i'm becky quick along with joe kernen and andrew ross sorkin. disney reporting earnings three cents better than the street was expe expecting. among the catalysts here, strong attendance and theme parks and higher advertising at its cable networks. the studio with a loss due to the fiction movie, "john carter." >> "the avengers" isn't just a film. it's a franchise from our per expect ter. we see a tremendous boost in products and gaming. we have an ability to leverage what was a very fine film done by a great group of filmmakers from marvel into something bigger for the company and its effects will be prolonged. >> iger says there will be a sequel. in other earnings news,

toyota reporting better than expected results and they expect to triple their operating profit this year to more than $12.5 billion that. would be the highest since the global financial crisis. also glaxosmithkline is launched a genome offer at $13.10 share a week. they're taking it directly to the biotech shareholders. genome rejected the offer last year saying it did not reflect the company's inherent value. andrew? >> they're going to be setting aside another $45 billion against loans to builders. the country's tries to rebuild confidence in a sector where huge losses have raised fears that they may need an international bailout. of course, we going to keep our eye on that. the tricycle ya canning its trip. it comes amid concerns that the political turmoil in greece

could derail the rescue effort. political turmoil in greece could derail the rescue effort. stronger than the market had expected. currency largely flat against the dow following that news. china wants to keep its control, currency flat amid market uncertainties. mr. kernen. >> i'm going to watch you walk over here, andrew, just to see -- i mean you're sober this morning, right? >> i am sober this morning. >> hello, hello. i can do it. there's no bar here this morning. i looked around. >> hold on a second. walk -- let me see you walk in a straight line. >> lean your head backward like this. there we go. like this. >> it was a mojito. >> you don't realize. what's a sip. you took three good sips.

>> about 6:50 in the morning. i had not eaten anything. i legitimately had not eaten anything. >> he was inebriated. >> i got e-mails from people saying my ears looked red. >> let's look at a few early stocks to watch. we're not starting with that. let's start with green mountain. maybe a little coffee would have helped yesterday. the companies found robert stiller has been stripped of his chairman pochlgts william davis was also asked to step aside. stiller tells cnbc's scott wapner he was shocked and hurt. you don't look to hear that. there were no s.e.c. laws broken, nothing in violation. i'm stunned. i've always been transparent with the board and i think it's an overreaction. there's the statement. you saw this stock the other day. it finally came home to roots.

>> david einhorn. >> he was with food. >> and now herbalife. >> when we talk about disney, what do we talk about? go back down. let's see. yeah, in demand media shares after the bell. the company's results beat the street as the internet content specialist revenues strengthened. wow. i don't even know that guy. that's why we're reporting on it. also lifted its full-year outlook. earnings and revenue beat the stre they saw a stronger output in oil. higher oil prices offset weaker prices in natural gas. they spun off from enron more than a decade ago. thank's what the "e" stands for. the shares dropped after hours. one more after the loser gulfport's energy earnings and revenues both fell far short of

the street consensus. >> let's get a look on the street. the futures are indicated pretty significantly weak e. this is coming five days after the losses. down by another 76 points. the s&p futures are off by more than nine points. and it's all happening as we continue to watch some of the chaos that's been taking place in greece. the leader of the left coalition party there meeting up with the lead over the democratic left party. people watching very closely to see what government is formed out of this. it's not just stock prices that have been coming down. oil prices have been coming down pretty drastically too. they're down another 69 cents. prices below $97 a barrel. that's been translating into lower gasoline prices too. just the idea some of the economies coming down across europe. and the economy in question here in the united states. that brings up questions of demand. that's why you continue to see this. if you take a look at the ten-year this morning we do have economic news that's going to be coming up at 7:00 this morning.

wholesale trade comes out at 10:00 a.m. the yield on the ten-year is at 1.823%. wow, that yield just keeps coming under more and more pressure. we do have some fedspeak that's going to be coming up. three or fur fed speaker that are going to be coming up on the day from transparency to women's leadership. ride now, the dollar, if you take a look, you'll see the dollar/yen is at 79.67. the eurois tra is trading down. gold price this morning also look at this point like, wow, they're down 21 bucks. >> down 40 yesterday. >> 15.82. >> why am i laughing? because it's under 1600. >> you prediktded that. >> civilized people don't buy gold. that's my new world. he's a funny old guy, isn't he? >> he's 88. >> i know he is.

god bless him. still getting it done. so sharp still, as a tack. and i -- i feel this to some extent myself. but as you do age, you say whatever the hell you feel like saying, you know? and he does -- i mean you heard a couple of things he says, it's like, whoa. so does warren. he's getting more edgy. >> i think too. >> more wide-balled about some of the -- std -- >> a little racy. >> yeah, racy. >> scharcharlie was actually a e more restrained. he'll usually call people a complete idiot and more ons. >> you know who else is on? where's the tenure? what did you say it was? >> 1.8 in change. >> he may be --

>> we're not there yet. what's amazing, we keep having this uneven -- it's amazing that we go back and forth to thinking people know what they're talking about to people are wrong. >> yesterday it was weird. we had the election and what's going on in greece. at the end of the day it was like, oh, boy, 175 >> and 200 the day before. >> yeah. both days it came back. now it looks like it's a slow motion. it's five days in a row. >> and the papers are rolling out. we'll have julian on. what did she say? 51%? >> about the euro. >> about the euro. >> and here greece is back to -- i mean you can actually map out

a path of how they could end up exiting the euro. >> i'll tell you oddly it's more about greece today than even france. we all thought mr. oh laund -- >> he's going to say it that way. i i'm going to say hollande, sorry. h-o-l-l-a-n-d-e. >> it's hollande. >> it's hollande. >> you won't do the alex trebek? >> no. >> he really does. >> if you get the wrong answer with trebek -- >> he's so smug. >> he's so smug. he has the answer. he's got the answers. >> he's driven me nuts for years. >> i want him on "jeopardy." sorry. i want to be the host. >> i always said that for years. sorry, you should have known that. he's just here. >> he's a beloved icon.

i love him with all of his faults. >> i've said that for years. >> with all his faults, but he's very -- he's like a teach fehr you get the wrong answer. but he practices all the pronunciations too. his french is like flawless. it's beautiful. >> talk about the right accents, let's go across the pond. >> i'm so glad you said that. i thought that for years. >> global markets report. our good friend ross westgate is standing by it's westgate. >> westgate. >> ross westgate. ross, do you have any comments about alex trebek? >> no. they've gone benny hill. >> i can't believe becky broke up the pronunciation. we did that yesterday. i thought we were there. >> ross westgate. >> they have a problem saying ross because in french r-o is a difficult thing. guys, ahead of the u.s. open, we're way down othe lows right

now. 73 advances being -- declines outpassion advances. stocks, heavy losses yesterday. we're not mirroring those yet this morning. the ftse 100 down to a close. another half a percent at the moment. xetra dax is flat. we had very good import/export data for germany in march came out this morning saying they're doing the best. the cac 40 down nearly 3%. the ftse down three-quarters of a percent. suspended at the moment. the stock was down around 5%. they have a tax investigation going on there into market manipulation. what i really want to focus on this morning is bond yields. you're looking at the treasury yields. let's focus in where we are right now with bund and then ten-year bund yields. these are record lows. 1.258%. we hit them after we hit a 5-year auction.

it got covered. that was seen as a success. bearing in mind there have been some ten-year benchmark auctions that have technically been uncovered in the last few months. that's driven down the yields. over here, i'll move fairly quickly. ten-year gilt yields down. 1.9. those, again, are record lows on gilt yields. federal trade rep. we had below 1.9%. and, again, a 30-year auction this morning. the cover on that, 2.2%. they weren't offering anything. at the same time we've got record-low yields on gilts and bupds. in italy they continue to climb higher, back up to 7.5% and in spain we're back over the psychological important, 6% level of spanish debt. so these driving investors' attitude this morning. we see record yields and high yields on the peripheral as well. that also means that the pound, they have a bank of england

meeting. they're supposed to scrap the q.e. euro/dollars as you mentioned, 129.69. but it is a risk across the board. the aussie dollar down on four-month lows against the uso. representing a risk in asia. that's where we stand. madame, messier, back to you. >> how do they say ross, ross. >> they say ross. >> ass? >> they like to roll the rs. >> that's bad. okay. i'll try it. ross westgate. >> they say westgate. >> westgate. >> westgate. >> westgate. >> and you want me to talk like they do. >> all right. >> hey, ross.

wait, real quickly, the spanish yields, is that because we look at greece and we worry that greece is going to drop oust the euro and it's not going to be greece? >> yeah. think it's all part of the same package. we've got spain, they're supposed to be announcing on friday. talking about putting more money back into that sector. obviously we've got post-france. it's a general risk aversion at the moment. so you're getting those record low yields for bunds and gilts. no surprise to see spanish yields rising. it's all in the pot, becky. >> thank you very much. >> andrew -- thanks, aus -- ross. >> come on. it's called a donkey. i don't understand. >> this guy -- >> lugar. >> you think -- you were born in indiana, right? >> yeah. he was there the whole time. >> he almost was there when you were born. >> yeah. >> just missed. >> yeah. >> i think six terms -- >> he's been there 35 years. >> 35.

