cisco reporting better than expected third quarter results. but the tech giant is forecasting current quarter earnings that were below what the street was expecting. that outlook is raising some red tlag flags about the company's ability to weather economic weakness. john chambers on cnbc late yesterday. >> the major thing all of us need in business is certainty. and businesses don't spend or react well when it's an uncertain economy. if we understand the issues, we'll make the decisions about where we grow our business, where we invest in resources, how much we give in dividends versus how much we do in share buy back, acquisitions, et cetera. so that's part of the uncertainty that bothers my customers the most. >> shares falling sharply. down 8.6%. we'll talk more with an analyst in the next half hour, try to find out if this will spread to other tech names, as well. and bank of england set to announce a policy decision at

7:00 eastern. the central bank expected to call a halt to its asset buying program despite renewed concerns about what's happening in the eurozone with the economy. boe is set to be more concerned about stubbornly high uk inflation. meantime the bank of japan signaling a pause in easing. last month the central bank boosted asset purchases by 10 trillion yen. now policymakers are suggesting they prefer to stand pat and try to examine the impact of that action on the the economy. unemployment filings are expected to rise by 5,000 to 370,000. before the bell we'll hear from kohl's. facebook revealing more details on mobile usage, saying the numbers continue to grow

more quickly than the number of ads delivered because more people are using the social knelt work on mobile devices. facebook show as very small number of ads in the mobile space so it's a big issue investors are looking at. apple and foxconn will share in the initial costs of improving labor conditions. fighting the perception that their plants are sweat shops. no numbers yet, though, on a cost figure or a split ratio. and con a conocophillips reported to looking to exit nigeria. the sale could help raise about $2.5 billion or possibly more if assets are sold separately.

>> west coast guy talking about uncertainty in government policy. but he covered both, uncertainty in demand, uncertainty in government. >> and a lot of that is not policy here in the u.s., but also policy in europe. >> you know what's cool is that you've got the wireless mikes on. so you're walk and talking and sitting down and it's like we're in somebody's home. i thought that was good. >> you love to have that pocket square. >> you can't see it. there's the pocket square. >> still no belt, but let's take a look at the morning stocks to watch monster reported a jump in quarterly profits above street

estimates. you might remember a couple weeks ago the share spiked briefly. it he is tesla motor shares fell. i drove one of those. really hard to get it in for me. really kind of -- but really cool. >> i had issues with the ferrari that we were driving because i had a skirt on that was long and to try to get out, pot easy. >> between the tesla and the ferrari, which way do you go? >> i like the sound. in stoubd or sound. >> i would build an audio file. >> you can mess around. could you have funny sound has you can put in, too.

anyway, shares rose in after hours after the company -- apparently he's more pit to run the company than some people fit. news corp topping estimates. among the drivers urstrong drivs at its u.s. movie studio. >> let's get a check on the markets this morning. believe it or not, the kou has been down for now six sessions in a row. you see dow futures down another 31 points.

today, though, we to get the jobless claims at 8:30 eastern and that could have a human img pankt on what i can the market is headed. market expecting 370,000 new jobless claims. that's an increase from last week. right now take a look at oil prices. oil at this point down about 67 cents. 96.13. so stabilized. and the ten year sitting at 1.855%. so it's picked up ever so slightly from yesterday when we can see a tick below 1.8%. i think rick santelli said the lowest we had seen was 1.71% and that was the trade that we had seen in the weakest times right after the collapse in 2008. if you take a look at the dollar, it is a little weaker

against the euro. but still the euro is at 129.32. dollar-yen at 79.63. and gold prices which have come under quite a bit of pressure under the last couple of days right now are trading down another $7.10. >> let's go across the pond. global market stories, china's trade data disappointing this morning. the company reporting weaker than expected exports and stalling headline import growth. this could signal that government spending is the crucial factor keeping the economy moving. >> it's a new dare, with you greece doesn't have a government. the last attempt by a greek political party today to reach

that coalition government and it feshly goes to the leader of the socialist party. but shy point out that chances of him being able to form that stable coalition government are extremely slim at the moment. because the greek plig party simply can't seem to overcome their differences. but he said he would support a coalition government as long as supports or ensures greece's membership in the eurozone. meanwhile i do want to share with you a very interesting poll that we got this morning through dow jones. it said that if new elections were to take place right now, it would show that the radical party would gain 25% of the votes and this should be very worrying for investors because this party called for the bailout package to be scrapped along with all the austerity measures that go with it. back over to you. >> and in other headlines,

president obama saying he supports gay marriage. in an interview, he says i have hesitated on gay marriage in part because i thought that civil unions would be sufficient. mitt romney has reaffirmed his position saying, quote, my view is that marriage itself is between a man and a woman. >> huge news yesterday. going to be a lot that rides on the election on this. as some people think he was taking a risk. plenty more people who are for it rather than against it. >> and the question is are there independents who have a different view. >> thank you for the political courage because on other issues,

i think he's been much less forthcoming and it's good to see him take a political risk that's not based on election -- >> explain what happened. >> i think biden just spoke because he speaks up. >> and so then did he force obama to do this? >> i think that's what happened. >> that whole story about the vice presidency and about you how it could be emasculating, not the case. he's the one who is leading the way. >> there you go. we don't talk personal issues much. and the social issues have never been what we've focused on. >> romney's answer yesterday was let's get back to the issues of jobs. or maybe it was boehner who said that. >> i said let's hope that when people do get married they have really good jobs and they're able to have a really nice wedding. i want them to -- i want money moving through the economy and let's all rise together. i want everyone to be happy.

that's all i care about. and you, too. and i think you are happy today, aren't you? >> i am. >> hurst goes a long way towards making happiness, doesn't it? it's my favorite day because friday is too close to monday. it's like it's already over. so thursday it's the anticipation of friday which then brings in the weekend. >> so what's the worst day? >> wednesday is good because it's the anticipation of the anticipation. >> sunday is the worst? >> sunday is bad, but tuesday is bad for me. i don't know why. >> i like tuesdays. >> i don't like tuesdays. things always go wrong on tuesdays. except for trump tuesday. >> okay. >> when we come back, we'll get to the economic story of the morning. a preview of the weekly job l t lastlelasess claims. plus your national weather forecast. cast. math scores.

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futures down about 31. again yesterday, got worse in the middle of the session. it's been about four are or five or six days. >> and that he another longest losing streak since august. so at this point, it will starting on get concerting.

>> we were at 12 -- weren't we at 13.3? >> on the dow. >> on the do. now at 12800. >> feef daive days down on the . s&p has been worse. i apologize. 3.48. >> i said 3 1/2. you're like a computer. lipitor, a lot of people, so many people ask minute that you might know, so many people take this. "wall street journal" reports that the generic is coming in today. pfizer pulling the plug on the catch cow. company spent more than 87 million promoting the medicine, but now said to be quietly giving up on its once great cash generator. big gest drug in the world because more generics will soon

be going on sale. >> they thought maybe this was the way that other companies would deal as generics came on, but thatment would be the case. >> and how to today's national weather service. raining again here. alex wallace joins us from the weather channel. >> how is it going? you named it, wet for sure. and socked in across the northeast. but the good news is there is a back edge to this mess and it's just about on top of new york city. so maybe another couple of minutes of some of the light rain in new york and then things will start to dry out. all thanks to this will storm system starting to exit, so we'll again start to see shinkss improving there. so the forecast for today, more than rain across the northeast, beautiful conditions, hoe. we brought in some refreshing nice cooler air in parts of the south. a few isolated storms across south florida. back into the upper midwest,

central plains, nothing but sunshine here. the west coast enjoys beautiful times. seattle getting up to around 59 degrees. the reason for the wet weather here into west texas, low pressure hanging around will keep us wet for today and even in to tomorrow. spreading a little bit farther east, dallas toward houston, you'll be ending the week on a wet note, but the good news is with all the rain. >> back here on wall street, we'll be focusing on jobs. weekly claims due at 8:30 eastern and wells fargo he senior economist mark vitner joining us. we're looking at 370,000 jobless claims. what's your take, do you think it will be a little hotter, a little colder? >> it's a hard number to get right. we had the surprise drop last

week and i think people are looking to revert back to the average of the last four weeks. >> i've seen some traders say that that's a reason for big concern. from an economic perspective, what do you think? >> it would probably only be concern for a few minutes because people aren't watching claims that much. when we got below 400, stayed below 400, i think that we're 370, somewhere in that range is about right. the economy seems to be muddling along at about 2%. and if it went back up to 36thre seeing more of a slow down, but so far most of the problem is coming from overseas. >> people are wondering if it's real or if it's because of the weather and are we can expect

that picture to head. >> in some ways it's a replay of what we saw last year. we got the season al quirk where the numbers are bolstered in that december, january period and then we get always pay back in march, april and may. so it doesn't seem to be anything out of the order from that when you read the headlines, there doesn't seem to be any discernible pattern there, doesn't seem to be a pick up in layoffs. there may be a slight pick up, but nothing more than that. >> so when you see the headlines but what's happening in europe and situation in greece, does it worry you you that this is going to have more of a downward effect on what's happening right here? >> what worries me is there is no end in sight. we kick the ball down the field and say, okay, we'll manage the crisis a little bit, but there's no end in site. and i hear the debate where people say it's uncertainty. it's not uncertainty. i spend most of my time meeting

with business people. i don't meet with a lot of government officials. but the only people that say uncertainty doesn't matter is in government or academic world. every single business person tells me that they are holding back on hiring, investment decisions because there's so much uncertainty, they don't know how europe will end, they don't know what's going to happen with health care costs and taxes. they have to maintain their businesses. >> do you have a second job in either government or academics? >> i don't. >> the question that i would posit, i think uncertainty is a real issue, but is it being driven solely by the politics of the moment or is it being driven by the demand that's the result of the fact -- >> what and he hurting the demand in the first place?

