tv Squawk Box CNBC June 7, 2017 6:00am-9:01am EDT
his name is scooter guinett. trump will be making his sales pitch on infrastructure and health care in the heartland. it's wednesday, june 7th, 2017, one of the greatest offensive performances ever. "squawk box" begins right now. ♪ ♪ live from new york where business never sleeps, this is "squawk box." cbs news this morning. >> it was? >> it was. >> good morning, everybody. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. the equities are indicated higher after closing down yesterday. yesterday we saw the dow down by 47 points. the s&p off by 6.5. the nasdaq down by 20 points. believe it or not even though these were small declines again, for the second straight session we are now seeing the nasdaq and
s&p 500 having their worst day since may 17th. so you've got to go back weeks just for even modest declines like that. this morning dow future's indicated up by 15 points. s&p futures up by 2 and nasdaq up close to 10. overnight you did see gains in the chinese markets. japanese nikkei was flat as well. in europe this morning in some of the early trading there. let's get a look at what's happening in the u.k. ahead of the elections tomorrow. stocks are slightly higher. up by just under .2 of a percent. the cac is up. take a look at the treasury market. this is the one that's been causing so much consternation. the ten year note sitting just above 2.15% but hovering around this level even though we do expect the fed is likely to raise interest rates next week. a lot of people wondering what's going on. some of the weaker economic data including the jobs report
leading market watchers to assume that the fed, even if it does raise next week, that it won't do it again in the near future. let's take a look at crude oil prices. api data out late yesterday showed a bigger than exekt ped drop of crude oil prices. the supply jumped more. the u.s. energy department will release official energy data later today. crude oil down by 16 cents. it did push above $48. sitting at 48.04. breaking news overnight. iranian state tv reported several attackers raided iran's parliament and they left up to 7 people dead and several others wounded. the news agency said there were unconfirmed reports that the attackers have taken four hostages inside the parliament building. isis claiming responsibility for the attack. we will continue to monitor the situation and bring you updates. in corporate news, spain's
banco santandar buys banco popular for 1 euro. santander plans to raise nearly $8 billion for a rights issue to pay for the cleanup of popular's balance sheet. and, by the way, raises some questions for how the central bank in europe is dealing with one of the -- one of what might be a failing bank in italy and where this all goes. i don't think we're back in 2008 at all, but i do think it's worth watching. shares of banco popular are falling. the bank has been weighed down by $40 billion of bad loans. also, uber has fired officially 20 employees following an internal probe of sexual harassment claims. the company spokesman confirming those fires to cnbc. uber also said it's working to try to improve management training. firings came after uber hired a
law firm to look into this. former u.s. attorney general eric holder launching a separate investigation into the company's culture and practices. we are still waiting for that report. >> you need to say if someone is massaging you, you need to say stop, at least a couple of times, to let the person know that it's unwanted for you to like file anything like that against me. >> oh, you're talking -- we have videotape. >> i know, but -- and we have videotape of you not saying stop or not saying -- >> because you have a career, another opportunity if this doesn't work out as a masseuse. it was pretty good, shoulder massage. i'll take it. we do that every day? >> am i in a position of power over you for where you're afraid to say something? >> in the -- >> well, with the massage. you're okay with it then? you were okay with the massage? >> i thought the shoulder massage was good. >> okay. all right. going to be very difficult for you to bring -- >> feet during the commercial
break, my friend. >> feet? might draw the line at feet. >> wait a second. you're not putting him over my lap. taking place across the table here. okay. >> you're going to get ratings somehow, dammit. >> wouldn't that be driving people away? >> that might be driving -- we've seen -- you've done the foot massage. >> we did the foot massage, on the air no less. >> all right. from the ridiculous to the sublime here. amberella, never heard of it. shares of ambarella slipping this morning. turns out they make some of the stuff for gopro, but it had weak guide dance. the numbers were okay for the current board but the guidance was weak. they said it makes components and cameras for supplier go pro. don't know how big it is. i'll take a quick look. $2 billion market cap. so small cap but a big loser today. dave&buster's, it's an en r
entertainment and dining. earnings and revenue did beat the street. it was a mixed quarter for united natural foods. earnings beat by a penny. revenues were a little short. the company cut its full year guidance and announced that it's going to extend its restructuring. president trump is headed to cincinnati today as part of the administration's infrastructure week. eamon javers joins us with the top political stories. good morning. >> reporter: good morning, becky. the administration has been trying to focus on infrastructure week all week but they've been dogged by headlines regarding russia. a whole bunch of reporting out today sort of one day ahead now of the testimony of former fbi director james comey. let me bring up what the news organizations are. one report is from abc that attorney general jeff sessions
actually offered to resign because of the growing rift between himself and president trump. president trump said to be very frustrated with sessions questioning his judgment. sessions offering to resign. that resignation offer not accepted by the president. also, the fbi director james comey said to jeff sessions, don't leave me alone with president trump. in the protest effectively of the fact that president trump wanted to meet with comey personally. comey felt that was inappropriate, this according to "the new york times." comey asked dan coats to intervene with the russian probe. we have a statement here from the director of national intelligence who denies that saying that coats has never felt pressure by the president or anyone else in the administration to influence any intelligence matters orion going investigation. so a swirl of reporting out there this morning. we'll see more through the day. more headlines tomorrow morning. then we'll see that testimony at
10:00 tomorrow morning. the national broadcast networks will be carrying that. that's going to be a rare moment for a congressional hearing to achieve that level of attention and scrutiny. i asked press secretary sean spicer yesterday whether or not the president would be watching this and where we would expect that he would be at 10:00 tomorrow and spicer simply said he has a very busy agenda, but that schedule remains open. it's not clear whether the presidentlike watching. there's some speculation, guys, that the president might live tweet his responses to comey's testimony. we'll wait for that. if that happens, it would certainly be unprecedented. >> nothing would surprise anybody. >> right. >> abc has the story that comey's not going to draw any conclusions that it was obstruction so i don't know -- >> right. >> -- democrats are going to -- now are they going to hate him again? >> comey's an emotional roller coaster for partisans. >> we love him.
we hate him. >> both parties. a man without a home. >> partisans on both sides have flipped and flopped on him. >> now he's going back to a bad guy. what he did before the election with the weiner, if i say weiner, we need to ding him. thank you. interesting thing in the op ed piece in "the journal" today just about comey, he's -- you know, won't answer certain things because he says he's a private citizen -- >> right. >> -- but he's willing -- he gets to pick and choose exactly what he responds to. >> yeah. >> "the journal" points out how politically savvy this guy really is in terms of -- >> he's been around for a long time. >> in terms of watching his own reputation and everything. >> he rarely makes an unintentional step. the one time where he got the number of e-mails wrong was
related to the anthony weiner huma abiden situation. there was a misstep there. very deliberate, very intentional with what he says. tomorrow we'll have to watch for him. he has a whole bunch of guardrails keeping him restrained. classified information he can't talk about. >> but a lot of stuff that the republicans are going to try to i won't call it a diversion because it's interesting -- it's important stuff, but they're going to ask him stuff that has nothing to do -- they could ask him about unmasking. >> sure. >> they could ask you how did your memo get leaked? >> yeah, i would expect leaks would be a big focus. >> he's very deliberate and also very tall. >> 6'8" i believe. >> can't hide. you can stand near curtains all you want. you're 6'8". people are -- >> that was a great anecdote. the white house -- >> he needed to get behind -- >> a blue suit and he didn't want to meet with the president so he stood next to the blue
curtains. when you're 6'8", you don't blend in. >> eamon, should have gotten behind the curtains. we see you, jim. >> no. then you have the sean spicer comes out hiding in the bushes. >> by the way, on that sean spicer thing, i think spicer's getting a bad rap that he's hiding in the bushes. >> i'm totally joking. >> it's become a meme. >> there is a path there, flag stone path. >> he's relieving himself there. >> he was waiving, huddling with his staff to figure out -- >> you've gotta go, you've gotta go. >> making it worse. >> got a bunch of coffee. >> reporter: that's not the case. >> thank you, eamon. we're one week away -- >> i'm going to have my coffee now. >> i mean, i think i can get through this interview, but then i'm going to have to -- anyway. we're one week away from the closely watched june fed decision where the central bank is expected to raise interest
rates again. let's get back to the broader markets and the economy. joining us now, henry peabody -- i say peabody but it's probably peabody. >> no, it's peabody. >> it's up there. >> yes. >> and ian shepardson. just not a diversion, but, ian, since you're here, we've been talking about the ten year a lot. can we just start with that and whether it's a harp bin ger of weak economic activity that is responding to other factors? what do you make of it? >> i think a lot of people are buying the fact that the data has slowed a bit. i'm completely unconvinced. i'm expecting good numbers for q2. the market is focused on the soft itch payroll numbers. march was the big weather. the big snowstorm in the
northeast. may had issues. small business, ism yesterday all super strong. i'm looking for much better -- >> do you think the market takes off again if something like that happens? >> yeah. >> we're sitting around thinking that the economy is slowing. look, very near all-time highs in the markets. >> yeah. >> for a couple of days. >> i think the problem is the market gets into its head that the economy isn't slowing and the people are going to start looking at september. hike in june, okay, that's done. that's baked in. doesn't matter. then we might get another hike later in the year, maybe not. we get nothing else. if actually payroll growth is going to return to $200,000 a month and unemployment is at a cycle already keeps falling, then a lot of people in the fed are going to get worried about future inflation risk. 6, 12 months down the line, that's what they're thinking about. >> we're not back to a case of good news is bad news, are we?
>> not really. give it a few weeks of good news and that's how the interpretation starts to show. >> you think we go 2.5% on gdp but not necessarily permanent and not for a whole year. but you think we do 2.5% without any success? >> yeah. >> tough to sustain it and go to 3, not likely? >> 3 is tricky. 3 is tricky. with productivity growth so low, 3 is hard but 2.5 is what we had in 2014 and 2015. that's over now. that puts down pressure on the unemployment which for the fed is going a bit too low. >> what do people call it, hank, ha hal. >> i try to avoid that. >> we have a guy hank that comes on. does he feel weird people calling him hank?
>> if he's comfortable, that's fine. >> henry. >> let's stick with henry. so we need your take on i think the environment for equities given what ian said. >> the strategy we manage is fixed he cincome discussion. so what funds do you advance? >> the multi-income sector. we're a value oriented strategy. we can go across the caps structure, globally, currency, credit with a value oriented -- >> no dividend stocks. we have those reasonably stretched. credit and equity is telling a completely different rate market than we just talked about. ten year at 2.10, fairly flat. that market is telling you that it doesn't trust the fed. it doesn't think the fed has any credibility which i think ian and i completely agree on. we're taking trump out of the
occasion here, which started almost the moment after he got elected. >> why does the fed need credibility if there's no inflation? >> well, i think as ian pointed out, there is inflation now. there is the potential for the mid cycle. >> it seems like if the people were worried about it, you wouldn't have the 2.15. if people were worried about the fed, you wouldn't have a 2.15. >> don't forget the spread between germany and the u.s. is 180 basis points. the u.s. ironically is a high yielder. we are the carry trade in the developed world. there's some distortion. that's keeping the tail end of the curve a little bit on the low side. >> don't you wish you had -- you're in like the worst business. >> it's great -- hey, the fixed
income. >> do you try to tell people to get excited about 2% for ten years? >> absolutely not. we have zero weighting in treasuries. >> where's their yield? >> we think local denominated e.m. is a good place to look. places like brazil. >> that sounds complicated. >> to find value -- >> we need you for that. >> there you go. >> breast the breakdown of funds between equity and fixed income? >> the lion's share is fixed income. we have a large loan book, high yield book, exposure management. >> some stock funds to get into? >> absolutely. we have a great equity business. >> any good? managers? >> yeah. yeah. good folks. yeah. take a look. >> all right. henry, thank you. ian, you're just here to just opine. we're not giving you any money. >> that's right. >> okay. right? >> yeah. >> it's better. >> yeah. >> doesn't matter if you're wrong. >> no. >> anyway --
>> coming up, everybody, we're going to talk about elon musk who's now outlining his investigation for tesla. up next, "fast money" editor will reveal the new cover story on tesla. here's musk teasing the september unveiling of the country's semipro truck. >> i like to recommend showing up for the semitruck. unveiling. maybe there's no more than i'm seeing. maybe. finally. hey ron! they're finally taking down that schwab billboard. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? ...no minimums. schwab has lowered the cost of investing again. introducing the lowest cost index funds in the industry with no minimums. i bet they're calling about the schwab news.