she's -- well, let's call her 35 if you'd like. >> okay. >> all right. so she was -- he was there when she was born. six-term indiana republican routed. for some reason i like this. i don't know why. because peggy noonan doesn't like it. see, he was outed -- look -- >> he moved, sold his house, moved to d.c. he was the ultimate washington insider, and it just got -- i don't know. it was a tea party-backed gop -- >> he was a bipartisan guy. >> i want to tell you my comments on that. we had arthur brooks on yesterday. analysts say the race was in a conservative state. it illustrates animosity toward many incumbents buchl arthur made a point yesterday to bill bradley and to others, bipartisanship just means doing what the other party wants basically, at this point. in other words, the guys that went in, didn't want to raise taxes and do certain thing, bipartisanship means we're going

to do all the things that you were elected not do. so being bipartisan -- >> bipartisanship means we're doing what we want to do. and they're not going to do it. >> they're at a standstill, which we're at now. >> that's because we're at 15% revenue 25r revenue, 25% spending. let's work on the 25 first. >> you have to be willing to do both. that's the problem. >> the biggest problem is -- i guess they're not going be stuck doing nothing. we will be forced into these issues when the bush tax cuts expire and all the tax propss have been put off are going to come crashing down. >> the problem for republicans is christine o'donnell, remember her, erin angle, remember her in in the primaries they win and then when they win they hand the seat to their nemesis on the other side. indiana is a pretty conservative

state. they've benefitted from some of the stuff mitch daniels has done. >> you say it is a good thing. >> i didn't say it was a good thing. i got a kick out of it. >> you don't like it. >> i do like it. >> or you don't like it a lot. >> i saw peggy noonans peechls just to stir things up. >> judd gregg, evan byah. >> you don't think they need to stir things up, a couple of people that could be in the middle there? >> no. you saw it yesterday. >> i saw that. >> you're -- i see progress. you're 35. i see progress. >> you do. >> i do. >> you've going read the book but you haven't started it. >> i'm paying you to read the book. i get a dollar a page, 175 pages. but i want you to know i plan on reading the footnotes which adds

another 30 pages. >> so that's 235 bucks. >> if you read that, i would almost give you $2 a page, i really would. >> now the free market is working, okay. i like it. >> it really goes -- l'enfant, do you have my music next? >> free enterprise music? >> yeah, i've got free enterprise music, "star-spangled banner," "god bless america," things like that. do you guys know whose birthday is? 100th birthday of carter. he was the guy who discovered king tut's tomb. >> oh. king tut. >> i hear music. i was a huge freak about king tut. >> hey, the esteemed steven martin. >> that's what i asked for.

check out google. >> i love that. steve martin. >> for a while, that was -- >> that's on the bloopers video right now. >> we were going to play "walk like an egyptian." >> we weren't allowed to. >> remember all the bad things that happened after they found him? that's what i was into is the curse, the mummy's curse. >> and then we have cash curry on for a while who looks like the guy. >> billy zaing. >> let's talk about that during break. >> a forecaster who tells it like he cease it. he's going be joining us to talk about how he's actually been right with a lot of things. we're going to get to that in a moment. but first, congratulations to the devils. the new jersey devils beating the philadelphia flyers, 3-1 last night to send the devils into the conference championship round for the first time since 2003.

stick around. "squawk" will be right back. in your fight against bugs. ortho home defense max. with a new continuous spray wand. and a fast acting formula. so you can kill bugs inside, and keep bugs out. guaranteed. ortho home defense max.

welcome back. our next guest probably doesn't need another in trow ducks. he specializes in forecasting. he's been on our -- >> i said it wrong just a minute ago. >> i like saying it. i like saying it right.

oh, my. even aus westgate. there ro some tv shows that stand on their own. the "sopranos" stand alone. for you this is an ongoing thing. this is almost like a series with you. we've been back and forth with you on whether you're going to be right. here's my question. you were fully forecasting negative gdp growth. now, things have been going your way. you look at the ten-year, you look at the jobs number the last two months. you look at the 2.2% gdp which is way below what it was recently. so the trend is your way. are you still saying we get a negative quarter of gdp? >> our forecast was for a recession, which does not always give you. >> you welshing here? >> no, i'm not welshing. >> let's get the record straight first.

you're like when, when, when because the market's going up, all this stuff and we said, look -- >> the gdp was going up. sniet geesd because it puts a spotlight, i think, on this which people don't really get. we believe a recession is going to begin by the middle of 2012. it typically takes six months. >> that's like meredith whitney's bond restructure. that can't be right unless we get worse than 2%. are we getting worse than 2%?

>> let me tell you something. >> go ahead. >> year-over-year growth, gdp was over 2.2%. if you look closely, that is almost precisely the same growth rate just before -- in the first quarter of a recession for the last two recessions. if you look closely, it's -- the median -- that's also the median year-over-year growth right of the gdp over the last three recessions. and if you look over the last ten, the growth rate's a little bit higher. >> is that where we're headed? >> excuse me. it's very common to see positive gdp. half the time you have accelerating gdp growth into the beginning of a recession. >> so are we decelerating still? >> now, let's move on, okay? >> we're not there yet. >> no, no, no. a recession is not a statistic of gdp. it's a process where you get into a negative feedback. >> are you following? >> are you following? >> i'm trying really hard. the show's over at 9:00.

>> hang on. well, this is not simple. >> all right. >> this is a little complicated. >> this guy is running a soap ox rah. >> lakshman -- >> these why it's episodic. >> your definition of a recession is not the official -- >> that is not the official definition. >> what is it? i'm not making up that -- >> i hear the decline here. >> no, no, no. that's the rule of thumb. we tracked it down. 1974 new york times. jeffrey moore, my mentor and his colleague about all the different characteristics of a resection. one over a dozen was two negative quarters. >> are we still decelerating -- >> that is the point. we already have got the bang for our buck after the last

recession. >> thank on. >> that was our recovery and we're going have another recession? >> yeah, you're going have another recession. >> already? >> yes. that is my forecast. and in february we had gdp in a cyclical downturn. we had production. sales in a big cyclical downturn. the only thing that had not turned was jobs growth and that too has entered. i told you it was going to flag. it is flagging. the year-over-year drop in job growth since the high in february, you've never seen the drop that we've had outside of a recession. furthermore, if you look at year-over-year growth in real personal income, the cash that you're earning, the decline, it's so low now, you've never seen it where it is now except in a recession. if you look at each of the last ten recessions. >> take it one step further. >> how lock do you -- let's assume you're correct. >> well, you know, most people don't, right? >> i'm going to assume you're

correct. >> i also want to know why. >> when -- >> how deep, how long? >> well, the best-case scenario, i would suggest, is still a relatively mild recession which could be like a one or maybe -- that type of recession. we're not talking about the great recession here. that's not necessarily what we're talking about. >> if you're watching the program and you're an investor in the market are you saying run for the hills because we're about to go off a cliff? >> look. i'm not making a market call because the fed is sitting with a printing press, which is very important to talk about. however, the cyclical risk in term ofts demand is certainly to the downside. now, what's really interesting is that the minute this starts to become apparent, everybody says, ah, well, the fed's going to do something. they believe it can be staved off by the right policy, just

the right policy from the fed or somewhere else, and that is not true. looking at 222 years of business we've had 22 recessions. >> i just need to know how long and how deep. >> look, a recession minimally is half a year. minimally. >> we're not talking about improvement between now and the election. >> the recession may have just started or already started or it might be right in front of us, but i think by yearend we'll have a pretty good idea when it started. but generally, yeah, the direction is down. it's not up. we're not alone. this is global. it's totally global. in asia, the downturn, the size and decline in growth is actually as significant as it was. >> it seems like it would have to be. >> the trend is so high. >> housing is not going to cause another one here. >> you're at an extreme, right. >> bouncing along the bottom,

that's not going to be the problem it's going have to be europe and asia. >> the problem right now, it's staring you in the face. it's income. which is when you have income growth this week, it's been this extremely weak for a few months now, that -- where does your consumption come from? you're supposed to have jobs created which are going to increase consumption. there's no income. >> maybe unemployment is really in your view, you know, when we use this participation rate and we get to a 35-year low, we can get it to 8.2, but it probably feels worse if those people came back. we'd be at 11%. maybe that's why income is so weak. >> we've done a lot of work. >> what is the real unemployment rate. >> it is what it is. >> right, right, but for income it could feel worse for income. >> here's the insight we have on your point, which is in your prime earning years which is 34 to 54, right? that's where -- >> i know. go ahead. >> that's your prime earning years, you've lost jobs. those people have continues to lose jobs since the recession

ended, okay? some very young people are getting jobs and people over 55 are having to work because maybe they lost a lot of money during the last recession. and in the middle where you're supposed to be sweeping away your money, the sweet spot, you're still losing jobs. that may be part of the story on the income, but there's no denying. this is not -- what i'm telling you about jobs and income -- you can see. >> i know why. >> we're being told we have to go. what do you do with your own money? i'm curious. >> it's risk on, risk off. i don't try to be fancier than that. you know, i'm not sophisticated enough to call the markets and know what the fed is going do. >> no, i didn't. if the fed comes out and prints and you feel happy about it, who am i to say the price is right or wrong? >> still doesn't seem like a great time. >> i think the cyclical risk is a lot higher than you would hear other than during the discussion. >> it's interesting. you had warren buffett on monday

saying sitteniing on cash is th worst thing to do. >> he said that in '08. if you have a long enough time frame, that's the correct thing. but if you've got to retire -- >> it's obvious what he does with his money. buys suits. look at those beautiful suits. and you already asked him about it. >> tangible goods. it's worried about the ultimate inflation. >> thank you for being here. >> keep it real. >> we're going to keep it real. it's episodic. we'll have you back. >> "as the world turns." the soap opera continues. >> coming up, a man who knows the media business better than almost anyone else, w.p. boss, sir martin sorr soro. we'll talk after the break. [ male announcer ] the inspiring story

