legitimate business and sure, at the right valuation i would. >> steven, thank you. you like the green dress? it's not really green. watch this. snap. yeah, there we go. see you tomorrow. time for "squawk on the street." ♪ beautiful day ♪ blew sky happy birthday to bono who turns a very young 52 today. good morning, welcome to "squawk on the street." live from the new york stock exchange, the gang's all back. nice to have everybody back. dow looking to snap a six-session losing stream. slight drop in weekly job less claims also a positive. meantime look at the european markets. we haven't seen this in some time, they are in the green across the board. take a look at those gains. up nicely. >> here's the road plap, as

spain bounces 3%, futures turn positive, can the markets focus elsy, as greece is still struggling to form a collision government. >> avon shares are flying again today on a new her from cody, telling avon that the offer is on the table under may 14th. cisco getting slammed today, disappoints guidance, weak enterprise spending, what does that mean for tech? a sector favor. and new revelation from facebook. more mobile users not translating into higher add rep, so is it a question before the big ipo? so far the bulls breathing a sigh of relief. u.s. futures are on the rise as stocks look to put a dent in what's been a 144-point drop in the past six sessions. european stocks on the rebounds. up more than 3.5% one day after plummeting to 9 1/2-year lows.

jim we've had very interesting market in the past three session where we plummeted sharply in the first half of trading and bounced back. we're seeing the inverse. will it be the inverse? >> boy, that's a tough one. we've been very strong here, okay, and we've had some decent earnings, not great. what's really going on in spain is just they're doing a citigroup basically on one of the largest banks. when you look at the number of bad loans, it's really strange, but what i don't like, that conference call, we're going to discuss cisco. i'm not going to plame john chambers at all, but that was just the type of thing that makes me think, listen, if they go up big there will be people who sell them because of what chambers said. >> i would be hard pressed to sit here and tell you we won't be talking about spain next week, next month or next year. we probably will be. i've been saying on the show many times, at least the guys i talk to, in terms of macro hedge

funds who have been underinvested have been consistently concerned about spain, about the banks system. you've got to remember the capital markets there are not like our capital markets. banks are much more closely tied into corporationings are and man, are they all tied into each other. the cross-ownerships, you can see that a lot, but it doesn't mean it's all going to happen, but gets back to this overall concern watching the bond yields above 6% may be off the table today, maybe a nice response to spain steps in but hard to imagine we won't be revisiting this i want your point last night, looking for companies with expanding markets and no exposure to europe. they are out there, right? you ran across a couple in new orleans. >> gee, there's so many. you sit down with verizon wireless, what's the big issue? can we handle all the business? what's the big issue with at&t? can we continue expandsing margins? absolutely yes. what these say is the dividends are going to go higher, the

growth is consistent. they're not expensive stocks. i tried to tell them off-line, here is how you should always start your presentations, we are not in europe. that's how you get a spike these days. >> they're not cheap stocks, either. >> well, but that cash flow is big. a lot of what people don't understand is when they have more wireless growth initially the costs are so great because of the toll you have to pay to apple that you don't get a gigantic earnings boost, but it does come down the line. i think these stocks represent good value. >> one of the things we were talking about a lot in new orleans was this subsidy you just mentioned this, this enormous amount of money which now exceeds their capital expenditures. that still will be an interesting debate. you get to this whoa idea of who owns the customer? >> and how -- you get a deal from android if you're one of

these companies that's so much better, but in the end when you talk off-line with the major executives, people love apple so much, they just want it, and dan hise online and off-line saying i know we spend $15 million to get the iphone. it's been worth every penny and i think dan has been honest the whole way, the whole way down. at least five wall street firms are cutting their price targets for cisco, the network equipment maker, forecasting current quarter earnings below consensus. it does raise some red flags about the company's ability to weather persistent weakness. the ceo, gentleman chambers on late yesterday. >> businesses don't spend or react well, either from the economy or from government policy. if we understand what the issues are, we'll make the decisions about where we grow our business, where we invest in

resources, how much we gift in dividends, how much we do in acquisitions, et cetera, so that's part of the uncertainly that i think bothers my customers the most. so longer sales cycles more sign-off needed, smaller deals, jim. a crystallization. what we're seeing in corporate america. >> i have been critical of john chambers and what he's done. i'm not critical of this quarter. i think they're doing everything they can. they've made a lot of bets on governments. governments are cutting back. i think he used government and it wasn't an excuse this time. they're killing the competition, but it's not enough, because the customers are frozen. >> we saw it play out in juniper's second quarter guidance. they said things were terrible. very weak guidance and cisco had very good gross margins. that bears it up. they're gaining market share not by cutting prices, but simply getting market share because their products are in demand. at the same time i have to call out john chambers. he used to be a regular here after the earnings call.

he does the 4:00 show right after the earnings are released, but he does an interview before the guidance is released. wouldn't you have loved john chaim better to come out and explain the guidance, because today wall street is saying, you know what? we don't know in we can believe cisco systems at this point, and he's not answering to the media. >> stock did tick up to 19 while he was on tv, and then -- >> and then swiftly tanks once the guidance was out on the conference call. >> we've been talking for some time about this underlying uncertainty, i hate to use the word i have heard so often from ceos wondering while it still exists, during that great first quarks, yes there it is again being mentioned in terms of their customers. i don't know if the unwillingness to spend at the corporate level from ceos and the decision makers, i'm not sure where it finds its roots. is it europe? is it worries about the deficit here in the u.s., which always

comes up, issue number one for so many of these people, but it's still there. to the extent you believe chambers, and it's not -- >> i do believe him. >> isn't that a bad reflection of what to expect the rest of the year? >> i think so. they did call out datacenters as being very strong. that group will be under pressure, because people tend not to read the conference call. he calls on the cloud as being credibly strong. he said service provider was not bad, but yes, he is out there, saying salespeople saw weakness, and there is just fear. i think a lot of it is europe. he did call out india as not being good. china not good, but apparently there's some sort of gap there. look, they look like a lot of stock at $20 and change. that was looking like a mistake. they have i'm not recommending

the stock. i just think that chambers did -- he speaks to customers. >> to melissa's point, it would be great to have more from him and understand in terms of the bigger picture. >> in his defense, he probably answered the questions to the analysts on the conference call, but as you point out not many people read the transcripts. we don't have that qualitative measure. if cisco isn't back doing everything it can in the space in which it exists and there's a secular deterioration in demand for its products, that sounds like to me this is not a buy, nor is any member of this industry. >> i think that there's a secular decline in government spend, and he has done a fabulous job in getting government spend. i think it's cyclical on the other side. he's annihilated hewlett-packard. when i met with mark hurd, oracle downgraded, we're talking about he's going to go after

cisco. kevin johnson from juniper, he's going to take business. game, set, match cisco, yet in the end it doesn't seem to matter. i felt for chambers on this one, because boy, they were making this turn really the deer sell rating, but as you mentioned am iing you john? john, i think you're crushing everybody portland there's not enough customer interest. >> what does that mean for people who says it's 10 p.e. on a blue chip company on a balance sheet, is it a buy? >> declining earnings and decelerating during the actual quarter, he was very candid about that, the multiple is a shrinking multiple. i contrast that with intel which has a shrinking multiple. i contrast that with microsoft. there's this great did i cot my between the consumer, who actually has more strength and

the enterprise which is tentative and the governments around the world which are, hey, listen, we've got to go bail out bancea. >> maybe you want to stay away from the "ia" companies. >> that's up from 23.25 in a her to avon's board, cody says it believes the offer would coty also adding it will withdraw the offer if avon does not enter into discussions by may 14th. coty says berkshire hathaway is among the companies providing acquisition bid. avon says it will consider coty's letter in due course. do you believe it? >> due course will have to be fairly quick. listen, coty has come a lot way from when i first saturday here, they will not go hostile,

because the equity investors will not allow them to do that. they are relying on avon to say, here it is, here are our books, if you let us in by the 14th we'll be done by the 31st of may, we may raise our offer or lower or offer by what we can see and determine in terms of synergies, but let's not forget. coty is a private company, it has to buy this with all cash, so there's no up seed in the combination you might be able to offer. by the way, coty also considering going public this summer. all that being said, even though there remains no path here, they have gone up to 2475 in the face of very poor earnings. avon does have a new ceo with a $30 million contract. that could be called the cost of doing business here. we'll see how avon shoulders here. will they put enough pressure to say just let them in, let's see what we get. if nothing comes of it, fine, and go your other path with the

new ceo direction, but warren buffett involved here. that changes. picture. >> it makes it much more real. >> we're not questioning the equity at this point. i've been hearing berkshire's names, a number of others, the brazilians. they've got the money and by the way it's got to be a lot of money. so you're talking about an enormous equity check for -- remember, every dollar up for avon is $431 million. it's not small. they have a lot of shares outstanding. >> aidie yen young still a -- >> still there. what do you have to do to get fired? maybe borrow a lot of money and sell your green mountain coffee shares. >> and violate a trading window. >> or think she's being treated differently because she's a minority woman and there are so few? corporate america? >> that's tough. there was a great article in

