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tv   Squawk on the Street  CNBC  June 10, 2016 9:00am-11:01am EDT

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>> i think i know what you wished for. >> the same thing all of us would wish for whenever we get a chance. >> yeah. >> because we all know -- >> it's the only thing that matters. >> that's why i want the ularity because i want to be with these people. >> congratulations, my friend, 25 years, will see you here monday. >> thanks for the warning. >> make sure you join us monday. "squawk on the street" begins right now. have a great weekend. good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchange. david faber's off today. weak premarket as these bond yields continue to hit some fresh lows, s&p though still on track for a fourth positive week by a pretty comfortable margin. european banks continue to get hit today. 10-year rally adding steam. oil getting hurt on that stronger dollar. jim, a lot we didn't get to as
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you were out yesterday whether it was sorros, icahn, these german 10-year threatening the zero bound. >> yeah, i did a piece on "mad money" when the rich people who are big money managers have this kind of natural disposition to being negative, we can't necessarily take cue from them. i take my cue from oil. there is no doubt about it oil's under pressure today. i don't take my cue from europe anymore because i believe that if the dollar is weak, right now you can't have a weak dollar because they're buying so many of our bonds. but i keep waiting, that's the only thing that's popping up, the dollar. i do believe the yields are a little insane in europe. this is draghi doing it and he's having some success, and that is weakening the euro. that's his plan. but i am again not -- i am more constructive than most because i just think when you look at the overall profile of the earnings we've been getting of late, and there haven't been that many, they're pretty good. but i recognize we've been up a
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lot. and it's been very benign. and we've got to shake out some of the weaker hands. i'm just loathe to be able to say this is it, no bell going off. it's been a nice year for us, if you look around other than brazil most of the markets are down very big. we're in much better shape. fed's still on hold. it certainly doesn't hurt anybody to take a profit. but i'm not, you know, they've been negative for a long time. icahn's been warning, look, it's very easy to be very rich and to be very negative. because you've already made it. >> well, they would say that's how we got rich in the first place. >> well, they didn't always. i think they took more risks. i think -- you know, the rich are different from you and me, as we know from fitzgerald, they are more skeptical and you have to have more faith. again, thank you fitzgerald for that because many of our viewers have not had a chance to be rich yet. and we are listening -- we had the unfortunate death of mr.
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perkins, and when i look at the companies he was involved in i think, geez, maybe i would have stayed away from one of those because i heard sorros was negative. i'm urging people to temper negativity, that we've been up a lot, the rest of the world's not. we have a little bit to come down or to equalize them, but i'm just not as negative as some of these headline rich people are. >> more tactically we got a brexit now, we're within two weeks of that vote. >> that concerns me. >> what's going to happen to liquidity? who wants to step in front of that and basically nine trading sessions? >> people who genuinely believe that the polling is not going to be right and in general britain doesn't want to do something that drastic in the face of the government saying it would be drastic. i know that i'm concerned that the euro takes a big lag down off of brexit just because of uncertain ri. i'm focused on brexit and think we'll be negative until then. i'm very interested in u.s. companies not involved with
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apparel. >> a lot of people have said the bears have had repeated chances to really gain some traction. hasn't worked, why is that? >> i think it hasn't worked because all we really care about in this country is oil and the fed. and the fed on hold means the dollar's going to have a hard time really screaming. and oil, i have said oil goes to 50, we did a very interesting interview yesterday with harold hamm on our network. trying to figure out how to be diplomatic on this, he's been dead wrong. he came on "mad money" and said oil was at 85 going right back to 100. he's been wrong, wildly optimistic the whole time and he came on yesterday and says he sees a bottom and about to produce more oil -- >> actually raised. >> about went off there. a bell went off and basically okay, oil is about done going up for now because he's a counter -- you know, wow, i mean, if he says -- if he's
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bullish, you can't be. he's been that wrong. again, the love of billionaires to a show sorken came up with that my friend mr. burger -- he's the director. some know him from home, but we should revere those guys. but in reality a billionaire like harold ham has been dead wrong and if you're following him and thinking oil is about to go up, i think going to show the second straight day up, last week was the first week since april 29th that we did increase this year. so i'd be very careful with oil. if you're careful with oil, you have to be careful about the market. >> so you don't believe, we've had some argue that the rigs don't really start to get added until 60. you don't believe they'll have collective discipline. >> the counter indicator of ham is we're not going to do more drilling but we have a lot of wells that we've capped that we've drilled and we're going to let that oil come up.
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and that's the $50 problem. there's an area in oklahoma that he's very dominant, thank you rbm for good note today in oklahoma where it's $40 that they make money. so absolutely he wants to open that. but he's talking about a million barrels shortfall. you won't get that if collectively these people start pumping. i think that the deposed ceo at shi near always said there's no cheap marketing officer for oil, because they're just optimist. harold ham his stock is up threefold -- actually almost threefold but i believe he's a counter indicator and oil at 50 is where too much comes out. watch that. if oil goes back to 45, we're going to have a bit of a hiccup here. >> interesting. yesterday deutsche bank issued a report said you're crushing us, stop this madness.
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the banks, are they doing more damage to the banks than they're getting a benefit on currency? >> i do, one of the things they're forcing banks to lend. and there is from the banks i'm involved with there's a move to lend very aggressively at these levels for individuals that there had not been until draghi really put the gas pedal down. so if you're trying to get a mortgage in italy, it had been difficult because of the problems. now it's getting easier. and the mortgage rates are really, really low. so they're going to try to restart housing there, which is very important. but i think the numbers from europe are going to start coming in much stronger. and they're going to have to stop this. which is why the dollar's not soaring. i think you're at the tail end of this particular phase of emergency. >> really? >> i really do. and i say that because the ease with which mortgages have come about in europe just in the last month tells me that they got to be -- that draghi is a little too affirmative with his malcolm x by any means necessary. i'm a huge fan of his, but i think that they're jump starting
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it now. and if merkel -- he wants merkel to start using the balance sheet of the great company that's germany to start hiring people. and that's not happening. he's lost there, draghi. but i think that the yen going up for gm, ford, but that europe is struggling here not to go down the way draghi wants it. so let's be careful. i think europe is going to get stronger because there's going to be more lending. but they're not going to make as much money on the lending, which is why that deutsche bank has been a falling knife stock. watch d.b. for those at home if you want to see the stress, by the way, it's not stress involving actual capital. though they need more capital versus our banks, it's stress to have to lend and not making any money. >> or keep in a vault in some places. >> and italian banks really coming back strong. and spain is very strong right now. france has not come back yet. but i'd be wary if i were draghi that there could be not
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inflation but this is going to get better in europe. and a lot of it is by the way americans. americans are going over there. and i'm see iing and i'm shocke to see americans invade europe. it's odd that the european companies -- it's a little counterintuitive that they're coming in now and buying our companies because i think the euro's about to continue to kind of percolate up. but that's been going on for a while, like the bayer deal for monsanto, which it's ongoing. but i'm saying you would think the dollar would be soaring today and it's not. that's because yellen is very cognizant of what could go on with the dollar and draghi is win right now. be if he could really -- if there was ever any stimulus from these countries, you would see europe fly. but as it is europe's growing. >> yes. >> again, i'm not as negative. i know people say this is the end of capitalism as we know it. i'm just not buying into that. i think europe's getting better. now, the stock market obviously
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is trying to figure out how much money's going to come out of here to own bristol because a lot of money is coming to this country. >> sure. >> it is surprising, given that why isn't the dollar soaring? because we've got janet yellen on hold and i think europe's going to get stronger. i know my views are very contra contrary i accept that. >> a little bit. back in this country presumptive nominee hillary clinton receiving endorsements from the president yesterday and elizabeth warren. this clinton response from -- obama just endorsed crooked hillary, he wants four more years of obama, but nobody else does. clinton then responded by saying delete your account which has been retweeted for about 400,000 times. trump then retweeted how long did it take your staff of 823 people to think that up, and where are your 33,000 e-mails that you deleted? it's an interesting -- it's a comment on social media. >> we're really off track as a country, huh?
