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tv   Squawk Alley  CNBC  May 4, 2016 11:00am-12:01pm EDT

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on cnbc. good morningb, it is 8:00 a.m. in twitter head kwaquarter san francisco and 8:00 a.m. on "squawk street" and "squawk alley" is live. ♪ good wednesday morning and welcome to "squawk alley." kayla is out, and jon fortt and i will very busy with the founder and information trader melissa and isaac who is looking at the markets for us, and first up, guys a lot to talk about today, according to bloomberg a
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major overhaul coming for apple music to make the service easier to use. and they say that musician trent rezner has been brought in to oversee the redesign, and there are some clashes with jimmy iovine running his own negotiations. and so, the maps and the watch, and music, and sometimes the first inning is not the best inning. >> true. i'm not personally a big fan and user of apple, but they do though have 13 million paying subscribers that is to my back of the envelope calculation is 1.5 billion annual run rate, and that is pretty good. they are continuing to grow, but the service is pretty clunky and hard to use and not exactly great from the experience. and now, with this new position
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to take over the rein, and they will have more user pleasure as they try to streamline. >> and melissa, what about the lines of the hardware as opposes to the services? >> well, it is important because apple has put a lot into it. they are putting a lot of marketing into it, and they have got at lot of star power behind it. the one thing that i want to see is the better integration with itunes, and when it comes to the experience, it is a separate app where it is not itune, and that is where it falls short for me. so i want them to change it. itunes is so sacred at apple, and the organization there is so sacred, that it is a big deal if we see the barriers coming down a little bit, but i am not sure that we will. >> mike, what is your take on where apple feeds to go with this? on the one hand we want to see better integration, but on the other hand, there is omuch
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crammeded into the apple music to begin with which is my frustration of the service, and facebook has done well splitting off the different things, and messenger from the main app to clarify what is to be used when. from your point of expertise on how the whole mobile app evolution is working out, what do you think that they need to do? >> well, look, first of all, if you are bringing in trent rezner to the the overhaul, you are bringing in heavy hitter who created the machine. but here is the thing, i use spotify, and i have not found a compelling reason to switch over to apple music. there is essentially feature parity, and i can to the play lists, andiovine's big pitch before apple bought beats is the artist-centric cure ration element of the service, and there not much different that apple is doing there in
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terms of spotify. spotify has the service, and i don't know if you have used it which is discover and it is al go rhythmic based and suggestions of music that you might like, and so apple needs a fee can chur to differentiate themselves or they are just another art shark that doesn't change from spotify. >> and so, you use macs and iphones? >> i do. >> you do. so isn't that the point? is to have the hardware and then get people to switch into thor viss, right? be part of the ecosystem? >> well, it is, but at the same time, they put this apple on android, too. so for the one special service, they are trying to appeal to everyone like they did with the itunes to begin with, but with the difference of the itunes they were the first out of the gate with the legal music service, and this time, far from first, and the mainstream music lovers and the people who know
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trent rezner's street cred like isaac says it is not the best. >> okay. guys, after earnings and revenue helped to beat revenues for cbs, they were helped by the super bowl and the campaigns, and so this is what leslie moonvez said about the competition of digi l digital. >> we don't believe that any skinny bundle can exist without cbs. we have the number one schedule, as i said in primetime, and we have extraordinary array of the sports, the nfl, the ncaa tournament, late night, 60 minutes news, and et cetera, and any bundle out there that expects to be successful with the public has to include cbs, so weal feel like we are going to be included, and we are going to be paid appropriate ly for or channel. >> jessica, the headline out of "variety" today is that at cbs news, the future may not be tv s. that putting it too bluntly?
