Skip to main content

tv   Squawk Box  CNBC  June 4, 2015 6:00am-9:01am EDT

6:00 am
4th 2015 and squawk box begins right now. >> live from new york where business never sleeps, this is squawk box. >> good morning and welcome to squawk box on cnbc. you'll see at this point the dow futures are down by 75 points below fair value and s&p futures down by 10 and nasdaq down by 32 points coming a day after the stocks rose for the third time in 8 sessions. there was optimism about greece yesterday but take a look at what is happening in the european markets today. europe right now getting hit pretty hard with the dax and germany down by 1.4%. london down by 1.4% and in
6:01 am
greece stocks down again this morning. this is happening as yields in europe rose sharply across the board. take a look. in germany, five year at this point is yielding. >> but if you look at how quickly and rapidly that's risen that's caught investors off guard. to borrow money for anything you're looking into and it's the relatively fast pace that shocked the market. >> it's 1 kt but it doubled this week i think. >> i thought the ten year was at 215 and it's at 31. >> we'll take a look at that in
6:02 am
a moment. >> we just saw 240. >> back at that point, the euro at this point looks like it is down. it is trading at 11352 but it was the weakness of the dollar yesterday that spark somded some of this stuff. >> i was counting my profits at 107 last week. >> you were counting your chickens before they hatch. >> i was. you would think that yesterday would have been a day of dollar strength. >> we used to think the fed is actually going to -- it did happen. 240. normally that would make the dollar stronger but there was good economic activity. >> that's part of the reason that the yields there went up. >> retail sales. >> people expected draghi to say maybe exit early and he said
6:03 am
that would be great and we'd love to have the problem of exiting early and we're nowhere near exiting qe yet and i don't think people would believe him. the inflation data out of europe too. >> we doesn't think not only are we not going to end but qe 4 is on the way. >> i think that was a summary of what he said. here we are. dow, 1807. so we do 75 today. if we do 80 we're under 18,000 again and zero for the year. so this is what we have been talking about. we made no head way at all in 2015. >> let's take a quick look at what happened in asia overnight as well. you'll see that the asian markets we're largely uneffected
6:04 am
by this. the hang seng was down by .3% however the dollar's weakness did impact oil prices yesterday. it was back below $60 and remains there this morning. the ten year which we looked at briefly before but if you check out the ten year you'll see the yield there is 2.404%. finally gold prices were down slightly yesterday and you'll see this morning that gold prices are down again. >> you could be a taper tantrum territory soon. what was that in 270 or 280. >> it was. >> you saw what the market did with that. >> we have a big line-up of guests today. >> richard fisher. >> who will be sitting. >> and finally tell us what he really thinks after getting off that board.
6:05 am
>> yeah with him you have to say, you wanted to get tighter for a long time but we can certainly talk to him about now everybody is arguing. did it cause the rich to get richer? everybody on the fed is saying no. >> bernake did not. >> that was after he deposited his $500,000 check for speaking. he was like did the rich get richer? >> let's say what else is going on. it's impacting all of the story. greece is still a big part of the market story today. greece's prime minister finished talks last night with senior officials in brussels saying a deal with creditors was in sights. he suggested they would make a payment tomorrow but we still don't have an official deal. also opec ministers are
6:06 am
gathering as we have been saying, the cartel widely expected to keep it's production quota unchanged and we'll have a live report from that meeting in a few minutes as well. mr. kernen. >> yes. >> it's your turn. your up. >> i saw what glad well said. the document has been too patient but in comments yesterday he struck a more cautious tone saying first quarter economic weakly was largely due to factors but near term concerns still weigh over
6:07 am
the economy. much more interesting to hear what dallas fed president richard fisher says in the next hour and we'll make our own news and maybe we'll get -- although bullard is still sitting obviously. on today's economical lan dercalendar weekly jobless claims those reports due out at 8:30 eastern. >> a little bit of corporate news this morning, could be a big deal in the works. we'll talk about it. dish network in talks to merge with t-mobile. t-mobile's boss would serve as the ceo and dish ceo would become the combined company's chairman. a purchase price in the structure of the deal are still to be undecided and at least from the early reporting i have done on this it seems like the very early days. it says that in the paper as well. barely started. unclear whether this actually
6:08 am
benefits either side. >> although they arguably -- >> the rational was pretty good that i read. >> well you know. >> they have no broadband. >> they have no broadband. >> they have all of that spectrum. >> they have all of the subscribers but they don't have any sell. >> i don't know if you saw there was a piece that basically said this is like two of sort of the last guys at the dance and nobody else to go home with. he said he didn't want to come men on that particular article. >> your partner starts looking better. >> we'll see but as you know t-mobile has tried to do this now with at&t. they tried to do it with sprint. directv, i don't know. >> we didn't get ties this time. how did you get a new tie.
6:09 am
>> this tie? do you like this tie. >> we din get new ties. don't waste time. how did you get a new tie when none of us got one. >> i purchased the tie back in december. >> and haven't worn it yet. >> i haven't worn it. >> in front of me? >> prof you mr. i catch everything. >> i'm slipping. >> do you like it? >> no. i just noticed that -- >> yeah. >> no i like it. >> don't ask him. let's tell you what else is going on. apple pricing it's first ever yen denominated bond today raising $2 billion. they previously issued bonds in euros and swiss franks. >> let's tell you about a couple of stocks to watch this morning. five below getting a bump. better than expected earnings in revenue and had an upbeat outlook. fire eye looks to be an early winner. announcing a new partnership with visa. it promises to help banks quickly detect and respond to cyberattacks. stuff like that catches the
6:10 am
markets attention. the stock is up by 2.5%. shares of verint systems beating the street this morning. quarterly revenue fell short. that stock is down by 5%. >> opec ministers are meeting in vienna this week. steve, you're in vienna. call me i'm coming. i'm coming dude. i'll be there in two weeks. you need to give me the run down places places. >> it is 30 degrees. >> that's freezing. >> yeah, it really is. i'll tell you. i've just come back and i've been in paris as well and just trying to gauge what's going on fascinating market for many. it was for saudi in november when they refused to cut
6:11 am
production and sent the markets down trying to flush out the expensive shale producers and then the u.s. scored a goal back by lowering their cost of production by saying do you know what, we're okay at $65 barrel for shale rather than the 8590 you thought was our minimum price. it's all to play for in the second half. people are saying to me who's winning in this one? i don't think anyone is winning at the moment. everyone is producing their large amount of volume. but the fact is u.s. shale production is still pretty heavy as well. and they are still producing at record levels. the russians are still producing at record levels. so the world is absorbing all of these barrels and the demand side has picked up. that's what saudi wanted. china and europe are are picking up on the demand. we're seeing a little more out of the united states as well.
6:12 am
i'll remind you next time i'm here. >> thank you for that steve. we appreciate the report. we'll see you soon. in the meantime, the result of the new cnbc oil survey are in. it's a poll of the world's top strategists. >> good morning to you guys. certainly steve was mentioning it's been a volatile year for oil prices by anybody's standards and we've seen oil go down to 42. it was down in marchand rebounded up to the $60 range and a lot of people are wondering if this is the end of it. if we've seen the bottom for this year. the strategists, the traders that we talked to. three quarters of them said they do believe that prices have seen their low for this year. average price targets is roughly $60 which is where we're trading now. what's more interesting is they didn't forecast a jump in 2016 either. they think wti could get to the
6:13 am
$70 range by the end of next year. this is in line on what we heard from the ceos. we also heard from bob dudley but there are some bears out there, goldman sachs, city also saying look the 40 could be in the cards this year. we could see a lot more volatility before things start to change and we get back to that $60 level by the end of the year. we don't think we'll hear about a production cut but at the same time a lot of the issues is the dollar. that could drive prices down. at the same time we talk about the demand scenario as well and iranian oil. we could see 400,000 barrels a day flood the market. right now they're more factors to push us down than to push us up and that volatility could continue.
6:14 am
>> what's been so interesting is hearing from a lot of the people in the industry doing the fracking who say that look the technology has changed and you can much more quickly bring the wells back on the fracking wells back on if prices come up to $60 which is why there's more of a lid on this. >> absolutely. a lot of the shale producers are break even so they're not losing money by producing right now. production does continue to ramp. we saw another bump up. over 9.5 million barrels a day. saudi isn't turning it off as well. so if the supply demand dynamics don't change we could see that lower but our analyst said we'll probably stay at the $60 range by the end of the year. >> we talked to the ceo of one small company that pointed out yes not only that but once the boom times left prices for everything dropped pretty substantially. so the money that they can --
6:15 am
the dollar figure where they make money, the profitability point for this dropped substantially because they don't have to pay as much for the equipment and services. >> the $60 could be supported by driving season and demand for crude to buy gasoline and that tapers off as we head to the fall as well. >> thank you for coming in. >> thank you for having me guys. >> when we come back we'll talk about why malcolm gladwell has a big problem with john paulson's gift to harvard. should twitter guy boog-- buy google? first let's take a look back at this state in history.
6:16 am
friday night, buddy. you are gonna need a wingman. and my cash back keeps the party going. but my airline miles take it worldwide. [ male announcer ] it shouldn't be this hard. with creditcards.com, it's easy to search hundreds of cards and apply online. creditcards.com. in the us, three in ten college students drop out. but how can you spot who's at risk? the one who lives far from campus? the one who works the night shift? the one with new responsibilities? one thing can't tell you, but the right combination can. universities are using ibm analytics to understand pressures in and out of the classroom- some expect to cut dropout rates by twenty-five percent. ibm analytics is working to make education smarter every day.
6:17 am
6:18 am
welcome back this morning. early twitter investor says that twitter would be in his words a fantastic use of google's cash. here's what he had to say on cnbc yesterday. >> it's a fantastic use of google's cash. it's up to this board to figure out if that's something they
6:19 am
want to pursue. i don't think there's any religion on this board about remaining an independent company forever. a lot of these board members see this kind of potential for the company and realize there is a lot of value in keeping it independent for now. if they ever achieve any doubt or start doubting those prospects they'll look for other options but from the google side it's an instant fit. >> it would help with the instant search results and twitter has its own value. >> it's strange to hear an early investor in one company pitching it to another company. >> it's the first time i've ever seen an early investor be as publicly antithe the management of the company he supported early on. >> google hasn't gotten to where it is by blowing money on stupid ideas i don't think? have they ever made a huge. >> youtube.
6:20 am
>> that worked. >> except there was a fascinating article on that by the way. youtube, facebook which is obviously a much newer business now in terms of video is almost competitive with youtube. as many people are uploading -- >> so build it yourself or buy it has been the question. >> facebook has gotten very close to where youtube is. >> and i learned from you about veno yesterday. i think that using celsius is stupid. >> as a measurement. >> you heard 30 degrees in vienna. >> yes. >> now wait a second. you're going to go through and defend fahrenheit where boiling water -- >> 212. >> 100 is a rounder number. >> there's not enough number -- >> differentiation. the difference between 30 and 29 is 6 degrees.
6:21 am
>> and they don't care. it's getting hotter. that's all they know. >> the me trick system makes more sense. >> i don't have to say that. i'm not using kilometers per hour. >> they're going to welcome him with open arms when he goes over for vacation. >> i made a promise to listen to winston churchill and that is that you'll never get to your destination if you stop to throw stones at every barking dog. >> when did you make that promise? >> mallcolm gladwell he can say whatever he wants but this is so annoying. john paulson giving $400 million to harvard for engineering. be great to lead the world and even better at engineering. he decided that's what he wants to do. malcolm gladwell done like what he is giving away too. doesn't like his philanthropy.
