>> mohamed el-erian. >> and he wanted, again, to call attention to something that he had forwarded to us about some of the things, the plumbing in the european system getting a little clogged up. interbank lending, because nobody knows -- if you follow the dots, someone owes this and portugal lent them money and spain lent portugal money. now rates are rising and the system is getting gummed up. >> the german electricat is very unhappy. their point is, they've been living in these times to try and make sure that they keep things even. they've been going without raises, giving back some of their pensions and now they're expected to cough up for somebody else who has not lived like that. >> we now have more employees in the union than in the private sector. what is the ratio in greece? >> union membership? >> these are public unions that

are demonstrating. >> it's a million people. what is the population of greece? >> i don't know. in mexico, do people go to work on cinco de-mayo? >> because his name is carl quintanilla. are you not -- >> i am ott mexican heritage. >> you came back on cinco de ma mayo. you get off at 9:00. >> you know, the hot and spicy burrito, the number three is very good down there. >> you get off at 9:00 a.m. it's hard to go home earlier than 9:00 a.m., right? >> ooefb asking for eight, but they haven't said yet yesterday yes. >> the population of greece is -- there will be 8% of the population striking. the imf's chief now sees a risk of the debt crisis

spreading to the rest of europe. but he adds there's no real threat for countries like france and germany. under the deal outlined by the imf, greece will be monitored every three months. derns will be hitting the euro, which have been trading at its lowest levels in a year. protesters taking to the streets of athens to demonstrate against austerity measures. >> they're not really striking, are they? oh, there you go. >> keep going. >> anyway, flights came to a halt at midnight local time. workers went on strike. these are pictures of the athens international airport. some travelers were forced to sleep on chairs. a lot of our anchors sleep in chairs during the day. i don't think it's that big of a deal. >> you meanwhile they're on air. >> while they're on air.

>> there's the thought i wanted to show you opinion if you're striking and you want to put the banner up, where do you do that? >> that's good. the banners are in greek and you know it. you don't have to ask, what is that language? >> i forgot, one in greek, one in english for us. >> that's nice of them. but if you're going to talk about greece one -- >> you mind melded with the protesters. >> i think they might be watching. but why are they watching a business channel when they're not at work? >> watching squawk. >> you have to admit, that's erie that they use the same thing we use -- >> you're in sync with them. >> yeah. >> let's get a check on markets this morning. becky said at the top, we're going to get a little bit back early on. but again, the concerns about

contagion continue in europe and some of those markets are in the red, as well. oil, as you probably know, extending the losses today down 43 cents. despite all the worries about inventory and supply with the fire or the spill down in the gulf. the 10-year note, a lot of money is flowing into treasuries as people try to avoid europe and the risk over there. the yield on the 10-year, 3.603%. the dollar, as joe told you, a year high against the euro. the biggest daily gain of the year as a lot of people put mow money back into the greenback, and then with a stronger dollar, gold has been under pressure today, but getting 2.60 to the up side. $1,171.80. let's go overseas and check in with anna in london. >> thanks, carl. we thought we might be ready to have another down day for these markets. but that's not turning out to be the case. we have managed to turn around.

we've got moves to the upside, fractional moves, but nevertheless, given yesterday's big falls, that is a decent performance. yesterday, the athens market down 6%. the portuguese market down 4%. just to give you a heads up on those markets, the more peripheral ones, we see a couple of those in negative territory, but not by much. we seem to have, at least in the short-term, put a break in this story. it's gone around the world in 24 hours and we are supporting brass on this one. some of the banking stocks are trading lower. bond spreads, of course, have been widening as a result of concerns about whether or not this is going to be contagious from greece into other countries. but intlly, those bond spreads are widening because people are buying german bunds. that is interesting when you can see where this risk is going, where is it going to end up? possibly on the german and french balance sheets and people are still buying those kinds of assets.

you went through euro dollar and what was happening there. just a relief rally. many analysts are heading up as we try to put yesterday behind us. but let's not overdo it, i guess. peru dependal, a very big story here. this is the corporate insurance company that had to pull their rights issue, issues with the regulator, it seems. christine tan has the latest in singapo singapore. japan and korea closed for a public holiday. elsewhere, it was a greater session in asia. shanghai dropped to a seven-month low. in the end, the shaj shanghai composite managed to end higher after getting weighed down by a local media report that icbc and

bank of china may change their strategies. in congress congress, a bailout for greece maybe enough prevent what crisis. foreign sellers were big sellers on the back of the wall street fall overnight. that's the picture here in asia. back to you. >> christine, thank you very much. we are counting down to the adp employment report. that hits the tape at 1815 eastern time. joining us now with more on what's moving the markets on the trading day ahead is chief market strategy david joy and from john hancock financial services, chief economist bill cheney. david, what do you think? are you feeling lucky right about now or are you feemg nervous given what's happening in the markets? >> i think a little nervous for the near term. ting recovery is still on track. but i think the events in europe

are making people nervous. all of a sudden, there's been a shift in thinking from sort of the reflationary aspect of the recovery now to the deflationary implications of whapg happening out of earlier. all of a sudden, the market is trying to figure out that we switch to something like that with deflation on or about expectations >> do you chase the flight to value or our flight to safety in terms of looking at treasuries, in terms of looking at the u.s. dollar? >> well, maybe on a temporary basis. as i say, i still think that this recovery is on track and i expect the treasury yields are going to be moving higher eventually. but this is going to take a while to sort out in europe. i think the bond market is just going to pound these countries until the eu makes it clear that they do have a mechanism that could be replicated, you know,

to bailout spain if it needs it or portugal if it needs it. so until we get there, i think it will be welcoming to have treasuries and other type safe securities in your portfolio. >> and what would ce your mind? i mean, we've got a lot of big votes coming up on friday and monday there are votes in the german parliament on this. today, the workers in greece are striking. what makes you feel like, okay, now we feel like we have our arms around it? is there some development that would get you to that point? >> well, i think you have to watch the markets. maybe we get abdomen okay vote, one that allows this bailout in greece to proceed. but then watch what the markets do to, you know, default swaps for portugal and spain. and as long as those are under pressure, then i think you have to be cautious. >> bill, the other big focus will be what happens with that jobs report on friday? we'll get a look at what we might be able to expect at 2k8 15 though mrng when we get the adp numbers. what are you expecting on friday's number? >> i'm expecting a pretty big

number. aside from the census, which i think is going to add 70,000, 8 0,000, i think we're just on the cusp of getting around the 200,000 or 300,000 of fans here, it will be welcome. >> are you convinced this is real? >> i'm convinced this is real for the moment. it seems to me that the one consistent thing you can say about the u.s. economy is that when you knock it down hard, it comes back first. >> a lot of the strength that we've seen from manufacturing has been generated from asia. china is doing its best to tamp down run away inflation by holding things back. we saw some numbers earlier that indicate maybe it's not quite as much on fire. do you think if that slows down it comes back to roost here? >> i don't think so. i don't think we're heavily dependent on the pace of growth in asia xwra. it's a nice assist to have our

exporters doing well. but basically, i think this home grown growth. i think there's a huge inventory cycle. i think there's a huge backlog of demand from both business and consumers and i think it's going to build on itself. >> david, i guess the good news, if you're looking for something, is that the market tested new lows yesterday. but volatility is picking back up? is there anything you would ask people at this point? >> we could see a sell-off that that's this market down for its pete. so i don't think there's anything there that's telling you to do negative different except for expecting that this recovery process is role. and diversification with the

high quality portfolio is the best positioning as my colleague says, the headwinds that are out there. >> when we come back this morning, we'll head to the gulf. >> he spilled! >> are you out of practice? >> and then we'll talk about the potential impact on commodity prices. first, though, as we go to break, take a look at yesterday's winners & losers.

welcome back, everybody. we're up about 24 points above fair value for the dow futures. we have adp employment hitting the tape in less than two hours. "the wall street journal" says discussions are hypothetical, but they range from whether blank fine should re-sign to the idea of separating the chairman

and ceo posts. under one scenario, goldman ceo hank paulson would return as chairman. the journal says blank fine has the support of gold man's board and of its partners. one of goldman's biggest shareholders gave plankfein his support. >> i am talking my belief and we do have a major investment in them. if you put $5 billion in the company, you ought to feel pretty good about it and we felt pretty good about it when we did it and we feel pretty good about it now. >> do you think lloyd blankfein should continue in that job sfp. >> absolutely. i'd rather have him running it than anybody else. >> the man topic is the collapse of bear stearns. jimmy kain and allen schwartz will be testifying today. he blames that bank run as the reason things went down.

>> an hider bush inbev made more money than expected in the first three months because of rocketing sales in brazil. sales in the united states fell by 6.8%. it's all unnecessary wallpaper. >> yeah. here is a look at bud over the last year. it's done pretty well, come up from $37 to $48. >> when you first taped that, did you know it would be used five, six years later? >> i guess you shouldn't drink beer with the camera around, probably, right? >> generally in the a good idea. >> not in a man robe, either, where i'm getting my feet done, pedicured or something. >> on a more serious note, this effort to contain the massive oil spill in the gulf of mexico could get some important help by the weekend. our senior correspondent is in port fourchon with details. >> actually, i've moved up to new orleans as we continue to

gauge the impact of this oil spill, which they still have not gotten under control. the good news is that oil still has not reached the shore partly because of the disbursements that they are injecting near the source of the spill. but late last night, we get word that the unified response for the western coast of florida has been activated. that's the coast guard, local trorts and bp as they ready for the potential for oil hitting there. meantime, the ceo of bp was on capitol hill yesterday woo'ing members of congress and talking about that big containment dome that we've been talking about for the last several days that they hope will cap the spill. >> on thursday, we will bybe hooking it up over the course of friday and the weekend. this has never been deployed.

this is a technique that the industry uses often in fact shallow water, 300 to 400 feet. it has never been used at 5,000 feet. so we should not expect it will go easily. >> we know that they have a back up in place -- in case that first one doesn't work. and we were watching them building that over the last couple of days in port fourchon. as i said, we were up in new orleans as we continue to gauge the impact here. we're at the port of new orleans which has not been hit by any of this yet. but nonetheless, they are also concerned as if everyone that is either directly or indirectly affected by the spill. everybody is concerned, let me say that. there has to be a deep element of concern but it's not an element of panic. we're not panicking yet. we think with the projections we're seeing right now, the lion's share of the flow

possibly can be contained and what flow there is going more to the west -- to the east, rather, for the time being. >> and that is the hope. they, of course, had a very nasty spill in the mississippi river here in 2008, which blocked traffic up the mississippi and was a major economic impact. but they got that under control rather quickly. and so they're hope now that they have time to prepare if anything does get up here or if there are vessels that are affected that can't get up here, that they'll be able to deal with that. but in the meantime, bp is at the center of all of this. as we said, the effort to try and maintain the effort in congress and they say they are spending $7 million a day and has given $25 million to each of the states that are potentially affected by this spill and the crisis is still unfolding. guys. >> thank you, scott. here so discuss the long-term

implications for the oil spill and more, peter butell. peter, watching schwarzenegger yesterday, and saying he saw a bird on tv and then he decided to withdraw his support for some drilling, i just -- you know, we have car accidents. that's why they're called accidents. should we stop all drilling offshore because of this? >> i don't think so. i'm hoping that they're going to find a way to contain this and work on procedures that will prevent it from happening again. you know, you and i have spoken before about how the hurricanes of 2005, we had a platform floating in the mississippi. this was three years before the other spill they were talking about. and yet there was no major spill during katrina or rita that we had gustav and ike.

