anybody. my whole life was in the investment business. >> sorry. >> i made the mistake. >> you're good. >> hey! there you go. >> you've done this before. >> jamie dimon and me. >> make sure to join us tomorrow. "squawk on the street" is next. ♪ >> "squawk on the street" for $200. >> "squawk on the street" for $600 please. >> who is david faber? well today he is a "jeopardy" champion. good morning. welcome to "squawk on the street" on carl carl quintanilla along with jim cramer. melissa lee is off. faber is basking in the glow, i guess. >> just talk about going against watson and ken jennings. ease up. >> eating peeled grapes, something like. that faber is going to call in. futures are holding steady here this morning. rather stable action here in the states after nine out of ten losses for the dow.

housing starts up. a fall in permits. actually in europe though a little more volatile. greece calls for elections on june 17th. road map for a wednesday. there is a sale at penneys too bad it's on the stock. target, meantime, posed the best same-store sales in six years. more facebook investors want to sell. the company boosts the ipo offer by 25%. just as gm says advertising on that site does not work. speaking of gm, buffet buys ten million shares of the automaker. what other name does he like? we'll run down the list. and with elections a month away, will europe be in limbo for the next four weeks? cramer will explain how europe will effect these markets. >> well, i have to tell you, carl, this is one of those days where we have more retail news than i really shake a stick at. jcpenney is probably going to be the talk of the day, why? ron johnson was without a doubt the great hope to turn around a great brand. and this was a discouraging

conference call. he was discouraged. i want to take -- whenever you use the term titanic, you got to be very careful. and he talked about trying to turn j. this j. this penny from the titanic to 11 wave runners. the titanic ended badly. let's hope there are no icebergs ahead. >> tougher than anticipated profits in the turn around. at the same time, he says the turn around is ahead of schedule. so what quarter -- of what quarter is this a phenomenon? >> he says for 29% of the way, we're going to be 30% dissatisfied. i love a man that can be th precise. one of the things i love about retail and david faber known as the brain, special and j. crew next week. inventory is our enemy. old inventory is not our friend. it's the old inventory doing

them in. >> meantime, there is target. what a quarter. same-store sales, strongest in six years as we said. street still wanted 5.6. >> target is back. >> you sthoi? >> i think target is taking some share away from walmart. i think target is crushing kohl's. needless to say, i'm sorry, ron, target's killing jcpenney. everyone's feasting on jcpenney. >> target's guidance for the full year, still rather cautious given their boost for the second quarter. >> right. >> street obviously believes they're a little too cautious. >> i think taergt rget is a cla case that is going to benefit from gasoline going down. every penny in the tax of gasoline that comes down might end up in some of target. i do want to point out that your piece on costco is important here for target. target is trying to target costco. i don't know if that is really possible though, carl. >> different audience, you might argue. both upscale. >> yes! target is trying to move a little more upscale. and, you know, target is so interesting how good retail is

really doing in this country. i go back over home depot's call yesterday. people were down on home depot. they listen to the call and realize things are good. target saying the weather didn't play the role. target found its way again. let's not forget ron johnson. he is going to be introducing brands. you take down the branz he's talking about, michael graves. very good name. betsy johnson, retailer itself didn't do well. martha stewart mentioned offered twice on the conference call. >> retailer, if your products if you're not in apple's class is that johnson, is that his mission now? >> he does have to develop his own brands. he didn't know how much people relied on coupons. he made a classic mistake, when you come in, you must always underpromise and overdeliver. he overpromised. he underdelivered. he eliminated the dividend.

he needs all new dna. the information technology, the 492 unique applications, that's not possible. when you go through nordstrom's change, they upgraded the information technology. there's a long, long way ahead. he may be in day one of what he says is a 29% turn. i think it's a year, maybe two years. and i really like johnson. point blank, i saw him at the white house correspondence dinner. i wish him well, he's a great mind. i didn't know how badly jcpenney was doing before he came in. >> he may get asked about this. >> you know, the conference has always been a place where people present their wares. canadian pacific, a name that achman is affiliated with. upgrade today. i don't like the rails. rails are sensitive to coal. rails are sensitive to ag. deere this morning lowered its prices for what they thought corn is going to be. corn is the bedrock of our food

chain. i was surprised that deere is doing that well given the fact that they need corn higher. >> interesting. on facebook this morning, as you probably know they filed increase the size of the ipo to more than $4 421 million shares. it could raise $18.5 million. as the social media giant pushes the ipo, gm says they plan to stop advertising on facebook claiming the ads have little impact on consumer's car purchases. ford has a different view. a company spokesperson says they find that on facebook to be very effective. but if on a week when you're going public, jim, if the largest -- one of the largest advertisers in this country say they don't think it works and you're looking to sell more than you were before, how does that build confidence? >> it doesn't at all. this was breath taking. obviously, i've been saying buy on the ipo, not after. this makes me reiterate that. millennial reported yesterday, very disappointing outlook. they did talk b it's very easy to go through mm, the symbol.

they're saying that they do mobile media and they say there is a tremendous rush toward mobile media. maybe gm's brand doesn't resonate with the younger demographic. i know a lot of companies that have come on mad money and said facebook is the way to be able to really build share of buffalo wild wings. i want that younger demographic. maybe gm is picking the wrong time to what i now regard as being a real in your face zuck. here's the way we're going to play it. we're playing hard. don't play hard ball with a man that has nuclear weapons when you're playing with conventional. even if he wears a hoody. >> i think gm has had some turmoil in their advertising ranks. >> oh, yeah. it's not like their strategy has been completely unbroken in recent months. >> they should speak softly. they got a real small stick. >> yeah. >> and then meantime, the size of the offering, does it make you think it will spike? >> i don't like. that i don't like. that i want to keep the offering

tight. they have increased this from what i regard as too much, carl. when i was looking at the amount of stock they're putting out, what i worry about is the more stock, the more you put it in flipper hands. now a lot of people are talking about some of the brokers having a little more stock for people at home to be able to get a piece. i still advise you to do that. i still think the ipo price will be okay versus a $2 -- the conservative number in 2015. but this mobile media, the difficult thing here is the younger people hate paying for anything. the younger people hate ads. the younger people hate to click on ads. so you have to do branding, in other words, i look at the ad and say like that product. i like being the operative word. and if people want something to click on, the advertisers will be disappointed. >> yeah. >> do you think, lastly on this point, that the increase in the size of the offer is to get it into mom and pop's hands? >> yes, i do. i think that's the hidden positive here.