"fortun "fortune." she was embarrassed by the fact that avon had this avolcano calling. what she had to do is bring in brand name products that people might bring in retail. it was a disaster. herb greenberg has been doing fabulous stuff on herballife. they she got up in a chinese foreign bankrupt practices business. i think at a certain point, no matter who you are, you should leave the company firms and coty wants to try to understand all those things in terms of costs, in terms of financial -- what's going to happen with the fcpa. we'll see. we'll see what happens from here. you know, brazil is still a problem for them, regardless. i'm not sure how coty figures it can solve what's going on in brazil. again, no path here, so if avon says no, it's going to be over. moves on to facebook, ahead of the ipo, facebook revealing

more details on mobile using, saying the mobile ad business has not kept up with user growth in an amended filing, facebook says more than half of its users use the network on mobile devices, showing very small number of ads in the mobile space, so it's not translated into an increase. zhukker better is on the cover of "new york" magazine calling him the last great american tycoon. if for some reason he's calculating the platform, that's a problem erchlts my lennial media got hammered, reporting -- that was worrisome. another insight that ply me away. dan hise, very candid set in the big issue in 2012 is privacy and your cell phone. if facebook can't market its data about you because of privacy laws, why does procter & gamble want to advertise on

mobile? this is a very different platform than your desk stop. i'm worried. i think it's substantive. >> except in ten years, does anybody think we're not going to be completely mobile? in five years? at some point the advertisers have to make the move, and understand the construct and what it's going to take. i mean, right? everything will be mobile. i may be walking around with a dinosaur in my pocket, being i have a blackberry, but -- >> the defense department. >> some lady on the plane actually insulted me. you still have one of those? i said, are you insulting my technolo technology? >> i think it's retro. >> still easier for type on. >> weren't you vote in the dinosaur theme once in your earlier part of the career? >> disney, yes, i did work at the magic kingdom. given their quarter this week, they're a dinosaur. >> dinosaurs rule the world. >> but everybody is having

trouble managing to this transition. or even pandora, in talking to joe kennedy, but same issue. aren't they all going to resolve it? >> have you ever clicked on an ad when you're playing any of the games? have you ever clicked on an ad? >> no, you don't. they're too small, you're not going to click. that's the inherent problem. in the meantime while they're figuring out a resolution, companies will go by the wayside. that may not be in the future. that's going to kill some people. the last tycoon supposed to be a hundred -- 900 million users. it should temper your enthusiasm for the deal. i know it won't, but it should. >> you are typically looking to act and do something commerce related. very difficult on facebook. "usa today" this week had a big story how you can get a piece of the facebook iismt po. you would advise the average

investor to stay away? >> i know they're giving it to terrific retail outlets, if you can't get stock on it, if you were on "today" you say your kids may love it, but if you buy this stock in the after market, i think you can get hurt. all right. still to come this morning, a lot to talk about. one of the year's ipos looking to get its mojo back. cafe press, something that allows you to design your over t-shirts. one time for the futures in several mornings, some green arrows. we're backs at post 9 in just a moment.

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. that more may join the ranks after facebook goes public. that brings us to the squawk on the tweet. if you left your job at facebook and took your shares, what business would you start and why? tweet us, we've got your responses throughout the morning, and certainly there are a lot of innovative, so the types of businesses they

possibly found could be interesting and intriguing. the next wave of ipo, perhaps. >> i spoke to the people on the cti panel, i said, wans instagrm worth it? i'm thinking let's give guys $500 million and jest bet on them. >> we've tried that with some solar companies. >> yeah, how well did that work out. >> that was a complication, good point. cramer as mad dash is next. and how we are setting up for this thursday morning -- is it thursday this the dow is up by about 61 points. looks like at the open. stay tuned.

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there you have it, it's the cnbc real-time exchange at the big board. the northeast utilities financial academy. at the nasdaq, tellius does the honors there. fed chairman better nangies getting ready to address the chicago fed conference. steve liesman has headlines crossing now. >> carl, making some upbeat comments about the banking industry saying lending has generally been improving he as -- banks says it makes considerable progress in the and in building up capital. they reduced their dependence, which was their relyians on

wholesale short-term funding. delinquency rates are down substantially from the peaks, profitability is up, businesses and households are finding it easier to borrow. the improvement is not just to small banks. and fewer community banks failed in 2011 than in each of the previous two years. domestic banks are picking up some customers because european banks are pulling back. crepe demand generally has remained sluggish. credit conditions in some sectors for some types of borrowers, he says remain tight. it's going to be difficult to turn around the mortgage market very quickly, including, because current mortgage standards may be limiting loans to even creditworthy borrowers, even those who put down 20%.

overall, guys, i think this is pretty upbeat fed chairman, who is not inclined to making too many upbeat comments about the banks industry. carl? >> all right. steve, thank you very much. steve liesman joining us back at headquarters. interesting given a week when the journal says if you want to reify, good luck, there's only a few bank that is will talk to you. >> i think steve makes a point. a that's been echoed in the regional reports. there's more consumerlanding? i'm always in the market to buy real estate, because i can't own stocks. >> not a castle, though, in ireland. >> did you see there's a castle for sale in ireland? 275 acres. >> just came on the market. so i've been looking. >> you're getting all those e-mails. >> hey a groupon, along with the brazilian deal they're offering. >> going back to the

brazilian -- >> amazon gave me 85% off on a bikram deal. amazon could kill groupon. what a gorilla. >> about a company that does not care how much growth costs, if they want something they're going to go for it, and good luck, godspeed to all the people in its path. >> high-end fashion is the next pioneer. and they're ready to take hostages. they are going to spend money. >> any opponent that doesn't care about losing money a la the justice department, the great nick cal cason back passed away yesterday, you go up against the justice department, unlimited capital. you go up against amazon, seemingly unlimited capital. >> to that point we hear so often, we're too focused on quarter to quarter, when you

have a facebook and a google and amazon, all of which don't really care about that. it may be a good thing. >> jim last night, your brought point on stocks was if you're really sick about this market, wait until some higher levels come along and then sell. is this that kind of day? >> we've been down a lot, so i think we can bounce, but the answer is if you're a weak candidate, owner of stock, i don't want you selling into a panic. yeah, to me, this is not a reason to sell verizon, not a reason to sell at&t. i find that the cisco quarter was very jarring. if you're in some tech and you're concerned, hey, lighten up today. >> cisco, by the way, opened lower by by 8.25%, we're watching shares of oracle. and that stock is trading down by almost 2%. downgrade specifically on europe. and i think we should start

thinking about technology. technology in particular has a lot of percentage of their sales out of europe. if this is what cisco is telling us, you've got to think there may be some trouble brewing. >> i think that's a great call. if you want to know what could be sold, i think oracle is a sale here. i'm sure they'll argue otherwise. they never like to be on the other side of larry ellison, because he's a killer. i'm speaking figure ratively, but i think oracle is a sell. >> our producer says cisco is the biggers loser in the dow, s&p and nasdaq 100, a triple play on the down side. >> look, they ball ought that stock back. you mentioned the cash issued, ij not recommending the stock. i think the stock is dead money. iology that rigor mortis is setting in, though. >> and don't think they'll use it for a different or stock buyback. john chambers has been very

vocal about the need for a repatriati repatriation, which does not look like it's going to come. >> so it really is, until tim geithner figures out something, you know, whatever happens with treasuries, i think it's a really good point to say that john chambers talks directly about the government. mark papal last night c oeismt of eog resources, the great finder of oil in our time, when is the government going to start doing something positive. >> but they have plenty of cash they're still not spending. apple has $74 billion overseas part of that is because irehand is a tax haven, fine, okay, but that's one of the reasons there's so much cash over there. fwerta coombs is watching the action this morning. >> on the seventh day the dow rises. traders sort of saying we're seeing a bit of europe fatigue. we're also seeing reality on the ground in europe.

generally has been very tough on the countries like greece. now the bund bank saying we need to be more flexible and have higher inflation in order to help the situation. mean toim spanish banks with the nationalization -- near nationalization near 45% stake, the government tailing in bankia. the ibex has now recouped losses and some of the competitors are all trading higher. the euro has been down eight straight days. bouncing this morning as well. if it does close lower for the ninth time would be the first time since 2003. we have a slightly weaker dollar. saying it sees better demand despite missing on the top line and earnings, that second demand outlook seems -- and we do have an ipo listing a number of --

because of the -- wage worth listing here this morning they price below the range at $9 a share. it's indicated to open between 9.50 and 10.50. so they're getting rewarded for being brave and coming out here this morning. back over to you, jim. >> rick santelli in chicago, and passing as always on the 8 oomt 30 adjustment. go ahead. >> this morning we saw some data, just doing a quick forensics jobless claims really hunkering down at a level that makes most people think we'll see better jon creation. last week the surprise was a big of a kick up in the trade deficit. you can look at that any way you want. in some ways, what it tells you is in the end either we're not exporting enough or import demand is actually pretty good. so piece it together, probably doesn't have a huge impact on

the gdp revisions at this point. if we look at the ten-year, it's up at 190. how about three basis points to that is just the rode between the new ten-year we issued in the old guide, and the big news out of the usda, and i'll try to go fast. if you look at corn inventories, they expect to double after the next growing season. right now trading about down 15 cents. acreage, they're looking for a major jump in acreage to the biggest levels in this season since we've seen in 37. beans due to issues we're exporting more beans. those stockpiles are moving in the other direction. jim cramer, back to you. >> thank you so much. the latest news in energy and metals. go ahead, sharon. >> jim, we are looking at currency action having an impact in commodities in both oil and gold, perhaps providing a bit of

a technical bounce we're seeing right now in the crude oil market. we're right around a key technical level right now. this could be the battle point for crude futures. we're continuing to watch as well what is happening in terms of the underlying fundamentals, and opecs out with a report day saying that supply it pawlentiful. we also, of course, get the data from china showing that imports were slight will you up in april, but down from the february peak. also keep in mind that while there's some out there like barclays talking about the fact we're starting to see improving demand, they're also skeptical about the market. traders, though, saying we may have found a short-term bottom here in the gold price, we are up a bit right now, perhaps with a technical bounds, but the gld holdings have remained steady, even as the flat price of futures has fallen.