6:22 am
you know malcolm gladwell his grades were so bad he couldn't get into grad school. i don't know if it has anything to do with that but he suggested it should go to hair research -- >> no. >> he thought it should go to hair research. so this never happens to anyone again. and -- not that. not that. where is my malcolm gladwell shot. do we have it? here it comes. i think he might be on to something here. 200 million to harvard and 200 million to hair research because people shouldn't have to live -- >> he has a great head of hair. >> people shown have to live like that. these are some of the tweets that he said. it came down to helping the poor or giving the world's richest university 400 million. wise choice john. what's next up for john volunteering at the hermes store on madison avenue. let's make it a truly world class retail outlet. if billionaires don't step up
6:23 am
harvard will soon be down to its last $30 billion. so now endowments that fund scholarships to bring in to do engineering -- i also think that he agrees with you that to some extent these are ill gotten games. >> i did look through his tweets yesterday. >> the journal implied that. people don't like him because he bet against the housing market. he bet against the us. he was smart enough to see the housing bubble. >> i wondered when i saw his tweets yesterday. i wondered if he had a couple of drinks. >> i admire anybody that gives money away but let me push back on one piece of it. if you're just playing for straight up impact do you think his 400 million -- >> this isn't the only money biggest gift harvard has ever gotten -- something that bill gates is doing out in africa.
6:24 am
>> who knows if bill gates gets anywhere with it. >> it's the giving pledge. >> i don't think you should ever look at -- >> i'm not looking at it. >> i don't think this guy should ever. he's preefree to say what he wants and tweet if you want to look like an idiot. >> i wondered if he had had a couple of drinks before he did it. speaking of booze that brings us to another story i have been watching this morning. taco bell there's one location in chicago that is reallyolling out a plan to start selling beer wine and some mixed drinks. taco bell a lot of people show up there after they have been out drinking all night. >> yeah. that sounds good. >> that's a good plan. >> chipotle serves alcohol. >> not the ones i've been too. >> and they even have little margarita things. >> well you can the need to feel like you are more of a sit down and less of a fast food
6:25 am
place because margins have gotten crushed. it's not been the best place to be and they're also announcing they're dropping artificial flavors and colors from the menu by the end of the year although some the products like the doritos locos tacos would be exempt from that but they're trying to get to the healthier vibe their competitors have done so well with. >> can you give me a list of. >> acceptable places. >> impactful things. >> we had a guest about a year or two agatha came on and talked about how they measure the impact of the investments. >> is it okay that sandy gave money to cornell for medical research? >> of course. >> is it okay if they do enough there? >> i can't believe that someone who couldn't possibly do as much good in terms of fill lanphilanthropy
6:26 am
is -- >> he's done pretty well. european stocks selling off. u.s. futures pointing to a lower open this morning and the european debt yields. marc faber will be here but first a look at s&p 500 winners and losers. ♪
6:27 am
6:28 am
6:29 am
new york state is reinventing how we do business by leading the way on tax cuts. we cut the rates on personal income taxes. we enacted the lowest corporate tax rate since 1968. we eliminated the income tax on manufacturers altogether. with startup-ny, qualified businesses that start, expand or relocate to new york state pay no taxes for 10 years. all to grow our economy and create jobs. see how new york can give your business the opportunity to grow at ny.gov/business
6:30 am
welcome back to squawk box. news from the political world this morning. jeb push announcing he's going to make his formal announcement on running for president on june 15th at miami dade college. the announcement of the future announcement coming on twitter in the last half hour and you probably saw the recent articles written about being able to raise a lot of money as sort of a candidate everybody knows you're going to run but you haven't declared and are you in the grey area of some law or something. >> i realized earlier this week he han announced yet and it surprised me. >> neither has walker. >> no. >> they say right now the top three are walker bush. >> christie hasn't made an announcement yet. >> he has a lot of policy stuff.
6:31 am
put out stuff yesterday about the fed. i like all the stuff he is saying. but walker bush and rubio, only rubio has actually announced so far. >> we got lincoln rekrenly and a lot of people do it for a cause. >> to sell another book to what? >> no with lindsey graham i think it's to talk about leadership in the world and -- >> funding the defense department. >> funding the defense department. people have differ things they want to highlight i think. >> all right. >> i would say we use this forum to waste our time all the time. >> the idea when you're sitting at a debate and trying to listen to 20 different people and differentiate between them that makes it very difficult. >> i did see that the gop mieg pick at the first time in it's
6:32 am
history the nonestablish -- might not going the establishment route. >> in terms of bush. >> there's always sort of someone waiting in line to be the next mccain and romney. the democrats, you never know what they're going to do. jimmy carter bill clinton, barrack obama. on any given day they could nominate weird al. >> let's get to the global markets that have been under pressure. that's not all that surprising to our next guest. just a month ago he was sounding the alarm about a possible market melt down of 40% for the s&p. does he still expect the markets to tank? he's the editor and publisher of the bloom, doom and gloom report. marc thank you for being here today. >> it's my pleasure. thank you for inviting me. >> with a do you think? you had said there was the potential for the s&p to drop by as much as 40%. do you sthil think that exists
6:33 am
at this point well that volatility has come back into the markets. the currency exchange rates have moved substantially over the last months. the yen has broken down and it will go lower and what has also happened is all the gains of sovereign debts over the last say six months have been given back in two weeks so we had a huge back up in yields and by the way also in the us. the bond market has been quite week. in other words yields have gone up. the stock market has held up but with fewer and fewer stocks supporting the advance. so we have a lot of stocks that have already gone down substantially. >> your concern about the back
6:34 am
up in yields part of it is coming because of better economic numbers we've seen in europe and europe is actually pulling it's way out. what do you think is driving these higher yields? >> i don't see much of an economic improvement anywhere. in fact in asia particularly in china, the slow down is actually accelerateing with some suggesting that chinese growth could be as low as 2.5%. in my book it's around maximum 4%. in other economies in asia we have no growth. we don't have recession per say. it's just no gross environment, mobile exports are flat. korean exports are down. this all tells you something.
6:35 am
in the u.s. despite the talk on the upside statistics have been weak and i tell you the problem in the u.s. is afford blt. i'm now in boston. i was coming out of the hotel and someone was parking his car and he had to pay $49 overnight parking fee. not in a luxury hotel. i thought the prices have gone up so much that the us., many in the u.s. by the way also in europe are simply not affordable anymore. so what people do is they still spend money but they don go out every day of the week. they go out once a week or so. so consumption done pick up. >> you have said you think the us. fed will have to embark on another round of qe. qe-4. >> yes i think so. not only the u.s. fed but all
6:36 am
the central banks are so deep in the mud that in my view they will continue to essentially buy assets. >> and that turns into what? if the central bank -- every one of the central banks continue to buy assets that would seem it would pump up the stock market once again because you're faced with there's no alternative. >> maybe. maybe. but not necessarily. one thing i want to tell you when i look at the whole financial industry the whole sector including myself yourself and everybody, i feel like being on the titanic. we're fighting about deck chairs, who is performing best which assets is performing best and we are fighting over the best tables in the ballroom but
6:37 am
i think it's worth while to have your own safety boat and your own ladder to lead you to the safety boat because the problem is that the whole financial system one day will implode. >> in the meantime though we have watched stock prices continue to climb. you would be telling people to stay out of all of this, wait for a sell off and then come in if there is one? >> well i have advised my investors and also on this program that you have to have diversification and you should hold around 25% in stocks. 25% in real estate and actually today i just bought a 30 year treasury bond because i think they're very oversold and given my negative outlook for the economy i think that the treasury bond market may rally once again and i would also hold
6:38 am
commodities, precious metals. >> mark we want to thank you for joining us and sharing your insights with us. >> thank you. >> great to talk to you. >> coming up calling it a high flier would be an understatement. shares of exact sciences. 30% in the last three months. the company's ceo joins us next. the pursuit of healthier. it begins from the second we're born. after all, healthier doesn't happen all by itself. it needs to be earned... every day... using wellness to keep away illness... and believing that a single life can be made better by millions of others. healthier takes somebody who can power modern health care... by connecting every single part of it. for as the world keeps on searching for healthier... we're here to make healthier happen. optum. healthier is here.
6:39 am
6:40 am
6:41 am
exact sciences teaming up with the university of texas cancer senor to develop a first of its kind blood based diagnostic test for lung cancer which is the number one cancer killer in america. men and women. the company's stock has been on a tear. up 100%. kevin is the chairman and ceo of
6:42 am
exact sciences. you have some similar things already for colon cancer. >> we do. we're building on the success of a real break through in colon cancer screening in this collaboration with md anderson cancer center to develop a simple blood test for the early detection of lung cancer when it's most curable. >> right because usually it's in an advanced stage so single digit survival rates for five years if it's caught early it's 80% or 90%. >> 3 out of four people survive lung cancer detected early. >> but not everybody gets a cat scan because it's really expensive and there's a hot of false positives. so this would be used to indicate whether someone should get a cat scan or confirm a cat scan. >> it can be used in both cases. to make the point more two out of 100 people survive lung cancer detected late stage. stage 4.
6:43 am
most people detect late stage. so the world need ace way to detect lung cancer early. >> all cancer. >> how accurate is the blood based test. >> it hadn't even been developed yet at this point. >> so we think that we can develop a lung test that can detect 90% of cancers with a low false positive rate. that's the goal. and the power of md anderson. they have this program where over the next ten years they want to make a big dent in the war on cancer. it's great to be a partner with md anderson and their resources and experiences. we think that a test can be used both as a screening test up fron front, that's more accurate than the blunt force cat scan and when people do get a cat scan and they find a nodule we think we'll be able to distinguish between a denine and malignant one more accurately.
6:44 am
96% of all found are actually benign. and you do all of these extensive work ups. >> people get everything scared out of them. it comes from that too. >> so in the case of cancer instead of using one marker that won't work how many specific lung cancer markets do you think you can find and test for? >> we think it's going to be a lot like where we used a combination of protein markers and dna markers with this colon cancer screening test we use ten markers to get to about 94% curable stage cancer detection at about a 9% specificity or 10% false positive rate. >> >> you're testing just for
6:45 am
colon or lung. it would be nice to test for just cancer in general. there's things concerned for all pref len. can you do that too. >> it seems really hard to find colon cancer early stage one out of the blood. lung cancer which lungs are highly vascularized it seems to be easier to find the signals or the beacons in the blood. >> this would be for all the different kinds of lung cancer? >> well it will be for the majority of lung cancer. there's so many different kinds. it's hard to say it would be for all of them. >> but you could test smokers and former smokers because the risk is triple or quadruple normal people so they could do the blood test to see. >> 85% of all lung cancers are in smokers. >> or former smokers. >> correct.
6:46 am
>> so they're going to have their lung patients come in and it's a 15,000 patient study. >> it will be a large study. we really believe that to get the evidence you need to do these studies the right way. so many times company don't. we ran a 10,000 patient study and then we won an approval. >> are you looking for the markers? >> absolutely and then you design it based on the 15,000 10 common markers out of the 15,000 so that's why it takes two years to do it and then you couldn't even start. >> so one of the things that md anderson has is samples that you can validate your test on before you start the big huge clinical trials. those samps are precious and hard to come back. >> great so early stages and they get a lot of cancer
6:47 am
patients because people want to go so that's where you can go. >> and we'll partner with other porn institutions. we had 90 clinical trial sites around the country. with md anderson we'll do the same thing. this is global. there's 1.6 million people around the world dying of lung cancer every year. this is an opportunity to detect early and we think too that if you detect early these new advanced drugs have the ability to have a chance to win this war against lung cancer. >> and if it's early enough you can cut it out too. thank you, appreciate it. >> thank you very much. >> coming up when we return bourbon boom in kentucky plus bar rescue host stops by with a toast for struggling business owners. we're back in just a moment. u spot the difference? no? you can't see that?