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>> well, it is a little too blunt, but it is also rosy to believe that every bundle is going to have cbs, and that sounds like great negotiation, but you know, i think that we are all seeing all different types of the television packaging, and obviously, the huge fragmentation, and again, it is nice negotiating, but of course, we have not seen the apple bundle allegedly coming together, too. so there is a lot of the roadblocks on that, and the licensing business as cbs's results showed, it is not as great as it used to be. so strong advertising this quarter, but reduced fees from licensing as those fees are coming under pressure, too, so there is a lot of open questions about this business right now. i know that les was opt mimisti about the upfronts, but hearing a lot of the mixed things, and the outfronts are very soft, and this week in new york, we have the new fronts talking about the digital side of that market. so i just see many, many open
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questions for this business. >> and mike, one of the many questions for this business is exactly what the revolution is, and everybody agrees as the revolution in tv, and the consumers wanted a pricing revolution, and more and more it seems that the stuff is getting pretty expensive and is this a pricing revolution, distribution revolution, content revolution -- what are we getting? >> yeah, look. i mean, think about what you subscribe to right now. i have a netflix subscription, and i have hbo now or go or whatever the a la carte option is there. there's hulu and a bunch of other smaller things, and those one-off subscriptions add up over time, and that is not going to include the sports package which frankly a lot of people coming to get the bundles are looking to get anyway. so you have to sort of weigh, am i actually saving money on this, or take the bundles that they have is a bunch of channels that i am wanting to look at. >> and you were talking about
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the subscription fatigue a year ago. >> yes, yes. >> and sometimes i get this right. n now, to me, the apps are like the remote controls, and you used to have three or four different remote controls to be a pain, and now you have to open up three or four apps like the hbo now or the hulu or the netflix and remember where you stream that show, and that is not a good experience. mike? >>le with, it leaves open, jon, i think also the -- oh. >> go ahead. >> and i feel passionately about the bad experience, but it leaves open some business opportunities, too, right? people need to solve this, so whether we are looking at the start-ups or ways obvious ly fo the companies like apple that are trying to do the more integrated siri apple tv, you put it well. this is the point that we are at, but it cannot be possibly the end point, because it is frustrating, and there is some opportunity there for someone to crack.
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>> yeah. >> and finally, guys, tackle twitter. the shares are rebounding a little bit today after closing the all -time lows, and twitter close the falling 50 p% below the original ipo price, and one analyst has a buy on it this morning, and yousef pasqual joining us now. welcome. >> thank you. >> and fou, your content is built around the nfl, and what is giving you confidence a that it is coming? >> well, it is more than that, and what you are seeing twitter doing is to pivot are from the facebook-like social platform to start building awareness around the special events. the nfl is one of them. you the olympic, and you have the european champions league, and obviously, the election, and what we are saying is that as they are going to start nailing them down, and improve the measurement, and their analytics which is very, very important to the brand advertisers they
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should be able to see higher ad budgets coming their way, and again at $14, none of it is baked into the stock. >> and mike isaac, i can't help butnotice the contrast of the same from cbs, super bowl should have been great for cbs, and should have been great for twitter, and so is this going to change things so that the big events translate into revenue better than they have in the past for twiter? >> well, the street got really spooked at the last earn inings quarter, because as you know, the twitter has had a user growth problem consistently since before the ipo, and the business side of the house is always really delivered every single quarter, and this is the first time that the management said, we didn't see it the same demand from the brand advertisers that we thought, and we had to lowerer the guidance and it spooked everyone. is that going to the change as
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they can boost the userer fwroet over time? that is their hope, and i think that what yousef said, they are working on the measurement stuff to tell the brand advertisers, and other advertisers, look, we can actually sew you what your roi is here. and again, that is coming later on in the year. i don't know if it is enough to freak everybody out or to stop freaking everyone out, but that is what they are counting on. >> yousef, this morning i heard someone say, what does it say from the maus are flat sequence sally in north america in on of the most extreme political cycles in decades. and if this is not enough to get people on board, why would the nfl be? >> well, look, i the think that everybody was focused in on the maus up until last quarter when they showed the flat to slightly up. people that want twitter or compare it to facebook are going to lose.