this is an indication that it's the new shorts perhaps doing the selling. back to you. >> thanks very much, sharon epperson. want to direct our viewers' attention to shares of news corps, up over 5% as earnings were reported after the bell. they were good, quite good, though it good point to a more difficult fourth quarter in terms of its guidance, at least, toward the bottom end, low double digits to mid teens growth. capable networks very strong. 10% domestic advertising growth. the key is the buyback. they increase it to $10 million in the total authorization. that really has been what has been moving this stock t you know, the scandal is motivating the murdochs to actually focus on what their shareholders want. we've been saying, jim, in some ways every time it seems back for murdoch, it's good for shareholders. that's not necessarily a line, which a lot of people have known for a long time, in terms of

investing with rupert murdoch. >> david, when people real stories in the conventional prey about scandal, they would think that a stock gets hit. what would make it so it would get hid from scandals. >> if it moves over to these shores and fcc was looking at broadcast licenses, then you would start to see real weakness, as long as the drumbeat continues to beever overseas, it really doesn't have an impact on fox news ratings and again on a share buyback program that was instituted in the face of all of this and is only going one way much to of happiness of the shareholders, keep shrinking the cap. >> interesting that they said uk panel is finding that he's unfit

is ridiculous, and the prince talking to the bbc saying he hopes this issue is behind us, but a very large shareholder he says he's hoping it's coming to a close. >> the stock goes to 17. the stock goes very nicely into the 20s. by the way, management said they expect to complete the 6.1 billion authorization by fiscal year 13, so they are consist aren'tly buying back a lot of stock, which by the way is a theme across media. does this make the stock a buy, jim? we know that the shares base will shrink. >> i think obviously there was a better moment to buy it. i'm not going to get in front of this freight train. >> disney or news corp.? >> i think bob iger did a

fabulous job. the avengers is the next big franchise. i think gasoline going down is terrific for them. i like that stock very very much. "john carter" we sat here a few -- >> john carter, who is that? the ceo of something? >> that cash flow people have argued news corp. is not levered enough. avon, people may say why are the shares down? move up yesterday on reports that shares were sold to help fund this bid. but it also goes to the belief that avon is just going to say, no, we're not going to let you in. you know, the 52-week high on avon is over $30 a share. that often can be a psychological barrier to anybody, particularly in a cash deal, where once you get your money it's not like you have any

other up side. >> you think they might be sued? >> no, the board is likes how can we possibly consider an offer that's a good $5 below our 52-week high. >> though it's a premium before all these rumors came out. as a reflex thin that a belief that avon is just going to say, the farm. you leave your job at facebook, take the company shares with you. what kind of business would you start and why? we want to know. so tweet us. your answers are coming up. take a look at this morning's early movers. tesoro up nicely by 5%.

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no surprise at the bottom right hand of the screen you see the dow laggard, cisco leading the way lower, down by about 8%. consumer discretionary doing quite well. time for squawk on the tweet on this thursday, as we counseled down to facebook's ipo. there's an article. bankroll some others, so our question is if you left the job at facebook, took all your shares with you, what kind of business would you start and why? gary writes -- i would open a rehab center for social media addicts. hot pockets delivery service for those who got ipo shares and are now -- hot pockets for deep pockets. >> i would go work for apple, teach them how to finally annihilate all and achieve global domination.

i think they're lard figuring that out. >> they did look good on squawk the other day. >> you know, i country of like them. >> handsome pair. >> it would be interesting whether or not in five years we talked about the rise and fall of facebook or facebook gazillion aires that spread that wealth. >> that is the new part of tech. i want to emphasize again, be in on the deal. i'm just afraid of tremendous euphoria for people who come in after the deal. but i do like the business model. david may be -- he's right, maybe they solve mobile. in the meantime we have a decent market today. if you keep the selling to tech, basics are a very big part. you mentioned toll brothers, melissa, go back to what steve liesman was saying about lending, the domestic economy is stronger than people think.

i don't want people to sell those stocks, when we talk about what to sell. >> don't do that. >> you talked about the gentle rise in domestic demand. the business sentiment surveys haven't been terrible, right? loan grout not too bad. >> not at all. i'm always reluctant to be too optimistic, but we've got down for a while. do i want to own international banks? they're a tough one. but domestic banks, they seem to be facing. they reported a good number. wow. did i ana olick was very popular yesterday. she's been dead on. our housing person has been debt on. >> a healthy skeptic. so we'll take stock in this market, trading day is young. a lot more "squawk on the street" in a moment. coming up, you may have six

stocks sitting on the shelf, but cramer has six sitting in his mind. six stocks in 60 seconds, when "squawk on the street" returns.

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simon hobbs here on a thursday morning. what's coming up? >> we have someone from barcl s barclays, taking down her estimate for gold. the etf pioneers cafe press will also be here trading below the ipo price. also we'll ask if investors are coning themselves if they think they can profit easily. we'll talk about that in the second hour. >> see you if a few minutes. time for six in 60. six stocks in 60 seconds. priceline. >> want people to realize that outlook matters. price line was very cautious. i don't want to touch it, because i have questions, even though the growth is fabulous

3m, this is a call say global economy is slowing down. >> a man who likes to garden, scotts miracle-gro. >> everybody housing is going higher. i want to own it. >> check the peak midstream. >> first time i heard someone say are they enron? no, enron -- you can't make that complication, but goldman says that chex peek has to sell shares to shorten things up. >> guy didn't like it and then upgrades. i want to comment taz the way analysts should do it. >> costco? >> carl, i have to tell you this is a domestic -- i wanted to ask you, the night that costco appeared last, it was high. what kind of feedback did you

get? >> people's questions are about the long term. obviously it will run into headwinds, of course, but the dip making a difference today, up almost 2%. >> and some sports events that night, this is a fabulous special. if you missed it, costco is the great american juggernaut. you did a fabulous job. i hope people watch it tonight. >> speaking of tonight, what's on "mad money"? >> i like that drug companies with the science of weakness. ireland needs help. i love ireland. he's a terrific guy. they do a lot of stuff, really an interesting story. we'll stick our teeth into it. >> we'll see you tonight. good to have you back. >> oh, love it here. cisco systems has been underperforming so far this year. will the tech giants earnings change that trend? that's in just a moment.

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what's next for the markets? we have a top ranked panel 9 experts to weigh in. >> and cisco cloaking in, this is a company that beat estimates, but issued a very cautious outlook. so are chambers' turnaround efforts just a distance memory? plus we'll sit down with the ceo of cafepress. with the market of one of a kind product. sony reporting a record annual lost of 5$5.7 billion, te fourth straight years of red ink. china's trade surplus widening to $18.4 billion in april up 5.4 billion the previous month. the weak import growth raising fears the world's second biggest

economy isn't doing enough to stimulate domestic demand. guess who is back? privately held perfume company coty with an offer to avon. avon has since hired former johnson & johnson exec cheryl mccoy. shares are down by almost 2% so far this morning this after a very big pop yesterday. on rumors this big was becoming a stronger one. it sold its holdings in -- >> in record time. >> part of its holdings. >> the equity check is probably not it doubt. the financing from jpmorgan. the question is what does avon's board choose to do? you have a company that said we're not raising until you let us do due diligence and then they raised.

there may be a higher price in there if they do let them in, but that's the key consideration, melissa, which way the board chooses to go here, because they are not going to go hostile, so to speak. it's an unsolicited offer, made public, but not a hostile offer in the sense they won't go down the road for clleninging the board. the annual meeting has already occurred. >> it might be worth mentioning that if the same family that was behind was put behind avon, they executed extraordinarily well at a time when others in the space -- this is household detergeants, the way they innovated. for a lost time -- if that family was responsible they could take it to avon. that is a major thing. >> it is, except they would be the pure beneficiary of that, because it's an all-cash deal, and therefore shareholders you don't actually get the benefit. >> but maybe their valuation behind closed doors is higher because of their ability to

execute. >> they want to see the numb bers to understand the synergies. they have given a deadline as of monday in order to hear -- >> a busy weekend at avon headquarters. >> or maybe not. >> and the market seems to think that's a high probability perhaps. >> overall, this morning we're now up 84 points on the dow. the market is taking a turn for the better today. shaking off early weakness after the jobless claims. after the big sell-off. richard bernstein joins us. he's also a cnbc contributor. we should mention that. and rob morgan with fulcrum securities. rob, you started the year at 1300 was the projection on the s&p. you raised it to 14 linz. if we hit that, will you raise it again?

it's been quite brutal the last few sessions. no doubt. your ozone fears in china, with some poor trade data, but at the same time we keep bouncing off the bottom of this two-month range here. and, but as i said, earnings have continued to be great, and once we get to the next earnings season, i'm sure investors will focus on that. >> overall earnings have been great, but you take a name like a cisco, based on what they're saying about europe, we piece that together with what foss the said about europe as well.

i wonder if you start seeing concern about multinational companies with heavy exposure to europe at this point? >> we've been very concerned about multinationals. i think the story has been among most investors, you either wand to invest, or you want companies that are exposed to them. our strategy has been the exact opposite. we've been very concerned, because the global credit bubble is still deflating so why would you want to lead with your chin into those markets? our strategy has been much the opposite, to kind of expos our portfolios to the domestic u.s. economy and try to avoid as much as we can. people might translate that into maul scams. obviously there are large-cap companies twhar, but small caps are generally domestic companies. i wonder if you see value there. >> yeah, absolutely. in fact, you know, people are always looking for growth

stories. the greatest in the world right now is actually small-cam u.s. companies. the projected growth rate is about 6 to 7 times projected earnings growth rate for chinese companies. people can't believe it could possibly be a growth story in the united states, but right now the best growth story in the world is in. >> steven lewis is asking she very profound that i like your views on. he is suggesting that strategists are overly insulated, failing to realize the huge forces that are ripping around the word in a moment and that ipo will give us a false sense of security. just as you ripped up the book on bond investing, you actually have to rip up the assumptions

you're making as well, that you can solely invest in the united states. he would say longer term, actually the diagnosis for all developed country is very poor, richard. >> well, i think, simon, that is a great extrapolation of trends to be honest with you. i think people still don't appreciate the credit bubble was not a u.s. event, it was not a developed market event, it was a global event. the biggest beneficiaries of the global credit bubble were the emerging markets. so if one believes that the credit bubble will be reflayed and that is the secular story going forward, yes, you want to say in risk-on aspects. our theme is the exact opposite. we're under the impression that the global credit double is defla deflating, so why would we expect credit-related assets like emerging markets to outperform going forward. one quick thing. i think we have to separate --

ten years ago everything was talking about the new economy, but everything that people said about the new economy has come true, but if you bought nasdaq ten years ago you're down 40%. there may be these rosy economy stories out there. isn't the name of the game investing, and shouldn't we -- rather than the rosy economy stories? >> finally, rob, bank of england today, no more q.e., even as that country faces recession. did that put even more of a lid on the hope for q.e. or additional easing in this country? would the fed follow? >> yeah, carl, i think we're not going to see more qe here regardless, but certainly the boe announcement this morning probably seals that. >> that has huge implications, rob, for gold, oil and silver, does it not, what you're now saying? >> yeah, simon, earlier this

year, when i came out with my ten projections we would see this year, i projected that oil and gold would be lower in prize at the end of this year than at the beginning. >> guys, we're out of time. thank you. great conversation. thank you. cisco reporting earnings rose 20% in the third quarter while issuing what was a muted fourth quarter outlook. that has sent shares down 7.5%. still the market up. several analysts remaining bullish on the name. we're going to break it all down, next.