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go to xfinity.com/myaccount welcome back to "squawk box" this morning. tesla ceo elon musk says his company is on track for production of the next car that supports the model 3. tesla doesn't stand for electronic cars anymore. it's in the power business. joined by the editor of fast company. musk is on the cover of the latest issue alongside the words no fear. the mag is a seazine lays out m. >> good morning. >> you are a skeptic, a cynic. >> no, i am a realist about this. i am a realist. at the annual meeting, the shareholder's meeting. the obsession was with the vehicles. >> right. >> which is where obsession is, but if you really want to understand what elan is up to
and where tesla is moving, you have to look at solar city. the risk that elan musk takes as a ceo and the risk the company is taking overall is extraordinary. solar city is an acquisition that embodies the reason that that stock has climbed so high. the vision that elan musk talks about and that people have bought into. there are many things about solar city that are not as wonderful as tesla would like you to believe. >> do you believe in the next, let's say, two to three years, because you have to see it ramp to make it work, once these solar panels are fully online and available in retail, if you will, that people are going to put these shingles all over their roofs. >> i think there are going to be a lot of them. are there enough to compensate for the value that he spent and
the ties between tesla, solar city and musk even before the acquisition. >> what do you think about the idea of having a battery, if you will, in your home? >> i think the idea of having a car, a home, a light where we are independent of fossil fuels, that gas is being put into the air, that this is a vision that people get very excited about. this is the future of -- >> you think there's no economic map behind it? >> i think there is. i think there's an ecosystem that musk is trying to create that in some ways is representative of kind of what steve jobs did with appleby trying to create an apple like sort of cross platform experience that is running through the ethos that tesla represents. >> how much of this is dependent on government regulation, either state, local, national regulations that make things happen? because we just saw that -- >> subsidies. >> right. either subsidies or regulations that require the electric company to pay a certain rate to the consumer for doing things.
we saw them starting to put solar panels back in nevada because of change in regulations. >> regulatory markets in california tend to drive a lot of regulatory activity and business activity across the country. that's going to, i think, remain that way. i think the kind of audience, the people, the customers that are going to tesla are the kinds of customers that tesla believes will go to solar panels and that this sort of integrated e ecosystem -- this is why the marketplace has valued tesla's -- >> does it make financial sense if you don't force the electricity company to pay a certain amount to customers to buy the excess from customers that put the excess -- >> i think if you have extra power you can use and sell we'll -- >> again, if the regulators are forcing them to do it. >> if it costs four times as much as natural gas, eventually that's going to come out. >> you can pie a car for less
money. some people believe in that. >> the energy -- natural gas threw a huge wrench in the works. the availability of it, the way we get it now and the price of it and all this crap. it's not happening. >> i'm going to -- >> it's not happening. >> a whole thing about tesla buyers. interestingly, they're not all environmental. >> no, they're not. >> i'm separating tesla from solar city. it's a cool car. the solar city i have a questionable -- >> again, if you look at what elon and what tesla's perspective is, this is an integrated system. it's not integrated yet but over time it will be -- >> people like ron baron who's a major investor has been convinced of this. that is certainly something that makes me sit up and pay attention to it. i still have doubts. >> more money has been lost in
betting against? >> true. jim cramer's spoint it has the funding so it will eventually invest. >> the risk level that elon musk and tesla takes is incredibly high. it's inspiring and inspires people at both ends of that spectrum. >> very cool. thank you for coming in. >> thanks for having me. >> go check it out. cover this month. coming up, silicon valley bank has been helping startups get off the ground for startups. stock's up more than 50% in the last year. ceo greg becker joins us next. as we head to break, a look at yesterday's sthap winners and losers.
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♪ ♪ welcome back. you're watching "squawk box" live from the nasdaq market site in times square. good morning. take a quick look at u.s. equity futures at this hour. we're going to show you what's going on right now. dow looks like it would open up higher. close to 32 points higher. nasdaq open up as well. the s&p 500 looking to open up higher. currencies, dollar trading higher against the euro this morning as well. becky? >> stocks to watch this morning, shares of keysight technologies
rising after earnings topped the consensus. the positive results are due in part because of an acquisition of an internet of things company. that stock is up by 5.8%. sears is reportedly closing 72 more stores. that comes in addition to the 180 closings already announced earlier this year. business insider says that the latest round will include 49 k-mart stores, 60 sears stores and several auto sentences centers with most of them closing by december. oxford industries trading lower. posting revenue below estimates and offering a weaker outlook and that stock down by 2.7%. silicon valley's hometown bank. an inside look at the state of startups and funding as well as insight into what entrepreneurs want from the trump administration. let's bring in greg becker, ceo of svd financial group, financial group of silicon
valley bank. business itself, sounds great. let's see. there are people that are in the bank business and it's like, yawn, but if you're in the bank business in silicon valley, you're with all of these geniuses that have these home runs that they're going to hit eventually. i can imagine -- >> hopefully. >> -- your bank should be a much bigger gainer -- like growth stock based on the potential, but i don't think the risk is higher, too. are you just a normal bank ceo or is it a totally different thing for you? >> hopefully not a normal bank ceo. you're right. we get to work with cool companies and cool trech nur entrepreneurs. we have companies all over the world. anywhere you think there's innovation happening we have offices and people spending time with entrepreneurs. what makes us different is, yeah, we work with very early stage which tend to be higher risk companies. we work with later stage, more mature innovation companies that are more stable in growth, growing at a faster pace.
so the risk isn't as great as people would think. but, yes, it's -- >> risk/reward. i would think the rewards could be great for you all although you're not necessarily equity investors. >> correct. >> we're bankers. >> you're lenders. not as much. do you get a higher rate of return depending on the risk? >> we do. it is risk/reward based. earlier the beta is much higher. we get a higher return. with those companies we tend to get a higher yield and we get -- we participate in the up side with warrants. think about it as stock options. >> are you a between yous or do you listen to these guys? >> the first question is no. i'm not a genius. >> i didn't think -- i wasn't getting that from you. no. you're fine. >> we have great people. >> you have engineers and physicists and scientists? >> no. >> how do you know? >> we are excellent at pattern
recognition so for the last 30 years, i've been at the bank for 25 years, you spend a lot of time with venture capitalists, you spend a lot of time with entrepreneurs, you spend a lot of time with companies looking to acquire technology. you put all of those data points together and you figure out which companies to lend money to, which companies not to lend money to. how to get your loan back. >> that's fascinating to. what's the pattern of a budding entrepreneur that's about to take off versus a budding entrepreneur that's about to flame out? >> there's a failure rate with startups. you know that and you talk about it. >> is your pattern about finding out about this is a superstar, let's get behind this? >> the first part is we bring in 4,000 new clients every year. we don't lend money to every one of those companies. first of all you say which ones do you want to lend money to and which ones don't you. >> you said you're very good at finding pattern recognition. >> it is who the investors are.
what market are they in. how much risk they're taking. are there assets that they're building, accounts receivable, other things that banks would lentd money on to -- you look for that. we look at ways to determine internet pattern recognition. ones we believe are more likely to be successful. >> one last point, very important, big difference between equity and debt, right? so equity is taking the heavy risk. so even if an equity player may lose money, it doesn't mean the senior lender or the bank is going to lose money. >> for the most part a lot of these digital companies have very few assets except for people walking in and out of the building, right? >> true. if they've raised 20 or $30 million, let's say $50 million, they've typically built something. >> venture capitalists are doing your work for you if they're reputable investors that have
given them money, they've done due dilly gents. >> that is part of it. you don't -- >> they love their portfolio companies. they love all their portfolio companies. we're trying to figure out which ones are the best. >> did any of the after effects of the financial crisis and then dodd-frank and we've seen certain banks that aren't -- you know, aren't the biggest in the country that had some problems getting access to funds, things like that, did any of that affect you or are you just a totally different animal? >> i would say it's a different animal. what's different about technology innovation companies -- you see this with larger companies where there's an apple or google, they have a will the morely quit at this. there's six times as much cash as borrowing needs and debt needs. when the liquidity crisis happened in '08-'09, we still
had a lot of liquidity on our balance sheet. it ended up being good. it protected us. yes, our profitability wasn't so great during that time period but we turned out to be successful. >> do you lent known people in their dorm room like 19 years old? have you done that with the youngest person? >> it's funny you ask that. my son is a sophomore at michigan. he and some of his buddies have a startup. one of the questions he came to me, we don't know if we want to raise equity. i said, it doesn't work that way. it doesn't work that way. you first have to have a base of equity investment and so we'll follow on that. we'll augment that equity, but you first have to have investor capital in those earlier stage companies. so although we may work with someone that's just out of college or somebody that's young, typically they will have an investor of some type before we would actively lend them money. >> who started the silicon
valley thing, not you? >> this is my 25th year at the bank. i got that name early on. i would like -- cool name. >> very good name. >> good name. >> it also plays every market, right? it's not just in silicon valley. if you're in shanghai -- >> just one of the questions in silicon valley, the trend of these companies remaining private longer. >> right. >> they often don't have great cash flow. they're often waiting for an exit, both personally for the investors themselves and for the company even to some degree to actually have cash that they will ultimately need. how does that change the dynamics? >> it doesn't change it that much because on a private basis the amount of capital that's available to them, that's why they're saying private. they can raise 100 million, 200 million if they're doing really
well. with soft bank's new fund that they're talking about getting close, you're looking at another 100 to $150 billion of money that's available to support the companies when they're private. the second part of your question is how do the individuals get liquidity. public, they can't go out into the market and sell stocks. >> you make personal loans as well? >> personal loans. that partly helps it. you provide them liquidity even for private companies. so you end up having liquidi liquidity -- >> are you making more personal loans these days as a function of all of this? >> i'd say a little bit more. we have a private bank. it's growing. that secondarily quit at this is partially done wshith actions. >> real quick, do you use the relationship on the personal end in terms of loans to then get
involved later on ipos and other snings. >> so we don't -- >> any ipos? >> we don't participate in any ipos. mostly all private. we work with public companies. it's not the investment banking. >> okay. >> but it's -- yeah, we work with the relationship, individuals on the individual side, venture capital side and work at them with the company. >> greg, thank you for coming in. >> absolutely. thanks for having me. did you give your son a lone from the bank of dad or go no to that? >> very little. whitney wolffe joins us on set straight ahead. plus, kansas legislatures overriding the governor and hiking taxes by more than $1 billion. that story is next. stay tuned, you are watching "squawk box" right here on cnbc.
welcome back. an update now on the attack on iran's parliament. iran state tv is now reporting that four attackers have been killed. reports say seven people in addition were killed and 35 injured in attacks on parliament and the mausoleum of ayatollah khamenei. we don't hear as much about things like this in iran. >> it doesn't. it's a closed society. there is a very vaunted security force. they are monitoring people. as a result, it's considered one of the safer havens where you don't see attacks like this. however, because of what's happening in syria and they're fighting isis, this has come back in. and, yes, there have been many instances where they have supported terrorism being sent out to other areas of the region. >> exactly. >> the first time it's kind of happening here. you have to separate the government policies from the people of iran. >> okay. we've got time now for the
executive edge. this is news. you talked about this during the wex program with joe trying to massage my -- >> trying to? >> -- shoulders. >> sflieg. >> you were doing it. you may need a massage after the news i'm about to give you. kansas legislatures have voted to raise taxes, raise taxes by more than $1 billion rolling back tax cuts that were signed into law five years ago by governor sam brow. a bipartisan vote of democrats and republicans overrode the veto since the tax cuts can fudge deficits and bitter fights between the governor and legislature over spending. this has been seen one of the great experiments whether if you do lower taxes whether businesses will come and it will generate employment. in this case it's been negative. >> there's a sweet spot for
stat states. >> there's the laufer curve. >> i'm talking with someone yesterday -- >> by the way, the raises that they're putting back in are incredibly low taxes compared to areas around here. 2.1%, 5.2%, 5.7%. >> someone was talking about the navy, why they need 75 more ships, what's wrong with 2502, 75? why do you need 75 more? >> between 6 and 600 ships. there is a number that you can calculate that probably -- people that know what they're talking about -- >> right. >> -- that they can come to that is at least -- looks like the optimal number of taxes. there's someone in there where you raise enough to provide the services that the state gets and to not hurt. connecticut, apparently, over shot, you'd agree with that. no one is left up there. illinois. so there's -- and then maybe kansas was too low.
hard for me to believe -- >> the way it gets the lowest is 3.1. >> the separate piece of this is even after lowering the rate they did not increase -- to me the story isn't did they raise enough money to create enough revenue. it's did they actually create remarkable additional employment. the whole argument around lowering taxes is it's going to stimulate investment. it's going to stimulate sales. >> for some states it's hard. florida and kansas -- >> i know you've flown over it. >> nice place. i love kansas. i used to drive there. i love it, but -- >> fatalistic about kansas? >> not fatalistic. you don't extrapolate. it's not silicon valley, it's not florida, it's not -- >> it is an experiment that we're watching. >> it's still pretty rural. >> it just shows you -- >> if you ever go there, you'll see. >> corn. a lot of corn.