provided that people rrnt so, you know, you don't want to be too greedy. if you get a stock that opens -- you get a $40 stock and opens at $80, you take half off immediately no matter what. unless the broker says i'm looking at your account. please don't flip it. >> thursday at 1:00 eastern time. cnbc will go inside facebook, literally. we'll see how the company makes money. hear if you should invest it in. >> i'll be on that special. >> find out how much money everyone involved will make. don't miss facebook, the social offering tomorrow at 1:00 eastern time. we mentioned gm. the holdings is worth e$257 million. a lot of discussion about what was his and what were some of the new money managers. >> gm, you're buying a story where you need china to get aggressive. china, by the way, ford is joint venture. so gm is really a play on china.

right now when i see the news out of china, not heartening bhp saying all the wrong things about commodity uptake in china. bhp being the bellwether commodity stock around the worlworld warren buffett is taking a long time view. long term, we're dead. >> you don't want your horizon to be too long. >> i don't want to own gm or ford. these are classic cases of raw costs not coming down fast enough. gm, by the way, a little bit better positioned because of china. volkswagen, bmw, that's who's hitting the ball out of the park. germany at this point in the world, you always have to be careful when you use the word himgeminy and germany. boy are they taking over the world in terms of commerce. >> also in the 13-f, increase in wells fargo, bank of new york

melon, viacom. >> viacom buying back a lot of stock. melon, that's a bottom fishing play. i totally get. that wells fargo is the heir to same banking, banking that doesn't regard -- not being financial engineering. by the way, wells fargo, there's a major undercurrent going on in this country. the refinancing program that white house mentions, he's a democrat, he's a republican. no, this program is working. wells fargo is the leader in refinancing. they are going to be the friend of the home buyer for years to come because of what they're doing. i wish they come on "mad money" or "squawk on the street" just so i can say to them, job well done. >> you mentioned the heir to sane banking. more reports about jp morgan today including a report in deal book about how the bank's asset management division was owning the things the london whale was trying to sell. on the one hand, some say that's good. they were acting independently in asset management.

others say why do you have something so complex that you were buying and selling amongst yourselves? >> i think jamie dimon summed this up. this is stupid. remember, i worked at an investment bank. i worked at goldman sachs. what is the animal i'm supposed to be a part of? this is dumb. you know, it's time for jamie dimon to take a look at his bank and to continue to trim the positions of people who are an thet call to the dimon principle which is let's not doo stupid things. let's be all on one page. i keep coming back to my branch and think jamie you wiped out everything my branch did for that company for 100 years to come. don't do that. >> while we are on banking, let's do ge. ge capital going to return a dividend since '09. a special dividend. $4 billion as capital deployment looks like it's on the mend. >> my charitable trust owns ge in full disclosure. mike neil came into ge capital.

this man is an amazing man. i went to georgia tech to do my show. he is the hidden gem within that company that deserve mores applau -- deserves more applause. you'll see increase. you already have 3.7% yield at the $18 level. i have to tell you that you may not like ge because it used to be in the 40s and now 18. get comfortable with mike neil, he's a killer. >> and almost 3% move on ge. that is something. finally, greece's political leaders meeting to establish a caretaker government. it would lead the country into the second election in over a month. that date is june 17th. the german chancellor reiterating she wants greece to remain in the euro. good interview to have. how is it going to hang over this market? how do we survive the next four weeks? >> dominance, i that i germany in many ways while being in

control does not seem to understand the logic of pulling your money out of a greek bank. if you're going to go back, you clearly have to pull your money out. i don't want a run on the bank. we saw what happens when we did that in our country. we have an fdic. i woke up at 3:00 a.m. this morning and said are they putting money back in the greek banks? carl, we need to be sure there is no run on the bank. if you're going to be able to get money out in euros right now, you don't want to get money out in drakba. the story in the world to watch. anybody that thinks it's not -- i wish david "the brain" faber were here now. greece for 100 and he would say what is the most dangerous thing on snernlg. >> some argue if greece were really going to leave, the euro would be catching more of a bid at these levels. >> look, the euro, the way to be able to bring the economies back there is to have the euro debased. i would tell that you the declining gold is also all part and parcel with this notion of a financial implosion there.

obviously, i don't want to see that. no one does. if greece, if they want to pull the out of greece, they doll that. it has to be stock. someone has to say ecb, here's a trillion dollars in bonds. we're going to do this. this is the time to go growth. this is the time to assure no runs at the bank. or it's going to be too late. >> let's get industrial production. rick santelli is in chicago. rick? >> well, industrial production rose much more than expected, up 1.1%. double expectations. the fly in the ointment, last month originally released an unchanged. it is now down .6. if you average the two year, that's where you need to be. utilization rates jumping to 79.2. even though there was also a downward revision last month. now 79.2, boy that, is the highest utilization rate since april of '08. so we had a housing number that was very, very close to the best

levels since '08. this is worth paying attention to. carl, back to you. >> all right. industrial production. a number that bernanke, we know, watches very closely, jim. >> look, we are -- there are three economies going on right now. there is the european economy which is in free fall. there's the chinese economy which is stalled and then there is the u.s. economy which is really getting pretty good. by the way, there is a fourth economy which is facebook. that is a very real issue, facebook, apple. are they what's going on in our stock market and our economy? >> yeah. tom selleck made his way to the floor of the new york stock exchange. >> so often i'm confused with him. as i look at him now, i realize he and i are separated at birth. you and me. >> so guys, we got that going for us. meantime, he's going to ring the bell in a few moments. speaking of which, when we come back, what is a social media entrepreneur and starbucks board

member have to say about the facebook era? stick around to find out. later, a interview with richard anderson as delta looks to capitalize on the international travel boom. and now it's vertical integration which it comes to oil. >> i like. that that's a very big story. >> i know. take a look at futures. ♪ why do you whisper, green grass? ♪ [ all ] shh! ♪ why tell the trees what ain't so? ♪

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kayla is here for the next hour. we'll talk about facebook and a lot of other things. david faber was on "jeopardy"

last night scoring a victory against kareem abdul-jabbar and dana parino. david won $50,000 for his charity, new visions for public schools. we had a camera on scene to catch up with david right after the show. >> it went pretty well. i was able to come home with a victory which is good. i did well on some of the pop culture stuff. >> the purported subject of the devil wears prada, this voeg editor went to the film's premier wearing prada. >> david? >> who is anna winter. >> correct. >> the movies. "rosebud." david? >> what is citizen cane. >> that's it. >> books? >> his best sellers include "lincoln," "1876" and the less historic aal and myra breckenridge. >> what is yom kippur. >> i did not know what the word yom means. >> what is a year. >> that is big trouble. >> good. what is good. >> no. >> in fact, yom kip you are.