temp you are pedic, this is a fascinating story. you remember a few days ago, a raymond james analyst came out with a note that said his checks said they would have a big discount promotion on one of the best-selling mattresses. that crushed the stock. today that same analyst is upgrading the stock, that's right, upgrading the stock after the company did confirm, yeah, we are having a promotion, 12 to 17% off from about mid may to early june. the analyst saying the sell-off was overdone, so it's an upgrade. so down one day on rumors, up

the next day on the news. that's your market. that's a mattress. >> don't you love it? thanks, brian. we're also watching shares of cisco getting clobbered down by more than 8%. right now the maker of computer networking equipment reporting better than expected calendar k-3 results, but issuing calendar q-4 quarters. mark has a sector perform rating on cisco. guys, great to have you with us, simon, you have the outperform rating. at this point why do you stick by this stock when they have said low single-digit revenue growth, well short of what the street was expecting at large. >> yeah, certainly the sequential trend for the july quarter was disappointing, the year-over-year growth is certainly less than what we've been expecting, but we see cisco

as an incredible value and a company with a solid strategy. so selling here feels like a classic selling at the bottom. we think that service provider vertical and the datacenter market for them will be good markets for the rest of the year. the weakness from europe is certainly a concern, but not quite sure that's going to be a material down side to the current estimates. mark. >> simon raises a good. selling right now may not seem like the right thing. at the same time sow see catalysts that can break the sort of concentration by analysts in investors this morning on weakness and better price, weakness in europe? >> i think there's no denying that the business is -- i so agree the stock is cheap, but i think for tech investors, what

you need is increasing confidence and also interesting catalysts. i don't think we have that in the near term. cisco with all the end markets it's diversified into they need to do more, they need to break after from this gravitational pull. i think the worry is the situation in europe can get worse, and i think the spillover is also in the u.s., where financial services and also retail, which was strong in the beginning of the year is starting to slow a bit for cisco. >> simon, is it difficult for you to recommend a stock that is sore correlated at this point to global macro? it does in, all fairness appears that it's hitting in all cylinders. they're not cutting prices to gain market share. they're taking share away from competitors, yet here we are with the stock down where it is today. >> so directly cisco is in fact correlated. it's such a big company that it can't dodge and weave and avoid markets. they can't say, okay, we won't do business in europe. that is true, but it is growing

faster than gmt dp, faster than the global economy. so when we look at the full year, the calendar year, this is a company that's still anticipated to grow 5% to 7% year over year. that's not as great as the kind of double-digit growth ratings we have seen from cisco in the past, but clearly better than the macro economy growth. >> simon, you had this report suggesting you would be biased, but the outlook should reflect higher growth rate. send the true that it may be correlated with what's happening, but down 30% over five years, they need more, they need invasion to pull it away? >> we've got to say, what is the

cisco today? and look at where it is. albeit the concerns about commoditization are irrational and a risk we need to look at, but this is why they're gaining market share in routers from service providers where the -- >> hey, simon, before we go, everybody is latching on to chambers' tone and comments last night, but can you put it in some per spect tiff? in every quarter he's never enthusiastic about the outlook, right? the intersurprise is always lumpy and there's always corporate insurgency, was there anything different about his tone last night? >> i have to admit, john chambers did sound a bit more concerned and cautious than he has, but i will tell you that in the question we asked about the

competitive threat, he sounded generally fired up and eager to take on competition. i do think perhaps thereof an incremental negative tone out of him. >> we've got to leave it there. quickly, mark. >> cisco is a leading indicator, and i think the worries that they see things before they see other companies, so there's always the notion it is second half is going to be better, but i think they're negating that. it could be more challenging from here. >> simon leopold, and mark sue, thank you for your time. >> thank you. cafepress, allowing customers worldwide to create, buy, sell personalized products, reporting strong results in the first quarter, but is wall street's appetite enough to send this ipo higher? we'll talk to the ceo bob

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glue universal display, ticker panl, this is a favorite of herb greenberg's celt such. the company coming out, earnings not horrible, but they guided for full-year sails, right now the consays is above $100 million, so a big haircut, getting pounded today. brian, thanks a lot. cafepress debuted on the nasdaq and join us here on post nine, exclusively bob moreno. good you have to you back. talk to us how business is, issi i guess year over year.

average order size may not be much as much. >> that's true. even superior growth at the margin line, and customer count is way up, alls mentioned. aov, average order value for us, is a byproduct of the new merchandise. over 100 new products. not all of them are priced the same. that's why you see some fluctuation in the aov. >> how much do you think came from the ipo. a lot of good press, and you have a pop. how sustainable is that trajectory? >> it seems since the ipo, it was a real good branding event. we noticed that brand traffic and we see that repeat rate even before the ipo continues as strong as stuffs.

>> we have more content, 3 million shopkeepers contributing content. mo products, so more reasons to come back, and more places to find those products. >> margins are higher on what types of products, for instance? >> really on all the products, because as we gain scale, we gain efficiency, but also the new products are getting more and more high-end things, which naturally bring a higher margin set. >> do you worry about -- who is the goliath that you're trying to slay here? is it an amazon? another player in customized goods that is doing what you're doing on a broader scale, spending more money doing it? >> no, actually i would have to say we're the goliath of this industry. this industry is very different in how we go to market than some of the others you have named. when you go for an online printer, normally you bring your own content.

it's already a finished good virtually and the back end manufactures it on demand as fast as you would get it. >> but it is customized products. i wonder if there's a product with that, a little like themed restaurant. do you have a problem that you have to continually attract new customers and in a sense the business is a sticky wicket, for want of a better expression. >> we believe the way to have things that you want is primal. cafepress has pioneered more and more ways to bring consumers products we already buy, but just make them available. >> but that's different from saying i want the exactly the right furniture, but i want the

furniture with my name on it, which is effectively what you do. >> that's not really true. a lot of companies allow you to put a photograph on there, but we go through a shopkeeper model. they wouldn't know what your darling children will look like, but they have passion about other things that other people share. when you explore on the internet, you find cafepress. once you find it that way, you tend to stay there. >> bob, i hope you you'll come back and talk about other things. welcome to post 9. >> appreciate it. >> thank you. the downtread with a two-point high hitting earlier in the week. news on inventories after the break. of how a shipping giant can befriend a forest may seem like the stuff of fairy tales. but if you take away the faces on the trees...

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welcome back. breaking news on natural gas, storage levels from the energy department. supplies were up by 30 billion cubic feet in the last week that's less than what analysts were expecting. the consequence sense was around 34 laster -- in terms of -- what does this mean? it means we're rallying once

again. we have seen this valley from the lows in april under $2, up 60 cents from that level. we're continuing to watch what is. that demand is helping prices. add to that we have seen warm weather over the last several days. morgan stanley out with a nose, talking about production being at the peak, seeing we're seeing increased generation. their priefer targets 3.95 for natural gas. carl, back to you. >> a lot of debate about whether it's a head fake or not. meantime, an hour into trading, some stories we're talking about think again, it's

windstream, down more than 14% after a first quarter earnings miss. freddie mac says the average race has fallen to a report low, now at 3.83%. and so on the seventh day the bears rested and the dow was able to gain. it's up 40 points, over the last six trading sessions, nasdaq is lower. a lot of it has to do with sis do and the other networks. let's have a look at the breadth of the move so far today the threats of the market is kind of 2:1. j.j. joins us, chief drifty strategi strategist. good morning. what damage has been done by the

falls that we've had technically and the rise we've had in the vix? >> well, actually route now, simon, the damage isn't completely done. the last two nights we held a key technical level. it was 1351 on the future that equates and we broke that level both days, but then closed back above that level. traders are watching it very heavily, as we have seen so far in the last half hour, the s&p has weakened a bit. with that, the encouraging thing is -- and a 20 is a bit of a magical level in terms of volatility as far as most traders down here are concerned. >> are you saying on the broader market, on the s&p we're well supported here? is that what i take away from this conversation? >> yeah, i do believe we are well supported here, simon. we have held those technical

levels. as we start to weaken here, i think we're going to test them this afternoon. it will be interesting, the vix is creeping up a bit. with some of the news we've had over the last few hours and few days in terms of retailers, there's a lot of concern right now, because the retailers had very good earnings. they talked about weakening demand going forward, even though we have seen the consumer spending well. many are concerned what can happen. >> j.j., there's concern about weakening enterprise spending, and specifically stemming from cisco's results last night. i'm curious if you're seeing any trader make directional bets on these big declines like priceline, oracle or cisco? >> well, priceline, we saw a lot of put traders over the last few days, if you look at -- we're starting to see last night and today again seeing people coming in for put demand. there's a lot of concern in that

sector. as you mentioned cisco last night, it's interesting to me that this morning we have actually seen some call buyers in cisco. i think one of the reasons is it's a well-known name, we see this a lot. i still think it's a quality company besides what they have said, and we may get a bounce right here. impeople think it's overdone. >> j.j., thank you very much for joining us. >> always agreed to you you guys. gold is on the decline on. goldman today saying it's citying by the bullish forecast, and the precious metal could till set 1840 in the next six monday. after erasing all of its gains for the year, is this dip simply another buys opportunity. >> suka joins us in a forecast. suki, always good to see you. sounds like you think it's stuck in a range.