there were not major spills after them. so apparently it can be done correctly. >> and they didn't have what they needed, either, right? we know that the safety protocols weren't followed for this particular platform or a rig sfp. >> yeah. it seems to have been a company specific, rig specific problem president it doesn't seem to have been an industry-wide problem. and yeah, there is a great risk here that we're going to throw out the baby with the bath water. it's very dirty bath water. >> everybody that comes on and we had a congressman on yesterday, they all say the same thing. if we for for every drop of water from what you ksh. >> well, there are bigger

supplies, say, in the rockies mountains and say under the shale formations. but we don't really know because we haven't done a full round of exploration in some of these regions. so we're not completely sure. i don't think it's that small. i think it's actually quite a bit more than that. but in a lot of cases, we don't know. we don't know what's off california. we don't know what the off the atlantic. we haven't been out there exploring for i think close to 30 years. >> what do you expect the obama administration to do, play this by ear to see whether it gets worse and make decisions on whether to go back on that decision to open up some new areas or do you expect them to stand firm with that? >> well, i'd like to see them, run, continue to keep an open mind on it. but i think he's under a lot of pressure from his base at this

point to capitulate and say, that's it. but if we're going to have an energy policy that's going to last, it has to be bipartisan. we have to have everything the republicans want, everything the democrats want if we're going to get anywhere near energy security. and we need to have something that can last through different administrations. so that, to me, is what is really very important here that's being lost. we know the republicans are a key of drilling. >> that's, peter putell. we're going to kul you from now on p.b. >> that works. that's what they used to call me. >> pb and j. >> are you on board? >> oh, no. i wanted to call him bp until they insisted that we not call them british petroleum.

they called our news desk and folded. >> well, they folded and -- >> it's the name of their company. >> no, they can't -- you don't know it's appreciate petroleum? >> i'm not saying it's a marketing boost. what they call their company is their call, not yours. >> but he kaels you carlos. >> oh, and that makes it right. >> this company wanted you to call them british petroleum. they change their name to bp. >> this is like my brother wanted to be called robert, not british to roll yumm. >> right. petroleum, spilling, and more

ground needs to go to the s&m place. your pr campaign is not working. i'm sorry. >> wheels on bus. >> never show what bothers you. that's a sure give away, especially for him. >> anyway, coming up, from commodities to currencies, the gulf coast to greece, the stories that are driving the global markets this morning. "squawk box" will be right back. with an a+ credit rating in good times and bad, sun life financial should be famous. we're working on it. so you're seriously proposing we change our name to sun life valley? do we still get to go skiing? (announcer) sooner or later, you'll know our name. sun life financial.

good morning. welcome back to "squawk box" here on cnbc. i am joe kernen along with becky quick and carl quintanilla.

i mean, british petroleum is better than broken pipeline, the viewers are writing in. are they sure they want bp? they're positive? okay. still to come this morning, one of the neigh's largest home builders joins us to talk about his company's quarterly results. and the health of the nation's housing market, richard dugas, the ceo of pulte group. well get to the markets in just a moment, but first, let's take a look at this morning's headlines. time warner reporting a quart quarterly adjusted rate of 61 cents a share, better than expected. progress is being made on financial regulatory reform been but there's only a little bit on progress at this point. dodd and shelby agreed on a too big to fail protocol, but the senate adjourned without casting

votes on any amendments, as had been manned. and microsoft's efforts take a stop forward today. verizon wireless will unveil their first. >> and let's get to the cme with yra harris and boris schlossberg. good morning. >> good morning. >> yra, a triple digit move in either direction. what i'm always reminded of is if you watch a spill about to take a spill on their bike, at the last second, they'll start turning their handle bars more and more in an attempt to delay the crash. is this volatility that trouble is still ahead? >> yes, carl, absolutely. most of the troubles that we've seen over the last three years are the impact of credit crises. we're in a credit crisis now

emanateling out of europe. the credit issues ultimately become solvency issues. >> so do you think we are in a debt spiral here or does the relatively modest change in corporate spreads here signal to you that this is not going to be a problem staid stateside? >> wbl it's not the issue of the corporates. the corporates are doing very well over here. of course, it's the issue of the sovereign debt. it will be a problem. it has to be a problem. everybody talked about when the united states entered this and then the contagion spread overseas. now we've got europe, which is every bit the size of the economy of the united states and as their contagion down turns database if they're not halted. >> like? >> oun what is missing is the

russians. the russians do so much of their energy in europe, why are they missing from this? and the imf is sitting on a horde of goeltd they're always talking about selling off. i would start issuing some euro-based bonds and put that gold back to work. if i can do those bonds, basically they're converting. let's say they yield 3%, which would drive rates down in greece and some of the other peripherals, backed by the imf gold hold. and if everybody was sooerus about the undertaking to cure the illnesses over there, i think that would be a pretty good use of ta geeld horse. >> do you think there are issues we haven't thought of or is this a simple matter of any bet peeg wonder than anything else. the greek situation was basically a knew sabs for the eu

if they had kin taken care of it when i was a it is 30 billion issue. now, the italy, france, have to trade a key issues. we need to spas pie the credit market. until those credit spreads start to come down. until those spreads start to come down, through really stands under pressure. >> so what is capable of getting ahead of that train, then, boris? >>el with, i think at this point we're caught in a vicious cycle. the first thing we need to have is have a mishans change this dealing. they're wonning, are we throwing good money after bad. they will kraet a bit of a

relief rally and push it back to 40. >> on you down site region are you talking about 120 or tsh. can had no. you think a realistic down to the is 120 to 125. the idea ovd whole thing is that the lower euro is helping core europe tremendously. and on the economic front, tier doing quite well. so i think in the long run, this is relatively healthy for them. it's simply a question of confidence and they simply need to be able to pacify the markets for the time being. >> we know all about that story here not too long ago. yra, boris, thank you very much. walk to you later. come up, we've got irnlings, the outlook and rebuilding a

battered sector. "squawk box" will be right back. gecko: uh, you wanted to see me sir?

boss: come on in, i had some other things you can tell people about geico - great claims service and a 97% customer satisfaction rate. show people really trust us. gecko: yeah right, that makes sense. boss: trust is key when talking about geico. you gotta feel it. why don't you and i practice that with a little exercise

where i fall backwards and you catch me. gecko: uh no sir, honestly... uh...i don't think...uh... boss: no, no. we can do this. gecko: oh dear. vo: geico. fifteen minutes could save you 15% or more on car insurance.

welcome back. one encouraging economic sign at the high end of the spectrum, a picasso painting not seen in public for 50 years sold for a record $106 million at christie's last night. it was bought by an anonymous buyer and was the top seller. it wasn't too long ago we were

talking about pp -- remember the blonz bronze statue, the walking man. >> yes. >> this was a record for any piece of art. >> really? >> i thought the walking man went for more. >> i liked the walking man. >> you did. >> it was skinny and weird and you could put i anywhere. if someone walked in your house, they might notice the picasso, but i think i could have done the walk man. >> i think it was modelled after you. >> you know, i think the camera -- >> it adds ten pounds. because you're not that fat. >> 195 can't by that -- >> stand up. there you go. >> mac -- >> actually, show them the rear.

that's the best. because us really don't have a rear. there you go. >> i am not that fat. am i fat? no. no answer. people love -- and i always say, please send me a picture of you, you know? >> no, you're not. you look great, really. >> you don't need to say that. >> no, i'm serious. all right. pulte group is out with first quarter results this morning. the company is reporting a loss of 3 cents a share. that is a smaller loss than the street was expecting. but the company says it is not in a position to turn profitable for 2010. richard, the chairman and ceo joins us now. what you're taking and where you stand seems to be stabilizing. is that the case? >> is that is the case.

we're in a condition to suggest the trends will be more positive this year. >> there are several things happening, including that ex operation of the tax credit that could make it rocky for the next few quarters. >> that's true. the tax credit has been helpful in bringing down the foreclosure market. we are hopeful that we will not see much of a post credit hangover, so to speak. however, overall, we're monitoring the situation, but we like what we see at this point and, therefore, our forecast for a better rest of the year. >> revenue for home sales was up by 73%. that's a huge jump off of last year. but where does it stand, let's say, off of three years ago. >> becky, it's off substantially from three years ago. 40%, 50%. most of the game that we have posted is as a result of your

combination with syntec. we are now attempting to be the nation's first multi buildel home buy er ford busyness. >> and pulling all these groups together, how is it going so far? >> it's going fab julsly. we are extremely pleased with how it's going. we're ahead of schedule. we've taken out more costs than we expected at this time and frankly, we're operating as one company. >> i noticed that the cancellation rate for new home orders is about 18%. that's dounl from a year whack but what's the normal rate. >> normal rate for us is about 20%. so we feel pretty good about the cancellation rate. come off the the two or three years of continuous down, you know, results, we have seen a real stability in the market overall this year. and feel very good and

reasonably comfortable with where the market is today. >> richard, walking these cycles, and we've been told now companies know how to fix that. but it seems like that's you go from an area on your school then you write often the lauf you think it will never be sure for what was developed. where are we in that point right now. >> you know, joe, land is incredibly down from where it was. you are right, the industry is incredibly cyclical. one of the reasons that drives that cyclelty for home building is that municipalities individually control the way land is processed through the country. there's no national land approval process or even state approval process. so whenever business is good, it is very difficult to bring

enough lots online in order to meet demand. and then when business gets difficult, you can't led quickly enough. so having a large balance sheet is kit kral lull enabled. our fraindustry needs to avoid many problems as it might have otherwise had. >> richard, we want to thank you very much for joining us today. appreciate your time the. >> thank you. when we come back this morning, a trip to the chairs. we'll talk about some of the today's eye popping headlines. then we'll goat full span on a look at the market. the need that are in focused been still ahead.

♪ do a little dance sun life financial has never taken government bailout money, yet no one knows our name. ♪ get down tonight that's about to change. so you'll pay for the tour, but i have to change my name? no, you're still kc, but from now on, they will be the sun life band. it's funky. sooner or later, you'll know our name. sun life financial.

♪ welcome back my friends ♪ to the show that never ends ♪ we're so glad you could attend ♪ ♪ come inside come inside

all right. we are in the "chairs." baseball season is up and running, but it's got some controversy starting with a game that happened in philadelphia on monday night when the phillies were playing the st. louis cardinals. a 17-year-old fan, which you may have heard of by now, steve, a high school senior, ran out onto the field and was deterred by that official using a taser, which is now -- >> down! down! >> which has now sparked once again the debate of how much force you need to maintain order at a sporting event. the aclu is out this morning saying it was an inappropriate deterrent, citing statistics that according to amnesty international, between 2001 and 2008, there were 334 deaths by taser. >> 334 deaths? >> and it was a deadly force to subdue steve. >> age-old question about taser. when we used to follow it closely in the days of the

taserians where they were almost as obnoxious, the shareholders, when the stock was at $34, but it had a huge market cap. and every single time one would be used maybe on someone who was highly intoxicated or a drug addict or something and they'd die, they'd go into an investigation. we'd wait to see whether it was related to the taser or whether it was something else. and at this point they're used almost universally in police forces, are they not? >> yeah. >> i don't know whether the cause and effect has been proven for the 350 deaths that were caused by the taser. what is it with phillies fans? >> that's a different story. >> a lot of people say they should be tasered at some point. are they really obnoxious? >> it's not just phillies fans, it's philadelphia fans in general. these are guys who threw snowballs at santa claus. >> remember how tough it was to play at veterans stadium?

