itself a little bit. but two very different races on the democratic and republican side which is very unusual in an open seat race where you don't have an incumbent. >> i'm surprised you bring up o'malley. he's at 2%. bernie sanders is like 14%. >> that's true. there's been a little more media attention on o'malley. >> don't shy away from the real choices here. we have a choice of bernie sanders. >> we do. >> david, thank you for joining us. david, i have a 4.6 star rating. do you know what your passenger
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rating is? >> i think it might be a little higher. you've got to talk a little more to the drivers and less looking down at your phone on the trip. >> you didn't tell him about how you -- >> david, you've got to come back. there's a story to be told. it's a good experience but an awkward experience. i try to -- i'm not winning points. >> you know, my driver doesn't really like you. >> we're talking uber driver. >> no my regular driver. >> he's got a regular driver. anyway, driving growth in infrastructure. big de blasio will join us with the biggest challenges facing the financial capital of the world. at the top of the hour nissan ceo carlos chosn will join us. getting a piece of the u.s. market and a titan of the pickup. we'll talk about that truck.
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"squawk box" will be back in just a moment. ♪ ♪ time upon a once people approached problems the way same. always start at the starting. and questions the same asking. but that only resulted in improvements small. so we step a took back and problems turned these inside-up-down to approach them newly. and that's when we it saw.
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welcome back to "squawk box," everyone. our next guest runs the most populous city in the nation home to the beating heart of the financial center. among the issues that are front and center for new yorkers, growing income disparity and a vital need to fix the city's infrastructure. joining us today live is bill de blasio, the mayor of new york city. mr. mayor, it's great to see you. thank you for joining us. >> thank you becky. >> i know that you are there at the yale summit today to talk about infrastructure so why don't we start there. infrastructure has been something that has been a little surprising over the last decade or so that there hasn't been more of a move to get things done, because we have byipartisan support for a lot of issues. what do you think the solution is? >> i think you're exactly right. one it's a crying need two, it's one of the rare areas where we have clear bipartisanship. a lot of us mayors are working together around the country on a bipartisan basis to push the congress to act.
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now what's amazing here is look at the comparison with countries we're competing with economically around the world. european union countries spend about 5% of their gdp on infrastructure china is spending about 9%. the united states of america only 1.7%. the infrastructure is aging. this also unites not only mayors, it unites us with ceos. i'm honored to be here and i know a lot of the ceos i'm going to speak to today feel exactly the same. economists did a survey and 87% said aging infrastructure has becoming a problem for their companies, so i think it's one of those moments where we have enough of a consensus to actually push the congress to act. for the first time in a while on capitol hill, they're talking about a long-term infrastructure bill with more funding and the ability of localities to get these projects done to fix the roads, bridges highways and mass transit. >> where are the sticking points or maybe who are the sticking points when it comes to congress? >> look the congress obviously
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we've had a problem of a certain an mount of paralysis in washington. i'd like to believe this may be one of the issues that transcends that. we've seen some movement lately. obviously the debate over the patriot act is an example. we've seen some instances where a lot of members of the two parties have gotten together on something. infrastructure could be one of those areas for consensus. now we have two months until the end of july to get to a long-term solution. i met with some of my fellow mayors, we went to capitol hill we met with the republican chairs of the two key committees on infrastructure and both of them made clear that there is a growing appetite for a long-term infrastructure bill. now, i think in this moment where you see democrats and republicans working together on the issue and the business community speaking clearly, you know the u.s. chamber of commerce believes we need a better and longer infrastructure bill. farm interests believe in it. labor believes in it. this is the kind of thing where we may be able to find some real
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boy partisan bipartisanship. if we don't, we'll be less safe as a country. i've got 160 bridges. i wish i was making this statistic up. 160 bridges in new york city over 100 years old and that's the example where there's real safety issues we have to address as a country. >> as larry summers has pointed out, no time like the present when you have interest rates that are so low. >> and where you have a strong consensus. i think we have to grab this moment to get to something better. >> best of luck to you on this. we hope that this is something that happens. mayor, while you're here let's talk about inequality because this is a huge issue you've been pushing. i think if you look for bipartisan support there is not much question there is a problem of inequality. the sticking point is how you fix that inequality and how you address it. why don't you talk a little bit about what your plans are. >> look i've put together with a lot of my fellow progressives a set of ideas called the progressive agenda. you can see the details at
7:48 am we have to address the wage and benefit problem in this country. i'm sitting here in new york city where the minimum wage set by state law is $8.75 an hour. it's obvious that a family cannot live on that in new york city or in most parts of the country. so i believe the $15 minimum wage should become the national standard over the next few years. i believe we have to address wages and benefits things like paid sick leave and paid family leave, and we have to address the need for a more progressive tax system. by the way, who's been one of the strongest voices on this? warren buffett who years ago called for an adjustment in our tax system to make sure that millionaires and billionaires pay at a similar rate to the people who work for them. these are the examples of the kind of changes that i think are not only being called for by elected leaders and activists but more and more by business leaders. i think some of the strongest commentary on the problem of income inequality and what it means to this country has come
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from warren buffett and lloyd blankfein. income inequality is destabilizing the united states of america. again, when you start to see voices of such importance say we have a bigger problem, we cannot delay the solution. i think the obvious solutions lay in bringing up the standard of living for workers so we can have a stronger market as well. >> mr. mayor, you're right that both lloyd blankfein and warren buffett have talked about inequality but the answer that warren buffett has suggested is not, my understanding, raising the minimum wage. in fact he wrote an op-ed in "the wall street journal" two weeks ago calling for an increase in the earned income tax credit and said that was the better way to approach it. >> he said it would not only not work, it would be deleterious to the efforts and not help the people it was trying to help. >> warren buff elt is synonymous for calling for tax fairness.