>>. >> i don't know if it's the chicken or the egg. "wall street journal" talks about how people are saying we told everybody to go out and dig a ditch and then the economy didn't do better, so we said the ditch wasn't deep enough. dig it deeper. at the end of the day, you just got a bigger hole. essentially what's happened is that nobody sees an end, nobody sees an end to this. if you don't seat end and you say, wait a minute -- >> still says we're either reat the beginning or -- >> and he says the recession is not necessarily two quarters in a rove negative gdp. >> something that's identifiable as a slowdown. are we involved in something that will result in looking back

and saying that was a recession? >> i don't so think. in the united states, two consecutive quarters of declining gdp is not what a recession is. it's prolonged, declined economic activity. >> if you say decline that doesn't mean growth. it means decline. >> usually that's associated with a drop in gdp. in the second quarter, it looks like we're pretty safe because consumer spending at such a high level the problem is the growth recession, none of these things really have true definitions, is that economy isn't growing fast enough to lower the unemployment rate, yet the unemployment rate's falling like a stone because folks are dropping out of work. >> people in the markets are

calling -- some people are calling for qe-3. do you think this is something that warrants that or do you have to get used to the whied that this is the growth that we'll deal with for a while? >> until we do something on the fiscal side, and on the the fiscal side, it doesn't -- austerity, it's either austerity or stimulus. and it doesn't have to be that cut and dried. we can certainly do things to stimulate the economy, but you have to have a path to end it. >> it doesn't seem to be any hope that we'll do anything on the fiscal side, so it falls back on monetary policy both here in the u.s. and in europe. and i'm afraid that we probably will see a qe-3. i personally have always been in that camp. i think that they'll have to do a qe-3. and the reason why, most people look at qe as saying the ped is trying to counter act weakness in the economy. they're more forward looking and

that. they're trying to prevent any further weakness in the economy because about they have to counter act it, we may not have enough tools to do that. >> so because d.c. can't get its act together, it falls back on the fed and you think we might end up seeing qe three as a result? >> i think we're more likely to see qe # and i wouldn't be surprised if we saw qe 4 and 5. so i think -- >> how does the market take all of us. warren buffett said market is going down and i love it, i have to buy. is this just a blip? >> i saw warren earlier in the week and it was a great segment and i think he's saying the same thing water hearing from the business people. there's a lot of uncertainty, and in the enter enter heed

term, a lot of -- as long as you have the liquidity. some folks may not have that luxury. but there is a lot of optimism about the economy a few years down the road. everybody believes we'll find a way to move past these problems and you look at the revolution that we're having in the energy market and you look at what's happening with mobile internet technologies. and there's a the lot of really good things happening in the u.s. so there's a lot of reason to be optimistic about the economy years from now, but in the near term, it's hard to see how we'll get ourselves out of this mess. coming up, you can't afford to wait until 9:30 to see what will happen. we'll head to the futures pits next. first, the knicks season is over. one win and we went crazy here. but things are back to normal.

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welcome back to "squawk box." making headlines morning, cisco reporting better than expected third quarter results, but the tech giant forecasting the current quarter earnings will be below street consensus. outlook raises red flags about the global technology spending environment and the company's ability to weather persistent economic weakness and john chambers was on cnbc late yesterday. >> businesses don't react well when it's an uncertain environment either from the economy or from government policy. if they understand what the issue yous are, then we'll make the decisions about whether we grow our business, where we invest in resources, how much we give in dividends, how much in acquisitions, et cetera. so that's part of the uncertainty that really bothers my customers the most. >> when he says it, he means it.

>> given us policies. >> it's been tough and this is a west coast guy. this is one of your guys. he can west coast guy that should not be talking about uncertainty. >> were you is you are priced to see the reaction on the stock market? we don't know what's happening, we can't forecast it, and then the stock down as much as 9%. >> if you know that the number is unlikely to be good, therefore, you -- i agree, there probably is -- >> customers aren't ordering because of uncertainty. there's a better way of saying this to couch his terms if he wants to be on board. >> i'm not sure he is on board. >> i don't think he is.

some of your guys are not. >> we've have steve rattner here a little later. >> oh, you know what, i got my helmet. i'm going to get killed by you two. >> the webest buy is broadening. the probe is focusing on whether these leaders improperly withheld information from the company's board. there was a probe into his personal conduct, still not real visibility. talk about clarity on what's really going on. >> i don't know what brad anderson does, but when i told him my story, and buy it on a friday, they say if it goes down at anytime between the next week

we'll match the price and i go in on saturday, it's down, no, no we didn't mean that. and i said i can take it back? and they said, yeah, you can take it back. and get my hone back. and i can buy it somewhere else at the new lower price. yeah, you can do that. i said you're really wrbrillian. and i told him that story and he goes we got the wrong guy. probably shouldn't out him on that but he goes will is not the right by. and i also dialed 50 different numbers to get through to that company and never did get through to anyone that i can talk to. >> they're undersiege because of what's happening with amazon. >> i'm the guy who uses best buy as -- >> to buy it somewhere else. the browsing library. >> we have two tvs both bought through amazon, and yet i checked them out at best buy. even had a very nice sales man at best buy -- >> you slime. >> i actually out about buying

it there. >> that is low. >> did you give him like $10, thanks for your time? >> he came over, he said do you need any help. i was asking a question or two about the tv. >> led him on. you led him on. industrial experts expect the big four broadcasters will see an increase in up front revenue of somewhere between 2% and 4% for the next television season. >> and now to the markets. surprising. i ira harris joining us. i knew you were going to be here. let's talk about where we are and what may happen going forward. a phrase joe hates, but in terms of europe, in terms of how the

markets will be reacting today, we started obviously every day with -- ended down, too, but it seems to have gotten better progressively. >> andrew, of course you listen to every ceo, europe is the greatest thing to ever happen to them because if you miss earnings or you're a little weak perceived to go forward, it's always europe. but europe won't go away. you have to admire the greeks. like cool hand luke when he said sometimes nothing is a pretty good hand. and the greeks are playing -- they have a nothing hand here, but they're playing it pretty good because they have everybody -- nobody wants to admit it openly, but they're frightened. because if the greeks drop out or are pushed out, then it's a problem for spain because about if the greeks drop out, they'll automatically devalue the currency by quite a bit. the tourist have i will shift dramatically and whatever spain has, it will hurt france, 00.

so there's going to be a push to keep greece in at all costs and the greeks are aware of this. i think they're pushing for whatever kind of better deal they can make. >> is this right now a muddle through that we'll just be living in this kind of -- is this just lousy days and it's a buying opportunity? >> let's know back to the bernanke press conference. he put out the concept of that fiscal cliff. now, this is the chairman of the federal reserve saying this. and i think that's as much as europe is a problem, that fear of the fiscal cliff because they're now economists putting out this what the impact of -- if the fiscal cliff comes to fruition, then it will be a 2 mf

to 5% hit to gdp. so i think there needs to be -- it's not just the president. congress better get in gear here because in the cut backs come this to the economy, the hit will be dramatic. and the stock market is always forward looking and now we're starting to bite into that. so i think that uncertainty is weighing on the market more than anything right now. across the board. >> so what's the tipping point to turn the opposite way? >> i don't know. we need to get clarity so what's the dividend policy going to be, what will take place with the bush tax cuts rolling off. and then there's the other uncertainties about -- >> we won't get answers on those things for a while. >> the markets are telling

washington you better get it this in gear, you cannot let this uncertainty overhang the market and it's not helping incumbent and entrenched politicians. we just saw some of those results yesterday. this uncertainty is really making people nervous. >> ira, thanks so much for joining us this morning. >> a pleasure. comments or questions, did you read about the russian jet? >> no, what was that? >> they found the wreckage. >> was it the mountain? >> no, it was drizzling. they don't know why it descended. but this way trying to sell to these indonesian airline officials. eight russians and 39 in-dough needians. this was a demonstration flight of their new jet. anyway, if you have questions about anything you you see here -- russian airliners, do

you get on one? >> i was on a flight once to moscow. a russian built plane. it was very scary flight. >> all right. well, e-mail us at squawk@cnbc.com. coming up, we'll talk tech. is cisco a sign of broader trouble? i went to a small high school.

the teacher that comes to mind for me is my high school math teacher, dr. gilmore. i mean he could teach.

he was there for us, even if we needed him in college. you could call him, you had his phone number. he was just focused on making sure we were gonna be successful. he would never give up on any of us.

u.s. equity futures are a little bit in the red today, although the s&p futures have just turned positive. dow futures only down by 15, so we'll see if after six down days you can actually put in a positive performance today. we do have jobless claims coming up at 8:30 and that could lead the way.