6:48 am
alright, let's take a look. the one on the right just used 1% less fuel than the one on the left. now, to an airline a 1% difference could save enough fuel to power hundreds of flights around the world. hey, look at that. pyramids. so you see, two things that are exactly the same have never been more different. ge software. get connected. get insights. get optimized.
6:49 am
6:50 am
leave early go roam sleep in sleep out star gaze dream big wander more care less beat sunrise chase sunset do it all. on us. get your first month's payment plus five years wear and tear coverage. make the most of summer... with volvo.
6:51 am
the bourbon biz. delivering $3 billion and our own dom joins us from there this morning. dom? >> the bourbon boom is here and the economic impact huge. $3 million. up about 67% over where it was just two years ago. of course, that all comes down to the jobs picture, as well. just two years ago, we saw
6:52 am
thousands of jobs and now we see 15,400. so, a huge boom in terms of the number of jobs created because of bourbon. when it comes to the overall scheme of why this is such an important story for the state of kentucky, it's because of that economic impact. and, also because as people start to change their tastes more they're going towards drinks like the american,inate american native spirit and this is a huge deal. especially here for a company like makers mark. makers mark is part of a larger conglomerate owned by the japanese. jim bean makers mark bookers, all of that goes under that same umbrella. for a lot of people it comes down to whether or not this bourbon boom is going to keep going. by the year 2016 guys. we could see 19 more distillers open up. that would mean 50 in the state by the end of 2016. there were just ten in 2012. we'll be here all day talking about why this is such a huge story including dipping some of
6:53 am
these bottles in that signature red wax, guys. >> dom, belmont is back here. i don't know whether, you know we did, the belmont is in new york. you know that, right? you know we did the kentucky derby. why sent you down there just for this? >> pretty much. it's a big story, right? it's an economic story. it's kentucky. but this is now my second time in kentucky in two months. yes for the derby last month. >> thank you. we are going to continue with this big story and jump though from the bourbon barrel to behind the bar. the show "bar rescued." featured family bars that are just a week from closing and john tapper turns them around in just five days. >> good morning. >> how are you doing? >> industry is doing well. we good two years. the restaurant industry is doing well, as you know. doesn't go through the shifts. fast food is taking a hit to fast casual and a lot of sector
6:54 am
movement. you know, the bar industry is just doing well across all. the neighborhood bars sports bars, the industry is doing well. even during the recession we didn't get hit as hard as everybody else. >> if you were to invest in a bar today, would you go upscale or the lower end. what would you do? if you could start a bar tomorrow. >> my job is to mitigate risk. i do my demographics and i'll land in the middle. i'll go for the biggest opportunity that i can. trendy bars are great until the next trend comes along. the oldest restaurant any in city is the steakhouse. something said for main stream for the operations that we can all relate to. >> if you want to own your bar, don't drink at your own bar. >> right. if i love drugs, becoming a pharmacist. that makes absolutely no sense. if you want to be in the bar business, alcohol is for selling, not consuming. that's how i always looked at it. >> what are some of the biggest problems you've seen.
6:55 am
i saw an episode recently where you were and you told them there aren't enough people in omaha that will. >> normally i would have 60 days to do a competitive assessment and put together concepts and economics and i have five days. the problem is they made thousands of mistakes that got me there. i don't have the time to change what they do i have to change the way they think. >> a lot has changed, i think, about this alcohol consumption. nobody drinks at lunch any more. right? >> that's right. >> even hard liquor. i heard dom talking about bourbon. at bars at night, do people come in at night and side up to the bar and just sit there and pound bourbon? do they do that still? they don't have a problem? >> no they don't. bourbon sales are up 20% with women, joe. >> really? >> bourbon sales are up 20% with women. >> what are they thinking?
6:56 am
>> they're drinking sours. >> whiskey sours. >> stone sours. mixed whiskey drinks. they're not pounding whiskeys. >> beer still represents a huge muajority of our sales. >> we have to go in just a moment. atlantic city any chance it ever comes back? >> no. >> done? >> done. look i've been in the convention business for 30 years and president of the major convention for 30 years. as conventioneers we won't go there. and nobody wants to go there. and now we have it's substandard physically. they never built the destination. they've built a bunch of hotels. >> john, thanks for being here. >> thank you. when we come back this morning, jure european stocks selling off. richard fisher will join us right after this.
6:57 am
6:58 am
6:59 am
7:00 am
market alert. red arrows in europe and u.s. equity futures are under pressure. our guest host for the hour with one of the most outspoken central bankers for the last decade, richard fisher is here to talk rate hikes and life after the fed. get ready for a rise in oil prices. legendary oil man boon pickens tells us crude is headed higher. which 2016 presidential candidate is the smartest. a cable channel announcing a prescription service for cord cutters. >> it's showtime. >> it's showtime. >> showtime. >> showtime ceo matt blank is
7:01 am
here to talk streaming and give us a sneak peek of the hit show "billions." >> let someone in a government office tell me what i can and cannot buy i might as well close the shop. i'm not closing the shop. >> the second hour of "squawk box" begins right now. >> announcer: live from the beating heart of business, new york city. this is "squawk box." good morning, again. 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. some red arrows for the u.s. equity markets this morning. the dow futures are off, but right now down by about 63 points. s&p future is weaker as well. down by just about nine points and the nasdaq down by 29. take a look at the losses in the european markets. the dax down by 1.4% and the
7:02 am
cac, in france down by 1.3% and a lot of this coming as yields have risen for all of the european treasuries and right here in the yooupunited states as well. finished talks with eu officials and he suggested athens would make a payment due to the imp tomorrow but still some differences between greece and international lenders and we don't have an official deal. dish network reportedly in talks to merge with t-mobile us. that's coming from "wall street journal" saying that t-mobile's boss, jauj ledger would serve as the ceo and dish ceo charlie mergen would become combined. the purchase price in that deal still to be decided. that article, the sentence was this. a deal between dish and t-mobile two people who hook up because
7:03 am
they are the last two left in the bar at closing time. >> you heard we played "closing time" in the last hour. >> i did. john not so happy about that particular reference on twitter this morning. saying a little snarky. it didn't deserve a comment. so, there you have it. >> from the guy who is -- >> not what we did. >> he's not exactly a guy who has not known snark himself. >> he sneaks in to at&t meetings and stuff. isn't that the guy wearing the t-mobile t-shirt or something. >> and end up getting kicked out. >> he is trying to merge with them too. he tries to sneak in. we'll see where this goes. >> is this you? what is this? >> i think it might still be me? let's tell you what is going on today's economic calendar. revision to q1 productivity and those reports due out at 8:30 eastern time. thank you. timing for the first rate hike from the fed. one of the biggest questions for the market and it's something
7:04 am
our next guest might know a little bit about. former dallas fed president richard fisher. his first time on the show since stepping down from the dallas fed. also his first time on the network. drum roll -- since being named a cnbc contributor. ladies and gentlemen, applause. applause. i have said a life well lived and then finally, the just reward comes your way. the pinnacle comes. all the other -- some day you might be as successful as your son, miles. >> then i would really accomplish something. >> great to have you. and i always wanted you to do this and hopefully we'll see a lot of you because even when you're on the fed, you were somewhat outspoken. my first question we have had people in that i have agreed with at the time that it's been way too much given the economic background backdrop from the fed. stay too long, too much qe.
7:05 am
three rounds. and there were times when i thought that you sort of held that opinion to some extent. the people that didn't want to raise are now taking a victory lap that in fact even now we shouldn't because we've never really gotten that far above. were you wrong about not wanting to do as much accommodation? >> i don't know who's right or wrong. obviously, we've done better than most countries. we in the uk have done the best. we have done a lot. by march of 2009. we have already done $2 trillion. >> yeah. >> the market turned on march 6, 2009. three times the level it was before. if you look at the stock market yields were driven down, hammered down to historic lows. the question is did we do too much? well, the answer will never be known. >> it might be. >> what i wanted to do and i was against qe3, "a," because i didn't believe we could do it. i wanted more bullets in our
7:06 am
holster in case things slid to the down side. >> like they are now. >> i'm not sure they are now. >> we'll talk about that. >> here's the point, for all the criticism of qe 3, including my own criticism. it would have worked better if we had fiscal authorities that would have got something done. if we didn't have a feckless congress and that's what we've had. so, this whole, we'll get into these issues. wealth distribution and so on. there's a lot of criticism of the fed. i don't join in on that criticism because we did our job. >> right. >> it's the people that tax and spend and regulate that have failed us. hopefully we can talk about that a great deal. >> article in "the journal" today trying to explain the slow almost nonexistent rise in wages. one of the key points. one of the first points is that a lot of the, you know we hear about the participation rate. don't worry about it. it's boomers. don't worry about it. it's down, down down. but it has a huge pool of people that are ready to come back if they get a chance.
7:07 am
so they're willing to come back so there's no wage pressure so that 5.4 or whatever we have it really is not a real -- i'm not saying it's not a real number but it doesn't describe the actual unemployment picture. >> you look at the ratio. over 5 million jobs out there that are available that are looking for people to fill. people who already have jobs feel comfortable leaving and going some place else. if you look at the focus groups of these big retailers do and other big retailers do. they no longer hear i'm no longer afraid of losing my jobs but what they hear among their focus groups what am i going to be paid? >> is that a precursor of wage inflation? >> we're beginning to see a little bit of wage price pressure as unemployment rate comes down in the country. it's not sufficient right now, but it's picking up. >> two and change. previously it was four or five. >> it picks up with each report. with each decline in the unemployment rate. so, i think we're actually in a
7:08 am
very good place right now in the united states. in fact, we're in a unique place in the world and i hope we get a chance to talk about that. >> no we definitely will. do you get the feeling any more that that zero where we are right now. i mean is the fed behind the curve for 5.4% sore does this what we just talked about. >> look at where the markets are. look at where the ten-year is. we moved up to over 240. in a way the markets are tightening for us. these negative interest rates we saw for a while. what that tells me when you see rates that low. too much liquidity. too much money out there. >> i know you're not a market prognost prognosticator. >> that's a big word. don't you dare call me a prognosticator. >> does it make sense to you? >> what? >> the stock market. you say we're in a great place right now. >> we'll have volatility. we've had nothing but a straight line for the longest time. you've been in the business, you understand us.