>> what is a day? >> dave? >> that's going to come back to bite me. >> you know, come back to bite him because he actually mentioned the other day that yom means day. so what a coincidence. of course, if i was on i would have said kentucky fried chicken, taco bell and pizza hut. >> we should mention that there were a couple that everybody got wrong. a couple softballs like know one who kate middleton was. >> that's shocking. >> that's a "people" magazine name. >> but you know kareem is smart. and dana is very smart. >> david is just -- strikeout. >> yeah. >> that's why they called him the brain. >> he had that buzzer gripped in his hand and buzzing with pride. he was confident. >> he made us look good. "squawk on the street" rules. >> he has the day off. he is going to call in later on. we'll talk more about his appearance on "jeopardy" last night. when we come back, it's cramer's

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forecast for corn. the bedrock of all of our food chain and they've also -- they have what i call the worst conference call in the world. they are like a bad broadway play comes out four times a year. the curtain goes down instantly. they're so cautious. they are their own worst enemy. i don't want to own deere. not enough dividend. >> and international growth is not strong enough? >> right. construction is pretty good. it's just -- here's the issue with deere. you need to see ever rising commodities. there is an anti-commodity trend going on worldwide right now whether it is coal, natural gas or corn or whether it be grains. how bullish is this for the american people? if we can get corn down, wings will go down, buffalo wild wings, 50% increase in wings in the last six months. the food chain, all of it goes down. meat. it's really boesch for the consumer that there is more corn. >> crude stands at 92 and change. >> i'm pumping under four. >> opening bell is next.

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all right. you're watching the opening bell on this wednesday. and this is cnbc and here at the big board, tom selleck and the cast of "blue bloods" on cbs. richard moynihan here, too. i just happened to notice. also at the nasdaq, women for women international, a nonprofit helping women survivors of war move from crisis to stability. so we're into a wednesday which means tomorrow and friday, guys, are going to get really, really interesting. all about one name -- >> right. >> what about facebook? we were talking during the break. what is the significance the larger significance of facebook, people keep saying on twitter it's the top. this is the bridge too far. >> it's me saying i'm tired of this already and it hasn't already happened. it's a shame for my beat. i hope they don't get tired of

it. >> it's just a sign of a new cycle that we set into facebook fatigue when they haven't even gone public, jim. >> right. >> but you think it illustrates something about where we are? >> i don't like a split economy. doin i don't like a economy where i see 3m and united technologies doing so great and get a shrinking mold. intel, good earnings, good dividend. facebook, obviously is the exact opposite. it's just a high multiple stock. i want to caution people. it does have earnings. this is not 1999. when you do have earnings, its a more compelling story than when you have others. >> what you're looking at is trailing earnings. so the valuation is based on what was explosive growth. and in the first quarter we saw that come down. so caveat emptor. >> does it carry it with the hopes of equity volume, retail participation? does that naturally follow one way or the other? >> you sure want to believe it,

carl. the money coming out of the market is really shocking. and this has to do with the fact that the stock market has been such a horrible asset. it would be -- it remines me of visa. i thought when visa came public and mastercard came public, they were going to price the deals and prices you could really make money on. everyone knows visa and mastercard. everyone knows facebook. if they price it right, we'll have a momentarily hey maybe stocks aren't that bad. but it is momentary, i think. >> for the volume, it's not going to be a singularly traded name for all that long. nasdaq changed the rules to get into the nasdaq 100 simply for facebook. they said you only have to so-called season for three months instead of what was several years to get on to that index. so they're expecting a lot more index trading. maybe not so much facebook trading. they want it to be a widely held stock right out of the gate. >> do you think -- you covered this company for so long already -- is it a cautionary. >> i've been a user for so long.

>> is it a cautionary tale that people who own shares parentally want to sell so aggressively? >> yes and no. but i think that the tale for this ipo has been so long that, remember, peter teal was the very first investor in facebook. of course, he wants to get out when he invested seven years ago. you know, that's longer than most private equity firms hold their investments. you can't knock them off the face of it. goldman sachs doubled the amount they were selling this morning. we saw a lot more tripling the amounts they're selling. i think the fact they earmarked so much for sale, it is a cautionary tale. one that we just talked about, the growth might be over. the best might not yet to be come. >> did you want see bill gates sell a lot of stock when microsoft came public. i think he realized it was the greatest thing and he wanted to own stock, 13,000% later, the man justified not to sell. and i do like a not sell. obviously, microsoft is one of

the greatest investments of our time. people forget that. they forget how good it was for so long. >> let's pivot to the markets. three biggest losers, jcpenney down 15.5%. abercrombie and fitch, jim, and staples. what's going on with retail? >> people kept saying that staples is a breakout. it is a spplay on small busines. i don't like small business formation right here. it's more likely you shop at abercrombie than i do. i have to defer to you for that more youthful -- >> i do, actually. i knew that was coming. it is far from true, i will say. >> you ain't talbots. >> let's say i'm in between the abercrombie and talbots. >> we know it's not chico's. >> i think those plays are a fad play. not only is the price point very high at abercrombie, no teen can pay that for themselves unless their parents are buying. they're relying on someone else's pocketbook.

but also the trends change so quickly that you can't pay that much for something that might go out of style. >> yeah. abercrombie beat by a penny. sales did miss. they talk about challenges in europe. jim, fossil -- >> europe was the king. >> fossil was so important. fossil killed itself by indicating that things are going to get worse before they get better in europe. abercrombie, american eagle, hot topic, pacific sun wear, these are graveyards for people. people lost more money trying to figure out what the teen is going to buy than almost any other portion of retail. i remember going back to merry go ground. the same-store sales spiralled down, it is very hard to recover. >> and the europe story. can you say it quarter after quarterer? i felt like it was in the fourth quarter that all the companies were saying europe is going to get worse before it's going to get better. well, where is the bottom? when do they stop saying that? >> the other side, pvh, vf, they

managed to negotiate these stores. they are excellent companies. it would fool a lot of people if they said things are bad. >> let's talk to bob pisani who is making his way amongst the celebrities. >> just say hello to tom sell k selleck. a lot of people stopping to say hello to tom. did you notice how ugly it was in europe? good heavens, we were down 3% in hong kong. 3% in korea. china was down 1.2%. yet, europe we've been rallying in europe. we've been rallying in the united states. i don't see a lot of news there. most of the guests i talk to point out there is real profit taking in fixed income. we had a huge runup. i think that's all can you say right now. the market is still very much on notice. this thing can move any direction very, very quickly. so i wouldn't read too much into today's rally here. the big talk is about the commodity backlash and what's going on. you mentioned bhp, this is very

serious. this company spends a lot of money on capital investments, iron ore projects, steel projects all over the world and they're back ago way from the capital expenditures. they were going to spend up to $80 billion over five years. now the ceo says we're not going to do that. so the point is this -- they're still very bullish about copper. they're still bullish about iron ore projections. they are really changing them much. they're saying i'm sorry, we're making less money right now. can't spend as much. that means less projects for iron ore and copper production in the next several years. that's important. that's why we saw the weakness in asia. i want to mention ge. you mentioned that dividend. this is very important, this ge capital announcement. it came earlier than expected. ge said for a long time, ge capital is going to pay a dividend. this came earlier than anybody thought. number two, they would not have made this announcement unless the regulators were comfortable with ge capital, with its