among the stocks we're watching, priceline reporting better than expected quarterly earnings on an increase in travel bookings. but the guidance is a reason for concern as the company was predicting a slower pace of bookings growth for the current quarter. >> investors gathering in santa clara california for intel's annual invest totoreer meeting. managing director joins us. and after years, intel getting . bullish about that or will cisco rain on the the parade? >> in-it tell has a lot of good things going on right now. fundamentally they've gone well and the stock has outperformed over the last six months. the company will be focused on all things ultra book. it's really to compete against the ipad and other mac air.

and they have a lot of other between thin good things going on, but the broader market is very challenging. >> is that what we draw from cisco? can we draw any conclusions about the broader market are from john chambers being less than effusive about the future? >> the ciscos of the world are subject to a lot of competition and are price pressures from some of the chinese competitors. guys like wowway. >> and intel is a completely different animal. but number one, the demise of the pc was greatly exaggerated and i guess intel has moved along and is in other markets, as we. that's what was weird, that

intel finally got out of the 20 to 22 range right as you were hearing they were going to lose business because they were moving to tablets or to laptops or whatever. >> the ipad has slowed the unit growth rate, it has driven some challenges for the company. but they are powering new it and they're buying back a lot of stocks and a lot of impressive investments and manufacturing capacity. they are spending $12.5 billion on capital expenditures this year to press their advantage. so that will do well for them on the next generation stuff. but the ipad's taking away some of the up side, but still pretty good for in-he will anyways despite that. >> we always heard about margins being the thing to watch at intel. the margins are the envy of the business world because they're so high.

is it the investments they make in manufacturing that control margins more than pricing? it has to do with how many waivers you can get cheaply, right? is that what determines whether we go to 60, 65, versus 50 or 65? >> yeah. intel's done really good at two things. one, holding average selling price over the last ten years surprisingly. second thing is pressing their advantage in manufacturing. what's important is the size of the chip now is about 25% smaller than the last generation. so if they're able toed hold their average selling prices over the next year, gross margins should be really good. they guided q2 and in the back half of the year, it should be above 65%. so you're right, it is pretty good. and as goes the stock so we'll

have to watch to see how high the gross margins can go. but you're right, 65 is pretty darn good. >> so the smaller the chip they can make, the better the margins? >> more chips per wafer and if they can hold the selling price, that's also key. intel's held up really welloff the last few years managing the mix. so i think that's surprised investors and we'll hear more about that. that's been pretty helpful for intel. >> okay. thanks. appreciate your time today. coming up, john harwood joining us from washington on the buzz story of the morning. president obama and his support of gay marriage. he said it was evolving and it evolving to where now he supports it. and then the ultimate trophy for an investment bank, a high profile ipo. some guy you may have heard of will tell us how goldman sachs

blew its facebook opportunity. tomorrow he's the president and ceo of one the nation's largest holding companies. overseeing subsidiaries like diamond offshore drilling and loews hotels. james tisch will be our guest host tomorrow. plus the venture capital firm behind siri. >> you're ridding, rig ikidding? >> the voice of apple's iphone. we'll ask about the next big thing in technology. don't miss "squawk box" starting tomorrow at 6:00 a.m. eastern. u. in a new, faster-acting formula. s tio-y siin lxtes zemethan a porsche panamera s. the 429 horsepower genesis r-spec.

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welcome back. the story we've been talking about this morning, president obama says he supports gay marriage. joining us from washington, john harwood. i would say, john, it's not untrue to say that the nation has been evolving. the president i think said he was evolving back in -- when was that? was that 2008? has it already been four years? so the nation evolves, he evolves. my question is most people say at least we'll grant that all the rights and privileges of -- legal rights of a partnership that we should do that. what i don't understand is it really just a sem aantic argume

at that point, just using the word in the context of gay people? >> it's a semantic question that has huge emotional and cultural ramifications. pollsters say this is an issue that has shifted faster than any in the history of polling. eight years ago when john kerrey was running against george w. bush, public opinion was 2-1 against game marriage. 2009 it shifted somewhere to around 49-40, 49% opposed, 40% in favor. in our march wall street poll, that had reversed, 49 in favor, 40 against. >> why do people say this is a tough thing to get out in front of if the polls are in your favor anyway? >> because 49-40 is not exactly a decisive split, becky.

it depends where the 49% are and where the 40% are. if you're barack obama and you're trying to repeat your 2008 victories in virginia and north carolina, that may have got i don't know tougher. look at the results of the gay marriage ban that was just passed two days ago in north carolina. >> what were the numbers? >> 60% were against it in north carolina. you get arguments on both sides. what the obama people say is that anybody who would vote against us on that was already voting against us. many of those people already thought obama was for gay marriage even before he had come out with it, that they're going to fire up young people, that they're going to fire up donors, especially gay donors who are significant in the democratic party. on the other hand, one of barack obama's big problems has been among noncollege, white voters, blue collar white voters in many of those swing states, ohio, michigan, wisconsin.

mitt romney wasn't firing up those people. barack obama may have helped fire up some of those people who didn't vote for -- >> it energizes certain people on the right and energizes certain people on the left. it's net-net. it probably a draw. >> could be. my draw is it will probably hurt obama slightly. >> really? i don't know. >> if you're thinking in terms of the electoral college. >> i think it makes his path to 270. i still think he's a favorite to win reelection, but i think it got a little bit steeper, which was expedited by what joe biden said. >> i think it was a matter of thought that some president would do it someday. my question is whether old joe, i love him, is he crazy like a

fox or just crazy like a biden? did he do it deliberately or is just another one of his foot in mouth, just opening his mouth to change feet? >> i think this is not what the white house wanted to happen. he was accurately reflecting where the deliberationsin side the administration were going, but i think the timing was not what the president -- >> do you think the president is watching biden and he's just cringing -- >> in this case, yes, i do. joe biden is not going anywhere. he's on the ticket. >> for people who criticize the president for being too worried about elections, this is standing up. this is the courage. >> it was bold, no question. >> we have henry blodgett joining us and steve ratner.

stick around. we'll be back.

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the social offering of the century. business insider henry blodget goes behind the scenes. and why steven ratner says individual investors should watch facebook. >> and tom colburn says there's a way o keep from going broke. >> and huddle up to the trading block. the second hour of "squawk box" begins right now. ♪

good morning, everybody. welcome back to "squawk box" on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. the head of the european rescue fund says the fund will continue support for greece as long as it sticks to its previously negotiated bailout agreement. and cisco systems shares under pressure after the company issued a disappointing current quarter forecast. the ceo says they are cautious because of europe and uncertainty because of government policy. a triple dose of data at 8:30 eastern. the weekly initial jobless claims, those numbers for the march u.s. trade deficit will be hitting and april import prices. we'll get the numbers and the market reaction as soon as they hit. the futures this morning, at

this point things have turned positive. the s&p up by 3 points and so are the dow futures. andrew? >> it is the most talked about ipo in years, facebook set to go public, setting the price arrange between $25 and $38 per share. henry blodget writing a series of articles. he takes an in-depth look at the facebook ipo among bankers. and also with us, auto czar steve ratner. some great pieces this week on the battle over the ipo. i want to get to the valuation and whether this is a good deal first and i want to get into how

goldman lost this deal, even though they're on the deal, though maybe they lost their lead left position. >> would you buy into this ipo? >> no. certainly as an individual. this is muppet bait. everybody knows about it. they're so excited, it's waiting to go public, all this anticipation. muppet bait. >> i like that. >> my position has gotten a little confused. i'm not saying whether facebook is good and bad, i'm saying individual investors shuntiould be playing the stock market any more than you should take out your own appendix. how can you possibly evaluate it and -- >> do you remember google? i think the consensus was that google was muppet bait, too. that went from 80 and 600. >> i agree completely with steve, having been an analyst, come off, looking at the world

from the outside. most individuals have no idea what an incredible disadvantage that are after. google went public at a much earlier stage. they were still accelerating, growing incredibly rapidly. facebook, the business is decelerating fast. >> that's because they hadn't figured out mobile. the argument is if they can figure mobile -- >> there's certainly hurj option value. a lot of long only big mutual funds have to take a position because there's no fwroet anywhere else in the economy and this is a place to get that this they could go to 3 billion to 5 billion. the mobile growth is a big deal. they haven't figured out how to make a lot of money there. >> both of you don't think individual investors should be playing the market at all --

>> would you fix your own plumbing, get under your car -- >> you know i would not but joe over here would. >> i think you can in collaboration with a financial professional. >> so you're talking about some stock broker at some perfectly reputable firm. >> you got a ten year at 1.7%, i got at&t, verizon and pfizer and general electric, all these blue chip companies with 4% yields. >> i agree with you. >> you don't think an individual is smart enough to buy pfizer? >> they should absolutely be in the stock market, especially a young individual like andrew, who has made all this money from his book. individuals should be in index funds. they should not be deciding whether pfizer is better than png or something else. >> or dividend index fund. >> or dividend index fund, fine.