7:09 am
trees don't grow to the sky. i'm not going to talk about where the levels are. you can't assume, if you're a central banker you can't become a nervous nelly if you have serious correction. >> you bio techs are -- >> i never said anything about bio techs. >> you just said we're in a great place in the economy. >> i think the data is very good historical data and we are trading at a very rich price overall. it's understandable. you lower rates to zero you change the discount rate for cash flows and profits. if you raise these rates, which are hang then you'll have a different discounting factor. i don't see anything unnatcherate aunnatchural about this. >> the rise in the yields over the last three or four days that this is the real thing. we are looking at higher yields not only here but across the pond in europe. or is this a more volatile situation? >> i agree, we'll have more volatility. when you come of off these ultralow levels just a couple
7:10 am
basis points represents significant volatility. all a question of how you discount cash flows. that's what this business is all about. >> we have a lot to talk about. but you mention fiscal and the executive branch not getting its act together. implied with that always with you is texas has done it right and has done some things right. you saw "new york times" yesterday. >> was it today? >> i'll show you this because this is crazy. >> didn't you like the title? >> i love the title. >> i know. i. >> job growth in texas. and this is job growth in california. >> i love the title. the title of the "new york times" piece. they wish it was fading. they say, as the texas miracle fades, a closer look at policy. so the minute anything happens, they're going to, okay all that stuff that you thought was good. we were right all along. but they mentioned. the unemployment rate is 4.2. well below the 5.4. but you lost the jobs in oil. that's the point. they're waiting for you to
7:11 am
stumble down. >> the fed always has to readjust. >> don't you have guns in school? >> don't ask me about that subject. in march we lost 11,800 jobs. not the number that they have in the "times." >> what number do they have in the "time." >> in april it came back. so finally you can punch texas in the nose, that's great. but the point is it's a state of 27 million. we have 27 million people and we have 12 million workers and jobs. so, yeah we've been set back. only about 1% right now. >> you did tort reform and a lot of different things. but at least they put it in the op-ed section. oh, wait a minute it's like everything else. it's one big sort of op-ed. >> look, i like the "new york times." they hate texas. i can understand it because their own hometown has done so poorly for so long. it's jealousy. >> don't look at me. >> don't look at you? >> i didn't write this story.
7:12 am
i'm not -- >> the other comment -- >> i think that's the deal. the rest of the country is doing better and that's what we wanted to see for a long time. >> we will talk about being in a good position and definitely being the best in the world here right now. >> do we have time for me for 20 years on this show. dave letterman of business. >> i think we have some pictures of my favorite picture is birdie with i love dogs. i have two now. i had three. but don't you just love the way they're looking at. >> this is what i have been doing since i retired. >> that's your son-in-law and grandson. >> miles. the incredibly talented miles. >> i wasn't impressed with that. >> that's the fort worth rodeo. >> this is not your first rodeo. >> those are my granddaughters. >> do we have birdie? oh. who is that? how did that get in there?
7:13 am
>> see you had to work that in. >> you're so amazing to play with condi. you're not so cool. >> but did we see the dog? did they not make that one. >> it's my granddog actually. >> the way that it doesn't like that big, my dogs with ears. one of your bulls. it doesn't like it does it? we have to show that shot. what is he going to do to that thing. >> rich is going to be with us for the rest of the hour. when we come back showtime the premium cable channel and showtime chairman matthew blank will join us after a quick break. the jobs news and jobs cuts hitting the tape. that's at 7:30 eastern time. and legendary oil man boone pickens is in the studio. he says oil prices are set to rise. we're back in just a moment.
7:14 am
7:15 am
7:16 am
welcome back to "squawk box." showtime taking a major step to deal to the cable cord cutters. the creation of a new over the top streaming service. here to talk to us about the new venture, the future of tv and more is matthew blank. chairman and ceo of showtime networks. i'm involved in an upcoming
7:17 am
project on showtime and matt brought a little surprise on that which we'll talk about in just a little bit. nice to see you this morning. >> nice to see you. >> help us understand what this is all about in terms of getting to the cord cutter. not just get at the cord cutters. how many cord cutters buy this product and how many others who actually have cable already bundled and end up buying showtime? >> i think you're right. first of all, i sort of start looking at it from 30,000 feet. and we have nearly 24 million showtime subscribers. there is over 1115 million television households and a lot of young people entering our target audience who don't necessarily even have a tv any more. so there's a big opportunity out there in that entire universe. now, more specifically there's 10, 12 million broadband subscribers. they should be a target for us particularly to start off for this service. so, there's opportunity across all those groups. >> you look out ten years from now, the bigger opportunity is going to be cord cutters or how
7:18 am
do you see this all playing out? >> i don't think we'll be using the term cord cutters. i think that is sort of a short-term way of describing maturity in the business through satellite cable and the telephone companies. that's still a big business. close to 100 million subscribers there. it is a big business for a while and we do well in that distribution universe. >> the economics better for you over the top, better for you with the cable companies? how does this change the relationship, do you think? you're doing hbo is doing other sundicated. how will that affect that relationship? >> each time a distributer came into the universe. it happened early part of the last decade when verizon, fioas and at&t u-verse came along. do very well from a penetration standpoint. there are a lot of ways we profit from a new distribution universe. >> i think, you know i'm not
7:19 am
going to change. i got with showtime. it's exactly how i want it. i have it. it's on comcast. if i put on a movie that's halfway through on this x1 thing, it says restart. there's a button where i turn to it and it will restart. >> or resume. >> or resume. i could go on demand and get it but if it's playing on showtime. if it's ten minutes into it. i don't need anything. i don't need over the top. >> the good news is you're not our target. >> he's an old guy. >> you mean for the streaming. >> for the streaming service. >> for the streaming. you're not the target. >> but you understand the target. >> "survivor" is still on. and he goes we don't care about you anyway. >> we very carefully crafted the strategy, not just to showtime, but cbs and how we take advantage of all great content. and this is a really important
7:20 am
initiative for showtime going forward. >> content keeps getting more valuable. >> keeps getting more valuable. >> what do you think that means, though, about the future of the cable companies and the satellite companies and all the distributors. >> remember, lion share of our distributors are in the broadband business. and this is ait riffterrific for the broadband business. the more those guys benefit. so, i think we'll all benefit in the long term. we've crafted a strategy that we think is complementary to what our current customers are doing. we would like nothing more than comcast or verizon or broadband customers to start selling showtime to their broadband only subscribers. not just having us be in that business. they are the ideal people to do that. >> do you think they will? >> well i absolutely think they will. we're in a couple negotiations right now. >> is it 11 bucks a month?
7:21 am
>> $10.99. >> $10.99 a month. that's just showtime. that's why i don't understand. i can be at my overall cost so quickly with the channels that i want, i don't see how it's ever going to be cheaper. >> if you're watching all those channels. and if you're watching sitting in the living room at a television every day. a lot of our potential universe has very different way of consuming. >> you can't carry 75 inch screen around. >> matt, what are you doing, what do you think of yahoo! getting the nfl for that one game and do you ever see a day where you'll see a mayweather pacquiao fight taking the cable guys out of the game? >> directly to that big screen in your home and that's probably how you want to watch a pacquiao/mayweather fight. >> or maybe the way watch them. you still have a little blood right here. your seats were pretty close. don't think i didn't see you
7:22 am
sitting back there. were you in the second row? >> one of those rows. >> second row center. >> he did well. >> we did okay. >> that's how you watch it. >> sports you think other things like that going over the top or no? >> i think live television is best watched in your home and probably through the current distributors. but there will be sports out there for these different audiences. and different ways to consume them. and, you know getting back to joe's point about being able to stop a movie orstart a move start a movie. people using the internet for products and services and this is a great consumer interface. >> matt before we let you go, you brought something along that i had to keep under wraps for quite a while now and i need to thank you for that. they brought along a clip to give us an exclusive. the first look of "billions." is a series that i co-created with my partners brian and david. it's an epic better between gun slinger and a law man and you're not sure which is the good guy. take a look at this.
7:23 am
>> what we do has consequences. come to work every day and don't waver. >> when did it become a crime to succeed in this country? >> we've spotted a suspect trading pattern. >> you must get things like that every day? >> all three firms have links to bobby axle rod. >> so there it is. >> that looks great. >> we're really excited about it coming next january. classic showtime characters deeply submersive. you're not sure who to root for. we couldn't be more excited. >> it's been a great project with brian and david and also with david nevins. >> andrew you know i have people who come up to me and ask if they are the models. >> everyone. these are all the guests on the show. everybody will think there's something. >> damian is bobby axlerod.
7:24 am
>> paul plays the head of the southern district of new york. but he is far -- >> sorry. >> you know we're just trying to keep it together. but it is it is the epic battle. >> congratulations to you. >> thank you. and tieo my partners. thank you for being here. >> another year right now. >> if we're back and showtime online is doing terrifically. >> thank you. >> he's looking for a commission already. >> always looking to get rid of you. >> you're so good at this other thing. i mean -- >> see what he's trying to do. coming up, boone pickens is here. back in december he told us oil prices would rise and now he says the time has come for oil prices to go even further. he'll join us in a few minutes. time now for today's aflac trivia question. what was the name of the first commercially produced home robot
7:25 am
to reach $1 million in sales? the answer when cnbc "squawk box" continues. ah! aflac? aflac! i thought you said this guy was the best? oh, he's a horrible stylist. gah? but he's the best at paying claims fast! really... mmhmm. paid mine in just one day. one day? yea. aaaflaaaac! in just one day, we approve and pay. one day pay, only from aflac. 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?
7:26 am
like, right now? can it download a track while i'm sampling it? can my keys find me? with the power of digital, analytics and automation now every little "thing" can provide even greater value. ok, so can it tell the doctor how long you have to wear this thing? the answer is yes, it can. so, the question your customers are really asking is can your business deliver?
7:27 am
e financial noise financial noise financial noise financial noise now the answer to today's aflac trivia question.
7:28 am
what was the name of the first commercially produced home robot to reach $1 million in sales? the roomba vacuuming robot. still to come this morning, we do have breaking news on the job situation. the challenger report on layoffs is just a few minutes away. we'll be looking for clues for tomorrow's big job's report. boone pickens says oil prizes are headed back up. the oklahoma oil man joins us on set after a quick break. oklahoma or texas? he lives in texas but oklahoma roots. >> same thing.
7:29 am
when you're not confident you have complete visibility into your business, it can quickly become the only thing you think about. that's where at&t can help. with innovative solutions that connect machines and people... to keep your internet of things in-sync, in real-time. leaving you free to focus on what matters most. ♪ ♪ ♪ (singing) you wouldn't haul a load without checking your clearance. so why would you invest without checking brokercheck? check your broker with brokercheck.
7:30 am
7:31 am
♪ welcome back to "squawk box." some breaking new on the jobs front. the latest in jobs report telling us that layoffs are down 33% compared to last month. here to take us inside those numbers is john challenger. let's walk through those numbers. i think we should think those are good numbers but then sort of walk us through the energy complex, if you will, because that's where the problems lay, if you want to consider them
7:32 am
problems. >> the numbers are good. 41,000 layoffs and they were down 33% from april. but oil cuts were interesting because just weren't many of them. just about 1,000 we found. so it suggests that as long as oil prices stay stabilized and that is obviously a big question. maybe for now the oil and energy and gas companies have said let's hold off. we can't afford if there is a big change to lose our talent. so, we will be a little careful for now. >> about 5,500 cuts in the financial services sector. what's that about? >> we saw companies particularly jpmorgan dominated this space this month. announcing cuts to tellers positions that are kind of being outdated. so, as technology has changed, they've kept many of those employees on. more say than some banks. they are taking moves to now cut the most interesting was really the state government cuts led by
7:33 am
massachusetts. >> right. and the other thing i was going to mention, five top industries for cuts year to date. energy is the top, that's expected. and then retail, industry industrial goods financial and health care. how do you think that will wind up if you look by the end of the year in terms of order? >> we certainly know that energy is at risk. this may be a lull. this may be a point where we've hit a stabilization there. financial continues to cut, seek cuts because the legislation is making it harder for these companies to make the kind of profit margins they used to. some of the big banks are cutting jobs. the state government i think, the government cuts is coming. there's so many states that have bad budget deficits. we saw massachusetts take some significant action try to get that by offering early retirement packages and potential layoffs to follow that. so, i think we'll see other states follow that same path. >> john it's great to see you.