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sorry, twitter is clear ly not going to reach a billion or bill yop and a half. and so now, the promoted tweets are not in vogue. so what management has to do so integrate it in the way that facebook did in 2012 in mobile, and nobody gave them credit, and so i think that, yeah, the jury is still out whether ta will be able to pivot. >> jessica, can twitter survive in silicon valley when it comes to the hunt for talent, when it come for the hunt of advertising dollars as a second-tier social play, and accept the fact that we are not facebook, and hey, competing with us live, and competing for attention and advertising, and yes, we are not
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facebook, but still, come to us anyway. >> maybe. but that is the question. out here, too, what you are competing with today changes all of the time. and you know, the next app that is stealing usage and getting the advertiser interest, and so, that is a great strategy, but it is also facebook's strategy and youtube's strategy, and also the media companies and the networks' strategies. so i think that we are not seeing the evidence that twitter is going to be winning that live. so at the same time we have square reporting the earnings this week, and jack dorsey's other company, and so to get to the recruiting question and the talent question, that to me is something that we have to spend, and focus on, and investors do, too, and there is a lot of tension and questioning when he first took the role, but that seems to have die d down as things were kind of moving along, but with a quarter like twitter a had, we will see what comes out of square, and we will
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hear more questions about who is the right person to be leading both. >> and my favorite was the other day when the best performing s&p stock, and the worst performing had the same ceo and you can guess who that is. and now, than you all, jessica, and mike and yousef joining us to talk about twitter. >> we want to check on the markets now. the dow is down about 73 point, and the nasdaq and the s&p are both down half a percent over that, and time warner share s are in the green after the revenue beat estimates, and the strong quarter powered in part by earnbings growth at hbo, and shares of match group just absolutely skyrocketing now up 25% after the earnings and the revenues topped expectations, and the company is seeing the paid member count jump 36% primarily due to growth at the right or the left here? >> yes. >> and now, with donald trump the likely gop nominee after
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winning indiana, and what is a trump economy looking like? and plus more of kramer's exclusive with tim cook, and what he had to say about apple's fight with the fbi, and look at the etsy with the first public profit since their private ipo a year ago. squawk is back in a moment. ♪ bend me shape me, any way you want me
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presumptive after winning indiana. john harwood is live in washington with more. john? >> jon, with trump's victory over ted cruz's win in indiana last night, he seemed to complete the amazing and someis times divisive rise to the top of the republican party and when he did it, he said that he was in a mood to unify if country. >> this country, with it is very, very divided in so many different ways is going to become one beautiful, loving country, and we are going to love each other, and cherish each other, and take care of each other, and we are going to have great economic development. >> now, the problem is that he starts the general election significantly behind hillary clinton, and look at the averages from real clear, a nd he is is dow 70 points to hillary clinton, and in the wider margins of the polls out this morning. be through is a path to his h victory if he can energize the support in the election among those same white working class
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voters in the primaries, there is a shot. if you are looking at the map, if he can bump up the share of the white vote by fife percentage points from what mitt romney got, he could flip some states including the rust belt states, ohio, and pennsylvania, and virginia and iowa and colorado and new hampshire, and that is a potential path for donald trump to get to the electoral vote majority that he needs, but it is not easy at al all, and is it going to be a very negative campaign, because both hillary clinton and donald trump are fwgoing to to be targeting each other's very high negative ratings, guys. >> voters are prepared for that. thank you, john harwood. and so with ted cruz troping out of the race, that leaves trump as the likely gop. and what led toup to the behind the scenes to lead up to the moment? our next guest is the author of "off script" josh king. and your book is going back to dukakis and the tank and extreme examples, but what would the
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playbook be from the stage kraft point of view if trump were the client? >> well, he is hard to advise, because he is incredibly consistent since last june when he escalated the gilded trump tower in the branded blue suit, and the departures are the white golf shirt on and the khakis and the red hat at the border. and i am told by the golf buddy, that is all you see him in, and who is to question him who came are from nowhere to trump tower in that blue suit to do anythingp that the formula that has gotten him to this point when all of us said he has no shot. >> so has he rewritten the rules of stage kraft or only apply if you are a brand name billionaire who had his own tv show before? >> the 15 years of "apprentice" cannot be discounted to the cities and towns that he goes to