>> isn't comcast philadelphia? they're the finest fans in the world, aren't they? they're wonderful people, in general. >> gentile. >> flyers fans are different than eagles fans. >> didn't rick sanchez -- >> he did. >> he did that to himself. where is he now? he's been around. see, a lot of times when i say things, i don't have an excuse for saying things. with sanchez, i look add him now and go, you know, he tasered himself. i can explain why he's like he is because he's never recovered from tasering himself. so i should do that just so i can always -- >> would you actually do it here on set? >> no, i would not. no. no. >> would you guys like to see that? >> no, no, no. no, i will not. the only reason i would was so i could blame all of my just ludicrous -- >> do you think you can control your bodily functions when you get tasered? >> i've never been tasered. you mean more than i have already? so being tasered is like being over 50?

you lose control of your bodily functions? >> maybe becky and i can just pack some heat one day, so to speak. >> i'm not going to let you shoot me. >> i already shot you. i know you have the mark on. >> i still have a permanent scar from where you shot me with the paintball gun. it looks like a cigar burn on my thigh. >> you wonder why you can't be in combat. it's like the enemy troops will come along. you go, oh, don't hurt me. i'm a girl! >> you made me bleed! >> you were on the opposing side. i think i was fighting with gasparino, wasn't i? we had to fight to the death. >> we've got to done that again. when we come back, we'll talk about the jobs trade. two major reports ahead of the friday big-government release. we'll talk about challenger at 7:30, adp at 8:15, set to hit the table and get the numbers and instant analysis. plus, devon energy in the wake of the bp oil spill. as "squawk" continues.

>> oil spill, british petroleum. with expedia, i can choose from more hotels for my perfect girls' weekend. plus i can compare dates to find out when i can save the most cash. done and done. we should do this more often. where you book matters. expedia.

volatility spikes as the market sells off. a new round of fears spreading through the markets about the european debt crisis. is your money safe? we ask the top market professionals about recent moves and what you should be doing with your portfolio. plus, a primer for jobs friday. the challenger and adp jobs reports give us clues as to where the government's number will fall later this week. and the gulf oil spill

spreading to coastlines and the markets. the ceo of cargill, the nation's largest privately held company, on the impact on agriculture. and devon energy ceo on how this environmental disaster will change the face of the oil and gas industry. as the second hour of "squawk box" begins now. good morning, everybody, and welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and carl quintanilla. we have the ceo of devon energy and mary landrieu of louisiana. both of them will comment on the oil spill in the gulf and what this means. then the ceo of cargill, the nation's largest privately held company, the ceo has a bone to pick with congress over derivatives. we'll be talking about that. plus we'll get his outlook for

the economy. first, let's look at this morning's top stories. >> yeah, futures a little higher than you might have expected after yesterday. look at that. we just lost quite a bit of ground in the past few minutes. i guess continued weakness on contagion fears out of europe after the dow lost 225 yesterday. those efforts continue to fight the massive oil spill in the gulf of mexico. efforts have been helped by pretty good weather, and bp expects a giant steel containment device to be shipped to the site today and to be operating sometime in the next week. ex-bear stearns ceo jimmy cane, allen schwartz will testify before the inquiry commission. they'll talk about the collapse of the firm was due to, quote, overwhelming market forces. and figures just in from the mortgage bankers association show mortgage applications rose by 4% last week. just had richard degot from polty on and whether or not they can smooth out this cycle that's coming up, too. >> polty group. >> it was polty homes until a

month ago when they changed it because of the acquisition. now it doesn't mention home or home builder or anything at all in the name. >> i remember bp used to be something before, but was it big polluter? what was the old name? >> british petroleum. >> you're not allowed to say that anymore, so you can say anything. someone came up with big polluter, bayous polluted. >> so if they don't want british -- if they really don't want us to remember, people will come up with these others ones. i would rather go with the british petroleum. you're in britain and you produce petroleum. is that that bad? markets looking for a boun bounceback. with us, chief market strategist jim paulson of wells capital management. jason trenert of strategus research. >> that's a first.

>> economic strategist dan greenhouse. welcome to one and all. wow, look at that. that's a good-looking group. paulson, i need you because a couple of things that happened. number one, greece has gotten out of hand. we had a horrific day yesterday. and e.s. browning at "the wall street journal" said this market's got a long way to go, after having written a dozen other pieces how it's due for a pullback. so there's a lot of negative things hitting the mark. are you still okay? you still sanguine? >> i am pretty much, joe. i think that -- i think this european crisis eventually will be contained. i think the wherewithal is there in the region to do that. i think politics keep interfering. but eventually i think it will be contained. i think in some ways, we had a huge run from the january lows, market's vulnerable. we had optimism turn up. you have wall street strategists upping their target prices. >> it's all bad things.

>> you know, yeah. and so maybe this is what we needed to refresh that. we check optimism a little bit. gas at the pump here in minneapolis was closing in on $3 in a couple weeks it's going to be back at $2.69.9. maybe some of the things, the ten-year treasury was closing in on 4%. now it's 3.60. it's kind of a refreshing pause along the way. the key will be if we can resolve europe. >> i'll go to jason. jason, here in the u.s., we can always print dollars. obviously, long-term -- the inflationary, but can europe get a handle on this situation? there are some people that don't think that that's just a given that they can. others think this is the entitlement state, the entitlement state model coming home to roost. and that that needs to be fixed, and it's a problem.

>> i think -- joe, i think you're right. i think in some ways it foreshadows some of the problems we might have here longer term. i think in the shorter term, one of the ironies about the european problem is that it's probably pretty good for the u.s. to the extent to which the u.s. is still the reserve currency, at least for now, and it probably keeps our long-term interest rates lower, takes pressure off the fed to try to tighten sooner than it would. and most of the debts within europe are owed to each other. so, you know, i don't see it having a really big impact on the u.s. mainly because the cyclical forces in the states are so strong for maybe the next year. but i do think clearly, you know, if savings equals investment, which you were taught in college, you know, it's hard for any government to run massive fiscal deficits and not have it result in economic pain in some way either through higher long-term interest rates or taxes. i don't think it's here just yet. >> and dan, in the ebb and flow

of market psychology, this plays into your long-term sort of viewpoint that there are still things -- structural things that are problematic around the globe. and now it's rearing its head again. >> well, first of all, let's be clear about something. sovereign debt crisis. if ken rolloff has taught us anything over the last couple years, it's that sovereign debt crisis always follow credit crisis, financial crisis of these types. so to see issues in greece, a nation by the way which has been in some stage of default for basically 50% of the time for the last 200 years, shouldn't really be surprising to anyone. i would actually like to somewhat echo some of the points already mentioned in the fact that i think greece by itself isn't necessarily a big problem. it's a relatively small economy. but, of course, the issue was never greece. it was always going to become eventually spain and then italy. and as long as the eu, which i would argue they have not yet, but as long as the eu shows the wherewithal to jim's point to deal with this crisis, i think they can quote, unquote, contain

it. the longer-term picture, though, for a lot of these states is, at best, questionable. >> why? >> you know, to the joke that you just made a second ago about this being the entitlement -- >> that wasn't a joke. not at all. i mean, do you think it's funny? >> i don't think it's funny. >> do you think it's -- there's no validity to the comparison? >> that that's the entitlement state? >> the entitlement state model in europe that you can't spend and spend and spend and spend. and look when you try and take it back from the unions and greece. >> your point, i mean, if the financial crisis was a global earthquake, their building codes were shoddier than ours, right? their economies don't bend and sway the way ours does. >> and to your point also, you know, this is the moment when you, as a sovereign nation, would devalue your currency to sort of let off some of the steam as your economy adjusted to the downturn and, of course, greece can't do that. with a debt to gdp ratio at

125%, it is constrained. i would disagree with jason how this might foreshadow issues in the united states. certainly we are in favor of smaller government spending, a smaller entitlement state. >> who's "we"? >> those of us on the set. >> oh, okay. >> the four of us. >> when you say all of us, if we go -- >> the four of us are in favor of a smaller public sector. >> but if you go beyond the set, definitely not sure that the government is sure that that's what we want. >> we can check with the cameraman, but i would assume everyone in this room. let's just be clear, there is no research that links higher levels of fiscal spending in developed economies and some sort of bond market crash. it doesn't exist. >> i have to say, and i respectfully disagree there. you're looking at a deficit as a percentage of gdp on a cash basis last year which was 14%. $1.9 trillion if you didn't count t.a.r.p. as an asset. >> and coming down. >> well, it will come down to

maybe 10% of gdp which is something that's much higher than anything we've seen since world war ii. unfortunately right now we don't have the benefit of having wiped out all the world's productive capacity to make it up. you know, this is clearly an unsustainable fiscal approach that we have. and it's hard to see that not resulting in higher long-term interest rates or magnificently higher taxes. you know, this is something -- the u.s., obviously, as a reserve currency has a lot of flexibility to reserve keynesian policies, but it's not a blank check. i think that's part of the reason why gold, until yesterday, was really rising in all currencies because there's a lot of concerns about currencies globally. >> paulsen, how do they deal with it? why are you so sanguine about the ability of the euros to get their arms around this? >> well, i think one thing that's interesting about this, i think the greece debt-to-gdp

ratio, when this started, was about the same as it was in the 1990s. i think, again, this is like the united states running the bank stocks in march of '09. it's more of the cds trade than it is about the fundamental solvency of greece or europe. i mean, the fact of the matter is, there's plenty of wherewithal within the european union to backstop this. still is now and has been all along. it's more about politics of germany and others waiting, trying to get the greatest conceptions out of greece and maybe embarrassment. there's a lot of rich brothers and sisters around that can stop this contagion and we can move on to the next armageddon crisis. it's not all unrealistic or uncommon to have crises sort of mini-crises after you have one. in the early 1980s, the '80, '82

crisis, we had states and cities that had financial problems all through the 1980s. we'll probably have some of those issues come up here in the united states again. but i don't think that that that's a really big risk of bringing down this recovery. the greatest news for greece and europe is that the economic and earnings momentum about the globe is pretty fantastic, and it's getting stronger and stronger. if you're going to have a debt crisis, it's a wonderful time to have one when the momentum and the world economy is growing as opposed to coming down. this would have been much more serious in the '07/'08 era than it is today, i believe. i think it keeps -- i think it keeps dodging our attention, which is what we've been doing for a year. the big elephant in the room is that the economic and earnings momentum is -- continues to be far better than people think. and that keeps running over our worst fears. and i think that we ought not lose track of that. >> you talk about having rich brothers and sisters. it is possible to have a rich

brother or sister who finally says, i'm not carrying you anymore, right? i'm not going to loan you any more money. >> i think so. i think so, carl. that's a possible outcome. i guess we could go down the road of exiting greece from the european union, but i think that that really is a big risk for those members. i think, you know, they got a lot of skin in the game. you can decide to exit greece, but if you're germany, you're sort of cutting off your nose despite your face, and i just don't think they're going to go down that road. >> i don't think the greeks want to do that either. >> you mean leave the union. >> leaving the eu is a big deal. >> yeah, but what about germany? >> i don't think germany's leaving the eu either. >> i don't know. they're not happy. >> leaving the eu entails two primary problems very quickly. the first of which is everybody who owes you money or is involved in a contract with you is going to have to rewrite that contract in a different currency. if you're greece, the

expectation will be that you're leaving in order to devalue your currency. that will have an effect, obviously. there are broader works. there are broader things at play. i would also quickly add to jim's point, let's be clear. these types of crises happen all the time. and you could run down the list. you had the scandinavian crisis in '91, japan in 1990. argentina, asia, '87, brazil, '99. this happens all the time. especially greece. >> the sovereign nations, not to something that's been pulled together like the eu. this is a brand-new conflict for the eu. >> but a single nation having some sort of a crisis akin to what greece is having right now happens quite frequently. as much as joe yells at me, is a nation defaulting. >> when i'm totally serious, you call it a joke. i do make some jokes, but that was not a joke. >> that was the wrong word. fine. greece is the entitlement state. we agree. >> well, no, europe is the entitlement continent, right? >> i have clients in europe. i plead the fifth. >> that's awesome. >> that's what it's all about.

some days you need to come in and say what you mean and not care about your client. >> yeah, fine. one day. >> thanks. jim, jason, dan, thank you. yesterday we had three guys on, we called them the three amigos. that should have been today. >> should we do the mariachi music now? did they do the cough thing? >> none of those guys were spanish, right? >> el guapo was. >> you were in colorado. >> i was. this past weekend. close to arizona. >> right next door. what if you just -- i mean, you thought about that. >> i would have had to do the show from tijuana. any comments or questions this morning, drop us a note. our address is squawk@cnbc.com. when we come back, the ceo of devon energy will discuss the gulf oil spill. its effect on the industry and what it means for drilling. the company also out with quarterly results. a lot more "squawk" continues in just a moment. time now for today's "aflac

trivia question." the cinco de mayo holiday commemorates the anniversary of what event in mexican history? the answer when cnbc "squawk box" continues. aflac is not how do i fit it in my company's budget insurance. aflac is help protect and care for your employees at no cost to your company insurance. with aflac, your employees pay only for the coverage they want or need. and, the cost to you - nothing at all. if all you know about us is... duck: aflac! ...then you don't know quack. to find out why more businesses provide aflac, visit getquack.com.