7:34 am
thank you for bringing us these important numbers. we appreciate it. >> thanks. >> thank you. >> andrew thank you very much. we've been talking oil this morning. domestic oil production hitting a new high as robust supply continues to keep crude prices some 40% lower than a year ago. could oil prices be back on the rise? boone pickens says oil could climb back above $70 by the year end and looking at higher prices by the end of next year. boone, great to see you this morning. >> you know i'm a year older. >> first i was going to say, happy belated birthday. and i liked the headline in one of the papers i saw at the time. four score and seven years ago -- >> that was oklahoma city paper. >> happy birthday. >> thank you. >> the last time you were with us you told us you thought prices would be back by $70. >> that was the 23rd of december. >> it was. we are looking at oil at $60,
7:35 am
but a pretty stubborn ceiling at $60. what do you think happens here? you're still looking at $70. >> it's a long way until the end of the year. >> it is. >> and you've had a good bounce off the lows. but the key to it is that we've had 1,000 rigs shut down. we were 1,609 rigs when i was on there in december. and i said you're going to shut down 1,000 rigs. we have about 640 working now. >> one thing we heard from an oil producer this week though a smaller oil producer who has been doing this for a while and in the crude is that he is now able to produce oil at a much cheaper price than he was before. simply because prices have come down for equipment, for labor, for all the things that you were paying a premium for before. that helped out tremendously. >> when you are getting $100 a barrel everyone wants to get in on the act.
7:36 am
frac companies pressure people. everybody wants in. when the price tumbles, everybody wants to keep their equipment busy. and they're stacking rigs and they're stacking pumping equipment. everything else starts to you know -- >> people think they can turn it back on in a second though. they say that they got it right to where they can leave it in the ground if they want now with this new technology. but then when it gets -- >> once that new technology leave it in the ground. >> this is what we don't understand. we've been told obviously, we're not experts. >> the horizontal drillers are able to cap it and then immediately bring it back online within days. >> that sounds like what you're talking about is that they can turn it off and turn it on like your faucet? >> right. >> no. i think what they're referring to. they're not shutting those wells down, okay, but they're not completing wells that they run pipe and horizontal hole. >> right. >> for instance. eog.
7:37 am
i think they said they had 258 wells to complete and they were going to complete 20 wells a quarter. yes, that is sitting there to do but -- >> couldn't they bring it back at 70? >> we increased our production. a million barrels a year for five years. 4 million barrels to 94. so now you shut down 1,000 rigs, we're dealing with a decline curve. so there's, if you're trying to grow production, you first got to maintain production. and decline curves. i mean that's what made me old was -- >> you're not decline. >> but i fight the decline curve the last four years of my life. as soon as you get an oil well and mutt it on production it's ours to decline. now, how fast is it going to decline is very important. >> do we know. you said 9-4. what will we do with 640 rigs.
7:38 am
will it go below 9-4? >> yes. definitely, you can't hold it. you already turned over on the balkthe eagleford. >> maybe we don't need to get to 10.4. if it doesn't go down to 7 or 6. >> you have to have a higher price than we are right now to put a lot of rigs back to work. what is a banker going to say? >> you know this better than i do obviously. part of this too, the banker in me says you keep things going because you have to service your debt, as well as right now, that is part of the equation. >> i cannot tell historic. yes, sir the banker had three loans that were not performing. he calls him in and says hey, we own the money for the drilling rig and you're not performing on that one. and he said yeah it could be
7:39 am
worse. he didn't like the answer but he thought he was nervous. so he asked and said we loaned you the money to get the acreage to flip. you can't sell the acreage and he said it could be worse. and the bankers doesn't like answers now. we got to production and you're making more salt water than we thought. lifting costs are more than we thought. how could it be worse? he said it could be my money. >> that's right. >> you think the banks are going to get stuck. >> no they're not going to get stuck. banks never get stuck because they have smart guys like fisher and they don't know the producer will get stuck. nobody is going to get stuck. this is going to -- it's just a slower pace. >> that's right. >> yeah. i mean i had three rigs running. i shut them all down three months ago. and, so when it gets back comes back to 75 80 i can
7:40 am
drill those wells and make money off of it. i get to say, i was running one rig unit was running for $23,000 a day. and now 17,000. so, everybody cuts. but that's a history. you know there have been five of these where the oil price was cut in half. and -- >> tough times in modern history? >> since 1980. okay. and the saudis always step up and take the cut to stabilize prices. well you saw what they did this time. no more us, united states, they didn't say united states, but that's what they met. we are the swing producer now. how do we adjust it? we don't adjust it by the king or whoever says cut production. we cut production for economic reasons. >> so, it's actually market forces that take over here versus a cartel. >> it's america.
7:41 am
>> right. >> that's the way we operate. >> think of these numbers. we go to 9 million barrels. that's a huge leap that boone just described. we are the swing factor. >> when we went we peaked on oil at 70 at 10 million barrels a day. we started a decline and we declined down to 4 million barrels. then we got on horizontal drilling and the heavy fracking and everything else. so, they brought it back up to 9.4. unbelievable that we had an industry that could do that. and it's remarkable. the oil and gas industry in america, they operate market forces like you said and it's a great industry. >> has it changed the economics of oil, though to have america as a swing producer operating under market forces to the point where it has a new band that has been set. is 60-80 the new band. how would you put that?
7:42 am
because it used to be before 2008 we were looking at oil prices and thinking they were going to be super spikes that took us to $200. i don't see that under this area with supply. >> well the price, whatever the market forces are is where you are going to end up on price. but if you go back and look at the last five years, the only country in the world that increased production was the united states. all right, now, i think that opec is they're all in at 31 million barrels a day. that's about all they can do. they talk a lot about it. what they can do and the saudis say 12.5 or show me. i'm ready to see 12.5. and they're making 10.3 and they struggle at 10 i think. i think 10 is just about all the saudis can do. so, the dynamics are all changing and here we got a president that i think he's your guy. i'm not sure. but he he doesn't -- this guy
7:43 am
doesn't get it. today, we do not need one barrel of oil out of the mideast. >> it's a texas democrat. >> i'm a texan. >> he just looked at me and said he's talking about me. >> you're talking about him. okay. don't -- >> but you're sitting here and you do not need a barrel of o oil out of the mideast? >> what is the most this country or north america could do? could we do 20 million instead of 9? >> north america? >> we could. >> mexico and canada right? >> canada i mean that is -- what we should do is get an energy plant. >> no. >> we heard about that. >> we have to do climate change first. >> you haven't asked him about the cingulsing cingulsingularity. >> he knows this stuff better than anybody else. what about mexico?
7:44 am
>> mexico -- >> they have the potential or is it overexaggerated? >> no, it has the potential. >> north america is big. >> if you look at pmx, they can't find oil ankle deep in it. technically from the united states, which we could do. and we could get back and increase production. it could be a very solid loan and you put north america together. now, we are the market for mexico and canada and the united states production. we don't need anybody anywhere. and this president i love for him to get up and say, by the way, we don't need a barrel from the mideast. that's that's old stuff. it's over with. and if we don't need anything we can just pull the fifth fleet out and come home. well i'm not saying i want to do that. dick cheney tells me i don't know what i'm talking about. which, i know something about oil. i may not know about -- >> all right. >> okay. >> we have to go.
7:45 am
thanks. but i was going to bring up. we have a picture of a texas long horn. i was going to say, he did that to needle him about the oklahoma state. we'll bring it up. watch when we come back. >> oklahoma state cowboy, the first time in three years. >> okay. >> i don't want to get anything start would you. >> i know. you've sent us pictures of big longhorns. >> he calls texas baja oklahoma. >> the way you say it one thing. you were going to ask me about earthquakes and -- >> oh, we were? >> whether fracking is causing earthquakes. you know what is causing earthquakes? climate change. i swore they said that. caused the civil war in syria, caused ebola. i'm not kidding. it caused earthquakes and all that. climate change. >> we need you back for another time very soon to talk about this. >> you're out of here. >> the other day i said joe kern
7:46 am
kernen doesn't like you. anyway we're going to have a great guest host on set and a lot to talk about and we'll also have a little bit more from i wish we had a lot more from former dallas head president richard fisher after a quick break. verizon say neversettle. t-mobile agrees.
7:47 am
never settle for verizon's overpriced gimmicks. try the un-carrier risk-free for 14 days you'll love it, or we'll pay for you to go back.
7:48 am
7:49 am
american pharaoh enters the belmont stakes to become the triple crown winner in history. the drawing ceremony for post positions was yesterday and american pharaoh started at post five and he wasn't supposed to win at the preakness because post one. 14 horses have won from that position, including 1977 triple crown winner and then wasn't it next year was affirmed but it has been i think 1978 was the last triple crown winner. a couple in a row. >> the best was secretariat who won in 1973. >> 1973 right. >> the way it is now where some of these horses have sat out the last two or sat out the preakness and they're totally fresh and the way they do it now, you remember the guy last year got all mad and talked about how it's almost impossible to win out there.
7:50 am
huge deal. for some reason this horse just seems special, even more special because before the derby, everybody was talking about american pharaoh. maybe this is it. luckily nbc has it and the belmont stakes 4:30 p.m. a programming note i think it will be probably on nbc sports network even earlier than that. but you can watch the big-time coverage on nbc. 4:30 p.m. eastern. big deal in our house. we were thinking about going out there. impossible to get out there. >> they are limiting the number of people who can get in this year. >> they want us to go. >> who does? >> the folks in our ear. >> don't be a wimp. coming up next we've been teasing you the entire hour richard fisher embracing life after the fed. we'll show you the longhorn pictures you have been waiting to see. go roam sleep in sleep out star gaze dream big wander more care less
7:51 am
beat sunrise chase sunset do it all. on us. get your first month's payment plus five years wear and tear coverage. make the most of summer... with volvo. you used to sleep like a champ. then boom... what happened? stress, fun, bad habits kids, now what? let's build a new, smarter bed using the dualair chambers to sense your movement, heartbeat, breathing. introducing the sleep number bed with sleepiqtm technology. it tracks your sleep and tells you how to adjust for a good, better and an awesome night. the difference? try adjusting up or down. you'll know cuz sleep iq™ tells you. only at a sleep number store where you'll find the best buy rated mattress with sleepiq technology. know better sleep with sleep number.