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that are not the most bold places on the map. to go to have a celebrity descend into town, no matter who it is, it is going to draw attention especially when the 757ley ri leivery is branded fs well as the helicopter. >> and why would that brand not matt matter? >> well, carl, it has gotten him this far, and you can see in the comments that john harwood played in the softening of the tone last nights and he has been experimenting with that for several weeks now, and i would expect that to continue. i would expect him to pivot towards the center. his native views are more moderate than most people in the republican primaries have thought they were, and so maybe the true more moderate centrist views will come out, and remember in the 15 years of "apprentice" the people he was working were union people, and were of different sexual orientation, and he is very
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familiar with the milieu. >> and he is aware of the impact of john mccain picking sarah palin, and so what does he have to do to have the right kind of stage kraft for a v.p.? >> it is seen as the first decision that a president would make, and when palin appeared with mccain, it was a huge moment that turned into a catastrophe not long after that, but think of the implications of what donald trump and the decisions that he needs to make in the general, and the washington insider, but what about the olympia snowe, and bringing her out of retirement, and joni ernst, and utilizing the female advantage that clinton has and a big decision he has to make. >> and we are in the social media where gifts and photo consumption is gone out, and so if you are eating pancakes or reach for the bottle of water in
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the response speech, it lives, and becomes a symbol of sorts. >> right. >> how do you leverage that and aufd the trouble? >> well, if you are like donald trump, we have not seen him eat much on camera have we over the last year. >> on purpose. >> and mark levovich wrote a piece about digging into the potatoes awe gratin, and so there is to picture. but if you are john kasich, there is a big deal. i saw heidi cruz elbowing the husband at the minute he is pulling out of the campaign, and it is terrible insult to injury, but if you are a fuse producer trying to put together the news, you say, that is funny, and keep some eyeballs by showing it over and over, it is really unfair to people who are putting their careers on the line. >> in this case, unfair injury
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to insult. in this case, if you want to see how stage kraft is doing as we get into the general now, john king's book is fantastic. >> thank you, carl. and apple's ceo tim cook is sounding off on the government in his exclusive government with jim krcramer, and more on that coming up.
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apple ceo tim cook talking about the government and the 2016 e e lek is shun in an exclusive interview with our jim cramer, and this is what he had to say. >> i think that government in general has gotten quite dysfunctional in the u.s. in some other countries as well. and so, what that does, i believe is to put more responsibility on the everyday citizen and companies to help p
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promote change and improving things. i don't mean to play a government role, but it is not just government who can change things. >> jim also talk to cook about his relationship with the late steve jobs. take a listen. >> i had incredible love and respect for steve. and i think that there has never been anyone like him, and belie believed in the unbelievable. >> and apple trading down about 10%. and i don't think that anybody would disagree, but it is a theme throughout the presidential campaign leading to surprising gains for trump and bernie sanders, but apple has criticism for the stance over the encryption that it is basically writing the rules for everybody, and tim cook is saying, well, if congress is not going to be writing the rules
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then i am. >> and not by his own doing, but apple was singled out, and they had to speak for the industry to some degree because of the position they are in. >> and the rise of the billionaire policy maker. you have zuckerburg and tim cook, and donald trump wanting to be president,ed a it is quite an era. >> and the page one story of the journal about mark madoff and the ceo now has a policy that is weighing on your decision of whether or not you want to buy the shares, but it is the way that executive offices are moving. we will get europe closing in 30 seconds. simon is here at post 7.
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european equities are down at three-week lows as you can see, and the individual stories and the earnings and the minors and the airlines and the uk supermarkets are dominating overall overall, and the bigger news is moving forward and you can see it in the uk pound which had the biggest fall in six weeks today is the fact that you have now seven weeks away from the vote on britain potentially leaving the european union and two polls came out that the brexit, and though they are head-to-head on the brexit camp those who want to the leave are slightly ahead, so that the bounce that you had from obama being in the uk and his advocate or advocation of staying in the european union seems to have e eroderoded. front page of the journal talking about the banks starting to hold the short-terms assets n the uk for fear that the capital markets could freeze up, and at the same time up able through perhaps the currency markets to get the liquidity that they n d
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need. david cameron, the uk prime minister is about to give evidence before all of this in to the liaison committee, and when that happens we will bring you some excerpts live or at least monitor it for your behalf, and the bundesbank warned that it is the biggest financial event in 2016 if the uk did indeed vote to leave the european union on june 23rd. and guys, back to you. thank you, simon. more of tim cook's interview by jim cramer. and we will break it down with the dow close to session lows again at 105. [ male announcer ] eligible for medicare? that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses.