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this kind of strange. i think there are -- i don't want to talk politics per se, but i think that people feel somehow that the democrats are really getting their act together right now. obama out there campaigning. i think the republicans have some very good articles in all the different papers about the veer attacking the judge, the republicans have said we really don't want to attack this judge. so i don't -- i sense that there's a bit of like, okay, trump's got to cool it. but, again, i don't talk politics but i do think that sanders not being part of this very, very left socialist movement, if he were really to drop out, then now we really do expect hillary will become much more center. and if she comes much more center, then you'll see our stock market go up too. >> how about iger in shanghai this week and also talked cnn, he chose the wrong company to criticize, indicative of a
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person who'd never been in business. >> interesting. >> yeah. some of these ceos are more quick to be vocal. >> i'll tell you what's interesting about iger, he doesn't smile a lot or giggle or anything. he was in a particularly jovial mood yesterday. don't read that into the stock. but he was like, ha, i think jeff should similarly come out since he's attacked first an aircraft company that he does not need to have in vermont where they start your salary at $27. but i think that him off the scene, sanders off the scene will make it so the rhetoric is going to be other than this e-mails, the rhetoric is going to be much more calm. now, a lot of people felt once obama got the nomination he would move to the right, he did not. but i think people feel like now that sanders is gone that hillary has friends in business. and maybe she won't be branded as corrupt for having friends in business. >> so when does the response by equities to politics start to near one-to-one? i mean, when do we get there?
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>> well, i think if the media's going to make it a horse race no matter what because media refuses to look at the electoral college, but the electoral college is so heavily skewed right now to hillary clinton that has a very much mcgovern '72 feel to it, meaning the democrats still felt they could take -- >> although may silver says it's going to be more of a photo finish. >> i feel bad, but nate silver's -- >> fair enough. fair point. >> been quite wrong. i revere silver. but he's been wrong. >> but where the markets start to weigh it now that the table -- >> yes, i do. i think markets will weigh it and they'll say -- i believe they'll say trump's a little unguided but is not as anti-business because he's a businessman and that hillary clinton -- there are many ceos that i deal with say hillary clinton speaks to them. and that's very different from obama. they can sit down with hillary clinton. she can hear their concerns. and now it was as long as sanders was in the race that was a sign of corruption.
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as sanders drops out the idea hillary make speak to gary at goldman or lloyd blankfein is no longer going to make her into public enemy number one. and iger's giddiness is indicative of where we're going in terms of ceos coming out and not endorsing trump saying, hey, listen, we're cool. senator warren interesting. i happen to like senator warren. >> by the way nbc news confirming that warren will meet with clinton at her d.c. home this morning. so if we get details on what that's about. >> i've spent time with senator warren. she -- now, again, you really get in trouble with a big group of people if you say you like senator warren. i'm saying as a person senator warren when you sit down is actually quite sophisticated about the banking system. now, where she is politically is of no interest to people and shouldn't be, but the fact is you're seeing the democrats unite. and that means we believe that, you know, there's a perception
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among business people that a hillary clinton white house is a clinton white house where chevron could speak to her. i use chevron because i know during the spill the president was really not wanting to sit down with the chevrons and bps that were offering some advice and i'm looking at a different environment. i always ask all the ceos off the desk what's your relationship with hillary clinton, and, well, you know, she takes my call. what's your relationship with donald trump? i don't have one. >> sure. >> some golf with him, i don't want to talk about what they say when he plays golf. >> all right. got a long way to go before -- >> yeah, i think sanders off to the left going to make it so it's different dialogue. >> yeah. when we come back this morning chipotle dethroned as the top fast casual mexican brand. according to a new poll. we'll tell you about the new king of the hill. take one more look at the premarket. s&p and nasdaq on pace for a fourth week of gains. nine out of ten sectors actually
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after three years at the top, chipotle is now dethroned
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according to a new harris poll. moe's southwest grill is now the top mexican food chain. chipotle has fallen to fifth now. you've been championing these guys, yes? >> yeah. you know, this has been -- this is why chipotle stock has dropped in a precipitous fashion. i don't think people should trade off that. moe's -- i've been trying to book moe's for "mad money," but it's conglomerate actually is part of it. but to give up on chipotle now is i think a little late in the game. i've asked for many people in the twitter account to send me pictures and increasingly they're being filled again. sochi polt's been buying back a lot of stock. but, yes, i mean, it is shocking because chipotle was the gold standard. it's going to take a long time for them to win back people. >> and you're not worried -- the dynamic of people forgetting about a health safety scare.
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>> 18 months. >> 18 months. but don't believe more secular trends about taste will change away from chipotle? >> no, i don't. i think as part of our disruptor series i've had many companies on about food. and it's natural and organic and it's anti-gmo and it's anti food chain and chipotle still chands f stands for that and they haven't lost that. i didn't think i better take anti e. coli pills, i have chipotle almost every week and i'm not saying i should have gotten the congressional medal of eating for going there, but i think it's lessening. and i would love to have the co-ceos of chipotle back on because i think they've become the number one in terms of food safety. but i know that moe's is well talked about hear many people go to moe's. the chipotle's i go to are now jammed. >> competitive category. >> yes, very. >> when we come back cramer's
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mad dash and countdown to the opening bell. a lot of rumors, take a look at the premarket which continues to be weak. more "squawk on the street" in a moment. this just got interesting. why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. ask your doctor about cialis and a $200 savings card
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a good car has to maneuver quickly. that's also true of a good car company. people have always bought cars. but we saw an opportunity in sharing cars. so we moved fast and launched car2go in 29 cities, all around the world. doing that required dozens of data centers,
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designed for speed and performance. we built our business on the ibm cloud. because that's what the ibm cloud is built for. just about six and a half minutes to the opening bell. let's get cramer's mad dash ahead of the open. you are bin talking about the quarter. >> yeah, another leg down in retail. urban had done quite well, you're going to see reflection, hit macy's, kohl's, they all
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trade together because urban has so much power. this is a reminder we're not out of the woods other than the dollar stores and walmart, okay, those are the ones holding up. so be very careful again the fact this is a read through to department stores may seem unfair, but it was somebody who was doing well, so that worries people. apple, at the worldwide conference they've been really busy talking about this. pacific crest says it's going to raise visibility, today's a down day and apple's chart is bad. i continue to keep apple something to own because it's expensive and the service revenue streams are going to be play up at the apple conference. >> which is coming monday. >> yeah, i think it's an important milestone. you've covered everything involving apple. you know that's a very -- a lot of companies and a lot of individuals made a lot of money making apps, and it's kind of like the other side of a lot of how big companies have destroyed and disrupted, it's a way for people to start jobs.
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keep in mind it's going to be feel good. >> and for those who don't know developers conference monday. siri looking for a big update. >> yes. >> and then changing the structure -- the piece of the pie they take from a developer of an app. they're lowering the bite that they took. >> yes. and i just think the people have to understand apple is an ecosystem and that's going to be fully on display. >> all right. >> i want to clarify my comments on politics because i hate talking about it. when i say the ceos are not favor to them, these are international ceos and fear protectionism, they don't like hillary, they just fear protectionism. no, it's just they're worried about earnings per share. i'm conveying their view, not my view. okay. >> their view. >> we'll get the opening bell in just a few moments. don't go away. they found out who's been hacking into our network.
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who? guess. i don't know, some kids in a basement? you watch too many movies. who? a small business in china. a business? they work nine to five. they take lunch hours. like a job? like a job. we tracked them. how did we do that? we have some new guys defending our network. new guys? well, they're not that new. they've been defending things for a long time. [ digital typewriting ] it's not just security. it's defense. bae systems.
