welcome to "squawk box" on cnbc. i'm michelle caruso cabrera. let's bring you up to speed. greek worries take a bite out of investor appetite for risk. the country's political leaders are meeting today to establish a caretaker government. that will lead the country into its second election in just over a month. we're going to have much more on greece including state of bank deposits there and the pace of withdrawals in just a few mijtss. facebook sin creasing the size of its ipo by 25% at the middle of its expected range. it could raise as much as $16 billion. we've been reporting on the early twists and turns of the story. she's going to join us with more in just a moment. and a few economic releases. they release april housing starts at 8:30 eastern time and we'll get production and minutes from last month's fomc meeting. gary. >> thanks, michelle. shares of samsung slipping.

apple placed huge dhip orders with japanese chip rival elpida. china mobile is currently the only chinese operator that does not officially carry this devise. and ge is buying two equipment mining firms. ge's trying to boost its presence in the $61 billion industry. nyse says it's out of the race to buy on the mellon exchange. it's report add $1.3 billion bid for the lme was deemed too low. over to you, joe. a few early stocks to watch. let's start with jc penney. reporting a first quarter loss of 25 cents a share. much worse than expected. same-store sales were down almost 19%. the company also ending its dividend to help pfund the multi-year overhaul under new ceo ron johnson.

earlier this year the retailers released hundreds of sales on most items. it's supposed to be the second coming up supposed to be the apple store. i don't know. >> you could change the logo, you could give a big presentation. remember the presentation he had? ? we were you out and about? >> i've been here. i made many calls to greece. now they're calling me back. >> i did see michelle a few moments ago. two of your pieces get a lot of information. >> i was referencing the party last night. >> yeah wlrks you saw that tall white-haired man and ask him about this. >> bill actman? >> yeah. with the long eyelashes. >> i think last night was supposed to be background, off the record. i probably should. even talk about it. i did say, not to him but to one of his co-workers. >> lackeys. >> that i have received jc

penney gift cards and gone into the store and not been able to find anything. >> it is early in the turnaround tr ron johnson. it wasn't a good number. >> i remember having a -- ron johnson was on "squawk" on the street after the day of the first analyst meeting and i remember asking, you're putting out plans and you're sort of staying it in stone right here. this is going to be the strategy, three-pronged strategy. are you sure you want to commit to something right here, right now that is absolutely written in stone because reflecting on the fact that retail is difficult, and to basically commit to something that strong and that solid so early was probably not the right decision. i think last night's results tell you. was that breaking news call? >> i don't know. i didn't take the call. there's a lot going on in europe as we know. can i say one thing about jc penney? sale, no sales, it's the product mix. it's the stuff in the store.

do you want to buy it or don't you want to buy it? >> it's been that way for a while. >> long time. >> you know, making a cool apple store, does that mean you know how to do inventory mix at jc penney and know how to buy? gap has had a big problem over the years. it makes a big difference to know what people want and how to place it. >> did you -- i like -- i like those glasses. where's the one with the wood on the side? >> the woodies? >> don't talk about woodies so early in the morning. >> too early. family show. >> did you retire those? >> no. they're in the drawer. >> in the what? >> over by the drawer. >> by the what? >> that's how i say it too. drawer. >> i don't know if there's -- there's a chinese internet company called -- because it's china, i figure i say sina, but i say sina and i think it should

be sina. it is sina. smaller than the street expected. the company talking about higher extensions in the face of an increasingly strict regulatory environment, that it's hampering user growth for its popular microblocking much like twitter. shares initially rose after that report but then traded down from their highs. shares of twie quinn got a buena vista after a fellow chip maker avongo technologies said that it would settle all patent claims against each other and dismiss related. and arena pharmaceuticals. arena have developing a new obesity treatment. it jumped 74% on the news on

friday. let's check on the markets this morning. nine out of ten down days. we've been told for years that greece is too small to matter. it's like the size of delaware or something in terms of gdp. >> the economy, yeah. >> when you take out 700 million euros in one day, that's called a run or at least the start of raun, and sooner or late fehr that happens and they don't get access to euros, they need to start issuing like something so that the financial system -- >> it would be the beginning of the end. >> yeah. >> can i add something i did this morning? i spoke with a senior executive -- >> i hope we're going goat something after all the disturbances. >> we are. >> there was a shark strike on monday absolutely with the withdrawal from greece but on tuesday it drops and today they are even lower. believe it or not, there's still $165 billion in euros in deposit. >> the percent that came out was what percent? >> so i -- off the top of my head, i'm not sure. i can tell you that we've seen

roughly, you know, a billion or two billion leaving per month. so to see nearly a billion in a day is absolutely a huge, huge increase tochl add more context to this, as the banging executive said, the withdrawals we saw that the ill-fated referendum that it will never happen, the strike in withdrawals was even sharper back then. >> was it a politician? somebody said -- there was a report where somebody said i don't blame them. it was some comment tair in greece. >> what happened was the president of greece had a meeting with all the parties and he said i got off the phone with the hecht of the central bank. here's what he told me. he said there's no reason to panic yet. >> you're being very -- >> politicy? >> yeah. >> i'm trying to. >> that so many people are watching this could cause a run. we couldn't, i don't think. i know we're influential. i like in the journal they have

the various scenarios. >> yeah, i did. four different scenarios about what could happen. they could get more money, no more money, stay in. >> right. an on ed piece on what they need do which is basically abide by -- i mean i'm sorry. austerity is bad, but, you know, at this point you can't rb expect business as usual. >> and the economy in grease is that -- you know, this is a big time of year for them. >> in theory. right. >> has it gotten worse in terms of the economic outlook? >> yeah. so hotel rates are bay, way down because even domestically people can't travel. that's a key part of it. revenue is around. this is the first month that they saw more businesses go out of business than were actually created. the gdp's down 20% in the last couple of years. it's horrendous. >> i was going to make a point about oil. i mean inflation is even

moderated as gasoline prices have come down and i saw an interesting piece from david saying that the action in gold and oil and commodities indicates the tail risk has not been increasing with it. inflationary recession fears than some type of cataclysmic effect. >> when you say the equity market is the same? >> i would say that. it's not awful. >> bad but not cataclysmic. >> when people say greece, lee man, you'd think you would see something in gold. let's -- it's time for the global markets report. it's day three in the saga that we're watching as kelly evans tries to assimilate into it. you love it already, don't you? i mean it's cosmopolitan. you were made for london. london was made for you, right? >> i do really like it. there's all this great history. there's a church a couple of

streets over off fleet is called bride's that inspired the wedding cake and it's dedicated to brides. there's crypts with a piece of the roman road. i mean this is extraordinary. it's all right around the corner. >> so we're expecting to believe that you went to london and you've been going basically to church most of the time while you were there. >> to church. >> you haven't been out or anything. you've been basically praying since you got there? >> we made reservations at this great restaurant the other night, thing for 6:00 p.m. we were out of there when most people were coming in. >> you have red again. what's with the red again? >> i know. i'm clashing with the wall. this is the "daily telegraph." you can see the headline. you know, "greece on brink of collapse." "they face killer losses on greek debt."

it really is a concern. it's all over the headlines. this may help explain what's going on. "a sea of red." a very few stocks from the stoxx 600 in the green today. pretty choppy day. we're definitely off the highs of the session. stocks down 0.9%. this following a lot of action in bond market driving yields to special lows there. take a fresh look at what's happening. the foodcy down 0.8%. the cac lower. it was green earlier in the day. xetra dax down almost a percent and the footsie down 1.1%. a lot of data coming out of the uk. showing better than expected employment figures but at the same time, the bank of england in its last inflation report sharply down. that's sent ten-year gilt yields to 1.84%. that's what's going on.

the yield, 1.845. italy's at 6%. by the way, via market, cds spreads are also at new highs. quick look at currencies. i think fe with can show this. below parity. still with the dollar. the euro's weaker, 127.03. the level to watch, of course. back to you guys. >> thanks, kelly. they give her a lot of good london recommendations. >> you had v those? >> i did. i've gimp them to her. >> you've been to london. >> many a time. many a time. now to today's other big story. facebook. kayla is on set with us. kayla, what isyla, the latest, upping the size of the deal, upping the price of the deal? >> yeah. we're in a week of pricing. this is another carefully architected deal and yesterday we saw the size increased of the price range, so now it only makes sense that you would

increase the size of the number of shares that you're actually offering than's what we're expecting to see. kate kelly, phenomenal reporter that we all work with reported last night that 85 million shares roughly will be added to the deal size. so it's going to go from 337 say .4 million shares. so it was originally filed as a $5 billion rise. it could raise to 18.5. >> is it coming out of -- is it coming out of employees? where is it coming from? >> we don't know exactly where it's coming from yet, but my understanding is that facebook does not want its valuation to go out of whack. it doesn't want to delude them anymore. so if they add primary shares,

that's what happens. they said to early investors if the demand is high enough, we'll add these to the mix some of what i understand is when they raise the offer price yesterday from 34 to $38 a share and they closed the book yesterday, of course, that's a metaphor. that's not a literal thing that happens because a big order that comes in, you're obviously going to look at it. but when the order book finally came together yesterday, the price was at or above $36 a share. every share was basically coming in at least at the mid point of that range because they wouldn't have added this extra batch if it was below that. and that's even counting the green shoe. the underwriters have let's call it 15, 16 million shares they can sell in the aftermarket if the deal goes off without a hitch. most of those are secondary shares as well and that's what gets you to 18.5 million. if they price above the range,

they can still price a couple to several dollars above that range and then it's rivalling the biggest u.s. ipo ever, which is visa. >> if mark tells me my shares won't be diluted with this latest thing, i would believe him. he would never -- i don't think he would ever try anything. >> you wouldn't read the paperwork? >> no. just tell me where to sign and i'll sign. >> that's basically what they did. they stood in mark zuckerberg's kitchen and he kitchen, and he said, i'll pay you $100. >> that's why you're here. >> yeah, that is why i'm here. >> last week when i was at the s. s.a.l.t. conference, there was a survey and the expectation was this thing would start at $48. that was based on a $32 pricing. now $38 is going to be the highest pricing. >> $38 is going to be the high end of the range.