>> gold struggled because of the market. it proved much more fragile this year than last. last year we saw india and china continue to come to support it, but this year the activity has been more lackluster. so gold has struggles, but we think the macro backdrop is favorable. >> favorable to what level? what are you looking at? >> we have a forecast for the full-year 2012 at 1716, about you we would expect prices from the lows that they have reached at the moment to reach back to 1700. >> sukki you talked about the physical demand, i'm wondering if you believe whether or not there's any pent-up demand as the government has backed away from the excite tax. people who wanted to buy gold before, don't they want to go into the market and buy gold? >> india's a really key issue here. the big factor has the ruby,

even though in dollar terms we have seen it ease somewhat. we've seen prices come up a bit in the last few days, but prices are still relatively high. there is still pent-up demand, so we would expect that demand to come through later in the year. with the wedding season, festival buying as well. so at the moment demand has been quite light, but we would expect it to improve in the year. >> isn't the truth, however we attempt to rationalize it, gold is a bubble based on fear, and that ultimately when people wake up to that or decide perhaps as they grow older he need a different, they might dimp it. as charlie munger put it the other day on cnbc, warren buffett's right-hand mand, really civil iced people don't buy gold. >> it seems the investor interest is starting to slow down somewhat, especially in terms of speculative positioning, and coin sales have

come off a lot ago well. the utfs are close to the record highs said back in march. and that continues to be strong at the moment. so although the broad investment interest in gold isn't as strong as it was, say, last year and the year before, the physical side of the investor interest remains quite strong. at the moment gold is struggling to establish itself, but we still believe there's enough factors out there that will support gold to the up side. though you would want to look for a dividend as such, there's still plenty of room for appreciation. >> sukki, carl pointed out something very important earlier, which is that the bank of edgelands today, despite the fact that the eye nighted kingdom is in recession has stopped its quaint at a timive easing because inflation is where it is. if you don't get the central banks embarking on fresh qe --

>> certainly we have seen the expectations of quantitative easing providing a boost for gold prices, and as speculation have scaled back, so has -- it could provide the catalyst or the boost for gold prices to move substantially higher, but we think given the longer term inflation concerns, still provides the sufficient number the factors for gold to grind higher rather than to be substantial pushed higher. so that could be a push higher for gold prices. >> sukki, good stuff. we'll keep an eye on 1716. thanks for joining us today. we want to send it over to brian sullivan with a quick market flash. >> this is an absolute sdas ir, maybe the disaster du jour.

basically the company said, listen, we're going to lose money this fiscal quarter. they're expected to make money. that stock is down more of 22%. it's a $7 stock, but one year ago today it was a $22. 22 to 7 in a year, mow predicting a loss. i have the feeling that the story is not over. >> no, and not pretty. thank you, brian sullivan. we'll be sitting down with phil mcnabb right after this.

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that's where we find our own tyler math i sen, who is with phil mcnabb and carl hagua. >> you thought buffett had a lot of money. i'm sitting here with roughly $3 trillion of money of shareholders just like you. $1.8 trillion under management at vanguard, and about $1 trillion at paul hagga's company. so we have a lot of money and a lot of things to talk about here. i want to start with etfs. have etfs been good for your companies, your industry, the fund industry, and have they been good for investors. ? bill? >> from our perspective they have been great, low-cost, high le diversified option for people. >> it only took you four seconds to get to cost, mr. mcnabb, let the record show. >> i was a little slow today. i'm sorry.

what we're seeing is an expanded use of low-cost index options, and etfs are proving to be a good vehicle for that. >> good for the industry? good for the investors? >> can be both, often is both. we don't do etfs. >> i know you don't. >> we don't think we can add value there. my concern about etfs is they are assumed to be broadly based indexes. some of the indexes are very small. about half of the indetentions on the morgan stanley international capital index are invicinitied solely to be the underlying indexes of etfs. you're not necessarily get an index. >> my concern and i remember when sector funds came about, building a portfolio for retirement around sector funds is a very tricky operation. i worry that people are trying to do the same thing with etfs

and trade them more. >> i couldn't agree more. i think of them as basic building blocks for portfolios, and they should be assembled under an asset allocation umbrella to give an investor full exposure to a broad array of markets. the idea of narrowly defined etfs or sector-specific etfs that people are trying to time, if you will, i think that's absolutely an anathema to good investing. >> a lot of people, your shareholders, are increasingly interested in alternative kinds of investments. we have a conference we're cover in las vegas, the salt conference, a lot of hedge funds there. has the fund industry, has your company been fick enough no embrace alternative forms of

investing. >> you imply that's necessarily the right thing to do. we don't do everybody that somebody want to have in their portfolio or available to them. we do the things we think we're good at. we are a global research operation, and we think we are good at stock picking and bond picking, and understanding the economy, but in terms of things that might relate to market time, we don't to do it. bakley bred and butter investing. >> you know, you think investors get completely full of divertsification with stocks, bonds and cash. you can create a fully diversified portfolio using -- >> let's got to the hottest regulatory issue, the probably that money market funds would have to price to nav every day.

the industry is hot against it. why is that a bad idea? quick answers from both of you. >> investors are hot against it. they trust money funds, they trust them, particularly with the regulatory reforms that came in 2010, we think they're very well protected vehicle and that we don't need to do anything else to them. >> there a more hafer there, that people think things are actually a buck and they're not? >> what they tell us they value are the stability of principal, the liquidity, the check writing provides and yield is far down their list. obviously everybody would like to see higher yields, about that saved of principal, the liquidity feature, those are the key characteristics. >> not just the industry that's hot. it's also borrowers, state and lot governments, many companies depend on them, as an

intermediary with short-temple funds. >> operating funds. palm, thank you very much. phil mcnabb, thank you very much. back to you all. >> thank you very much, tyler. when we come back, carly fiorina gives us her take on corporate tax talkses and the upcoming election. rick santelli working on the next hour. rick, you know, i think we're going to have a fun time at the top of the hour. i'm going to have a definition that look one and forall clear up the difference between trading and gambling, and government spending. it's a hot topic. we're going to try to put a face on what it means. last but not least there's an article about how some brokers may not be giving the investors the best deals and investors might be working with the brokers on this, all at the top of the hour. of the hour.f oppor.

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welcome to the world leader in derivatives. welcome to superderivatives.

let's have a look at where we stand at the markets. the nasdaq in negative territory. we're holding on to gains in the dow as well as the s&p 500. the strength in financials earlier, that is still there with bank of america higher by more than 1%. morgan stanley also doing well at 1%. this is off the back of strong showing in the european banks. >> the question is what damage have we done? we had six trading sessions in which we were down. that's the longest run of negativity sense way back last year in august of last year. you might have thought we would fund it back. you might have thought there would be substantial short covering. even if i look at the banks within the dow jones industrial average, they're only up 1%, 1.2%. it's not a thundering back. clearly, whatever clouds we had -- and you can debate what they were. i don't think they were just euro -- they have not dissipated. >> a lot of suggestion today it was just a result of fatigue.

you can only talk about one thing for so long before the markets eventually flatten out. and the nasdaq with cisco on its tail is going to have a harder time getting out of the red today. >> cisco down almost 9% today, 8.7%. this is testing the 200-day moving average on this stock. people looking at the technicals of the stock and also the fundamentals of the stock, they are lining up but in a negative way. >> is it a market leader, is it a bellwether like it used to be, in your view? >> i don't think it is. >> a the lot of technology companies moving partly in sympathy. >> they have the radar of the enterprise, large corporate customers although the point has been made today chambers tends to be an over promised, under deliver kind of guy. >> or an under promise, under deliver kind of guy these days. >> this call was more negative than he has heard in past calls >> and to emphasize, they are a forward looking indicator of what you might get down the line. when you go into recession, which is what's happening in

europe, it takes a while for people to understand what is happening, for it to actually accumulate. it's a crowd behavior. and that, in terms of contracts being cancelled and forward looking projections, it doesn't happen at the moment you actually start getting negative growth. >> and cisco and price line may seem like different stocks, but priceline is also very exposed to european revenues, hotel bookings in europe. that stock is down 5%. it had been a market darling for quite some time, a momentum stock now showing some signs of cracking, at least at this point. you know what, the london olympics in the summer, that won't be as big of an impact. a lot of analysts saying that is going to be a huge catalyst for this company, and it's not going to be materialize. >> i don't think you can use priceline to get a hotel room in london during the olympics. the ioc has them all, 4,000 hotel rooms. >> you tried.

>> we're going back to hq. we were going to, but we talked too much. >> it's tweet time. >> in honor of facebook's pending ipo, today's new york times has a story about facebook employees who left the social networking giant who left to launch companies or bank roll others. this morning in "squawk on the tweet," we're asking you, if you worked at facebook and left it and you took your shares with you, what business would you start and why? tweet us. ncer ]e a what if you had thermal night-vision goggles, like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do.