♪ now the answer to today's "aflac trivia question." the cinco de mayo holiday commemorates the anniversary of

what event in mexican history? the answer? the mexican victory at the battle of puebla. >> aflac. >> devon energy out with first quarter results just a few moments ago. earning $1.85 a share. when you strip out items, that was well above the $1.47 the street was expecting. joining us is larry nichols, chairman of the american petroleum institute. and larry, the numbers are better than expected. what happened here? >> we just had a good quarter, good operational quarter, all the prices are higher because of worldwide oil demand and just operational success. costs were down way below our forecasts. we're doing a good job of controlling lease operating costs and g&a. >> oil prices have come down. yesterday they were down about 4%. down another $1.30 this morning. what's the concern here? part of is it the dollar strengthening because of concerns in greece.

do you think that is the trend that's likely to continue, or do you expect to see oil prices remaining above $80? >> yeah, above $80 is certainly what we see. the situation you've been talking about earlier in the program in greece is, of course, a driving factor and concern about the worldwide economy. but a lot of the strength of oil prices are driven by the economy in the far east in china and india and places like that. >> i know that devon is selling off its gulf of mexico assets, but the oil spill in the gulf is a huge, huge issue for the entire industry. what kind of setbacks does this mean, larry? >> well, it is a tragedy. whenever there are human lives lost, whether it's in an offshore accident or whether it's in driving cars, it's always a tragedy that anyone has to pause and think about how we can -- we do it safely. long term, our country gets 30% of our oil from the offshore and 25% of our natural gas. so after all the emotion -- understandable emotion of this accident calms down, we're going to still be producing those wells, we as an industry, and

are going to look at that as part of our overall energy supply. >> larry, yesterday we had a congressman on who said if we developed all the oil offshore, it would serve our needs for one month. those are the figures that are thrown around. you just said that 30% of what we get comes -- what -- 30% of the oil that we produce domestically comes offshore? is that what you meant? >> thaert's right. no, 30% of the oil we produce in the united states comes from offshore. 25% of the natural gas. you know, you can look at any individual segment of any of our energy supply, whether it's wind or solar or coal or nuclear or natural gas or oil and say that standing alone only produces a little bit of our overall energy consumption. and using that rationale, you'd shut down all sources which makes no sense at all. >> you mentioned driving a car. schwarzenegger on. he said i saw a bird on tv. i'm pulling my support for this offshore project. i just wonder if you saw a bad accident where there was a loss of life, i mean, you don't say

no more driving cars, right? this was an accident. maybe there was some safety issues where they should have had some of the equipment on this platform or this rig that they didn't have. but you don't all of a sudden just never drill offshore again, do you? that's not helpful, and it makes me think the president will probably -- >> it's not about never drilling offshore again, it's whether or not you want to do more of it, right? >> right. well, we just opened up a lot of areas. >> no, we didn't. they pulled it. >> larry, don't you think -- does the president fold to the same type of pressure that schwarzenegger folded to? >> i have no idea what the short-term political ramifications and policymakers are going to do. if you look at it long term in a more mature and sensible way, we need all the sources of energy that we can get. and all of our offshore is clearly a part of that. even though devon is exiting because we see, for our company, for devon, better returns and a better diversity between oil and

gas in our on-shore north american both in the u.s. and canada properties. from a country standpoint, offshore is clearly going to remain a part of our energy supply. >> larry, what's your best guess as to what happened? >> i have no idea. you know, this has never, ever happened. the industry's been out there 60 years. preventers have never failed like this. i have no idea what happened. it's unprecedented. i'm sure bp will get to the bottom of it and figure out what happened so we can fix it. >> all right. larry, thank you very much. it's great talking to you. we do appreciate your time. >> thank you. when we come back, we'll get a check on the markets this morning after yesterday's big selloff. also challenger's coming out in eight minutes' time. later on, gregory page of cargill shares his thoughts on the ag market and the possible impact of the gulf oil spill when "squawk" continues on this wednesday. as we head to the break, here's a look at the widely held stocks.

over 20 million customers have put their faith in sun life financial. we should be a household name. and we will be. so you're suggesting that we change our name from florida, the sunshine state, to...? florida -- the sun life state. the posters will be so cool. sooner or later, you'll know our name. sun life financial.

talk about wile wild ride on wall street.

the volatility index up more than 20%. jessica is at the cme group. jessica, good morning to you. >> reporter: good morning. thank you for having me. >> do you think we've seen the last of the spike in the vix? >> no, i do believe that, you know, if we look back to what happened back in january, february when the s&p corrected to about 1050, we did see that vix edge higher for the duration of that correction. and i think that as long as the euro continues to collapse, we'll probably see a continued correction in the s&p and also upward movement in the vix. greece right now has eclipsed everything. if you pile that on top of policy, tightening in asia, i think it does create the perfect mix for continued pressure on the s&p. >> that means we're sort of victim to the calendar that is in germany, i guess, in this case, right and whether or not they can make this thing quote, unquote, official. and after that we can worry about whether or not the medicine is worse than the illness. >> most definitely. the headline risk in the next couple of days is huge. you do have the elections in

germany on may 9th. we have the ecb meeting tomorrow. it looks as though the ecb, given the -- i would say the panic in the environment may have to, you know, reopen those long-term refinancing operations and going back to the election in greece, you know, the political will to get this package passed through parliament is strong, but the people don't want it. you know, i think actually the feelings are pretty mixed. you have some german officials actually talking for the dis -- >> disillusion of the union? >> disillusion of the union, exactly. and i think given that comment on the back of angela merkel expressing her confidence in germany passing the package in greece kind of eliminates all the benefits of germany passing that package. >> jessica, it's been pointed out that some of europe seems to be moving away from socialism as some people here say we're moving towards it. i tried to maybe tie some of the problems they're having to entitlement states, too many

entitlements or whatever rigid labor rules that you want to talk about. does that have something to do with this situation, and who is the paragon for the free market over there? is it germany? >> well, i think that, you know, i completely agree with you. it's very ironic that as we continue to move further left in our politics, europe is forced to move further right. i just believe that culturally in some of these mediterranean countries that doesn't seem to be favored because the government has been supporting these economies for so long. >> life is pretty good. in greece and italy, i'm telling you. >> not now. >> no, it's still pretty good. >> not now. >> it's sunny and there's olives. you know, things don't work quite as well, but it is pretty good. i mean, i could see -- >> yeah, strikes are a lot better when there's olives, that's what i've heard. >> i'd rather stay home than go to work in a lot of those countries. who wouldn't? the lifestyle is fantastic. >> yeah, there's nothing to do but work in chicago when it's snowing. well, what am i going to do?

sit at home? watch the snow? no. exactly. >> hey, c'est la vie. >> thanks, jessica. talk to you later. >> thanks a lot. have a great day. >> if you have any comments or questions about anything you see here on "squawk," e-mail us at squawk@cnbc.com. when we come back, the first of two data points we're expecting today about jobs. the challenger jobs report is coming up next. (announcer) roundup extended control does two jobs... at once. one: kills weeds to the root. two: forms a barrier, preventing new ones for up to four months. roundup extended control.

welcome back, everybody. wall street has its sights fixed on friday's jobs report, but here first on cnbc, weaver got the challenger jobs report. joining us now is john challenger, ceo of challenger, gray & christmas. john, the numbers look the best like they've looked in many years at this point. what do the results show you? >> we saw over 38,000 cuts this month, becky. you're exactly right. it was the lowest monthly total we've seen since july 2006. that's before this latest recession started. in fact, it was the lowest first quarter we've seen, over 181,000 cuts in the first quarter, since before the dotcom recession. >> it looks like the retail sector had cuts but not nearly as many as we'd seen before? >> well, compared to last year had we saw over 80,000 job cuts

in the retail sector, in the first four months, we're now down to just over 20,000, a quarter of what we saw last year at this time. >> john, does this tell you that there aren't as many jobs to cut because employers have already cut to the bones? you've got productivity numbers that have been incredibly high, or does that tell you that hiring is about to come back, job hiring, net highring is arod the corner? >> no question that productivity has been high. companies to hone their operations to get the most out of their people. they're very -- they're tuned up. at the same time, demand is growing. financial service is interesting. we saw the most job creation announced in that area in the month. in many ways they overcut. they cut so deeply that now as business returns, they're having to staff back up. maybe not -- certainly not to the levels they were before. but we are seeing hiring gains

there. >> financial services? >> amazing. >> you're seeing some jobs there. we'd better take care of that. we'll get this fin rate through hopefully, and maybe we can cut off any of the new jobs there. we've got to do that quickly, john, before we add too many. >> well, you know, certainly, you know, the financial sector has been buffetted. >> you're doing a little bit too well. they got bailed out, and here they are doing well again. we can put an end to that. >> wall street greed? >> yeah. there will be no more -- no job additions coming there, carl. >> john, i noticed the government numbers showed the biggest declines. almost 15,000 cuts in the government sector with nonprofit. that may come as a surprise. is that state and local governments that are chopping? >> it is. heavily in state and local. they have to balance their budgets. almost every state is in deep trouble. they're cutting services, and that means job loss. so it is the heaviest sector

cutting jobs. almost 15,000 so far -- well, 15,000 this year and over 76,000 so far this year. >> all right. john, thanks for joining us. appreciate it. >> thanks for having me. >> meantime, the louisiana coast suffering from the bp oil leak disaster in the gulf. joining us from washington with more, democratic senator from louisiana, mary landrieu, member of the senate energy and natural resources committee and the homeland security and governmental affairs committee. senator, good morning to you. >> good morning. >> the latest update we're getting is that the winds are pretty calm, right? currents relatively calm, giving some of the workers down there some tailwind here, so to speak, but that's not going to last long, right? >> well, it's a very difficult situation under any circumstance, whether the seas are rough, there's some advantages and disadvantage to that, or whether they're calm. but the point is is that we have got to close and plug this well. it is a highly technical, very difficult situation. not only is bp doing their best, in my view.