>> have you heard, is it living up 10, 15 from there? have you heard? >> i haven't heard anything of that sort. of course, we still have ore day, nearly 48 hours until the pricing. just less than that. so a lot can even happen between now and then. they could even up the price range again if they wanted to. there's still a couple mash nations that still have to happen. i think a lot of people bought. the last was $43.50. of course, you buy on that market knowing that eventually you're going be diluted in some fork or fashion but to go to a low end range, they felt extremely cheated in the beginning and now i think that number is going to more closely mimic the second market trading price. >> thanks, kate. stay with us. i have been thinking about this

gm store. they were spending $10 million and they didn't feel like they were getting a bang for their buck. i would never say gm has mismanaged itself over the years, but this this case, are you sure this is facebook and not gm? and then i think about that $900 million. >> yeah. >> there's got to be way. >> think about like the average driver of a gm car, you know. are they people who are spending hours and hours and hours on facebook? i wouldn't traditionally think so. >> i sort of had a vision of a bunch of bankers sitting around over morgan stanley. >> that would give you pause though for like a second. >> can you believe these guys come out with this 48 hours before pricing the deal? they're also for gm, are they

not? >> yes, they are. gm actually -- they said gm is yanking its advertising from facebook, but it's actually not. there was a little bit of a misqualified leak because they're spending $40 million total on facebook, which still out of the entire pot isn't that much but 107b8 million of that is actually going the banner that you see on the top or side of facebook. that's what people aren't clicking on. the other is going to sponsored content. fan page isn't putting gm content on those pages and that's what facebook is banking on, we think that's going to be more effective and we're trying to get them on the platform sniet ends up becoming like a second dairy but far more interactive web sooichlt it's another place to hang your shingle? >> and i would be interested to see how it changes after the pressure for quarterly profit growth gets to be too much, wle

they have to put so many ads on the site that people don't use it. >> remember when cable was invented there weren't going to be any ads because people paid for it. >> i don't remember that time, but -- >> thanks for reminding us. that but i mean i -- i can see it both was. i'm ready to argue that this valuation is crazy and that they're never going to be able to monetize the advertising. the whole business model of how it works. "american idol" to aggregate the super bowl, you pay to aggregate those, and you're take $900 million in its infancy. >> i know. it's got to be worth something to have $900 million, right? >> right. which is 51ch of the world's intern internet world. but the -- they can't get into

china. >> not yet. >> without access that is correct was a question that came up every single time, without growth how do you comb pl pleat grow at all. >> this morning on the sports buzz, the kings top the coyotes 4-020 go up two games to nothing in the western conference finals. kings have won nine straight in road game, playoff record and match the nhl record held by the islanders, the other new york team from the 80s. we have this rangers mascot in yesterday slapping andrew around. >> the devils mascot. >> yeah. game two tonight in the east.

welcome back, futures, anything can happen. they're up six points on the dourks not really change. making headlines, berkshire hackett way adding new positions in gm and viacom. and cutting its stake in chip maker intel by a third. berkshire bofted its position in walmart by 20% just before news broke of the bribery scandal involving the company's mexican unit. coming up, our silvia vlad

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"eyes wide open." >> is it better? >> it's got a retro feel. >> i'm joe kernen. michelle caruso cabrera finally heard this song. see, i would never just blatantly leave on the same day because people immediately -- these rumors. i doan know. where are they together? they can't say. together on assignment. >> together. >> i'm not going to say anything. our top story this morning as we approach 6:30 on the east coast is worries about greece, once again putting pressure on stocks there. let's head over to there. this time to berlin, which is kind of cool, to check in with silvia wadhwa who spoke with the german chancellor today. that's pretty neat, silvia. let's get it right from chancellor merkel. what do you have? >> reporter: well, i think the message is quite clear. a, we're going see something like a growth compact inside the

fiscal pact. they'll sell it as we're not changing the treaty. this will enhance it. didn't put it in so many words but the reading between the lines put it quite in that direction. the other part of the equation is we're working on the assumption that greece stays inside the eurozone. that's as careful as we can phrase it. angela merkel said we have an unshakeable desire to keep greece inside the eurozone. she didn't quite put it so dramatically, but this is what she said. >> translator: europeans can be very proud of what we've achieved. but we also know each and every country needs do his or her own homework but the european idea is the guiding principle so we can give solidarity. >> reporter: well, so the twin message, so to speak, a, we need

a greek government that's sticking to the spirit of the treaty, and they keep saying, look, we're going to cooperate, we're going to stick with reform, et cetera, but we can't stick to the reforms you're imposing on us. you have to help us out. there she quite clearly said if greece thinks it needs more stimulus for its economy or we need more stimulus for the eurozone economy, then we can talk about it. that's what's going to be on top of the ajep da at the special summit. the eurozone summit in brussels next week. >> silvia, i missed the hideous monstrosity of the euro thing, whic which, by the way, is showing new signs of cracking. those stars are removable, right, on that euro sign? >> reporter: we had a few stars blinking but none has been removed yesterday. >> what time is it? >> in the event of -- can you

screw them in in. >> they plug right into them things. >> reporter: no, they don't have to do that. on the euro design, not all of them -- we can drop out a few. >> it's not leak the u.s. flag. >> silvia whrk enyou were interviewing the chancellor, were you speaking germany too? do you talk in a totally different language together? >> reporter: yes. they had some translation but we actually did the whole interview in german. >> not everybody can speak german. this's why she was able to do it. i figured that out. it's like when you speak spanish. it's like a whole different language. you have a different word for every word we have. it's amazing. chief market strategist with ameriprise financial. you're worried. you're cautious and you have been right. it's kind of a -- i guess a risky time for financial assets.

why aren't we seeing that reflected anywhere other than -- why not gold? gold's down again today. why not oil? all these things are kuwaiting a slowdown but not some ka lamb us the event. am i wrong about that? >> no. you mentioned that earlier with david mao pass, and i think he's absolutely right. what the financial markets are telling you is the economic fallout in the immediate term is unknown of. even short of that, the world is decelerating. this is not just about greece, although that's the headline. a lot of concern coming out of china that they're slowing down as well. so you see this in the price of oil, you've seen it in copper, you've seen it in gold, in bond yields. >> it looks leak a world wide deleveraging. >> yes. and i think the risk of a deflationary environment is rising and i think all of a sudden now it bridges back on the table intervention which 30

days ago was off the table in my opinion. >> none of that sounds lehman like though. >> i will say this. in the next 35 days or so, we get greek elections. before we get there, we'll have the talks with iran. we'll have more data out of china. the first two have the potential for creating a lehman-like scenario. >> people are that come play sacramento th-- come place aunt that they're not putting on trades now? >> i don't know that they're co complaisant. >> you look at the german bunds. the euro just printed, michele, 1 126. >> four-month low. so they're buying dollars, buying ten year bonds. >> we're back at the old trade

again. >> if you look at the expected odds of a greek exit, the lowest i've seen is 25%. one in four chance. the highest, 75%. so in my mind even at the low end, 25% of the like liehood of something as potentially disruptive, i want to be hedged. >> i talked to people who were 100% chanced. so 75% sounds low it's not up to me. you can have nice interviews with the chancellor here and talk about her decision to keep it together but it's not up to them. it's up to the greek people. >> if you want to be hedged there's only one place go to protect yourself on the down signed with hedging. you've got to call up jpmorgan, right? you want to make sure your hedge is effective. do you believe that? banks are allowed to take risks. >> right. and it's not a crime to lose

money. i think this is being politicized -- >> like everything. >> yeah. now we need more regulation. i think that's -- that's not right. but secondly, i think the market's overreaction to this loss has create add buying opportunity. it's shaved $15 million in market cap. >> but you're not really buying stocks with both hands right now either, are you? >> no, no. think you want to be pairing back -- you want to be sector neutral and be hedged just across the board. >> a few weeks ago, a number of strategists said that the facebook effect on the overall equity market was going to basically lift everything up. facebook is going to place tomorrow night. you had nine oust ten days, a sloppy market. was that wishful thinking. >> i think at the time it was probably -- there was probably rackcy to it now but it's been gone away, i think it's been overwhelming by these events. it's going to be a nice distraction. how many people are going to be participate up 10, up $15.

and does that get people excited? >> a younger demographic to be more interested in the equity markets in general? >> maybe but i don't think that's going to be that important. i think the big beneficiary is going to be the state of california and the tax revenue. >> no not big enough. >> not big enough, exactly. >> i want to make sure this is on. a remnant of -- thank, you david. i appreciate it. >> you're welcome. >> you can kmenl on this too. did you see ge capital. >> i did not. >> do you remember when ge capital -- this isn't the common stouk dividend, but do you when when ge capital did not pay a dividend since 2009? the historical dividend was suspended during the financial crisis. the board of directors has declared a quarterly dividend of $45 million which is payable to the parent ge in the second quarter of 2012. this is a resumption of those dividends which still a little bit of residual left over from

that -- from what we were just talking about, the financial crisis. as we stated, our goal has been to resume the ge capital dividend to ge in 2012. with this announcement, ge capital is returning cash beginning this quarter. demonstrates the strength of ge capital and the significant actions, to strengthen liquidity capital and quality. we're finally back with that. >> yt another step in the healing of the financial crisis certainly. >> and ge capital was huge. >> was huge for a good five years, the major source of, you know, top line revenue. >> a shackle on it. >> i wonder if they'll keach them. >> i wonder if at some point they look attractive enough. >> they'll be able to finance. >> remember, they were grandfathered in by dodd/frank. there's never going to be another ge because law prohibits

you can't do what they do anymore. so i think you'd be crazy to argue that. >> yeah. >> i just saw a ge dividend and immediately had to look at it because i figure i'm looking -- they had been raising that. >> you can pay for lunch today. >> right. >> thanks. >> all right. you paid -- why would you brink people dunkin' doughnuts? do you think it helps? >> it does. it feels really good when sugar hits you. >> you saw the box is half empty. someone's eating them. i want to, but -- >> do for it. >> i can't. >> doughnuts. >> thaerng you. comments or questions about anything you see, i'm us. coming up, jpmorgan coming urchld fire from shareholders and regulators. jacob will join us. jacob, should the bank

beworried? >> never be dismissive of an investigative file, but the answer is no. >> wow. >> thank you. we won't need you now. >> we have to break. here's a check on the currency markets. look at the euro here. last we checked, it was a buck 27. back above it. ♪ ♪ why do you whisper, green grass? ♪

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jie cob, let's get right into it. the shareholders are, i guess, the negative beneficiaries.