>> i get it. >> good basketball players. >> goal was to bring businesses to kansas. >> all right. got to move to kansas. >> i -- i -- i agree. >> this shows you that you can't take one set of circumstances and drop it into the area. this is an experiment. >> i wouldn't say dynamic scoring has been thrown out the window. >> he said it was an experiment. >> i would say it didn't work. >> you have to move to kansas and live in the field. coming up, dating app bumble -- >> i love kansas, believe me. kansas city, kansas, overland park. "dust in the wind." they're betting on brick and mortar locations in new york. bumble founder joins us next. ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions,
welcome back, everybody. the dating app bumble is going analog. the company opening its first brick and mortar location in new york city and for the month of june bumble users will have an official place to meet. the app puts women in charge of making the first move online and they are doing just that. up to a million times a day. joining us right now for more, is whitney wolf bumble's founder and ceo and whitney, thanks for being here. >> thank you for having me this
morning. >> let's back this up before we start talking about the location where people can meet for people who don't know what bumble is, it's similar to -- to -- >> tinder. sort of. >> where you were co-founder. but you put a new twist on this whole thing. >> that's right. >> so explain it. >> so bumble is a plop where women make the first move. >> what does that mean? >> women have 24 hours to make the first move with a connection after they both chosen to connect. >> swipe each other? >> choose if they want a connection. and then she has 24 hours to make the first move. unless it's a same sex match in which either party have 24 hours to do so. >> so she gets his information. she can't get hearse -- >> they both can see one another's profiles but he cannot contact her. this gives her control. it changes the rules of the game essentially. we've grown up in this world where women don't make the first move or they're told not to. finally women are making the first move on this platform every day and it's completely changing the dynamics. >> was it hard to get people over that hump? >> it really was. >> but i would assume as a
guy -- i look -- i'm married now so i'm going to get in trouble for this whole situation. but this is -- i needed this. because i could never make the first move. >> that's exactly what i was going to say. >> right? >> guys must love this. >> this is what men are saying. >> it would have made everything a lot easier for me throughout life. >> by the way, it may not have because maybe nobody would have selected me. but still i'm just saying. >> usually i would make the first move and when i did it was unsuccessful. >> this is what i'm hearing from guys all over the place. they're saying, i've always wanted a woman to make the first move but everyone told her not to and there was this strange dynamic surrounding it. and now -- >> so was the genesis of this more thinking i want to put women in control of the process? or more thinking that actually, guys are as dumb as we are, and that we're not good at making the first move, therefore maybe the whole system needs to be reversed. >> honestly it stemmed from the idea of creating -- i originally wanted to do a female only social network where they could only speak to one another with kindness and compliments to really change the landscape of
this lack of online accountability. it does not exist. it's a scary place digitally. and it really parlayed into this -- this take on dating, my business partner andre suggested taking that vision and putting in the dating space and it's worked phenomenally well. >> so it takes the control, puts it back in the woman's hand and creates a friendlier environment for some of these -- >> it does. it's a very respectful environment. and it gives women confidence. and it also takes pressure off the men. and it just creates a happier environment. >> so much -- >> it's harder to convince guys to sign up or women? >> no, you know, it's funny. when we first launched everyone was like, why are you doing this? women won't make the first move. that's ridiculous. and they have. so we've successfully shown that women are willing to make the first move. >> you're also setting up -- now people are not just dating they're doing like a friendship situation. >> that's right. the big vision for bumble is to really be a social network for
people you don't know yet. it is supposed to be what comes before something like facebook or instay kwram. let's find you the people that you can then add to your social network -- >> in your area? >> exactly. >> what happens if you get too many people in your network, you want to get rid of the network? >> see that's the part. it's -- it becomes stagnant at some point. you need something new, and good relationships are very important. and those are not just romantic ones. >> you were' co-founder of tinder? >> i was. >> that dime is real, isn't it? >> i don't know. that -- that's for another segment. we'll do that after the show. >> that thick is like 12 carats -- are you related to winston wolfe? >> no i'm not. not that i know of. is that a buddy of yours? >> no, no. he's -- the fixer in pulp fiction. >> oh! >> winston wolfe? winston wolfe? >> i forgot his last name was wolfe. whitney, it's really interesting. love to hear more about this. thank you for joining us. >> thank you so much for having me.
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british voters get ready to cast their ballots and if you believe the polls the outcome is anything but certain. we have a live report from london coming up. the president looking to rebuild the nation's water highway. he'll be in cincinnati today touting his plan to improve locks and dams across the country. we will talk about his latest effort to unlock infrastructure deals. and has the subprime auto loan market stalled? we have the latest report on lending, delinquencies and defaults that shows a big drop in new loans. what this means for the sector. that's coming up as the second hour of "squawk box" begins right now. live from the beating heart of business, new york city. this is "squawk box."
good morning. welcome back to "squawk box" right here on c cnbc live at the nasdaq marketsite in times square i'm andrew ross sorkin, along with becky quick and joe kernen. in studio for the rest of the show, larry bossy is here, former chairman and ceo of honeywell, a cnbc contributor. lots to talk about, the economy, politi politics, and much, much more. we are in the green this morning. dow looks like it would open up about 26 points higher, s&p 500 up 3.5 points and the nasdaq about 10.5 points higher. headlines for you as well. the big one, isis now claiming responsibility for some attacks that happened over night on the iranian parliament and at the mausoleum of the ayatollah khomeini. pinterest has raised $150 million in a new funding round. valuing the company at $12.3 billion up from $11 billion just a little over two years ago. pinterest was founded seven years ago, has 175 million
monthly users. also goldman sachs moving to attract new savings deposits for consumer units raising the interest rate it pays on those deposits from 1.2% up from the prior 1.05% well above the national average for savers, which the fdic puts at 0.05%. joseph? >> you were around -- or were you too young? >> yes. >> you know how many times people said ayatollah. >> ayatollah. >> the ayatollah khomeini. it was said a thousand times every day. that's a tough one when the ayatollah. you've done twice to. ayatollah khomeini. ayatollah, right? when was that, larry, do you remember? was it '79? >> i do remember. >> i was too young. >> the ayatollah. >> the ayatollah. the ayatollah. just say it with me. ayatollah. >> let's do pronunciation class. >> gillian tet is here.
that is a cool name. the tet offensive. >> i have had that joke before. amazingly enough. >> it wasn't funny the first time. >> hey, you've got to make it work. >> all right. stocks to watch today sears is reportedly closing 237 of 72 more stores in addition to the 180 closings announced earlier this year. business insider says the latest round will include 48 kmart stores, 16 sears stores and 7 auto stores. i don't know why i'm having deja vu. but has sears been doing anything for the last ten years or so? >> no. i actually wanted to look up to see how many stores were left in this phase. sears and kmart two of the most widely populated, hugest retailers that we had decades ago, now let's see how many stores are left in this space. >> but it's been -- remember arthur martinez, was going to save the entire thing, larry. and he did okay for awhile. nothing was going to save sears. >> owned the space, too, for awhile. >> what happened? >> for years and years. >> you go in, you couldn't find -- you know, it was like -- you'd yell for one and it would echo like the grand canyon. they had great brands, craftsman, die-hard.
>> a lot of which they've lost over the years. >> it's hard to get on top but it's harder to stay there. they did not stay there. >> that's in your book, i think, isn't it? we're going to bring up a shot of your book when we -- he's writing another one, right? >> no, i'm not writing another one. >> you should. anyway. >> all right the uk general election will take place tomorrow with all 650 seats in the house of commons up for grabs. prime minister theresa may called for the early election in hopes of gaining more support from her conservative party. as brexit negotiations are due to start. wilfred frost joins us from london. wilfred? >> morning, becky. theresa may called this election back in april from a position of strength. and almost 20 point lead in the polls back then based on the idea that she was the only strong and stable leader that could deliver on brexit. but since then that lead has all but evaporated. why is the question? first of all, she announced a very unpopular social care policy. and then, after the manifesto had been printed, an almost
unprecedented level, she decided to u-turn on it. that called into question whether she was, in fact, a strong and stable leader. she's also been labeled as overcontrolling. that's undermined her personal popularity, and jeremy corbyn her main opponent has captured the imagination of voters, particularly young voters, in a way that nobody thought was possible for someone with such a far left socialist stance. the result all the polls show momentum for jeremy corbyn. some with a lead now for theresa may as small as one point. but the f.t. poll of polls has that lead at six points. 43-37. now one other issue i just want to mention is security. because it has dominated the debate this week in a way that perhaps people didn't expect after the manchester attack. corbyn was appearing to score quite significant points by attacking theresa may for cutting police numbers by 20,000 when she was home secretary, since 2010 to '16.
but a new poll out this morning from the sun and survey monkey asks the question, who is the best person to handle security issues? a big lead on that for theresa may. 47 to corbyn's 27. we'll have to see if that plays out in the polls tomorrow. the bottom line, though, the security issue is it. and many others, have kept the focus off brexit. which was why theresa may called this election in the first place. becky? >> wilf, thank you very much. we're going to be following this and checking in with you repeatedly. so thank you. >> okay. for more on the uk snap election let's bring in gillian tet u.s. managing editor of the financial "times" and we thank you for being here. >> great to be here. >> you want to handicap it for us? you saw the stats on the screen. what do you think is going to happen? >> i think what's happening is absolutely fascinating. the markets is keep on, care on, have a cup of tee, you haven't seen dramatic swings so far. but what you have seen very interestingly enough is that traders have gone into this vote without taking strong positions either way.
very different from the vote on brexit, when there was an overwhelming accomplishment that the uk would vote against brexit and that brought out the people are very unsure. we've see how unreliable polls can be. right now the lead that theresa may has is anything from 1% to 6% or 7%. the problem is, that that could very easily leave her either very weakened or with a hung parliament and frankly that almost is as worrying as any kind of -- >> i should give you credit by the way. both you personally and your paper. >> thank you. >> for getting brexit -- no, for getting brexit right. being much-well you were closer. >> yeah. >> most of the reporting in the f.t. was much closer in terms of what was going on with the polls. >> well, thank you. >> you don't think you had a clue? you're looking at me like i've lost my mind. >> i don't think they had a clue and i remember if you had read it, why did you say that it was 99% sure that they were -- >> because i love gillian but i didn't believe her. >> okay. >> there we go. >> what i wanted -- by the way,
is wilf still there with us? is he playing in this? no? okay. i thought he might be. >> i mean, the important thing to realize the one thing that's crystal clear is unless there is a will by tomorrow theresa may has lost ground. she called this election because they were supremely confident that they were going to absolutely win a landslide. they were 20 points ahead. to have lost that much ground in that short of voter time is quite remarkable. and one is that brexit is not the only issue on voters' minds at all. in many ways it's not the most dominant issue. secondly they're not even security is the most dominant issue. notwithstanding the attacks in borough market and manchester which were tragic the fact is the polls show that people are really concerned about what kind of country the uk is becoming. and one of the key reasons -- >> when you abandon the conservatives are supposed to be the parties of growth. and she's -- why isn't she -- all she had to do. it's always the economy, isn't it? >> one of the problems is she
flip-flopped on core policies. i held up the f.t. instead. we have great coverage in the fvlt t. >> competition is good. >> we welcome competition. we support the media in all forms in what's happening in the world. but the fact of the matter is that 1450e flip-flopped on policy. she's lost part of her core conservative base by not being sufficiently pro-market but meanwhile you have to recognize that corbyn has tapped in to people in the same way that bernie sanders tapd in to people and frankly that donald trump tapped in to people by being an anti-establishment outsider who offers a positive vision of what he wants the country to be. he talks about the momentum, he talks about trying to get people, you know, free student tuition. free school meals. things like that. and the reality is that right now the voters in all parts of the western world are looking for positive visions. they don't just want status quo. they don't just want to be told, take it as it is, because that's the best you're going to have.