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tomorrow on "squawk box," the company behind apple's siri. what's coming up on "fast money" tonight, melissa? >> we've got portfolio manager david albrycht, the chief investment officer at new fleet management. >> fixed income is where it's at. >> it's where it's at. get his topics, and he'll be all over market action. >> normally, we've been buying on the european close, simon. today it looks like we might be selling on the open. big story is late money or early money. >> keep watching cnbc all day. >> if you're just tuning in,

here's what you might have missed earlier this morning. welcome to hour three of "squawk on the street." here's what's happening so far. >> individual investors shouldn't be playing the stock market any more than you should take oult your own appendix. what does an individual investor know about, not just facebook, but exxon or gm or any company? >> the mobile thing is a big deal. they haven't figured out how to make a lot of money there, and that is a big transition. >> avon in discussions with coty after coty raised its bid to $24.75 a share. >> they were down a whopping 365. >> i am critical of john chambers and what he's done with cisco. i am not critical of this quarter. they're doing everything they can. >> coty has come a long way from where when i first sat here,

$23.25. they're not going hostile because their equity investors won't allow them to do that. >> facebook can't market data about you because of prifry laws, why does procter & gamble want to advertise on mobile? this is a very different platform than on your desktop. i'm worried. >> since the ip. >> the brand and direct traffic is up for us. >> we see before the ip. it was an ipo. >> as we get a check on the markets. it was up about four and change, and the nasdaq with cisco on its tail is negative to the tune of almost five points. energy stocks breaking their six

session losing streak today. chevron, tesoro, and pioneer, natural resources all spiking higher. cisco is one of the biggest losers on all of the indices, causing rifts across the sector. juniper getting dragged down into the red along with riverbed after john chambers had negative comments on the call last night. ceo carly fiorina has comments to mark zuckerberg in terms of launching in this industry. we'll hear from her later on. plus california will finally run on dunkin. the coffee and do doughnut chain opening its first franchise since the 1990s. less than a half hour of trading overseas. find out how the close in europe will affect your money here at home when they bring you all that action live. and two giants of the golf world, phil mickelson and tim finchum will be with us to talk about the business of golf.

coming up in the next hour. first, let's get to the cme group and talk to rick santelli, see what he's got today for the santelli exchange. >> a lot of traders on the floor for the last several months and again in '08 and various points in between have been immersed in this debate trying to clarify gambling, trading in speculation. i think i have a breakthrough. i don't personally see a whole lot of difference between trading and speculation, but trading and speculation versus gambling, here's the way i view it. trading assumes risks that already exist. think about energy. there's a risk the straits of hormuz could close. there's a risk we're underestimating the refinery capacity to turn to gasoline or the export demands of china or the data of china and their cars, those are risks that exist. gambling creates risks that didn't exist. if the bears play the packers, there's no risk.

but if i want to gamble on it, i create a risk of who i want to bet on that didn't exist. government spending. there's a great op ed in the journal yesterday that talked about job training programs, federal job training programs. there happens to be about 49 of them, and the cost is about $14.5 billion. and only about five of those programs have ever had impact studies, and the five that have, according to this op ed, didn't garner very pove results. this goes to the crux of the matter. it goes to the crux of the matter why, when you put conservatives in washington, like many of the tea party conservatives that get berated for trying to cut spending, what we should talk about is simple. it's about results. if we have 49 p9ams that cost $14.5 billion and you try to cut them because they don't really give you any results, you're viewed and portrayed as somebody

who's not trying to create jobs. this is at the heart of it. the difference between a form of socialism and a form of capitalism because, in capitalism, results are easy. investors will take their money out, the stock will go down, and chapter 11 won't be far behind. that's why it works. the last one -- and this one's a touchy one. "new york times" article, broker rebates cost investors billions. it was written by nate pauper, but it was a study done by woodbin associates. a lot of these rebates that brokers get that directs different volumes to different venues might not be in investors' best interests. brokers include things like high frequency traders. just on our own exchange, 80% are high frequency traders. that may be a bit disturbing. look at the balance sheet of the new york stock exchange. maybe taking care of investors should be front and center. last but not least, even down

here, when we talk about block trades, it nearly always is about money. back to you. >> rick santelli over at the cme. let's hop over to brian sullivan and get another market flash. >> i'm not sure i can compete with that. i'll give you a single stock. windstream, i heard you mention earlier. it's come off its lows. it's an ugly day for windstream, down 11%. ironically, profits doubled but missing estimates. high speed internet ads, kind of a phone company. about half of what the consensus was. windstream down 11%. i know i got the hook last segment because of the london discussion. i feel like the modern pentathlon. you know it exists, but nobody's watching it. >> sometimes there's a gong, brian. it never ends well. see you later, brian sullivan. >> don't make me ski and shoot. >> let's bring in capital markets editor gary kaminski

still in vegas at the investment conference known as salt. with the chairman of investment holdings. >> i'm here with joe. some of the stuff we were chatting with off camera, joe is a character. good morning. >> you look very casual. i've got a suit on. >> you look very good. let's talk about willis quickly. you did report earnings. you did decide to withdraw guidance. an interesting thing, no longer giving future guidance. let's talk about the business and why you're not guiding the sell side analysts anymore. >> i think the world is difficult. it's very difficult to project into the future what you're going to be able to do. people take that information, and then they do something with that information. i think it's wrong. what we found out in the last three or four years is anything's possible. when you look at last year alone, there was over $100 billion of insured losses around the world, $300 billion of

economic loss. you look at what happens in the eurozone. i made a projection at the beginning of 2011 that did our plans. you do the things that people like me do. i had no idea in those plans that in the eurozone, spain, one of our better businesses, would be in a position to do what it should do. in a world that changes every day where anything is possible, i didn't feel comfortable >> and reaction in terms of your largest investors, obviously, they supported a move like that. >> well, everybody would love more certainty. we're in the business of certainty. people love certainty. when you take -- you insert uncertainty by taking guidance away, nobody feels good about that. in a lot of conversations that i've had, there's been an understanding of i don't want to lead people in the wrong direction when things that i don't control are possible every day. >> you're here to address this group tonight to talk about restoring america. you're going to talk to the

1,800 attendees at this conference. give them a sense of what you're going to tell them the opportunity is for this country now, the way you see the world, and the vast business experience you have. >> gary, when you look at the agenda, you've got economists here. you've got bankers here. you've got hedge fund managers here. you've got people who are very astute. for me to get up there and to talk about the same kinds of things related to insurance, i thought i'd look at it a little bit differently. we have an opportunity in this country at this point in time, i think it's the defining moment. when you look what is happening in europe, double digit -- double dip recession in england, got what's happening in france going in a different direction. see what's happening in greece. see what's happening in spain. we have an opportunity to be able to regain our position in the world if we do this right. i think it has to do less with economics, and it has more to do with our ability to understand our passion, understand our

sense of entrepreneurialism, under our sense of what made us what we are. we regain that mojo, we're in a position to do this. >> as you pointsed out, joe, this is a group of people that have a lot of influence of the direction of this country in this conference. are you optimistic that's going to happen the rest of the year? are they going to be able to have that influence? >> i'm an optimist. i've always been long on america. my days on wall street. i think what made this country was its creativity, innovation, its ability to do things that nobody was ever able to do. if we can regain that again and begin the dialogue to talk together, no matter what party we're in, to be able to do that, we can regain that position in the world. >> you mentioned wall street. before we run, we've got to go. you were one of the chief architects that helps create citigroup. what's the future of the city? is that a business that can stay and be the growth business the way it is today? >> when i was with citigroup,

obviously, the idea was a financial supermarket. and people say, you know, it's too big. you couldn't handle something so big. i don't agree with that. when i was there, the partners that we had and sandy weil and everybody, we did a pretty good job at it. i don't think this has to do as much about the business model as it has to do with the people. as it related to citi and its future, i think it's a viable business. i think it's a good business. it has to have a business model, obviously, that works, and it's a different business model than the one that was created back in the late '90s. >> thanks, joe, very much. carl, long on america and one of the architects of citigroup, long on citi. >> some inspiring comments from him. thank you very much, gary. we'll come back to him in a little bit. when we come back, we're going to talk to carly fiorina. she's written an open letter to mark zuckerberg. it's a fascinating read. we'll walk through that and get her opinion on other issues as well.

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former hewlett-packard ceo and cnbc contributor carly fiorina writing an open letter to mark zuckerberg on his upcoming facebook ipo next week. she knows firsthand what it's like to be involved in a high profile ipo. back in 1995, she led lucent's spin-off, which back then was the highest recorded ipo. carly, nice to have you back. i know you went through some travails to get to the studio today. thanks for being with us. >> my pleasure. >> it's a great letter. you called mark a great entrepreneur. you said, you've made history, and you've changed history. but there are going to be some things he has to do after next week. what are they? >> first i wanted in this open letter to acknowledge the historic nature of mark zuckerberg's contributions. as i said in the letter, he literally has changed everything from a teenager's social life to

the political calculations of a middle eastern tyrant, and we ought to celebrate that because that kind of innovation and entrepreneurship represents the best of america, and it's why we are the leading economy in the world. now, of course, with the ipo, expectations are going to be very high. specifically, i gave him three pieces of advice. one was to stay focused on the long term, even though most of his investors will be focused on the short term. that means, in my mind, for example, providing strategic goals but not quarterly guidance. >> that's okay with you? >> it is. i think quarterly guidance -- once a company has established that precedent, it's very difficult to walk it back. quarterly guidance, in my opinion, has gotten to be a game. it's a game of whether you hit estimates or exceed estimates or miss estimates. the estimate-setting process itself is something of a game. the average holding of a stock now is four months. that's not exactly long-term thinking. this is a company that needs to focus on the long term.