the first question i have, which is what pretty much what everyone has asked me over the last 24 hour, what does this have to do with the department of justices? this is a shareholder loss. why are they even looking into this? >> exactly. but the answer is this is an election year, and the allegations are such that it almost provides political cover. i don't want to suggest the opening of the investigation is a political act. but the fact is there's -- you know, almost 50% of all s.e.c. investigates have parallel criminal investigations, and what we really have here is what i was alluding to. political cover in the sense that opening an investigative file is easy. if there is something there that ultimately would require or warrant a referral to the department of justice, then, yes. do i think anything criminal is ever going to come out of this? absolutely not. >> now, in terms of the s.e.c. investigation, a number of executives from jpmorgan appeared on this network and

other networks in mid-april, let's say, after the quarterly report and sort of downplayed some of the allegations, which at that point had been reported. is that a possible s.e.c. action, based on your experience? >> well, i mean the s.e.c., you know -- the impression is the s.e.c. is going to look at whether there are disclosure issues that come out of this. but i mean ultimately what we're talk about, i think jamie dimon used the word yesterday. this is a cop duct that may be inconsistent with jpmorgan's practices, but they do not necessarily rise to the level of s.e.c. violations, certainly anything of greater significance. yeah, there certainly is a possibility if there's something that can shoe horn into a disclosure issue, but based on everything i read, i still don't see where there's anything that would rise to the level of a regulatory violation. >> and let me ask you this. was this in your -- the way you look at this, was this a hedge -- michelle was chatting about

this earlier. was this a hedge or a prop trade, the way you look at the definition of what each is? >> well, you know, from my perspective, looking at it both as an ex-federal prosecutor, it almost doesn't matter. what's more significant is what was the effect of the trade? did they follow their internal policy? did they have adequate policies and procedures in place that really -- what it ultimately proves to be, you know, doesn't matter. i think more people are concerned. the interesting thing is what is the political fallout going to be. >> what is the political fallout going to be? >> i think there's going to be a lot of noise. whenever you have jpmorgan, goldman sachs coming under fire, those are critical. democrats are being criticized for not having, you know, increased the regulation of wall street as has been projected that they would. the republicans want deregulation. and it's an election year.

i think it really presents an opportunity for a lot of debate, bringing one of the sus secful wall street stories right into the political fray, and at the end of this, i think it will be an afterthought. >> all right, jacob. thanks for your insight this morning. >> you're welcome. >> one additional thing. i said $475 million was the dividend declared for the second quarter. as i look closer, there's also a special dividend for 2012 totally $4.5 billion special dividends. so that's significant too. also, how does it, you know, affect me joe kernen. it won't, the common stock buyback will be accelerated by the parent company. ge will accelerate its -- >> it's being flowed back up to the parent company for their cashing. >> exactly. in 2012 subject to the gecc board, there will be a special

dividend of $4.5 billion paid to the patient in 2012. >> so this isn't just all about you but it's all about me as well. >> yeah, it is. >> does this mean the stock might move higher? >> no, no. >> just a little? >> the bid is up a nickel versus where it closed at $18.40 but it's more than a commentary it's 2012 now. it's not 2009. and that's when this historic dev dend was suspended during the financial crisis. >> now to the markets. scott of bradford capital management. i always want to say shaladi. how are you? >> we've been having a lot of discussions this morning about the response and the equity markets and the commodities markets as to what's happening worldwide with the global economy. are the numbers -- a lot of o people have said, wow, the markets have hld on fairly well considering we're talking about the possible implosion of the

eurozone finally. do you see that as the market telling us that things aren't necessarily going to be that bad if greece leaves or is not leaving to your think the market's too complaisant? i don't think they're too complaisant. i thenk you could see it one to one with a dollar, but why isn't the market screaming lower? i think we've got extend central banks. the central banks are behind the euro not going down as much as it should. what's the real value? we've had these earnings reports that came out halfway decent. thing we put expectations so lou we could have gotten over them with a skateboard. but at the same time, we're seeing day after day or economic numbers come in below expectations. so we're in no way coming out of this any time soon, and think that we've got more to come.

and our ten-year yield is telling us that. >> yeah, no. it's amazing. we've shown wti. it's fallen out of bed. a lot of numbers have famine out of bed. it looks like classic deleveraging. how far do you think it goes? >> i think for every book written on deflation there's 25 books written on inflation. when you look at cci, continuous commodities index, we're on a 12-month high. we're starting to see a total deleveraging because we could be running into, preversely enough, deflationary cycle when everybody said we were going to be running into a deflationary cycle. we could, and i think we are, looking more like japan every day than anything else. >> scott, good to see you. thanks for getting up. >> no chairs today, ann? we are going to have them. then i'll wait. i just found one i'm going to

explain. i like this. you're going to join michelle and gary. we're going to invite both of you over to the chair. we run this really lame animation of me animation of me and sorkin. >> in the silhouette it looks good. >> barclays is updating cisco to overweight, overweight to equal weight. price target remains $21 per share.

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so, if you were watching the show earlier we did have a party, one of our excellent bookers, associate producer. and state of ohio to go in the city again. >> like two nights in a row. >> two nights in a row. this is what happened. 58th street and this city, parking lot. hideous. >> horrendous. >> but the rain had stopped. i had three blocks to go and i'm watching the lights change five times. so i jump out of the car finally and say i'll walk the last three blocks. i get to this place, twice i yelled at someone who was coming right at me doing something on

their stupid phone. and rude. i go like this and i turn around, i go hello, look up. look what they are doing now. distractive walking, there's a fine and there should be, damn it. guess where the fine is? fort lee, new jersey. this spring fort lee, new jersey, right next to us began issuing $85 fines for careless walking. >> texting while walking. >> it's bad. it's dangerous. they are just walking -- their life is so important. >> i had something important to talk about but now i have to talk about something different. yesterday i'm in a starbucks. waiting in line and there's a person on the phone having a conversation and i said to my wife this should be against the law. if you're online, in a starbucks or any kind of place you can't be on the cell phone having a conversation with somebody telling them about your whole life. a, nobody cares and b, it's rude

to everybody else. >> you're going to prohibit them talking to the person next door. >> have you been in the supermarket and you're minding your own business and they start talking and you look over you're scared. >> you're scared. >> i'm scared because i think they are unstable or something like hearing voices. >> we're not interested in hearing, you know, what you're doing later this afternoon. >> you're talking to somebody who wants to talk on the phone on the plane. >> what was the thing you were going to talk about. >> i was going to say, you know, buried in the paper with jpmorgan is one inhouse firm, one inhouse asset management was actually the buyer of a lot of these credit default swaps. "new york times" has it. >> coming up this morning's top stories, plus we'll welcome guest host ken langone. you never know what he's

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painful lessons for jamie dimon. >> this should never have happened. >> legendary business mind ken langone is here to weigh in on jpmorgan's $2 billion blunder and facebook's upcoming offering. >> greek worries adding pressure for european stocks. what the situation means for the financial future of the euro. >> target sets its sights on earnings. get the reaction only here. the second hour of "squawk box" starts right now.

good morning. welcome to "squawk box" here on cnbc. i'm michelle caruso-cabrera, along with joe kernen and gary kaminsky. another greek the election probably mid-june. much more on this in just a few minutes. jc penny a stock to watch. took a 13% to hit in after hours trading after reporting a bigger than expected 18.9% drop in first quarter same store sales. also eliminated its dividend. it's official, facebook has filed to increase the size of its initial public offering to about 422 million shares. that's a 25% jump. that means the deal could raise as much as $18.5 billion. the futures this morning are suggesting we have a pretty flat open. the s&p 500 would open lower but

fractionally. the dow jones industrial would open up by eight. the nasdaq by one. flat in percentage terms. >> from facebook to jpmorgan there's nothing that today's guest host won't opine about, talk about. joining us is ken langone, ceo of geek net and a former new york stock exchange board member. also one of the, i don't know, you founded some company, home depot. >> co-founded. >> co-founder. that was the last thing. pretty good resume. >> well, i'm happy. >> and a full life. >> i'm particularly excited how well home depot is doing right now. >> the other day there was -- i don't know. it didn't sell off much the other day when revenue wasn't expected to be better because of warm weather they wanted seven or eight and got six. >> the last three weeks the weather has not been good. >> right. it's been raining every day. >> you don't go out and plant

pansies in a rain storm. >> look at the stock. is that a different langone or is that you? >> unfortunately -- >> that's phenomenal too. >> that's doing great. >> we get more mail when you come on than just about anyone because you have no idea what you might say today, do you? >> i have everything in mind. i'm scripted like you can't believe. i don't want to throw myself in the den of lions like you all and not be ready. >> did you use the bs word? we always try -- >> i only use the bs word then i'm a prude. >> i think it was shitzu. >> they are wonderful dogs. >> let's start with 2.2% this lousy economy. it's better than it was. the jobless rate is better than it was.

but does it feel -- i don't know it doesn't feel good. >> i'll tell you why. i don't think the stimulus package did what it was intended to do. >> people would say we would be even worse off. >> there might be merit in that. we did pour some money into the system. but it's not taking. >> we were up in three for a while after we did that, ken. remember? that wore off. >> you guys have the advantage of all of these archives of people coming on. go back what i said a year ago or two years ago. things are not robust and things are not going to be robust for a long time. and we haven't begun to address our problem. that to me is what hurts us. i hate to kick this can down the road stuff. we're avoiding problems we have to confront and solve. >> did you see the news from boehner today? >> no. >> boehner says when we run out of money, the debt ceiling, the

extension is finished we'll do it again. they are going to, the republicans are going to insist on like a replay basically of what we saw last time, insist on deep spending cuts before raising the debt ceiling. last time they got a lot of criticism for that and it's mainstream media criticism, but should we be closing the government down to extract spending? >> geithner also said yesterday as a prelude to this or as a warning, do not do this again. he basically said to the congress do not put the american people -- >> by the end the year. >> -- stress. >> if we come up with a coherent program that demonstrates the beginning of resolve, whoever, i think if we do that the world will give us the patience we need to get it done. we have not begun to address the issues. for example, i shouldn't say this because i don't want to

co-op, but i did talk to the romney people about two months ago and i strongly urged them and this is not the political game but for practical matters. i strongly urged them that the governor, when he wins in november and he will win, the governor when he wins in november -- designee will win? >> yes. >> you've been a romney supporter. >> you were hard to bring over. you were the guy that stuck with christie. >> hold it. stop, stop, stop. i think and i thought then that christie would have been a superb candidate for what needs done. christie opted not to do it. governor romney was in my office and i said governor i want to be honest. i'm really excited about the prospects of chris christie becoming our candidate. but if he decides not to run, then i'm going to join you.