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you're watching cnbc "squawk on the street" live from the financial capital of the world. the opening bell in about 90 seconds. bond yields continue to fall. brexit as a backdrop once again although the futures are down
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triple digits, the dow hasn't had a triple digit loss since may 17th. >> yeah, you know, look, again friday, volume very weak, get people from -- you get that book transfer knocking everything down. by mid-morning you start seeing typically the united healths and the bristol myers start trading up and pfizer's, we're not going to get the dollar doing -- you're not going to get a weaker dollar today, but just be aware there have been stocks have the bids come in and futures settled down they have been health cares and consumer packaged goods. so watch those stocks as a bellwether for whether we can reverse midday. >> you mentioned packaged goods, i mean, hershey, kellogg. >> typically when you hear those that's the belief nestle is going to buy one. nestle does need to do a deal. i have felt that.
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kellogg maybe not as much, but those stocks have run a great deal. if you want to be in a food stock i suggest you wait until they cool off. >> let's get a look at the s&p at the bottom of your screen, china online a provider of interactive english lessons in china. and at the nasdaq capital on athlet athletic, we're going to talk to the event's four-time winner in the next hour. they call him the fittest person on wall street. >> wow. >> tesla getting a lot of attention today on this nhtsa thing whether or not looking into the suspension of the model s. tesla says we told them everything they wanted to know flt everything is fine. >> tesla had dramatic run because ron baren came on, stock
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up 11 points above where they did the secondary, so i think certainly on that news the profit takers will come out of the woodwork. i think tesla is cold stock and not going to cause people to not want to own it. there are people dedicated to telling me every day how bad the tesla financials are. and i come back and i just say i totally understand, but some stocks transcend, even if they shouldn't, because people see the models and everyone wants it. tesla, everyone knows where the stock is. >> yesterday rolled out new model with incentives lowering the price down to 66. >> i thought that was interesting. >> wonder how mainstream that can go. >> i don't know. i have friends who own teslas, okay, and they're now talking about how there's so many charging stations everywhere. i've never met a guy who said i don't like my tesla. i've just never met anyone, and i know enough to be able to make that statement.
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it's not the a lot of people own jeep cherokees and mainstream cars, my daughter's got a ford, but do they wish they had teslas? to a person, yes. >> yes. h & r block hanging in relatively steady. they beat by a penny. >> i thought that was interesting because they disappoints and disappointed and it's been intuit winning that war. that's an interesting comeback, but the stock has come back a great deal. it just did terrible, had a terrible tax season. they've been frequent guests on "mad money." i was surprised they had as bad a tax season as they did. >> applied materials. we mentioned tom perkins a moment ago. >> yes, applied materials was the beginning of that upside. they make the heavy equipment for the semiconductors, that has continued over and over again. and may remember nvidia has kind of become the new -- nvidia and
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broadcom, they've been the two semiconductors that have transcended a lot, kwaqualcomm trying to stay in there, but applied materials was the beginning of a serious tech rally. >> yes. >> so watch how amac does, if you like that group alcx is better. >> they add to the buyback today. >> they're doing quite well. >> yesterday a call to breem capital saying lower phones mean more pricing pressure for these guys. >> i'm not going to disagree with that. by the way they're very contentious when you say, listen, i think you guys are not doing that well because there's two kwaul kqualcomm stories, th demand and then licensie ining in china. i would not want to short a semiconductor company here. i think a lot of these are doing internet of things, doing better than people realize, the so-called edge meg whitman talked to about twice now and last couple weeks on cnbc.
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but i don't care for that group to go down. i do believe banks should be under pressure because rates are going the wrong way. >> speaking of which it's a campbell's soup market today. all the leaders consolidated, campbell's southern, right? >> yes, when you get rates down you should get that. that's the right thing. and in the interim of the day the 3% start circling. denise morrison at campbell's, can i just say this is a ceo who really understood the trend's of natural and organic and as investor one of the disruptor companies i had ton this week, they didn't have a great quarter but the stock came right back. that's very interesting. i would watch general mills, bristol myers and campbell's to see if this cannot have a precipitous decline from here. watch macy's, nordstrom's and kohl's to see if the retailers
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are unraveling. >> for the moment they are. >> they are unraveling. >> among the worst performers. >> you, it's been just endless pressure on those. did you notice by the way how wropg the market was on the ralph lauren and stefan larsson took that tough action and that coach cfo is a big hire, stock up basically 15 points. i still think the ralph lauren is not done going higher because that brand -- i checked in with so many people about that brand. and seeing -- i mean, when you -- here's what they typically say to you, yeah, they're getting hurt. do you know any openings there? >> ralph did fill the gap almost exactly on that day. >> there's a halo there that has not gone away. tiffany is the one where i'm concerned about the halo in terms of the highest end. and restoration hardware i'm no longer concerned because it's lost its title. restoration hardware, that was a -- i don't know if you know their conference calls but
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they're set to music. that's great when your stock's going higher, but the set to music and all the problems, it was kind of like a funeral. they're doing a lot of things to try to get ahead of the problems, but if you listen to the conference call set to music, it's a tough one to get in front of. >> the product delays. >> yeah. >> yesterday that bled into the home builders. was that deserved or not? >> yes, it did. no, gary frieden said, listen, we catalog, we blew the modern, we're in the wrong spots, they have a lot of places they actually have weak dollar for some shorts, they're in texas. but there's appeal to going to other places and the new york store they're remaking that, but the fact is they shot themselves in the foot. and i say that because gary said that on the call. it was very hard to listen to that call. >> i want to get your temperature on twitter, which is now within 50 cents of its
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all-time intraday low. new product chief this week, today it's this survey out of a unit of our parent comcast that says social ad campaigns are going to instagram for the first time by a higher rate. >> yeah, i thought twitter would have -- street did a series about where that ad money is going to go. look, twitter is really troubled. and you can -- i always find personnel turnover in silicon valley just means you're not going to make the numbers. the business has taken another leg down and i think those of us on twitter just can't believe it, but another leg down. another leg down. i'm a believer that someone else is going to have to find the value there. yahoo, someone else. some of these companies are just -- they don't have the growth that we're used to having for tech companies.
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they just don't. i mean, if i want no growth, you know, i got lots of companies with no growth. i've had general motors. these don't grow like colgate and estee lauder. estee lauder runs better, that's saying something. >> dow is down 122 on this friday. let's get to bob pisani. >> weak open here, but even weaker in europe. i want to show you the european markets and how they're trading right now. three-week lows in the ftse in london, three-week lows in germany as well as in france. it's the bank stocks that are really weak right now. bear in mind germany by the way hit historic highs last year about the same time we did, and they're up 15% off of their highs. we're only just off of the highs here in the united states. you see the european banks down here and i think the important thing is they have had a terrible, terrible year. look at how some of these banks have done. deutsche bank down 34% on the
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year. axa some of the big insurance companies down 16%. it's been downright ugly as bond yields are essentially zero. u.s. banks down here today, but we're down fractionally for the week, maybe 2% overall here. you can see that opening. and that is the weak spot here in the u.s. along with some of the energy stocks. you were mentioning the retailers this morning. and i think you're right, jim, gap, nordstrom, some of the other names like kohl's all being brought down as urban outfitters is down rather notably right now. elsewhere here we've got a big series of ipos trading today here. a little bit disappointing. atkore priced at $16, that is way below the price talk. haven't seen this in a while. we don't even have any indications yet for it. so i can't give you any right now. but what's interesting is we have not had many ipos -- there hasn't been a great year in terms of numbers.