>> but you also say communicate as proactively and transapparently as possible. some may say, look, that involves telling us what's going on in the next quarter and beyond. >> that means being as explicit as you can be without revealing competitively sensitive information. what are your strategic goals? how do you measure yourself against those goals? how do you measure your performance? that's transparent and proactive communication. and i also advised that the company be more transparent about how it makes decisions. there are a lot of people who are counting on this company's performance. it's not now risk tolerant venture capitalists who own this company. it's going to be risk averse, pension funds and 401(k)s. while i don't think they need quarterly guidance, they do need a guidance on how decisions and

choices are made. >> do you think in any way they've come too far, too fast? >> i think time will tell. that is a concern obviously. they seem to be doing pretty well right now. i think what sometimes happens, when there's this much pressure, these kinds of high expectations, the cameras everywhere, is people and companies can lose their way a bit. so wup of steve jobs' great geniuses was he never forgot who he was, what he was good at, and what he believed in. as a result, he built a great company. and i think mark has that same opportunity. he's a very young man who's accomplished unbelievable things, but it's a lot of pressure. so being patient with all of the commentary he's going to get, all of the scrutiny, all of the criticism, and remembering what they're trying to do sounds easy, but it's going to be difficult, i think. >> finally, carly, just to switch gears quickly, so much attention on yahoo! and the

battle between that board and dan lowe. i saw a couple of headlines calling the actions of that board, comparing them to the hp board. i wonder if you take offense to that. >> both boards are pretty dysfunction dysfunctional, and i don't think there's any denying that. what we've seen in both boards' cases is boards taking actions without being fully informed. it appears the yahoo! board took an action in hiring a ceo without being fully informed. it appears the hp board has hired and fired ceos without being fully informed, made decisions about spinning off businesses without talking to the responsible executives. that's not good governance, and it's not responsible behavior on the part of a board. >> carly, it's a good read. i recommend anybody go online at cnbc.com and read your letter to zuckerberg. thank you for braving the streets of san francisco to get to us today. >> great to be with you, carl. thanks for having me. >> again, the open letter part

of our sentence i have coverage of the facebook ipo coming out. as jobs claims fall slightly, we're looking at what some economists are calling the visible unemployed. and we'll count down to the close in europe. normally a bullish signal relatively for u.s. markets. we'll see if that holds true today in just under ten minutes. my high school science teacher made me what i am today. our science teacher helped us build it. ♪ now i'm a geologist at chevron, and i get to help science teachers. it has four servo motors and a wireless microcontroller. over the last three years we've put nearly 100 million dollars into american education. that's thousands of kids learning to love science. ♪ isn't that cool? and that's pretty cool. ♪ isn't that cool? and that's pretty cool. the hyundai genesis.

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let's get to rick santelli in chicago with a special guest. shed some slight on jobs in this country. >> i'd like to welcome peter maurici, president of smith school of business. welcome, peter. i really like what you wrote before and after the last jobs report, and you really framed an issue that is near and dear to my heart. you said four-fifths of the unemployment in this cycle post-crisis is due to the

falling labor force participation rate. can you give us more detail and expound upon that, sir. >> sure. the unemployment rate is computed by taking those folks that don't have a job but are looking and dividing it by those who have a job plus those who don't have a job and are looking. it doesn't include those who have dropped out of the labor force. the adult participation rate has dropped so much since october of 2009, if we had the same rate now, if as many or a portion of adults were looking for work now, that unemployment rate would be about 9.7%. so about 80% of the reduction has simply been from fewer adults essentially becoming discouraged and leaving the labor force all together. >> let me play devil's advocate. when i bump into people who want to discuss this, they are either talking about it the way you are or come at it from a different angle. they say, hey, i've been watching "squawk box" for 15 years, and we've always looked at the number and haven't dug

down any deeper. why are we digging down deeper? are there political motives here? what would the answer to your comment be? >> for decades, the bureau of labor statistics has been publishing records of unemployment. one of them is called a u-6 that said, if conditions were better, would you be looking, among the folks that are sitting down, and we have those folks. and among those folks that are part time, do they want full-time work? that unemployment rate is 14.5%. whether you're a republican or a democrat, i think you need to be deeply concerned about the fact that there are so many people, so many folks that are so discouraged by conditions in the labor market that they don't even bother. it's a tremendous loss of human talent, and we have to ask ourselves, why are we not doing better? nobody can say this has been a terribly robust recovery. >> another issue. it's always pointed to that

demographics and a reason for the dynamic in the labor force participation rate. when i look at the 55 and older and their behavior, i'm not sure i draw that same conclusion. any thoughts on that? >> we've had a lot of folks still in their prime working years, especially men, who have dropped out of the labor force because of the situation in manufacturing. i know that it has improved during this recovery, but over the last decade or so, there's been a dramatic decline. likewise, men are heavily involved in construction, more than women, as masons and things of that nature, and those folks who have lost their jobs have not returned. also, there's been a kind of an uptick to the extent people can get them, not so much in social security disabilities, but in the disabilities people can get from various state agencies, and they cobble that together with other government benefits. it's a terrible drain on the government, on the taxpayer, on the economy. >> thanks, peter. i would like to have you back after the next jobs report, and let's see if there's any movement in that labor force participation rate.

carl, back to you. >> rick, thanks so much. rick santelli in chicago. a few minutes left in europe's trading day. we'll get the close in three minutes. in your fight against bugs. ortho home defense max. with a new continuous spray wand. and a fast acting formula. so you can kill bugs inside, and keep bugs out. guaranteed. ortho home defense max.

the mead lines sound good. spanish market up 3%, most in several months, but you've got to take into effect what they've gone the last weeks and months.

>> over the last three years, they've lost half their value, but strong money in privilegial europe as we count you down to the close this thursday evening. >> markets are closing now. >> just look at the big gains you've got some spain. look at greece down at the bottom. a 4% move higher, you can see. it's actually bouncing back from some real heavy, hard selling. let's take a look at how we've built on that momentum through the session. here you've got athens, spain, and italy. those peripheral countries making gains through the session. there was a rumor, i'm told, it is reported by the wires in athens, there might be some sort of deal through the coalition parties. i can't get a confirmation on that. that makes it really unlikely given the maps and the third party leader this morning as we went into the process. nonetheless, he did lift the market there. what is quite interesting from this beaten down spanish position, with, of course, the

nationalization effectively of that collection of seven savings banks overnight is the way in which those big stocks have bounced back today. acs is the construction company. if you're looking for weakness, up 7%. bbva down 25% this year, even with the gains you see today. what's interesting is europe, where you report at the moment, the market is really sensitive for good or bad. repsol came out with decent earnings, and you can see how the stock gained there. spain overall today, the yields are from this elevated position we've had recently, they've come down very slightly, which i guess is an indication just at the margin of a little less tension of where we are with peripheral debt. obviously, we're not out of the woods by a long stretch of the imagination. just coming back to that theme about ceo comments and earnings really having accelerated impacts on companies that report.

kec is a bellwether of what's happening in the eurozone, the belgian bank. look how that stock has sky rocketed on earnings, over aegon. you've got this huge move up. jcd, an outdoor advertiser, weakness in china. you see how it's slammed as a result of that. earlier in the week, when i was talking about uk housing sxh whether it was beginning to go down because uk housing has been very resilient. today the house builders came through, and barrett developments had positive comments, saying they've never been selling like they are at the moment. you can make a lot of money on those stocks. let me leave you with the latest pictures we have out of greece. still, of course, the third party today trying to form some sort of coalition. the socialist evangelist saying he may come through with something. the market seems very sensitive

to greece. >> i wonder if you built an index of companies that warned specifically about europe, what it would look like. >> when outdoor advertisers like jc decault talk about europe, i have some sympathy. but when people here talk about europe, you wonder if it's an excuse. after all, it takes a while for the recession to show up in figures. look at mcdonald's, for example. prime example. >> fossil among others example. very interesting. you're right about the lag effect. let's hop over to rick over at cme. >> to build on something that simon said, i'm getting the same e-mails. is there going to be a coalition formed in greece? it looks like they're getting closer. i would make this comment. when you look at how people get elected, whether it was in france or greece, it's easy to understand that. i'm not going to take away anything. i'm going to try to keep it the

same, and you get a lot of votes. in the end, simon has acknowledged many times, you know what this is going to be about? whether they actually do what they said to get elected and challenge the investor community because, if they do what they said, the well's going to dry up. really, the process of the markets and how they've moved through it. you can see our tenure. in the end, it's going to be a long slog to monitor the newly elected and whether they challenge the status quo of financing. if they do, woe be to them because they're going to have to sink or swim on their own. anyone that's looked at a balance sheet in greece or spain understands there's a lot of bricks tied to that life preserver. >> thanks a lot. bertha coombs is kind enough to join us. you look wonderful as always. >> thank you. so excited to actually be here on top.

it's interesting. this market in a sense, a lot of folks are talking about the cognitive dissonance here. over the last few days, we've been watching this european close. if you take a look at the s&p over the week, we've come off. one of the things folks are watching today is to see whether or not we'll rally. we already started higher in the morning. are we not worried about greece? are we not worried about spain? we still are, and yet today we're rallying. a lot of folks are a little concerned about that. what's very interesting is, when we look at the last three years in may, we are now in the third act of this greek drama. we end up selling off in may when we are worried they're not going to be able to make their debt periods. wasn't quite as bad last year. we had another selloff, of course, with our june, july swoon really after that concern with the debt crisis. here we are again this year. if you take a look, we are higher each time as to where we are. part of the reason in a sense,

we're the best house in a bad neighborhood. a lot of folks feel like we don't have anywhere else to go. simon touched on the spanish banks. they are moving higher today although folks are very concerned about the fact that spain has to come up with $40 billion or $50 billion or so to stabilize their banks. where are they going to get that money. art cashin is watching that in places like greece a lot of folks are taking their cash out. they want to make sure they have euros and trying to put it somewhere else, in case things fail in greece. they actually exit the euro. those are things people are convinced is going to happen, and the markets are doing better. here today, another cognitive dissonance. we've got cisco with the dismal outlook, down #% tod9% today. it's weighing down on the dow. we'd be negative if that were the main thing going on. in terms of nasdaq 100, that's got it in negative territory.