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i'm sharon epperson, and this is the cnbc news update at this hour. president obama departing air force base andrews to fly to flint, michigan, to hear about the city's water crisis to ensure the people there that the federal government is not ignoring the flight. and detroit's teachers called out sick monday and tuesday to protest the possibility of working without pay. they signed a temporary contract to guarantee the paychecks into the summer. >> and russia is going to position new bases along the border of europe to counter a nato build-up, and he gave no more specifics of the number of troops to be deployed. and a rough diamond was put
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on display at sothebys, and it is the largest gem diamond discovered in over 100 year, and it is estimated to sell for $70 million. it will be auctioned on june 9th. thank you, sharon epperson. ohio governor john kasich has cancelled a planned media appearance in virginia and planned to make a statement on the campaign at 5:00 in ohio, so as trump won indiana last night, we will see what this adds to the development of that race. >> yes, indeed, and lots of moving parts to that story, and walt mossberg is sounding off in this week's column about the apple's e-mail service to significantly up the game, and before we get to that, apple's own ceo sounding off to jim kram e on "mad money" and take a listen. >> they asked us to create a product that we don't have, and we believed in doing so, it would put millions of peoplet at risk, and so that is a bridge
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that we thought that we shouldn't cross ta was not good for america, and so we stood up. we said, we are not going to do this, and so they decided that they would sue. and so subsequently right before the hearing dropped pursuit of that. so, i think that when you, when you are approached like this, you have to stand up for what you believe in. >> we will talk more about apple in a moment. right now though, we want to go to david cameron in the uk talking about the brexit. take a listen. >> in europe, nonetheless, it does address the key problems, and it was a successful negotiation, but i do, when i said that if as in that speech and i have said it many other times, if this organization had rebuffed one of the leading members and contributors and said, look, we are simply not going to address these things or prepared to talk to them, and we would have at that point said to
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them, if this is really an organization to us, and if it is so deaf to the proposals, i am fwlad that it can did respond. >> i must ask what you meant by that you would not be arguing for withdraw? >> well, i have not in my physical career, i have not argued for leaving the eu. >> you have said that already, but i am asking that seeing as this is not a hypothetical -- >> well, it is a hypothetical vision, because it is -- >> prime minister -- the current e sushgs t eu and the current eu and the hypothetical is what it would look like after the negotiation, and so i am asking you a real question and not a hypothetical, were the current conditions in tu so unsatisfactory that you would leave? >> well, it is a hypothetical, because it begins with the word f. if you have not got a reno ga
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goschation, then it is a hypothetical question, so that is why i said that we want a renegotiation and then a referendum, and if you are ask canning me about my view over the years in unreformed state, have apsed that clear ly. >> i have not asked you that, but nice again answering it. what i am trying to elicit from you is whether the decision on whether we should vote yes or mo in this referendum is based on what you have delivered in this rene goe renegotiation. >> well, i can answer that, because some people will say that whatever he negotiated, i would want to stay. i think that other people would say, whatever i have
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renegotiated would want to the leave. some people would say, and i have known many of them -- >> no, i am asking what you would say. >> i am going to be be voting to stay in a reformed european union on the basis of the choice that is in front of us. >> so back to where we were, we are in the current eu, the one that we have got now. >> yes. >> do you think that we should vote to stay in that? >> well, that is not the question in front of us. >> well, is it is the question that i asked you. >> well, the question in front of us is we -- well, i don't know where you are going with this. i have stood for parliament in 200 # 1, and i stood in 1997 unsuccessfully and then i said in 1997, britain should not join the single currency, but did not oppose the membership of the eu, and all of my political life i have been in the favor of staying in and getting reform, and as prime minister i have had a chance to deliver that reform, and from a standing start, we have delivered more reform than people have done in the past and expected and on that basis i say that people should stay. >> mostf people around the table
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will be asking you questions about the renegotiation in one way or another, and what we quite reasonably want to know how much store they should set on the importance for their decision, and i've been asking you now for several minutes to answer that question, but i don't feel that we have yet had one. >> well, what i would tell -- >> if you have another point, please do, otherwise. >> well, the renegotiation is an additional reason to stay, because it has made and addre addressed some areas that people had real concerns about. and too much of the currency club, and too much of the political union and too much emphasis of the welfare system drawing people to eu and not enough emphasis on the growth, and i have is corrected those four thing, and for that, people will make a important difference and it makes a difference for me, but we are frankly asking a bigger question which is should we stay in the organization or should we leave and then work it out. >> well, this afternoon -- >> and i don't overachievement