but you know the history of -- >> a blindfolded chimp. andrew's idea is to get a chimp in here. >> i want one that throws darts. >> be right 50% of the time. >> you're going to give a chimp darts to throw? you're going to end up with a one-eyed anchor i think, right? >> here's the problem -- to make money trading, you have to beat wall street. you simply lose money if you trade and you are going up against s.e.c. capital, 500 other incredibly other well funded hedge fund managers with millions of dollars to spend on research. you cannot beat that. you can't. >> let's talk tech, groupon, zynga. are they all overpriced? are some overpriced? that's the ultimate question of

this whole world we're talking about. >> most stocks that go out, there's going to be smart arguments on both sides. there's 7 billion people in the world, they have one, they're going to get six. huge opportunity going forward. sure, you can justify the price and a lot of people are going to make that bet. other people say we've got deceleration, we have the mobile shift and we have a ceo, who although brilliant has said in a crystal clear way i am interested in a long-term vision, this is a social mission, not a company. that is a three-alarm claksen. >> it's a real question. facebook but zynga, google now, does it matter? should the investor care? >> investors should absolutely care. i don't think they should overestimate the impact without

the dual class. >> they should care but they don't care. companies with dual class for stock are not valued any lower than companies with single class for stock. people don't think they have influence even with one class of stock so they don't buy -- >> if you have a really great founder and inventor, sometimes you want the person to have excess control. >> or you could end up like newscorp. >> what about the barriers to entry for facebook? that's the one thing no one's explaining. i'm not on facebook, i don't know about it. but i remember myspace, facebook, it's great. i love it. but we have a disruptor series, they've done incredible things. what makes it impossible tore another disruptor to come along and disrupt facebook? >> nothing makes it impossible. the advantage they have is that's where all your friends are. there's a huge network. >> viewed to start from scratch.

>> that said we now have mobile coming in, the reason they just paid $13 billion is because zuckerberg realizes it's a huge threat. >> mobile may be a threat but the real threat is how do you have monetize noble. >> but nobody's figured that out yet. >> tease an issue as well. -- that's an issue as well. >> if you look at the dot-coms of the 1990s, the one that has come through and done incredibly well is amazon. jeff resisted corn, ridicule -- >> that's not a dual class share. >> no but he has a huge position. he was clear in saying i'm sorry, i'm going to sacrifice the short term and, boy, was he screamed at for years, that's what mark zuckerberg is trying

to do. i don't want to get into a decision about the quarter that will hurt the long term. >> i think what jeff bassos was focused on is the idea if you make customers ecstatic -- >> i think that's what zuckerberg does, too. >> google was not going to do any evil. he might have a hoodie on but he's walking around with a g-5 in it. >> coming up, how goldman may have blown their chance at getting that lead left position, underwriting the biggest ipo in recent memory. and later senator tom coburn has a plan to help not bankrupt

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all right. welcome back, everybody. take a look at the futures. we had soon them go positive a moment ago. now the dow futures down just about 9 points, relatively along the flat line. a lot of people are waiting to see what happens at 8:30, when he we get the jobless claims numbers.

the bank of england has left its interest rate unchanged. no cash injections to stimulate the economy at this point. retailer kohl's reporting profit of 63 cents a share. the company's current guidance is below the street expectations of $1.13. you can see what impact that is happening on the stock. the bid is at 48, the ask is at 49.25 after that stock closed at 58.86. >> we're going to talk about all things tech at some point. we have a couple other recent developments. we can talk goldman. we got to do that at some point. also, thinking about yahoo! and what disqualifies -- what's worse, padding your resumé answered finding you don't have a computer science degree,

hitting on an employee and hiring a -- >> what was she, a social lu lubricant or something, soft core porn? all these things are problems -- >> as he looks at me. >> i'm looking at henry. >> i worked for yahoo! not going to comment. as an employee, i'd love to hear an explanation. not an apology. but how did it get on there. >> if you were running yahoo! it would look better if he had a computer science degree. wouldn't it? >> no question. explain it. >> i agree with henry. i'd like to see how it got on there. you saw the director of hiring also inflated her resumé. it seems to be a bit of an epidemic. >> it wasn't just that he left it on his resumé, he was

interviewed and questioned about it and didn't correct the interviewer. it's tougher to say i didn't know it was out there when he didn't say. >> is yahoo! fixable at all? >> absolutely. >> so if you actually -- >> no, no, no, i also own stock in yahoo!. >> over a long period of time. >> i'm actually curious in terms of the stock price and where it's at, if you got the right management in, is it fixable? >> absolutely. yahoo! has 700 million people hitting the site a month, the biggest digital media business bar none. >> would you get behind? would you back the dan lobe proposal? >> given, i feel like i shouldn't jump into this. >> andrew, is nbc fixable? >> nbc is one of the greatest if not the greatest network company in america.

>> the world. >> the world, yeah. >> here's my next one, henry and steve. >> you going to the muppets? >> yeah. >> can a company with a muppet culture -- >> that may be unfair. >> i'm asking. could it succeed for the long term? my point is goldman -- if clients aren't happy over years and years and years you don't keep clients and goldman is very successful so i assume clients are happy with what they've done. >> i do think that goldman lost their way a bit. i hope they correct. >> permeating the entire firm? >> five, ten years ago when i was on wall street, goldman was a premiere organization. >> you think traders took over

then? >> i think so. some of the things that have come out should be a real wake-up call should be enough for management to say enough, more clients first. i think the success they've had through that disastrous public publicity they've had -- >> let's talk briefly about the ipo. >> wait, it doesn't suck to be goldman? is that what you said? >> it doesn't suck. >> that's a good line. in your mind they lost the ipo? >> they were competing very hard for it. they're one of three. they're not the lead left. >> it's a subtle pecking order but wall street cares about it tremendously. facebook's bank ser is morgan stanley.

>> jpmorgan has a lot of people k -- >> surprised a lot of people by being there. >> did you see lee in his hoodie? >> it was embarrassing. >> anyway, we have to -- >> jimmy lee bought a corvette to get the corvette business. i guess wearing a hoodie is less expensive. >> steve's staying with us. up next the post office does an about face on some closures. then traders keeping a close eye on currencies, gold and equities this morning. as you eurozone crisis lingers, our trading block is just ahead. who do we have, donna? >> no, gloria gainor. but if you take away the faces on the trees... take away the pixie dust. take away the singing animals, and the storybook narrator...

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cutting plans and delivery of things such as prescription drugs. >> who is to your right -- or to your left rather? >> i'm definitely to his left. >> washington is urging the postal service to postpone any closings until an overhaul bill is passed in congress. >> dow futures down by about 12 points, s&p slightly higher. a lot of things waiting to see what happens with the jobless claims. we have other numbers come willing out this morning. this is coming after the dow has been down six sessions in a row, the longest losing streak since august. oil prices have come down significantly, down another 39 cents to 96.32. that's where things stand. you've seen prices come down at

the gas pump as well as a result of this. >> we're going to have to talk to steve about all of that and a lot more in a bit. coming up, the trading block tells us what's moving markets and senator tom coburn will tell us about fixing the debt crisis. he's our guest in a few minutes. stick around for that and a lot more. >> equities, gold and the dollar. the "squawk box" trading block is next only on cnbc. well, shoot, that's like checking on your burgers after they're burnt! [ male announcer ] treat your frequent heartburn by blocking the acid with prilosec otc. and don't get heartburn in the first place! [ male announcer ] one pill a day. 24 hours. zero heartburn.

♪ for the the first time in history it's going to start raining men ♪ welcome back to squawk on this thursday morning. we got a bit of news just breaking the wires right now on avon. avon now in discussions with cody after cody raised its bid to $24.75 a share. that was from the earlier bid they had rejected at 22.25. so they now have entered into talks. these are going to be sort of a non-public, if you will,

exploratory stage discussion. a couple of other notes, the financing for this deal on the coty side, well, a new name has emerged, berkshire hathaway so warren buffett. we'll talk about that in just a little bit. facebook seeing a surge in usage on mobile devices but in an updating filing ahead of that ipo, it's saying that monetizing that surge hasn't happened yet because of limited ads on its mobile site. and sony saying it expects to return to profitability this fiscal year after four years of losses. sewny sees significant improvements in its consumer electronics business and opec sees production up 40,000

barrels daily. >> why don't we find out what traders are focusing on this morning. >> why don't we start things out, kevin, just talking about what we're seeing. six days in a row down for the dow, the longest streak we've seen since august. what's going on? is the mood looking for more bad news to trade down or are you looking for some stops at this point? >> as we said a couple weeks ago, becky, the trading community has been very keen to be bearish. it's not like everybody is hurting from this move. so i think that the next 24 hours are very important. keep an eye on spain. greece gets the headlines but spain is where the importance

is. their program announcement tomorrow, any major dilution of bank shares will be the high volatility event that probably puts this to bed for the time being. but between now and then, anything goes. and i would say that, you know, the ability of the bond market to push it off or traders to push that out of the headlines would allow for some type of relief in the s&p. but 1350, it's not like the place is falling apart here. so you've got two things in its favor -- people were ready for it to decline and the decline has so far been order recall. >> krch, what happens if we get jobless claims that are quite a bit below what was expected? let's say we get below 350? >> i'd like to see it. it hasn't been all rainbows and

unicorns for me the last 24 hours. >> been rough. >> yeah. i think that would put the onus on the long arm of the market, we have a bond market today. that would make for some squishy bidding for that event. >> why is europe such a big issue at this point? we knew the elections could tgo this way? is it the greece situation saying forget about it? >> i was on your show before saying greece couldn't pay. my mistake is underestimating other people hadn't come to that conclusion yet. it's a slow, attenuated process that's going to ebb and flow through the marketplace. that's -- it's how you manage that risk when things start to get sketchy. and so right now we're kind of in that event. like i said, next 24 hours, i expect it to calm down. >> boris, we had been a little

surprised around this table that the euro managed to stay so strong. we are seeing it finally below 130. >> we're living in an interesting time. we're coming to the point where we're running out of pavementkevin said greece could not pay and i think that's true. the greeks do not want to leave the euro but they do not want to pay their debts. the only way to keep greece within the euro is to do a debt forgiveness story. i wonder if they're going to be politically courageous enough to do that. euro broke the 130, very likely we can get if the trust in the eurozone continues. >> steve, you watched what's coming out of europe. we knew those problems are here.