that's what i've done. now let me say this. i'm afraid that the other side will do it, but that's okay because all i care about is somebody doing it. if i were governor romney i would say that the day after i win, i'm calling simpson and bowles in, okay guys you got a couple of months until i'm in the white house but the day after inaugural day, i want you to work with me now through then to come up with a list of possibilities of the things we can do to demonstrate to the world that we understand it, that we get it. you know, the first way you're going to solve a problem for a guy that's got a drinking problem is for him to admit he has a drinking problem. nothing is going to happen until that happens. >> are you suggesting that was strategy? >> and i told the governor personally as well. i said look, to me simpson and

bowles goes a long way towards demonstrating to the world that we're in the process of getting our house in order. very simple thing. we need to show the world the way. >> does that plan include new revenues. >> of course. >> first thing they will say. we need new revenues. >> i'm not talking about they. we'll have a two prong effort. i'll pay more tax. i should come off social security. we'll have spending cuts. look, i'll tell you one thing that excites me about the governor. i believe when he wins he will have a massive number of people with significant business experience going in and helping him address this over spending. we can't afford what we're doing as a nation. but you can't do it with a guy whose entire existence was making speeches and by the way, obama is only doing what he was

trained to do which is go around and make speeches. he was a community activist. what the hell do they do? we've taken a guy with zero experience and given him the most complicated, challenging job in the world. and guess what he's doing? he's doing what he's best capable of doing, wandering around making speeches. >> here's what i'll say, intrade was at 50 for a long time. ran up to 60 as the economy started to improve earlier this year. been stuck at 60 for re-the election of president obama and intrade for the house has got the republicans winning the house back. senate is a little dicer at 56 or 57. he was stuck at 60. today it's 57. so i think they see a "new york times" poll and finally say if the "new york times" is going to put romney up by three and not figure a way to not put him up by three because if there was a way for "new york times" not to put romney up by three they would have figured it out.

ask the question differently, hanging chadds. even had him up, romney up with women and other demographics. >> see a rebound. >> 57. been 60. >> 57 is not a landslide. >> it's only may. >> what's going to happen? >> jimmy carter was up 15 points in 1980. and last i remember he won one state and it wasn't georgia. >> we remember that as oh, everybody knew that carter -- >> no. >> let's agree to one thing. if the governor, i pray that the governor does nothing but focus on two things. jobs and the economy. we need to get people back to work. we need to create an environment where a kid graduating from college can look forward to beginning a career.

and by the way, these -- >> are you saying they will stay off social issues. >> let me say -- i'm having trouble with this thing. >> i don't think you need it. >> let me tell you what last week was all about. gay marriage, first of all, what people want to do in that regard leave them alone. let them do what they want. >> everybody wants to be happy. >> i'm not going to judge anybody else and i don't want to be judged. that was a concerted effort starting with biden, that was a concerted effort to bring the issue on those issues where he thinks he's got an edge. >> to change the subject. >> it's a diversionary tactic. we need to stay focused. bucknell has a graduation, my wife's niece, not mine. >> she's not related to you.

>> no blood. no. >> enough said. >> i gave you that. i conceded that. >> you did. you handed that me on a platter. >> i don't tint accused of a false statement how about this stupid thing with yahoo! throwing the guy out. the guy was making the right moves. out of college for how many years? he's been in the computer business for how many years? he went to stone hill college. you don't go to stone hill college for higher computer courses. stone hillis a wonderful school. >> like that course would have made it. >> you would have modified it. >> they had four ceos -- look i'm a big carol bartz fan. >> you have the same potty mouth. >> she says it like it is. >> she doesn't say to it the media. that's the difference. look we got to get down -- by the way you want an example of this governance crap.

i am a chairman of the geek net. i don't get a salary or bonus. any products i buy i pay retail. last week we had our annual meeting. 19% of our people have voted against my pay package. now are they saying i should get paid? are they saying i should pay to go there? look, jack welch two weeks ago was at a women's conference. you put the best people you can find in the job and it shouldn't hinge around anything except the person getting the job done. this is where we win. all of us win. >> all right. hold that thought because we'll go to break. >> don't be mad at me. >> never. >> you add luster to the thing. >> you're very charming. you're the person who gave me my favorite sound bite ever. still to come the clock is ticking for greece. greek depositors fueling fears

of deposits leaving the banking system. oil have more on the situation next. >> later, they call him a control freak. there's controversy over mark zuckerberg's shareholders on the sidelines when it comes to voting issues at the company. we'll tell you more coming up. tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 the spx is on my radar. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus. tdd# 1-800-345-2550 i can custom build my own screens tdd# 1-800-345-2550 or use predefined ones to help me find tdd# 1-800-345-2550 possible trading opportunities quickly. tdd# 1-800-345-2550 i can also bounce my ideas off their trading specialists - tdd# 1-800-345-2550 on the phone or face-to-face.

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. checking futures right now. a lot of red in europe but we have been sort of trending sort of slowly moving a little bit higher. we had nine out of ten down days. we'll see what happens. european markets right now as you can see are mixed, down on the ftse. the cac. hilary said she likes france's new path. i don't know what that means. maybe there's a -- she said she likes the path not all austerity. in an interview this morning, german chancellor angela merkel reiterated germany wants greece to stay in the euro but warns athens must play by the rules and honor its commitments.

>> senior executive at a greek bank said deposits have slowed. data revealed by the president showed withdrawals on monday. there's increased concerns that greece may leave the euro. this banking executive says monday there was a spike, tuesday still increased but less than monday and today even less than yesterday. so the pace of withdrawals slowing. let's get a check on the markets so far this morning joining us from the cme is scott nations of nation share. scott good to see you. pretty flat here considering all the negativeness in europe. why is that? >> we had a chance to breathe but unfortunately our markets will be heading lower pretty soon. yesterday had a really disturbing chart in the s&p, this big rounded top made a high in the middle of the day, almost identical from the chart on the tuesday before unemployment which is when things came

unwound and got below 2130.40 and now below 213.40. we'll look at greece for the next 30 days. greece is like a drunken guest at a dinner party. everyone wants him to leave but no one will show him the door. until they show him the door we'll be at their mercy. >> we're looking at deleveraging going on, commodities selling off. the trade is once again you buy treasury, by german bonds and the $and that's about it. >> the dollar is what's killing commodities. even gold. gold should be doing really well right now and when something doesn't do well when it should i think that's telling but, again, that's because of the dollar. the dollar is absolutely on fire right now. who wouldn't want to be buying dollarsing right now. if something is going to happen in the eurozone, then where do

you go? you have to buy dollars. >> scott, thank you. >> thank you. coming up the f-22 is taking flight again. $18.5 billion coming again. can mark zuckerberg attract shareholders despite denying them vote rights. tomorrow our guest host is a "squawk" master of the market, wharton school professor jeremy siegel. don't miss "squawk box" tomorrow at 6:00 a.m. eastern.

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

how math and science kind of makes the world work. in high school, i had a physics teacher by the name of mr. davies. he made physics more than theoretical, he made it real for me. we built a guitar, we did things with electronics and mother boards. that's where the interest in engineering came from. so now, as an engineer, i have a career that speaks to that passion. thank you, mr. davies. and people. and the planes can seem the same so, it comes down to the people. because, bad weather the price of oil those are every airlines reality. and solutions won't come from 500 tons of metal and a paint job. they'll come from people. delta people. who made us one of the biggest airlines in the world. and then decided that wasn't enough.

the pentagon announcing new safety precautions for its f-22 fighter jets. new rules include limiting how far they can fly from air strips after pilots experienced oxygen depractice aviation. the new precautions are sufficient to guarantee safety. the f-22s were grounded for over five months because of the same issue. the air force will have an automatic back up oxygen system. the f-22 is made by defense giant lockheed martin. comments, questions about anything you see here on

"squawk," e-mail us at "squawk" @cnbc. follow us on twitter. coming up next. facebook increasing the size of its offering. we'll look at effects of mark zuckerberg's controlling stake. have natural gas prices finally bottomed out. boone pickens joins us with his latest outlook. in every way, shape, and form. it's my dream vehicle. on a day to day basis, i am not using gas. my round trip is approximately 40 miles to work. head on home, stop at the grocery store, whatever else that i need to do -- still don't have to use gas. i'm never at the gas station unless i want some coffee. it's the best thing ever. as a matter of fact, i'm taking my savings so that i can go to hawaii. ♪ not quite knowing what the next phase was going to be, you know, because you been, you know, this is what you had been doing. you know, working, working, working, working, working, working.

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. welcome back to "squawk box." among the stories we're following this morning, ge capital has declared a dividend of $475 million to parent general electric. that's the first such payout since 2009 when the dividend was suspended during the financial crisis. ge capital plans to pay 30u9% i was total 2012 earnings as dividends this year as well as a 4.5 billion dollar special dividend. general electric is a minority owner of cnbc parent nbc universal. apple's next version of the iphone may have a significant new look. apple has ordered mobile phone

screens from asian suppliers that are larger than the ones by the iphone since its debut in 2007. facebook increasing the size of its initial public offering has filed to offer 420 million shares. that means facebook could raise as much as 18.5 billion dollars. >> indeed. mark zuckerberg controlling the majority of voting reits and will continue to enjoy that power after the company's widely anticipated ipo. does the model work or does it push shareholders away? we have more. i think you have an answer to a question we had earlier about increasing the size of the deal. what about control and what about the selling shareholders? >> they are adding just about 85 million shares but those are all secondary shares meaning they are being sold by existing investors. that control held by mark zuckerberg is not going anywhere. he's not getting diluted. these are just more early

investors that want to get out. looking at the cap table. we have a few notable insiders selling more. jim breyer. he's on the board of facebook. peter tilt the company's earliest venture capital investor is quadrupling the amount of shares. goldman sachs more than doubling and gary milner is selling about a multiple of what he was going to sell. a lot of investors saying to underwriters we would like to sell more in this offering because we've been in there, we want to get out. we want to take a little bit more money off the table and underwriters are saying wait until we see what the demand is like and we now know they are given the green light to get the shares off the table. >> you've been in these meetings so you know what they are like. the bankers get the demand, see the orders. they come to these selling shareholders and they say we have huge demand. you interested in selling a little more at 100 billion

valuation. do you think they had to twist these guys arms? >> there's something else. if you go back and study sec regulations, there's something called pre-conditioning the market. what all of you have done in the media with this company have created a frenzy, okay, a feeding frenzy that would get you in trouble in a more conventional underwriting because you are pre-conditioning the market. you're hyping the market. now the other thing, i want to know from all of these great -- >> let me ask you because i have to say. hyping the market because there's so much coverage in the registration period because hyping -- i think there's been a lot of people have come on air and said i wouldn't buy this thing no matter what at this valuation. there's a balance approach to the coverage but you think -- >> in long term -- >> you're away from look at the business as a business. >> right.