all of the cloud space has been a cloud because of cisco. what's really strange is, even with oil down, we've got airlines moving higher today. what's interesting to me, when jet fuel prices go up, they raise prices. but as it comes down, they somehow don't bring those fares down. >> kind of like the prime rate with banks. they take their time when it's going a certain direction. thanks, bertha. bertha coombs. back to gary kaminski, who's in vegas, i believe, with a special guest. >> i am here with the grand pubah of this event, anthony scaramucci. you had an opportunity last night to sit down with paul singer, the very secretive hedge fund manager. he had thoughts about what's happening in europe. share with us what he told you. >> let's give his background. 24 years of investing. only down two years. 1998 down seven. and in 2008 during the crisis,

he was only down three. what he said was so interesting. in 2007, he was looking at cds spreads, said these are ridiculous, and there was higher default risk for banks than the cds market was showing, like eight basis points for citibank, as an example, on cds spreads. now i pinned him down. i said, paul, tell us something that we can go out and make money on, and he said sovereign debt on the short side. it's going to be relatively unsustainable to keep these interest rates where they are unless there's massive fiscal austerity, which he obviously doesn't think is going to happen. he didn't say those opportunities were as big as the cds in fwef, but he is looking at sovereign debt on the short side right now. >> despite the fact, as simon reported earlier, where yields are and a lot of this stuff you think is none, guys like paul singer, incredibly smart hedge fund manager, still looking to short sovereign debt at these levels. >> and also negative on the federal reserve current intervention.

completely understood what the fed did with qe1, but now he thinks it's too much, and it's destabilizing the currency. >> carl, that's the kind of stuff we're so happy to bring to viewers. they typically don't get to hear that kind of stuff. more on that when kyle bass joins me at 4:30 later today. if you know kyle, he's always got thoughts about sovereign credit around the worrell. >> the coverage out of salt has been amazing, gary. thanks to you and kate and scott and a lot of others. thank you very much. >> we're putting this all together. >> and a taste of what east coasters have already come to love, and that is dunkin donuts. the first dunkin donuts since the company left in the '90s, will open at the marine base. jane is on base, where the line, i'm told, is out the door. >> it is. this is the one week anniversary of this opening here. you can see it snakes around, and the line goes all the way out the door. the franchise owner tells me they're getting ten times normal

sales per square foot. dunkin was here in the '90s. it left, quote, wasn't the right time. it has come back, but this single store is not part of its planned slow rollout from east to west. it's more of a one-off, nontraditional here at a military base. still civilians can come in here if they have a valid i.d. and are not convicted felons. it's good news for those who have been waiting years, like this guy. >> dunkin donuts, six hours on the road, from bayside, california, to phoenix. here we are. >> this is king jay, who a few years ago drove six hours from california to phoenix to get his dunkin fix, only to find the store closed for renovation. >> we need to get dunkin donuts in the state of california right now. all right? make california the best place it could be. >> king jay is happy. jp morgan says only 2% of

current dunkin stores are in the west, but 60% of expansion plans are here. they plan to open 20 stores just this year, not in california, though. even though this is the largest market for bagged dunkin coffee in grocery stores, the company wants to make sure it has the franchises fully ready to compete with starbucks and mcdonald's. >> the supply chain is a significant portion of it, but we also provide support to our franchisees, in terms of operations managers on the ground, development managers on the ground, construction managers on the ground, marketing folks. we want to make sure that we are successful. >> the company held its first post-opo analyst meeting this week. morgan stanley said new u.s. stores are showing short volumes and dramatically improved volume. cash on cash returns have risen from 5% to 27%. finally, as you look at marines and others lined up, an important trip from my native

california friends, something i learned the hard way. when you order regular coffee here, it comes premixed with cream and sugar and quite a bit of it. a warning. if you want it black, you've got to tell people that. i didn't know that. >> that's good advice and a great point about the packaged goods business because that's where the money's at these days, jane. thank you very much, jane wells over at camp pendleton. another market flash from brian sullivan. two pieces of news, both in retail. number one, straight up, kohl's first quarter earnings fell. stock is down more than 3%. carl, i think this is a huge headline. i was just in singapore about a month ago. i did an economics piece, 2% unemployment, blah, blah, blah. practic procter & gamble is going to move its skin care division from cincinnati, ohio, to singapore.

again, from the journal. you're based in cincinnati, congrats. we're moving to singapore. that's a heck of a move and shows you what's happening in asia right now. >> that's a bit of a culture shock going from the midwest to that part of the world. coming up, phil mickelson will join us along with pga commissioner tim finchem. ♪ [ piano chords ] [ man announcing ] what we created here. what we achieved here. what we learned here. and what we pioneered here. all goes here. the one. the accord.

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the halftime report comes to you live from salt in las vegas. gotham capital's joel green blat tells you where he's finding value. and dan nooils opens his playbook. plus we're trading the coffee wars with starbucks ceo howard schultz. another big lineup at the top of the hour. carl, back to you. joel green blat literally wrote the book on value investing. >> i'll see you then. meantime, the players championship begins in northern florida. it's often called the fifth major tournament in golf, and it's the competition with the biggest prize purse, over $9 million. darren rovell has finally made his way to post nine with some golf graets. >> joining us from the players championship is phil mickelson,

teeing off later today, and pga commissioner tim finchem. guys, thanks so much for your time, especially phil, teeing off today. thanks for doing this. phil, i've got to start with the hall of fame induction earlier this week. what's it like to get inducted into a hall of fame at the age of 42? >> darren, it's really cool, and it's flattering that what i've accomplished to date qualifies to get in the hall of fame, because there's so many great names and players in there. certainly, i feel that there's a number of great years ahead. i'm going to try to add to my resume if i can the next five, six years. >> you've been extremely generous with money, doing a lot of charitable events. there's a great story in "sports illustrated" by you. tell me about this new charity you announced yesterday at tpc sawgrass later this year. what kind of things will be auctioned off to raise money? >> myself and the pga tour have

been involved with birdie for the brave about nine years now, and there are a number of pga members that have supported military programs throughout the years. we have eight military programs that are benefitting from a one-time event we're putting on at the end of the year here at tpc sawgrass, november 30th and december 1st. so myself and a bunch of players, we're going to have "a" list country singers, big gala and concert. we're going to do it one time and try to raise quite a few million dollars for these charities so they can take care of our military men and women. >> commissioner finchem, how would you describe the rate of the game right now? looks like ratings on sunday up 29%. we've had a lot of playoffs. it's been very exciting. how would you describe the state of the game right now, and are you happy with it? >> well, we couldn't be more happy with it. our sponsorship is in good shape. really, i think the fans have

reacted to these new young players coming up and challenging phil here. when phil keegan and joe bradley were challenging bill haas, it was incredible. the fans have reacted to these players. as long as hall of famers like phil keep playing at this level and the young talent seems to be coming up, we seem to be in good shape for a long time to come. >> phil, tell me what it's like for ricki fowler to finally win. they've been talking about rory mcilroy, the young guns, and ricki fowler, what does it mean for the game of golf? >> he's great for the game of golf because he's a great player and he does it with charisma and flair. it's great to see him win

because he drives people out to watch golf. the fact that he's american is great for us because he's going to be a mainstay on the ryder cup team. his victory is going to be big for us. >> people are excited about the auction items and how they can get into the pro-am. some of our viewers are kind of in the range who want to make the big donations. congratulations on the charity, and pga commissioner tim finchem. thanks so much for joining us. good luck out there today, phil >> thanks, darren. >> always love seeing him on our air. one of the best. when we come back, we'll hear from the person who sits on the board of estee lauder, groupon, and starbucks. we'll see how she's playing this roller coaster market, melanie hobson. first a check on energy as we look at crude, gasoline down today, up to 30% off the lows still.

some of the biggest power players in the mutual fund industry to talk about investing amid market insecurity. that's where tyler met up with melanie hobson. >> about $13 trillion of assets under management by mutual fund companies, and they're all here for the investment company institute's annual conclave, the general membership meeting in washington. pleased to be joined by melody

hobson, the president of ariel investments as well as on the board. aci. pleased to have you with us. i want to talk about the fragile nature of investors' psyche today. they feel to me like they just don't trust the market. they've stayed in bond funds. they're still pouring money in bond funds. why is that? >> we've obviously gone through an unprecedented time, if you look at the last few years. the financial crisis, the impressive volatility we've seen, flash crashes, et cetera, and that's made them extraordinarily nervous and tentative. on top of that, the market, while it's had a really significant rise, especially from the bottom back in '09, doesn't feel like it has its footing. it's very much influenced by the news of the day and the headlines, and it continues to make people very nervous. >> do you think people just don't trust the idea they're going to get a fair shake in the market? >> i don't believe that.

i think that people don't necessarily know how to deal with what we've gone through. it was unprecedented. the last time we saw this kind of thing was the great depression. as a result of that, i don't know what's going on. i want to wait and see, let the dust settle. i don't think it's about a fundamental trust of the system. >> because the industry itself, for all its efforts, done a good job of educating investors in the kinds of funds, the kinds of portfolios that they ought to be. what could they do better? >> i think we can always do a better job. it's partially driven by the fact that we don't learn about investing in school in america. that is a fundamental problem in our society given the fact that we've been handed the keys to our financial futures through 401(k) plans, which many of us must make the investment decision, and no one gave us driver's ed. so that puts a lot of responsibility on the fund industry, and i think we're up to the challenge, but we have to continue to hone our message and get better at educating our investors. >> let me get a quickie in here

that's going to put you on the spot. you're on the board of groupon. tell me why i shouldn't be worried about that company. >> because it's run by some really smart people who have developed -- >> are they seasoned enough? >> i think that they are surrounded by very seasoned people. so the board is very strong. yes, andrew mason is a first time ceo. can i call him seasoned? in the way that i think you're suggesting it, no. but do i think that he has all the ability, the capability, the smarts, and the ingenuity to do something really great that he already has done, creating a category from scratch? i do, or i wouldn't be there. >> case made. melody, thank you for being here. >> great stuff. [ horn honks ]

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[ whirring and beeping ] it's the at&t network -- doing more with data to help business do more for customers. ♪ a story about facebook employees leaving the company to launch new companies themselves. the question is, if you left your job at facebook and take your shares with you, what kind of business would you start and why? todd says, i'd start a hoodie store. i have a feeling there will be a run on them after the ipo.