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welcome back, everybody. facebook makes its public debut next friday but is it worth all the money and the hype. joining us to talk more about it is sir martin sorrell. good morning. >> good morn, becky. >> facebook, a lot of hull a hullabaloo. is it worth the hype? >> everybody from the company to the shareholders and the bank bankers. >> has it had a change? >> it has had a significant change. one of the most important branding mechanisms around. you've got a distinguishing brand. it's more a word of mouth-public relations and i got myself in hot water about a year or so ago

for saying that. i'm not saying i told you so, but i think people come around to that. so if you look at it on a long term basis. if you get people to recommend your products or services, it's extremely powerful. you can't look at it over a short period of time, however, and you have to look at it as a different way to search. is it worth $100 billion? i don't know. >> are you going to get an allocation? >> no, i don't get an ail case. i'm not important enough to get an allocation. i'll buy it for my nephew and grandkids. >> you will? >> well, interesting to see what it will look like 10 15rks years' time. >> why did you get in trouble? >> they're focused on generating it. i tend to look on the classic

like on wrating margins and revenue ratios. valuation, p.e. ratios. it doesn't compute on that basis. we were talking actually with -- the guy you're going to have on shutterfly about this. you've seen high-teng companies float ipo and come back sharply. i think facebook is going to be the same. retail demand will be very strong. it will probably trade up initially, and then it will probably relax over a longer period of time. but this is very different to google. i think google has an immensely powerful position. it's in five areas. search, video, mobile, display. it's in a fantastically strong position if it can develop the five legs of its stool. >> is facebook comparable to google in they or no? >> not yet. i think wa is really interesting is facebook having a handset by the end of the year and that will put it in a much stronger

position. from our client's point of view, the player field is much more level now. if i looked at the playing field four or five years ago when google was the only gamer in town. you have -- all of it is much more level and it's a much more competitive marketplace for us working on behalf of our clients. so it's much better now. >> what percentage of your clients' money is going toward google versus everything else? >> well, what's -- that's an interesting question. facebook in the first quarter of the year was relatively flash for us. >> in interprets of market share and in terms of your advertising dollar. >> we buy $75 billion of media around the world. i think we've had it up.

news corp. will be up. facebook last year was $200 million. we targeted $400 million. we have some to go into that. we went from a very small base. so when i came on last time, you said to me if going sl google is 1.6 billion -- there must be a disconnection. there's something in what you say, actually. i don't want to compliment you too much. i went on bloomberg first for my first quarter. you banned me from cnbc for seven days. >> you went on the mare. >> what is on bloomberg? i don't know what that means. >> i should wash my mouth out with soap. >> martin and i had a very long conversation. >> don't worry about it. no one saw you. >> you're not a multitasker.

>> i am. >> you are? >> i am. >> he's a crazy multitasker. >> did you see the roubini quotes? >> i did see the roubini quote. i want to tell you what the rue brue -- roubini quote is. >> i think the unknown consequences are so great. >> off camera if i asked you, you don't see it with greece. >> no. think we'll fight so hard to try to keep them in. now, what's happening is -- >> you have a leader that doesn't want to be it anymore. >> andrew, look. from a popularity vote, they don't vote for christmas. you see it in the uk. it's a long-term thing yochl view to get your costs -- >> does that mean that the europeans, the ecb are going to have to do a lot more to make it more amenable? >> yes. i was thinking about it this morning coming out in the car,

you know, what this probably means is easier monetary fiscal policy, more inflation. and i was thinking about what impact it would have on our clients and ourselves and actually in the short term, it's positive. now, we're sitting in america saying it's all of europe's problems. hopefully we'll have a conversation like this this time next year. i bet we'll be very focussed on meshlg, its deficit, and the boot will be on the other foot. so what are the americans going to do? what are we going to do about america? post the election? because all that we're seeing at the moment, i think, is pre-election trends and policies to try and get the electorate in the right place for the election. whoever wins. we have a bet going on this. >> you've seen -- i would just mention some of the polls. gallup is one or two points. >> neck and neck it looks like. >> real clear politics if you

put them all together. it's 46.7 to 46.8 or something. >> the president has a very good feel for the move of the electorate and the demographics and i think that will win out. >> a lot of it depends on the economy. a lot of it probably depends on the economy and what we do between now. >> you would think that there are a large percentage of americans benefiting from the government largess. it should be easy. >> on the other hand, 8% unemployment. >> or maybe even higher than that. >> usually it runs about twice the level of general unemployment, and spain is now at 15%. >> i think you erie right. it's around 16%. for teenagers at least. >> so it's a very tough environmental. to win an election in that sort of an environment, i mean -- i mean this is -- france's

hollande -- ask andrew. >> you're in the french restaurant. is first central government since lay mehman. >> it didn't work for kerry, didn't work for gore. maybe the time is right for it now. it never worked before. normally you need a better investigation for the entire country than just soak the riff snook the signal you're getting from europe is it does work. >> well, come on. you're throwing out anybody who's there now. >> call it what you want. that's what's happening. i'm not suggesting it's the right thing. >> the bipartisan austerity we're talking too. >> big argument here in europe is whether austerity works, whether a loser kensian approach

works. >> we're not there yet. we're not having any austerity here. not from the government. we're having austerity from the recession. >> we have to gorks but if that's what you think happens, if -- we have to gorks but if the boot's on the other foot, meaning america's in trouble post-election, does that mean the advertising outlook is much more sour in the united states? >> i've been saying consistently for a year sore or so. if we're growing last year 5% to 6%, 4% 4.5%, i see the olympics or football championships. 7 to $8 billion. the forecast will be spent on the elections in one way or the other in the u.s. over this year and last year. so we're talking about more money. so it won't be that -- by 2014, we'll have brazil, the world cup, and the mid term

congressionals again, the elections again, and the winter olympics. so you have russia and brazil, two of the brits, major worldwide events in 2004. >> we don't get a lot of write-ins from the europeans here from the elections. they would have re-elected obama 90%. we know how you love it. you love the pillars in greece. you guys think that hope change is so happening. >> you're so predictable. >> you think the hope change is predictable. we don't have a whole lot of write-ins. >> you've heard the american exception. we're different. >> i'm exceptional. i'll be the judge of that. >> thank you for having me, back, becky. >> thank you. >> we're looking to go to dinner. >> if you win, it's your treat. >> the ceo, shutterfly, how his business is benefitting from kodak's bankruptcy. and changing how we take and

store pictures in the process. [ technician ] are you busy? management just sent over these new technical manuals. they need you to translate them into portuguese. by tomorrow.

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coming up, remember when you took pictures with film and then rolls off at the photo store for development. our next guest was a game changer. we get a snapshot of his business and how it's changing the world of photos. that's coming up next.

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we're back. joining us now is the shutter fly ceo. we can call you a disrupter. you're disrupting the photo business in many lines. just bought kodak, online gallery. changing the face of this business. this business is becoming a different business, i thought people were printing out pictures on shutter fly. that's not the biggest part of the business? >> in 1999 it was 4 x 6, last year 4 x 6 was not the major

part of the business. now it's photo books and iphone cases. >> somebody takes a picture on their iphone and what happens? >> they take a picture. this is my three boys. drag it on to the iphone image and hit buy -- >> what does that cost? >> $34. >> so it's not cheap. what's the future of photos. 4 x 6s, you don't do it any more? >> i'm going to do it. >> all these pictures and nobody is printing them out any more. >> we're doing hundreds of millions of prints. it's a small part of the business today. prints were about $120 million. the rest was the personalized products and services. people are still printing but we offer much more interesting ways to interact your memories. >> how big is the international business because i assume that's where the growth is?

>> today it's zero. acquisition of kodak we get canada. we hope to be global. >> who is doing this in europe? >> dozens of small companies all kind of land locked in their host company and so we think taking our global brand and our strength of being vertically integrated, taking it across the pond is an opportunity for shutter fly. >> when does a company like yours does a deal with facebook you can do with one click and have them made. >> you can kbrab the pictures, put them in our photo books. our new offering which we launched two weeks ago, offering personalized cards. grab your photos and information. sign up for a reminder service on facebook so it grabs all your friends birthdays. >> i use a competitor service, postergram. >> thank you very much. when we come back we'll talk about the greatest risk to the

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a double dose of guest hosts, doug dachille and gillian tett. raising the stakes on the keystone pipeline project. house energy committee chairman fred upton weighs in on this issue and the implications for the the election. >> we present a new inductee into the blue chip book club. >> wall street is being made into a movie. a story i would have loved to have written. fortunate the wolf of wall street" author is here and pulling no punches. >> second hour of "squawk" begins right now. ♪

good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. dow component, walt disney earning three cents better than the street had been expected. disney saw stronger results from their theme parks and cable networks. and green mountain founder is shocked and hurt after being removed as company chairman. that move came after the company determined he violated the internal company stock trading prices. and boehner says the the election will be president obama's undoing. >> the american people, they are pretty smart. they figure these things out pretty well. l.and it's going to be about th economy. the president can't run on it.

and i'm frankly pretty pleased with the position mr. romney is in at this point. and frankly i think he's got a lot of room to grow. >> boehner also says europe's problems should serve as a warning that the u.s. should deal with their problems quickly. after five down days for the dow you can see right now it looks almost triple-digit losses. the s&p future under pressure as well. joe? >>. not one but two guest hosts joining us. doug dachille ceo and cio of first principles capital management, gillian tett is the u.s. managing editor for the "financial times." we're kind of merged you two together. we may have some discussions. one second, gillian. we'll get to you first. you do have some french so

you're probably an authority. you're so happy. [ speaking french ] >> so it's not francoise. he's predicting another recession in the united states and my point was i thought housing that we had seen the worse, but he pointed to unemployment still being high and income being very weak and then problems in asia and europe that can do it. do you think we'll have a quarter of negative gdp growth in the next year? >> i don't. i really don't. i think the biggest issues we have that we face is just policy holders screwing things up. policymakers. if you look -- look at the debate right now with the student loan. look how insane that is, okay. education -- we're dealing with high unemployment in the united states. one of the things that's most critical to solving unemployment

problem is getting people educated. >> that's a ten, 20 year problem. >> i'm just talking about look how silly the policies we have about student loans right now. right now we have a rate that we're applying for subsidized student loans. these are studio audience that have satisfied financial need tests and the rate on that loan is higher than the penalty interest rate that we charge to someone who didn't pay their taxes on time. if you pay a penalty on your taxes for delay of payment that's a 3% rate. for a need based qualification you try to get a student loan to go get an education to get a better job it's 6.8% and we can't pass legislation to get it anywhere near the market. that rate was established in 2001. nobody had the crystal ball to know where the market rates would be. >> what do you think a private market rate would be. if there was a private market rate what should it be. >> you know how they will price it? they will spread it as a spread

off the government student rate. if i see the government is making a government guaranteed student loan at 6.8%, by the way in contrast, that's virtually nondeductible. we have nondischargeable loans, a student loan is nondischargeable, ate lifetime obligation to pay until you die. when you die they discharge it. you have a loan structure, if i was to make a private loan what do i look? look at the government rate? i would be at 10.8%. whereas if they were to move the rate to 3.4 i would be at 7.8. >> it's policy making. >> screwing things up. >> does the recent rally in the ten year again rekindle global slow down. >> the recent rally in the ten year is the expectation you can make money on the ten year. people believe that and there's so much money going into the ten

year for a number of reasons. some are because they think they will have great opportunities to make a quick buck on the ten year because it's worked. >> everybody that came on said one thing i'm bearish on. >> same thing. why do people think it's a quick way to make money. >> it's the expectation the fed -- >> does it have anything to do with france or greece? >> of course. >> think it does. there's terror involved in what's going on right now. investors are very scared in what happened in the last five years and very nervous looking forward. >> why buy the ten year note. >> because you have -- >> you have zero t bills at 1.8, the next week it can go up 40 basis points. >> right now you have incredible correlation in the markets. people are buying ten sharyear apple shares. they are looking for safety.