now, they always can do more, but the entire industry is lending their expertise to get this well plugged. and the government, federal, state and local, have thousands of people on hand helping. so we've got to plug the well as soon as we can. there are techniques to do that. hopefully one of them will work. many are being tried. then we've got to keep that oil off of our shore and clean it up if it comes ashore. >> are you hearing from bp that this is a matter of weeks or months? >> yes, i've been hearing from bp since the day this accident started and from many other individuals because i've been very focused on it, as you can imagine. no one is exactly sure how they can get this plugged, but they do have some reasonable beliefs that it can be plugged by drilling another well which will take some time. they believe that this dome that they're putting on the oil today or over the next couple of days can try to trap it and get rid of it before it comes to the

surface or disperses to the bottom of the sea level. we hope some of those will work. but we've never had a situation like this. we have drilled 100 deep wells a year in the gulf for the last decade. that's over 1,000 wells deep just like this. none of them have blown out. so this investigation is going to go on for a long time. we need to make sure we understand what happened, put the pause button or the yellow lights flashing, not red, not stop, but learn from this lesson and go forward. >> you've been pretty outspoken the last couple days about how this should not be the end of offshore drilling overall. how much pressure is the white house under now after apparently losing governor schwarzenegger's support to reverse the plan they unveiled a few weeks ago? >> well, the president's under a tremendous amount of pressure, but i want to thank him and his team for being on the spot. they have had any number of conferences and meetings with local officials. it could have been improved a little bit in the beginning on communication, but the president

understands that this country uses 20 million barrels of oil a day. 20 million barrels of oil a day. that's what we use to run this economy. it's what keeps the lights on here in washington, new york, chicago and everywhere else. and offshore drilling has been an important part -- in fact, a significant part -- of the domestic production. so the president is absolutely right when he says we can't do without it. what we need to do is make sure we do it right. >> right. >> and that these companies are being held to the highest ethical and environmental standards, and that's what i hope we can do. >> speaking of which, "the washington post" says that the interior department exempted bp's gulf of mexico drilling from a detailed environmental impact analysis last year because they did some reviews, and they concluded that a massive spill was unlikely. do you think that interior or other regulators were the ones who fell short? >> well, we shall see. i read that report this morning, and it's very, very troubling

and concerning. so we'll have to look in the details. but again, remember, this is one well out of 1,000. the other 999 have been drilled successfully or producing oil that this country needs. even as we transition to cleaner fuels, natural gas is cleaner, wind is cleaner, solar is cleaner. but that is going to be investigated fully. you can rest assure that. >> one last question, a lot of concerns about the so-called loop current. once the current picks up, it's possible, if you talk to some oceanographers that this oil or some sort of sheen could wind up in south florida or miami or even some parts of off of north carolina. how realistic do you think that is? >> well, i'll leave that up to the scientists, but what i will tell you is one of the first bills i introduced when i got to the senate was called the conservation and reinvestment act. that recognized that offshore drilling is not only an immediate threat to the states in which it is off the shore because texas and louisiana have

the most experience with this, but i suggested that other coastal states, whether they drill or not, should use some of these resources to support their coastal activities, to make sure their coastal economies and their economies are strong. we came very close to passing that bill. and i'm going to file it again. because it is very important for the states of louisiana, mississippi and texas to share in the government -- the taxes that are paid to the federal government. none of those taxes come to the state of louisiana, mississippi or alabama for that matter. and none of them go to the other coastal states. so whether you drill or not, you have some risks associates with offshore drilling. of course, the states closest have the most. >> senator, you've got the eyes of the nation watching your state's coastline. >> thank you. >> we wish you the best. >> and we thank all the people for their help and support and the many volunteers coming down to help the gulf coast. >> senator mary landrieu, thanks very much. all right. up next, financial reform is not only a worry for wall street. food and agricultural giant

cargill has big concerns about finreg as well. gregory page will join us to talk about why the overhaul could mean very big changes for his company's risk management strategies. "squawk box" will be right back.

financial reform debate is officially under way in the senate, and it's not only the banks that are closely watching. derivatives regulation could also mean big changes in risk management for those in the food and agricultural businesses. joining us for an exclusive is gregory page, ceo of cargill. mr. page, it's great to see you. we had warren buffett on the other day and kip vaughn kept bringing this up from missouri. not just agriculture but power companies. a lot of corporations effectively use derivatives in their businesses and save a lot of money by using them. is it really possible that those type of companies would be affected in the current bills pending? >> there is that risk. we are concerned that a one-size-fits-all approach could harm farmers, exporters,

manufacturers like ours. and the regulations that are aimed primarily at financial firms and banks, if not well crafted, could lead to a reduction in our opportunities to mitigate our risks. >> i guess if you were to make banks or financial institutions spin off their derivatives into a separate company, that wouldn't be directed at hedgers. it would be directed, i guess, at the more problematic derivatives. but if the business dries up or were to move offshore or something like that, that could eventually end up affecting you even though it wasn't intentional. >> certainly if we lose liquidity in the futures markets and in the counterparty markets that we have to shift our risks, that would affect us very directly. and it would affect the customers that we serve as we work with the restaurant to protect its menu board or a farmer to protect his input costs, the lack of counterparties for those hedges could drive our costs higher and make mitigating the risk all across the food and ag chain more difficult.

>> so how have you made your feelings or your opinions known? through lobbyists? through -- are there individual senators that you've talked to? are they listening? >> yes. they are listening. and we've received a lot of support. i've made a number of calls. i'm here in washington this week and have made a number of calls both to the department of the treasury and also to the cftc. we're also calling our legislative delegation. our efforts, obviously, are more focused on the senate agriculture committee at this time, but we've received a good ear from others as well. >> yeah, mr. page, i was going to ask you whether or not you've heard from senator lincoln herself. there's -- you've had some friends over at treasury who feel the way you do. even sheila bair thinks maybe the derivatives measure is a bit absolute. is there pressure against senator lincoln? there are others who say it's populists getting the tailwind.

>> as a minnesota-headquartered corporation, we have worked with senator amy klobuchar. there are exporters in minnesota that are very concerned about this. she has given us a significant amount of time. i think she well understands our concerns. so we feel our voice is well represented in the senate ag committee. >> mr. page, just to lay things out, i think there's a lot of confusion among the public as to how derivatives are used, what it means. can you give us an example of how you might use a derivative and what it might mean for your company? >> at the farmgate level, a farmer undertakes a loan, as much as $400 an acre or more to put in his corn crop. he, in conjunction with his banker, want to think about that risk and how they can have revenue assurance. they would sit down with our farmgate support people, and we would go through a tailored and customized risk management program for them, taking into account whether they own their land, whether they rent their

land, whether it's irrigated or not. and so the need for highly tailored products to mitigate these risks in conjunction with farmers is the way in which we would use a variety of these tools. >> to protect them in case there's a drought, in case something happens with crop prices? what's the need? >> exactly. certainly price risk is a big one. as we've seen this week, as the dollar strengthens, there's always the risk that commodity prices could fall and jeopardize their cash flow. so there's a host of risks they would work to mitigate. clearly the weather -- go ahead, joe. excuse me. >> sorry. no, excuse me. how much of the business you do is already on exchange in chicago? i mean, it wouldn't matter to you if it was transparent on an exchange, would it? >> no, we've been very supportive of transparency, of reporting. we think there's a legitimate government interest in having an understanding of what risks are being taken and to determine if a systemic threat is building up in the system.

the challenge for us, given the tailored nature of the products, is some of them are not easy to clear or to fashion in a way that would allow them to clear an exchange. i don't know the precise percentage today, but clearly the vast majority of cargill's risks would find their way on to an exchange for clearing at some point. but there again, there are products that are otc in nature, we think that's critical to preserve that opportunity given the disparate needs of our customers and suppliers. >> great. so almost all of your stuff is already on exchange, but there's still a few -- there's still some things you need to do party to party. during katrina, commodity flows, we talk about -- we talked to port officials just about every day about things moving up the mississippi. any disruption yet? are you expecting any? are you watching things closely? >> certainly we are watching things closely. this is our off-season, if you will, since we're in planting season versus harvesting season. we have not had a logistical

disruption at this point. clearly we're watching it carefully. if it were to worsen and as we moved closer to the fall harvest season here in north america, that could be an increased concern. at this moment we do not feel it's a factor in the markets. >> what are you doing in sales now? cargill, are you the biggest private company in the country? >> well, it's a difficult thing. >> yeah, you don't even have to tell -- >> our sales -- >> you don't even have to tell me that. >> our sales -- our sales are modestly over $100 billion a year. >> wow. >> when you look at what's happening in the public market mace, marketplace, i guess you're not feeling a real urge to sell stock at any time to the public. >> we have been well supported for 145 years by family owners, and i think we have a strategy that suits the nature of our ownership, so we're happy with where we are. >> we're thinking about taking "squawk box" private as well as

things head south. anyway, we appreciate your time today, mr. page. thank you. >> you're very welcome. thank you. >> cargill a run for their money. >> you want to be nonexecutive chairman? >> that works. yeah. >> do you? >> chief compliance officer might be nice. watch you. >> watching me. perfect. when we come back, joe lining up the top stocks to watch. plus, you are now looking at a live picture of athens where greek police are gearing up for another round of protests. there have been several clashes with police over the past several days. athens international airport is closed. we are monitoring that and we'll bring you the latest on the european debt crisis. the fall of the wall street giant is the main topic for the financial crisis inquiry commission today. we're talking about bear stearns and some of the key players will be on the hot seat when "squawk" comes right back.

live picture of athens, greece, where striking workers have taken to the streets. you're looking at what appears to be some clashes between the protesters and police, throwing some rocks. we've got the airport closed. a lot of travelers stranded as a result of that. some people have literally taken a chair and set up in the middle of the street. we'll continue to watch the situation. a lot of these are public sector workers that are challenging the country's bailout for austerity deal even as policymakers continue to wrangle with the problem. but a lot of these pensions, salaries being frozen, spending being frozen and the people are

not happy, joseph. >> just watch for a second. >> you're not seeing the full crowd there, but this is where the -- there's about 1 million protesters. this is where the crowd is meeting the police that are lined up. that's where you see some of the skirmishes and confrontations. >> normally -- nbc must have someone there. we don't have anyone there at this point. i've got someone in mind if there's danger in the area. >> i wonder who you mean. >> i don't mean danger. i just know someone that would be very comfortable in that dangerous setting. >> here you go. >> we don't have anyone. >> we don't actually have control of this camera. this is, i think, an aptm feed. they're going to video what they want to video. you see in the police lineup now helmet gear. who knows what could happen. oftentimes this does get interesting. >> helmets on some of the protesters, if you'll watch closely, they're wearing motorcycle helmets, picking up rocks and throwing them on the front lines. again, there's expected to be 1 million protesters who turn out

today which is incredibly significant when you consider there's only about 11 million people who live in greece. that's about 7% to 8% of the population that are turning out for these riots. it's not just the riots they are watching right now in greece that pose a big problem for this bailout for greece, though. it's also germany. its constituents in germany, the public in germany, very unhappy about the idea that they have to pay for somebody else -- >> have they thought things through? do they think a bankruptcy of the entire country would be a better way to go at this point? or do they just think they're going to continue to get -- >> some of the angry people have said, look. the medicine will kill the patient. the medicine is worse than the disease at this point. >> but if you don't -- if you don't have the death service to keep paying for all the services -- >> but the case may be if you're talking about the severe cuts they're going to be taking -- >> do you kill aggregate demand because -- >> although if you looked at some of the benefits they get, a lot of people there are allowed to retire at age 45.