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only 34 this year. that's a terrible number. but returns have done good, those gone public have done well. the first day return is only 5%. that's below normal. this suggests to me that investors have been very disciplined in the ipo market not bidding up ipos and not high prices initially. the renaissance capital ipo etf, which is a basket of 60 of the most recent ipos have outperformed this quarter, doing a little better than the s&p 500. that's a very good sign. so the strange situation not many ipos but those that have gone public have done well. we did get additional news about a japanese messaging app that's going to be dual listing in tokyo and new york. we do not have an f-1, we do not have an s.e.c. statement so difficult to state what's going on here. just put that back up. i want to point out we'll probably be going public at the nyse on the 14th of july and the 15th in tokyo. again, we are awaiting for an
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s.e.c. filing for more information on that. in the meantime more tech ipos coming, twilio, let's you add voice and messaging to apps will be coming very soon. we're waiting for terms and road show to be announced on that. but they did file about two weeks ago. i think right now it's looking very likely that we will see a late june ipo for that as well. so bottom line here is not much in ipos, but some interesting ones, the big one. by the way, carl, that line ipo valuation a billion dollars, the company could be close to $5 billion, again, we're waiting for the s.e.c. statement, but that could be potentially the biggest ipo since alibaba. we'll keep an eye on that one. >> thank you very much, bob pisani. let's get to the bond pits and check in with rick santelli at the cme. good morning, rick. >> good morning, carl. i guess the world is finding out how wonderful negative rates are going to effect everybody's economy and especially banks and
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the financials. look at one-week of tens. wow. you know, here we sit in the low to mid 160s, let's create charts going back to the beginning of 2015, shall we? look at how the 10-year is toying with all of those 160 bottoms, particularly important was the february 11th low yield on a closing day. everything i talk about is on a closing yield basis which was at 166. if you look at a 30-year bond hovering around 244, 245, it's comping pretty darn close. 10s are january, 30s are february of '15. now let's go longer. let's go 20-year charts on bunds. yeah, 1 basis point. what'd they settle yesterday? 3 or 4. how many percent is that down in one day? look at a 20-year jgb, japanese, well off worst levels of minus 15 basis points, which of course is a record. a lot of talk about the banks
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and negative rates aren't that bad, spain's coming back, at least coming back nay-nay i say. let's look at a 20-year chart of santander, what about unicredit? looks like a bottom feeding chart, doesn't it? last chart bit of counterintuitive close here should we stay at these levels, dollar index actually holding its close from last friday with a couple a day rally. carl, back to you. >> rick santelli in chicago. rick, thanks. when we come back legendary film director, tv show creator gary marshall weighing in on the binge watching phenomenon and all of our lives from the new season of cnbc's digital series "binge." s&p only about 15 names in the green and the german 10-year now yielding just about 15 -- >> anybody who owns that
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♪ our new digital series "binge" is streaming now looking at the changing media landscape of those eyes making the content. gary marshall has produced everything from "happy days" to "the odd couple." take a look at this clip. do you binge watch any show? >> i have pride. i like a break once in a while. we love tim in mother's day, but i believe in that. it's okay. it's just who has time and playing ball. >> people make the time, that's for sure. >> no, it's a whole new way of creating but also whole new way of watching. it's interesting.
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and the kids are so quick. and they're watching it on their phones. >> amazing. he talks about back in the day "happy days" didn't get a 45 share, winkler would come in and say we're not doing well. >> certain times so good interviewed him. there are certain titans that come over and there are people who just command respect. and this is a man who commands respect. great interview. really fabulous. >> amazing. my favorite line from him is we asked when is the ideal time to pitch your pilot to an exec. he says there's a window of about two or three days where all the executives hate everything they've got and that's when you call with your offer. they got no other choices. >> well, we could learn from the great. this is a fabulous series. my wife loved brian grazer. >> fun to do. of course you can find our new series binge streaming on youtube, hulu, apple tv or at
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cnbc.com/binge. when we come back, we will get stop trading with jim, dow's down 126. s&p back below 2,100. the call just came in. she's about to arrive. and with her, a flood of potential patients. a deluge of digital records. x-rays, mris. all on account...of penelope. but with the help of at&t, and a network that scales up and down on-demand, this hospital can be ready. giving them the agility to be flexible & reliable. because no one knows & like at&t.
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♪ some pain on the boards. dow's down 136, first triple digit loss since the middle of may. the 10-year yield 163 is lower than it was in the depths of the february lows. >> geez, that's crazy. that's money coming -- you can't keep your money in the german 10-year, that's crazy. money coming here. >> that's good stop trading. >> people like housing stocks and one confused with that is mattress firm which has put up a lot of stores. i think we're finding they put out too many stores. do not take the bait here. that stock is down a lot. it's probably not done going down. they have a not great balance sheet. and then a company i absolutely love just to gauge how severe this downturn might be, watch zoeta, zts, anyone who doesn't have pet insurance knows how much it is.
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they do companion animals, but they also do a lot of vaccines they find for when there's something wrong, a flu, they've been amazing. really well company. so watch those two as just to be sure -- don't buy mattress firm and don't be too bullish watch zoetis, don't be too bearish, watch bristol myers. >> we used to say consumers spend on cars and homes. we got auto sales last week, now mattress firm and rh, when do you say peak? >> these are execution issues. i'm not crazy about them. i look at loews corp. and i think that's a better understanding. i look at some of the companies involved in the different rows. watch stanley works -- stanley black and decker, goldman sachs today came out and started with a hold. that stock needs to hold too. i do like the drug stocks here, i like the consumer packaged
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good stocks. i like them med daidday. >> we are going to get china data this weekend, retail sales. >> doesn't matter. >> someone said all you need is for someone to plot down the china slowdown card again to create real trouble. >> that's why smuker keeps going up. smucker may be the single best quarter by estimations, 2016 still going up, i urge people to look at that company. it's a very well run company. they bought a pet food company, a coffee company, they are many, many good things. that's the kind of company that's working in this environment. also watch disney. i think disney's at a very interesting level in terms of people who are bearish. there's a lot to watch here but i'm urging people not to be too bearish, or too bullish. we've had a big run. >> yes. what's on mad tonight? >> one of my absolute favorites and it's so strange because it's
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been such a win this entergy, near and dear to my heart. it had a very bad run for a while. made no sense. i do like the utilities very much. >> dow utility just set a record high. i was surprised while we were talking about that. >> that's a way to get income and entergy was net way too low. the best one aep, american electric power. they come on every quarter for many years and very consistent and raise the dividend. remember, no surprises with utilities. that's why you buy them. you just want to be sure they're doing the right thing. if you bayou tillties because you want to go stretch like nrg people got hurt, utilities is about plain vanilla investing. watch any three to four yielder.
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if verizon goes below 50, gift. >> you see the gm above 5? >> no, not a gift. be ware of gm bringing gifts. gm could be a trojan value horse here, value trap. my daughter was a classics major, she learned a lot from her -- >> jim, good weekend. >> entergy. when we come back, disrupting the world of payments talk to stripe co-founder john collison. dow down 122. don't go away. there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits.
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good friday morning. welcome back to "squawk on the street." i'm carl quintanilla with simon hobbs and kayla tausche at the new york stock exchange. biggest drop since may 17th with a triple digit loss on the dow. utilities a record high. the 10-year yielding the lowest for the year. the german 10-year just about one basis point. oil not helping either back below $50. we have some breaking economic data on consumer sentiment.
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not the only data coming our way with china data over the weekend. rick santelli is in chicago. rick. >> well, you know, we are a few seconds early just to put a face on it our last read was 94.7. one of the best reads we had was january at 2015 at 98.1, that was the best since january of 2004. one read under 90 this year, that was april at 89. here we go, 94.3. that's three times better than expected and about three tenths less than our last look. so this is a preliminary read. this ultimately in a couple weeks will get tossed out. 94.3 quickly, january 92, february 91.7, march 91, 89 the low in april. 94.7 last month. and here we have 94.3. yes, 1.63 less under key bottoms in 10s as the world tries to get a handle on the medicinal value of negative rates. simon hobbs, back to you. >> thank you, rick.