position and felt it was safe to pay out a dividend of this kind. they're talking about 30% of ge's earnings in the next year and it's probably going to go higher. they'll push it towards 50%. this is a good sign for ge capital. gay sign f a good sign for ge and the regulators are happy it with. ge pays a dividend 3.7%. that dividend, ge pays which is among the highest of anything in the dow, at&t maybe pfizer are higher, that dividend is going up. i'm hearing people this morning talk about them pushing it to 4% very soon. back to you. >> yeah. very strong story, ge. boy, are you ever right, bob, about bhp. it took my breath away. news came out in the middle of the night. those in the commodity stocks, you think they're bottom, bhp knows more than you do. thank you, bob. rick santelli is at the cme group in chicago. >> thanks, jim. we see that interest rates percolated several basis points higher. europe, the same dynamic. as bob pointed out, there is an

equity difference going on hemisphere to hemisphere. dollar index is the big story putting many days in a row as higher close. we're about a penny up on the year. so highest levels since january. but today, we get the minutes to the last fed meeting. many believe that a good portion of the dollar's recovery is because we haven't heard a lot about extending twist or more programs. so these minutes may be most important to whether or not the run in the dollar index continues. back to you. >> boy, the dollar is so important, rick. thank you so much. i've been watching this dollar and just thinking is that why oil is going down? it's obviously very key linkage. for more to have day's markets, let's head uptown to bertha coombs. >> thank you. the dollar helped in terms of the commodity losing streak. but we had a tech losing streak. the tech sector down nine days in a row, only the second time it's ever happened. getting a bounce here this morning despite weakness in chips. it's a fractional bounce. looks like sellers are getting

tired. social media continues to do well. you had sina, the social site portal in china beating by a penny. still posting a loss. a narrower loss. it does say it could have more losses because of wivo, the twitter like social media site that it is going to be investing more in. overall, take a look at the social media names that continue to climb higher ahead of the facebook offering. if you can't have fb, you might have some of their other peers. cisco helped moving things higher in terms of impact. it's getting an upgrade over at barclay's. barclay's said you can't lose on this right now. the fact that the stock has come off either they do better because the economy improves, if they don't, you don't really lose overall. they see a 26% potential upside. april this will morning moving hi -- apple is moving higher this morning as well. the new screen on the iphone could be bigger, carl. back to you. >> all right. thank you very much, bertha coombs over at the nasdaq. she mentioned cisco.

really quickly, the upgrade. you still think it pivots around a global spending revival? >> yes. >> looks iffy. >> it's dead money. i don't want to go against the ceo. when the ceo tells me link month to month it's decelerating, i'm not going to tell him he doesn't know what he is talking about. where things may be better than you think, in the last few days, people are saying apple, real weakness. the chart is showing something is wrong. it's certainly not wrong in china if they get china mobile. that's a very important partner. >> regarding cisco though, a lot of investors talk about the need for a game changer there. they can't go status quo for really much longer. they did the nds deal. several billion dollars. they were smelling a big tech deal. they don't think that's it. they hope something else is out there. >> yeah, you mentioned apple. the head of china mobile saying we're in talks, 650 million subscribers. >> i have -- let me show you. i'm doing math here. that's like -- that's like 1.3

billion years. a lot of years. >> it would be big. not a lot of them use smart phones yet. that is the key. >> no. everyone is fretting about the idea that -- >> a lot of them use blackberries. >> you have ever tried to play scrabble with friends or words with friends on blackberry? you can't. >> i don't do much of anything on my blackberry anymore. >> have you ever tried draw something? you can't. these games are -- zynga is the driver. i've been playing zynga, mark pincus, will you please come back to me with scrabble with friends. i crushed you in round two. he is the ceo. it's actually my daughter doing it for me. she had a 1300 last night. >> very nice. >> speaking of games, we're going to talk to faber about "jeopardy" last night. game on straight ahead on "squawk on the street." on "jeo" >> coming up, if you missed it last night -- >> this is power player's week on "jeopardy." >> we have all the details of david faber's appearance on

"jeopardy." >> david? >> what is the clarinet. facebook. what is street car named desire. >> correct again. >> get the inside scoop when "squawk on the street" returns. an airline has pla.. 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.

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♪ looking for relief over at jp morgan. stock up is 1.5%. "the wall street journal" just reporting that two shareholder lawsuits have been filed against the bank over the trading losses claiming that jamie dimon misrepresented risk to investors. of course, you already know they announced more than $2 billion in losses last week. and, of course, the other bit of news, the fbi with this inquiry and hard to envision how this would involve criminal. >> wouldn't you like the fbi -- they didn't really go after aig. they dropped that case. they didn't go after

countrywide. that's where real people got hurt. okay. moms and pops got hurt. this did not hurt moms and pops. but, look, criminals is criminal. you never want to mess with the fbi. i'm a big believer in the justice department. maybe they have something i don't know about. >> all right. we'll keep an eye on that. as you know, david faber was the big winner in last night's power players episode of "jeopardy." we caught up with the man, the legend alextrebek. >> i thought david played extremely well. he found a few categories that seemed to be his liking. >> best sellers forred 4dz hundr -- sellers for $400. >> that helps a lot. once you develop a little momentum, it intimidates your opponents. >> i pledge $30.7 billion to this man's foundation. >> what is the gates foundation. >> and they start instead of watching the clues and ring in first, they start concentrating on you and saying oh, he's doing really well. and they become spectators

instead of participants. >> nice. david joins us now on the cnbc news line. good morning, david. it's nice when alex trebek says you rule. david? can you hear me? oh, boy. >> oh, boy. >> looking for the phone line. >> that's all right. >> he's probably got at&t here in manhattan. >> he's been reduced to a speechless contestant. >> i think alex said it all. i think if david heard that, obviously he's going south sea islands on us. it's a big win. there is no reason to hang around to deal with us. >> do we know that david is not in bora bora laying by the pool? >> no, we do not know that. >> with a cocktail in his hand. >> that is it a possibility. he is drinking something out of the coconut if you know what i mean. while we have a couple minutes, we'll try to get david back. let's talk pepsi. relational investors, $600 million. they appear to want what you said you once wanted and that is

a split of the beverage business. >> i talked about the idea of whether there is good synergies. i think they have done a lot of stuff in the last quarter. she delivered as a ceo last quarter. i think this is wrong headed. you bring one truck there, frito-lay is starting to come around. frito-lay raw cast is going to come down. >> i think they announced they were going to reinvest in the advertising, they said they exhaustively looked at a potential split. they evaluated all the numbers. they advised against it. >> i think they're right. >> i think we may have david faber back on the line. assuming he didn't hang up on us again. good morning, david. >> sorry, carl. i'm at my son's school. right across the river from the headquarters in new jersey. apparently cell service here is not great. listen, listening to alex trebek on strategy is interesting. my strategy was simply don't answer when i didn't know. of course, watching last night how i couldn't know sally rye