>> larry? >> interesting situation. i wonder given the terrorist attacks, and the terrorism threats in general what impact that will have on brexit, particularly given theresa may's standing, which is, is as you have suggested is somewhat weaker than anticipated six months ago? >> i think that's a great question. everyone assumed until recently that terrorist issues and security issues strongly favored conservatives. not least because the main spokesman for the opposition party, the labor party on security issues is diane abbott who is not well regarded as a security credible security figure. but the reality is it that the cuts in the place, the 20,000 cuts we just heard about between 2010 and 2016 have played very badly. and the fact that donald trump attack eed sadiq chan who is a n who is very popular in london and sadc chan came back and basically backing away the donald trump attack he pointed out that in fact london had been
startled recently because of the austerity measures that the conservatives have brought in, all of that is actually weakening the momentum behind may. so, the one thing that's crystal clear in the last few months in the uk is the idea that we've stopped having unexpected political developments at the tro electoral polls, have gone away. >> what if the conservatives don't win? what happens to brexit? >> that is the very, very important question. frankly right now in the european union people are preparing for some kind of crisis post-the election because of the uncertainty about what the result is going to be. even before these uncertain result there's were signs that the uk in negotiating position and tactic were something of a shambles, to use a wonderful british word. if theresa may ends up very weakened by the result the reality is she's probably going to have to go back to the drawing board and get some kind of coalition position. it's going to be more uncertainty. more delay.
and a higher chance of having some kind of crisis when the brexit timetable actually runs out. it's not a good situation, however you look at it. >> right. gillian tett thank you. great to see you. appreciate it. >> coming up guest host larry bossidy about how what's playing out in washington is affecting the economy and business and later president trump will be talking water-based infrastructure in cincinnati today. after that 13-1 run -- did you see that, larry? >> four home runsz. >> five for five, and ten rbis. >> yes. >> he ought to call it a season. >> a rundown of projects -- thank god you're here. a rundown from someone i can talk to. what needs to be done and the importance of inland waterways to the economy is coming up. you're watching "squawk box" on cnbc.
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tthat's why at comcast,t to be connected 24/7. we're always working to make our services more reliable. with technology that can update itself. and advanced fiber network infrastructure. new, more reliable equipment for your home. and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most. welcome back to "squawk box." futures right now rebounding from a couple of days of weakness, up 25 on the dow jones. the s&p up 3.3. nasdaq up 11.5. 10-year, was off its lows as far as yields go, 2.13 at one point
yesterday i think. 2.15, 2.16 today. >> nothing to write home about. >> it's still -- i mean it's nice. people love it. richard lefrak -- >> unless you're worried about what it means. >> yeah, exactly. >> right now let's talk a little bit more about the economy, trade and what's been happening in washington. let's turn to our guest host today larry bossidy who is the former chairman and ceo of honeywell who's also a cnbc contributor. and larry, let's just get your take on how the economy is coming along, and what's happening to the washington agenda right now as we get ready for comey to testify tomorrow. that's taking up a lot -- >> the economy is interesting. we had a fairly slow gdp expansion in the first quarter as you know, 1% or less. and yet the fortune 500 companies expanded profits by 14%. primarily because of their business offshore, including their resurgent economy in europe. on the other hand, the second quarter looks more promising. last week, you look at payrolls, and autos, and construction
spending, and unemployment claims were a little softer than they were in april. but nonetheless, still strong. and the view is that we will grow 3% in the second quarter or close to it. i think there's a dichotomy. i've never seen gold go up in the treasury stay at 2.15. and that's something that we've got to understand what it means over time. >> what about 4.3% unemployment and 2.15 treasury? >> and also no pressure on wages. >> right. >> i think the truth of the matter is, we're in a world where there's relatively soft demand, very competitive, no price pressures across the globe. and as a result we're in a slow growth mode and i don't see that changing. >> larry, i still think 4.3 is misleading. i still think it is. i think you've still got people that can work it, that are, you know, not part of the participation rate. not all retired people. got people working part-time jobs that they would like to work more. and i think maybe the jobs that
are still around, maybe we don't have the people qualified. because people could be asking for more money. we have heard from ceos -- >> everybody from dunkin' donuts on up the line that they cannot find people to be in these jobs. >> some of it's hard to understand. it's hard to believe we don't have people that can't work in dunkin' donuts. they say there's 104,000 people who are not work hog are qualified to work -- >> why would you work at dunkin' donuts if you can sit at home. >> and make the same money. >> and not get dressed and not get up in the morning and not pay for gas. and you really can -- >> look it, food stamps -- >> disability. >> right now, 400,000 on food stamps compared with 10,000 in 2008. and social security disability, off the charts. >> right. >> so we have -- those are issues we've got to confront. when you look at the tax policies i'm still confused about what trump is trying to do in terms of tax reform and the affordable care act revisions. but taxes you worry about.
you know there were two big fund raisers to pay for the reduction in the corporate rate. one was the b.a.t., the so-called border adjustment tax and the other were interest deductions. both have come under heavy fire. >> both sound like they're dead at this point. >> they may. how are you going to raise the money to reduce the rate to 20% or 15%. my guess is at the end of the day there will be a small b.a.t. that will go in. it will go in on a phased basis. there will be an interest deduction cap, because i think you've got to do something to raise -- >> you're more optimistic on that front than -- >> i am. >> anybody we've talked to in washington. >> but remember the head line is we need tax reform. >> but hold on, the b.a.t., if you say there's a small b.a.t., the whole purpose is to make up for some of the lost income revenue elsewhere. >> right. >> if it's small how is it going to really -- >> i say the original proposal at 20% was to raise a trillion dollars. that isn't going to past test. but i do think they'll get one that raises a couple hundred billion dollars.
i do think they'll put a cap on interest deductions. another couple hundred billion dollars. it won't be revenue neutral as much as they say. but nonetheless i do think we're going to have to have tax reform. >> all the cable channels, i thought they were saying that trump didn't say reform yesterday. they said cut. >> he's been tweeting that for a couple of weeks. >> you do, theoretically. even without obamacare. >> remember, our $20 trillion worth of debt is 75% of gdp. we can't be going in to a further deficit position of any magnitude it seems to me. so we're going to have to have some revenue raising. >> you were explaining the difficulties of this entire situation. if you look at the business roundtable the ceo points out that the group's confidence has risen, it's at 93.9, the highest it's been in a very long time. >> yep. >> said failure to get tax reform passed could really lead to a lot of problems that the ceos say that if that happens they won't hire as many people as they'd been planning on hiring and they won't put as much capital expenditures back
into the economy. >> particularly the latter it seems to me that capital spending has been relatively weak throughout the recovery. >> right. >> and one of the reasons is because of the noncompetitive u.s. tax rate in corporations. if that were to change, i think it will give an impetus to more capital spending. if it weren't to happen, i think it's going to hurt the market in general, but it's also going to hurt the economy. so, it's important that we make progress and that we have to have a reform of the affordable care act. i mean, that's falling apart as we look at it -- >> anthem pulled out yesterday in ohio. >> ohio. so there's 18 counties with zero -- >> yeah. >> providers. >> right. and the medicaid problem is a big problem. you know, there's 31 states that basically expanded their medicaid coverage with federal help. they, of course, don't want medicaid hurt. the others who aren't in that league don't want to pay for it. so it's a mess. they've got to come to an agreement on that. and if and when they do there will be an affordable care act. >> larry's going to be wus for the rest of the program.
thank you. coming up, apple jumping into the reality show business. details right after the break. take a quick look at futures. we are in the green this morning. we're looking at the dow, open up at 26 points higher. s&p 500 up 23 points. most etfs only track a benchmark. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.
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welcome back to "squawk box." apple going hollywood. the tech giant dropped its new reality competition show last night called planet of the apps. the premise contestants can pitch their idea for an app to a panel of celebrities and entrepreneurs for a chance to win a spot in apple's app store. the ten episode sooer riis, new episode will be released every tuesday night on the apple music app. >> see who it is? jessica alba. gwyneth paltrow, will.i.am. >> short of a shark tank for the app world. >> hmm. all right coming up, 600 million tons of cargo. moved through the country's so-called water highway every year. but the locks and the dams on the inland waterways are desperately in need of an upgrade. we're going to talk about rebuilding the nation's water highway and the importance it plays in the economy after the break as we head to that
aforementioned break, take a look at u.s. equity futures. all green today. across the board. we'll be right back. you think traffic's bad now, the future's going to be a nightmare! does nobody like the future? c'mon, the future. he obviously doesn't know intel is helping power autonomous cars and the 5g network they connect to. with this, won't happen in the future. thanks, jim. there's some napkins in the glovebox. okay, but why would i need a napkin?
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good morning, welcome back to "squawk box" right here on cnbc, live at the nasdaq marketsite in times square. among the stories that are front and center at this hour, mortgage applications jumping 7.1% just last week according to new figures from the mortgage bankers association. both new purchase applications and refinancing activity rose. the average 30-year mortgage rate fell three basis points during the week to 4.14%. also, sony's virtual reality headset the playstation vr now sold more than 1 million units. according to some new figures from sony's gaming unit the headset was first sold back in october and retails for $399. that's lower than its main competitors. and consumers may soon have more choices for getting cracked iphone screens fixed. this seems to be a perennial problem for those of us who have these phones. always seem to break a screen at least once or twice a phone. easily.
according to a new reuters report apple plans to give access to its proprietary screen fixing machines to 400 authorized third party repair centers. right now an authorized fix can only take place at an apple store or a mail-in repair center. however, there's a number of companies, at least in new york city, that have now risen up -- >> you can get it -- >> and by the way, there's -- >> not authorized -- >> but now there's like an uber version of this. they'll come to your office or home and fix it in front of you. but, again, not -- >> not authorized. so you're not under warranty. >> exactly. >> joseph kernen? >> president trump is going to be in cincinnati today. very lucky guy. talking water-based infrastructure. morgan brennan joins us from cnbc headquarters with more. you always get to go to these places. this was the one you should have grabbed. jumped at, morgan. the queen city. >> well, well, the summer is still young and we still have a lot of infrastructure stories to tell. so, i'll have to put it on the agenda. on the agenda today, levees,
dams, locks and ports. that is what is on the agenda for president trump when he talks infrastructure later today from the ohio river. so it spotlights the u.s. inland waterways which account for 14% of all freight that is transported in the u.s. each year. most notably commodities like grain for export, also coal and petroleum products for power plants, and manufacturers. now, america's water highway as it's sometimes called is 12,000 miles equipped with hundreds of locks and dams built in the 1920s and 1930s. the design life 50 years. so, do the math. they need to be replaced. now according to the most recent data from the american society of civil engineers, 49% of vessels experienced delays in 2014 with the average delay doubling in length since 2000. so why the focus on this specific network? well, the waterways council has an infrastructure wish list of 24 projects, but only four of those have actually started. there's more money needed.