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i agree with him on the power of raising the earned income tax credit. that's part of our agenda as well. minimum wage i understand there's going to be differences but i think we can agree on one thing. $8.75 in a place like new york city and many other places is not enough for a hard-working family to get by on. >> absolutely. we want everyone to do better. here's the question that i have. the progressive wing in the democratic party has gained a lot of power. we even have a socialist running for president this year. history, if you look at it and you don't have to look at it very closely, littered with failed experiments in socialism and progressive economics. we most recently got another look at this renewed look in cuba after 50 or 60 years of central planning. take a look at what the cuban people have. capitalism and markets, market economics have lifted tens of millions of people out of poverty, even china is benefitting from market-based reforms. a, what makes you think that it would be different this time to
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move so far to the left with central planning and progressive politics? and two, why do you think that the country would ever elect anyone nationally that would take us in that direction? >> well the substantive answer is the policies that you see in our progressive agenda would largely take us to the time in american history epitomized by the leadership of franklin roosevelt, harry truman and dwight eisenhower. those were the years in which this country was investing, in which this country was making sure there was a decent standard of living for people. the middle class was growing. our markets were strong as a result. i think we have not an experiment from other countries, i think we had an experiment here that worked. it was the new deal and the years after in which our economy thrived. i think what we're talking about here is how to get us to some of those same possibilities again through policies that fit these times. and i don't hear a lot of debate on this point. if you take from 1945 through the 1970s, i don't hear a lot of
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people saying that that wasn't a great time for growth in this country, and growth that reached far into the grassroots and animated our economy across the board. how do we get back to that? i would argue we have to raise people's standard of living we have to give them more economic security. a lot of people have not recovered from the great recession still. let's come up with a set of policies that epitomize these times, but based on the solutions that have worked previously for the united states of america. >> mr. mayor, i think looking back to 1945 to 1970s span, a lot has changed since then. the u.s. economy has globalized. we have lost massive amounts of manufacturing jobs that used to be the solid middle class for this country. i don't know that you can turn back the clock and go back to those times. that gets you back to the question of what you do about trying to make sure that people are earning a sustainable living wage. you say $15 is what minimum wage should be. that might make sense in new york city, but certainly wouldn't make sense in other areas of the country.
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if you put a $15 minimum wage here in new york city that is not reflective elsewhere, you will find employers leaving new york city for other areas. is that not something you worry about? >> well, first of all, i want to be clear. i'm not trying to turn the clock back and act like we aren't in a more globalized world. i'm saying we have a model, a pattern that worked in the past. we should borrow it update it. look at new york city today. we're very proud of our diverse economy. the new middle class jobs will be in tech and film and tv and health care but the point is we have to ensure that people across the board have a decent standard of living again to energize the whole economy and create that market demand that can really lift all boats and we have to make sure that there's fairness in our system including tax fairness that allows us to invest in infrastructure education, et cetera. i don't want to go backwards, i want to take us forward on models that work. i would argue i think $15 minimum wage across the country
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over the coming years should be the standard because that's what's going to give us that buying power, strengthen our economy, but of course there's room for regional variations. i'd remind you in 2014 four red states four red states voted for a minimum wage increase. there is a demand all over the country. it may look a little different from place to place or be phased in differently but there's a demand all over the country to get the minimum wage up to a standard of living people can live on. >> but economists will tell you that's just the margin. that's not the kind of growth we need across the board, it only affects so many people mr. mayor. entitlements in the eisenhower period were 28% of the u.s. budget. they're now 72%. are you willing to cut entitlements to pay for infrastructure, to pay for some of these other things? 28% to 72%. it's a different world. >> yeah but you first have to create a strong middle class again. >> that's what we're trying to figure out how to do that. wouldn't growth initiatives, growth initiatives that get the economy growing at 3% to 3.5%
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again, wouldn't that help the people that we're talking about more than just raising the lowest level the poorest jobs? >> no, listen what would help us is investing in education, investing in infrastructure, investing in research. again, that was true on a bipartisan basis for decades in this country. what would help us is having some basic standard of living that we know people will reach in terms of wages and benefits. that will strengthen our economy. i'd like to see government be more efficient on many many levels and i live it every day as head of the biggest city in the country. i can tell you this much if we don't create an economy that's more inclusive, all the other possibilities can't happen. we need an economy where everyone has the ability to buy something again. i think that's one of the core concepts here. >> mr. mayor, i want to talk about the very top, the 1% in particular. i know you talked about a more progressive tax system and i wanted to get your perspective. we've heard from mayors of miami and palm beach and governor rick scott who has said that you have been the best thing for them.