>> you're talking about zuckerberg with his hood. you're talking about this. think of all -- by the way the media loves it. the media loved the primaries. gingrich is gaining. oh, look what santorum from nowhere. you loved it. >> morgan stanley calls you tomorrow, you do business with morgan stanley. >> i'm a member of the new york stock exchange and i also have my own broker deal. i can't buy it. >> hypothetically if you got a phone call, ken we can offer you 15,000 shares of facebook at the ipo price are you interested? >> no. >> target, 55 was the close. indicated higher because these numbers are pretty solid, $1.11, well above $1.01 as far as an estimate. i saw a revenue number that was in line. actually a little bit above, then the guidances, i think helping. because on an adjusted basis the

company sees second of a $1.04 to $1.14. the estimate is 4.28. pretty nice boost, better than expected results and the stock is indicated higher. >> why don't you understand facebook? >> first of all, it depends totally on advertising revenue. general motors today says they don't see any traction in advertising with facebook. i'm not suggesting they are wrong. what's revenue, $4 billion. >> roughly. >> not earnings. you're pricing this thing at 25 times revenue. somebody said what about apple. i said wait a minute, apple makes things. i'll give you a for instance. g 4. i got it two months. i haven't talked to it once. i had to have it.

this is different. >> 4g by the way. >> did you say g4. >> he's in the g4. >> i don't have a g4. >> you know who i found on facebook yesterday was joe perilla. are any of the big finance guys on there. and joe perilla was the only one i could find. >> i invested in a company. when i do research on a company and i want to get to the ceo and i want an introduction you go through all these things, you look at the board, who do i know here and all the connections. by the way great company. i wanted to get to the ceo to invite him for lunch in new york. i own the stock so i'm warning you it's a fabulous company. >> basically a more exclusive to

linkedin. >> here's what happened. i didn't know it. we go in through this connectivity thing. barney hill who is lead director of home depot. black woman, the best lead director any place i've ever seen. she got it on her ability and her talent. not because the fact she was a woman or the color of her skin. she got it because she deserved it. and she's doing a bang up job. an incredible job. anyway i call barney. barney is on the board of ak steel. the ceo of ak steel. >> he didn't know who you were before? >> he may know who i was but i needed somebody to say he's not as crazy as he appears. >> let's go back to facebook. >> you'll pay a fee if you want to use that service. that's different than what's going on here. >> you bring up a multiple. you bring up the multiple of car

revenues, expected revenues and the price that's being paid. it will price, you know it will be a hot deal, it will basically -- take me out a year from now. if somebody buys facebook at the opening price a year from today, where do you think they are looking at? >> i don't know. >> take a guess. you have a guess. >> with the hype that's going on right now, if they can keep it going it will be higher. but remember one, they brought general motors public. and jpmorgan was leading. i called them i said guys this isn't going to see daylight for a long time after you're done. what did they do? 27. stock is 22. two years later, they brought general motors public at a price, the value of general motors was greater than it ever was before in its entire history, a company coming out. bankruptcy. you don't know what the market will do. >> on the facebook thing you said you don't under it. you under it you just don't like

it. >> don't put word in my mouth. >> he doesn't tuned valuation. >> i don't understand the business to know whether i like it or don't like it. i'm simple. >> it's an advertising business. >> it's an advertising business. >> when people start to realize what sort of guidance they will give the company is mature in the growth cycle the stock will reflect that. >> you take apple. $100 billion in the bank and every time they need to generate revenues put a new fwad get or put a new app in and sell it. you got to have the latest apple or you're not in the game. >> talk on the facebook phone. >> if you're on the board of apple would you take that $100 billion and buy facebook? >> no. it's not their business. what i'm telling you about apple, apple is product driven. that's important because -- >> facebook is product driven. >> facebook is product driven to the extent a number of eyeballs that see it and that's what

determines advertising rates and whether you advertise. now are you getting the right eyeballs according to general motors they are not. okay. that i understand. >> all right. we got to leave it. >> when are we going to talk about jpmorgan. >> right after the break. >> we'll get to jpmorgan. good teaser. kayla, thanks very much. viewers listen up. go to facebook.cnbc.com for more on this historic ipo coverage including the story on a big challenge facing the company getting users to click on the ads. >> coming up, ken sounds off on jpmorgan situation. we're keeping a close watch on agrees, spain and the rest of the eurozone. plus a reaction to target's earnings. up 1.75. the stock getting a nice bump. we'll get the street's reaction and talk retail.

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quarter of a% across the board. let's talk to ken langone, chairman and president of inmed associates. you have a throat say about j.p. morgan and jamie dimon. what do you make of this situation of this $2 billion loss. >> it's a pimple on an elephant's butt. the cry out of washington is they took bailout money. go back four years. jamie and blankfine didn't want t.a.r.p. money. they were told by the secretary of the treasury, no you're going to take it because we don't want to you have the edge in the marketplace that we're strong we didn't need it. it's unfair, so the second thing is, and i plead partiality. i got to know jamie well.

he's an incredible human being. i'm not just talking about his talent. character, integrity, candor, honesty. he does it right. this $2 billion is a joke. it's nothing. now why? if it's nothing why did they do it? one guess i would have is that you ward off shareholder lawsuits if later on you admit you lost 2 billion and your stock tanks five or six bucks, those lawyers are hungry, they are looking for stuffer, they will jump on you right away. that's the reason. let's look at the bank. jamie manages risk better than anybody i know. >> that's where people get nervous. if he's good at managing risk -- >> hold it. this business about putting your capital at risk. every bank that makes loans puts its capital at risk. >> giving the mantra of risk

management and you know him personally, these were direct tloirmts. when he finally got word of what was going on, you know this guy, what was the reaction there? >> i'm sure he was pissed off. >> ballistic? >> i guess he would be because he's like me. we scream, we yell, we kick the garbage pail. so what. that doesn't mean we're mad. we're just vetting. >> he built up this reputation of risk management over a decade. >> he's proving it. that portfolio is up $8 billion. okay. this is two weeks loss for the bank. put this thing in perspective. i can guarantee you right now, if it was such that -- if the environment were different and he didn't go public with it he would still punish because he gave them a very clear mandate of what to do. all he was doing was saying if the economy tanks, my long losses will go up, this is

actuarial. he's saying make a bet. it's a hedge. >> the loans they were hedging is that they owned a lot of corporate debt. >> nope there was also their loan portfolio. the whole thing. $700 billion in total. >> the idea in terms of this big a hedge or this being a trade you're clearly in the camp this was a hedge of their existing loan. >> generally a hedge. somebody might try to get cute. don't forget this group made $3.6 billion last year. that's not a small number. >> your saying prop trades are okay as a profit center for the bank. >> no. >> you don't think they are okay? >> have no issue with that. >> what do you mean? >> you have a great trade. prop trades are okay. got a bum they are bad. >> volcker says he doesn't want banks doing prop trading. >> volcker has a much deeper understanding of the issue than me. i buy stocks based on

management. jamie dimon meets every standard i hold for a manager. direct, honest, forthright, aggressive, objective. >> you tried to hire him one. >> sure did. to run home depot. we tried to get him to run home depot. >> that's the news we'll tell people about. >> we're telling them now. more better than that. everything you see jamie do, he's consistent. >> if you bought jpmorgan based on that -- >> i own a lot of jpmorgan common and a bunch of their warrants. >> if you were a buyer of the stock a month ago, it sounds as a result of last week you have more confidence, you have more belief in the management of that organization given what's happened with the transparency. >> i have always had a high opinion of the management. i know them all. they are wonderful people. they work like hell. >> but some people came out last week and said we're more concern about jpmorgan, you said the

exact opposite. >> i said i think this whole thing proves that jamie is address ticker of running a bank that 2.5 trillion dollars in footings. >> i'll get in the bigger discussion. the worry is, ken, that if it wasn't jpmorgan and if it was more money that the government eventually is going to be on the hook again. and as a capitalist and you're an entrepreneur you need be able to fail to win or it's not fair. it's all stacked. if you win things work out and you get bailed out -- what would your problem be with having commercial banks just do deposit type stuff and have investment banks do whatever they want and be able to fail. why do we have this implicit too big to fail. >> the "journal" had a piece and quoting some professor from some college. what does know?

that gives them authenticity. we'll find an authority. >> you know we can't have this implicit for taxpayers -- >> wasn't what jpmorgan did here that got the banks in trouble. it was making a lot of loans to a lot of people who could not pay their bills. >> that's absolutely correct but we've now gone on to the point to the spirit of joe's questions we have banks that the government said we're not going let them fail. jpmorgan is one of them. so once you're in that position where the taxpayer is going to be on the hook it raises all kind of issues, right? >> hold it. i don't think, in the context of what jamie does, anybody is at risk, including jpmorgan. >> you're saying capital requirements have been good enough or high enough to absorb this. >> take wells fargo. i got a little bank in connecticut. we manage risk as good as i've ever seen.

but the point is these banks generally do a hell of a good job. >> is the department of justice, the fbi -- >> get out of here. >> -- is this a good use of taxpayer money to be investigating. >> let me tell you about taxpayer department. the department of justice allowed ford, ted steven's conviction was an -- they withheld information, the prosecutors. where is the department of justice now in not putting these people in jail. they are scattered around. big report down. brendan sullivan sent me a report of it. read what they did. they are criminal. they falsified information to convict ted steven's. read what the judge said. he threw it out. the tragedy is steven's lost by then. >> do you enjoy when these windbags. >> maybe i'm a windbags. >> take senator carl levin. >> ben franklin. >> look it up in the dictionary.

you see the demagoguing he's able, with the mileage he's getting out of this. he calls it depositor money that they gambling in a casino. and that's a -- we need -- >> that's absolutely totally wrong. and jamie can't fight back because guess what? he's got to live with these people. thank god they lose every once in a while. luger, when these guys are there that long and get thrown out, your turn will come too. because guess what what do they do when they get out they go to k street and become loobyists like sarbanes-oxley. >> if you were expanding in mexico, home depot would you allow bribes? >> absolutely not. >> how would you grow then? what do you say about walmart. how do you business down there. to get the environmental clearance it will take you three years to get a permit.

you let lowe's go in there. >> if that's what happened in walmart and that's a big if. if walmart knew what they were doing to accomplish their needs and permits and sites -- >> that's the way you do business down there. >> guess what? we got out of south america. >> i asked home depot specifically about this and they said for the record absolutely not. we don't. we don't think that's way you need to get business done in mexico. they are growing fast in mexico but not at the pace of walmart. >> how about india, china? >> hold it. for at that reason, pardon me, we pass ad allow, uncorrupt practices. >> is that a law that should be amended. >> that's not your question. you said to me. >> i'm asking you. should that law be amended. >> no. >> keep at any time way it is. >> yeah. >> why didn't jamie come to home depot. >> they met with arthur and his wife and bernie and we really put -- >> he's a financial guy.