8.7 billion to be exact. now the debate, how to fund that. there's already a public/private partnership in place to maintain these waterways. the army corps of engineers oversees it but commercial operators pay a fuel tax. trump would like to see that doubled based on his recent budget but there's also a lot of talk of potentially implementing a toll system. this is going to be a big debate for this particular part of the freight network in large part because as i mention there is already a public/private partnership in place and it is the least expensive option in many cases to move a lot of these commodities. and when you're talking about the people that are moving these commodities you are talking about trump's voter base. guys? >> that's true. although i think cincinnati proper might have gone for -- might have gone for hillary. although ohio went for trump. thank you. >> coal manufacturing. those types of -- >> right. cleveland and cincinnati, though, was hillary land. just like pittsburgh. anyway for more on the -- but
pennsylvania -- when was the last time a republican won pennsylvania? reagan. >> right. >> reagan. who cares about pittsburgh. anyway for more on the push to rebuild let's bring in real estate roundtable president and ceo jeff devohr. thank you for joining us. >> good morning. >> god i could -- every day we do another infrastructure related area that is so sorely in need of -- i mean, it's really unbelievable. this is a new one to me. >> well, look, america needs to modernize its infrastructure. whether it's waterways and ports or airports or roads and bridges, or you know, our electric grid, our water grid, our internet. we've got a lot of work to do in this country. >> the best way to pay for it is how, jeff? are you -- more and more people are talking about $2 gas is just right for something if you could make sure it was earmarked for that and do something because it would be obviously regressive. but if you could do it there, is
that a good idea? >> well, i think that we need to look at a variety of things. there needs to be an entire capital stack. it's like financing a business. we need probably the gas tax to go up. we need more private capital. there's a lot of capital that wants to invest in infrastructure. and if we could get it involved in some way, through public/private partnerships, maybe we need to increase volume caps on private activity bonds. maybe expand the types of activities beyond the typical municipal bond activities. you know, a lot of different ways that could be used here. maybe there's some foreign capital that could be brought in. what we do know is there's a big need. we do know there's a lot of capital looking for places to invest. and we also know that there's a huge transportation revolution going on. the third one in our history. and we need to modernize all types of infrastructure so we
can go forward. and, by the way, if we do it the right way, we can help create jobs. we can increase gdp. and it's good for everybody. so i wouldn't think just the gas tax. i would look at a variety of things, and, of course, you know, we need to streamline and make a lot more efficient permitting process in a lot of these infrastructure projects. and that's something that i think the president wants to do, and it's hard to argue against it. so, you know, a lot of different things here. >> jeff, larry bossidy. you've been around this space for a long time. and there's no question about the need. there is a question in my mind how you're going to raise the money. you talk about state and city partnerships. it's going to be hard to impose new taxes in these jurisdictions. so already in many cases, they're upside down financially. so, is it really practical to think you're going to be able to, by virtue of raising taxes one way or another, raise sufficient capital to undertake
these kinds of projects? >> well, you know, i do think that there's a shortage of taxpayer capital. and i acknowledge that taxes, look, we don't need to raise taxes all that much. as i said, there's a lot of private capital. and if we can figure out a way to have a revenue stream to compensate private capital that wants to support infrastructure, they do it in other parts of the world, you know. and we could do some of that here. now, granted existing roads, you know, it's very hard to toll those or to get a revenue stream off of them. but some of the other infrastructure needs, whether it's cyber. we need a safe, secure cyber. we need workforce housing. think of all of these things that can improve productivity. and if we want to get gdp up, we do have to increase productivity. the real estate industry that i represent, we know the sort of
cycle between healthy real estate markets, healthy, good infrastructure. and increased productivity. and it goes round and round. and we're certainly, as a industry, looking forward to doing our part to make our infrastructure better. and to improve the country. so you're right. look, taxpayers are burdened already. but let's think of a variety of ways to cobble together the capital stack that needs to be done. and permitting, i'm telling you, is a key part of lowering the cost, lowering the time frame, and reducing the amount of money that's needed for these projects. >> jeff the permitting argument makes a whole lot of sense. i mean we've had everybody from all sides of the table who have gotten behind this. the idea of overhauling the federal aviation authority's system that monitors air traffic control. that makes a whole lot of sense. then you start injecting some ideas like privatizing that, and i think you may lose some support from one side of the
aisle when that happens. what do you think about that? is it more important to do something like privatize or more important just to get support from both sides of the aisle and move ahead with something that gets passed? >> well, the chicken or the egg, right? >> yeah. >> no, look, permitting really doesn't have much to do with that. look -- >> no, no, i'm just talking about the privatizing of the air traffic control. >> oh. well, we'll see how that goes. that's going to be an interesting debate. clearly, the goal is the right thing. more efficiency -- >> absolutely. i don't think anybody's going to argue with that. >> you know, but we'll see about what privatizing really means in this area. but it's a healthy conversation to have. and it's about time we had it in an open way. on air traffic. on airports. on roads. on bridges. on everything. and, frequently, we end up hearing in washington all the reasons that things can't be done. and you know, i'm enthused about
all of this. because there's a lot more conversation about how to get things done and not just the problems. so, you know, we'll see on the air traffic situation. but, they can bleed into everything else. and there should be more responsibility on state and local governments. who better knows the infrastructure needs of their localities than the state and local governments? so let's put more responsibility there. and let's look at all the options. that's what -- that's our message. >> jeff, thank you. >> you bet. >> for being with us this morning. >> thank you very much. have a great day. >> get in charge of this, larry. >> pardon? >> we've got lefrak. but you could do this. you could figure out infrastructure, couldn't you? >> i don't know. >> i think you could. >> i think i have a healthy case of skepticism here until i see it -- >> are you a gas tax guy? >> yeah, i'm okay with that. but that's not enough to cover it. that's just a piece of it maybe. >> $10 a gallon might be. >> yeah, right.
and that will have other repercussions. >> we'll all be in smart cars. >> when we come back we have much more from our guest host larry bossidy and later the subprime auto loan market stalls. a breakdown of the latest lending figures and what the numbers could be telling us. the power of innovative thinking. the power of 100 of the world's top companies. the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at powershares.com/qqq. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.
welcome back to "squawk box." take a quick rook at the futures. we are in the green this morning right now. dow looks like it would open up about 20 points. s&p 500 up close to 3 points. the nasdaq up a little over 11 points. want to get back to our guest host this morning larry bossidy, former chairman and ceo of honeywell and cnbc contributor. i want to talk about the paris agreement with you in a moment. because i imagine sparks may fly on that issue. but i also wanted to ask you, we were talking earlier about employment and the idea of food stamps. which of course have grown in this country. and how important do you think that issue is in terms of really changing the game. i was just doing -- looking up some statistics during the show. trying to understand the issue. i don't think i even appreciated it. it has grown remarkably but at
the same time you look at the families that are on it, and they're -- you know, they're making $26,000. and over 80% of them have either a child or a disabled person, or a senior in the home. >> look, andrew, when you take a look at food stamps and social security disability, for example. >> right. >> both of them have a place. i mean there are people who observe it. the fact is though that they've been corrupted. and there are people on those promise who don't belong there. >> right. >> and that's why they've grown at such a rate, and why people are incensed about them. there's no question there's a place for them. you'd like to have a mechanism, a process in place, to control it in a way that those who deserve it get it. >> right. >> and those who are basically -- >> -- fraudulent -- >> get out of the way. >> you'd like to have it as a bridge. >> well -- >> they go from something -- >> the other day i saw a statistic that said in other places where they've tried to incent people going back to work. >> right. >> from many of these promise,
if you give an incentive, 80% can eventually go back and lead -- and it's not just to get them off the government dole, it's to give them the dignity of work. and a productive life. no one wants to be sitting at home. >> all i'm suggesting is it's not clear to me getting basically the equivalent of $130 a month that's what's keeping you at home. >> which is the $130? >> he's talking about food stamps. >> $130? >> i just read an article from alabama that when these counties recently put back, they had exempted from the rule. >> absolutely. >> that required you, if you were a working age, able bodied adult, to only be on it for so long and then get kicked off. when they reimplemented that it fell by 85%. >> right. >> it's like $126 or something. >> the other thing about it is oftentimes those who earn food stamps are on other subsidy programs as well so they do build an income level that says going to work was not going to be a gain. >> you can't get a job that good. >> they need to be administered better. not eliminated just administered. >> on the flip side during the commercial break we were talking about the paris accord.
>> yes. >> and you are a fan of what donald trump, president donald trump has done. >> i do. i think the decision to leave was courageous politically. and challenging politically. the document itself was an empty vessel. >> mm-hmm. >> let me just say this. last year the united states reduced its carbon emissions by 140 million tons. more than anybody in the world. china's increased 1.1 billion tons. >> larry -- >> we have -- >> we have an fbi nominee from the president. i will be nominating christopher ray. christopher ray, a man of impeccable credentials to be the new director of the fbi. details to follow. there's the tweet that just came out. i've heard people put this gentleman's name forward before. >> interesting. >> yeah. and you're -- we don't even need to talk about co2 and 0.04%. >> we lead the world in terms of reducing emissions. >> whether we talk about it or
not, whether that's a -- you know. let's not even get into that part. but the -- the paris agreement itself was really just -- costly to everyone involved? the benefits which are nebulous to start with, even if you assume that it worked it was 0.2 degree by 2100. >> and expensive. but more expensive for the united states than any other participant. >> much more, because -- >> why would we have signed it in the first place? an empty vessel. >> but because we supposedly contributed so much co2 because of our industrial -- we've done so well, so we now need this wealth transfer to the rest of the world because we've done -- the whole thing was preposterous. it was a globalist -- >> here's the question, the flip side is, there's a couple issues here. one is many of your other ceo brethren and peers and colleagues clearly disagree with you.
>> right. >> the ones running companies today. >> yes. >> running companies that are involved in energy -- >> some are -- >> all of them -- >> national companies that are -- >> they're worried about the relationships -- >> buy into it -- >> totally unknown. >> my question though is, to the degree you think it's an empty vessel. >> yes. >> let's assume it is an empty vessel. >> yes. >> why bother making the political statement -- >> why bother making the political statement? >> exactly what becky said. >> why not just not enforce it >> because first of all it would have cost us a lot of money. >> oh, in terms of what we're supposed to pay to the other nations -- >> yes. i mean maybe as much as a trillion dollars. >> but is that enforceable or can we just say we're not doing it? >> i think if we didn't do it then it would have given rise to another discussion. i think it's better to cut -- cut bait now than to go on. but i think your first question as to why other ceos supported it, and they certainly have to respect their view, they all have foreign components.
>> you can argue whatever you want about the agreement but once we were in it it definitely wrangled our relationship. >> did. >> jeff immelt is not going to support the climate change initiative when he spent how much money on all this stuff and, you know, and ecoimagination and all -- >> you had companies like disney that don't have anything -- >> without the -- >> without the paris -- >> we had a guy on the other day from johnson controls. johnson controls' entire business is in energy efficiency, but cars that when you go up to the stop light, the engine -- >> what would be the rationale for google? >> google, it can -- we talked. you know what my rationale is last time. who can come -- the president. you watched when sean spicer is there and they badger him to try to get him to say that he's not -- doesn't believe that co2 is this menace. remember when scott pruitt said it here. my god he almost got tarred and feathered for going against -- >> here's the question, you think they all believe it?