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120 hedge funds have already moved to miami and i was just curious as the mayor of a city that has financial services is such a central theme to what the city is about and the tax base what you make of the potential moves, and moves that we've already seen by financial services leaving the city? >> look there's been competition for different businesses for decades and new york city has fared very well. we've gained a number of businesses, we've lost some. that is the natural state of thing. look at our tech sector 300,000 people employed in a tech sector that was almost nonexistent 20 years ago. our film and tv sector is growing. our health and academic sectors are growing. i feel very confident about the future of new york city. we know the financial service industry is crucial to the city and it's strong. i think it will remain strong. so it never surprises me if some individuals make a different decision. but a lot of other individuals and firms are coming here in droves because they know this is a place that you need to be if you're going to do business on the global scale.
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>> mr. mayor, we want to thank you so much for joining us today. we really appreciate your time. >> thank you very much. >> come on back we have so much to talk about. it was a great conversation. >> please come back. we're right in the middle of your town so come back again. >> i will indeed. coming up, breaking news on jobs. ecb president mario draghi starts speaking, and we'll check out this titan. nissan's enormous super pickup. nissan ceo carlos chghosn will join us to talk about getting the biggest piece of the u.s. market when we return.
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plus five years wear and tear coverage. make the most of summer... with volvo. life in the fast lane. may auto sales racing at the strongest pace in nearly a decade. nissan's boss carlos ghosn with his visions of the vehicle of the future and why he thinks the titan can run with the big boys. are shareholders lazy? jamie dimon sparking a debate over the role investors play in the board room. ann mulkahee sounds off. >> and calling on draghi. will things remain steady as she
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goes or could markets in greece go reeling. the head of the ecb is about to hold court with reporters. we'll bring you the tough questions as the final hour of "squawk box" begins right now. >> live from the most powerful city in the world, new york. this is "squawk box." >> welcome back to "squawk box" this morning right here on cnbc first in business worldwide. i'm andrew ross sorkin along with joe kernen and becky quick. let's take a look at the futures right now and see how things are setting up before the market opens. we're looking at green aeros. the dow looks like it would be up 102 points higher and the s&p about 10 points higher. you're looking at green arrows
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with germany the ftse everything up close to 1%. the ftse one100 a little less. mario draghi will be speaking in less than 30 minutes. opec is set to keep pumping at current rates. it's widely expected there will be no change to policy. oil at this hour you can see crude at $60.35. here are the stories investors will be talking about today. first up jobs. that may adp report is due out in less than 15 minutes. we'll be getting a look at what those numbers show. the polled forecasters say that the economy probably added 215,000 private sector jobs for the month. greek prime minister is in a key meeting with jean-clod junker. we are hearing positive chatter so that's why you've seen futures move up markedly over the last hour or so. and president obama signing the usa freedom act after the senate passed a house bill.
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this extends three expiring provisions of the patriot act while overhauling the most controversial provision which allowed for the bulk collection of phone records by the nsa. that will now be done at the corporate level. >> we've got a couple of stocks to watch this morning. wendy's announcing it's buying back a billion four of shares by the end of next year, including $211 million from its largest shareholder. also linkedin added to the focus list. the girlfirm says lower guidance reflects short-term and fixable. at&t has added to the pick list. the analyst says there has been an overly bearish view on at&t and the acquisition of directv should relieve a number of investor concerns. reuters is reporting that teva is said to be positioning itself for a legal challenge to the generic drug maker that rebuffed its takeover bid. and meg whitman announcing
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the separation of hp and hewlett-packard's enterprise business will be effective on november 1st. guess is beating the street but its revenue missed and the current quarter guidance came in a bit light. auto sales. we've been reporting if there's one really strong part of the economy that's sort of really excelling more than housing or anything else, it's auto sales in overdrive. u.s. sales in may coming in at 17.79 million units versus 16.73 a year ago. we're joined by a very special guest, carlos ghosn, chairman of nissan. what does salad days mean? if all i had was salad, i wouldn't think that was a good time but it is salad days for the automakers and nissan must be doing amazing lowellly well. >> first, the u.s. market is in good shape but many market in the world are going well. china is going well even though
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some people are a little disappointed by the level of growth. it's still a very healthy growth. double-digit growth in the largest market in the world. europe is recovering. surprising recovery in europe more than 7% increase for the first four month of the year. so if you accept russia which is in limbo, brazil in limbo, japan still behind overall the picture is good. >> and you're talking about the strong dollar not just against the euro but against the yen as well. you should be competitively in a good position. >> look i don't think there are many car makers who didn't learn their lesson from the recent crisis which means don't bet too much on currencies because one day it's going to play to your favor, one day it's going to be against you. we learned this lesson in 2009 and '10, the yen was at 80 yen to the dollar. now it's at 120 yen to the dollar. so if you want to build on a weak or strong yen, you're going