7:52 am
7:53 am
there it is. >> you own that. not the dog. you own -- >> that is my granddog. that is my daughter allison's dog. >> the long horn. i love the dog. the position he's in. he's barking. what are you? >> it's a she. lady bird. >> i thought it was birdie for golf. >> are they friends now? >> they will never be friends. >> they'llo exist. we're back with our guest host richard fisher. richard, you said at the top of
7:54 am
the hour that right now america's economy is in a very unique place. you want to elaborate on that? >> boone pickens is a good example. think of where we are now, we're not energy independentdependent but energy strong. the cost of doing business is as solid as it can possibly be. we don't have deflation. and we have the best ballot sheets you can imagine, whether it's public private, large, small or medium because the cost got so cheap and people restruck restructured their balance sheets. the worst and darkest periods and what's wrong with our banks is nothing on the left is left and nothing on the right is right. everything is right. here we are. think of all those people that wrote that book. professor kennedy here nearby in connecticut. the rise of europe, the decline of the united states the rise in japan and the decline in the united states. we are the epicenter of economic
7:55 am
progress. technologically speaking economic growth. north america. the economy, we and the brits have outperformed everybody. so, i'll set aside britain a tiny country. come back to the united states. you couldn't be in better conditions than we are. if we only had leadership that came out of the congress and in the white house. i think the fed did its job. >> you couldn't have better conditions we are in right now. how come we're stuck at 2% growth. >> you have to remember the key workforce demographic is between the age of 20 and 64. only growing at 0.6%. we can't have many more numbers like the 200,000 number we had yesterday or the kind of stuff that was talked about by challenger. so at this point in the business cycle, i think we're growing at the speed we probably would be growing in the 2s. maybe a little over 2. 2% to 3%. we're in a mighty fine spot right here. you talked about the horse race. >> remember i used to say that i thought that the united states was the best-looking horse in
7:56 am
the glue factory. >> right. i think we're the secretariat. i think we're 31 lengths ahead of everybody if congress would let us out of the starting gates to get our act together. >> the only part. >> so, now, we're 16 lengths ahead. so far down the track. >> give them another chance. >> we are number one and how is that? >> luckily, always another election coming up. >> it's not just, the executive is important. it's the congress. we have to make sure that we have congressional leadership that rewrites the rules and allows people to take care of the cheap money the feds made possible. change the regulatory structure. and in sense american businesses, women and men that run public and private and small and large businesses to create jobs and make profits that invest in cap-x. that's how jobs are created. >> it's been wonderful having you here today. >> i want to continue on a patriotic note. >> every cnbc contributor is strutting around because the
7:57 am
average stature of the other 100 we have just went up like 30% or so. >> it's great to be here. thank you for having me. >> don't go on other shows on the network, though. when we come back this morning, we'll talk tech trends and beyond. roger mcnamee why uber is the best idea coming out of the valley since facebook and which tech unicorns he thinks will survive. "squawk box" coming right back. you wouldn't hire an organist without hearing them first. charge! so why would you invest without checking brokercheck? check your broker with brokercheck.
7:58 am
why should over two hundred years of citi history matter to you? well, because it tells us something powerful about progress: that whether times are good or bad,
7:59 am
people and their ideas will continue to move the world forward. as long as they have someone to believe in them. citi financed the transatlantic cable that connected continents. and the panama canal, that made our world a smaller place. we backed the marshall plan that helped europe regain its strength. and pioneered the atm, for cash, anytime. for over two centuries we've supported dreams like these, and the people and companies behind them. so why should that matter to you? because, today, we are still helping progress makers turn their ideas into reality. and the next great idea could be yours.
8:00 am
time to elevate your portfolio. is there a tech bubble brewing? is china's economy slowing down? what companies will survive the next 20 years? should americans be afraid of the explosive growth of the sharing economy? senator mark warner is here why the uberzation could put the workforce at risk without a safety net. you want a beer with your beefy fritos burrito? the final hour of "squawk box" begins right now.
8:01 am
welcome back to "squawk box" here on cnbc. first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. less than 90 minutes away from the opening bell on wall street. watching the futures this mourned and they have been under some pressure. you can see the dow futures are still down by 40 points and the s&p down by 6.5. believe it or not, these are off the worst levels of the morning. taking our cue from european stocks this morning. if you check that out right now, there has been improvement there, as well. the dax is down by 1% and the ftse is also down by 1%. again, we saw bigger declines steeper declines earlier in the session. check out the yield on the ten-year german boon you can see that yield has climbed significantly. it was at about 1% and trading at about 90 basis points. that is again, something we have been watching very closely
8:02 am
because that has impacted yields here in the united states as well. a couple stories that investors will talk about this morning. dish network reportedly in talks to merge with t-mobile u.s. a price structure not decided. apple pricing its first ever yen denominated bond. the tech giant issued bonds and euros. the former governor of florida saying he will make his formal announcement for running for president on june 15th at miami-dade college. they make an announcement about an announcement. >> hillary is really announcing coming up right? >> they are all announcing. >> i think around the same time isn't she? when is hillary's reannouncement? >> she already made her announcement. >> she is having a reannouncement. >> like a renewing your vows. >> almost like renewing your vows. she may at that point decide to actually field a question or two from someone. anyway two big economic reports this morning.
8:03 am
weekly jobless claims and productivity and costs and the big data point comes tomorrow with the may employment report. a key piece of information for the markets, as it always is and as well for the fed. here is what newly named cnbc contributor richard fisher told us about the challenges facing his colleagues at the central bank. >> for all the criticism of qe 3, including my own criticism. it would have worked a heck of a lot better joe, if we had fiscal authorities that would have got something done. if we didn't have a feckless president and congress. that's what we had. >> our guest host for the last hour. and new guest host this hour. mark zuckerberg credits him with insisting that facebook should not be sold. silicon valley super star roger mcnamee is our guest host. so great to see you. >> so much fun to be back
8:04 am
becky. amazingly, i've been lucky enough to have more than one career and that one i get to do a lot more frequency now that the markets give me time. >> what is the significance of 420 420? >> social changes come in america and in the world of legal cannabis is upon us. we wrote a song called "it's 420 somewhere." and 6.4 million people downloaded it. a leading indicator of social change. i'm proud of that. >> this is that song. >> this is that song. >> your most downloaded song. >> by 6.4 million. turns out to be the most any band had downloaded from their own site. i mean when we got to 100,000, it was the most. so, i was really you know, we were sitting there and i was going, who are these people? you get to 1 million and 2 million and who are those people? >> a lot of people had forgotten that they already seen it. >> your point about the political reannouncement.
8:05 am
it's the same thing. people just have a very very steep -- >> but these people are pot smokers. >> i would hope so because -- >> you're sumging thatggesting that they forgot they already downloaded it. >> oh, man, i forgot. >> it's the same guy, really. it's the same guy. >> right. >> david faber just downloading it. >> and having some peanut m&ms. >> roger, we're always trying to figure out what is happening in silicon valley. we had questions about whether there is a technology bubble whether it comes to the publicly traded companies but the private market before these companies go public. what is the answer? >> indisputably and i'm happy about it because every major industry in the history of the united states has been built on the back of a financial bubble. go back to the beginning of the industrial revolution to canals and railroads. you go back and study the history of the united states and the history of speculators and throwing money at the next big
8:06 am
thing. making it huge. having it blow up. but then the united states is left with a great new industry. the speculators are sitting there with burnt fingers. but the country gets a great new industry. i think we are in the process of doing that again. so, i always like to look for the silver lining and i do think that bubbles are inherently exciting while they're happening and they seem tragic when they end, except that you are left with this great new industry. and what's going on now is that we're moving from the period where the excitement was around selling smartphones to now applying the technology of smartphones to industries that frankly, had either little or no technology applied to them before. and that is a huge deal. it's as big as you know, the same phase in personal computers is what created the internet. >> i like technology bubbles. i'm not sure about housing bubbles. >> to be clear. new industry bubble. >> the debt bubble we have going
8:07 am
on right now is terrifying. >> that is not a new industry. bankruptcy lawyers. >> my point is we left it from 2008. so we're still sort of reinflating that bubble. >> where are we though in the bubble. oftentimes these things inflate and they can inflate and this can go on for years, as it did in the late '90s. >> as we are already doing. you know i think when you got into $10 billion territory ubere people are going, wow. that's a real number. and then they get $40 billion and now they're at 50 billion and you sit there and go how high is up? i don't know the answer. >> does that mean that you wouldn't buy anything at these prices? >> i wouldn't. but to be clear, that's me. i have very i look at this and go, hey, i think uber is the most important new company since facebook. but i don't need to own it today. i'm perfectly happy to wait until it's public and it comes back down. you know things it's a market. things will go up and things will go down. the real things will always give
8:08 am
you another buying opportunity. that's just how markets work. >> you bet there is another buying opportunity. >> for sure. >> meaning lower. >> well yeah. >> lower than where it is today. >> the alternative is that the game is completely over. things don't keep going up an escalator and keep going up and up and up. sorry f i'm wrong about that. god bless. the world will be a better place. >> it will be different this time. i don't see it but maybe. >> do you play around with just futures thinking -- >> all the time. >> so the internet was huge and we remember that bubble. but then i had no idea that it would totally change like social media. i had no idea. i didn't know that would be the next trend and now i had no idea. i look at uber and air b&b andcutyapacity not being used, society is after it. what is after that? >> i think the big economic thing going on behind that is
8:09 am
that the notion that we're going from every individual borrowing tons of money to own assets themselves to this idea of a much more efficient, centralization of ownership. so if you think about what's happened in business over the last 30 years. when i started as an analyst in 1982, every company had the factory attached to the headquarters and then they moved the factory to the southern states and then they moved it to asia and then they sold it to some dude in china. right? now they outsource everything. now, watch consumers do the same thing. so watch moving towards using, you know, on a pay as you go basis housing. transportation. all of these other things. i think that's the logical end point, joe. so that's why when i look at uber i think to myself imagine if uber was to take all the billions it's raising and buy the cars at really extraordinary attractive rates. if you show up in detroit, you'll get a really good price. and if they verticalize that way, then they can be in the dow and replace general motors.
8:10 am
we shift from a motto where the manufacturing is the one in the dow to the one who owns the assets being there. >> you mean owning the cars and having everyone working for them instead of having contracts. >> imagine you're walking down the street. it's the zip car model and you want to use a car. but instead of owning a car or having to go to a rental agency they're parked along the street and you take your amphone out and you got your id. and all of that. just imagine it's about transportation. maybe somebody else drives and the person is professional and maybe they're not. maybe you drive. but the notion is that this this whole thing abhoutout the shared economy is really about centralizing the ownership of ex expenseive assets which would be way more economically efficient. >> if that happened and you see uber expanding like that, does it make it worth the $50 billion valuation? >> that is the scenario where it is ultimately worth more than that. i'm stipulating that i think
8:11 am
that's entirely possible. and i think uber is that special a company, or at least that category or someone in that category and it may be that uber is like the people who proceeded google and search. you know that they're iust the guy who gets it started. >> that's the other question, such network effects that lyft. valued at $2.5 billion. is there a verizon and at&t two guys in this game or really just winner take all? >> that i do not know. what i do know is that the idea itself is so powerful that the biggest barrier to success at uber, i think, is that the poor ceo read the biography of steve jobs that you need to be a jerk in order to be successful. dude seriously, you don't need to do it that way. you don't want to confuse things that are coincidences with causation. >> it might be more fun. so you're finally going to buy a car. >> i keep talking about thinking i need to. >> but you're getting closer. >> journalists and trailing
8:12 am
edge. >> that's what i mean. we're finally making this huge transformative move. >> are you going to sell your car? you will never sell your car. you will never let somebody else drive you. >> i want to buy a flying car as soon as i can. >> flying self-driving car. get on this stuff, would you? >> i think we'll run the experiment on flying cars but we'll run them with little ones and ski if people can actually fly remotely with drones. >> i think we're doing that. >> i don't know about you, but i'm terrified of having thousands of drones flying. >> ehelicopters. >> looking up and you're going to have to wear a helmet to go outside. >> roger is going to be with us for the rest of the hour. we have a lot more to come. okay all right. coming up what goes better with a beefy burrito than a nice cold beer or a margarita? taco bell thinks it has the answer to attract millennials. that story coming up next.
8:13 am
8:14 am
8:15 am
taco bell plans to serve beer, wine and mixed alcohol freezes at a new location in chicago. this is the only for dine-in customers and drinks -- >> not for the drive through?