>> do you want to see him in an apron? >> you brought him down to atlanta. >> by the way, 3,000 kids with aprons on today are multimillionaires. >> you brought him to atlanta. what happened? >> after it was all over he called me -- he didn't have a job. he said ken my whole background is financial services. that's where i was. >> i didn't get an answer to that. >> jamie dimon in an orange apron. investors have their eye on target. company reporting just a short time ago much better than expected numbers. valuation expert breaks down facebook and tells us why he would not be a buyer of the stock.

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after reporting better than expected results that stock will open higher. joining us with his take on the numbers is david strauss managing director of montgomery scott. david, good morning. what was the surprise here? was it the back end guidance given what they had seen in the april comps? >> i think the numbers aren't exactly right. it's 1.11 versus 1.10. they beat by a penny. it sets up for accounts for canada. a more modest beat. >> why does first call have

$1.01. >> most people are taking the expense out of canada the eight cents where that 1.11 is relative to 1.10. >> what about the year guidance. >> it's generally in the range where people are. you know, it reflects what is a company that's getting better as the year progresses. >> what do you have on the stock >> i'm neutral on the stock. >> it's a 4.28 estimate and saying 4.60. >> it has to do with the spending. >> why haven't they adjusted the numbers to reflect that? >> they give both, target will give both numbers on the issue. i think it's not necessarily the analysts. they are doing it one way. you are talking about two separate numbers. >> they do give the two numbers. they give the gap number and the adjusted number and the analysts are supposed to use the adjusted

number. >> i can only tell you what our model does and the way we do it and that's what i think is kind of the confusion is there. we are accounting for those numbers in our numbers. we did want for the quarter we went 1.10, they went 1.11. they beat by a penny. >> what were you for the year? >> 4.50 for the year. >> as far as the guidance, is there anything here that is a surprise either on the positive side or negative side in terms of what they are saying for the rest the year, again given the tough comps they have, for example, last month? >> i think what they are saying it's a choppy environment out there, that their business is relatively choppy. they have a fairly bumpy, you know -- they are somewhat of a cyclical retailer. what they are saying we saw strength, we're seeing weakness and trying to give you a number. >> david, did you say there was

a penny difference. >> 1.11 versus 1.10. >> help me out. what the hell is a penny. >> it's nothing. i'm not arguing with you. >> let me tell you something. >> we got run. >> good talk towing david. come see us again, david. >> david, thanks very much. >> still ahead on "squawk box" valuation expert who says facebook may not be a good bet. he'll tell us why. tell us why. would you mind if to be i go ahead of you?omer. instead we had someone go ahead of him and win fifty thousand dollars. congratulations you are our one millionth customer. people don't like to miss out on money that should have been theirs. that's why at ally we have the raise your rate 2-year cd. you can get a one-time rate increase

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he's never shy about speaking his mind. >> we've taken a guy with zero experience and given him the most complicated, challenging job in the world. >> one more hour with home depot co-founder ken langone. >> we're counting down to the most widely watched ipo in recent memory. facebook is expected to price tomorrow after the bell. we'll talk to one investor who is not buying in. >> when you hear his name think natural gas, we'll talk oil, energy and chesapeake energy with boone pickens. the third hour of "squawk box" starts right now. ♪ welcome back to "squawk box" here on cnbc.

first in business worldwide. i'm joe kernen along with michelle caruso-cabrera and gary kaminsky and our guest host, hopefully you've been with us since 7:00 a.m., ken langone. >> michelle loves him. >> she does. >> stop complimenting me. >> you have a lot to compliment. >> do you remember the first time we met? >> probably you were -- >> all right. >> listen, let me get my credit card out. you guys want to get a room. >> we don't need it. i'll buy the hotel. >> you're right, ken she does have two really beautiful eyes. checking u.s. equities futures this morning, they are indicated -- what's wrong? anyway. he's also the founder of home

depot -- >> co-founder. >> co-founder. fine. co-founder of home depot. you had the whole grasso thing. >> spitzer, my buddy. >> my favorite sound bite ever. when we interviewed you about eliot spitzer and you said we all have our own private hell. >> by the way -- >> he went to hell. he went to primetime cnn and then left there. >> wonder what he's doing about his sexual desires. >> i knew when management set this up today, i scene you guys an e-mail. >> i'm looking up there. >> he's nowhere. >> he's pacing. retailer target reporting first quarter profit of $1.11, ten cents above estimates. above the 99 sent estimate. first quarter results were the

results better than expected sales. despite continued economic uncertainty and also the second quarter numbers that the company gave is pretty good and full year number was also big. we had an analyst on and there always is -- there's 26 analysts that give us -- that give first call numbers and some of them have different info about expenses or one time items. usually you can get within a range of consensus and we try to compare the number that comes out apples to apples. facebook is increasing the size of its ipo. that's a big number, gary, 25%. normally they will throw in a couple more shares but 25%. 85 million shares were added to the deal at the middle of its expected range. social network could raise as much as $16 billion. >> one thing this will do the critics said a lot of these new internet 2.0 ipos have put 5%,

6%, 7% shares in the flow. now you'll have almost 20% of the flow at that mid-point at that new price range will be tradeable shares. so should that not create at least an equilibrium where it should trade? >> this demand is to be in good part emotional. emotion. the price, it's a great company, the kid had a hell of an idea, okay. and they put it together. everybody has got -- i'm not on facebook or twitter. i don't know what they do. i don't want people to know about me. >> no one wants to see pictures of you. >> they rather see pictures of me with my hair, my natural color instead of pictures of you. >> do you think this is dyed? >> i don't think it, i know it. you're an old man. you should have gray hair. >> you know how much i love my children. i love my children lots. this is not dyed. >> i'm not only a heck of a

president -- >> i take it back. >> it's not fake. it's not a toupee either. you folliclily old white haired guys can't take it. >> i'm old. at 5:00 this morning i was on the bike. okay. i'm going to be -- i promised my wife when i get done with this program i'll be sculpted like a piece of marble. let's always have fun. >> can i ask you about one of your co-founders here. >> who? >> how many co-founders do you have? >> two. >> never mind. in other -- bernie, is that -- >> i don't know. >> okay. all right. >> why don't you ask me my thing. >> you did that on purpose. >> to me? >> i shave it on top.

>> now we lost you. >> little whiskers. some other facebook news. if sorkin heard this he would say it went off the rails. gm said it will stop advertising on the social network. auditorium deciding facebook ads had little impact on consumers. ford said their ads have been effective. we'll talk more about facebook in just a minute. >> number one i would never sit in a chair and they put tin foil. i don't ever go to a salon. you know that's what happens when they do that. >> he's walked down main street and seen it through the window. >> he's gone in for a preliminary interview. >> what's that? what do you say? >> gray. >> you know with a tooth brush, put grain. >> in europe zmoosh let's go back to jpmorgan. >> okay. >> wait one second.

>> hold on for one second. >> michelle -- >> a senior executive at a greek bank says the pace of withdrawals has slowed further today after a large spike on monday. late tuesday data inadvertently revealed by the company's president showed 700 euros withdrawn. there's increased concerns that greece may leave the euro. european markets are mixed at this point. certainly not decisive in any way. bank executive says they speck on monday. withdrawals fell to a lower level on tuesday and lower level today. >> for those who may not have been when you i asked earlier that 700 million put it in comparison to what it was two months ago. >> we've seen in the last two years one to two billion per month. >> 700 million in a day. >> is a big number. not as big when the referendum was announced. let's get back to the widely anticipated facebook ipo. our next guest is one investor

who won't be looking for a piece of the action. good to see you. >> good to see you. >> why wouldn't you invest -- >> talked to you a few years ago. >> that's right. why wouldn't new vest in facebook? is it valuation? what's your concern? >> look, first of all, let's stipulate the fact that we're quibbling whether the market is pricing it. it's a fundamental that's promised in that valuation and growth in revenues and cash floss are astronomical. >> i read here your primary concern is the governance issue not the valuation, is that incorrect? >> the governance issue is very, very troubling.