bonds are terrifying. in the short term with the fed and everyone else piling in plus of course you have these new banking regulations coming in, forcing the banks to hold more government bonds. people are saying i'll go to safety and juice it up a bit and go to apple. >> you were on a few weeks ago. >> yeah. >> it's gotten worse in terms of the prospect for a country -- what's the percentage that it doesn't stick together. >> 51. more like 60% now. but if you're looking for the common unifying theme between what doug was talking about and europe is in now, people across the world are saying we don't have the political structure in place to deal with the fundamental economic challenges we face. whether it's having a policy making group in the u.s. that can deal with student loans and the madness around that structure and mortgages or whether we have governments in

the eurozone that can tackle these fundamental economic challenges. and what you've seen in the last 48 hours is incredibly important because whether it's about loans or the greeks or irish coming up and everybody should be watching very closely what's happening in ireland right now, you have a howl of protest in pain from the electorate that says we don't trust our government to never mind fix the problems to actually -- >> to get fixed i would have thought sarkozy, wouldn't you if you were a reasonable person. in greece you don't want neo-nazis. >> two issues going on with sarkozy and francois hollande. first do you believe the eurozone sticking together will solve the problem or make it worse? sarkozy was very closely aligned with merkel. people are voting for francois

hollande said maybe we're not so enamored in being so close with the germans. and austerity is issue. >> he said he thinks the ecb will have to be forced to do more, more action if you want to keep this whole thing together otherwise the electorate will say forget it. >> absolutely. the pressure is on the ecb and yet you have a lot of powerful voices inside the ecb and particularly inside germany saying the limits of monetary policy have been reached and we had a very important opinion piece from the head of a bank saying there was no more that central banks can do. it's up to the politicians and the problem is the political system the losing faith among the electorate. >> you can see anything short of -- since the individual countries can't devalue, seems like the ecb has to devalue. >> here's the critical issue. the eurozone project was launched to try to heal the wound and the scars of world war

ii. it was supposed to be a unifying political force. the big tipping point is it's begun to reopen the scars. you look at the rhetoric emanating from germany, you look at the rise of the far right in greece, incredibly important. you look at what's happened with ireland and spain. the kind of language that is coming out. we're seeing scars reopen and growing tensions between the voters and the elite who had the eurozone project in their dreams. it's hard for investors to plot right now. >> gillian, there's two schools of thought. one is that -- or not -- [ speaking french ] >> he'll quickly run into the merkel buzz saw and realize he has the play. the other they will renegotiate and agree to print more. they got to print more. but then i think about that.

the germans are so worried about the wheel barrow -- they like the weak euro because they have been make being hay. >> it's a disaster. look, you have to diagnose what the problem is to decide what the treatment is. printing is okay when you think you have a cyclical downturn. you can print as much as you want and provide fiscal stimulation. if you have structural deficits you have to address the structural problems that will allow monetary policy to work. if all you do is throw more money at the problem and you don't get growth you have a real disaster when you apply monetary policy and accommodation and fiscal policy and deficit spending in that matter. >> right now economists can sit there and talk about economic theories all they want. the reality is political incentives is trying what's happening in the eurozone. first, merkel itself is getting

nervous. it suffered a big drop over the weekend. if you look at a country like greece, a couple of years ago 80% of the electorate supported the centrist parties. over the weekend 30% did. that means 70% of the greek electorate are basically going for noncentrist parties and frankly when you get into that situation, economic theories are great, they ain't what's driving. >> can a german vacation in mikonos right now? >> my favorite theory how to cope is create a german club med and build it in greece and give all the german pensioners vouchers to go to greece, spend their money in greece, have a nice holliday -- >> do you get tar and feathered if german goes to greece or greece goes to german.

there's a lot of animosity. >> all the germans should go to greece and spend their holliday and spend their money down there. >> the greek have to go up and see people do work and pay taxes which is a new concept. we meet somewhere in the middle. >> we're going to slip in a break and come back to this conversation throughout the next hour and a half. if you have questions, comments about anything you see here, shoot us an e-mail ass "squawk"cnbc. coming up next the keystone pipeline project. it's been revived. canada applied for a new permit with an altered route. we'll talk about that with fred upton after the break. >> still to come, one of the most infamous names on wall street, making millions by day and spending it all on sex, drugs and lavish toys.

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welcome back to "squawk" on this wednesday morning. we have got some news coming in to earning central. just a few minutes ago aol reporting first quarter earnings of 22 cents a share.

revenue beating consensus. citing stronger advertising revenue and lower expenses and that's a company we've had an eye on for the past couple of months. a lot of people said it was left for dead. then hit that microsoft patent deal. interesting story. transcanada reapplying this month for a permit to build its controversial keystone excel oil pipeline hoping for an approval by changing the route. michigan republican fred upton is the chairman of the energy and commerce committee and he joins us now, known to me more famously as the uncle of kate upton. >> no way. you did not know? >> i did not know that. >> i know fred upton for a lot of reasons but to me that's a good reason. it's hard to forget. hard to forget. let's go through this. a, is this route going to get approved? just handicap it for us.

>> i think that there ought to be a pretty good chance that it will antibiotic proved. frankly they are running out of excuses of why not to build this thing. they are in essence moving the route further away from the sand hill aquifers in nebraska. we use oil sands from canada. we refine it in other refineries around the country. there's no reason not to do this one. add 20,000 jobs, direct jobs, more than 100,000 indirect jobs. we're a country that consumes about 18 million barrels a day for transportation. we only produce seven or eight million. this is going to go china if we don't build it here. >> the keystone pipeline has become an icon almost in a way for the controversy about jobs and politics and the role of government. i'm curious if we've overblown all of this in terms of what this ultimately means. >> well, i mean folks understand what supply and demand is.

this is the canadians. they will be producing about four million barrels a day from that region up in alberta. they want to export about a million barrels a day and there's no reason not to take it here, particularly when we've seen gas prices in essence double from the day that president obama took office and there are certainly still predictions that it's still going to go up this summer. >> fred, gillian tett from the "financial times" is here. she has a question. >> what do you think manufacturers are playing in this debate. something caught me the other day showing china is becoming increasingly creative in terms of how it gets access to oil in places like iran. how they get around sanctions. are you concerned oil being directed to china will for the government's hand? >> here's the statistic you need to be. in the u.s. there are about 800 vehicles per 1,000 u.s. residents or citizens.

china today is about 65, 70 vehicles per 1,000. india is about 35. as third economy begins to improve, and you look at where auto sales are projected to go, they are talking about in a few years auto sales in china are going to be about 200 million a year and in this country a goodyear is about 12 or 13 million vehicles a year. so that thirst for china and india will be the for oil and they are looking for long term contracts for oil just like they did down in brazil. the early part of the obama administration, we in the u.s. have provided about $3 billion to develop some of their offshore oil. all of that oil as i understand it now is going to china. it's not coming here. so the chinese are very good, very adept at trying the lock up these long term contracts just like they are trying to do in canada if we say no it's going

to china, we're going to get none of it back. >> i think the other question i have, isn't the issue -- i think the issue has been framed about the jobs created directly from the pipeline but what about tissue of energy independence and the ability to have lower energy to actually more broadly help improve the economy and put us on a competitive landscape of manufacturing back in the united states by having lower energy costs. i think the focus on this 20,000 jobs undercuts the importance of this project. >> this is why this project should be a no brainer. not only does it create jobs direct and indirect jobs it also reduces our reliance on oil, it's a national security issue, it reduces our reliance on countries that aren't quite to friendly to us whether it's venezuela or countries in the middle east. canada is our best friend. they want to export this oil to us. they don't necessarily want to send to it china but at some point they are going to say gosh

the u.s. has been studying this for three years now. it's a privately built pipeline, $7 billion project. if the u.s. doesn't want it even though they get oil sands from other places in canada, even though we refine it in places like detroit and other places around the country, if they don't want it, we'll just build that pipeline to the west and the chinese will take it all and the chinese will be very willing to take it all. in fact, there was at that report in the "wall street journal" just a couple of weeks ago, front page that in essence they were planning to spend as much as $5 billion to take it instead of having it come here. >> we just had sir martin soro on and talked about the president's ability to gauge the sentiment in the country. there's certain constituencies that they felt the epa hasn't gone far enough and the president has caved on certain issues that are near and dear.

but with the political capital that he built up from appeasing the far left on this pipeline will that work to his advantage? even unions wanted this thing to go through. so he is very adept and i'm just wondering if you do the calculus was this a net positive for getting some votes in november for him? >> let's remember why he made the decision that he did in all likelihood. we've studied this for three years. it's the secretary of state who makes the decision. hillary clinton said in october of 2010 i'm inclined to support this. >> right. >> in august of last year she said we're going to have the review done before the end the year. then we had a huge protest out at lafayette park in the fall. >> a core contingency. >> the message was mr. president if you approve this pipeline we're going to be sitting on our hands in an the election and within a couple of days the president in essence said we're

going to punt until after the the election. so the canadians were very upset about that, that's for sure. but then compound the problems with our relationship with the canadians, you know, we passed this as separate legislation last summer, passed 2-1 in our committee and again on the house floor, was included in a couple of different vehicles. it's now in the transportation bill, it's in the house passed bill. there was an amendment to add it in the senate and the senate has 58 votes for this keystone project, but it needed 60. so this is now a point of contention, a point of disagreement between the house and the senate. we'll see where those negotiations take us as the highway conference started just yesterday. clearly there's bipartisan support for it. >> thank you. we got to leave it. we appreciate you coming on this morning. >> keep an eye on that ravel character. >> i don't know if he knows him.