and tom clancy or dorothy parker is embarrassing. >> david? young tough to you. david. >> say again? >> young tough. >> what was the pregame strategy? a couple laps around the building? >> a little bit. i lulled them into a full sense of security in rehearsal in which i was terrible. trebek, they start focusing on you. kareem answered a lot of questions correctly. he answered a number of questions wrong. i only answered one wrong, of course it's one that will haunt me being the only hebrew up there. clearly i have no grasp of hebrew thinking that yom meant good which is embarrassing beyond belief. and every e-mail was congratulations, you're a moron. what you are going to do? i'm happy i won. >> at one point the spread between your score and kareem

abdul-jabb abdul-jabbar's score was big. did you get nervous there? did you get the yips as a golfer might if he was well ahead? >> i had no idea i was that far ahead. >> that's not true. >> it happened very quickly through a number of the categories. and then i suddenly realized, wait a second. i moved ahead. for quite a while i was not doing much of anything. so that momentum built fast. and then the nerves were gone. i realized, oh, my god unless i do something really bad, i'm going to win. so $50,000 for my charity. >> talk about final jeopardy. when kareem revealed -- i mean i was thinking, geez, he might have you. >> well, you know, you know the googenheim museum. i always wanted to skate board down it. i've been there a number of times. i think my son could have answered that one. so i was happy that that was the question. and happy that, you know,the $5s

which is great. >> once you walked off the set, david, who met you? what was the first thing you did? >> well, alex said congratulates and i walked off and then my wife and two kids said i can't believe you actually won. we thought you were going to lose for sure. >> so when is round two? when is the next appearance? >> i don't know. you know, if they bring winners back, i'm ready to go next year. i want to do a lot better. really, again, in watching the game last night with a little perspective, there were so many questions. now part of it is not getting the buzzer thing right. that takes a little while. but some were unanswered that were really easy. can always do better. >> so proud of you, david. >> very much. somewhere ken jennings is saying i want a taste of that guy. >> i know. >> please. >> david, congratulations. you made us all proud. >> thank you. >> i'll see you soon. i apologize. i couldn't miss his concert.

>> no worries whatsoever. david faber, "jeopardy" champion. a lot more "squawk on the street" still ahead. . ♪. >> coming up, well now we know how david fab der at jeopardy. >> $7,000. that takes you to $21,400. now that takes him to $50,000. >> will cramer fair just as well? we'll find out with six stocks in 60 seconds when "squawk on the street" returns. today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site.

now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers.

an irish regulator is here to potentially give them a black eye. what on earth is going on at jcpenney? we'll discuss that with analysts and also are we missing the potential upside on greece? the french and germans possibly about to do a deal, carl. that and more in the next hour. back to you. >> all right, simon, thank you. time for six in 60. boeing? >> i have to tell you, there are many people who like this analyst meeting yesterday. i like it too. eads is better. >> the capital is going to be good? >> this is a dice roll. a lot of people betting against

this. this is a battleground stock. >> altria? deutsche bank says it is strong. >> people thought we were about to have a tobacco price war. >> einhorn disclosures yesterday. herbalife watch today. >> talk about battleground. this is the irish owned conference. people say will they lower the boom? i don't know the answer. >> visa, deutsche bank likes it on a pullback. >> this is one of the best stocks of the year. every time it goes down a couple smacks, someone reit rates. >> finally, continental resources. >> all right. alaska, sorry. you're now number three. north dakota is number two of our produce rs of oil in this country. north dakota is as big as alaska. that's the way to play it. doinlt like oil right here though. >> very nice. what's on "mad" tonight? >> we're going to continue our analysis of facebook. we're going to tell you how to value the thing versus other social media sources.

>> we'll see you tonight, jim. >> thank you. >> when we come back, jcpenney shares taking a hit. the u.new ceo has a plan if pla. [ male announcer ] this is the at&t network.

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♪ one more time >> dow up is 85. the best day for stocks all month long. highest gain since april 26. let's get to the road map for this hour. jcpenney missing on the top and bottom line. target beat expectation and bumped up their profit forecast. >> many people still can't take their eyes off facebook. two days from the big debut. we're sitting down with the pioneer of social media and the author of the facebook era for her thoughts on zuckerberg's big launch friday. >> plus, as friday nears, lou facebook's euro privacy concerns faring? we'll sit down with ireland's commissioner of data protection for his take in an exclusive interview. >> and google is planning a major overhaul of the android

strategy. this is cording to "the wall street journal" and instead of partnering to build a handful of devices via the nexus line, they'll form hardware agreements with five manufacturers at once in hopes to take further aim at apple's market share. >> financials catching a nice bid after ge capital announced they will resume payments to general electric after a three-year suspension. the board declared a $475 million quarterly dividend and plans to pay out 30% of the total earnings for 2012. >> back to news of the week if not the year, facebook announcing early this morning it will increase the amount of shares its selling in the ipo by 85 million to 422 million which the newly raised price target of $34 to $38 could bring in $16 billion. we're'done here, are we? >> we're not. actually, if you take the high end of the range, it would range to $18.5 billion. if some people are saying that it could even price above the range. that would make it roughly a $20

billion offering. it would maybe be the biggest u.s. ipo, beating visa. >> visa almost $20 in 2008. so potentially the biggest ipo in this country ever. >> what is interesting and what i found really interesting when we had so many ipos that met were the desire you were saying earlier to actually keep a lid on this one. they don't want a ridiculous profit. >> linked in was interesting. the underwriters were surprised at the demand being so high for that. granted, it was sort of the gateway drug for social media users. as far as ipo market went. it opened the floodgates. and we saw that temper back tend of the year. underwriters were surprised. the price kept leaping, leaping almost double what they expect the it to go public at. and here they're just marginally increasing it and then adding a few more shares. i think those were eeshg marked the whole time because they're

coming from early investors. so early investors had to indicate what they wanted to sell. and speaking of facebook, gm announcing they'll pull the ads from facebook after determining those ads on the social network giant have little effect on consumers. that's roughly 40 million in advertising spending and $10 million will go away. phil lebeau joins us on the news line with more. phil? >> i just talk to some people at general motors. they're trying to put this decision into the context of understanding they spend between $3 billion anded 4dz billion a year on marketing. en that decision to pull $10 million in direct ads from facebook, look that, is less than .25%. it is the direct ads that they're pulling. they spent overed 4 e$4 billion facebook last year.