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so global investors shedding stocks and commodities but perhaps most importantly buying government bonds even though the returns or the yields are often smaller than we've ever witnessed before. joining us now our very own mike santoli with more. it's rare you're in a situation where it's hard to overstate the scale of what is going on. >> absolutely. simon. i mean, the extremity of these moves in yields like $10 trillion or perhaps more perhaps in government and corporate bond yields below zero. it's been animating all other asset markets this whole phenomenon, and it's fouling some relationships that have been in place for a very long time. for example, notwithstanding today's pullback in u.s. stocks, you've had stocks here near all-time highs at the same time that global bond markets, at least historically this message they'd be sending would be something like threat of deflation, very, very slow global growth. but it's really set off this ongoing chase for yield globally. and basically there's a shortage
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of safe investment income in the world sending people into things like stocks. i would point out the s&p 500 right now yields in terms of a dividend yield 2.15%. that's a pretty good advantage over the 10-year treasury yield. historically in the last several years especially when stocks have yielded more than bonds, it's been a buy signal for stocks, but it's usually been because stocks have been pulling back. so nobody knows quite what to make of it and sending people perhaps to take more risk than they really intend to simply to get that income in areas like high yield bonds and supposedly safe things like defensive stocks, consumer staples and the like. >> mike, stick around if you would. let's bring in more analysis on this. gabrielle la global chief strategist at j.p. morgan, david seaberg also joins us head of equity trading. david, as you sit here and look at these extraordinary cross currents, let's say people are in equities and that's the main thing they're interested in, but you get these massive cross currents from treasuries, from bonds across the screen. what emotion do you see in the
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market at the moment? >> yeah, i mean, it's amazing, simon. when you look at the chase, just outright chase for yield we've seen recently, it scares me quite a bit actually to step into some of these names that have been really bid up. i look at the overall market here and we've talked about this a lot in the show, i think if that were in tape right now incredibly unpredictable. you've got hedge funds incredibly underweight equities and underperforming, so that's the worst case position they could be in right now. and i think what you're seeing is essentially very light volume drift higher, again, there's really nowhere else to go except for some of these higher yielding, you know, names. look at the correlation, positive correlation we're seeing between gold and the dollar now, which is i think very interesting. if you look at that, you can make an argument that people are looking at a little bit more of a safety sort of setup here going into, you know, the next several weeks. >> as far as the stock market is concerned, david, clearly we're inching towards those highs that we had last year. a lot of that has to do with
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energy. energy, oil is up 34% so far this year down from the lows. taking that to one side, the other parts of the market that are really shifting are the utilities, are the tel kons, the consumer staples, if that is shifting market to record highs what does that mean? >> let's look at a sector like technology -- look at facebook for example, it's trading at one of its lowest p/es since it's been a public company. there's a stock go to any institutional investor and line of sight from here to 150 is there in the line of sight of people's eyes. the stock is not necessarily moving right now, we're not seeing a tremendous amount of demand and you question yourself if there's that line of sight to 150 and people are that bulled up, why is it trading at the lowest multiple it has historically? the answer is people are very concerned about whether or not we're going to see some sort of
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pullback in the market, and again money is gravitating right now toward yieldy type names, sectors or stocks that will give them that opportunity. look in the staples sector look at reynolds america, trades roughly a three-turn discount to let's say coke. why is that? reynolds america is basically double digit earnings growth where coke doesn't, right? coke however is a 4% dividend yield. so you're seeing that sort of trajectory, that sort of money flow into names that do offer that dividend. >> gabrielle la what strategy are you recommend ld here? >> we're talking to clients about the difference between actual economic fundamentals and the risk aversion or bear sentdment we see in the market. as rick santoli pointed out we've got very positive consumer sentiment numbers for the month of june, very high levels. we really see the underlying momentum of the economy continuing to evolve and continuing to come in at a
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decent pace. and so our strategy, our recommendation to clients is really stay invested and look beyond some of the -- >> but i mean this is very important because, yes, the economy is getting stronger, but the argument for long-time have been the central bank bought gains in the asset market, so they are already disconnected, while the economy may be improving maybe we already factored that into stocks two years ago? that would be the counter argument. >> the counter argument, and i think it's a valid point, right? we're not saying we're going to go back to getting double digit returns. what we're just saying is that we don't think we're due for a bear market or some sort of big, big correction in the market because the underlying economics still supports top line growth, earnings growth and hence some modest returns in the market going forward. >> we are though learning of families across the world who are taking out mortgages where the banks are paying them to take a mortgage. how are companies, how are people going to benefit from these continued low rates? if you're a treasurer say i'm
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going to japan and issue bonds today, i'm going to europe and issue bonds today? >> i think if you're a company for example in europe, right and you have the benefit of such low yield, the opportunity there is really to be able to finance yourself at very, very affordable rates. and so this is another opportunity we see really this evolving european story that we think is very positive for consumers and for the company and the investment side of the equation as well. >> mike, are you still with us? join us if you are, mike santoli. >> i would point out as investors look at choices now laid out before them, i think the big risk is going into say stocks, large supposedly defensive stocks for the dividend yield and treating them as if they're bonds when in fact they hold more risk than bonds. so there are areas if you generally just want safe cash income, you probably should look some place aside from the stock market. you can look for high grade corporate bonds that now yield more than 3%, a notch down from there is a mid grade bond, etf
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qltv 4%, there are things out there preferred stocks yield more than 5%. if you want just yield, go for pure yield instruments, don't miscast stocks in the role of bonds. >> david, do you want to pick that point up? >> i completely agree with that point. if you look at the sectors in the market right now and say what are the sectors that are purely trading in fundamentals alone, it's very hard. it's very difficult to look at a certain sector and say whether it's energy, are the equities trading in fundamentals, some expectations or positioning? you look at the staples, what are they trading on? a lot of yieldy names they rush into not necessarily from a value perspective when you're looking at price trading at a level that makes a lot of sense to jump into. to mike's point you can find yield in different areas versus going into the equity. >> okay. great conversation. thank you all for your time. david seaburg, gariela and our own mike santoli. >> the war of words takes to the twitter sphere as trump picks up
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endorsements. john harwood in washington with the latest. >> hey, carl. yesterday hillary clinton's priority was locking up and releasing that endorsement from president obama. they're going to campaign together in wisconsin next week. this morning she was trying to deepen her alliance with elizabeth warren, the progressive leader who can help her bind up those wounds with bernie sanders in the primary. you can see in this video hillary clinton is arriving at elizabeth warren's house this morning. last night on rachel madow's msnbc show, elizabeth warren came out joined the president, the vice president in endorsing hillary clinton. >> i'm ready. i am ready to get in this fight and work my heart out for hillary clinton to become the next president of the united states and to make sure that donald trump never gets any place close to the white house. >> now, when elizabeth warren says work her heart out, that means going hard after donald trump. she did that again last night in both the maddow appearance and
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in a speech. donald trump fired back this morning calling her goofy elizabeth warren referring to her as pocahontas, which he likes to do in light of the questions about her indian heritage. we're going to see though directly from hillary clinton and donald trump today. they're going to do dueling speeches in washington, hillary clinton before planned parenthood and donald trump before a group of conservative christians. we'll see what level they take it to later today. >> with 150 some odd days until the election, john. thank you so much, john harwood. when we come back, insider trading scandal that rocked the street. pro-golfer phil mickelson, high rolling las vegas king maker billy walters caught up in that mess. we've got the inside scoop. pulitzer prize winning artist james stewart going to cover some of that when we come back. tokyo-style ramen noodles.
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the s.e.c. stepping up its crackdown on insider trading. in 2016 alone nine new cases are pending including the scandal involving golfer phil mickelson, gambler billy walters and tom davis. davis has pled guilty to leaking inside information. our next guest says like many previous cases davis should have known better but was too proud to admit that he had had some financial hard times. joining us at post nine cnbc contributor and pulitzer prize winning columnist, jim stewart, good to see you again. you go to motives as to why somebody would do this. >> yeah, again, it surprised me davis more than even mickelson
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or walters because he's this eminent wall street deal maker, chairman of a major fortune 500 company seemingly with all the trappings of wealth and success and looking forward to golden years in retirement. why would he ruin his life like this? i'm telling you, i don't even know where to start with the astounding things in here, but it is a textbook case in how not to manage your personal affairs and finances. it's astounding. >> pride seems to be a big part of it. >> apparently. i talk to several people who know him and kind of close-knit world, the dallas country club golf you know high level executive world, and they know the guy. and he was very successful, very admired, and he started getting into trouble. i think he had some bad times in the financial crisis who didn't. he got divorced. i mean, nothing out of the ordinary really, but pretty soon he was in deep financial trouble. and instead of like going to one of his friends and saying, you know, can you help me out here a little bit, he turns to who?