>> he knows your niece. >> he knows your niece. >> thank you. all right. let's get it. >> he's got almost as many tweets as you. >> he's got a lot. >> let's take a quick look at the markets this morning. we've been watching and the situation has been weakening throughout the morning. the dow futures are down by 109 points. the s&p futures down 14.5 points. the ten year, check this out. it's fallen between 1.8%. the yield on the ten year is at 1.797%. people treat this as a safe haven. >> i have to refinance my mortgage. >> 1.797%. let's take a look at the dollar. the dollar is stronger against the euro. the euro is below 1.30.

the dollar yen is at 79.55. and some red arrows across europe. ftse is down 1%. the cac 40 is off by 1%. 32 points there. in germany the dax is off by 28 points. italy in a spain you're seeing quite a bit more pain. italy down by 1.7% and spain the index there, the dj index is down by 3.8% and we had been looking at spanish and italian yield bond earlier today. those spanish ten year bonds trading at above 6% and that was a concerning level. this is happening as we're seeing a greek government being put together and a lot of concerns about what's going to happen to the euro. we'll talk more about all of that in just a moment. when we come back let's take a look at the brighter side of this. there is a bright side for the mortgage market and we'll have that story right after this. then europe weighing on the markets in yesterday's trading session. are investors on wall street

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welcome back to "squawk." 7:30 a.m. on the east coast on a wednesday morning. among the stories we're following mortgage applications rising 1.7% last week according to the mortgage bankers association. applications for home purchase and refinancing increased as mortgage rates hover near record loss. minnesota vikingses one step closer to have a new home. the senate built for a stadium to be built. a conference committee still needs to work out the differences between those bills. renovation of new york's famous pennsylvania station is now set to begin later this week. penn station the long delayed $270 million project designed to improve access to underground passenger train platforms. joe. >> okay. andrew, good work over there. up next we'll find out which emerging markets spoirgs for

growth. the president of the sovereign wealth growth at common in fund tells us which areas of the world is attracting his attention. but gillian is here. and later we'll don't build our library. today's entry was the basis for the movie "boiler room" we'll speak to jordan belfort about "the wolf of wall street." >> these are new awards. they look good. they changed that gold around a bit. got to take a closer look.

all right. welcome back, everybody. he is a former duke basketball captain establishing his position in the investment world, providing strategies. joining us right now with his game plan, the president of common funds pension and sovereign wealth group. it is great to see you today. thank you very much for joining us. doug, we want to take a look at what's happening right now in the market and i know we have more things to talk about.

as we've been watching for the morning futures have come one pressure. you can look at the ten year and it's trading below 1.8%. what's going on in the world? >> i'll tell you. there's quite a bit of uncertainty out there. here in the wu.s. with the elections coming up there's a lot of uncertainty manifesting itself in the market and certainly globally with all the challenges you're seeing in europe, primarily i think that's what's driving the market right now and we're certainly watching it very closely on behalf of our clients. >> you're a longer term investor. you look at pension fun. what do you tell those people. >> i'll tell you. despite the recent action in the market we're seeing cautious optimism, i would say. we're looking for opportunities for those investors and i think we're finding them such as the emerging markets. we're a big fan of the emerging

markets. we have been an advocate and our clients are looking for opportunities, in a number of areas in the emerging markets and looking for interesting ways to play them, private equity as one example. we think it's really a consumer story if you look at it. in 2010 as an example the u.s. from a global, from a gdp global gdp perspective, the u.s. enjoyed, i believe, around 25% roughly consumption pattern with respect to gdp. if you look at brazil, russia, china, they were around 17%. if you check that on into 2030 the story changes. the u.s. drops to about a 17% gdp figure and those same countries enjoy about a 33% gdp figure. so with china, of course, being around 23% of that number. so for us it's a consumer story. it's a consumption story.

it's one that we want to take advantage of in the long term. how do you play it? >> do you play private equity or do you look if it's a consumer story or do you look at the multinationals. >> you can look in terms of the public markets but in terms of longer term investing private sect a good way to think about it. venture capital certainly emerging markets, private equity is something we're very focused on and our clients are very interested in that as well. >> the problem with private sect you have to look at its exits and whether you can get your money out. i'm curious about your outlook for a country like china. in the short term there's a lot of excitement. in the median term the outlook is binary. either the system holds together or you can see some political stresses starting to unraveling. at what point do you get worried about whether you can get your money out of the private equity in places like china. >> china is an interesting story. unlike in the u.s. and other

western countries, a lot of the chinese economy is driven by government. so, in terms of judging where the exits are going to come from, a number of the investments that the government are making aren't necessarily for the benefit of creating that kind of value. you have to be careful in places like china but we see other areas, like india being one you can benefit from the technology boom that's happening there. again, brazil, obviously from a commodities point you think that's important too. china, i think -- >> would you be more bullish about china or india right now? >> we like both. but india certainly is an area we're looking at very closely. >> what about the other extreme for investors? what are you doing with investors with liquidity? what do you put money in when people need liquidity? how do you manage liquidity. >> that's interesting. >> that's the other extreme. i find it to be harder problem

to figure out. >> yes, i think that's right. we see a lot of our investors looking for more liquid opportunities. hedge funds certainly is an area where diversification properties in hedge funds are very attractive. we've seen a number of our clients showing greater interest in that. >> you done? >> no, joe, please. >> three articles in the last week about retail or lack of retail interest in u.s. i mean striking the amount of people have not come in following getting burned three, four, five years ago. typically that would signal a good time when people are down on -- you know, if everybody is rushing in and your cab driver is talking about-face book that's not a good time. volume down 24% a lot of computerized trading isn't this a good time for u.s. stocks? >> i think it looks very interesting for u.s. stocks

right now. >> dividends at 1.7% on a ten year. >> retail and certainly some of the reports are down. you have seen signs, auto sales as an example, you've seen sales of consumers coming back into the market and looking and driving some of those opportunities that you find in retail. >> what has the reaction of pension plans. because you manage money for pension plans. when you see the ten year going below 1.80 what is their reaction in their willingness to allocate. do they get to a point where they say i need to capitulate, do i need buy more bonds because the value of my liability keeps going up. >> pension funds for the first time are allocating more to fixed income and equities. it's been a turn around. >> at the worst possible time. >> i think what we're seeing and what we're talking to our

pension fund clients about, it's interesting. we're seeing a much more of an adoption of the endowment model, if you well. a number of our client. we have over 1500 clients. we work with select pension plans in what these pensions are saying to us is that the return is a problem, right. they are not going to sling their weight. >> the other stuff -- did you ever block a shot -- do you ever score on here? >> tell us. >> the internet is interesting. you can go on the internet and find my story. oil tell you michael jordan is one of the greatest players. >> did you ever -- do you remember? >> probably one time in my career and more in the summer. not during the season. >> is it as much fun managing money as playing sports?

>> there's lessons i learned from playing sports that i think definitely are applicable to what we're doing. >> which is more fun? >> depends on the day and depends on the market. i can tell you playing basketball at duke was an honor. >> you beat michael jordan's butt. >> i hope he's watching now. you may receive an op-ed letter. >> doug, you'll come back? >> certainly well. >> much more from our guest host. gillian did you play basketball? >> i'm 5'2".

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checking the futures, which i guess we have to. 101, and it's been -- this is the third straight day. >> we had this before and then the market has come back. >> the dow has been down for five days in a row. >> it's not a good situation. >> we were looking good at four year highs, 1303 on the dow and now 12,932. gold. it's greece. >> i thought it would be france. >> it's france but ireland that's coming up. >> okay. it is now time to present another blue chip book award

this morning goes to "the wolf of wall street" by jordan belfort. he's been called the poster child for the dark side of modern capitalism. tease author of two books that tells his story of becoming a stock market millionaire at 26 years old and a federal convict at 36 years old. good to see you this morning. thank you for being here. i should say the book being turned into a big movie. you are being played by leonardo dicaprio. i'm curious how you think about the world of wall street when you were there, if you will, and where we are today in the culture. >> listen. i think that things have always sort have been a bit, let's say

inside firms people get carried away. the difference is like in a firm like goldman i don't think everybody was talking about people like muppets, just a handful of people. what happened is that on wall street the littlest bit of fraud gets magnified so much. just a few people doing things wrong can destroy so much. even back when i was doing what i was doing which was wrong, there were other people on wall street committing fraud as well but the system seemed to be operating okay and then flash forward ten, 15 years later, wait what happened? well that stuff has been going on for a long time. after a while a little bit magnifies. the system itself is not entirely corrupt. >> do you think the culture is different now? do you still have friend on the street? >> post-gfc the culture has changed. the unbridled greed that ruled wall street has been reined in somewhat.