basically mr. zuckerberg has control with less than 30% of the shares. this is very common. we've seen companies like apple and microsoft go public and do perfectly well. the governance structure makes it a control corporation where the board has little or no petroleum play and extensive amount of emperrical evidence that these companies make acquisitions, in fact tend to over pay their employees too much and in fact the strangest thing cash is often worth less than cash in these kinds of companies, market things they will waste their cash, so basically we are being as investors asked to liquify. >> you say on average you've seen when you see this kind of control structure the stock

doesn't necessarily do as well yet you also mention in the same breath microsoft and april p.m. so a company like this structure can still do phenomenally well? >> actually i was saying that companies like apple did not have this kind of dual class structure and did phenomenally well. >> i misheard you. >> yes. yes. i'm saying we had extremely successful companies throughout our hundred year history. the great thing about the american corporate gompance system is the nofgs one share one vote and it troubles me that we're moving away from what had been an inherently very democratic governance process. >> we ask ken langone earlier, if you're a retail investor, you buy this stock on friday after it opens up for trading, where do you think you are in term of your investment a year from today? >> it is -- oh, gosh. if any of us could make that

kind of a prediction. suffice it to say it will be extremely difficult to sustain those valuations and if the recent ipos are anything to go by, we have had a situation whereby the time i want goes sort of close to the period of time when expert lockups expire, the stock price seems to take a pretty, you know, hard tumble, so i'd say if facebook can maintain, if we go sideways between here and a we're from now that will be a remarkable achievement in my book. >> all right. professor thanks for having us on. i mean thanks for coming on. sorry. >> she's all flustered. >> i'm flustered. >> what would you have done to the host of the show. >> haven't we proven we're hyping. >> you're so unaccustomed to

these people treating you nice. i see those nice, i see everything. >> coming up -- >> should we just walk off the set. >> coming up, more from our guest host, home depot co-founder ken langone. still ahead we'll talk oil, natural gas. also chesapeake energy with bp capital founder boone pickens. that's coming up. >> but first the future of business. >> unemployment in our country right now is at 8.1%. in tech it's only 3.8. i think projects are being driven here in the united states so that is preserving like i said the people who are the liaisons between the business unit and tech. customer service and support of these applications on the infrastructure side will continue to stay here in the u.s. that's going to be very powerful for the u.s. to continue to invest in innovation and these young entrepreneurs who are

starting companies and going market with their companies, which is ultimately going to bring more job creation. so i feel very optimistic the way things are going, the push for innovation, the push for keeping things in america. it seems really positive right now. hey, it's sandra -- from accounting. peter. i can see that you're busy... but you were gonna help us crunch the numbers for accounts receivable today. i mean i know that this is important. well, both are important. let's be clear. they are but this is important too. [ man ] the receivables. [ male announcer ] michelin knows it's better for xerox to help manage their finance processing. so they can focus on keeping the world moving. with xerox, you're ready for real ness. [ laughter ] ♪

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welcome back to "squawk box." the futures right now are suggesting a positive open. the dow would open by 67 points higher. the s&p open up by eight. nasdaq up by 14. it's a marginal change. more now from our guest host. liesman was just here and in let you talk to him for a second and he scurried off. what did you say? >> don't want to say. >> he used the "s" word. >> we'll talk more now. ken langone chairman and co-founder of home depot. the only bald co-founder.

>> let me -- i want to say one thing, we were off camera before. talking about america. let me tell you something right now. i am 100% invested. our best days as a nation are ahead of us. i'm talking about great days. we are a great nation. every once in a while we get a little foolish and we do things and we get through it. we'll get through this. the number of entrepreneurs out there -- >> do you hear they are playing music? >> many people have written it. whenever you come on a lot of people write in. why don't you ever run for office? >> i would be the worst office holder in the world. >> here's what i want to ask you. why is it guaranteed that, you know ronald reagan is one of my favorite quotes of his, bear with me, he dyed his hair too, one of my favorite quotes is that freedom and economic freedom is never more than a generation away from becoming x

extinct and if we don't protect it we never get it back. are you putting it off for four years. >> i'm giving you my opinion. >> all right. >> it's clouded when the first lady of the united states says i've never been proud to be an american up until now. i can't think of a day my mother and father, my grandparents or my grandfather left school at 6 years old. he couldn't read or write when he died. wonderful man. we have been proud to be americans every single day. when i put this on every morning, my thought is grandma and grandpa, thanks for coming to america. we are the greatest nation on earth. we'll get through this. we'll get through it with less pain or more pain but we'll get through it. let's not lose sight of the fact that we're fundamentally a good people. look at the charities.

we're talking about the opera, the medical center. >> 57 million in one night. >> paul jones. look at paul jones. look at what these people do with the enormity of their success. >> europe when they learned helplessness versus earned success and the social safety net their way of life over there if we slowly gradually head to that why couldn't it happen here. why is it guaranteed it will get better here. >> you know how fond i am of you. we have a good time together. >> right. >> you want to be careful about becoming ideologs. this president needs to go because he hasn't gotten the job done. at a point in time when we need leadership in areas beyond printing paper, create job

growth. look at jack welch. what this man did at general electric is absolutely staggering. look at what bernie and arthur, they were there all the time. i'm a co-founder. i was like the grandfather, i would go to the stores and pat the kids on the back and tell them how great they are and then give them back to their parents. this country is magnificent in what it is and i believe, i believe that at some point i would hope the first lady would say, you know what? maybe i was wrong. >> but to the spirit of joe's question, now, general media loves to focus on political freedom which, of course, is paramount and important but the other side of the coin and just as important is economic freedom. you know, we have very few people in the world willing to articulate that at the moment. europe doesn't care about economic freedom and it feels like we care less about it lately. >> the thing i'm more proud of

and i'm one of the co-founders of home depot, i got a call from a kid that's a district manager out in long island. he wanted to come in and see me. he came in two weeks ago. he told me all the things he did for his family and all the things he did for himself and his children. then he said to me, by the way, he said, my broker called me last week to tell me i'm now a millionaire in my home depot stock. this is a kid that started for $11 an hour 17 years ago. didn't graduate. graduated from high school. didn't go college. >> at that point bernie marcus comes on because of sarbanes-oxley home depot couldn't exist any more. another example of killing of economic freedom that achilles prosperity. >> the bigger issue is we believe moynihan ti elevating our people with ownership. we gave out options like crazy. the accounting rules today on options would not let us do that. >> you said earlier it's for those that want, they hear the way your vision, the way you

think about things, why aren't you running for office. you say you would be a terrible politician. why not try to have some influence direct influence. >> i'm selfish. i think i have all the influence -- look let's be honest about one thing. this is generally speaking. when a guy tells you he's talking to this guy or that guy in public service don't kid yourself he writes the check. that gives you a lot of access. okay. particularly if you can raise a lot of money. i don't get caught up in my importance. i'm saying i realize what i take advantage of. i take advantage of. i look at a guy like andrew cuomo who i didn't raise a nickel for. the job he's doing in this state or new york state is magnificent. and you know what? he understands the reality. if he screws around with guys like me and up we're gone. i have a magnificent home on together in the florida. believe me it would not be a shack.

this would be comparable to how i live in new york. >> stay there, ken. we'll have more with ken coming up. still coming up his name has become synonymous with a switch to natural gas. boone pickens will join us in the next half hour. first the government's latest read on the housing market. we'll be right back. and tailors it across all the right points, automating all the right actions, to bring all the right results. [ whirring and beeping ] it's the at&t network -- doing more with data to help business do more for customers. ♪ tdd# 1-800-345-2550 checking the charts. tdd# 1-800-345-2550 looking for support, tdd# 1-800-345-2550 resistance, breakouts, tdd# 1-800-345-2550 a few other tricks that i'll keep to myself.

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welcome back to "squawk box." i made myself into the control room. needed to give michelle and ken a little breathing space. making headlines, bhp expects commodity markets to cool further. these are the most cautious comments yet from the world's biggest miner. j.p. penny said sales were down 19%. the company ending its dividend to help fund a multiyear overhaul under the new ceo ron johnson. the retailer began to eliminate sales events in favor of every day low price strategy on most items. is it safe for me to come back out there, joe >> liesman is here. >> all right. michelle, by the way heavy. >> coming up we're minutes away from housing start numbers for april. as we head to break take a look

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we are just seconds away from housing starts data for april. rick santelli is standing by at the cme in chicago. steve liesman has joined us in studio. rick, we'll have the numbers right about now, i think. >> yeah. survey says, an increase of about 2.5% in terms of starts from an upwardly revised 654 which went to 699. that number moved to 717. so really benchmark against the original release, much better number if you look at permits, they are down about 7%. exact opposite story. but same revision. originally released at 747 last month moves to 769. that number now moves to this week's current 715. down 7%. so revisions were both upward to last month's data on the newer home side of course the start side that continued to move

higher and this is a good thing. now there's going many debates out there as to whether housing starts is a good idea when we have all this already built inventory. not for notice decide. that's a market force to do when you have economic freedom at least for 2012 thus far and if you look at what's going on in interest rates they are up several basis points. you know there is more stability for the instability in europe at the moment. and the japanese buy back program couldn't find enough two year securities to buy so they are going probably have to get another room and print some more so like our country, their ministry of finance, the treasury and bank of japan and fed, this relationship between print, buy, store, print, buy, store. repeat, repeat, repeat. back to you. >> for more on the data we'll get to steve liesman for some of the individual numbers that you think are worth talking about and then maybe broaden the discussion a bit. >> just quickly on house.

permits fell and that was expected. we had a huge surge in permits. we were waiting for housing to catch up. it did. starts up 2 poif 6% after falling. this is another kind of catch up from the unusually warm weather, spurred housing starts in january and february. came off in march. now we're back to april. still waiting for a feel of the real trend. what was nice about this, though, is it wasn't just led by multifamily. multifamily was 225 up from 218. single family rose 409,000. big decline in the northeast which you might expect if we were doing a bounce back from the warm weather. big declines out west. big gains in the midwest. there's a joint venture of the nielsen company and conference board. what they are saying, big housing recovery. they are saying the worse is over for the u.s. housing market.

after six years of declining sales and falling price, a turning point has been reached. average prices will rise by up to 1% in the second half of 2012 making the start of a housing recovery. nothing to write home about. i'm reminded of that song prosperity is around the concern. which corner. but there's another guy coming in looking at the data and one thing they are looking at is household formation. lot of people, i mean the great buy, ken, i don't know why you didn't tell us this. the great buy of this recession and weak recovery had to be futon couches. all the kids getting out of college and moving in with their parents and then getting married increase of 7 million people living at home that should be out there. 20% decline between '06 and 2010 among people, i think, in their early 20s who are not forming households. if that were to get going

household formation did top a million or has been topping a million. so there's some demographic basis for the housing recovery. >> can you take us into the boardroom at home depot. the numbers come out like this. housing starts, huge impact. when you see a possibly number and the board gets together at home depot, do you change your internal forecast as a result of these monthly numbers? >> no. for one reason. you run your business the way your business is. if you get a tail wind like you will with housing -- by the way, a benchmark to me that matters, i was talking to stan drucker yesterday and he was telling me that the housing stocks are indicating -- >> they have been for a while. >> i don't know of a guy i know that has a better nose than him. but he was telling me, he's got more than a noe, he's smart. he was telling me he likes the way the stocks are looking right now. and, you know, we're going to probably bottom out right around

here. back to your question, home depot, the thing i love about our business, when things are booming, it's great. when things are bad, it's great. people actually -- problems happen whether it happens on the outside of the house. houses need to be painted. this is a wonderful business because we're back to the way america's single asset is the home you live in. >> rick, while you're here, i wanted to ask you something additional. you know, we have this argument a lot and liesman and you get into it. did you notice the deflationary forces have reared their ugly head again in terms of the way gold is acting and people are rushing to the dollar. with all the printing this world will have to do to somehow get out of this mess it's in the markets seem to be focusing on an imminent slowdown because of austerity or something.