obviously it's the voter situation and push back some some of these austerity measures. >> i think what's happening is the greek's inibility to form a stabl political system, form a government. people are going to start to look more closely at portugal and spain. >> if greece leaves, do you think it's that situation where it's the first domino to fall and there will be more? >> i think before greece defaulted, everybody said if a euro country defaults, it's going to be a domino. the market got conditioned to accept a greek to fall. i think the market is feting conditioned to accept a greek withdrawal from the euro. it's a marginal player, a very different economy. i think the market would accept

it, i think it would be a disaster tore the greeks. >> i disagree with steve. the problem here is spain and italy. you can either deflate the debt arrange you can inflate it or do debt forgiveness. since they don't control their currency, they cannot really lower the exchange rate. and if they seech greece leaving the union, that's why i think it's a very dangerous event. >> but, boris, greece isn't a very different situation, right? even if they stopped paying off all their debt -- >> greece needs debt forgiveness. there's no way greece will be able to pay this back. >> is that more of a contagion? if you get debt forgiveness for greece, how do you con taken spain and portugal down the lien? >> they're running out of

pavement. there's no more road left. >> if greece were to leave the euro, it would be such a disasser to for greece in terms of its ability to financial as an economy, i think it would seasoned a message to other economies get your act together or you're going to end up like greece. >> john, why don't we talk about gold. it's been a pretty horrific week. there were a lot of comments from the berkshire hathaway conference. has that been part of the impact or is there something else taking over here? >> the comments were taken in the context of the overall global macro space. if you look at the systemic risk, which belies europe, as boris mentioned, i think it's bullish for the longer term. shorter term with systemic risk or perception of systemic risk, gold can sell off. for me looking down to 1550,

that's the spot gold can sell down to. but overall, once the short-term growth correlation is out of the market, i think gold can head back higher to 1750. >> you would tell people to set pat at this point but at 1550 you'd be a buyer? >> 1550 is a nice buy spot. 1575 is the break even spot of the year. it wouldn't surprised me if we go through some sell stops and we see some technical weakness. we saw china imported year over year a ton and net-net longer term it's very bullish, these aforementioned dynamicsdynamics. i want to thank all of you for joining us. >> coming up, we're going to huddle with td ameritrade

chairman. joe moglia will joins us. you ought to see the dancing going on on this set. now everybody stops. there was a little bit of shoulder movement. still to come, senator coburn will talk about how we can escape this miss cak fiscal. that interview is next on "squawk box." any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying...

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♪ . welcome back, everybody. steve ratner is the former auto czar. we talked a little bit about the post office today and some of the changes they are making. you made a really good point offset. >> my point is if we can't get together as a country and agree to cut the costs of the post office when mail volumes are dropping dramatically and people are getting so much more of communication via e-mail and electronically, how are we going to deal with a $1.3 trillion deficit? the post office is imbsymbolic

the problem, nobody is willing to have it in their back yard. 70% of tea party members do not want to see medicare cut. here you have a group of people who are committed to addressing the budget deficit but 70% of their people don't want to cut medicare, which is the biggest problem in the budget deficit. >> even during the auto bailout, the number of dealerships that were set to be closed -- how many finally were closed? was there some backtracking? >> yes. and i'll tell you exactly why, joe, it's exactly the point, the same point. the only time -- the only time that congress got involved in the auto rescue was when they -- when in the midst of all the other problems they decided to spend the summer of 2009 passing a piece of legislation forcing gm and chrysler to reconsider the dealers closed. all politics are local. this is the on thing congress thought they could do during

this period of time. unless we get together as a country and force congress to start to act more responsibly, we're never going to address these problems. up saw it in the debt default and super committee. >> also off camera, you like the post office, right? >> i do like the post office and i like my postal people. i understand why our town wb looked at. we have 3,300 people in our town. i love our local postmen. i go into them every day. >> you go into them every day? >> i go in every week. >> they should closed the one next door. >> newman, he doesn't deliver mail on a rainy day. >> i wonder if part of the postmaster general's plan was to go back to congress and put the pressure on them, knowing full well congress would not go along with that. >> you think it was a machiavellian plan. interesting.

>> it's possible he put forward knowing he was going to get cut back and negotiated. everything is a negotiation. i get that. >> if you were in charge of fixing the post office, do you know how you'd do it is this. >> you have to recognize the world has changed. >> would you increase the prices? and what does it do to the media business? the magazine industry, newspapers. there as a lot of businesses that would fundamentally shift, right, depending on what the ultimate outcome is -- >> and as i understand this, and i'm into the a post office expert, all they're talking with b it potentially delivering saturday delivery, which is not when i get most of my magazines. >> they're talking about slowing down delivery, if you're used to

getting time magazine on whatever day it comes these days, that you'd get it two days later. >> the biggest point is how do we cut into the government expnd turs and deal with this looming -- >> that's right. it not the job of the government, the taxpayer, the post office to support the media history stri. >> i absolutely agree with you. >> they have to run a business. they could lose money, we get that. >> you think they should be able to lose money? >> it a public service to some level butch the losses have exploded. they're unstainable and you have to deal with it. >> what's an accept number? $14 billion, $15 billion a year? >> in losses? i remember in a quarter it was like $3 or 4. >> no, maybe they're on track to lose something in the order of $18 billion a year by 2015 i want to say. >> and it just going to get worse obviously. mail volumes are dropping. it going to ten to be dropped. it got to be restructured in a

fundamental way. that's the way it is. >> is it a good adeto have what you have and you're coming to a fiscal cliff? will that be the one thing that puts a gun to everybody's heads and they say sound and say let's fix this. no sane person would want to go over that cliff. i think it does put a gun to people's head in a constructive way but there is always the possibility for congress to simply say, forget it, we won't go over the cliff but those cuts aren't going to happen, the tax increases aren't going to happen, we're simply going to extend the status quo. that's not outside the realm of possibility you mean for two months, two months, two months at a time? >> yeah. i would say there's a 10% or less chance, if we dp over the fiscal cliff, there's a 30%, 40% chance we get a real meaningful budget deal like simpsons-bowles and a 50% chance we keep muddling through. >> which means we have more

uncertainty that people like john chambers of cisco says, give us some sort of a plan and tell us what's going to happen. >> the real impediment to business is the government. business cannot operate in this climate of uncertainty. i get that. it's up for the congress to decide whether they want to seriously get down to business or not. this congress has passed fewer laws than nip congress in 20 years. they just don't do anything. >> that is a concern when you realize the fiscal problems that we have. >> and all the other problems. we have a huge array of problems in this country and you need legislature to function. >> you can pass laws to shrink government. >> that would be fine with me, too. we have a lot of businesses in this country and they have to get on their game and do it. >> it's simplistic but one side wants to pass laws that grow government, the other side probably wants to pass laws that shrink government and they're both entrenched in cement.

one of the things that newt gingrich said during the primaries, which is true, is that he and bill clinton were able to do business. 1997, 1996, 1998, you had welfare reform, trade, budget deficit. >> is it 50/50 in your view? >> i didn't imply anything youin f -- you infer. >> give me your number. >> i think it's something like 60/40. during the debt debacle, you had members of of the tea party saying we're not going to vote for an increase in the debt ceiling no matter what. >> if you're at 25% of gdp in government spending and you're at 15% of revenue, should it -- is it wrong that it's 60/40? doesn't the 25% take precedence over everything at that point? >> but if you look historically, we've been in a band of 18 to 20. >> that's what i mean. >> so that means the 15 has to

go up and the 25 has to go down. but they both have to move. you've got a group of people saying only one can move. >> but they're both going to be unstimulative in terms of the tough economy that we're in. which would you pick first? >> i don't think it matters. i think they have to come together. >> we're going to continue this conversation in just a minute. we have senator tom coburn standing by. and joe moglia and kristy whitman. [ male announcer ] introducing a powerful weapon in your fight against lawn weeds.