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a professional sports gambler. and you think you'll get a fair deal out of that? what is most amazing to me is that the government alleges that billy walters made $43 million on the tips that he got from davis. what did davis get? he got about $1 million in quote/unquote, loans in return. i mean, as i said in the call, this is the worst insider deal in history. and this guy's a professional deal maker. >> did he plan it and go out strategically to end up where you say he did, or was it more a case of he was just basically looking for friends and looking for favors down the line as he got himself -- i mean, there was no clear transaction, was there? >> that's correct. >> he just wanted somebody to stand by him at the next turn, from the reading of your column. >> as best i could figure out, nobody sat down and said let's do an insider trading scheme. it was kind of a slow thing where walters would say how is the company doing while they
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were on the golf course and then it would, you know, kind of morphed into something way more specific. and obviously at some point they knew they were doing wrong because they had a special cell phone and code names, all the trappings. >> dallas cowboys. >> you make a good point because, you know, the courts have gotten all hung up whether it's a benefit when you give somebody a tip. one thing i've been saying all along anybody who knows wall street knows you don't necessarily get something back right away. you don't get the suitcase of cash unless you're really, you know, idiotic, but you build up what you could call a favor bank. it's like back scratching. and pretty soon, you know, when the bank account is really full, as he did, you come knocking and say, okay, pay me back here. >> he obviously should have known better, but then he lied to the government and then destroyed the evidence. how did he not keep this from snowballing? >> well, he didn't not only not keep it, he like packed more snow on to the ball. i mean, again, if there's one
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message here too is, okay, once you get caught, you cross the line you decide to commit a crime, you get caught, take a deep breath and say, okay, this game is over, it is time to use a gambling anl jis, told my han throwing things away there go the felony counts. by the way, he was also dipping into the checking account of a charity that helped battered and homeless women. he helped himself to $100,000 of that. it wasn't disclosed. i think there could have been even more crimes in this case. >> you make the point that the definition of insider trading continues to be like a mirage. no one can actually decide what it is and whether mickelson should have been a part of this or a whole list of other questions ancillary to davis. >> right. well, mickelson clearly under the current, you know -- is in a gray area to put it mildly under the current law and probably should not have been charged. who knows whether he really knew where the tips were coming from. he's like the remote tipee now
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being sheltered by the current sort of court interpretations. and many experts think, you know, this needs to be clarified to the supreme court. walters too although he looks, you know, he's right in the middle of this thing and he made the most money on it, well no doubt he's pleaded not guilty. and he will say, i'm sure, that he too -- there was no specific quid pro quo, there was no benefit, i didn't really give money, they were loans, that kind of thing. i don't think that will hold up. this is so brazen. but i'm sure that will be the defense thanks to these very vague court determinations. >> the takeaway, the tale at the end of all this is if you go through the 2008 crisis and you lose a lot of money, if you have an expensive divorce, if you lose your job at credit suisse and income plunges, you need to change your lifestyle. ultimately he did not. that was his undoing to save face through that. >> but do you think people will learn from this? or do you think history will keep repeating itself? >> history repeats itself.
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there's something about human nature that just -- i mean, one other thing that he was doing this while the news was filled with ra ja gupta running out of the goldman sachs meeting. and here he's doing the same thing while somebody else was being caught. why didn't he think he would get caught? there are some personalities that would really turn to crime rather than go to golfing buddies and say i have to get out of the private jet deal or i'm going to have to give up my membership to this club. >> especially as some of the buddies told you they would have helped him if he would have come to us. >> yes. i mean, i don't know at some point it remains a mystery of human nature. >> it's a great read. an important read. >> thank you. >> thank you so much. jim stewart of "new york times." >> coming up on the program, start-ups and banks head to the white house for the first ever summit on the future of fintech regulation. thanks man.
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the fintech industry is booming with investments of more than $5 billion in just the first quarter of this year alone. and this morning the first ever summit between banks start-ups and the administration discussing fintech is taking place at the white house. joining us now is charles moldow from foundation capital participating in today's summit, an early backer of lending club and on deck, charles, good to see you again. >> good to see you as well. >> we saw you yesterday in palo alto before our shot went down. you are now in d.c. for this summit. we'll pick up our conversation from yesterday in just a bit, but tell us how the table's been set for today's conversation in washington. >> sure, there's been a lot of conversation this week across multiple organizations related to the government, the ftc yesterday, cfpb and today it's the white house. so we're looking forward to hearing the white house's take
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on innovation in fintech and how they plan to support it. >> there have been a lot of agencies raising their hands in a sort of me-too manner when it comes to figuring out how to regulate this sector. who do you see doing the best job? >> so far the white house's posture has been the most positive in terms of trying to embrace innovation and trying to understand how we can utilize innovation to benefit the public. seems to me the other organizations are more watchdogs trying to figure out what's going wrong rather than right. >> fintech can be anything from processing payments to running digital wallet to making small business loans. i'm wondering if you think any part of the fintech sector needs regulation sooner than others? >> well, i think anything that controls consumers money obviously needs more protection than when it doesn't. and so to me anything on the wealth management side is probably the area where you might want to look most closely as compared to let's say remittances or the lending space. predatory lending of course is bad, but really that's in the
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subprime space. you mentioned lending club, that's not a space lending club plays in for example. >> but we have seen a lot of small businesses, a lot of consumers when they either get turned down for a loan from a bank or they just want to exclut the bank from the process altogether, they've been going to alternative lenders. how is that trend shaping up? where is the safest place for someone to get a loan outside the banking sector right now? >> i would say for anybody who's a prime consumer, you know, those that are in the economy with good fico scores, there are a tremendous number of alternatives. and they're all quite safe. the predatory lending is really for things like payday lending and check cashing. putting that small sub segment of the industry behind and that's only maybe 3% or 4% of the industry. the other 95% is quite safe and provides consumers with a strong value proposition of good choice, transparency, ease of use and much lower rates. >> we spoke yesterday about lending club, about the declining confidence in the business at least from wall street's perspective judging by the stock price, but you were
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telling us yesterday before our conversation ended that you think that it is more of a blip on the radar rather than a more longer term event for the industry. tell us a little bit more about where you're coming from and how you think that situation plays out? >> sure. you know, it's really a difference between corporate governance let's say on one hand and the product on the other. in the case of lending club, the product is an incredibly sound product. you have borrowers receiving rates at 500 or 600 basis points cheaper than alternatives. they're saving that and putting into rent and food and necessities. other side lenders making hundreds of basis points return better than alternatives. that's a great product. that product deserves to exist. corporate governance is something the board is trying to address and their actions. i think maybe the hp activity four or five years ago where they were doing back dating of stock options, said nothing about the chips inside computers or the computers hp was selling,
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when that issue was resolved people kept buying the product because fundamentally it's a good product. i think that's the same case here. >> so no problems with the fundamentals, the stock being down, would you help the founder do a management buyout? is that what you think is the best option to go private and figure out these issues behind the scenes? >> well, you could certainly argue that taking the company public a few years ago maybe was the largest mistake because it narrowed the ability for them to move with freedom with respect to new product development and the growth rate that they were pushing the company at. whether the company stays public or goes private i think is a very attractive opportunity. of course we'd have to look at every alternative, but right now we are very big believers in the long-term opportunity of the stock. you know, yesterday i mentioned netflix, i remember sitting in a partner meeting where the stock was about $3.40 and we were worried about blockbuster taking the company's business away but fundamentally was such a good product offering and the management team was so strong, as in the case of lending club here, although we feel like you have to hold for the long term because it's a great business.