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to be doomed. so what we are doing is localizing production. more than 90% of the cars sold in north america are made in north america. even the yen go up or down we really don't want to bet our future on the weakness or the strengths of the currency. >> although we have seen such crazy moves in currency. didn't it affect nissan when the ruble lost so much value last year? >> oh, yeah. that impacted all car makers but the reason was we were not localized enough. we suffered because we still have a lot of imports, so obviously when the currency tanks, all car makers started to have problems. what we're doing now in the situation in which russia is finding itself is we are localizing production as much as possible pushing the suppliers to invest in russia. >> joe has been talking about currency. i want to talk about oil prices. you have pursued a strategy around hybrids and electric vehicles in a meaningful way. one of the things mike jackson
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told us is that electric and hybrids are only 3% of the market. given fuel prices it doesn't look like it's going to be increasing any time soon. >> yeah. well electric car sales will increase. now, the speed of the increase can be accelerated with high energy price or slowed by the fact that energy price is very low. you know obviously nobody can predict where oil price is going to be next year or two years down the road. what is sure is that emission level, emission restriction are going to get stiffer. that's why -- that's what's going to be the main you know pusher towards sales of hybrids and electric cars. >> mike jackson also told us that truck sales have been phenomenal in the united states. >> we got a beautiful nissan truck out there too. >> yeah a large pickup truck. the big surprise. it's very correlated also to the price of energy. whenever you're paying less than $2 a gallon it encourage the sales of this kind of product and you have to follow the
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demand. except that today you have another phenomena in the u.s. market, which is even more striking than the had avent of the large pickup truck is the sales of the compact suv. this is the biggest booming sector segment of the market now. >> carlos do you have to change anything about the way that your company is structured in terms of renault and french government could get more activist. is there anything you need to do to change the way that the capital structure is? >> no i don't think there is a need to change the capital structure. the capital structure one day will involve in function of strategic consideration, not in function of tactical consideration. we know very well when government have a stake in company we know what they're interested in in jobs in their country, technology this their country, interested in preserving assets. but by the way, governments, if they are shareholders or not,
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they're interested in this so the weigh on your decision is practically the same. people are telling us government are helping car makering because they have more or less at stake in it. wrong. during the crisis, during the crisis government support all car makers just because they're worried about jobs. >> not ford right? >> but the car makers are worried about the job. >> does it make sense for more consolidation? sergio said there will be a big merger between now and 2018. that would be it seems like a pretty good combination. >> our industry have been on a consolidation mode for the last 20 years. i remind you that the first big move on consolidation was the daimler-chrysler mitsubishi. this was 1997 1998. it was followed by renault and nissan and so we are on a
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consolidation mode for a very simple reason is that we are heavy investors, we have big employers. this is not the commodity, this is a business where technology matters a lot. and, you know, sailcale is of importance so the trend is going to continue. >> what about the takata airbag problem. we're hearing it will take years to replace all of these airbags. >> yeah it's massive. it's a very large problem. it goes beyond one supplier. obviously all car makers are involved. we're working closely with the authorities of the different countries, we're working closely with the authorities in the united states, in japan, because you need to be extremely open on this issue and share as much data as possible. i know obviously the supplier -- >> but is this a problem with the consolidation of the suppliers, when you have one supplier who's basically supplying to everybody and there's a problem with it it affects all industry lines and there's no one to step in and
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help out. >> that is very sure. that's one of the, i would say, negative side of the skaul consolidation and you have less diversity. if somebody has a problem, you have much bigger impact. from the other side you have benefits. the fact that you get technology faster and you have a much lower cost for your product. >> before we let you go what do you think of tesla? and what do you think of tesla's valuation? >> obviously i'm not going to mention anything about the valuation of tesla, but i can tell you that anyway i consider him, even though we're competing in the domain of electric car as an ally. why? because he helps promote electric cars and that's exactly what we want. >> okay. >> carlos thank you so much for coming in. it's a pleasure to see you. when we returning, the adp report, plus more to come from carlos ghosn, including a look at this newly redesigned nissan titan that's outside. we'll get his thoughts on a highly competitive pickup truck market.
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and the former xerox chairman and ceo on the challenges. are you moving forward fast enough? everywhere you look, it strategy is now business strategy. and a partnership with hp can help you accelerate down a path created by people, technology and ideas. to move your company from what it is now... to what it needs to become.