>> i don't know. >> or don't believe in climate change at all, but they -- >> they all say -- >> secretly but -- >> no they all believe in climate change. we'll be doing the same stuff we've been doing right along in my mind. this won't change what we're doing one bit. >> by the way without this agreement our energy usage dropped -- fossil fuel energy usage dropped 12% in this country in the decade leading up to it. >> we need the nation and we're not going to change that. i know it was politically difficult but to get rid of something as false as -- >> politically difficult with our allies but probably red meat to his base. >> yes. that's true. >> but what's the advantage just on a mathematical basis, the economic advantage to the united states as a result of it. meaning, there will be more jobs created, do you think? >> well, first of all, we won't be spending the money that we were going to be obligated to pay assuming we lived up to what our promise was. and secondly, we'll continue to make gains in terms of environmental cleansing, i think, and that ultimately leads to more jobs.
yeah. i believe that. >> and the -- if it -- >> more coal jobs? >> well there's going to be coal jobs anyway. >> they wouldn't have been here. it's not -- it's a small number. they probably won't go down. >> probably -- >> the amount of coal that will be used in energy generation over the next 50 years -- >> going to continue to go down. >> joe's point that natural gas is so cheap you're going to go to the market forces will take over. >> yep, they will. >> market forces always dictate the end -- >> we didn't tax buggies and horses to the point where people migrated to cars. there's a reason we went to cars the stone age didn't end when we ran out of stones. and the hydro carbon age isn't going to end -- >> irrespective of the paris accord. that was the flip side of this. >> trillion dollars of -- trillion dollars of what i would call wasted effort that wasn't going to really accomplish
anything and was going to definitely hurt economic activity. it's a no brainer but very difficult, the courage to do it. >> yes. >> he won't get credit for this. >> he won't. but was the right thing to do in my mind, at least. >> larry is our guest host. he's going to be with us the rest of the morning. when we return is the subprime auto loan market stalling? we're going to kick the tires right after the break. and in the next hour dr. craig venter and the search for human longevity. also a programming note for you later today on cnbc don't miss a cnbc exclusive interview with billionaire hedge fund manager ken griffin coming up on power lunch at 1:30 p.m. i'll see you there.
welcome back to "squawk box." breaking news just in the past couple of minutes. president trump tweeting a short time ago i will be nominating christopher a. werewray, a man impeccable credentials to be the new director of the fbi. he was on the enron task force if you remember. >> led the doj's investigation into enron. >> he was nominated by president bush back in 2003 to be at cystant attorney general in charge of the criminal division of the department of justice, too. we will talk more about this when we come back. in the meantime, though, maybe it was the warning of jpmorgan ceo jamie dimon about the dangers of writing too many subprime auto loans or maybe it was the memory of what happened during the financial crisis in 2009. either way lenders appear to be
realizing too much subprime lending may not be good. phil lebeau has the details of a new report showing a big drop in subprime auto loans. phil? >> becky, this is a big change from 12 or 18 months ago when we saw a big surge in the amount of loans written to those with the poorest credit scores. take a look at the latest data from experrian. those are auto loan originations. in other words new loans written in the first quarter. look at the drop in subprime and deep subprime down 9% and 7% respectively. according to the people who track this at experian this is all about the industry policing itself. >> so it does appear that the industry is policing itself a little bit more. and we've been hearing just here and there over the last year, year and a half various lenders coming out and saying that they were really going to restrict subprime. and as those lenders came out and made those statements, it seemed to trickle down into other lenders in the industry, and others seemed to follow suit. >> as you take a look at shares of the auto dealers, and we're
talking about auto nation, group one automotive, keep in mind that the average amount that is now borrowed for an auto loan has hit a record high well over $30,000. guys, this is only part of the equation when it comes to subprime. the other part is, asset backed securities. that's a story we're going to continue to watch. back to you. >> okay. great, phil thank you for that. in the meantime when we return stocks suffering their second straight day of losses. we'll see if things turn around today. "squawk box" returns in just a moment. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.
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rebuilding america. president trump makes his infrastructure pitch in ohio today. we're going to tell you what's at stake. the uk snap election. british voters head to the polls in less than 24 hours. a live report from london straight ahead. plus, cheating death with dna data. genetic guru craig venter is giving the checkup new life. he'll be here to explain as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york. this is "squawk box." good morning and welcome back to "squawk box" here on cnbc. live from the nasdaq marketsite
in times square i'm joe kernen along with becky quick and andrew ross sorkin our guest host this morning larry bossidy, former honeywell ceo. he's also a cnbc contributor that spends his time in florida during the winter. and came back a little too early this time. i would say. glad to come back to all this? larry, when did you get back? >> early april, and -- >> nice job. >> i have to confirm the fact that it was too early. >> nice job. i hope you like rain and cold. let's get a check, want you to never exited that agreement. check on the markets right now. futures up. 36 points. the nasdaq up 15. and the s&p up 5. breaking news in the last couple of minutes. president trump tweeting that he will nominate a new director of the fbi. gentleman christopher wray. he formerly worked for the justice department as head of the doj's criminal division during the george w. bush administration. he also led the doj's enron
investigation. wray now works in private practice at the king and spalding law firm. we're going to have more on this story in just a couple of minutes. >> among today's other top stories, president trump will make his way to ohio today as part of the white house's infrastructure week. the president will deliver a speech in cincinnati that focuses on overhauling the nation's aging levees, dams, locks and ports. in corporate news uber has fired 20 employees coming after an internal probe of sexual harassment claims. a company spokesperson confirming these fiergs to cnbc. uber also saying it's working to improve management training. the firings come after uber hired a law firm to look at the claims of harassment, discrimination and bullying. former u.s. attorney general eric holder is conducting a separate, broader investigation of the company into culture and practices. the broader markets, joining us is paul hickey, cofound he of the spoke investment group. our guest host is larry bossidy, former chairman and ceo of honeywell, also a cnbc contributor. and paul welcome, it's great to
see you. >> good to be here. >> i know that we've been looking at these markets continuing to climb higher. you're thinking that things are looking a little expensive here. but you still like stocks at this point? >> yeah. i mean, you have these concerns about valuation. there's been concerns about valuation for well over a year. as we always said they're never a catalyst for market sell-off. there has to be something else. this pattern we've seen in the market for the last year and a half now, has been a stairstep pattern where we rallied. market trades sideways and then during the sideways period everyone gets concerned. you know, the rally's over. we're going to sell off. there's no catalyst on the horizon. we saw it again in the last two weeks we've seen the market move to new highs. on after earnings season when people thought, you know, that was what was driving the market higher. and during that period, once again we've seen credit spreads confirm the rally and we've seen the percentage of new stocks -- percentage of stocks hitting new highs expand. so it's been a, you know, just very systematic, and orderly rally here.
>> at the top of this stair step that we're sitting at right now people are saying, oh, what about the khoe? we had lousy jobs numbers once again last friday. they're saying what about the fed if the fed continues to rise? is the economy strong enough to get over that hump of higher interest rates? >> jobs report friday was on the weak side. but adp was very strong. jolts yesterday was a new high. so i think you have to give the jobs market the benefit of the doubt because most of the secondary indicators of labor market strength, the ism manufacturing and ism services, those employment sectors and indicators showed solid growth during the month of may. i think it's one month but let's see how things go going forward here. i think regarding the fed, there's been some walkback of, you know, expectations for september rate hike. but i wouldn't be so sure of that right now because last year i don't think the economy is any worse off now than it was a year ago. and last year one of the biggest holding back the fed was brexit
and the upcoming election and those boogiemen around the corner aren't really here right now. >> larry that kind of jives with your view of the economy. >> it does. one thing is that is overhanging the economy is that the fed has a $4.5 trillion balance sheet. it looks as though they're going to start paring that balance sheet sometime this year, probably by just not renewing mbs securities. what kind of issue do you think that's going to have in terms of the market itself? >> you know, that's a great unknown. obviously, because it never -- we've never seen this kind of situation before. but from what most people, the expectations are that the paring back of the balance sheet will be less -- less tightening impact than a rate hike. so there's talk well maybe they'll pare back the balance sheet and hold off on hiking rates. but you know, who -- we never know exactly what's going to happen here. but what we're constantly doing is listening to the market, and looking at the internals of the market and as long as they're supportive of where prices are going, then it's hard to, you know, step back and say, you
know, we should sell just because we're at high prices. >> thank you for coming in today. it's good to see you. >> thanks for having me. >> okay. >> forget the border adjustment tax the white house is out with a new proposal that could hit retailers like walmart. we have more on that story. is she there? can you hear me? >> -- this provision was in the president's budget and retailers say it caught them off guard. the administration has told us they would be assessed every five years. the size and type of retailer and it's expected to raise $2.4 billion over the next decade. the white house is calling this a modest fee especially since they say the biggest retailers redeem a billion dollars or more in food stamps each year. walmart alone takes home $16 billion and that accounts for about 23% of the food stamp program, or snap as it's now called. walmart declined to comment but
the food marketing institute which represents grossers called this a quote flawed policy and it comes on top of nearly $200 billion in cuts to food stamp benefits, and that move has been widely criticized by both parties, including republican chairman of the house and senate ag committees. now the last time that the government restricted food stamps back in 2013, walmart said its grocery sales dropped 0.9% so food retailers are watching this one closely. >> all right. a lot still ahead. thank you, ylan. a lot still ahead on "squawk box." the pace of growth, the oecd out with new data on the global economy. we'll dig through the results. but genome sequencing at a discount. craig venter is hoping to slow aging. he will join us on set. i'll give him my tips. and then later, the fiduciary rule has been a subject of debate on wall street. payments pioneer bill harris will make the case for regulation. stay tuned you're watching "squawk box" on cnbc.
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we're here with krach win mann. a very smart person but on a 4.5 second delay from paris. kathryn let's go through this as quickly as we can. tell us about the outlook for growth in the u.s., in the world, and in europe. >> so what we're looking for in the global context is rising from 3% last year to 3.5% this year, and going to 3.6 by 2018. for the u.s. it's a little bit under 2% or a little bit above 2% and for europe a little bit under 2%. >> catherine have you guys dialled back your forecast for the u.s.? you were among the first to say there's good fiscal policies coming to the u.s., and we're dialling it up. and now you're saying fiscal policy will be neutral in 2017 and look for stimulus to the u.s. for fiscal policy in 2018. so are you down from where you were?
>> so we first had some numbers come in that were a little bit weaker than we had hoped for. but it's also the case that the progress on making some of those changes in fiscal policy both on the spending and the tax side, those have been delayed, and so we're putting off some of the stimulus into 2018. so you're right about that. >> okay. now, your paper, which by the way is a great survey of global issues, u.s. issues, european issues, an excellent read, you talked about this idea, the world is growing. but is it enough? let's talk about this idea is it enough? why isn't 3.5% growth enough? >> right. mm-hmm. so, i think there are a couple of different ways of looking at it. first, 3.5% or 3.6% is below this long-run average global growth rate at 4%. but that's an average and it doesn't really mean anything to people in terms of their pocketbook. so what we like to look at is gdp per capita as kind of like on average what you would think
you would get in your pocketbook and that's quite a bit lower than it was from the two decades in the '80s and '90s and the 2000s. that's what people expect. that's where the expectations for themselves and for their children come from. but it's not just that the average rate of growth is lower. not just at the oecd but the u.s., europe and japan. it's also that the distribution is worse now. between top 10% and bottom 10% and the mean, as well. so we're looking at lower growth rates and mean. >> catherine, larry bossidy. is this rendation, 2017, more optimistic or less optimistic than it was a year ago? >> it's a little more optimistic than a year ago. what we've seen is some cyclical upturns really across the board in terms of consumption, investment, and labor market performance. we just don't think that we can be assured that those kinds of
improvements are going to be durable. we have not seen real wage growth. we have not seen improvements in productivity growth. and until we get those two things in place, we don't think we have a sustainable recovery going forward. >> catherine, very quickly, you guys are among the first to sort of officially state what you think is going to happen in the european central bank policy. it looks like you're calling for the ecb to reverse course next year. is that your take? and how much do you think happens next year in europe? >> well, you know, strength in europe looks like it's becoming more entrenched. we've got some politics to still work through, and that clearly is going to have some effect. but, we do think that the ecb is poised towards more neutral normalization. there's a couple different ways that they can do it. i think they've talked about it. they haven't been as explicit as what we put in the paper but that's the way they're going. >> catherine, thanks for joining us this morning.