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>> we've become very familiar with that blockbuster-netflix anecdote. before we go, charles, silicon valley obviously in mourning for tom perkens, legendary venture capitalist, you knew him. tell us a little bit about your relationship with tom, about the valley's remembrance of him today. >> yeah, you know, he was definitely two generations before i entered the venture business so one of the foundational people that created the industry back in the '70s. my fondest memory was when my partner, paul holland, filmed a documentary about the venture capital industry called something ventured. and tom perkins was featured in the documentary quite extensively. and he was interviewed in the cabin of his yacht with his big bright ascot and you could see in the back windows the yacht was kind of floating. you would not have known it was such a big space, and it seemed at that time he was enjoying life and the fruits of his labors and building the venture capital in the late '70s. >> he's gotten so many companies off the ground thanks to his funding.
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he will be missed. charles, we wish you well in d.c. safe travels back out west and have a great weekend. >> thank you, and you too. >> charles moldow from foundation capital. ahead on the show return to the topic third party payment process stripe making big marks getting backing from heavy hitters including elon musk. we'll hear from stripe's founder. much more "squawk on the street" ahead.
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thank you. ordering chinese food is a very predictable experience. i order b14. i get b14.
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no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business. good morning everyone. i'm sue herera. here's your cnbc news update at this hour. a moderate earthquake hit the palm springs area earlier this morning. and it was felt across parts of southern california. there were no immediate reports of damage. the 5.2 magnitude quake centered about 20 miles south of rancho mirage, touching off a series of smaller aftershocks. five worshippers killed and 15 more injured when a steel shed in the courtyard of a
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central mosque collapsed. muhammad ali will be laid to rest in his hometown of louisville. after a lengthy procession through the streets of the city, the funeral proceedings will take place. the headstone for the outspoken former heavyweight champion will simply read, ali. and detroit red wings hockey player gordie howe has died. howe played more than 1,700 games and scored more than 800 goals. he was widely known as mr. hockey. and he was a legend in detroit. he was 88 years old. that is the cnbc news update at this hour, let's go back downtown. carl, back to you. a lot of sad news today, sue. >> i know, unfortunately, yes. >> it remains a day where we're watching bond yields around the world hitting new lows. let's get to rick santelli who has a special guest. rick. >> absolutely a special guest. a guest when, you know, when candidates running for president want a rubber stamp on tax
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policy, he's their go-to man. it's lawrence of america, my friend, dear colleague larry kudlow, thanks for taking the time. >> thanks, rick, appreciate it. >> now that the niceties out of the way, let's put the gloves on. larry, i don't feel the same way you do about low rates. and you've made it no secret that you don't think it's a good idea to raise rates. and i respect your opinion. but let's think outside the box because everything central banks have done for the last several years has been way outside the box, so maybe the solutions ought to be outside the box. my question is simple, negative rates aren't good for capitalism, larry, we all know that. if there's a recession before normalization in this country, i see two alternatives, quantitative easing or negative rates. don't any negatives of raising rates at this point disappear when you think there could be worse things than recession? >> well, look, they might. okay. i'll concede that, but let me just make a point.
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two quick points. number one, my view, the reason yields are so low in the u.s. and around the world is we have global stagnation, virtual global recession. that's point number one. and we have virtually no inflation, point number two. so you see real rates and, you know, flat, negative in some countries, and inflation break evens low, 1 to 1.5%. now, to answer your question directly, rick, something's got to change here. i recommend an across-the-board slashing of corporate tax rates for large and small businesses in the u.s. i would start right there to reignite growth and then give the fed a chance to normalize their interest rates. i do not approve of what the fed or these other central banks are doing. i have never favored it, qe, negative rates even worse. the trick is how to get out of this with minimal damage.
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let's cut the corporate tax, that will pick up business investment and it will pick up productivity. >> larry, i couldn't agree with you more. couldn't agree with you more, but here's the problem. let's say i make $25,000 a year and i want to buy a car and i do my research and everything suggests the best car that will last the longest, best resale value is a rolls-royce, yeah, but i can't afford a rolls-royce. whether it's corporate tax rate, dodd frank, all of that, it's all the correct thing to do. but one of the reasons it hasn't been done is because the fed and central banks especially in europe set a pick. they give an easy out for doing tough reforms. and i think that if janet yellen wants to be proactive, as much proactive as she is on the easing side, she should pick up the phone. she should call the speaker of the house, the head of the senate, the president, his press secretary and say, listen, guys, i'm going to normalize rates
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because negative interest rates aren't a good idea. so maybe you better think about how you're going to respond and get your house in order. what's wrong with that, larry? >> look, i'm not opposed to coordination between fiscal and monetary policy. i'm not opposed to it at all. i think that's quite sensible. i mean, the fed is independent. but look in the reagan years when i served there's plenty of coordination between president reagan and paul volcker. i'm not opposed to that. i'm just saying you want to think outside the box, rick. we need a different model. in other words, zero interest rates, or negative interest rates, and tons and tons of government spending for all these g7 countries have not worked. government spending and zero rates. >> $58 trillion of debt worse since the credit crisis, larry, and nobody talks about that. >> all right. well, listen, i love to talk to you about that. but debt to me the way you deal with that and the way you deal with the economy, the way you deal with productivity -- >> growth. >> -- is growth, thank you,
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buddy. growth. so right now what i see is much more a fiscal problem, a fiscal obstacle -- >> you know, there was a point i agree with you, larry, but i think we have negative feedback loop. when you've seen the extreme of low rates it goes negative. they are now the problem. they are the enemy. and they're keeping inflation and pricing pressures and all the other issues that need to be fixed you pointed out are keeping business -- listen, so they have access to money around the world. what do they do wit? they buy their stock back? what about all the companies that would have been born that haven't been born? birth death model is horrible the last six years, why? misallocation of capital, larry. >> i agree. >> right back to too low interest rates. >> i agree, rick. i actually agree with everything you just said. the question is how do you get out of this mess? and i'm just saying you need a different economic model. >> we need leadership. >> yes. >> we don't seem to have it on pennsylvania avenue. the two candidates coming up really open the debate as to
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whether they're going to satisfy that criterion. i think janet yellen and the central bankers who've already tried to prove that they are, you know, from zeuzzeuz land neo step it up. >> i think one of the candidates, donald trump, has a very significant business tax cut for large and small companies. and i favor that. he also is a de-regulator, and i favor that. on the other hand -- >> yeah, but you know, clinton was a deregulator, that didn't turn out well. go on. >> well, bill clinton i think was at least a quasi supply side and i think he did a lot of great things with newt gingrich. unfortunately mrs. clinton has a different world view. and she's talking about raising regulations and more spending. and with respect to taxes she wants to raise the capital gains tax, that's bad for productivity in jobs. we don't know her views yet on the corporate tax. but she also wants to raise upper income personal taxes. so i think she has the wrong
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model. mr. trump is closer to the truth. it ain't perfect, but it's closer to the truth. look, in the house paul ryan wants major pro-growth tax reform, in the senate mitch mcconnell wants major pro-growth tax reform. actually, obama, president obama sometimes talks about tax reform, but he never seems to follow through. so what i'm saying to you, my friend, is yes, let's think outside the box. we need new pro-growth fiscal policies, taxes and regulations, and then let the central banks follow suit. the kudlow vision, real quick. >> all right. >> first 30 days the next president slashes business tax rates right away. the economy reignites, real interest rates go up and the fed follows by raising their target rate and we get out of this mess. and they let their whole bond portfolio runoff. that's the kudlow vision. that's how we get out of this business. fiscal leads monetary. >> we're going to have to cut it short there, larry. i agree with much of what you
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said, but some of the politicians you mentioned have been in congress so long why haven't they done it already? this hope and change of the future hasn't worked out well. we need some action right now and janet yellen and mario draghi and abe, they are people that can make it happen, but they refuse to cooperate with logic. thank you, my friend, for smending the time. >> overthrow the establishment, rick. now's the time. overthrow the establishment. >> gee, i think one of the candidates figured that dynamic out. have a great weekend, larry. >> you too. >> carl, back to you. >> thank you very much. coming up on the program, revolutionizing digital payments, the founder and president of stripe will join us live. plus, the bond king himself, bill gross will join our very own brian sullivan live from the ja nus capital. we'll be right back. because the ultimate expression of power,
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is control. this is the pursuit of perfection.