and i'm referencing the david malkus piece the cataclysmic event by greece it might be something different than that and years of just slow growth is what we're looking at. what do you think? >> well, i think it's one-third the notion that despite a crack in the door, that the market has come to the conclusion, especially commodities that there's probably going to be less programs by our fed, by the bank of england, potentially by some of the developed economies, forget europe for a minute and i think the other two-thirds is exactly what you're pointing out. with global slowing there's less demand for commodities, and that's how you look at $93 a barrel or you can look at brent. the prices are down. >> you've been taking a bit of a victory lap. is it time for liesman -- >> i said nothing. he's stirring, make no victory

lap whatsoever. >> i can see it on your face. >> it's too early to say. i did not site. my point has been i think bernanke had this right. we'll pass through -- not necessarily. we were going pass through this bump we had in gas price from an inflationary standpoint. that's been correct. it does, though, look like we're settling down into a cpi, a core cpi in the 2%, 2.5% range which is not a number that leads the federal reserve towards quantitative easing. when they get uncomfortable in their seat and it's a number when they start talking go qe3. i've maintained and i've been bright this, you need the deflationary threat to bring in the qe3. we don't have that now. you have a bunch of things happening. you saw what happened yesterday on clothing prices. it's a historic rise in clothing prices. it may be old cotton prices working their way through the

system. you'll have rental prices go up. that feeds into a big market of the cpi. that will have an effect and keep it up. under the current situation there's no victory lap. there's a where's the inflation victory lap. but i'm not going to take it. i'm not going to take it. not going to get the e-mail. not paying attention. all this inflation out there. you're not measuring. yada-da. i'm not going mention it. >> all right, rick. stay tuned. we'll be able to talk again sometime. >> what's gasoline by you in chicago. just dipped below $4 a gallon. >> up here in jersey. >> coming up, the future of energy in america, boone pickens will join us next to talk natural gas, politics, and chesapeake energy. [ nadine ] buzzzz, bzzzz, bzzzz, bzzzz,

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welcome back to "squawk box." oil prices continue to sag as worries on greece and china weigh on the market. here now with his energy outlook, boone pickens, he's participating in the hp byron nelson golf tournament in irving, texas. the event has raised $21 million in its 45 year history. more than any other pga tournament. before we get to energy, i was with you in las vegas last week, about a week ago at the salt conference when you were asked

about, you were asked about what it is like having the experience dealing with the federal government in trying to get them to embrace an energy policy and there were some reports about what you said. can you share with the viewers what you told people? >> did you hear him say i can't hear anything. >>, i didn't. >> that's what he said. >> so, if he can't hear. this was the point. we'll try to get him back. ken, you can respond to this. boone was asked last week by some members of the press in this briefing what has it been like trying deal with federal government having them embrace your natural gas policy, not necessarily -- boone, i don't know if you heard the question. at the salt conference last week, show the viewers what you told the audience in terms of your experience over the last four years. >> haven't got anything done. it's a great idea.

it's all about american fuel and let's get off opec oil. so you buy from the enemy. >> you did say that having had the experience of trying to educate those in congress, trying to educate those in d.c. that unless i, sort of misinterpreted what i think i heard you say, you had given up on the federal government is that correct? >> no. i said when i get through with this project that i'm finished. i'm not going to go back and ask for anything again np is the last deal. i was going retire from washington. >> boone, all right. how are you? >> i'm doing great. is this ken? >> yes. good to see you. >> i've been watching you all morning. >> i hope i didn't disappoint you. >> you didn't. you know where i am. >> i know.

boone we need people like you on the playing field for a long time. as long as you're physically and mentally able to help you got to stay in the fight. you know and i know that we are where we are because we were born in this wonderful country. and in really believe that. i understand your frustration. i share your frustration. but things don't last forever and i'm praying to god you and i talked about this in washington a couple of weeks ago, i'm praying to god that the president is a one term president. because right now what we need is people like you and me who have done well by the system to roll our sleeves up and go to work and create jobs and get energy prices down and be less dependent on these terrorists. this is the tragedy of what's going on. >> ken, how am i going to respond to you? where do i sign up? >> we agree. god bless you. >> you know, you're exactly

right. and i do understand energy. i think better than anybody in the united states. and i'm trying to help. and i do get frustrated. but, you know, you put it very clearly. i can't leave the field. and so i'll stay in there. i'll do whatever i have to do. >> boone, less have a little chat on a couple of stocks. chesapeake energy, big natural gas company. you mentioned last week you sold your position in chesapeake and the hedge fund because you were concerned about natural gas prices. have you been short of chesapeake and more importantly can chesapeake sell the asset, delever this company and make it here? >> yeah. you asked me if i was short. >> have you been short in the hedge fund at all in chesapeake? >> no. have not been short. and to answer your second question, yeah, chesapeake is going to make it.

he's a visionary. he gets out over his skis some time. don't beth against aubrey. >> you think the asset sales they have to make to delever this company there are appropriate buyers that have capital and they can bridge that negative cash flow gap this year? >> yeah. he's got the assets priced six to eight billion. eight is strong. i think he'll get six for it. >> that's an endorsement, you put your money where your mouth is. your actually buy igit? >> am i? >> yes. >> no. we got out of the natural gas stocks and chesapeake was one of them. we're not long for chesapeake now. >> boone i agree with you. don't bet against them. leapt me say this. >> no. >> in environment we're now in, boone, we all need be purer than cesar's wife and i think the

loans and all the other commotion that happened down there, detract from the value he adds to chesapeake. we need more people like him. >> aubrey has been -- he's been selling natural gas. he understands. i can tell you he's a great oklahomian and chesapeake is a great company for oklahoma city. let me tell you, they got employees. a lot of oklahoma state people that work for chesapeake and all but you bet against aubrey and you'll scratch a loser's ass i'll tell you that. >> you're absolutely right. >> boone we got run here but we've had this back off on the price of west texas intermediate. have we seen the short term bottom or continue to move down here?

>> i'll tell you oil i'm scratching my head on. i see all the fundamentals for me are that oil goes up. and i'm not, i'm long a little bit on oil but not much. and ill like to put a position on because do i think we'll see real tight market coming up. 91 million barrels a day is now what the demand is globally. and i don't think the industry is going to be able to fulfill that demand. it won't be easy. so what's going to happen is supply is going to be short and you'll kill demand with price. now that's my whole theory on this. let's talk in 30 days see if boone knows what he's talking about or not. >> we'll check back in 30 days. have a good day out on the golf course. >> beautiful course, great tournament. >> play well boone. >> like you've been there.

>> that was his. we missed it. coming up we'll head down to the new york stock exchange for the latest from wall street. check out the big brain. and last night's jeopardy power players episode. he won $50,000 for the charity new vision for public schools. >> is that a charter. >> don't know. i think it is. >> he was much shorter than -- h- you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments.

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let's get down to the stack stack. david faber straight off his "jeopardy" victory. he's there, isn't he? >> he did fabulously right down to the end. i think it was actually never in doubt, to be honest. we're going to miss david today. i do think that his victory was fabulous for charity from new vision. i think that is just fantastic.

>> yeah for charter schools. >> look at that face. jim, did you watch the episode? it was a very slow start for david. first round i think he had $200. but the double jeopardy round, he came pounding out there. >> how about goiogenheim. >> kareem abdul-jabbar this man is a person who is loved. he would do a lot of great things. he impressed me. it is not too late for him to do public service. >> and david isn't that short. >> no. they had a box underneath in the middle. look, the comparisons are very difficult. >> yeah. those are tough -- that's like comp store sales from a really big year. yeah. you're right. yesterday faber said he'd like alex trebek's job. and trebek said he's about to hang it up. where is he today? >> by the way, never play cards

with a guy named doc and never go bluffing with david faber. it was a disappointing performance. wow did he fool me! it was fantastic his play. >> very good. >> wow. >> he said to me on the floor yesterday, i'm not allowed to discuss anything with it. and i had no idea. i mean i had literally no idea how he was going to do. i agree with you. >> poker face. >> by the way, your show is fantastic this morning. ken, great stuff. i concur. home depot, remarkable quarter. prem way too negative about that. i think boone pickens is going to be right about oil. the stock is getting hard. there is a glut in the united states but not in the rest of the world. i think overall energy will come back. >> great. >> thanks, jim. >> thank you, guys. >> coming up, final thoughts from our guest host. >> tomorrow on "squawk box," our guest host is a squawk master of the market. jeremy siegel. don't miss "squawk box" tomorrow at 6:00 a.m. eastern. ge just crossed above the 20.

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and that's what we try to sum up at one point, too. jcpenney reporting worse than expected results. can you design a pretty good store around apple products. you could sell that in a cave, i think. i'm going to be interested in cramer's thoughts on both target and pene. >> see what jim has to say as he weighs in on both of those. but jcpenney, this is not the quarterer that the big ron johnson turn around is going to come. >> no. it would be unfair to label him with this quarter. a year from now, i think can you start to say this thing should turn around. >> final thoughts from you. we were just talking about frank blake. you think he's one of the best ceos in the country. >> at home depot, he is arguably the best ceo in all of retail. >> however, the stock price now -- that chart. we look at it. >> let me say this, frank is smart in more ways than one. he has this great humility to

bring with this brilliance. he is brilliant. look at his c.v. someone said what about nardelli? everything he touched he made better. the last two years was horrible. it was not good for any of us. >> you would say that board recognized that and then took action? >> absolutely. by the way, remember this -- frank will say this. frank blake to hoeme depot because nardelli was there. i'm not rationalizing it. i'm saying to you that we could have done things differently. we should have -- >> i think we would be remiss if we didn't ask you, nardelli told the board not to come to the shareholder meeting and did you want go. why not? >> you ask him that with 16 seconds left? >> nardelli suggested i should get the bum rap. i should have