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welcome back to "squawk
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box," everyone. take a look at the futures this morning. they have turned around pretty significantly. we were up by 28 points when we started this morning at 6:00 a.m. eastern time. now you see the dow futures up by almost triple digits the s&p up by 9, nasdaq by 27. part of this on thoughts maybe things will work out in greece. who knows. steve liesman has the private payroll data and a special guest. >> thanks. adp says that private payrolls in the month of may rose by 201,000, a bit below the estimate of 215,000, they revooid down april down 4,000 to 165,000. show you a couple of the details here. goods producing actually up just 9,000. services powering ahead 192. and there's that nonfarm payroll estimate, 225 for friday from the government. construction, 27,000. but inside of that what you see is that manufacturing was down 5,000. but those construction numbers are along the lines of what we saw some better construction
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numbers from the government. let's bring in mark zandy from moody's analytics who calculates the numbers for adp. mark it seems to me that what we've had is a slowdown in growth of the jobs market. not a crash, but we were at very lofty levels and now things have seemed to have settled down in that 175 to 225 range. >> yeah i think that's right, steve. i think we were 250 to 300k at the start of the year. now we're probably 200 to 250k which is still very solid at 200 to 250k that's dull the rate you need to absorb the growth in the working age population. if we maintain this growth we will be back to full employment by this time next year. >> whatever the estimate of full employment is, which is another conversation. tell us what a number like this 201,000 on the private sector with who knows what the government is going to do what does that mean for the
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unemployment rate this friday? >> well i think it means the unemployment rate the underemployment rate to your point, all those folks that stepped out of the workforce that will step back in as more job opportunities develop and also the part-timers who would like to work full time that will get absorbed pretty quickly at this pace of growth. my guesstimate is that the slack of the labor market all in is a little over 8% of the labor force. at a 200k per month rate of job growth that will be fully absorbed literally by this time next year by june july this time next year. >> you can feel it in the wage data. you can feel it in the acceleration in wage growth. it is already starting to happen. so we're sliding into full employment and it's starting to be absorbed in the wage growth numbers. >> mark, last question because we have to run. but i was surprised yesterday by the fed governor who was very downbeat about the recovery and talking about the second quarter
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bounce-back not being very much it being a very modest bounce-back. is that your view as well? >> no. you know, i think the economy is fine. i think the underlying growth rate in the economy is about 3%. you don't get 200k per month without being gdp -- underlying gdp growth. it's going to be a weak side some quarters stronger but all in i think we're about 3%. here's the other point, steve. i think when all the data are in and all this data are revised, gdp will be revised up more consistent with the job numbers. the job numbers are not consistent with gdp. >> small business leading the charge here, up 122,000. joe, god bless you. >> thank you. god bless you too, steve. and god bless mark zandi. especially for that big stimulus. when we return can the nissan titan compete in a very crowded pickup sector? how does it stack up to the new ford f-150 or the chevy
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silverado? carlos ghosn is out on the plaza ready to answer those questions. later, jamie dimon says shareholders are lazy when following voting advice from advisory firms like iss and glass lewis. we'll ask long-time target and johnson & johnson board member anne mulcahy if she agrees.
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♪ ♪ time upon a once people approached problems the way same. always start at the starting. and questions the same asking. but that only resulted in improvements small. so we step a took back and problems turned these inside-up-down to approach them newly. and that's when we it saw. garbage can create energy. light can talk. countries can run on jet engine technology.
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when you look at problems in ways different you new solutions find. ♪ ♪
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welcome back everybody. we have been talking cars this morning. right now it's time to send it outside to the plaza. that's where phil lebeau and carlos ghosn are looking at the new nissan titan. >> thank you becky. let's show the viewer the new titan. this goes on sale later this year here in the u.s. how important is it for nissan that you really take that next step in terms of the pickup market? >> this is very important pause this is one of the largest segment of the u.s. market. practically 2 million units sold last year. and it doesn't give any sign of stabilization, it continues -- it continues to grow. people like it so we need to contribute. we have an ambition to become one of the largest maker in the united states, you need to be present in this market. >> but you haven't been present in this market technically speaking. you've got such a small market share relative to the big three. what's changed with this version of the titan relative to the
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first edition? >> today we have 8.5% market share in the united states very little presence in this segment. this segment representing 2 million units. we have to be there, so we're coming with a new product. you know we had a very steep learning curve from our first experience. we obviously hired also a lot of talent. >> so you've brought in talent from the other automakers in the industry. >> exactly. and we learned from our first experience and now we think we have a good product that will attract consumers. >> you think that the pickup buyer will say i can look at nissan and not feel as though i'm short-changing myself. >> this is our intention. obviously we're going to have a diesel engine made by cummins on one of the versions. obviously this is extremely powerful in terms of torque in term of you know loading capacity. we're putting everything from our side in order to be competitive. >> i want to ask you one more question regarding consolidation in the industry. sergio marccione said it's his
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gust feeling that there will be a mega merger by 20 ape in this18 in this industry. first, do you expect that? secondly, has he approached you at any point and said let's talk about possibly getting together? >> our industry has been on a consolidation trend for the last 20 years, with acceleration stabilization, et cetera. this trending did not change and is not going to change for a lot of objective reasons. i'm not going to speculate what's going to happen frankly i don't know. but i think the dynamic and the forces are working towards more consolidation in the industry. >> has he reached out to you? >> no. >> he has not? >> not. >> if he called you, what would you say? >> you know he doesn't need to call me. we meet every couple of months. we are both member of the board of european car makers so he doesn't need a phone call. >> the crossover utility vehicle, that segment continues to boom in the u.s. >> yeah. >> any slowdown or do you look at this and say that is the car
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of the future. people in sedans are saying i want the crossover. >> the compact suv as we call it here in the united states is a booming segment and it's a segment which is bottoming everywhere in the world. it's booming in europe and booming in china. it's practically 17% of the market. expect this to continue to grow on the detriment of the lower mid-sedans. >> and you're at capacity in smyrna, in canton at your plants in mexico. do you need to add capacity? >> we will. we will need to add capacity. we have to be careful. the u.s. market has grown a lot. we're approaching 17 million units. as you know the trees don't grow to the sky so we have to be careful adding capacity. >> do you add a plant or simply add a line and add capacity at the existing facilities? >> for the moment we are limiting ourselves to adding capacity at existing plants. >> carlos ghosn with the new titan. goes on sale guys late this year. he says more capacity more
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capability and that cummins engine he thinks it makes a huge difference when it comes to pickup trucks. andrew, back to you. >> thank you, phil. coming up when we return anne mulcahy. plus more draghi drama. who can forget last month's disruption of the ecb news conference. we'll talk eurozone and bring you an update on his comments. more protesters in just a bit. take a look at u.s. equity futures. we are in the green with the dow up about 92 points. back in a moment.