>> no doubt. >> they need to leave the eu, then. what do they have, drakmas or something? >> they used to. the only way to get your way out of a problem like that is deflate your currency. like when it's a euro that you're not in control of. >> no animal orchestra for you on the day you get back. >> thank you, greek protesters. >> however, we do have the adp report coming up. stick around. we'll be right back with those numbers. get inside each. and see what you find. if perfection is what you pursue, this just might change your course. meet the new class of world class. the twenty-ten lacrosse, from buick. may the best car win. thing as taking a chance?

as having to decide to go for it? at the hartford, we help businesses of all kinds... feel confident doing what they do best. by protecting your business, your property, your people. you've counted on us for 200 years. let's embrace tomorrow. and with the hartford behind you, achieve what's ahead of you. ♪

welcome back to "squawk." want to take you straight to athens. thousands of striking workers taking to the streets in greece in protest of the government's austerity measures to deal with the fiscal crisis there. the athens international airport is completely shut down. as air traffic controllers are among those on strike. we've been watching these pictures here. police firing tear gas. according to reuters this morning to disburse a group of about 50 protesters who tried to storm the parliament during a march. about 50 people, they say, tried to get in. police used tear gas and flash bombs to disperse them. that's what a witness is telling reuters.

other reports from sky news saying people are trapped in a burning building. we do not know much about that situation at all. >> again, this is from sky news. we're getting updates, but it does sound like the violence is escalating. we've been watching protesters throwing rocks back and forth as the front line of the protesters come up against the police line that's there to hold them back. >> and just underscores, even if a bailout package is approved by everyone is rock solid, then you'll be dealing with the multiyear anguish of whether or not this economy can sustain the kind of fiscal measures they're talking about. futures are lower. maybe not exactly on this news, but they have been down for the past hour or so as contagion fears continue in europe. and once again, the euro below $1.30 at a year low against the dollar. the financial crisis inquiry commission plays host to yet another ceo taken down by the financial crisis. cnbc's mary thompson is in washington, d.c., this morning and joins us now with more.

think about goldman with the gulf and oil and bear stearns and how happy they were that lehman came along, mary, because we don't even talk about bear stearns necessarily in the same context as we used to. >> we really don't. you know, everyone was so worried about bear when it collapsed and their workers. they actually came out ahead certainly of a number of people who used to work at lehman brothers. today, though, it's jimmy cane, former chairman and ceo of bear stearns. he is one of five former executives at the first investment bank to fail during the crisis testifying before the fcic today. in their testimonies, both cayne and his successor, allen schwartz, blame unfounded rumors for bear's collapse in march of 2008 and that leading up to the frenzied week before it was sold, bear was well capitalized and had adequate liquidity. the hearing to be the bridge plane former bond salesman's first public appearance since the firm he worked for for

almost 40 years and ran for 15 was saved through a fire sale by jpmorgan. that deal brokered by the federal reserve and treasury had jpmorgan paying $1.4 billion for the firm after upping its initial from $2 a share to $10 a share. the problems of the smallest of wall street's investment banks foreshadowing those that would later take down lehman brothers and put merrill lynch into the arms of bank of america. leading to a loss of confidence among investors and clients. canne nonexecutive chairman at the time was in detroit playing bridge. he told "fortune" later that year, i didn't stop it and i didn't rein in leverage. he will testify today. the investment banker and 32-year bear veteran was ceo in 2008. less than three months on the job, schwartz told cnbc days before bear's demise, there wasn't an imminent threat to the bank's liquidity. >> the markets have certainly

gotten worse. but our liquidity position has not changed at all. our balance sheet has not weakened at all. >> schwartz repeating that assertion in his testimony, adding he believes the firm took all the right steps to survive the storm breaking upon us, but in the end, it wasn't enough. bear's problems evident the summer before the deal due to hedge funds that failed. their failure leading to warren spector. he was expected to be cayne's successor. instead, he fired him in 2007 laying the blame for hedge funds' failure at spector's feet. the coo will testify at 9:00. later in the day we'll hear from the former chiefs both bear stearns' chief regulators during the time and leading to its

demise. >> thank you. we'll be watching it through the day as well. joining to us weigh in on the markets is george dowd, the director of new edge at the cme group in chicago. jim eckers. and gentlemen, welcome to both of you. jim, we're watching protesters on the streets. futures were higher, but as concerns continue, you expect to see more market turmoil? >> yes. i actually don't think this is a greek crisis specifically or even a euro crisis. this is more of a global crisis. what is a bond market? it's just a promise to pay you back. it's all based on trust at the end of the day. greece is ground zero today. it's too bad to see the violence. although not totally surprised. they've had violent riots in the past unrelated to this austerity. i imagine what would happen in the united states if they said hey, you've got to get your defic deficit-to-gdp ratio down to 3% in three years. maybe not because of violence but that would be a shock to the u.s. >> you're not suggesting that the united states is in the same situation as greece?

>> i'm having trouble finding a greek metric where the u.s. is as bad or worse or will be shortly. you look at where our deficit-to-gdp ratio is or going, money creation, we look like greece. one big difference -- >> we have currency and can print and inflate it. >> where does that get you? that's really the problem worldwide. in every asset class, investors no longer think about the fundamentals. they think about government policy. china, the question is can the government prop up the housing market? in europe, can the government prop up greece? in the united states, can we pump up the banks? >> in terms of what you're talking about, in terms of trust, every time there's a flight to quality, you see people rushing back to the dollar and u.s. treasuries. >> well, it's the only place to go. there are limits to that. and ultimately, it's going to go to one of two places. there's a meeting in zurich on may 11th. it's basically the imf is convening a meeting. they'll look at the issuance. so the g-20 and leaders want to

go to sdrs to take the dollar off the hook, the market may go to gold on their own. it's sort of a race. the dollar's pretty much at the end of the line. >> george, do you agree with that same sort of view about the u.s. versus everybody else? >> i think -- you know, i couldn't have said it better myself, sadly. i pretty much agree with all those statements. you've seen the dollar rally. it's because it's the best looking horse in the glue factory and there's no where else to go. you have elections in the uk. there's uncertainty there. sterling's been under pressure. obviously the uros's been under pressure. for sure the statements coming out in europe have been pretty unanimous in that sure they've gotten $110 billion but that's not going to solve it in itself. they've got to get their debt-to-gdp down to 3%. that's where they should have been in the first place. if you look at the news feeds carl was showing, it doesn't look like happy days in greece. i don't think they'll be able to meet the fiscal austerity measures that are being, i guess, imposed upon them. so, you know, i think it could

be, you know, dark days in the currency side. i just don't see a lot of reason to go into the euro at this point, especially with other looming problems on the horizon. you've got spain now. you've got portugal. ireland. and i just think that, you know, this was maybe a band-aid on a very large situation that, you know, to me, especially with, you know, some of the reactions you're seeing in greece, doesn't appear to be, you know, moving towards a proper resolution for the markets. >> there's this metaphor, but there are two new contestants, gold and str. we'll see how they do in that contest. >> jim, some of the craziest viewers i know send me stuff that i think is from you. i'm just wondering if it's the same jim rickards. are you a theory conspirist? are those the mightinones that ?

>> i was asked to respond specifically. i'm a lawyer also and i was shown correspondence from the antitrust division of the justice department, someone writing in about jpmorgan manipulation in the silver comment. my comment was it was an unusual communication. the justice department, instead of saying thanks for your letter, they said, we're looking into the jpmorgan alleged actions. they went on to say we're not going to refer it to the cftc. we're going to look into it ourselves. i thought both were unusual. >> you know that some outliers are going to use your -- >> you know, once you hold yourself out publicly, you sort of lose control. >> i know. i know. >> i'll take responsibility for that. >> you're not necessarily saying gold and silver would be 1,000 times more expensive if free market forces were -- >> no, ten times. i am saying gold will get to 5,000. it's eighth grade math. the amount of gold, the amount of paper money, do the division,

that's where gold has to get to. >> george, yesterday the one point of good news if you're a bull watching the markets fall yesterday was that when the market tested a key technical level, it bounced back up off of it. what are you watching today in terms of the technicals and what you think might happen? >> technically in the s&p, you know, it's been kind of a choppy range. it's really had a hard time. the june s&p contract sustaining any rallies above 1200. so i think we probably drift lower. i think the first target on the down side for most of the people i talked to is this 1150, 1148 level. i wouldn't be surprised if we get down there. as far as looking forward, what data matters. we had the ism yesterday. i always like to look at the employment component. that was a pretty strong number. this morning we had the challenger job cut numbers. it was down 71%. that's encouraging for nonfarms on friday. maybe in five minutes or so, we've got the adp number. if we get a strong adp, i think you start to build in strong optimism on friday. and i think that probably adds to dollar strength. i think it probably holds the equity market in. but in the longer term, i think

we see a little bit of a drift lower. >> i'm sorry, we've got to leave it here because of that adp. gentlemen, thank you both very much. >> one person's now dead at a bank during these riots. they're obviously heating up to quite a degree. when we come back, we'll get the adp number for april. breaking news and allegation when "squawk" comes back. hey, aren't you... supposed to be following that fidelity green line? well, yeah, but it keeps leading me back to my old office. i think it might be broken. or maybe it's trying to tell you something. yeah, but what could it be trying... oh, i left my 401(k) at my old job. and i left a jacket on the back of my door.

but i think the line is talking about my 401(k). leave a 401(k) behind? roll it over with the company that's helping more people reach retirement than anyone else. when it comes to investing, never settle. fidelity investments.

welcome back to "squawk." we are moments away from the release of adp numbers. meantime, futures are lower. we continue to watch this live shot of athens where reuters is now reporting that three people are dead in a fire set by protesters in central athens during a protest march against some of these austerity measures. this is according to the fire brigade in greece. they said in a statement, we have found three dead people in the building that is on fire. that's not the shot we're looking at rite now, but clearly the protests are going on all throughout the city. on this street here where we've seen some rock throwing and where this bank appears to be on fire. i guess we're going to eyeball it, but it's obviously having an emotional effect on some traders if you listen to what we just heard from the pits and where this may be leading at least on the currency front.

reuters are saying three people are dead in this bank that says on fire as a result of the protests. could this happen here, joseph, one day? >> i was watching this. and we've seen some, during the g-8 or globalization thing, i guess we've got an important number coming. >> we do. adp. a third consecutive monthly increase for april. shows the total private employment up 32,000. that's an increase of 13,000 from a revised rise of 19,000 in march. tomorrow's jobs number expected to show a jump in nonfarm payrolls of about 180. and that will include hiring for the census which, of course, is not included in the adp number. joining us is joel prackin. good morning to you. >> nice to be here. >> we're missing liesman, but we'll try to work our way through it. >> i'm sure you can do it. >> spell out what this means at least in terms of tone for friday's number. how encouraging is this? >> yeah. so including revisions now,

we've had three monthly increases in private nonfarm employment. that's good news, but the increases are grudging, i would say, and we clearly haven't gotten employment into high gear yet. and in particular, we haven't turned a corner on employment construction yet. the friday number from bls will include hiring for the census. we put that hiring at about 145. so if you added that to today's adp number, you'd come up with a number for total nonfarm hiring on friday of around 180, as you mentioned. >> now, as we know, census hiring hasn't been as hot as we thought, at least in the last month or two. is there any reason to think that it will make up for that or the government will have made up for that lost time? >> you're right, it hasn't been as hot as we initially thought. we think there's reasons, in particular, the pool of census takers is very well educated this time around because unemployed qualified workers to do it, they seem to be getting work done faster than previous censuses. so fewer were needed.