they say it continues to be an effective tool for engaging our customers. and, in fact, gm is commanding the amount of money they're spending on social media and online advertising this year. now it may not be $10 million in facebook, but they're stressing they understand how to use social media. and they also understand that they're taking hits from the competitors. ford is out saying, listen, we're increasing our facebook advertising. they call facebook advertising infective for reaching customers. that said, at the end of the day this is a case where gm looked at how much it's spending and said, you know what? we don't think is $10 million well spent. we may change our mind down the road. but for now, we think that there are better places for us to spend this money. guys? >> phil, it's kayla here. i think it's interesting. it's such a small percentage, roughly .25% of facebook's revenue. yet, everyone is paying so much attention to it because this is basically what its entire growth

story is pinned on. but gm, had they said they will pour more moon into the brand pages, putting more content on facebook or just social media? general? >> they're very cagey about that, kayla. they do not want to say specifically what they're going to do. i wouldn't be surprised if we see them reverse this decision at some point and decide, listen, maybe we will spend more in terms of our marketing on facebook. part of this also is the question that was brought up this morning on "squawk box." is gm effectively using facebook or is this a brand that people look at facebook and say listen, are you trying to reach the right audience here? you are doing it effectively? general motor says, yeah, we are effective. we know how to advertise and market. this is more art than science. there is no way of knowing for sure. all we know is that for now gm says this is not the best place for us to spend this $10 million. >> all right. thank you very much, phil lebeau. certainly one of facebook's biggest advertisers there. >> all right.

thank you very much, guys. let's get to jcpenney. the retailer suspending the dividend. jcp shares trading below where they were prior to the announcement of ron johnson's hiring of ceo. chuck rob has a hold on jcp, a $38 price target. chuck, always good to talk to you. good morning. >> likewise. good morning. >> i understand you've been talking to ron johnson not too -- in just recent past. what's going on? >> yeah, we just had breakfast with ron. you know, we got more color on the color and the quarter and what went wrong. obviously same-store sales down 19%. when i asked ron kind of what went wrong relative to the initial expectations, he came away saying they underestimated the impact on coupons on their business, the cycling of that. he also thought that pricing strategy that they unveiled on february 1st was confusing to the customer. and so they're making tweeing t. the expectation for the rest of

the year is for business to get better. i thought the tone from ron this morning was to expect a gradual improvement and not to expect a hockey stick type uptick in the back half of the year. and so i think it's going to be a long turn around. he told me to have faith and keep the faith. and so we'll see. we've got the hold rating. >> the most recent report is titled "turn arounds take years" which people are beginning to figure out. >> yep. >> the last line of your report says the company would not provide any clarity of comp cadence over the balancest year. you got a little more color on that today? >> a little bit. i think directionally same-store sales likely to stay, you know, down double digits for the reest of t rest of the year. we still have yet to cycle the two promotional periods, back to school and christmas. if you look at the first quarter, two big promotional events with president's day and valentine's day. that is when the comps were the worst. i'd be nervous that that's the time of year where their

competitors, macy's, kohl's, old navy, gap, target, et cetera, are really going to amp up their message and get more promotional. i think that could hurt jcpenney. the message he was trying to deliver to me today is this is a long-term turn around. as i rub my nose, those turn arounds take years. >> you kind of confusing me. on the one hand this pricing policy underestimates the importance of coupons. those are major things to have got wrong. yet, you have a price target that's $9 higher than here. you think the stock can rise by 30%. >> no, that's fair. our price targets are under review. there are a lot of moving parts in the quarter we are a lo t of one-time charges and expense. our price target will have to come down based on the news we got last night. we have a hold rating. i think the stock is in the $25 to $30 range here in the near term. >> turning to target. buy rating. anything in the comps or the

results today that emboldens your faith in that story? >> yeah, that's gay poia good p. inventory levels are flat which is much, much better than anybody that's reported in my group so far. and so that coupled with the fact that target delivered a 5.5% comp, their best comp in over four years with broad strength across categories with traffic, you know, up over 200 basis points in the quarter i think is encouraging. i think there is a return with this stock. i think there is a lot of nonbelievers which i understand given all the stress that the model's endured. but i see a couple bucks of down side if comps are in the 3% range. if they continue to stay in the 5%, 6% range during the balance of the year, it could be a high $60 stock. i like that risk/return here. >> interesting to watch ackman work his way through the names. we'll see if jcpenney is a good chapter for him. chuck, thanks again. >> any time.

>> now let's send it over to brian sullivan for a quick market flash. >> thank you. orasure technologies, that stock is up 30%. they make basically a home hiv testing kit. the fda while not approving it, an fda panel said they recommend approval of it which is a big boost to a potential approval. analysts are saying, hey, if we get the home hiv kit which is an oral swab, it may go to things like pregnancy and other types of, you know, basically conditions you want to test for at home. so orasure getting a boost on that news. >> in 48 hours we should know what the opening prices are on facebook. we continue to track down to that important debut. we'll talk with a social media pioneer next, the author of the facebook era who is also on the board at starbucks. stay with us. ♪

>> it's finally here, facebook friday. we have the ipo covered from the east coast to the west. we'll be at the nasdaq in new york the moment the stock starts trading. and carl carl quintanilla will be live from california outside facebook hq. you're going to "like" everything this friday on "squawk on the street." [ creaking ] [ male announcer ] trophies and awards lift you up. but they can also hold you back. unless you ask, what's next? [ zapping ] [ clang ] this is the next level of performance. the next level of innovation. the next rx. the all-new f sport. this is the pursuit of perfection. the all-new f sport. for a hot dog cart. my mother said, "well, maybe we ought to buy

this hot dog cart and set it up someplace." so my parents went to bank of america. they met with the branch manager and they said, "look, we've got this little hot dog cart, and it's on a really good corner. let's see if we can buy the property." and the branch manager said, "all right, i will take a chance with the two of you." and we've been loyal to bank of america for the last 71 years.

holding ton slight gains as we're looking to facebook though. facebook frenzy near fever pitch. if not right now, in the next 24 hours. the social network filing to increase the ipo size by 25%, as if it wasn't big enough. that could mean raising as much as $18.5 billion. our next guest is the author of "the facebook era," ceo of hearsay social and sits on the starbucks board of directors. we'll have a lot to talk about with claira schai. do you think this is the deal of a generation? >> i do. i think facebook is doing to going what will google did to microsoft a decade ago. >> it is almost ten times the offering size of google.