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fidelity -- where smarter investors will always be. with a multibillion dollar valuation in clients like lyft, insta cart, about a third of americans have made a purchase of his product without even knowing it. joining us now is john collison, the co-founder of stripe, company is number 29 on our cnbc disruptor 50 list. john, great to have you this morning. >> good morning. good to be here. >> or i should say good afternoon since you're at a conference in beautiful monaco. basically for our viewers not familiar with stripe, you give customers a couple lines of code and let them run with it. why is that the model you chose? >> that's right. so stripe is a platform for building online businesses. so if you're building the next big app or web service, and you want to turn it into a business,
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you can use stripe to accept money from customers all over the world. stripe is really a product of our own personal experience. we have built online businesses before and we found it shockingly hard to do so. so we created as you say a few lines of code you can be up and running accepting payments. >> although your competitors would say opening the kimono as much as you have leaves you open to security issues or potentially more competition stealing your code, stealing your ideas. why are you not worried about either of those? >> all right. so on the security front we actually designed stripe from the ground up for security. if you look at many of the traditional security headaches that companies and merchants have had, it's been due to trying to tack on security as an afterthought to existing systems. you look at these systems that date from the '80s or '90s trying to secure them after the fact is just fundamentally quite hard. stripe we built it from the
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get-go for securing credit card information. and so when you buy from stripe as a consumer, you think you're just keying in your credit card information into an app, but it's actually swiftly couriered off to stripe without even touching the merchant servers. so it's secure by its nature. then our approach to the code is really about putting the businesses and the apps in control. we think compared to approaches like paypal or amazon payments or anything like this, we think the apps really want control over the look and feel and over the experience. we think the really nice experience is where you enter in your payment details once and never really think about it again. some of those companies mention like lyft and instacart, the payment experience disappears into the background and we think that's nice. >> we're used to transacting on mobile, online, through the company, through the product site itself, we thought we were going to get a wave of buying through social media, but it seems that has really died down.
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i'm wondering where you think commerce will originate from in the future if not twitter, if not facebook. >> well, i think what's certainly clear is however commerce looks five years from now, it's not going to look at all like it does today because honestly many online and mobile commerce experiences are pretty clun ki. we've all been there when you're pecking in your credit card details for what feels like the 17th time in an app and you make a mistake, you have to start over. it's really kind of frustrating. and i think that explains why mobile commerce if you look at the macro statistics still hasn't penetrated very far. in fact, all online commerce globally is just between 2% and 5% depending on whose numbers of total spending. so we have a long ways to go. in terms of where we think it will go, we still think social commerce makes a lot of sense buying on sites like pinterest and twitter and places like this because that's where so much product discovery has.
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so if you're on one of these social networks all day it really makes sense when you see something you like to buy it frictionlessly there. obviously another very significant trend is apple pay and android pay where within app experiences if you've used it it really takes away the entire credit card entry process and makes buying things just one tap. we see in the data it's a very significant change. >> with a $5 billion valuation perhaps we'll see you next time on the floor here of the stock exchange. john, for now we'll have to leave you in monaco, but it was great to have you and congratulations on being named cnbc disruptor. >> thank you. >> and don't miss another cnbc disruptor today on "closing bell," the ceo of augmented reality company daqri, that's later this afternoon. coming up on the program, wall street's beth athlete mark reuben won the wall street decathlon four years in a row, can he make it a fifth this
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sunday? he'll join us next on cnbc.
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competition on wall street is intense and taking it to the athletic field and it is potentially multiplied by a
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thousand. this weekend's decathlon pits athletes in a head-to-head competition for charity. this is wall street's best athlete forefour years running mark capps. >> yes. >> and saturday is the team sports and sunday the individuals. >> yes. >> and how is the competition holding up, and if you have won it four times, you are a marked man this year. >> i mean, it is tougher, and getting older definitely does not help, but we get more and more participation every yee, and that is what it is all about and to raise money for memorial sloan kettering it is an amazing cause to be a part of. >> and there is 100 of you who compete, and the same guys vying for the top slot, and that is potentially vicious. >> well, it is a good network of people that you get to know year after year, and every year as it grows, we are doing it in five cities, and more and more people come out to participate. >> but there should be some
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breakdown in the contenders who were nfl free agents and everybody else. that is sort of not fair. >> and that is the thing, the level of the come petition, and the quality of the events, and we have super bowl champions and nfl players and the division i athletes and the competition is top tier, but at the same time, it is really anyone's game, so we will see. >> and 400 meter run, and pullups, and how many do you do? is it set? >> 20-some last year. >> you do it until you expire? >> yes, as long as you can, and that is tough. >> and the bench press is propor proportion of the body weight? >> 150 for the males and proportion for the women. and this year, it is broadcast by the cnbc, and it is a whole new level of exposure, and are you ready for that? >> yes shgs, i think that it wip us to get to the goal which is $11.5 million for sloan kettering which is to fund the 20% of the children who do not respond to traditional kacancer
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therapies, and so the exposure is better. >> i think that you have tv aspirations and a white collar sport, and the wall street by day, and the killer athlete by night, and reality tv beck conns. >> i wish. i wish. >> how long do you train for it? >> and that is the thing, it is tough with the work and the family, but when you are supporting a great cause, really, whenever you have time. and you can find a half hour run before work, and half hour run after work, and it is not easy, but that is part of the balance and when you are raising money for a great cause, it will motivate you to find the time. >> and does your boss give you leeway, because you is have won four times? >> e definitely not. >> and there is a big challenge here for most people on the wall stre street, and you can't train when you want. >> and when you are the ta desk at 5:30 in the morning, and leave at 5:30 at night, and you have family obligations, and so it not like you are at home resting and getting the training that you need, but it is for a great event.
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>> do you have a pull-up bar in the office? >> well, that is a good idea and maybe i will try that next time. >> and tell us about the team sports, because our own john na jarp or the pete -- >> jon najarian. >> and he is competing on the team sport saturday and that is also carried on the television? >> yes, and june 25th, nbc sports is doing a one-hour segment to combine the team competition on saturday and the individual saturday which is held on sunday, and so both for a great cause, and we will have a lot of fun to see how it turns out. >> that is jon on camera last year competing. >> yes, and in the final minutes if you would like the address the potential competitors on camera four what they are in for. >> and i'm below the fund-raising target, and i'm at 13,000, and i would like to shoot for $14,000, and if you want to have last-minute contributions at decathlon.org. >> and you should have done it
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donald trump style and put the text this number there. >> yes, next time. >> and mark rubin for the decathlon this weekend. and now, we will go over to jn n fortt for the rallily of the week? >> lle with, are there is a lite twitter war overnight with donald trump and hillary clinton, and what does that mean for social reality? and we will talk about a social media app to see if it rallies the ipo market. and one of the people behind taylor swift, the head label big machine is going to join us to talk music business and more coming up on "squawk alley." whole communities are living on mars and solar satellites provide earth with unlimited clean power. in less than a century, boeing took the world from seaplanes to space planes, across the universe and beyond.
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welcome back to squawk on the street as we are awaiting the shares of the heels of a "new york post" report that the ftc may be moving closer to the pend torg proposed merger with both shares rising on the heels of the report. we ve not confirmed it here at cnbc however, and it is moving the stocks higher and moving on
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the above-average volume and it is something that we will keep an eye on as we look at these particular shares. it is also something to keep an eye on as we are looking at the entire health care sector which is a sector that is a notable laggard overall in this particular year of trading, so again, something to watch in today's early bid of trading. now, over to you guys, carl. >> and some movers. thank you, dom. it is 8:00 a.m. out there at hillary clinton and donald trump's head kwaquarters and on squawk street, it is 11:00 a.m. "squawk alley" is live. ♪ say your prayers ♪ and don't forget my son to include everyone ♪ w

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