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what did abba stand for? do you remember? >> it was the people i thought who were in it, wasn't it? >> i think it was. this was like a number one hit for months. >> have you seen "mama mia"? >> no, i have not. is that in that? >> i'm pretty confident. >> i know you've seen "rent" like five or six times. >> "rent" is great. >> our next guest says. >> from the left and the right must help fix the country's mounting debt problem.

his new book "the debt bomb" came out, senator coburn from washington. up say 3 trillion from tonight, 3 trillion from discretionary, almost $9 trillion you're talking about. any traction we can get before november? >> probably not. we're going to do that because the international financial community is going to quit loaning to us eventually. i'm convinced we're not going to do it until the pain of rising interest rates hits the politicians. you go back to historical interest costs for our debt at $650 billion more a year for what we have on hand right now. it's an impossible situation we find ourselves in and the longer we wait to make the tough choices, the more painful it's going to be.

>> i just had with steve ratner a really interesting, i thought anyway but i'm strange, but we have a conversation. we're talking about whose fault it is in congress opinion heap says probably 60/40 the republicans' fault not being able to get -- here's my point, though. if you're at 25% of government spending on gdp and we fallnd 15% of revenue because of the recession, he thinks we need to do both. since both tax increases and spending cuts both hurt the economy and they're both sort of weak, i would start -- if you can only do one, we know government is too big. start with that. hopefully growth comes back and the 15% gets raised back up to 18 where it was in 2007 and twibs and then look at things. doesn't that make sense? >> what makes sense but i think mr. ratner's point was you're going to have to build a consensus somewhere in the

middle. >> 60/40. not really in the middle. i think he really was thinking 70/30. maybe 20. >> let me tell you whose fault it is. it's career politicians who are more interested in the next election than they are the future of our country. >> covers just about everybody, senator, except for you because you're only going to serve two terms. >> joe, that's not true. there are a lot of people who are term limited who don't care what happens to them but cares what happens to the country. >> some of those are that's tea party guys who only serve two years and a lot of people would say those guys are the problem. >> senator, i'd love to you respond to this. steve made the point that 70% of tea partiers don't want to cut medicare. so you're getting what you're paying for in washington right now. >> elderly people don't want to cut social security. >> there's not a truthful

conversation going on in the country because there's no leadership in this country right now about the severity of our problems or the urgency of or problems. there's going to be some combination ultimately worked out. the question is at what price and at what time? everything's going to continue as it is until it doesn't. we see spanish bonds where they are, we see the change in the greek election. what makes us think that stuff isn't going to happen to us? i would say drop the partisanship, find the common ground in the middle and let's fix our country. that's what we put forward. we're going to get there eventually because they're not going gouf us the money to continue to run medicare the way we are, and continuing social security. >> senator, you've been an enormously constructive force on this subject but now you're basically saying you don't really see any solution until

interest rates start to rise. as you know at the moment, our interest rates are sitting flat at 2% on the ten-year and 3% on the 30-year. >> yeah. they're going to rise, though. you can't create $3 trillion -- you know, the only reason we're not rising is we're still seen as the least wilted rose in the vase. >> that's a good one. >> and so who's buying our debt? the fed is buying our debt. what's the demand on u.s. bonds? almost nothing. it's minimal. the reason they're not extending the maturity is no one's out there willing to buy it. >> do you think, senator -- senator, we'll talk to you next time. >> we appreciate it. >> coming up, blocking, tackling and banks. we're going to huddle up with

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the individual investor sidelines.

joe moglia will tell us what it will take to get money back in the game. >> and christie whitman. >> and job numbers at 8:30 a.m. eastern. the third hour of squawk begins right now. ♪ there goes my hero, watch him as he goes ♪ >> welcome back to "squawk box" here on cnbc, first in business world wide. i'm joe kernen along with becky quick and andrew ross sorkin. our guest host is with us here. >> we were down 30 points at one

point. >> wow. it's the first day we've seen where we've been positive. hopefully it's not the same as other days where the morning didn't indicate. maybe we'll pick up ground after six straight losses. >> private live held coty increasing its takeover bid for avon products. in a letter coty says it's willing to pay $24.75 per share, up from $22.25 and an april bid of $23.25. it's given avon until monday to respond. avon is saying it will consider the letter but not that they are in talks. >> this is a pretty interesting letter. they say if after due diligence our final proposal were to be unacceptable, we will indicate so and part company as friends. they say this is a premium of over 36% from the undisturbed

closing price before anybody knew about this. given the challenges facing your business we believe the premium is higher when considering your stock price in the absence of a possible transaction. >> and the other interesting piece of news in that letter, who is financing the coty deal, warren buffett of berkshire hathaway. byron famously warren buffett's favorite banker when he was at goldman. i guess he's still his favorite banker now that he's off on his own. so there's that news. we're also going to be watching shares of cisco this morning. the company reporting better than expected third quarter results but the tech giant is forecasting current earnings below expectations. now let's get a check on the european markets. as expected, the bank of england

left its key interest rate unchanged and leaving the size of its asset purchase program unchanged, meaning no additional cash injections to stimulate the economy. we've got green arrows pretty much across the board, the dax looking good. look at spain. >> it's europe that's wagging us these days. >> a little bit. slightly. >> a lot lately. >> the last few weeks, everything they do we do in the morning. >> and do something different in the afternoon. >> joining to us talk about the bank of england's decision as well fed policy here at home, cnbc's chief economist steve liesman. >> another morning time promotion. i love it, joe. >> you know what, i've been evolving on my view of what you are here. and i just finally decided to face the facts and call you what

you are. there's a lot of this going on. >> it's nice for to you say those nice things publicly and not say off camera what you say i am. there's some hope this morning the bank of england would announce additional stimulus before we've had a bunch of quarters of negative decline in england. but the concern there is inflation, which is running at 3.5%. that is staying the hand of the bank of glaengland. at home, increasing concern about the fiscal cliff. to hear fed officials talk, it's up there with concerns of europe, housing. evans said the stimulus already in place that's being removed is

providing a little bit of headwind. the cliff at the end of the year is just what that writ large. significantly fed chairman ben bernanke talked down that possibility at his press conference two weeks ago. bernanke is concerned over the fiscal cliff, too, but he doesn't think the fed can or should do anything about it. >> we'll have to take fiscal policy into account to some extent but i think it's very important to say that if no action were to be taken by the fiscal authorities, the size of the fiscal cliff is such that there is i think absolutely no chance that the federal reserve could or would have any ability whatsoever to offset that effect on the economy. >> bernanke fears a repeat of the debt bebadebacle.

he does not want to let the fiscal authorities off the hook and believe the feds will step in to clean up the mess. he repeats his frustration that too much of the burden has been placed on the central bank. atlanta fed president dennis lockhart shares the concerns but his message is it would not be a shock to the economy because it's perfectly predictable. he told me i believe that the fiscal authorities, congress and the administration understand that the perception is growing that if a transition isn't ng neared that works well, that you're going to end up with a lot of mojo taken out of the economy. >> steve, real quickly, we had marc vitner on from wells fargo. he said at this point he thinks qe3 is likely and the

possibility of qe4e 4 and qe 5. >> if the government is going to spend, spend in a way in a leads to investment and human capital and infrastructure that leads to economic growth. i think what they want to see, they're really concerned i think, becky, about short-term patches. you have the uncertainty about how it going to be fixed and then you end up with temporary fixes. all that does is prolong the uncertainty. the fed would like to see more certainty built into the structure of the nation. >> thank you. let's go from volatility to facebook fever. there's a lot happening. you can bet t.d. ameritrade has a heads up on all of it. joe moglia, it's great to have

you on set here today. >> it great to be here. thanks for having me. >> did you bring a whistle. >> i don't need a whistle. i'll just yell loud if i need to. >> coastal carolina -- >> coastal carolina university. >> no, the team. >> the china tears. it's not exactly a rooster. it's a fighting rooster that protects the entire kingdom and estate. >> that's illegal, isn't if? >> it's not cockfighting. >> just want to make sure. you're on tv. >> how's everything going with the coaching? >> great. it's a great university. tremendous emphasis on undergraduate education. from a football perspective, our goal is to be able to compete at the national level. it's going to take a while for

to us do that but the school has a great tradition and great commitment. >> at td ameritrade did you some stuff with nebraska. >> when i transitioned from ceo to chairman, i coached the omaha night hawks. >> we're thrilled for you. it's a huge deal. we really want to talk to you about what's happening with retail investors. >> i understand that. >> we've gotten all these newspaper articles that point out that the retail investors are missing out of what's happening on wall street, they they don't trust what's happening. >> i don't think the retail investor is missing out in terms of what's going on. one of the things we've always talked about is the retail investor is a lagging indicator in terms of what goes on.

if you think about their concerns, there's concerns about europe, the economy, the election. on top of that, you just go back to last year where we had a pretty powerful early part of the year and then things kind of fell apart may, late spring, summertime. the retail investor hasn't forgotten that. the retail investor needs to see the economy, markets settle down, stable a little bit and have a little bit of positive energy and they'll get back in. right now they err on the side of caution. >> look at the shock individual envestors went through in the financial crisis. that was 2008. do you remember 2005 very well? do you remember hough quiet everything was? that was four years after september 11th. people were gun shy, they were still afraid, there was no retail interest, the dot-com bubble had burst. they were still not doing anything four years later but that was the bottle. that's when everything started per cliff and volume started

picking up again. it would be a sad when this is a building -- the retail investor should be taking positions at 11 times earnings. and they're not. >> i certainly agree with that, joe. but i don't think that the individual investor can get through what they're going through now without having learned from the early part of the last decade and from what happened in 2008. >> but it might have been the wrong lesson that they learned, once again not buying at the bottom. >> they're not buying at the bottom bottom but they're a leggingnd kateor. you need to see some sort of legitimate stability and they'll get back in. >> i was going to ask a different question. they're not necessarily in too late because they get in a little bit later. they have done this for the all -- >> they get all in at the top typically. >> they tend to have their greatest allocation toward equity at the top and that's a mistake.