is that too big? >> i'm not a financial analyst. i know that facebook waited longer to go public. and there is just so much upside. >> so now half of the world's internet users are on facebook. do you think they have room to run there? >> well, i think they're both going to have more users as more people go online and get smart phones. as well as each user who is on facebook is willing to spend more time on the site. >> what is your view of their advertising model in light of what gm said? everyone's been waiting for procter & gamble to make a big leap into the facebook advertising space. but now you have a big one actually taking a step backward. is that concerning or no? >> i think that, you know, advertisers need to understand that facebook is still focused on brand ads. even the newest formats like sponsored stories and regenerators is targeting consumers during the awareness phase of marketing. and it's not fair, therefore, to compare it to google ad words which is very much close to the transacti

transaction. >> is there something -- do they need to adjust somehow, though, to alter the perception at least of some advertisers like gm? >> certainly there needs to be a lot of education. as facebook gets more sophisticated, there is a lot of money to be made in brand dollars as well as opportunity for facebook to expand its ad offering into social search. >> who is educating who? >> sorry? >> who will be educating who? >> i think facebook and its ecosystem of partners, perhaps here say social, the reason i wrote the book is all part of the education process. >> yeah, it's interesting. this is obviously the preempt nent performer in social media. and now this is the crunch when we see if you can monetize social media. your pedigree is excellent. you worked at google and microsoft. have you ever had doubts as to whether social media is actually as commercial as we might hope it is? >> i personally haven't had doubts. i know there are a lot of doubt out there.

it's not unlike a doubt that surfaced around google a decade ago when that company went public. >> sorry. elaborate on that if you would. what if somebody said i don't think it will work. why do you say i think this is hugely profitable? >> i think a lot of companies and marketers and agencies don't yet fully understand social media. and the reason i'm so bullish on it is because it is so inherent to the way that human like toint a -- humans like to interact with each other. the closer we can get to that natural human behavior, the better. >> which is why they're trying to put time line into effect for advertisers because it sort of causes the ad content to mesh with what your friends are saying. but is it actually going to cause people to click on it or make you disillusioned with facebook? >> well, that's the billion dollar question. i absolutely think it will. >> finally, a lot of discussion about to what degree they want

to be a public company, right? that in some way they've been forced into this position. do you think they want to be public or would they prefer to be private? and to hammer out a billion dollar deal in another room while your lawyers are in the dining room, that kind of thing? >> as an outsider, it seems like they delayed it longer than they could have. i mean there is a lot of difficulties and challenges of being a publicly traded company. >> why do you hear they're doing it now? is it because they need to get kind of all the money out of the way for the capital gains tax increases? is that the pressure? what's the word on the street from the position that you hold? >> again, i'm not a financial analyst. i think it has to do with a number of investors that they have at this point. >> right. >> many thanks. >> thank you. >> for more on facebook, go to facebook.cnbc.com to register for the cnbc webinar. kayla will be answering

questions. it's all live on the internet tomorrow at 2:30 eastern. >> by tomorrow they mean today. today at 2:30. >> wow! you're not missing a beat on this story. >> no. >> not missing a beat. you must be tired out. >> it's been a long week. but it's an exciting one. >> trust me, it's not over yet. the anticipation, meantime, building up towards friday's first day of trading for facebook shares, what about the social media's giants efforts to appease the irish? we're going to find out in a moment when we go straight to the source and it is down with billy hawkes. don't go away. ♪

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we're up 88 points on the dow, one of the major reasons for that is a bounce back on the euro and european markets. we'll talk about the european close in a moment. first, let's concentrate on currencies with our money. emotion currency trading

segment. kne neil curry joins us from merrill lynch here in new york. good morning. >> hi, simon. >> what do you think the euro will go from here? >> sure, well, it does look like we're seeing a squeeze to the top side. if you look at what transpired over the past week and a half, you had a one-way trade. euro got pressed to the down side significantly and in dollars which effectively are a flight to safety, currency. they rallied significantly. the dxy is up 12 days in a row. that is an all time record. i think we get a bit of a squeeze to the top side. the larger trend is to the down side for the euro. i think they'll trade to $128 or there abouts. from there, i'd be looking to set a short with a move ultimately targeting $125.20 so through this year's lows at $126 and change. take a look back and take a look at the bigger picture. the trajectory for european financial markets, whether it's debt spreads, european stocks and bank stocks, those are still clearly to the down side.

and the uncertainty surrounding the euro definitely remains intact. as long as we have that, i think the risk for continued deterioration will persist. >> yeah, it's interesting. the move is really clear through the month, isn't it? you actually taking the euro down at a rate that frankly, it's failed to do so in the past for the shorts at least. >> sure. it's playing catchup. don't forget, we've seen debt spreads. we've seen a host of financial indices trade lower for the first three months of the euro, the euro traded side ways. it is playing catchup to the rest of the european complex, if you will. >> longer term $125.20 is the call. >> it may be shorter than medium term. >> what time period, do you think? >> i'd say over the course -- i'd say let's give it a week and a half or two weeks or so. >> we have to leave it there. thank you, neil curry. for more currency trades, be sure to catch "money in motion"

on fridays at 5:30 with melissa lee. >> for now we're going to send it over to brian sullivan for a quick market flash. what is moving this time? >> i want to take a look at stapl staples. obviously, jcpenney getting most of the attention from retail side and abercrombie and fitch. i'll take the third player there. spls. you see that down over 5%. obviously the market not liking the numbers here. although digging into the numbers, a lot of the business segment dz see increases in sales. really with staples a cost issue. so staples down 5.5%. kind of third tier in the retail coverage today. you know, we're digging in here on the stocks. that's what we do. >> big retail day for sure. a lot of them -- thank you, brian. next, we have breaking news on crude oil enven toreies and talk facebook's move to satisfy privacy policy regulators with billy hawkes, ireland's data

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welcome back to "squawk on the street." i'm sharon epperson. traders are waiting for energy department data on oil supplies. we have seen a little bit of a bounce here in crude oil prices after a huge selloff and as many

traders say, a bit of short covering with such a dramatic move is usually the case. we are anticipating that we're going to see a build in crude supplies. the question is how much of a build will the energy department report for the last week? we have seen supplies already here in the u.s. at a 22-year high. right now we're looking at supplies here of crude oil supplies that have increased by 2.1 million barrels in the last week. crude supplies up by 2.1 million barrels. that increase in supply is less than what the american petroleum institute reported last evening. they reported increase of 6.6 million barrels. but it is also greater than what many anlives surveyed were anticipating. they were looking for a rise of about 1.5 million barrels. again, we're looking at a bigger than expected rise in crude supplies. meanwhile, in terms of gasoline and fuel supplies, big drops there. bigger than anticipated for this week. gasoline supplies down by 2.8 million barrels. gasoline supplies fell by 2.8

million barrels in the last week. and fuel supplies dropped by 1 million barrels in the past week. we're also looking at this spread between brent and wti futures. that is around $18 right now. even though we have this reversal of that key pipeline that's supposed to take crude frto the gulf coast, there is a lot of crude oil in the u.s. and that divergence between the two cr crudes will continue. >> we also have a little bit more breaking news. for that, let's head to diana oleg in washington. >> new mortgage delinquencies saw the largest drop ever under finally back to the historical long-term average of around 3.1%. that's good news. the bad news is we're still working through a big backlog of bad loans. and that's why loans in the foreclosure process are still rising, now 4.9% of all loans. this is a tale of two states,