>> thank you. >> i think one of the untold stories today -- >> where was she saturn? >> she was in paris. i could have done a series of written -- you could have done a whole bunch of things. one point, which is a part of the story that we're telling here in the states, part of the story with stocks and u.s. economy is happening overseas and it's been a reasonable shift that suddenly we're getting help from overseas and that's going to be worth something here for u.s. gdp that's worth taking into account. >> why a lot of stock pickers said you should be looking at foreign markets instead of here but also a big part of why the multinationals here in the united states -- >> it's also going to echo back on u.s. economic growth -- >> also propelled earnings in the first quarter for the s&p 500. >> right. >> thank you. >> president trump making some news in the last few minutes. tweeting that he's going to nominate christopher a. wray to be the next fbi director. eamon javers joins us now with. eamon what do you know? >> yeah, good morning, again, joe. well i think we've got the president's tweet we can bring up for you. the president surprising most of
washington here with this announcement today. he says i will be nominating christopher a. wray, a man of impeccable credentials, to be the new director of the fbi. details to follow. well i think in that tweet you see the essence of the president's strategy, a man of impeccable credentials. the president is looking for somebody in christopher wray who can get through a senate confirmation, who will be absolutely untainted by politics or partisanship. he's hoping that this will be a fairly seamless move here to install wray as the head of the fbi. we'll see what the senate says in terms of confirmations. christopher wray was the assistant attorney general from 2003 until 2005 under president george w. bush. and while he was there he was actually confirmed by unanimous consent by the senate which gives you some indication that he was not a controversial figure in those days. this is an entirely different political era, though. he was also on the corporate fraud task force at that time and oversaw the enron task force. so he will be familiar to people
who have spent a lot of time around business and finance over the years. he also, importantly, represented new jersey governor chris christie in the bridgegate scandal. he was chris christie's attorney in that process. and he's now a partner at king and spalding. so we know a little bit about his background what the president this of him and we'll find out what the united states senate this of him in terms of the confirmation, joe. >> yep, eamon. was kind of interesting timing, wasn't it? although -- >> yeah. >> even more interesting if it would have been tomorrow. >> right. well, look, the president faced a situation where he was going in to the fired former fbi director's testimony tomorrow at 10:00 a.m. without having nominated a replacement. this nomination, once he makes it formally, will go a long way to easing any credit civil that he would have faced tomorrow for letting that job sit swrakant for this long. there's been a long process here in terms of the white house interviewing candidates for this position.
at one point we were told that joe lieberman the former connecticut senator was a front-runner for that. there was a day at the white house where a number of candidates paraded in and out and they made those candidates walk right in front of the press on the driveway. so we could all get pictures of them coming in and out to interview for the job. so this has been a long process of vetting these different candidates for this job. >> yeah. >> and the president landed on his decision this morning. >> and vetting and i think lieberman was a trial balloon. great man. >> didn't fly so well that trial balloon. >> there was not a lot of embrace of lieberman from democrats. >> when's the first time you heard the term nothingburg ir? is that in -- is that in the oed? it's relatively recent. hillary used it. for the whole e-mail scandal was a nothing burger. and then i've heard it used about tomorrow's testimony that people were hoping for -- some people were hoping for a lot, and that maybe that's going to be a nothing burger.
i just wondered where that came. i'm going to start using it. that's where you try and eat the bun and there's no meat? or do you eat just -- >> reminds me of the whole where's the beef commercial with the big bun and no meat? >> maybe just no -- >> tomorrow is going to be a lot of attention and the question is what will comey say and will it live up to the billing? >> you notice once abc broke the news that comey wasn't going to do the obstruction, someone there leaked out coates. who knew that coates story? who do you think knew that? because then that -- >> i think that story is attributed to officials familiar with, and it said that coates told associates that -- >> right after comey said he's not going to do it. that's like, all right. we need something else! all right. try this. i mean it is -- >> i think you are drawing too direct of a line here. i think there's a lot of reporters, and a lot of sources in this town all frantically interacting. i don't think you can say that there's western thing -- >> i just hate to see the
disappointment of everyone covering that. i hated to see that when it came out that comey wasn't going to -- cnn just the hang dog expressions of, wait a second, no obstruction? won't impeach? anyway. thank you eamon. don't you love when i do that to you? you've got to worry about even your expression when you're listening. >> look at this. watch. >> you do, you do. expressionless. coming up at 8:30. is our concept of health stuck in the middle ages? dna pioneer craig venter wants to drive down the cost of gene sequencing. he'll join us on set. at blue apron, we're building a better food system.
welcome back to "squawk box." guest host larry bossidy, former chairman and ceo of honeywell. we talked a lot about business and the economy but i'm actually curious what's going on in the market? what does bossidy do with his markets? >> you know, very a diversified interest. as you get older you get more conservative. i probably have more money in liquid funds than i ever had before. still have some tax exempt. i play the market myself. but i'm more diversified than ever. >> you play the market yourself. what does that mean in this environment? >> i have money with other people but i also have my own portfolio and i buy names all of which you're familiar with. i take a long shot once in awhile. but by and large i play more defensively than i ever have in my life. and i think that just goes along with your continual aging. >> and have you been surprised
by how the run we've been on? >> yes, i have. i mean, this is the longest run i can remember in my history. yet i see no signs of inflation. i see no reason to think it's going to end immediately. i do think some of these securities are overvalued. but if you look at the market this year, there's only about 6 stocks which have created all the increase. there's still reasonably priced securities. >> the business cycle is the longest run or the stock market run is the longest run? >> stock market. stock market. >> the '80s? remember went from 800 to 10,000? >> yeah, but i mean -- >> this is like -- >> but this is more -- no, percentage is not. but it's continuity surprising to me. so yeah i mean, the business recovery has also been more tepid than ever before. doesn't look like it's going to run out of gas, even though it's ten years old. >> and when it comes to the real economy we haven't hit a major credit expansion yet. that's usually a high sign we're in the last ort of innings of things.
>> that's right. and you don't see that either. i don't see delinquencies moving in a significantly different way. there was a pop a year or so ago. that's since turned around. so, i don't see any bubbles out there that give us warnings that something significant is going to happen. >> maybe this is the industry policing itself. we spoke with phil lebeau earlier talking about the subprime auto loans and how they're down significantly because the industry just doesn't want to wind up in trouble. >> that's right. and there's no question, too, dodd-frank with all of the reason to be criticized there's a lot more capital in banks than ever before, and therefore they're more safe today than they were a decade ago. >> have you been surprised there has not been more m&a activity? people said in the fall that if president trump won there was going to be this, you know, and we were in what felt like a bit of a merger mania situation even in the fall, but it has not continued. and it's unclear to me what that's a function of. >> you know, it's harder to get deals done in this market.
not just because of antitrust. but for all reasons, as well. and i am surprised. you know, with what the available credit's been, for example, you'd think that it would have accelerated m&a activity and there's a lot of discussions going on all the time but in terms of concrete deals fewer than i would have expected. >> okay we're going to continue talking to larry. >> when we come back, voters in the uk getting ready to cast their ballots. a live report from london. it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average?
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good morning, everybody, welcome back to "squawk box" here on cnbc. we're live from the nasdaq marketsite in times square. let's get to the stories that are front and center this morning. president trump will nominate former justice department official christopher wray as the next fbi director. the president made his choice known in a tweet just a short time ago. during his time at the doj wray led the government's enron investigation. he has been in private practice since 2005. shares of jack daniel's
maker browne dr. foreman are lower this morning. it missed estimates by three cents. revenue came in before the forecast and the stock is off by 1.8%. another stock under pressure, navistar. that company reported a bigger than expected quarterly loss and although revenue exceeded estimates they reported a drop in u.s. truck sales and that stock is down almost 7.5%. >> less than 24 hours until voters head to the polls in the uk. wilfred frost is in london this morning. wilf? >> hey, andrew, good morning to you. so less than 24 hours to the polls. at 5:00 p.m. eastern time tomorrow we'll get the first exit polls. what could that mean for markets. here's what some currency strategists have told me could be the immediate move as the results come out based on three possible outcomes. the average of these polls suggests that if may does win and increase her majority we could see the pound rise by 1.5%. if we get a hung parliament, no
clear result, a fall of about 2% and if corbyn wins then the fall in the pound would be bigger up to around about a 5% fall. why is it that they forecast such a fall if jeremy corbyn wins? the very much immediate economic policies domestically. let's have a look at them. because it implies what they mean for business. firstly, labor has a bigger planned increase in spending and borrowing, $42 billion increase by 2022. but they also plan to increase corporate tax from the current rate of 20% to 26% whereas conservatives want to cut it to 17%. they also want to increase the top rate of income tax and for those that worth in banks worth noting that jeremy corbyn plans a quote robin hood tax on exotic financial trading. we haven't had much details on that but it's something to watch. however, many are wondering whether that fall, if it came about in the pound on a labor victory, could be a short-term buying opportunity based on the two party's different positions on brexit. crucially the conservatives say
no deal would be better than a bad deal. and they're willing to leave the single market in the customs union, whereas labor said they want to retain the benefit of the single market and the customs union. thus could a labor victory even if it leads to a slort-term fall in the pound, in the end lead to a rally based on the brexit negotiation outcomes? the bottom line, though, what we should say is betting markets strongly expect a may majority, thus a corbyn victory would be a big surprise and no doubt lead to volatility at 5:00 p.m. eastern time tomorrow. >> wilf, thank you very much. today's top story here in the united states, president trump saying that he will nominate christopher wray as the new director of the fbi. joining us right now is amy wile of the wile firm. she worked with wray at the u.s. attorney's office in atlanta. and maybe the most significant part about this is who he is not, who christopher wray is not and that's a politician. there were a lot of concerns about some of the earlier names floated that it would lead to a
politicization of the agency. why don't you tell us who christopher wray is. what did you know about him when you worked with him? >> christopher wray is a really smart person. a really fine man. really high integrity. working with him was never political. all about the work, all about the job. took it very seriously. takes what he does very seriously. very well respected. respected by the agents, by his colleagues. >> what were some of the big cases that came your way in the atlanta bureau there. >> he worked on a lot of high profile cases when he was in the office. one of them was an arson case that involved arson at churches. and i worked on that with him and on the appeal he was so dedicated to that case that when he was at the department, i think at the time he was chief of the criminal division in washington. he came back to atlanta to argue it before the full court sitting
enbanc. >> have you kept in touch with mr. wray since you have worked with him? >> i have not. i don't see him all the time. i think the last time was at a reunion for the u.s. attorney's office. he was doing great. he was the same old chris wray just a very down-to-earth, nice person. >> amy if there is an achilles heel, a confirmation process, what would it be? >> i don't think he has one. i'm not sure i know too many people, i can't imagine him having an achilles heel. he's really just a decent, nice person and sort of what you see is what you get. very smart, humble guy. doesn't walk around, really smart. but he is. and he's really competent, and very well respected. very well liked. so he's kind of the full package. >> amy thank you so much for your time. we really appreciate it today. you're welcome. >> half empty. but i'm going to give you what eamon is saying.