>> his statement, he leaves the individual investor should not be investing in individual stocks. full stop, that's your view, right? >> that's my view. >> do you agree? >> no. you can't take every individual investor and lump them in a stereotype like that. from a pragmatic perspective, there are a lot of people who do a good amount of homework, they stand what's going on and they're comfortable with their stocks. there are a lot more people who are comfortable with funds. to me it's you think a pediatrician in kansas city is qualified and able, no much how much time he or she spends to analyze exxon and chef ron -- >> i think if they can stand

where he should go and research and come away with a conclusion on handful of stocks. absolutely. >> joe pays attention to football but i don't think he's going to be quarterback for the jets. >> well, nor is the typical individual or investor or doctor going to wind up becoming an astronaut. that doesn't mean they can't do a good job of doing their homework and make good decisions. there are many, many investors that do a good job for themselves. there are plenty that don't but many who do. a high percent and of active money managers -- >> can you hire the greatest money manager in the world for absolutely no fee. warren buffett. you just buy his stock. no fees -- >> you said a minute ago they shouldn't be buying stocks. >> that's hiring a money manager. >> many of our -- >> that's not a stock. that's a money manager.

>> is there a difference between taking your portfolio and running it yourself or taking a small slice of it and say i'm going to play around a little bit on this because i've heard about this. >> sure. if people want to speculate, some amount of money they can afford to lose, why not. >> you know, this is cnbc here, ratner. >> i know, i know, i know. you can't possibly think they're so assumed. >> i'm taking food out of their mouth. >> you're now a professional money manager for bloomberg -- >> correct. we have 16 or 17 i believe highly trained professionals who spend all their day, all their night thinking about how to invest this money. they're not pediatricians in kansas city. >> it's a matter of cust

customization and choice. the only this evening i'm arguing, steve, is you can't lump everybody into one boat. there are plenty of individuals that washington cnbc that watch learn from some of the things that -- >> on cnbc.com! use our tools. >> joe and i always have fun when we're on here together. >> go on cnbc.com, figure some stuff out, find a good valuation. >> the next thing you're going to want to do is take care of becky's baby when it has a fever -- >> no, he's going to pump. >> i tried that pump. it is painful. it chafes! >> stick around. we're going to continue this conversation in just a moment. we'll take a quick break. check out the "squawk box"

indicator. can you see the futures have turned around. dow futures up 36 points. we'll be right back. >> still ahead on "squawk box," the outspoken former governor of new jersey. we'll ask christie whitman to weigh in on the economy and the race for the white house. tdd# 1-800-345-2550 the spx is on my radar. tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus - i can custom build my own screens

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hi. we're back. let's get back to our discussion with td ameritrade chairman. do you think it matters what happens in november in terms of will it shift? for example, if romney were to win or obama, would it change the dynamics of the market either immediately before or immediately after? >> for the individual investors we've spoken to, the reality is i think they are so concerned about what's going on with the economy and therefore they look at that through the eyes of the market. in terms of what's going on with the market, i think regardless of what -- i think it's all going to depend on what happens to the economy and the markets three or four months prior to the election. if the markets are stable and the economy looks pretty good,

obama will have a better chance. people are worried about taxes going up, going crazy. they worry about the uncertainty. we haven't figured out health care and all those issues. if obama ends up winning again, i think there are concerns about the market, they worry about that being an impediment to growth. >> mr. ratner, do you agree with in a assessment? >> i think what the markets are really focused on is the fiscal cliff and what happens at the end of the year. whether obama wins or romney wins to me doesn't indicate whether we're going to make progress on this issue or not. >> you think there is a market bump to one or the other of the candidates? you say yes. you say romney wins it's better for the markets. >> there is a bump primarily because people will look at that

as a positive indicator to potential change and that maybe some of of the problems may not get fixed i think they have a better chance of getting fixed. >> the other important thing that's going to happen in november is congress, whether you end up with a congress that's still divided or whether one party achieves more of a mandate in congress. i think people want to see something get done. i think the outcome of the election will affect the markets to the extent people think something is going to happen, hopefully something good. >> joe, what are your politics? >> i'm independent. i have been. you asked me who i voted for. i did vote for obama last time. i'm not sure i'm going to do that again this time. what obama talked about yesterday, there's the big issue in terms of same-sex marriages, et cetera. at the end of the day, we've got to be able to get terrorism

right, energy right -- >> jobs, jobs! >> not what somebody's sexual orientation is or personal beliefs is. that's got to be the focus. >> can i ask you about individual retail investors, we assume they've been sitting on the sidelines, volumes clearly down. are they sitting on cash or have they left their money in stocks and they're just not trading them? >> no, you're seeing less trading of stocks. we've seen some of movement out of stocks and into mutual funds and into short-term fixed income as well as cash. the typical client we've got has about 21% of their portfolio in cash, which is high relative to the industry but it's not high relative to the last three years. >> what is it historically? >> 16.5%. >> that's high, too, isn't it? >> that's high but through really, really prolific positive market environments, it's never gotten much below 12%, 13%.

the 21%, that's as high as it's been but it's been there for three years. people do have money sitting on the sideline and looking what the to do. >> there was a time when size and strength and brand commanded 40 or 50 times earnings in 1998, 1999, things like coca-cola, disney, j & j, general electric. now you don't have to be a smart individual investor to figure that out, a 4% yield. verizon. verizon owes not going to be here? >> i think you're talking about two different things. >> i'm saying i'm smart enough and i'm an individual -- i'm no smarter than any of our viewers and i'm smart enough to figure out it's time to buy stoms. >> you're arguing that there's value in stocks.

>> then i can do it myself. i think it's important to keep in mind whether the retail investor is a lagging indicator to what's going on. last year we had a very, very positive spring, then they got slammed. >> joe, thank you for being here. >> thanks for having me, everybody. the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. ♪

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coming up on this thursday morning, joe, the camera's right there. >> i'm looking -- >> i know, but you're in the shot. we have breaking economic data just a few minutes away. the weekly jobless claims, international data for march. as we head to a break take a look at the dow futures. >> you are such a camera hog.

welcome back to "squawk box," a litany of data coming in. jobless claims, we are down one instead of up two. and the april price index, it was down half of 1%. i'm sure there's a little energy figuring into that. if we look at the march trade balance, it's worse than expected, meaning a large ar negative number. it crossed back offer 50. 51.8 is the deficit.

at one point when it wasn't a deficit, it was called the trade balance. what is the aftermath in the marketplace? really not much. equities are higher, which is a bit unusual over the last week. interest rates are a bit higher, also unusual. we auctioned off a new number yesterday, about three basis points. that actually added to the level of the interest rate, pushing it closer, very close to 1.90. >> steve, i'm trying to give you the numbers i know you're looking at. the trade deficit widened on oil. >> i think a lot of it is going to be oil but i'm interested in the non-oil portion. >> let's get to steve, who if you're not going to get any of the stuff i say to you, i'm not going to do it anymore. >> i know, i missed that. >> i said i've been evolving on calling you chief economist. >> i was overly concerned with

my report. >> you were, you were. work with me. >> what's the number you need? >> which one do you want? >> non-oil. >> non-oil. i think the 367 on claims is going to be a bit of a sigh of re relief. we will a couple of days where it spiked up to 380, there was an argument about seasonal distortio distortions. it looks like the seasonal adjustment argument was probably right with the early easter. >> non-petroleum imports unchanged. >> the 51 billion number given the assumptions of the government in the first quarter estimate is going to be neutralized to gdp. it looked like we were tracking about 1.9.