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welcome back to "squawk box" this morning. here's what's making headlines right now. adp the first of many economic numbers today. we're about to get the u.s. trade deficit for april. that's expected for drop to 44.1 billion from 51.4 billion in march. the ism's nmanufacturing
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index, we get that at 10:00. also the fed's beige book is released at 2:00 p.m. mario draghi is just beginning his post-meeting news conference. no protesters i think so far. we'll have more on all of that in just a few minutes. in the meantime jamie dimon recently called shareholders lazy. we recently talked about this a little bit, forecasting votes based on the advice of proxy firms like iss and glass lewis. so the question this morning, are shareholders indeed lazy? our next guest, anne mulcahy is the former chair and ceo of xerox and current chair of the board save the children and she's in town for the yale summit, you're part of the yale mafia this morning. >> i am. >> so are shareholders lazy? is jamie dimon right about this? >> you know i'm a jamie fan, and jamie often says what other people are thinking.
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and, you know i would say that that might have been an accurate statement in the past. i think it's changing dramatically. i do talk to lots of shareholders over the last six months. >> because you hear about people like blackrock and larry who's now doing his own work. >> yeah. and that's true i think of most major shareholders right now. i've probably made 30 shareholder calls in the last few months and not one of them defers completely to iss or glass lewis for their recommendations, they do their own work. i think the issue is the smaller investors and they're overwhelmed. all the news we just saw and the size of annual reports and the complexity of annual reports, it's impossible for a small investor to stwael wade through all of that and have the resources required to make their own recommendations. so i think it is an issue certainly for retail investors, for small investors. but i think the large investors now almost without exception are
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doing work with come up with their own views. >> what do you think about the quality of iss and glass lewis, the quality of the work that they put into it. again, for the individual investor who may be playing along at home. >> you know i think it's okay. it's gotten better. you know i think it's a boilerplate by nature. i'm not sure it always does justice to the actual facts around the company's results, but i understand the need for it and clearly they do a good job for, i think, a large sector of investors who need that kind of research. >> so boilerplate, checking the box. >> absolutely. >> do you think that the boxes that they check are the right ones? for example, they like to split the chairman and ceo roles. you've now been on lots of boards. does that make sense? >> well i think the problem is that it does not make sense to be arbitrary about it. it is totally situational. that's what's missing in the
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assessment. so almost now without regard to the individual circumstances of companies, they'll make a generic recommendation, which, you know is not all that helpful for an investor who truly wants to be informed. >> the other question i have is do you think that iss and glass lewis are conflicted? because some of their constituents are the hedge fund activist community which work them, let's just say. >> yeah. you know i'm not sure i know. i think it's a slippery slope and there are certainly times when it's very difficult to change a point of view with iss and glass lewis, despite the logic at times. so you do wonder whether or not there's a more -- a background issue there that could be influenced. >> let me ask you another question. as a female and a former female ceo and somebody who's on these boards, in the world of activism there's been a lot of
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conversation about whether activists are purposely taking on companies that are led by women more than men. do you think there's something to that and do you think it's anything to do with the fact that they're led by women? >> i'd like to think not and that that is not the case. i do think they have made some mistakes recently about who they have targeted. you know, the dupont situation was a good example of that. you had a successful ceo, a company with a good track record and i think a poor target on their part. i would sit back and say i don't think there's anything particularly intentional about it but i think that -- >> do you buy into the argument of this glass ceiling idea that somehow companies and boards are more inclined to hire women at a point in which the company might be either troubled or needed a turn-around and so it's just a more challenging job and environment? >> well you know i might be a
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good example of that so it's hard for me to necessarily debate it. but i do believe that that's changing. i think in the past you could have pointed to some examples where that might have looked like it was the case but i think that is changing. but the reality is that the numbers are still woefully inadequate and, you know there's still a lot of room for critique in terms of both board rooms and companies with regard to women leaders. >> and one of the boards you serve on right now is target. >> yes. >> that has been a company that's been in the midst of a massive overhaul and change. can you tell us where you think things stand right now, because the decision to get out of canada was widely heralded on the street. >> yes. >> how do you think the company is doing right now? >> i think the company is doing terrific. you know in the eight months that brian cornell has been there, i think he has clarified strategy, he has made some clear choices, he's focused target on
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the key differentiators for the brand. the last three quarters the trends have all been positive in key areas like traffic and same-store sales. you know web sales have been 30% plus great innovations. so i couldn't be more pleased with the progress that target has made. >> you think target has its mojo back? >> i do, i do. i think it's a never-ending challenge but i think they have got it back. >> anne thanks for coming in. a mutual friend who will remain anonymous sent an e-mail to say jamie dimon said that some shareholders were lazy not all shareholders were lazy. >> oh i thought he meant every single shareholder was lazy. >> i was told -- i thought i -- >> so he didn't mean all shareholders. >> not all shareholders. >> thank god that guy sent that in. >> kind of an important clarification. >> i just want to put it out there, that it's not everybody. when we return the draghi news conference is under way.