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the achievement of the renegotiation, and if you see the speeches of the campaign and i will talk about the biggest issue of all which is the end game. >> and now, i want to bring in bill cash. >> thank you very much. on the renegotiation package, mr. prime minister, which you just said is so successful and the promise of the full-on treaty failed, and you promised a fundamental change in the relationship which we have with the european union, but all you have actually got is lateerer discussions in the council and no change whatsoever in the paths of the eu institution, and even future exemptions of the union requires a treaty change, and you claim that the packages are not reversible, but it is an international agreement, but it is not the eu treaty change and it cannot be described as irreversible in the eu law. and the principles on what it is made clear to the legal ed a ad
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of the european council and parliament, and no one including the kocouncil can control futur decisions of the court, and nor changes in the member states governments or outcomes of the referenda, and the house of common analysis of the package clearly shows that in the uk opinion poll, 57% said that they did not trust your package, only 22% did. so when the voters vote on the 23rd of june, it is going to be a historic vote on your package as a whole, but as you cannot guarantee or even offer a treaty change before they go to the polling station and cast their votes, i want to thereby, aren't we cheat ing ting the voters why vote on that historic occasion? >> well, no, i -- look, bill you and i have a longstanding and mutually, i hope, understood disagreement about this, and so, but let me run through some of the points. first of all, we have achieved
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the full-on treaty change. there is in the international legal agreement that we have negotiated the commitment to treaty change, and the -- >> no, sir, you have not. >> you asked a right-on question, and i will try to shorter answer. and that is important, because the treaty change in those two areas is very important. you have asked about whether or not it is irreversible, and that is not just my view, but the view of for instance allan dashwood cousy who says that he specialize s specializes in the european law -- david cameron undergoing questions on brexit which comes on the brink of some say that a brexit vote raises risk ahead of a fed meeting and before that vote, and simon hobbs is here to walk us through what we heard from post 9. >> well, that is in the weeds discussion of the united kingdom as to the news flow they are dealing with. it is an impassioned plea for the uk to stay in the eu, and
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they are running into the events in the press, and there is a suggestion from another committee that it would take 5 to 7 years for them to renegotiate the trade deal with the rest of the european trade union, and there sis a suggestin if they voted to leave the european union they could reverse the vote if there were a change of government in the uk, because clearly the prime minister would have to resign, so the reversibility is part of the question ing thing that the going through, and to repeat, this is very important, because the polls are connecting, and i'm being disingenuous to the leave because they are slightly ahead, and with seven weeks to go, this is unnerving for the people who are trying to run businesses that export and import to the rest of the union, because if there were with a vote, we go into the unknown, and capital markets could freeze potentially or you could have big swings in the currency which make them difficult to navigate,
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so you are hearing reports that the banks are starting to stockpile the short-term assets so they could is sell the assets in the event they need to raise liquidity for the general business or lloyd's bank a high street bank has front loaded the requirements for the year, and this is an important discussion for the uk and though arguably for the foreign audience very much in the weeds. back to you. >> and simon, the follow-up, what is the potential out here and what could the investors here from not maybe the specific deliberations, but deliberations like this that would cause a sigh of relief? >> well, if the polls are going to stay as they are, there is no sigh of relief if we get there, and what people are assuming, and go back to listen more of what is happening in the committee. >> the suggestion that the agreement does not have legal force unless it is incorporated into uk treaties is not true. the point at which the uk notifies the part of the union that wishes to remain, and in fact, your own scrutiny of the committee in the um is mer legal
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analysis says that the agreement is binding in international law and goes on the say that the international agreement is irreversib irreversible, and what i would say, bill, look, don't argue that we are doing all of the things under false per speck tuf, an honest discussion, you want to leave, and i want to stay, and we have a referendum, and we have a conservative prime minister and lots of thing to talk about better in and off, and accusing each other of the false pretenses when it is legally clear is a waste of time. >> you are have quoted prominent opinions, but one of the eminent voices of the country, and vice president of the european court, he, himself, has made exactly the same points as i have, and i really think that if i may say so that you are just trying to get away with something. >> look.