>> this is all coming home to me. i was there real-time for this. were you ever with a real firm? >> yes. i started off with rothschild. >> this was bucket chop. >> not really. >> it was bucket chop. i mean it wasn't merrill lynch. >> not a great comparison by merrill lynch. >> not a great comparison but i don't know whether you really speak for the member firm in terms of what was going on there when we talk about this. if you were running a buck shop? >> it's about human nature and people are people. whether it's here or a bigger place, a bigger shop it doesn't matter. things that drive people to do certain things. >> but there's lawyers, there's, you know, there's doctors that are unscrupulous that used the word muppet at some point. i just happened to look

through -- greg smyth and culture, a culture around wall street whether it's at the big firms or smaller firms. >> you don't start on wall street with bad intentions. you go into wall street and you get inducted in and you get corrupted by the culture. in my firm what happened is it ran away like a freight train. before i knew it i did things i never thought i would do. it seemed perfectly okay. >> when you think back and you were in prison what did you think of what did you? how do you think you got there in retrospect? >> one step at a time. doing everything right and i took one step to the dark side. i will pull back and do it right again and your line of morality moves again. >> what were you doing?

>> what i was doing was commonplace i was front running customer trades. put block of stocks that were hot in friendly accounts and buy them back. it was very similar. >> i had my issues when i was, you know, at a retail broker, it was commissions then. much less fee based. so as honest and ethical as you want to be, if you didn't have your rent covered, you looked in your client's book. then there's bucket chops that exist solely to separateate peo from their money. >> there's varying degrees. what i was trying to say what i did was wrong. but it wasn't pure bucket chop.

it was $20 stocks and $30 stocks. the point is this, when you're doing the big stocks or small stocks, the bottom line is this. at the end of the day, certain times when the brokers tend to act maybe not in their best interest of the client. >> i think less so with the fee structu structure. >> where was the regulators. if i saw you on the street corner offering me a security, i probably wouldn't do business you. i would ask a lot of questions. but when i'm a customer and i open up an account with a regulated entity i kind of feel that i have protection and to some extent my guard is let down in those scenarios. what is going on with the regulatory environment because regulation today is a big issue. so i'm kind of curious as to what your view as an inside organization that this was going on, where were the regulate ors. what were they doing.

>> you hit the nail on the head for me. when i got seduceed into this, when i went to this firm that was selling penny stocks i looked on the wall, i must be okay. i figured -- >> thank you for being here. i'm sorry we got to leave it. we do have an award. you have to sign the book so we can put it on the book shelf. get this gentleman a pen. your award, sir. >> blue chip book award. >> you got a movie coming. >> do i. >> we'll look out for that. and maybe you can bring leonardo next time. >> when we come back we'll take a look at the next big web head. we continue with this. take a look at this. this is a browser that connects your facebook, your twitter and other social media accounts. makes it easier to keep in touch with friends. we'll be joined by the ceo of

rock melt right after this. >> up next on "squawk box" don't start your day without knowing the names that will make you money. joe has your list of stocks to watch right after the break. dave, i've downloaded a virus. yeah. ♪ dave, where are we on the new laptop? it's so slow! i'm calling dave.

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♪ let's take a look at some stocks to watch this morning. would have been a perfect time for animal orchestra. we'll do that for your one of these days. a little bit. i need to pick a song. we need to get a back bone. let's start with soda stream first quarter was 55 cents. that was above expectations of 58 cents. that stock is soaring. better than expected revenue. this has been one that people are waiting for something happen here, right? been a big hit. what do you do? you're able to make your own soda fountain drinks? >> supposedly. i've never done it. >> it's very popular. >> soda is why you're fat. >> we had an office vote and they voted to get a soda stream over a coffee machine.

>> our soda is why we're fat. >> warning soda is why you're fat. >> there you go. walt disney. you saw walt disney. please. the animal orchestra. reports second quarter, three cents ahead. he sees continued good trends. say hi to gillian and wants an animal orchestra. >> we have more coming in, if clueding the view of steve crawford.

the dow falling for a fifth straight session has concerns in europe rattled investors. steve crawford will weigh in on the market slide. >> facebook is the most widely anticipated ipo in recent memory. >> i believe i deserve some recognition from this board. >> i'm sorry? >> yes. >> senior internet analyst will unveil his forecast for the social media giant's first year. >> our series continues on the disruptors. eric vishira is the co-founder and ceo of social media friendly

rock melt. he'll tell us what's next in technology. the third of "squawk box" begins right now. >> welcome back to box here on cnbc. first in business worldwide. i'm joe kernen with becky quick and andrew ross sorkin. we're joined by gill jan at the time and doug dachille. you never got your medical license, you just got the degree. >> right. it's not for me. >> you became a stockbroker. >> i started out being in debt. >> that's right. we are keeping close watch on the markets this morning. those u.s. equity futures have been under quite a bit of

pressure. they are down by 81 points which is off the worse levels of the morning. the s&p futures are down by 10.5 points pap lot of this is following what's. happening in europe. they are off their worst levels than they had been. the ftse still down by 1%. in paris the cac 40 down by 1%. in spain down by a 3.33%. this is coming off what's happening in greece. spain will demand banks set aside another $45 billion against loans told you abouters. the country is trying to build confidence against fears that it may need an international bailout. that move is expected to be announced on friday. and the troika cancelling its mission to greece.

amid concerns the political turmoil in greece could derail the rescue effort. >> let's get you caught up on earnings news. aol reporting first quarter earnings of 22 cents a share. that was a 15 cent beat. tim armstrong citing stronger advertising revenue and lower expenses. nelson pets tends to talk to the company's management about strategies to enhance shareholder value including strategic alternatives. we have to keep an eye on what happens to that company. >> interesting one for him. >> it is. >> he's a different guy. >> great company. but the stock hasn't done much. greece's uncertain future in the eurozone causing jitters in the global markets. steve crawford is here. former co-president of morgan,

for how many years you've been coming on and i don't want to put words in your mouth but overleveraged around the globe with something you said will take a long time to play out. you've been worried for three, four years. that's your tune. you've been right. here we are still. >> long way to go. you know, we're seeing what happens when an irrestible force in the form of deficit, persistent deficits meets an immovable object which is excessive debt. we're bouncing back and forth guardrail to guardrail. >> we're ahead of -- we got time here compared to europe. but knowing you, i know that the things that we're facing, we shouldn't be less worried about what's happening here. our problems could be bigger. i'm thinking of entitlements which we've done nothing about but obamacare is a nightmare.

>> yeah. well you know there's a lot of talk about austerity versus growth. it's a red herring. it's not one without the other. the advocates of austerity, you look at what's happening with respect to greece and how that's radicalizing the population. that has an outcome that's bad. if you look at growth i find the approach that france is taking the growth particularly interesting. i mean you got a president who, new president who calls france's enemy and he has to keep his country running. >> those guys like to talk. >> yeah. but, you know, usually when a system is not working, an the election, you know, tries for something different. they are what 56, 58% of the economy has been run by the state for a long period of time. and now we're going to double down. >> i think they should -- if i

could pick their president i would put sarkozy back in and try to figure things out. >> to me there's a list of four or five things. you can't just talk about the problems without having some idea of how to fix them. i think there's too much austerity and growth side. entitlements is number one, two, three on the list for a number of reasons. first relative to the actual level of debts outstanding it's much more important to our system, right. there's 50 trillion of real liabilities associated with entitlements versus 12, 14 trillion. >> is that before obamacare or after obamacare? >> that's kind of before. the estimates of that is -- >> it could double. >> could doiblt. the interesting thing also about entitlements is they got to be transitioned in. right. you can't tell people who are 65 years old you can't pull the rug out from under them. >> we don't even want the conversation. the aarp and people that call

themselves conservatives over 65 years old say they don't want anything done to any of my stuff. >> the other interesting thing is the younger generation who are most at risk as a result seem to be the least either educated or interested in making a change in that area. >> do you think paul ryan's plan has any merit at all and what about the other side has demagogued him as the anti-christ, basically. >> look, i think when you look at entitlements in particular it's year the system doesn't work. making a number of changes, right, i mean most of these benefits were put in place when life expectancy was 50s, it's now 65, 70. >> 50? 72 or 73. now life expectancy is 83. i agree that the problem s-you know -- you know, they haven't shifted the retirement agency along with life expectancy so you get the same number of years

of benefits. you retire at 62 you live to 83. you just doubled the amount of benefits. that's the issue. >> one thing you can get credit for they started talking about raising the retirement age even in france. >> and working four days instead of two and a half. >> if you look at surveys, the population in america is very opposed to anyone touching retirement and they want it cut but it doesn't back up. the only thing the survey shows that americans are willing to cut happily is foreign aid budget and that's nothing. so unless somebody gets serious and talks about entitlements it's not going to be an answer. >> what's interesting about it too is unlike most of the other fixes that people are talking about, if done properly it doesn't have the immediate impact on the economy, right? it repairs the balance sheet without having the fiscal drag

that an immediate tax increase or reduction in spending has and it shows we're actually committed to fixing what's going on in the country. so it's actually not a free lunch but one of the things that doesn't have a real drag. >> let me ask this. we can't raise taxes enough to pay for all of these entitlements, can we? >> no. let's say the president is re-elected. will he just decide to i'm going to try to do this by raising taxes or does he have to bring his feert the point where we start -- >> don't know. we're the best in a bad neighborhood. this could go on a lot longer which makes fixing the problem a lot more difficult. >> get closer to europe. >> i'm hopeful that a bunch of things happen at the year end. the election. expiration of bush cuts. three or four things that are happening that may force, you know, congress's hand on trying to out how to deal with this. >> people talk about the cliff. you sound like you wouldn't be that disappointed if all the

bush tax cuts would expire. >> that fixes a lot of thing. is that snauft. >> think we're seeing what happens in that instance in europe. i think, none of the european countries are actually reducing their debt to gdp. they are actually all going in the other direction. now i think there are clear lui some fixes that could be made on the tax side. some of which wouldn't be particularly popular in my circle. i think actually moving the tax system more towards incenting income is a good why. >> how would you do it? >> whether it's calibrating or closing the distance between income taxes and capital gains makes some sense to me. >> would you close it completely? >> what about double taxation. the problem with income -- income is not doubly taxed. capital gains, a lot of time