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the ecb deciding to leave rates unchanged. we bring you a live update of his comments and we'll talk eurozone when we return. take a look at european markets at this hour. what's happening? we're emphasizing it there, as you can see. look, look, look! we'll be right back. you wouldn't take medicine without checking the side effects. hey honey. huh. the good news is my hypertension is gone. so why would you invest without checking brokercheck? check your broker with brokercheck. can it make a dentist appointment when my teeth are ready? ♪ ♪ can it track my crew's performance, and protect their heads? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ at cognizant, we see opportunities for every company. to meet the new digital demands of their customers. can it process my insurance claim?
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>> what is that? >> it looks like it might be like one of those -- like a compact one that you can carry around. >> the digaroo. >> something like that. >> welcome back to "squawk box." hunters from nine european countries gathering that belarus for the 17th annual deer calling championship. 27 participants competed in imitating a male deer after winning a fight with a rival stag. or when getting ready for some action. the centuries old skills are still used by modern farmers when they want to calm down an anxious stag or by hunters
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trying to attract a deer. who won, poland? they took first and second place. congratulations. >> all right. in other news ecb president mario draghi answering questions from reporters right now. the markets are also focused on the situation in greece and debt negotiations between athens and lenders. joining us right now, michelle caruso-cabrera, steve liesman, rick santelli. michelle, why don't we start out with you and get a feel on where things are right now with these greek talks. actually, let's take that back. let's start with rick. rick, why are don't you tell us why the market has been reacting the way it has this morning. we saw futures were up a little bit when we came up this morning but really took off a little later in the morning. what's been driving that? >> well i can't differentiate between greece and what mario draghi is talking about, but i would think it's the latter. in terms of greece i know it's interesting news but everybody
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down here says we all know it's going to happen. we'll kick the can with a new bailout. we'll let michelle get into the nitty-gritty. let's look at some charts. intra day the euro definitely a little lower but open the chart up and it's already had its rally. that's pretty much the stencil on everything today. let's look at the boone. these are the highest yields. should we close in the mid-70s since early december. here's where it gets interesting with the u-turns. look at the spanish tenure it's rates are down yesterday because it adjusted yesterday and the days before. open the chart up and you clearly see yields are up. the same could be said for what's going on in italy. so i think if we had to summarize what's going on in the eurozone, no matter if they preload or back load qe with august being a vacation month, traders are all over this and it's light liquidation mode for all the sovereigns. the southerns led the way on rates higher actually. foreign exchangewise yes, the euro is key but i don't hear or read anything thus far that's a
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surprise to the fx traders regarding draghi and the news conference. >> let's get to michelle and get to those details. michelle, you're still here. what are you hearing? >> i've been listening to draghi. i think rick is correct there. i think draghi thus far has gone out of his way to assure people. he said a number of things like full implementation of all of our monetary policy procedures intended -- our monetary policy purchase program, the asset purchase program is intended to run until 2016 or until -- or beyond if inflation isn't at our target. so we saw the sell-off yesterday in some of the european bonds when we saw the inflation data that was better than expected and maybe there were concerns that there wasn't going to be as much quantitative easing as people had expected but i think draghi is trying to reassure people that is not going to be the case thus far in what he said. this is only the prepackaged speech. we now get to the q & a where he'll be asked more questions in depth, one about this and likely about greece as well and the
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program that's going to be presented to the greek prime minister later today in brussels. >> michelle when did he first kind of give that idea -- this idea that qe is not going to be as strong as expected yesterday? >> yeah. i think it was -- i think there were concerns in the market yesterday when the inflation data in europe came out and we saw sell-offs in the broad averages in europe and also in some of the bonds there as well that maybe there would be concern thank yout you weren't going to get as much qe and he's reassuring people that's not going to happen. >> that would account for some of what they have seen but there are moves even earlier this morning. >> 7:00, 7:15 it looked like the futures strengthened and it seemed to come off a little bit from there. just real quick, they did revise up, the staff did, the inflation forecast for this year. from zero to hold on to your seats there, 0.3%. it's not huge. >> but it is the right direction. >> it is the right direction and that allows them to claim a little bit of victory.