8:16 am
>> drinks will be served in special cups so workers know that you're not trying to sneak out. the test comes as taco bell tries to appeal to millennials who probably like chipotle or baja fresh or something like that. as i've said so many times, the worst mexican food is great. doesn't matter. the latest bird flu outbreak has wiped out about 12% of the nation's egg hen laying population. the market is already seeing a supply shortage take hold and she's on the egg beat again. cnbc morgan brennan joins us now with her exceptional report. morgan? >> all right. we'll try. the usda has now confirmed more than 200 cases that is affecting 4,500 million birds so far. most of those hens supply the breaker market. these are eggs that are out of the shell. they're sold to food processing companies. those prices are up more than 220% over the past six weeks. that's according to barry.
8:17 am
shell eggs the kind that people like us buy. that jumped 120%, as well. this is all starting to affect consumers. take a look at this. this is a wegman's grocery store in new jersey. neez notices warn that the national shortage is causing higher prices. and it's not just there. we're seeing other places. wake firm food which is the co-op behind shop right and availability is limited at some stores due to shortages in the twin cities market. also earlier this week regional fast food chain whataburger curbed preccurb ed breakfast hours. its burt flu vaccine isn't effective enough for use and experts tell us this could take upwards of a year for many midwest facilities to produce eggs, again. you could see higher prices for a while, guys.
8:18 am
>> thank you for that. when we return it's being called the on-demand workforce. senator mark warner on millennials and how they're reshaping the economy, the gig economy. and then another piece of the job's puzzle ahead of tomorrow's big data point. the numbers and market reaction. we'll have that just minutes away. we're back in a moment. financial noise financial noise financial noise
8:19 am
leave early go roam sleep in sleep out star gaze dream big wander more
8:20 am
care less beat sunrise chase sunset do it all. on us. get your first month's payment plus five years wear and tear coverage. make the most of summer... with volvo. senator mark warner said that the uberization of jobs
8:21 am
from millennials could leave a huge part of the workforce without a safety net. delivering a major address today and he joins us now. senator, thank you for doing that. >> thanks for having me. >> i read with great interest your piece this morning and i guess we sort of had an idea about this but no one ever really crystalized what you're saying there. the one thing that i glean from it is i think you see sort of an individual, sort of a private sector solution to this instead of maybe expanding the government's role in this. so aren't there tax advantage ways to get people to start saving for their own retirement for people that are not covered by corporate, perhaps retirement plan? >> well let's step back for a minute and you had that segment before the burritos and then chicken flu about uber drivers. you know millennials are now 80 million strong. they pushed folks like me the
8:22 am
baby boomers off the stage in terms of the percentage of the workforce. they will be 75% of the workforce in the next ten years. fundamentally changing through technology. the social contract between the worker and the employer. i think there's a lot of good on that. i think there's some challenges. as i point out, i'll point out in my speech today. this means that the growing contingent workforce, whether you call it gig or sharing or 109 1099, they don't get employment working. they may opt into health benefits on markets. if they go from making 100 grand a year to when stuff hits the fan and making nothing, they'll be back on the government roles. how do you think of a social contractor. they might be more public and not geared towards the models. i laid out some options. i don't think i got the right answer or the full answer at this point. but let's look at this. we had 25 people running for
8:23 am
president at this point. and i've not heard any of them talk about the gig or sharing economy. about the transformation that has taken place in the workforce. and we don't want i don't want washington as a former tech guy to get in here and overly interfere, but we ought to be as policymakers at least talking about it. >> it is the subjects that we do talk about, it is a little bit frustrating. i'm sure it's frustrating for you, as well. i think you were one of the democratic senators that arguing or at least saying that the tpp, if it's done right, should be done. >> yeah. >> and it's a weird, you must feel like you're kind of in alice wonderland down there right now. >> listen i still make the claim that i've been longer in business than in politics. i was the co-founder of nextel and then vc for a long time. and we need a little more disruption here in washington because, again, folks can't get things done. back to the gig economy for a second. i talked to brian last night at
8:24 am
air b&b. i thought he had a ceo. in terms of rooms, greater than any of our hotel chains. he said this new generation is not so much into ownership, as into sharing. his example which i thought was great. his parents the way they measured success was own a house, have two cars and if things go great, maybe have a vacation home. this next generation which doesn't really want to own things as much. you pointed this out in the earlier segment, are more into their reputation owning their own data sharing experiences on an instagram and, again, we have tax policies that are almost all geared towards ownership not to where perhaps the economy is headed. >> i always like having you on because i feel like i can, i don't know. cnbc doesn't feel you're not a fish out of water on a network. >> i'm a business guy. this place is a little bit alexice in wonderland. >> i don't know if you saw the piece in "wall street journal" i
8:25 am
don't want to alienate but president warren declares and the basic point is she has more stuff going on. it's almost like she's at this point ready to hire sec commissioners, even though really, you need to be the president to actually do that. are you disturbed at the way the party has been your party has been moved so towards the warren perspeckive on many things? are you sitting there going, this is bad for us? >> listen i think the earlier question about trade. i strongly believe that america ought to be involved in globalization in terms of increasing trade. i think it's a lot better particularly as we think about tpp that america sets the rules for asia rather than china. and i do believe if these newer trade agreements with stronger labor and environmental and human rights enforcement actually is going to be good for the american workforce and good for growing the economy. so, you know there are other folks, senator warren and others that disagree with me on it.
8:26 am
that's a healthy debate. i think the democrats do best when we're a party of upward economic mobility when it is more about future versus past rather than the old and some folks in our party are stuck in the old left versus right redistribution versus how do you actually move forward with free enterprise in a way that is a little more responsible other than the quarterly earnings driven approach that, quite honestly, is disruptive, as well. >> the middle ground i wish we could find and we always talk about it is you just said it. it's not either redistribution or growth. i mean there's a way of having a great safety net for people that need it. but to throw out all the -- i heard certain people on the far left throw out every growth oriented idea as trickle down. and as we've tried that and it resulted in the financial crisis of 2007. i mean there's -- we can do it in employment we can do that.
8:27 am
>> i hear the music coming. let me just make the point. there are extreme players on the left and extreme players on the right. i can tell you in a place like virginia, they want to hire people to get stuff done. that's why i'm trying to talk about this gig economy and how it can be a movement for economic mobility. >> senator, thank you. please come back again soon. >> thanks guys. jobs' data just ahead on "squawk box" in a moment. verizon say neversettle. t-mobile agrees. never settle for verizon's overpriced gimmicks. try the un-carrier risk-free for 14 days
8:28 am
you'll love it, or we'll pay for you to go back. the e-class has 11 intelligent driver-assist systems. it recognizes pedestrians and alerts you. warns you about incoming cross-traffic. cameras and radar detect dangers you don't. and it can even stop by itself. so in this crash test, one thing's missing: a crash. the 2016 e-class from mercedes-benz.
8:29 am
8:30 am
welcome back to "squawk box." big day productivity out right now. this is first quarterfinal. we are looking for down 3%. it was down 3.1. our last look at down 1.9. well, of course that transitions into this number. productivity is an issue. and whether it has a calculation problem or not it needs to be looked into. what was at one point during green greenspan's reign considered and spoken to as the silver bullet in the economy has turned of late. labor unit costs moved. better than expected as well. 6.7%.
8:31 am
6.7%. claims 270. 6,000. that is down 8,000 from a slightly revised 284,000 continuing claims. move from just shy of 2.23 million to a bit under 2.2 million. 2.196. so we continue to see the dynamics, especially on continuing claims. hog very close to that 2 million mark. on initial claims maybe they're not at a 15-year low. but they're still low and this fire as far as the marketplace. yesterday i didn't see the final cash close until later in the evening. about the five-year note. it didn't quite, didn't quite close higher than its yield on march 6th because march 6th was the only day that all three closed above what they had closed at last year to surpass that. so, you want to close above 169.5 and might be an even stronger confirmation of higher interest rates. as i look towards the boon and-- as
8:32 am
independent as the market may be from what central banks wish do they even know what they want to wish for? but probably look to see the volatility continue. dollar index under some pressure today as the interest rate differentials paint us back and forth between interest rates and foreign exchange and back to you, becky. >> rick thank you. steve liesman is here and he has more on the numbers, as well. steve? >> check on this 1.6% insured unemployment rate is the lowest we've had. bottom line unemployment claims are low and they will certainly suggest to the broad economic community out there that we're going to have a really strong jobs market out there. we're looking for 225 tomorrow. obviously, adp came in lower than expected. but, i don't think anybody is going to change it at all. i ink the we're still looking for around that 2.25 range. >> roger mcnamee is here and he
8:33 am
tells us what he sees. my guess is silicon valley has a distorted view of the jobs market. >> i think it probably does. >> he made some interesting comments about the debt bubble that he sees building in the united states. roger? >> i have a lot of concern that in 2008 we had a financial crisis and we never really went after any of the root causes and never created any kind of regime that gave the perpetrators of that bubble and the consequences of it any penalty for having done so. so my anticipation is we're just in the countdown now until the next time that happens. and, you know i don't know what the trigger is. i don't know when it comes. but that's what keeps me up at night. >> we have 70 trillion new pages of rules to prevent the next crisis. >> i think that would be good. if you put all the 70 billion pages on top of the bank executives and keep. if we could use it as a paper
8:34 am
weight to keep them from doing anything. i would be in favor of that. >> barney frank and chris dodd all those guys get to continue doing what they're doing, though right? >> no i don't believe that we even understand the nature of the problem. no to me dodd frank was from the beginning a rubber band designed to, you know prevent boulders from rolling down cliffs. i mean we need something. i think we need to start off by answering the question of is regulation the financial markets in the public interest or not? we've been in a trend for 20 years of deregulating them without any safety nets for consumers. so really uneven rules. the banks have one set of rules. if the hedge fund above a certain scale is a set of rules and neither of those are the same rules that a mutual fund has. >> why don't we bring dan gallagher into this conversation from the sec and the sec is in the headlines this morning. you are in the headlines. check out the front page of the
8:35 am
"wall street journal." we'll show it right there and suggests two years after taking over the agency thwarted by bickering among the sec five members. you are one of them. what do you make of that article and what do you make of what roger is saying here? >> thanks first of all, for having me here. makes it sound like children. that's the picture they want to paint. look, a lot has been done under mary jo white's tennier as chairman. in my eyes as one of the free market too much has been done. i like dodd-frank point. it is the biggest rubberband. >> more in a different way. >> i'd like us to start with the core question of, do we think that regulation in the financial markets is in the public interest. we have been operating as though we do not believe that for 20 years. we have been unwinding all the things that were put in place. >> stated as facts. don't you like it when he states it as fact. >> this is not my life.