but back to claims, i think rick is right to kind of point out that it only a 1,000 decline from an upwardly revised number. we've also not made any improvement. the other side is right to argue that the 360 number could be consistent with reasonably decent job growth in the 150 to maybe 200,000 range. if we're up to 380 and rising, the 120s look good. the trade number, to the extent it's buffeted by higher oil prices and on the other side losing at least some trade to europe, but if you look and the globe, you've kind of got a slowing china, a slowing europe and some of our trading partners are not doing quite as well, which may add luster to the u.s. recovery story given what's going on around the world. >> is it fair to say the mood on the board has shifted a little

bit? you're coming in with under six down days and it enough to get things in line with consensus? >> absolutely. there is a bit of a better mood but i would say just a bit. most of the dollar increase is viewed in the context -- to get the dollar, which is still not in positive territory for the year, if it takes watching continents slip into insolvency in europe. you have to be very careful. it's a relative volume trade. we have our own set of issues. uncle sam is still pounding in corridors. i think many people are just surprised that the media general really thinks that we can have our companies making our technological products and be buffeted by such major insolvency at every point in history where europe has made

this much noise, whether it's on the war side or economic side, even though there appears to be a threat. >> what happened in february, guys, was you had a pullback in the deficit. so it's a bit of a bounce back. we did have a 2.9% increase in exports but a 2% increase in imports. that's a bounce back. some of the shyness has come off commodity prices since the spring or since last fall, rick. what is the sense right now as to commodities and where those prices are going now? >> a lot of people on this floor of course are looking at commodities we don't normally talk about like live hogs, live cattle. you're seeing major downward price pressure there. much of it is fundamentals, some

of it demand, some oversupply. commodities have a life outside foreign exchange. when i hear here is how do you make $97 a barrel cheap? most people i i talk to think 97 is a bit scary. where are we going to be when we fire on a few more cylinders? >> import prices declined 0.5% in april. bernanke has to think the forecast is coming to him in that he did forecast there was a bubble in commodity prices, they were going to come off and he was going to have some scope at least to maintain the current policy, which i don't think that's where they're going here. but i think that's he's going to feel like those numbers are going his way. in commodity prices decline,

that's helpful to corporate profits. >> i was thinking about getting you guys going but we'll do that soon. >> as long as people tune in. >> okay. she is the outspoken former governor of new jersey and the former administrator of the epa. christie whitman will join us.

all right, welcome back to "squawk box," everybody. the futures right now are indicated sharply higher, dow futures up about 50% up by fair value, the futures up by 0.8%, after seeing jobless claims that came in at 367,000, right in line with expectations. >> the presidential campaigns are in full swing, president obama raising money in california at the clooney -- >> george clooney event. >> that's going to be glittering. at the correspondents dinner, clooney is -- >> he's the man. >> he's a star. it's like there's this weird thing coming off him. >> you should have seen him hold court. at the party afterwards. >> we're going to get to governor whitman. >> what was weird is santorum

was there. you should have seen that. i want to run, too. andrew laughed at me for living in new jersey. >> i live in new jersey, too. >> every day you give me a hard time for living in manhattan. every day. >> the nice thing is you come over here to earn your money. >> where the taxes aren't so bad. >> but you have two little boys, they deserve grass and open space. >> you don't have a car, i forgot. governor whitman served as epa administrator under president bush. let's get this out. you think you're not endorsing romney yet. you think that huntsman should run on a third party ticket and that you can't really endorse romney yet because i guess we're not at the end of the whole procedure. but can you -- after he's come this far, to still not be endorsing him, will he want your

endorsement when it finally comes time to do it? >> i'm not sure he ever wanted it. you were a moderate. is he too conservative? >> the whole point is just to open the process so there's a third alternative for a candidate who is not beholding to either one of the party for their nomination so they can be a little freer. >> there's been third party candidates before. >> this isn't really a third party because we don't have a platform. we have over 4,000 delegates. can you start do this kind of thing on line. 4 million people who watch what we are doing, 2.7 million who sign petitions to get us on the slate. evan bayh and john huntsman, those kinds of tickets are enormously appealing. >> don't you have the problem with the electoral college?

unless you get 270 votes, you end up where this third party standard -- it doesn't push you over the finish line. it simply put you in the house of representatives. >> we wouldn't let it go to the house. we've had that discussion with the board of trustees. if it's a very close election and we win enough states with electoral votes -- we win states, we'll have electoral strots and if it's close in the electoral college, the presidential nominee of americans elect has to determine which of the two candidates is the closest to what he stood for and our electors will vote for that person. if he or she chooses to the to do that, then we direct that whoever won the popular vote -- >> so there will be a candidate, if it's not hunts dash -- no,

no, it's unto the 15th of may under the current may, we have the opening we can continue this right up to the end. >> if it comes down to obama and romney, will you endorse romney? >> i don't know. we'll see what mischoices puerto rico. >> so that's -- that is indicative of your -- >> i am very -- i do not want to see -- i don't agree with the president on fiscal matters and i don't believe that big government is the answer for everything. that's problematic not so much because of the fiscal issues which neither party is doing anything about solving but what's happening regulatory, with the snang commission, national labor relation board.

>> a lot of problems with women. >> it gets to the point where you are say women are 50% of the population. it's not a war on women but there are two sides here trying to distract us. >> which issue, the contraception issue? >> for instance, i was enormously disappointed with mitt romney when during the tea party debate you had the question in the soldier in uniform overseas and they booed him. he had a home degree kr style. he is putting his life on the line for you. when rush limbaugh called a woman a slut. well, it's not the language i would have used. where are we going in the

future? what is he really going to do about the economy. medicare/medicaid. what would be your issue with president obama's economic policy or do you have a different point of view? >> i'm a little troubled by the size increase in the defense. i'm all for a very strong national defense, but even the defense department has said that they could do with less and he's talking about attaching it to the cost of living and watching what happens. it would be an enormous increase in spending there. >> what about the massive tax cuts? >> i'm sorry. >> go ahead on the tax cuts and then i have a question. i believe in cutting taxes, i certainly did it as a governor over and over again. but you didn't can't do just tax cuts.

and this is the problem with our primary system it forces the candidates to the right and left. mitt mift signed a no new taxes pledge. how you get around that and still address loopholes that everyone agrees need to be closed. >> do you think this is a problem with the primaries because the candidates are pushed so far right and so far left. mitt romney, spint on him is he was too -- am i voting for what seemed to be this moderate massachusetts governor or am i voting for somebody else that's part of this campaign and does he ultimately push back to whatever you think that moderate was? >> i don't know. that's one of the concerns -- i would have said now is the time for -- it can get nasty, particularly with the vice

presidential choice. the delegates are a very small, self-selected group of people who represent the most passionate of the partisans. and they tend to be more conservative as democrats delegates tend to be more liberal. so he does have to get through that. on the other hand to watch what happened with his foreign policy visor bothered me. i mean, to walk away from somebody that quickly because of the pressure you were getting because of the man's lifestyle, who happens to be a very well recognized international expert. i'm looking for the core. >> his choice for vice president, is that a huge deciding factor for you? is there someone who would make you feel very good about that ticket? >> there a number of people who could make me feel good about temperature. that's why i want to stee where we go. >> and governor christie -- >> i'd like him to stay in new jersey. i think heeding good.

>> you're in new york for chinese takeout. is that it? >> andrew's never going to leave manhattan. >> no, he's not. >> he knows my wife. up know my wife, too. >> you don't have a back yard. >> central park. >> go out there and midnight. >> andrew will use all the money cnbc is buying him to buy a weekend home. >> then you'll be the 1%er you actually are. >> coming up, we'll head to the new york stock exchange right after this. ready pornt -- or not, the stock of the day is coming up. you're watching "squawk box" on cnbc, first in business worldwide. nteractive learning, plus, in-branch seminars at over 500 locations,

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welcome back to "squawk box," everybody. carl, melissa and jim join us. the news has to be the job less claims and the market reaction. >> spain is up 3%, haven't seen a move like that in six months. look who's back here at the

table. >> i'm also here. >> there you go. there you are. >> it sounds like you had a great time in new orleans. i'm sure we'll talk about wireless and some of the names you seem enamored with. >> the slowest growth names, the slowest growth that's consistent with defends is holding up. today will be different. it looks like if you take any action like spain did, any action is welcome to the freeze. f.t. is all over there. have to read what here saying about the germans may be letting up. >> avon getting a little spicy, too. >> that's starting to get more serious, at least cody's bid has to be considered more serious. they have a new ceo, lots of problems, the stock has been down sharply, but we're going to take a closer look at that coming up at the top of the hour. >> david, i like the letter they put out where we'll set we'll go away and be friends if it doesn't work out. >> i've used to send letters

like that. you know, let's be friends, but they tended to be much more of a personal nature. >> it's not you, it's me. >> right. right. >> they gave them until monday. they have shorted up. we know the equity is for real. this is a significant bid, but they don't have a pather they're not going hostile, so we'll have to see what avon has to say. >> i'm okay, you're okay. i have that book. >> berkshire is in there now. >> a lot of things have been brewing for some time. it's still well below that, because we know how bad things are. >> we'll see you in a few minutes at the top of the hour. coming up, some final thoughts from our guest host steven ratner. we'll be back in just a moment. what are you doing? you dancing? ♪ i can feel something inside me

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back in the day, a monster beverage, the maker reporting a 38% jump in quarterly profits. that is macho, beating street estimates, shares spiked briefly last month on a journal report that coke was in talks to acquire monster. coke later said that such talks were going on, in fact. they want they weren't going on. >> no such talks were going on. >> no such talks were going on. >> the report was wrong. >> you really drive him crazy

when you do that. >> i don't take any pride in saying that. curious as a former m & a guy where you think the animal spirit has been nothing. >> in terms of. >> deal making, what's going on. as a barometer of confidence. >> m & a is always a barometer of confidence. what's paradoxical about it, we talked about the individual investor doing things at the wrong time. the closer it is to sort of a top, the more m & a you see, so i think the lack of m & a is the same thing. a simple lack on confidence, and knowing where the world is going. >> we have to run, but very quickly, carl aisle had the ipo, now trading below the offering price. would you buy into any of these private equity firms? >> the ipos have gone very well, but the fact is these are big real firm that is