so while there is going to be substantial hiring over the next couple months, we backed away from the kinds of numbers that were initially being bandied around. >> walk us through the breakdown in terms of company size and industry, if you can. >> well, the goods-producing sectors are adding to payrolls now. they've done so for three months in a row. and that's a nice looking trend. in the goods-producing -- i'm sorry, in the service -- >> service up 50, right? >> yeah, but in the goods-producing sector, you're really struggling here with the fact that while manufacturing is finally moving into positive territory, construction employment still continues to fall fairly sharply and by enough to offset the gains in manufacturing. so in the goods-producing sector, we still haven't turned the corner yet convincingly in my view. >> okay. and then really quickly, on company size, looks like small businesses did not lead the charge by any means. >> no, they're not leading the charge yet. small businesses have difficult times to rationalize access to

credit markets. late adjustments to the crisis over a year ago. but i do believe that in a few more months you'll see small business hirings are to pick up more aggressively. >> let me bring in diane and our rick santelli at the cme. diane, your take? >> i agree with joe. we're going to continue to see very modest job growth and even small business. i've been talking to a lot of small businesses over the last couple days. they're still reluctant to mire along with large corporations. we are starting to see a little tipping in schools saying they're reporting that their graduates are starting to get better outplacement. even graduate mba programs. i'm affiliated with a couple in the midwest. i agree with joel, the quality of the census workers, the down side, you do get quality census workers. you just don't need as many. so you're not getting as big of a kick from those temporary census workers as we thought. >> a friend of mine took the

census test and scored a perfect 100. and he is being stalked, literally stalked, by census. and he doesn't know if he wants to go do this or not. i mean, that's extreme, but it's an illustration. >> it's exactly those test scores we're talking about. the average scores are a good deal higher this time around than they were ten years ago. >> interesting. monsieur rick, what are guys making of the video out of athens today? >> well, starting with adp, you know, it hasn't altered the landscape. it was a minor little mogul. i think some traders may have waited to see it. but post-number, we see the same slide that we saw. obviously these images. you know, carl, you and i and joe really have been talking about the social side, the cultural side, the political side of what's being pushed into austerity packages for a long time. and i think these images aren't good. i mean, this is a very fragile

issue not so much -- or i guess with politics, but i think the people of europe. whether you're on the donating side or the receiving side. and not to accept the austerity is not going to make the givers more happy to give. i think the dynamic continues to play out. we're seeing a very active market. the boon in the last ten minutes has continued to rally, up 0.75%. we see the euro currency close to $1.29. pre-opening equities continue to deteriorate. i think today will resemble much of the forces of yesterday. not to mench portugal, israel big time again. i'm sorry, portugal and spain. >> we're with you. are there solutions, rick, that you think the policymakers have not yet considered? someone earlier in the program today talked about the potential for european bonds backed by gold. some things that are a little more out of the box.

>> you know, i don't find this easy. i liked one of the "journal" articles because i disagree with the new conventional wisdom, quantitative easing. i think that's a bad idea. if you really want my honest opinion, i think greece ought to be let go. i think everybody would be happier. i think they could live the lifestyle and have the culture they want, print their own currency. and i just personally think that's the cleanest solution. the nastier it gets, i think the more it has this contagious effect that's going to give us more dark side. >> diane, what's going to be interesting over the next couple of days is watching whether or not jobs, any marginal strength in jobs, can distract us from what's going on in europe, right? >> absolutely. and i think, you know, the problem is that we are going to continue to see the employment. we're still climbing an upward wall. we're not seeing the kind of gains you'd like to see. it's still a jobless recovery. even if we get to 200,000 and get surprised on the upside, that's still not enough.

we should be seeing 350,000, 400,000 at this stage. that's not going to happen right now. although we've seen better economic news, the recovery looks like it's sort of broadening a bit, that's good news. the bottom line is there's still those gaps out there like joel mentioned in terms of construction employment and although we got more roads under construction in illinois than ever, which is obvious by the traffic here, it's not enough to offset that slowdown in commercial construction along with residential. >> joel, just as a macro guy, do you have thoughts about whether or not credit strains in europe would eventually result in some strains here? >> well, i can certainly imagine an alternative scenario to our baseline in which contagion effects from the greek crisis has an impact on the u.s. economy, first through slower european growth and our exports to that market, but also a strengthening in the dollar and simultaneously accompanied by hits to equity, prices here. you know, this does pose some down side risk to the u.s.

it's an unfriendly reminder, ugly reminder, of what can happen if you have a large, unsustainable, fiscal imbalance. >> absolutely. it's a reminder to us to start thinking about it, right? >> exactly right, diane. i agree with that. the specter of what we otherwise would have done for cyclical reasons is something to at least think about. >> absolutely. >> especially the video we're seeing today. joel, thank you for the adp number. diane, thanks to you. and rick, we'll talk to you later. rick santelli at the cme. coming up, we've got more market reaction to the adp report as we count down to the opening bell on wall street. plus, the race to stop the oil spill in the gulf. we're heading down to new orleans to find out if bp is any closer to getting this environmental disaster under control. "squawk box" will be right back.

down by more than 30 points below fair value. this is coming as we are continuing to see what's happening in greece right now. riots in the streets. greek officials now say that three people have died in a blaze that broke out in an athens bank. when we come back, we're going to be talking more about this. put this to our market watchers today. this has been the big pressure point on the markets. and this has been the pressure point once again this morning. people are watching it in the pits right now. we're going to put that question about whether these market fears go beyond the debt threat to our market watchers after this.

stick around.

take a look at this videotape out of athens from just a moment ago. we've got police in the streets firing tear gas and flash bombs

at protesters to disperse them. a lot of these are public service workers who are protesting the new austerity measures going into place in greece. three people have died in a fire set by protesters in central athens during another march. again against the government's austerity measures. some of the videos getting a lot more dramatic as the cameramen are able to get closer to the fighting. clearly, people are throwing rocks and doing a lot more. some of the protesters themselves have helmet gear, knowing that they're going to get pelted with whatever the police can fire. >> there are also some reports that they've been throwing not only rocks but molotov cocktails in some arenas. you see in this video the rocks clearly firing. >> remember the eu back in the '90s, you guys were probably at "the journal" at that time. you looked at gdp, employment of all the different constituents that would go into the eu.

they all had to get close enough to put it all together. it looked impossible. one country versus the other. it's like how is this going to work? i just wonder, you look at it now, greece should be -- like santelli said, on its own. print enough currency. live the way you want. but it's not the germans' responsibility to give the greeks a lifestyle -- >> it's easier to keep this together during good times. and one concern that a lot of people have raised is you had to meet those standards to get into the eu. but there's no way to set up to punish you for falling below them once you're in. or to require you to maintain those standards. >> yeah. >> again, the pictures have been dramatic, and it has caused some concern. that's part of the reason we've seen the futures lower this morning. also, two key pieces of data we got ahead of april's jobs report. adp says that the u.s. economy added 32,000 private sector jobs last month. that's the third consecutive

monthly increase. adp also saying it's optimistic the private sector job growth will continue. perhaps this gives you some insight as to what to expect friday. also the monthly challenger report says the planned layoffs fell by 43% in april to nearly a four-year low. employers announced just over 38,000 planned job cuts in april. that was down from almost 68,000 that were announced in march. it suggests that employers are becoming more confident about economic conditions. let's look at shares of time warner this morning. the company reporting quarterly earnings of 61 cents a share. that's 13 cents better than the street was expecting. you can see that stock at this point slightly below the bid/ask is slightly below yesterday, 32.21 to 33.25. i'm sorry, it's straddling the close from yesterday. we'll see where this shakes out. let's check the markets right now. the futures, given all the things we're seeing happening in greece, you can see down. i don't know whether the adp report helped either. >> not much.

we've come off lower levels than we saw before the adp report. again, the pictures have gotten much more dramatic. and since that time we've also gotten reports about three deaths at least in greece at this point. >> euro's below $1.29. >> friday is the employment right. >> yes. >> i'm told this is something we should cover. the higher-ups -- >> another directive from management? >> yeah, this could be an important -- >> great. >> -- this could be an important day on friday. >> it's good that we got the heads up. >> i think so. so we should cover that definitely on friday. futures right now are -- i'd be in trouble if they lost probably. anyway, futures, as you know. let's get to scott nation, chief investment officer of nation share, and david kovax, quantitative strategies at turner investment partners. scott, is this the end of the beginning or the beginning of the end of a pullback in our

domestic markets here? >> unfortunately it's probably the middle of the middle. i think unfortunately we have a ways to go. the 58 moving average in the s&p has been really important for the past year. that number's right below 1170 right now. so it looks like we're going to open right there, unfortunately. i think that we have some -- a ways to go to the down side. based on the picket he pictures seeing out of gross right now, unfortunately. >> david, your view? >> yeah, i agree with that. i think that we're lucky to go down to the near term. all kinds of disturbing pictures that you see from greece. you're likely to see a potential downgrade by moody's of portugal in the future. they may lose that to ratings. spain is a very big economy. it's got the fifth largest overall external debt globally. and that is a concern with almost 20% unemployment. so you put all that together, and as much good news as you get from the u.s., you're still likely to decline in the near term. >> does it mean eventually that the euro needs to inflate?

i mean, is that what's going to finally happen here? >> well, i think actually the euro is likely to decline further. i think it's -- we're going to see a level of 1.2 probably within the next two to three months. it has to decline because of the potentially -- i think there will be some quantitative easing. i think there will be purchases of greek bonds as well as spanish-portuguese bonds in the near future. i think it's one of the likely events that will take place. that is likely to further reduce the value of the euro. it's necessary. i think it's inevitable. and as long as the dollar appreciates, that's a headwind for u.s. equities as well as the commodities and the stocks that trade off of the value of the commodities. >> joe, that's the problem right now, i think, is the dollar. the dollar appreciates. people don't want to buy dollar denominated securities. worldwide that's the problem. rick a few minutes ago said that greece should break off and go on their own. and while the pictures out of

greece now are really troubling and it's a tragedy for the whole country, not just for unfortunately families of three people who have died so far, but isn't this the beginning of the end of greece being in the euro? and to that end, isn't this probably a good thing? they certainly do not have the interest in making the moves that france and germany are going to require. and so maybe they're going to cut them out of the hurt. >> well, i'm looking back now and thinking how worried a lot of people were about the future of the dollar at 1.45 on the euro and how many people were scratching their heads saying oh, my word. it's really working over there. their currency is, you know, suddenly preeminent, and our system over here, we need to think about it. and certainly there's no satisfaction here. but they're going to need to print yeuros to finance what gos on over there on across the board on that continent, no? >> oh, i think you're absolutely right.

that's the only way for them to get out of this. and unfortunately that causes problems for our stock market. and let's look at it this way. the $350 billionish that was lost by u.s. investors yesterday could have solved the problems of greece probably twice over. and feign everybody out after that. unfortunately that's not the way the world works. >> yeah. that's true. gentlemen, we appreciate it. scott nations, david kovax. >> thanks, joe. we're going to get another live report from scott cohn who's on the crisis on the coast this morning. the president planned to expand offshore drilling originally got the thumbs up from both sides of the aisle. but the oil spill has another -- officials are also reverse says course depending on who you talk to, governor schwarzenegger pulling his support after seeing -- was it a bird? was it a bird coated in oil, joe? >> that's what he said. on the air. he said yeah. i saw a bird. i saw what was happening. >> anyway, we'll talk about the spill, the politics surrounding

the spill. hi, ellen! hi, ellen! hi, ellen! hi, ellen! we're going on a field trip to china! wow. [ chuckles ] when i was a kid, we -- we would just go to the -- the farm. [ cow moos ] [ laughter ] no, seriously, where are you guys going? ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! [ female announcer ] the new classroom. see it. live it. share it. on the human network. cisco. hey, aren't you... supposed to be following that fidelity green line? well, yeah, but it keeps leading me back to my old office. i think it might be broken. or maybe it's trying to tell you something. yeah, but what could it be trying... oh, i left my 401(k) at my old job. and i left a jacket on the back of my door. but i think the line is talking about my 401(k). leave a 401(k) behind? roll it over with the company that's helping more people reach retirement than anyone else. when it comes to investing, never settle.