former high ranking fbi official tweeting this about the fbi nominee. good reputation. confirmation. big job for someone with his level of large organizational leadership in management experience will be a big learning curve. that's what eamon tweeted. anyway, youth may be a myth but the man cheating death with dna data is real. craig venter was the first person to have his genome mapped and is responsible for some of the biggest 20th ventry breakthroughs on understanding our genome. he's the founder and executive chairman of human longevity. when did wally -- did you initially use wally gilbert's machine, didn't you? >> no. >> he won a nobel prize for that? what are we getting at. when did we first sequence an entire genome? >> 1995 was the first genome of any kind of species, and then
2000 was our first human genome. >> it's a lot of data. >> and it's tough to -- i wonder just as an aside, can a.i. help us with this eventually? because it's very difficult right now. what do we need? what other discipline do we need to merge with the data that you already have for us to really make strides, do you think? >> that is the point of what we're doing at hli. compiling hopefully tens of millions of genomes together -- of different individuals together with pmenotype, clinical data on those people -- >> the expression of the genes you can see. >> any measurement we can get off your is your phenotype. we're using machine learning to put that together. so 10 million jen i'ms is just as, cs, gs and ts. >> okay. so the variability must be vast
but the similarity must be staggering as well for the 10 million. >> we all differ about 3% from each other. >> only 3%. >> but knowing that 3% sequenced to any one of your genomes now, we find about 8,000 totally unique sites in your genomes. >> and we know what -- how many of those actually code for? >> very, very few. so that's the point of what we're doing. we're learning every day we're making major discoveries because of all this data. >> if we just see a -- an anomaly and see a propensity for a certain disease, you can -- you could at least screen for that not even knowing what the gene product is? >> yeah. well that's why we measure in the kleinic all the different things we measure not just the genome. the genome is an early phase. hopefully in ten years just doing the genome will give us massive predictive information. but our health nucleus measures everything we can about you at the same time. >> we talk all the time, andrew
talks about he's worried he's going to -- eating the kind of food, living in a certain place, a lot of us -- a lot of the problems we have, you can't do anything about, they're just in us, are they not? >> a lot of pre-programmed. but if you know about them early on you can -- >> i want to know how you changed your life. what do you eat differently? vitamins? what's changed as a result of the information you've been able to gather about yourself from this? >> well i first learned about risk for heart disease. i started taking a statin about 20 years ago. >> okay. >> i've lost 40 pounds since i learned about liver fat. because we can now measure on the mri your organ fat. and it's one of the most important parameters for your future health. it changes very dynamically. over the christmas holidays a year ago mine went from below 4 which is normal to about 7. so it goes up and down. >> craig, the big discoveries are still to come?
right? >> most things that we will know in the future about us as a species are to be discovered. >> hurry up. whenever i see you i say hurry up and it's heart. >> a whole lot faster. pretty stunning. so the big difference now is we've shown that health is kind of an illusion. it's based on ancient things if you look okay and feel okay you must be healthy. we're finding 40% of the quote healthy people that come and go through the clinic, through the health nucleus we find something pretty serious wrong with them. >> like what? look at andrew. can you tell? >> 2.5% of people have major tumor that they don't know about. >> 2.5% of the people who come through your clinic? >> oh. you sthunt even say that word. >> and the important thing is we're finding them at stage zero, stage one, the latest is stage two. every one of them has been treatable. and curable. i was one. i was discovered to have
prostate cancer in my own clinic. the nobel laureate who's been working with me for 20 years we found a fist sized tumor -- >> this is through genetics? >> this is through the mri screening. >> i like a marker for all these cancers that you can test for in the bloodstream. >> that's kind of -- >> what's the full cost of the workup? >> how much does it cost? >> we have three different stages because we're trying to expand the number of people that can do it. the platinum version is eight hours and that's $25,000. the simplest version is $4900 and it takes about an hour and a half. >> you ever catch tumors in people who pay $4900? >> we do. >> craig, with heart disease -- >> so, you're past the stage but if you're between 50 and 74 and a male in the u.s. >> yeah. >> 40% of that group will never see the age of 74. and two-thirds -- >> oh. >> craig --
>> two-thirds of the reason is heart disease and cancer. >> i don't want a false positive or a false negative. and what are the percentages? >> yeah. so with the cancer screening we have a 100% accuracy on detecting them. in fact we have to argue with clinicians that don't understand the new technology we have, that people really have a tumor. >> yeah. >> but we -- our team has been 100% accurate on that. >> that's good. >> the false positive things came out of the '70s when they did the whole body ct scan. >> yeah, right f >> and now with the mri, we can do things, tumors light up like a light bulb. so you can see them clearly, but just ten minutes in a ct scanner, and the age groups are changing. you know, used to be, you know, when you got to my age, or your age, you start worrying about these things. we had a 45-year-old woman who looked totally healthy, her calcium score put her in the
99th percentile for having a major heart attack in the text nine years. >> wow. >> 45 years old. >> wow. >> hurry up. >> with health care being what it is in this country, everyone's going to be subjected to these tests at some time and you're going to price the coverage on the basis of what you find? >> we would save the economy interests of dollars if we screened everybody first. >> that will happen some day. >> godspeed. >> i think it will. >> hurry. >> thank you. >> all right. great. >> craig venter. coming up next the obama era fiduciary rules set to go into partial effect this week. bill harris is going to join us to talk about it further. he'll explain next.
welcome back to "squawk box." this friday new financial rule putting stricter standards on stock brokers set to go into effect. of course, this is called the fiduciary rule. it's been the subject of intense debate across wall street. joining us to talk about it is bill harris, out with a new report of americans' trust in financial professionals. i sadly imagine the results of this study are not good. >> well, you're darn right. and let me just say first, andrew, i'm a fan of your book. with that plug let me just say this, you are correct. we see that nearly half in the study of 2,000 investors, nearly half don't trust their financial institutions. >> and so therefore the question
becomes whether the partial going into effect of a fiduciary rule is going to help that or not and what should happen as a result? >> well, the portion implementation does help. and that will be friday. most of it comes in on january. but yes, it does help. not completely. and we're all looking for how it gets watered down in the meantime. but we're off to a great start. >> you know, brokerages and others on the other side of this argument would make -- would make -- would contend that the fiduciary rule is actually going to hurt customers. not because companies aren't going to be working in their best interests but because of the additional cost to comply with the rule are going to make it harder for them to offer certain products. at certain price points, to more people. do you buy that? >> no. i think it's poppycock. who can argue with the fact that financial advisers and brokers should operate in your best interest rather than their own.
who can argue with that? and yet, 70% of individuals in our study say they think that the brokers already do. but, it's not the case. and they also make the argument that if you -- with the rule, then small investors won't get access to good advice. but, if the only way that you can get good advice is by paying high fees, don't get the advice. >> bill, let me ask you a knew eve question, why aren't all brokers registered? >> well, they're registered as brokers, but not fiduciaries. not true advisers. and yes, they should be. why is it? well you know, it's the history of this business. if you go to a doctor, you expect the doctor to work in your best interest. in fact, doctors pledge the hypocritical oath -- sorry the hippocratic oath. brokers pledge the hypocritical oath. >> bill how do you see robo advisers working within the
fiduciary duty? >> they do a great job, particularly for people who have simple finances, not a whole lot of assets. and robo advisers just to define the term, offer algorithmic advice. what we do is hybrid advice. we offer great software but also great financial professionals. and for someone with complex financial lives and hundreds of thousands of dollars, if not millions of dollars of assets, you need something more than a simple algorithm. >> okay. bill we appreciate your time this morning. thanks for bringing us that news. >> thank you. >> a little sad but good to know. thanks. when we return, jim cramer joins us live from the new york stock exchange. and later on cnbc don't miss shake shack ceo on power lunch at 1:00 p.m. eastern time. >> not us? >> shake shack. i'm an power lunch, too. >> i know. but -- s way to say this. it's over. i've found a permanent escape from monotony. together, we are perfectly balanced.
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fine out about. you in? >> when he said they light up what we doing? why are we even going to our regular physicians? go to him first. thought that was a remarkable interview i. do feel this is something we should be offered. >> and then also, i have made the point that, wow, if we -- if we keep fixing every single thing that's wrong with every person, no one will die, our health care will soar. but if it's preventive, you could cut it in half or two-thirds. i don't know about the jobs market. >> i thought that was terrific because it's just a completely different method of solving the problem. look, if i were the hospitals i would be trying to lock this up because they're going to lose a lot of business. what they do, where they make their money on the complicated surgeries i would try to get this business instead of just keeping it with him. i have to get to san diego. i have to find another reason. >> we have to go to san diego.
you could be going to rochester. i mean, yeah, san diego, there's worst places to have go for a -- you know, for that -- >> i'm all in. i thought this was remarkable. i hope others saw that interview. i thought of the incredible. we have to get more companies doing what he's doing. >> yeah, for you, one last plug. how important is innovation? when we think about if we don't -- you know, if we do anything to kill the golden goose, it's innovation that will save our butts from all of this. so we have to make sure that that goes forward without being, you know, price controls or any of that stuff. >> just eye opening. it's great that it's ours. i just want it. i mean, i have to figure out way to get out there. >> all right. i know. take a field trip out there. we'll do the show. thanks, jim. >> thank you. >> see you in a couple of minutes. as we head to break, a quick programming note.
business icons are meeting with visionaries and disrupters in new york. do not miss the full coverage of the 2017 iconic tour. it's on cnbc all day long. unbelievable. "squawk box" will be right back. got it. rumor confirmed. they're playing. -what? -we gotta go. -where? -san francisco. -when? -friday. we gotta go. [ tires screech ] any airline. any hotel. any time. go where you want, when you want with no blackout dates. [ muffled music coming from club. "blue monday" by new order. cheers. ]
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sorry, rochester is a fine place. >> i have a daughter up there. it's marvelous. >> i meant san diego -- this no bargain. the weather we have. our guest host is larry bossidy, former ceo of honeywell. how often does san diego have day like this? >> maybe once a year. >> yeah. all right, larry. on a scale of one to ten, for 2017, the chances we get both obamacare and tax reform done? >> six. >> that is so optimistic. >> i know. but we have to get -- we have to get obamacare done. i mean, it's falling apart as much as we have this paralyzed congress. tax reform is a little bit more difficult, but both of them six. >> what grade do you give mitch mcconnell right now? >> i give him a "c." >> what grade do you give kevin brady? >> kevin brady, i want to give him a "b."
>> what about paul ryan? >> b-minus. >> chuck schumer? >> "d." >> president trump. >> b-minus. >> wow. >> nobody is getting graded on the curve. >> is there anybody you would give an "a" to right now? >> wilbur ross is the mvp of the administration. what he's done on trade. give him an a-plus. >> how -- what did trump get on foreign policy? we're the laughingstock of the world. i thought it was great. >> no, foreign policy, solid "b." >> solid "b." you're tough. >> what kind of -- >> it an noise a lot of people. >> what about christopher wray? >> sounds like he's got impeccable credentials. >> by the way, there's two achilles heels, potentially. one is his firm works for russ inevitable, the russian company
and he has worked for a laundry list of fortune 500 companies that are in major litigation with the government so he has to recuse themselves from those things. which going to complicated -- there's an argument being made this will complicate things. i'm suggesting that's what the other side will say. >> by not saying i'm going to research on all the great qualities instead of immediately saying what's wrong with this guy, do -- >> no, you don't understand. >> so negative -- >> no, we had a guest on who told us about the wonderful qualities of the man. so i just felt like somebody needs to find out if there's anything at all. >> good choice. good choice. >> good choice? >> yes. >> solid, c-plus. >> no no. he might be a "b." b-plus maybe. >> i'm glad you're not my professor. >> i don't want to get graded.
>> greg evener is here. on longevity we can learn from larry bossidy. >> nice having you here. that does it for us today. join us tomorrow. we'll be back here at the same time. right now time for "squawk on the street." ♪ good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. futures in a narrow range but positive as markets brace for a heavy wave of political news over next couple of days. the president goes to ohio to talk infrastructure. he has nominated chris wray for the fbi director. and our road map begins with a deluge of news from d.c. trump tweeting his nominee for fbi director. more reports on comey's rift with the president. and the president goes to