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i just that is wrong on all ground grounds. i think that, you know, to be absolutely fair, you have always wanted, i think something which i think is unattainable, and you have wanted for many years to find a way of not being subject to the european court or being subject to the common rules of the single market and the rest of it, but to somehow find associate status within the eu uk and my six years of prime minister, and chancellor and all of that, is not available. the option is really a special status within the eu which is what we have to -- one thing for sure, simon, we have to pay attention to this more over the next six weeks. >> and yes, if you are a voter there are around 800,000 britains in the united states who can still register to vote on the referendum on june 23rd, and the british establishment would like them to do that and they may hold the balance of power in this. >> an undecides have been a big
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key. >> yes, and which way will they swing? >> yes, thank you, simon. good stuff. >> and back to the ricoh editor walt mossberg, and walt, a lot of people don't know before you were the dean of product tech reviews, you at the "wall street journal" covered military and intelligence, and so reflecting on what tim cook said about this ongoing tension with the fbi and apple's role in standing up for citizens despite government dysfunction, what is your re reaction? >> well, i thought that you were going to ask me about the brexit for a minute. >> well, we can get to that. >> we will get to that, and so, it is a great question, and i appreciate your giving the background. so, let me start by saying that we need intelligence. we need spying. we need, you know, the military preparedness and particularly in the age of the horrific
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terrorism that we have seen, but i would also say that one of the things that i learned from that period before i was covering tech was that the government often overreaches. for instance, it grossly overclassifies thing, and that kind of stuff, and we have, you know, we have a kind of the captive court that issues quote warrants, and it looks like the regular court procedure, but it turns down the government or very rarely, and so there is problems with that, and that is on the government side. on the apple side, the company is going a long way back a long way back before they were encrypting the iphones and before this dispute in favor of privacy. steve jobs years ago on the interview with me actual ly in one of the conferences that you went off on this question. they care about privacy, and they see it as a distinguishing competitive advantage toward google which because it is an
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advertising based company or the search-based company, and obviously, want to collect more informati information. and so what tim cook did was to take a stand and the company and he, himself, personally in legal jeopardy if the courts would go on with a court case, and the courts had gone the other way, because of the principle, and a, the principle which is sincere, but also the business issues like the distinction with google ax and the ability to sell overseas and not have other governments ask for the same thing. >> right. right. well, moving on from that, and to the lower impact issues, and i want to talk about apple music, headlines out saying that trent rezner is taking a more active hand in that product and the service and trying to revamp it. in your initial review you called it uncharacteristically complicated by apple standards, but said with a caveat that you would be willing to pay for it,
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and i wonder, walt, is apple music your primary music streaming application right now? what do you think that they need to do to make it characteristically simple? >> so it is my primary streaming application, and the one that i paid for, and the reason for that is very simple. for many years, and like many millions of people, i have had the music on itunes, and then itunes match which is a earlier cloud-based thing that is more limited, and it is integrates with those. so, you know, you can add songs that you don't own into the play lists of the song thabs you do own, and so it was easier for me. but it is way over complicated. i don't use 90% of it. and i think that any move they take to streamline it to reorganize it to redesign it is a good sign. i mean, we will have to wait and
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see how they do it, but it is a good sign. >> all right. walt, you also in your column mention third-party e-mail apps and a new one out i recommend that folks read that if they get a chance, and it is very interesting, but for now, we have to leave it there. walt mossberg, the thanks for being with us. and you can see in the bottom of the screen that nbc news is saying that governor john kasich is going to suspend his presidential campaign, and now they are calling him the presumptive nominee to 1,237, and it is going to make it 100 times easier than 48 hours ago. >> it is staggeringer because ted cruz for so long was begging and exhorting john kay is sich -- john kasich to drop out, and if you are reading this years from now, and not reading day to day, you have to wonder if he is working for trump the whole