fidelity investments.

welcome back to "squawk box," everybody.

the futures remain under pressure this morning. in fact, reaching some of the lowest levels of the morning. this comes after the big losses from yesterday. there have been major swings over the last six or seven sessions. this morning, though, you're going to see that those futures are down by about 50 points below fair value when you're watching the dow futures. keep an eye on this. this is continued to put some pressure on as the dollar has strengthened and the euro has weakened based on a lot of those pictures we're getting. meantime, the effort to contain that massive oil spill in the gulf of mexico could get some important help by the weekend. our scott cohn is in new orleans this morning covering the story. and scott, we are getting some reports from reuters that bp apparently is saying that they have capped one of those three leaks, although we know that that is no solution by any means. >> reporter: that's right. and what they're trying to do is somehow or another control the flow of oil. but the flow of oil has not abated even though they've managed to do that. the big containment dome is hopefully going to be out there by this weekend. we'll know more about that in a moment.

bp says that it is paying -- it's costing them $7 million a day. the company's ceo, tony hayward, saying yesterday that even though the company's statutory limit on damages is $75 million, they're going to exceed that. but there's some costs that are even more difficult to calculate, particularly as they begin to ramp up now on the west coast of florida, the joint response to a potential oil slick there, and just the major public backlash that this company is likely facing. and as a result of that, the ceo, tony hayward, made the rounds on capitol hill yesterday. >> we have an industry team assembled working on the subsidy situation, and we are working very hard with the local communities in defending the shore. and bp is taking our responsibilities on this very, very seriously.

we understand absolutely the concern of the local communities and the people along the south coast. >> reporter: bp has been issuing grants to states, and they also have committed now to compensate the fishermen here. and it's such an important industry. to compensate them for lost wages. but that loss is likely to be considerable. so that is one of the things that they're working on. the other thing, again, is that containment dome which we were looking at closely as they were building it down in the port over the last few days. that reportedly is now on its way out to the site of the spill, but it's still going to be several days before they can lower that and hopefully cap it once and for all. take a look at bp's stock. it has dropped precipitously since the disaster on april 20th but has been battling back a little bit in an otherwise difficult market as people seem to think that maybe they have this under control. but the reality out there is that this is not even close to

under control just yet. guys? >> okay. unfortunately that's the case. thanks, scott. appreciate it. the vix spiked more than 20% during yesterday's market selloff to its highest close in about three months. joining us now, mark abbitter, for standard & poor's. historically still a low market. once again, it's going to be an interim high that goes back down, or is this the beginning of something? >> no, i think the vix and everything else will stay elevated. i think the first phase of the bull market is complete. the price structure since march 2009 has been very similar to the bull market off the 2003 lows as well as the 1982 lows. and it was interesting, after earnings were reported, we had a fair amount of blowoffs to the up side. a lot of stocks were very extended going into earnings. then we saw many stocks gap up after earnings. and, obviously, the trend of the

train is unsustainable. and i think this was a clear case where the end of the bull market here has started here. >> what? okay. so this is it. you're calling it. this is the end of the bull market is here. >> well, the end of the first phase of the bull market. and then now i think that we will correct anywhere from 10% to 15% over the next, say, six to ten months. typically the first major correction in a bull market lasts fairly long. the one in 2004 lasted about six to eight months. the one in '82 lasted longer than that. so i think we're in for a very choppy sideways to down market here for the next -- you know, either the fall months, possibly into the first quarter of 2011. and i see major damage more so over in europe and asia than in the united states. >> so no 1250 on the s&p and no

11,500 again on the dow. instead you look for us to be down -- will we go under 10,000? >> well, the s&p, i think the first support level for the s&p 500 will be 1150. that was the january highs. i think we get a bounce off of that level. then i think we take that out and head down towards 1100. maybe the 1050 level sometime later this year. >> okay. so after that mark, we resume the bull market, and then what would your objective be if we give up 10% or 15%? then do we go back to 12,000, 13,000, back to 13,500 on the s&p 500? >> yeah, then i think the bull market resumes. one of the reasons i think that is because the breadth on the nyse has been so strong. typically the breadth peaks well before the bull market peaks. we've seen broad sector

participation. and that suggests that this is just a pause in the bull market. and the bull market does have further to go. >> because there are plenty of people that are technicians that say that this is just a cyclical bull and a secular bear. and that is the commerce of what you're saying. you're not saying that at all. we're not ready to go to lower lows and test 6,000 on the s&p -- or 600 on the s&p and 6,000 on the dow. we're not ready to do that. >> no. i think at worst you might give back 30%, 38% of this rally since march, possibly 50%. even at 50% would only take the s&p back to about, i think, 950. >> that will get your attention, though. >> yeah. but i think that will take time. but i don't think there's any way we go all the way back to the lows. >> that would put the dow back to, let's see, like under 9,000. >> yeah, that's a possibility. >> you know what?

the economic backdrop or the situation in europe or, i don't know, what would be the -- you know, you're a technician, but the fundamentals that go along with that, i don't think i want to go through that again. that would be some tumultuous -- it wouldn't just happen in a vacuum, probably. the situation in europe would get out of hand. what else could do it? >> i don't know. i'm not a fundamental analyst, but i do know -- >> unemployment goes back up over 10,000 or the whole idea of a recovery gets thrown into dow? maybe that would do it? >> i think that's exactly what's going to happen. and that's starting to show itself in the emerging market stocks and indices. they actually -- china actually broke down a lot earlier than some of the other indices. and what we're also seeing a little disturbing relative to the economy is that it looked like treasury yields were setting up for a major breakout

to the up side. and they have reversed back to the down side. and if they start breaking down below, say, 3.5, that would be a sign that people are very worried about the u.s. economy. >> you haven't been saying this the whole time either, right? you know, i know some people, if they told me this, i wouldn't worry at all because they've said that since 6,000, but you haven't been saying this the whole way? >> what, that we were going to have a correction? >> yeah. >> no, i've been looking for an end to this bull market somewhere between 1200 and 1250 -- >> well, they were looking for the end of it at about 850 on the s&p. so we're even lower. you know what? if we go below 9000 on the dow mark, it doesn't matter whether it's a secular bear or a secular bull. that's going to feel horrible. that's going to be small consolation we're in some type of bull market and it's going to resume. >> yeah, i don't think we should worry about the terminology.

i think we should just get, you know, the intermediate to long-term trends correct. >> all right. mark, thanks for your time today. i appreciate it. >> thank you. >> doesn't have some flaky name behind it either, standard & poor's. >> yeah, it's a reputable name. when we come back, the mood on the big board. sell-off. we'll check in with art cashin.

probably the picture of the morning so far has been this video out of athens, greece. three people dead in a fire set by protesters. other police firing tear gas and flash bombs at protesters. all of this happening in central athens as the unrest continues. all of it centered around the austerity measures that greece is now trying to put in place to make good on the eu/imf rescue. we're watching that along with waiting for the opening bell on wall street. art cashin is director of floor operations at ubs financial services. art, you've been talking about unrest in that part of the world

for i don't know how long, and i wonder if you think the video this morning means that the chickens have really come home to roost? >> yeah, i'm afraid they have, and they haven't fully put an austerity plan in yet. i mean, they're talking about it. the biting down has not really occurred, and i'm afraid, as you say, i've been saying for weeks, watch the streets of athens. and i'm afraid it's coming home to roost here. we'll see how the markets do. yesterday the s&p stopped right on its 50-day moving average, which is 1,168. it looks like we're going to get a test of that. if they violate the moving average, then the correction's probably got further to run. >> you talk about -- you write about intermediate sell signals this morning, and in particular, looking at the number of new lows, which has been modest so far, right? >> absolutely, absolutely. the 52-week new lows were to pop up above 100 or so, then it would be a matter of real concern. as i've been writing for weeks

and as your former guest said, the breadth of the market, the number of advancing stocks over declining stocks is of a type that usually doesn't produce a full, meaningful top. it suggests you might have a correction, and i think that's what we're in. how deep it goes, i'm not really too sure quite yet. >> do you think the bulls are going to be able to regroup, as you write this morning? because there are a lot of people who were interested in the market but at lower levels. where's their entry point? >> well, i think you might see people come back in in the s&p around 1,140 to 1,150. 1,144 was the previous low. so, if all those people are saying, you know, please give me one more chance to get in, i would think that might be an area those people might try. >> okay. we will see what happens, but that video is pretty compelling, you've got to admit. >> unfortunately. >> everything you've got to watch. thank you, art.

art cashin. the "stock of the day" is next, now that you're back and you're back. i wouldn't want to -- >> you didn't do it? >> i didn't do it that many times because the people here weren't that excited. >> not interested. [ clinking of plates ]

you still day-trading stocks? yeah. i switched to commodities. there's even more volatility in markets like gold and crude oil, and i can go long or short any time, with no special rules. commodities? yeah, and commodities always have value, unlike some stocks. well, how'd you get started? lind-waldock. call lind-waldock, the premier futures broker, at 800-445-2000 and see if commodities are right for you.

all right. "stock of the day" is going to be hard to do a drum roll when it's right down there at the bottom of the screen, isn't it? let's take a quick look at garmin, which reported 38 cents a share. and you think that was above or below? >> below. >> yeah, yeah, good. see? >> mm-hmm. >> all these years -- >> i've been doing this. >> -- you know, i've been bringing you along -- >> how much below? >> teaching me. >> it was 38 cents versus 42 cents for the estimate. how about revenues, what do you think, above or below? >> below. >> my work -- >> you learn quickly. >> you know garmin. >> we could go on "celebrity jeopardy" now. >> i only watched it once. you know who's pretty smart? jane curtin. >> really? >> but the questions are -- >> they're tough. >> no, they're not. >> the ones they ask the

celebrities? >> no. if you ever went on "jeopardy!" and got a zero, you'd have to be -- i mean, because the questions are not very hard. >> the trouble is turning it around to say "what is." you have to stick the "what is" in front of the answer. >> becky, i think you can figure that out. the hardest thing is working that buzzer, i think. >> make sure you join us tomorrow. "squawk on the street's" coming up next. and vivo! from the financial capital del mundo, this is "squawk on the street"! feliz cinco de mayo. >> oh, that's right! it is cinco de mayo. >> commemoration of the battle of puebla, where about a force of 4,000 mexican soldiers defeated a force of about 8,000 french. >> well -- [ laughter ] no wonder mark honors this day. >> i love that one, yeah. >> oh, you french.

okay. i'm erin burnett. we're going to start the hour with breaking news, widespread protests throughout greece. yes, they've protested for sport. these, however, have turned more violent than some. the bank has been reportedly set on fire. the "associated press" is reporting three people inside the bank were killed. throughout the next two hours, we'll have live pictures from athens. yep, you can see, that's just a couple moments ago, not actually live, obviously. riot police and protesters are standing toe to toe. i think we have some footage of that, too. tear gas being fired. and obviously, as we said, there has already been violence within that bank. >> the airport is closed in athens. a lot of anger on display today in greece. we're also watching the markets very closely. the futures had been weakening throughout the morning, apparently on the news of the violence. because earlier this morning, i don't know, about