8:36 am
i haven't seen deregulation. my ten years at the sec. >> we're not regulating anything any more. we need more regulations on everything. >> dodd frank is 2,300 pages and single party piece of regulation and 100 rule making to the mandates. we're about halfway down. >> speak to the wall street journal piece. which is there has been a number of major deadlock positions over the last couple of years. there's an issue about conflicts with mary jo white and her husband getting involved on other sides as a lawyer. there's this letter that elizabeth warren put out earlier this week attacking the agency and mary jo white specifically. >> probably the wrong person to take on the merits of that letter to give it my view of regulation. >> you'd send the same letter it sounds like. >> i wouldn't send any letter. look the notion that mary jo white's integrity is at play is disturbing to me. i mean one thing, no one should
8:37 am
dispute is mary jo white has the utmost integrity. the agency the government the country should be happy to get people like mary jo white to come to the sec and her husband the same. i worked with him when he was a staffer at the sec. these are incredibly talented people. >> do you think it poses a problem because of his involvement in some of these cases that she has had to recuse herself and there you have been left with a stalemate 2-2 in terms of the commissioner voting on these things. >> it hand before mary jo white and it will happen after. i've seen conflicts and 2-2 deadlocks. >> an argument made to the extent that you want more regulation or that there is regulation on the table that is at least supposed to be enacted that it hasn't been enacted in part because there have been both the bickering on one side and on the other side these stalemates. >> absolute nonsense. congress gave the sec an impossible task in 2010 with dodd-frank. 100 rulemaking mandates. four five times the size of sarbanes and it's more than we can handle and they expect most
8:38 am
of us to get it done in two years. impossible task from the get go and no one admitted it. first you have to admit you have a problem. it's impossible. a day job. in addition to dodd frank. and then we got the jobs act. so, this notion that we're slow. mary jo white. i've been on the losing side of wade two, three votes with her. ruthless pushing through some of these rules. i respect her ability to do that and her desire to get it done. the notion that she talled. every congressman and every senator. they all have a pet project and when it's done just not the right story. >> do you feel like the markets are safer today or less safe than they were seven, eight years ago e. >> dodd frank. >> someone is an individual investor looking that markets. a lot of reasons for them to think maybe it's not a great place. the flash crash and other items out there. are they right to think that or wrong to think that? >> mostly safer through the private markets and better risk management and through lessons
8:39 am
learned from the crisis. i think dodd frank, no surprise to joe here is based on false narratives of the financial crisis. i don't think we know what the financial crisis was all about. >> you leave a vacuum and you allow the media to fill the vacuum with hindsight and the history of what happened. >> i think we know what happened. i think a lot of fathers, there is a lot of fathers to this crisis. not to say that it's -- the thing is it's banks. it may be regulators. it may be housing. and it may be credit rating agencies or a combination of all those things. >> every homeowner who didn't deserve a home thought they were benefiting. a cultural move to hire home ownership. all the banking industry did was secures it the loans that were going to go to fannie mae anyway and allow people to do what they want to do. >> we created synthetic. >> we did. because that's the best way to make profits. which is what the economy is actually designed to do from time to time.
8:40 am
>> a mortgage without collateral is not a security. it's a fraud. >> maybe you stay at zero. >> that was a big part of the problem in 2008. we were selling fraudulent instruments that and, again, i sit here and with all due respect i don't think the issue is about dodd frank. the issue is about very simply do we believe that having unfedered transactional flexibility serves the public interest. >> again, just not the world i live in. >> you live in washington. we live in the financial markets. so the really -- >> you live in silicon valley. you don't live in this world at all. >> oddly enough -- >> roger, you were an expert on the iraq war with your ponytail. i mean come on you're an expert on all these things and technology. it's amazing. >> that's why i'm here on your show. >> my point is if you do a word search you'll find only a passing reference. the narratives are built in large part around wall street greed and regulatory failures only. nothing around housing policies.
8:41 am
you look right now at the bubble building up. ir they're very obvious. we're not paying attention to that. >> whose job is that? >> the oversight council. that was supposed to be the answer to the next crisis. >> you think another crisis is coming and that's where it's coming. >> if that's where it's coming from and too busy to designate asset managers. >> is there something that the sec can and should be koogdoing? >> upping our game and thinking about liquidity issues and the fixed income markets. we're starting to get there, but decades behind quite frankly. >> is that a resource issue? a philosophical issue? >> it's an agenda issue. we just don't pay attention and on the corporate debt markets we don't pay attention because historically they work well and that's great. they've been on a long bull run. >> it sownunds like you agree that the building is coming from the debt markets and that's where it's going to explode. >> thing that we've missed a 23-year period of record low
8:42 am
interest rates. incredibly low inflation. if ever there was an opportunity to rebuild the infrastructure of the economy to encourage corporations to invest in new things to make the economy more exciting, to build you know renewable energy industry other things like that. we, as a country, have lacked the national will to invest at the greatest period of time we could have done that in our history. and, you know that's our national fault. we've all contributed to that politically. and, you know, i look at this and i repetition of what happened in 2008 it's not going to be exactly the same. things are different today. but something just something as bad as that is coming. >> how political do you think the sec is? >> i get this question all the time and i'm supposed to tell you it's not because those who care about the agency want to say it's not political. it's a bunch of technocrats not beholden to congress or the executive branch. i will tell you, though in all candor.
8:43 am
since dodd frank, things have become more political. and i actually don't think it's capital p politics. i'm not a politician. i'm not elected by the people but i have my own ideology and dodd frank when we debate these rules, what is the best way to proceed with this mandate? it draws out your ideology. you know why? because it wasn't tempered in congress. the single piece of legislation. the only piece of federal security legislation that wasn't bipartisan. sarbane oxley was almost people put their heads down got it done. >> also terrible piece of legislation. in the end it didn't address the real problems. it didn't it created a huge burdens for the economic part of the economy. helped the old part of the economy at the expense of the young part. >> but it draws out the ideologies ideologies, andrew, is the answer. >> one revolving door answer for you. this is the end for you. you're stepping down soon. looking for a replacement. will you end up going back to
8:44 am
the industry and if you do what should people say about that? >> i don't know what i'm going to do and people should be thrilled about a revolving door with people with expertise come in and out of the government. >> thanks for being here. >> thong. up next we'll head downtown to the new york stock exchange and get a read of what you can expect in today's trading session with jim cramer. check out the futures at this hour. negative for most of the session, but much better if you're long than earlier. we're down 34. we were down 74, 80 for the beginning. financial noise financial noise financial noise
8:45 am
8:46 am
you are looking at two airplane fuel gauges. can you spot the difference? no? you can't see that? alright, let's take a look. the one on the right just used 1% less fuel than the one on the left. now, to an airline a 1% difference could save enough fuel to power hundreds of flights around the world. hey, look at that. pyramids. so you see, two things that are exactly the same have never been more different. ge software. get connected. get insights. get optimized.
8:47 am
welcome back to "squawk." apple making progress and clearing out back log of watch orders. should ship most unfilled orders in two weeks and begin selling models in apple stores soon. get down to the new york stock exchange, jim cramer joins us now. jimmy, i was looking at what is the super, i didn't understand yesterday, did you? >> look i think there's a big short squeeze in the euro. i think it may run the resistance right here. did some great work with trading the other day on how the dollar did get out of control. but it would be terrific if the dollar did not go higher because a lot of our companies would do much better and you'd reverse the futures immediately because there are 27 dow stocks that do better in a weaker dollar situation. only three that do better in a
8:48 am
stronger dollar. >> and then we had the, almost the, i mean 100 basis points on a ten-year it's not, it doesn't sound like much on the german bund, but it was like 53 days ago. >> it should have never been there. spain should have never been under 2. i think they're all radical moves. and i think that sasas soon as they smelled the whiff of inflation, break rates down. they're always worried about buy more. >> are we at risk of a taper tantrum if we get to 270 on our ten ten year? >> i have to imagine we are. this is a market that is led by the financials and a giant rotation going on and it's all under neath and bubble up. jpmorgan and goldman sachs. those are companies that need the ten-year and they're selling it at an average of ten times earnings and it's a great thing for them. it's time for them to show their leadership and they're actually doing it people just aren't looking at it yet. >> all right, jim, we'll see you in a couple minutes. >> thanks guys.
8:49 am
when we come back this morning, why roger mcnamee thinks uber is the best idea out of the valley since facebook. tomorrow on "squawk box," special coverage of the may jobs report. our guests include harvest professor craig and credit swis barbara rine barbara barbara rine hlt and jim parsons. make sure you don't miss it.
8:50 am
8:51 am
8:52 am
8:53 am
♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.
8:54 am
seven out of ten power outages in the us are caused by weather. but utilities can now predict where the power will go out, within a few city blocks. working with ibm they're combining micro weather forecasts with detailed data from local sensors. to predict where outages are likely to occur. and send crews exactly where they're needed, when they're needed. ibm analytics from the internet of things is making energy smarter every day.
8:55 am
co-founder of elevation partners. you didn't bring bono. >> no he's on tour. he's got a funny thing. he likes to show up on time for the show. >> twitter. we've been talking about it during the break. chris is not a happy investor any more. he's been a happy investor most of the time. >> it's not to imagine he isn't on balance a happy investor. >> is this fixable? >> i don't like the strategy. i love the product. i think it is so important. the way i think about twitter is twitter is today where stock market information was in the '20s or '30s. you had a little machine that gave you a ticker tape.
8:56 am
that's how twitter is. there is a news feed. it would be infinitely more valuable if there were the equivalent of bloomberg and services investors use to track stocks the equivalent of charting. so i can go back and look at stuff. this is not only fixable, i think it's a relatively easy fix. one good night's sleep is just the notion to recognize the product is incomplete. it could be made complete. technically, it's not a problem. it's a matter of will. folks there now feel like there is a goose which lays golden eggs and they don't want to mess with it. i totally understand that but they aren't they wouldn't be messing with it. they would be taking this beautiful thing and making it better. >> does it then become comparable to facebook? you were an early investor in facebook. >> it becomes really valuable. way more valuable than it is
8:57 am
today. facebook is the mobile interface that everyone uses. that is a high bar to get to. can be a lot more valuable today. can be the best stock on wall street. >> have you spoken with dick costolo? >> no i never met him. i would love to. i love the product. i look at it and go wow. give me an hour. let's talk about it. i look at twitter and think, wow. it's such a cool product. >> i look at where twitter is and facebook is. you're an old friend of sheryl sandberg. she had a remarkable post on dave yesterday. it's one of those great educations on life. >> and in the grieving process. >> also the amount of sharing, the amount of comments people having a thoughtful dialogue there in a way. >> substantive.
8:58 am
>> how i dealt with as great a life crisis as a human being can encounter. >> that doesn't happen on these other platforms. >> hang on. in a sense, that's true. you can't use facebook to drive to work. the products do what they do. the difference between twitter and facebook. when facebook started out, they didn't have the product right. they were forced to constantly improve it to get to something viable. when they did, they found something amazing. what i'm suggesting is twitter started out with a product that was in some ways perfect on its first day. that makes it really hard for the team to tinker. i think the situation really just is begging for it. >> during the commercial break we were talking about elon musk and tesla. >> i never met him either. i'm amazed. i'm a huge fan of what tesla has done. >> would you buy the stock? >> i would not. that's because i'm not close enough to have a good judgment.
8:59 am
what i think is amazing is i think his down side is he is the wright brothers for the new age of electric cars. he's past the point where this is just an asterisk. he's done something memorable. what's fascinateing. each product is a brand-new start. he obviously believes we haven't gotten to we aren't far enough down the curve to standardize yet. he is not getting the benefits would you get from standardizing parts across cars. he is looking going, the stuff i'm doing today will be completely ridiculous in five years. i've got to keep pushing the envelope. that is so brave. to do that as a public company? i love the guy. dude, keep it up. >> you're investing in wellness but i don't see you wearing the bands? >> i play in bands. i don't wear them. i think wellness is one of those things. we are in an era where we moved from smart phones as the enabler
9:00 am
of new product. wellness is a clear opportunity. apple will be player. fit bit is a player. i think that scratches the surface. >> it's been a pleasure. thank you for joining us. >> joe, cheer up buddy. it's going to be okay. >> thank you. i feel better. thanks, pal. >> that does it for us today. join us tomorrow. right now it's time for "squawk on the street." good morning and welcome to "squawk on the street." i'm david faber with jim cramer live from the new york stock exchange. carl quintanilla has the day off. let's get a look at futures. as we get ready to open the morning 30 minutes from now. we are poised for a lower open. a lot coming back to that ten-year note yield.

74 Views

info Stream Only

Uploaded by TV Archive on