you're dealing with taxation with the second round of taxation. it's kind of distribution level which setter dividends or capital gains. if you raise that you're creating a bigger penalty to capital going into business per se in the form of corporations. that's the problem i see -- that's tissue. the double taxation issue of corporations. they are not partnerships. with most of the capital gains there's a double taxation issue have to think about. >> i understand the double taxation but you need to find revenues. >> do you really want to inhibit investment? >> i think you actually want to encourage consumption. >> encourage consumption? >> yes president not debt based consumption. you want to end courage people to work. certainly -- it certainly addresses, you know, politically one of the huge problems we have now is the perception of income

in equality and wealth inequality. >> the fact that ten year -- >> which is a big problem. politically you got to recognize that could prevent our system from continuing the way it exists. >> ten year treasuries trading below the rate of inflation. if in the process of saving you're returning less. we already got a policy in place where the fed has moved trits a level which should spur consumption but it's not. >> you think this is the next bubble. >> of course. >> i totally agree with that. if you look at where long duration government securities probably the worst. >> almost everyone says it's a bubble and everybody keeps buying the stuff. that's where the real fundamental -- >> i raise the income in

equality at the table and i get shot down. how important is it in the larger conversation or not. >> i think the longer that we have the economic malaise and the more that it spread, the more substantial -- >> the implication becomes what, therefore? >> implication becomes we lose the center and you got a radicalization on both the left and the right of how to fix the problems we have. that's the implication. and that the fixes end up being substantially worse down the road. that's problem. >> what you want right now is what might be a goldilocks shock which is enough of a turmoil in the bond market to focus washington in tackling these issues before they become too bad as you say but not so big it would bring down the financial system and real pain.

the problem is with bond yields where they are and with the treasury market there's no pressure took. >> that is true. unless we do -- i want to do the 10% -- one player can only have 10% of the market like oil. i want that oil to go to the fed fortressies. what do they own >> 16%. >> we like when they even lot when it is where it is. >> if you tone banking system. >> oil is our problem. anyway i like that. >> cool. >> thank you very much. >> pleasure. >> handsome man. handsome man. >> when we come back it's the hottest ipo in recent memory. up next we have ipg senior internet analyst talking about his forecast for facebook's first year as a public company. and in the next half hour our

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welcome back, everybody. itg senior internet analyst is speaking out for the first time on facebook this morning. it's only right here on "squawk box." joining is steve weinstein. thank you very much for being here. >> thank you. >> what do you think about-face book? this is the first time you're speaking out. >> well, i think, as a company they've already done amazing things and will probably continue to do that. you have a company that's one of the largest companies in the internet space in a few short years and they are changing the way people are using the internet. in that regard it's a very exciting opportunity. but there's no difference between a great company doing great things and a great stock going forward. >> what do you think about the stock and its potential? >> well, i think a lot of that will depend on where the ipo comes out and what the stock is priced at. when we look ahead there's certainly a lot of growth opportunities for the company. but if it's coming out at 100

billion valuation which it seems it's on pace to do it puts a lot of pressure on the company to perform at an extremely high tloefl make a good return and be a bit of a challenge for them nuclear weapon say you're pretty optimistic given how smart the people are that are at the company. >> yes. i think there are a couple of ways to look at it. the company is doing great things. you have a lot of confidence that this management team will find ways to grow the business. the question is can they find enough growth to support the stock and the valuation. there are a couple of ways to look at it. i think right now we're looking for about 4 billion if you look at 2013. if you look at a lot of other leading internet companies out there they are trading 20ish. if you add back the cash you're around the 90ish billon type of value. the other way to look at it is from that point forward, you know, can the company put up enough growth to support the

valuation. a company coming out probably needs to be at a minimum able to double its market cap over the next six years. >> do you think they can? >> right now they are not on pace to do that. you know, if you look at what this company would need to do to be a $200 billion market cap company in six years the best example of that is google. that sits about where they are at which means this company needs to grow from a little under 4 billion in 2011 to somewhere between 35, 40 billion. >> so you would not be telling information buy? i'm trying to figure out your concern and your optimism on both sides. if you had someone who were investing as a client you would be telling them not to put their money. >> it depends where the stock is priced. >> if it's the low end of the ipo range or high end of the ipo range are you a buyer at the low end but not at the high end. >> the opportunity at the low end makes sense. at the high end you have to be

willing to make a bet that the company is going to find ways to accelerate their revenue opportunity in the fairly near term which is a difficult bet to make. there's enough excitement around the ipo, the ipo shares to be excited about it and i would assume people are coming into the buy it. from that point is it something you want to put more money to work. it's challenging at the high end. >> if you want to make sense. ipo you have to believe two things. the company can go from a pc business to mogul business and be a social influence to bring a viable advertising strategy. do you believe it can do that, those two things? >> well, i think they can. there are certainly challenges along that way. and to me the question is more when will they solve those problems. mobile is an issue that's facing everyone in the internet space because you're shifting to this new platform and the usage case of how people use your product. no one has found a way to

monetize. a lot of people are trying to figure out how to make that happen. they will eventually. for a company like facebook they have the resources to go out and acwire instantgram and other companies leveraging the social graph tie into facebook. facebook gets the most synergy from those companies. they are in a good position to both build out that opportunity as well as find good opportunities for acquisitions in that space. again, it's more the timing of when all that develops is the bigger issue. >> steve, thank you very much. appreciate your time today. >> coming up, smart web browser that integrates comcast from social media sites like facebook. the ceo of rock melt, eric vishira will join us in the next hour. first your guide to trading day. we'll head to chicago for what

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welcome back to box -- "squawk box." macies is -- macy's is reporting

43 cents earnings. and dean foods filing 31 cents. and mortgage applications rose. fix rates fell to the lowest level ever. coming up, we're going to get the view from the futures pits. rick santelli will tell us what to expect in the trading day ahead. and co-founder and ceo of rock melt one of the hottest web browsers out there for social media fanatics, newest member of the disruptors series on cnbc will join us. with a new continuous spray wand. and a fast acting formula. so you can kill bugs inside, and keep bugs out. guaranteed. ortho home defense max. ♪ so you can kill bugs inside, ♪ here we are, me and you nteed.

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welcome back. among the stories we're following this morning toyota reporting better than expected full year results this morning. the auditorium expects to triple its operating profit this year to $12.5 billion. phil lebeau. he's on the phone. >> i'm on a conference call. >> you are? can you do both? >> you know what fortunately right now somebody is translating a question in

japanese. oil put down the phone. >> that was dominos. >> yes at 8:00 in the morning. let me go over the toyota numbers. this sim oppressive in terms of what they are forecasting even though it's not leading up to what analysts were expecting. the results for the fourth quarter, earnings more than quadrupled to $1.5 billion. you look at the fourth quarter for them, their fourth quarter and it was the first quart when they are all the way back from all the problems of last year. fiscal profit did drop 30% to 3.5 billion. 232 billion dollars in sales and that was a slight decrease. the forecast is what people are focused on. they expect to sell 8.7 million vehicles through fiscal year 2013. that's an increase of 1.3 million and the profit forecast of 9.5 billion dollars, that is a substantial increase but, again, is not up to what

analysts were expecting. they were saying it was 7% short after posting the earnings. the chairman said in recent years we have suffered periods of hardship. this year i am determined to show tangible results. if you look at shares of toyota which had a nice rebound in parts because sales have improved but what yen has moderated as well. one thing to keep in mind they expect north american sales this coming year to increase by 26%. not quite going to be enough to catch gm but they are expecting a big year ahead. >> all right. thank you, phil. i appreciate it. let's get a check on the markets. rick santelli joins us now from the cme in chicago. what's is going on, rick? >> well, joe, it's pretty easy, i guess. monday the uk was closed. we didn't digest some of the issues of the weekend the elections. tuesday, you know yesterday was

a bit more electric but we saw the come back in equities. i think that the world is starting to grapple that there will be significant issues in europe for a very long time. i just don't see a lot of this getting worked out and i this monitoring the solution which takes years in the process to implement some fiscal religion in the euro group and still trying to get growth is going to be haunting the markets for a long time. >> like duh. it's been going on for a while. >> yes. do you remember is low on the ten year this time around? where was it, rick? >> what do you mean the roll? >> the low. the low yield. or the high. >> the low yield. the all time low yield is september 22nd, 171. so we are, you know, nine basis

points away from new low yield close going back to the eisenhower administration. >> wow. >> it's very interesting is the imf meeting had an internal debate with a number of g-20 leaders where they put up a chart showing the level of risk fear in the eurozone right now. what you see over the last five wears is a contact ratcheting up. we've had periods when markets were lax a little bit in the eurozone but then went it turned the bond yields all the other indicators about fear in the markets have gone higher. you have a chart that goes like this, going up, up, up. and the question is just how much higher can it go and just how unsustainable are the fundamental structures in the eurozone. >> what if we, all this events surpasses the current deficit and debt problems. what are the chances that southern europe does what germany did in terms of labor reforms and things like that. if we do get beyond this and

they haven't changed their ways. >> the key question is can europe actually become really productive and invested without devaluation. because in the past the way countries like italy have come through is through devaluation. if it doesn't happen this time will they find a way -- >> that's not becoming productive. that's just adjusting prices. >> that's a free market solution. >> that's preserving unproductive behavior and just having the market price look like you've equalized productivity so that incent guys to become more competitive. >> a lot of these questions are very chauvinistic that i give to you sometimes. we took all the people from where these euros live and all the ones that wanted to come over here and be entrepreneurial is in their genes. can it be repeated in some of

these countries where 56% of people, you know, are on the government dole. what has to happen over there? is this a crisis once we get through this. is there another crisis. rick, what do you think? do we write off europe for the rest of our lives? >> there are portions of europe, portions of the eurozone that we'll have to for a very long time. joe, you're exactly right. some of these reforms are is going to take a very, very long time. it took generations. yes they did it. you remember the unifiation and how they said we'll include that german workforce in a couple of years. it took a lot longer than a couple of years. the other problem and this is the one that scares me the most is our politicians really look at these low yields and it brings them to a place that makes, you know, freddy krueger look very congenial. this is not good. they should not look at this