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time, and that is not the case, but you have to wonder. >> and now, to digest the dynamics of the race at this stage, john harwood in washington. your thoughts? >> well, carl, our colleague andrea mitchell has just gotten word from the senior adviser to john kasich that the press conference that he was going to have in washington is canceled, and he will give a statement at 5:00 p.m., and suspend the campaign, so no opposition for donald trump, and he will have the 1,237 that he needs for this race of the republican nomination is over, and he is overwhelmingly likely to face hillary clinton is who is going to be facing a challenge from bernie sanders, and he won indiana last night, and he has no realistic path to the nomination. >> and so realistically, what should we think about? >> well, donald trump has to start working with the republican party to plan a convention, and vetting and selecting a vice presidential nominee, and decide what sort of approach he will take to the general election, and he has
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high negatives with groups like hispanics and women, and asians, and these are all groups that he has got to somehow repair the image with that he is going to be competing with hillary clinton, and in the april "wall street journal" poll, he was trailing hillary clinton by 50 to 39% and only getting 72% among the republicans, so he does have to unify the party in addition to reaching out beyond the party, and a new cnn/orc poll this morning had him down by 13 point, so donald trump has a lot of work to do. >> and john, why would kasich drop out now and not earlier? he has fewer than 200 delegats,s and people were telling him all along that he had no chance, and i mean, to the outside observer, you think that he was in it to keep ted cruz from having any shot. >> no, what he was trying to do is to hope that ted cruz could deny donald trump the delegate victories that he needed to get to the majority and then get to the convention, and then if you
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had a contested convention he thought that he might be seen as the most electable nominee, and he probably was of the three, but once ted cruz was out, john kasich's numbers were simply not going up, and negligible factor in the indiana primary, and negligible factor going forward and he decided what is the point, and money is always a concern in these situations, and who is going to keep paying for john kasich to fly around and compete with donald trump when it is perfectly obvious that trump is going to win the nomination. >> and john, finally, you said that we would not get a contested convention, am i ri t right? >> i have been very skeptical of that, because i have simply never seen it in my lifetime, and what happens in these cases, carl, is that once somebody begins to be seen as the guy who is going to be winning, the opposition tends to wither and collapse, and that is is what has happened in this case. >> john harwood in washington, and a lot of implications for
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various industries, states and markets, and thank you so much, john har woo. when we come back, and when we come backk with, we will get some thoughts, but scott wapner is going the have a look at the next hour, a a nd we foe what t is, right? >> well, coming up in a few moments, we have a "halftime report" and special event at the zone conference, and jim chanos is our guest host for the next hour, and we will get his take on the china, valeant and rubric capital, and also carson block of muddy waters is going to sit down with. we will have squawk on the street" right back after this. [bassist] two late nights in tucson. blew an amp.but good nights. sure,music's why we do this,but it's still our business.
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we spend days booking gigs, then we've gotta put in the miles to get there. but it's not without its perks. like seeing our album sales go through the roof enough to finally start paying meg's little brother- i mean,our new tour manager-with real,actual money. we run on quickbooks.that's how we own it.
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welcome back to "squawk
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alley" and we want to give you a first look at the cnbc wrap-up outlookment and indeed, the economists are looking for something of a rebound, and this is preliminary data, but we are looking for the 2.11 gdp, and this is the starting point and the rate is 1.8 to 2.3, and q2 data, and tracking upwards after the data this this morning with a range of 0.5 to 0.8, and lot of the data is here, and surprising to the upside. and im services beating the expectation, and that is helping the gdp, but we are not writing home about it, because the imports were down, and that is not good for the economy, and productivity is down 1%, but not as bad as has been expected and then we got the adp number disappointing at 156,000, but some economists are wondering with the softness there if they should be questioning the friday forecast of 205,000, and some
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believe it may come in weaker. >> and raising the curtains on the jobs coming of course friday ahead of a lot of earnings data and a lot more with the fox, met life, and prudential, and the week ist not over by a long s t shot, jon. >> not at all. >> and zone c-- sohn conference is kicking off in the next hour with scott wapner and the "half." >> carl, thank you so much, and welcome to the "halftime report special event" live from the 21st annual sohn conference from the lincoln center and this is the place to be because the top hedge fund managers in the business are here to share their best investment ideas and raise mo e e noo for pediatric research, and this year, we are the exclusive broadcast partner at sohn and that means that you will only see this


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