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in his opening remarks, michelle, correct me if i'm wrong, he didn't deal with two elephants in the room. i saw no comments on greece and no comments on the big story for us, i think, which is the backup in rates in europe. he hasn't spoken about that. but i am 100% certain he will be asked about that. >> and we can point people to the screen no points in commenting on the greek talks, which would be the other topic we thought hopefully he would say something. >> trade here, the numbers came in better than expected 40 billion versus 44 and that's going to flatter the second quarter growth numbers which have been ticking up. it's not the robust recovery we were hoping for in the second quarter. remember last year we did minus 2.1. this year we're looking at minus 0.6, 0.7 and we'll see if that gets ticked up. what we saw in the numbers was real evidence that the port strike on the west coast really had played havoc with the trade numbers coming in so you had -- you've had a rebound in certain
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areas that were hurt by them and the other side things going in and going out. >> you won't necessarily get a full rebound. some of that will be lost and not made up. >> i think that's right. but what you saw was this idea of goods were back up. you had a flood of imports coming in and goods came off so a lot of the volatility has been related to the port strike. i don't think it explains all of the weakness just a bit of it. we had brainerd yesterday, the idea that she doesn't see this strong second quarter bounce-back, something that zandi disagrees with. >> how many port workers are there? >> i don't know. you mean on the west coast or total? >> i think it's a relatively small number. if you can talk about that number of people actually causing massive fluctuations -- >> but it's a really important bottleneck on the whole distribution system. so much of our goods overseas come in from asia and you hold them up. you have an effect on inventories, consumption, wholesale trade, all manner of data has been affected by this. what you're saying is probably
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relative to the total employment of the united states a very small number of workers. >> steve, rick thank you very much. michelle is listening to draghi's comments. we'll bring you any updates as they occur. groupon, the company announcing its cfo stepped down. also increasing its stock buyback program. can we learn anything from groupon, sorkin? wasn't it a $30 stock at one time? almost a $20 billion company? now it's -- >> come down. >> it's like a $4 billion company. >> just a different business. >> i know but it was one of those -- >> it was a high flier. >> private market values had been really high. and when it's public and it actually has a chance -- >> what was the price? while you're talking about that or talking about other things i want to see google if you remember, put a $6 billion price tag on it offered $6 billion for the company and they said talk to the hand we're not doing it. >> they aren't happy campers. they aren't happy campers. they're not saying kumbaya.
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>> no. >> i know you. i know you and i love you. a smaller market cap name but a bigger move this is a half a billion dollar company, vera bradley missing the mark on earnings and revenue and as a result stock is a big loser, down about 12 -- do you know what that is? >> i do. they make bags that have floral patterns on both of them and it's popular with certain groups of women and even teenagers. >> i wasn't asking you specifically, i was throwing that out to liesman or andrew. i was looking past you. >> you were not. you were looking at me. >> a man bag. >> excuse me? oh, you mean like a murse. and wendy's getting a boost this morning. the hamburger chain announcing it will buy back $1.4 billion of its shares by the end of next year including some from trion, its largest shareholder. i say wendy's and i just think
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food. i don't know what it is. >> homer. >> right, it is. >> you're a homer. >> they have a lot of stuff there. >> doughnuts. >> a lot of stuff, purple stick it in the stuffed doughnut. >> anyway when we come back this morning, jim cramer we'll have him on the trading day ahead. take a look at the futures once again and they have been quite a bit stronger this morning. dow futures up by 91 points s&p futures up by just over 8, the nasdaq up by 27. "squawk box" will be right back. ♪ every auto insurance policy has a number.
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jim cramer joins us now. again, i don't know jim. i think a lot of times it's not what's happening around here. it's something else. in a day, i think rick said that we know it's going to be a kick the can deal eventually but it does get people in a better mood, it seems like and we may trade up on that. >> yeah the 180,000 employees around the world in philadelphia and all i can tell you is he said we are stressing greece too much. when greece is done it will get
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done things will be able to get much more focussed and business is getting better in europe and all that matters is in the end we stop focussing on greece either way because the rest of europe can handle a kick out. a lot of people think it's a leman moment. i'm going to go with the guy. anything he does is going to really help confidence and build what is abutting recovery in europe. >> we got to jobs number. adp, i don't think you change anything based on what we think about friday and over the years, jim, it's gotten to be a much smaller number to bring down the unemployment rate. i use to think we needed to do 300 and now i'm hearing 270 does it. >> there's people making money in strange places and three or four hours a day. all these people in the end are
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making money which is how you get the sales up to where they were and i've got to go with what phil was saying yesterday. the purchasing power of the public is extraordinary. there's a lot that's good. we need to get greece off the front pages. that can be done by a kick in the mount or giving them a kek in the can. i'm not going to disagree with that. >> okay jim. we'll see you in 15 minutes. five minutes. i don't think i could do another 15. i couldn't last. >> anyway, when i come back this morning income of quality and debates. squawk box returns after a quick debate.
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i believe we have to address wages and benefits. things like paid sick leave and paid family leave and we have to address the need for a more progressive tax system by the way who has been one of the strongest voices on this, warren
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buffet who called for a justice in our tax system to make sure billionair billionaires stay with rates. these are changes not only called for my elected leaders but even more by business leaders. >> that was new york city mayor bill by . minimum wage has been controversial but not fully embraced by the people mentioned. warren but you have said warren buffet said he would like to see it raised. >> i don't have the quote. i wish i had. he addressed not just the minimum wage in general but mentioned $15. he said i may wish to have all jobs pay $15 an hour but that minimum would almost certainly reduce employment in a major way crushing many workers possessing
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only basic skills. smaller increases, all though welcome, will still leave hardworking americans in poverty. i don't think you should bring up buffet and con flat what he said about taxes. i wish we would have had him on longer. it's gun violence. they take guns away from criminals. gun laws don't necessarily, you know, those are people registering. the criminals ended upkeeping the guns. he said murders up but it's between those gangs.
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who cares about those. it was a weird answer to. >> it was very controversial. >> >> that conversation and so many more. make sure you join us tomorrow because right now, squawk on the street is next. >> good wednesday morning. welcome to squawk on the street. the market is getting it from all sides today. greece on the verge of default. inflation has bottomed. adp in line. a trade gap for april has some thinking q 2 might not be so bad. 10 year right around 228 229. that's almost a six month high.


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