piggy bank of global fund available to them at very low rates because they just can't help themselves and there's going to be a dawn at some point in the future. so i continue to hope that we start to get a political class that understands that just because you can borrow infinite amounts of money at low rates doesn't mean that you should put the next six generations in the tank in the process. >> and yet just think back say ten, 15 quarters all those headlines calling germany the sick man of europe. and then think about how that turn about occurred. you know it's going to be optimistic sometimes and the reality is that some parts of europe have pulled themselves together in recent years. >> five years ago, gillian, i think there were certain parts of europe were gloating that the social experiment that they had done that it was working and that there was growth in the economy along with this massive social safety net and it was almost like a nirvana that europe had achieved but now we

know that that was usury. >> i think like sweden and finland -- >> they got 2 million people. that's like newark. >> we're entering an era where small is beautiful. can you have a government to solve these economic problems. should we be having municipalities, states experiment with solutions rather than try to solve everything on a macro level. both the u.s. and the eurozone are struggling with the problem of big governmentof b systems t are not trusted by the voters because they are too detached. new don't want to hear from us. when geithner goes over there to fix europe with the americans -- i understand especially with the uk you guys are still mad about everything, the tea party all that stuff the first tea party. i know that. but i still feel it. >> it's something to think about. the uk can implement an

austerity package in the last three or four years pretty efficiently and thus far the u.s. has been talking about it and discussing with bowles-simpson very much what the uk unveiled. >> the last visages of that great empire is like prince william in the wedding. you don't even have a navy left at this point. >> what good does a navy do right now? >> you were every where. you had tentacles all over the world. >> being big is not necessarily being beautiful. >> what do you think? they don't want our help over there, i don't think in how to sort things out. >> they run small businesses in the u.s. >> one thing you learned in the last decade whichever company is on top at the time shouldn't crow too much. whether japan, u.s., eurozone. >> there you go. >> you know what we have a saying, it's always morning in

america. shining city on a hill. are you with me, rick incan we stan up straight? what do you think? >> i'm here and absolutely. let me tell you, we're going to burn bright for centuries to come. believe me i think the american people are awake. they are watching what's going on and i think that you're going see many, many novembers where incumbents are sent to disney world. ♪ i love to be an american >> don't cut me off. >> keep going. keep talking. >> no. >> coming up our disruptor series continues with another upstart who is changing the paradigm in the world of technology. next the co-founder and ceo of a hot social media friendly web browser called rock melt. you got to see this to believe it when we come back after the break. break. in here, opportunities are created and protected. gonna need more wool! demand is instantly recognized

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we're back on a wednesday morning and we're continuing our series on the disruptor, the young guns who are shaking up the world of technology. our disruptor today is rock melt's eric vishira. i hope i'm getting that right pep joins us today to talk us through this social media connector. hot new website. explain for just a moment what is it and then we'll get to what's going on in this space. >> sure. rock melt is a brand new web browser designed from the ground up for how you use the web today. we take all of your favorite sites like facebook, twitter,

youtube your favorite new sites and integrate them directly into the browser, making it much easier for you to get news updates, share content with your friends and even chat with them. >> and eric, this is built, though so, i understand on top of google as cloem? -- chrome. >> yes. >> explain for a second what's going on here. the reason i raise the issue is if i have chrome already why would i want this browser? >> well, they are entirely different products. as the way things go in silicon valley there's a lot of open source components that are shared across multiple products and so in this case we're built on the same open source foundation as google chrome but an entirely different product and user experience. >> what's the business model? >> well the way browsers

historically have made money is through search. so you search through the browser, you get a results page with ads, a user clicks on one of those ads and the browser company gates share of that revenue. we have a partnership with google. they are our default search provider and that's the beginnings of the business model. i think longer terms the way we think about it is you have a product that users are spending hours and hours a day in, there are lots of different ways to make money through commerce, through communication, through gaming. but that's all longer term. >> these are aggregates. these different social networks. i wonder whether long term we're on so many different networks or decide we go with one. every other day you're trying out a new one. this browse are makes sense but in the end will i just default to facebook if that's the case, for example? >> well i think it's not only about social, right. there's definitely a number of

different social sites that we integrate but it's broader than that. the web is a major part of everything we do, from when we wake up in the morning and check headlines to our work and studying, to entertainment like hulu and youtube, to even like reading magazines or other entertainment and so it really is -- it's bringing all that stuff together. it's not necessarily just about the social aspects of things. >> and, i want to go back to the model for a second. you're solely at the moment dependent on google the >> that's our primary revenue source. the truth is that's the primary revenue source today. but really we're not focused on revenue generation we're focused on growing the business and acquiring users. >> erinjuries given that we're coming up on the facebook ipo in a week or so, would you buy into

it? i'm curious. >> if i have any money i would definitely buy into it. right now all my company is in the company. facebook is unlike anything that we've seen or i can think of in the consumer internet in that it is so disruptive and it's controlled entirely by one company, the social space, and so when you put that together, that's pretty powerful and i think there will be -- >> is there anybody else who can do it. do you look at google plus and think it has a shot ever? you integrate that into your browser. and they are your partner. >> we would certainly integrate google plus if they released ipos to do that. what's more interest is really the size of the facebook opportunity. when you go starbucks and look around what do people have open on their computers and what are they looking at on their iphones. it's facebook and related

activities like games. it's massively disruptive and huge opportunity and huge platform. >> it is. a lot of 99 percenters in starbucks with facebook open. it's weird isn't it, eric. >> don't know if it's weird. >> every 99 percenter is in starbucks paying four bucks for a cup of coffee. that's what i don't under bhop are these people. the one percenter is awfully big. >> we moved from a conversation about technology to a very different place. >> think about it. i don't think you think about these things sometimes. there are still people left that are in the country that are conversing. >> before you go tell me because you're in the valley what's the hot new app or you guys obviously have this browser that a lot of people are talking about. give me one other product now that you're using that we'll be talking about soon. >> i think what dave moran and

team are doing at path in terms of another social network that design mobile first is super interesting and we're excited to look at those. >> we'll keep our eye on that. good luck to you. i'm downloading the browser literally as we speak so oil -- >> excellent. >> i'll send you and e-mail and tell you how it goes. >> well head down to the new york stock exchange for the latest buzz on what's happening. box don't next. >> ready or not the stock of the day is coming up. you're watching "squawk box" on cnbc. first in business worldwide. adig throughout the day. and advanced charting lets you customize your views and set up your own comparisons. our ipad app can help refine your strategy or even find a new one. i'm velia carboni, and i helped create fidelity's next generation ipad app.

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welcome to the world leader in derivatives. welcome to superderivatives. welcome back to "squawk box," everyone. the futures have taken a turn for the worst. those dow futures down by about 117 points below fair value. >> california judge has now december m dismissed a suit aimed at the former lead singer of the village people by exercising his

right to reclaim ownership of ymca. carl and melissa join us. >> are you going to do the -- >> sure, yeah, of course. who can't? we're actually going to talk about -- >> are you focusing on the travolta case or something? >> ravolta, i think, is the headline. >> pulp friction. >> it's going to be a rock'm sock'm session here. spain back to an october 2003 low. and german yields, again, close to a record low. >> yes, in the markets yesterday, i know you noticed this. we had that turn around at the end of the day. that's largely baize what was going on in the european banks. it's pretty much the same story. we're seeing tremendous pressure or morgan stanley as well as the

rest of the banks as we are awaiting to take action on about a hundred banks around the world. >> also jive software is on the show which we thought would have come in handy on that flight in airpla airplane, right? >> exactly. that was a classic, carl. see. right, andrew? >> a cloud play, also. >> do you remember barbara? a little hard on the beaver is what the famous quote was. it was one of the greatest mothers. kept house, raised the familiment wonderful. thanks, guys. bringing up the old movie reference of airplane. i picked the wrong day to stop sniffing glue. >> that was lloyd bridges. >> coming up. the stock today getting a bike

hop. we'll tell you a what it is after the break. i will go find some glue right now. >> announcer: tomorrow, our guest host will be steven radnor and plus former new jersey governor and epa administrator, christy whitman. don't miss "squawk box" starting tomorrow at 6:00 a.m.'s twerp. ♪ [ all ] shh! ♪ why tell the trees what ain't so? ♪ [ male announcer ] dow solutions use vibration reduction technology to help reduce track noise so trains move quieter through urban areas all over the world. together, the elements of science and the human element can solve anything. [ all ] shh! [ male announcer ] solutionism. the new optimism.

♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪

a couple of times today, better-than-expected earnings. you know -- can you have a diet soda stream? >> apparently, you can. i recently polled people in our new york office as to whether they waned a soda stream or a coffee machine. and they went for the soda stleem. >> that's a maizing, isn't it? insed of coffee. >> it's a generational gap. i want coffee. i've got coffee here. but the new generation wants soda stream.

>> it's got caffeine. >> sprite does not. >> mountain dew has a lot, right? if you could get red bull. [ laughter ] >> they would love that. >> journalists need caffeine. >> you've done the mojito and you've done the red bull. >> red bull and vodka. >> you should require a prescription for that stuff. >> i want to get back to mortgages for a second. >> where is the front page of the washington george today? we were talking about whether we should refie mortgage. and you raised this issue. borrowers face big delays. how hard is it right now to re-fi your mortgage? >> ask how hard it is for a borrower who has been struggling

to pay and has paid but no one wants to re-fi. their loan to value is still less than a hundred. they've been making payments. why should i help that person re-fi. i'm going to help the person who i think might create a loss to me and create a default. the only reason you see every time you get to lows of mortgage rates, you see the mortgage applications go up is because you're re-fiing the same guy over and over again. all the other people who have paid can't get a loan. >> this is what economists call the problem with the mechanism today. >> look at the bma settlement. thorn given to the least worthy borrowers. >> you've got a fix for that? >> yeah, very simple. make sure the person who's