judicial and nonjudicial. you need a judge in the process and where you don't. the national rate of loans in foreclosure again, 4.39%, but nonjudicial states, just nevada exceeds that rate at 6.47%. in judicial states, ten states exceed that national rate with florida still over 14%, new jersey over 8%. illinois over 7%. think about it. illinois now has twice the rate of loans in foreclosure as california does. another problem area, the fha. across all loan categories, 7.4% were delinquent in q-1. but of fha loans, 12% were delinquent. plus, fha loans are climbing up to 29 basis points to 3.83%ment we're clearly on the backside of the foreclosure crisis. but judicial states are still taking far too loaning to process the bad loans and that is still jamming the system. the mortgage servicing settlement and more aggressive loan modifications may come back to bite us as those loans could

redefault. for now, most of the numbers are coming down. simon? >> okay. good news. thank you very much for that, diana. let's check where we are in the markets. 26 merz of tmbers of the dow ar positive. a bounce back today. the dow is still down about 4%. interestingly today, it's the likes of energies and industrial that's are doing reasonably well, beaten down sectors for all the reasons we talk about so often and, of course, we just looked at the oil price and, again, the loss that's we have there today. let's have a look at the move today. that is impressive. almost three to one advance to decline. at the nasdaq, of course, facebook will debut on friday. you know that. two to one at advance/decline. >> we're one hour in. we want to go to chicago and see what traders are watching. always good to talk to you, jack. >> how are you? >> i'm good. >> sounds like you're putting on more of the bull hat than the

bear hat today. >> i've been waiting for this. i put out a piece at the end of april and said this is a may to buy protection not sell and walk away. i was looking for the 5% pullback which is what we got. now they're trying to monotize that protection. do what i'm doing myself. take that money with some of that protection and roll it down and then add to positions. this in hindsight will be a gift for us. you know, it's time to be a contrarian, i think. at certain time this is not 2011. we have an ltr in place. everything and all the d dysfunction taking place in europe, it's an opportunity to buy stocks at what is a multiple of 12.6, 12.8 based on the earnings we saw. for me, i think we need to take a very deep breath, take a step back and understand that this is nothing more than one big margin call coming out of europe. to use what scott nations's analogy was this morning, it's like greece is that drunk

houseguest at your dinner party. you don't want him to leave and put him in a cab, on the other hand, you want him out of your house. that's the problem we're having. >> you mentioned the effect of the ltro which means this is not last year. a lot of discussion about the waning effect of that program n spain, a lot of the shorter term bonds, the yields may be lower. on the longer end, the yields are higher than when it came about. >> well, that's only because we have the contagion. this whole plan that was set many n. place, it's a question of how it evolves. i think in spain and italy, it's really a question of failure not being an option as opposed to greece which is always really been on the brink. greece was brought in as the redheaded stepchild. we have to keep that in mind. none of this is a surprise. everything that is done last year was done primarily for spain and italy. >> so last question, when you say you're adding to positions here, are you still expecting lower highs?

if we got back to 1360, would your enthusiasm be tempered? >> right now i think if you're adding to positions, you could be seeing a 10% to 15% appreciation from these levels. the reason for that is because there are certain things happening. oil price which in hindsight will be a tax cut for the american consumer come into the heart of driving season. and that lower euro, keep an eye on. that you'll see numbers out of germany that are going to surprise people and that was going to be a real catalyst. >> all right, jack, always good to you have. thanks a lot. >> thank you. >> as jack says throughout may investors are hedging for the possibility that greece will exit the euro-zone. this week we learn that ultimately that will be a political decision. so importantly this morning, just to build on what they were discussing, listen to what the german chancellor is actually telling cnbc about the need to keep greece in the euro-zone. in particular, hear what angela merkel when she uses the word solidarity.

solidarity is a promise that is repeated through all eu treaties, nations repeatedly grow bind themselves together through thick and thin almost like a marriage but in this case more like their destiny is how they view it after so many wars. >> europeans can be very proud, justly proud of what we've achieved. so we stand up for each other when a country gets into difficulty. but we also know each and every country needs to do his or her own home work. but the european idea is the guiding principal so that we can give solidarity. >> now you can say well she would say that, wouldn't she? it's not for her to decide. it's for the greeks to exit the euro. 80% of greeks want to stay in the euro. they may ask for less austerity, in essence, european governments and the ecb to forgive the debt f she agrees to the transfers organize from rich nations like germany, athens could still stay in euro. and when she met with the

president yesterday, she did a u-turn. she suggested the eu approach greece with proposals to bolster its economy. adding he believes it's now his responsibility to give greece a signal that europe will, he says, come with growth measures to allow them to stay in the euro-zone. the real question now is whether the french and germans are preparing to make sufficient concessions, carl, specifically on debt i would suggest in the event that greece elects an anti-austerity government on june 17th. or you could argue it's the start of a series potentially of political moves for the rest of europe to look more friendly and so to influence how the greeks actually vote on june 17th. i think it's important, you've got to listen to what the politicians are saying. >> yeah. i mean i keep thinking keep your friends close and enemies closer to quote "the godfather". >> to an extent. would they really throw the towel in now? >> jack says it's not 2011.

it's not 2010 for that matter. how much longer will we be telling this same story? >> yeah. but if you -- but the story is changing. the story continues to change. look at the outflows from the greek banks that we've had at the beginning of the week. look at how peripheral banks in ireland and portugal are actu actually under huge pressure today because there is a fear they could potentially also have runs on those banks. this is the end game that we've spoken about for 18 months. you know this is all the dire protections potentially coming home to roost. that's why you could argue they -- look at these banks here. in portugal and spain, look at them. that's for fear you're going to get a run on the banks there. ultimately, what do you do? you forgive the debt. it's not the end of the world. >> right. >> you think about the deposits and the fact that you had a billion euros a day outflowing earlier this week. >> just in greece. >> just in greece. the level of deposits, what is the time frame here? assuming that there's the worst case scenario where that happens

every day? do you have 150? 180 days left? >> how willing the ecb would be to come in again. >> these are not strong banks, some of them. you only need a medium sized bank to go down and cause chaos potentially. >> let's hope that doesn't happen. aig set to kick off the annual shareholder meeting in a few moments. our mary thompson is standing by outside aig headquarters with more on that. good morning, mary. >> good morning, carl. aig shareholders having reason to celebrate at this year's meeting, large part because the company's biggest investor is becoming a smaller one. i'm speaking, of course, about the u.s. government. the u.s. treasury stake now stands at 61% in the insurer. that is down from 91% at the same time last year as the insurer made rapid progress in repaying a loan that saved it back in 2008. now ceo robert benmosce who is seeing them back to profitability repeatedly said allowing the government to exit

aig at a profit is one of his primary goals. a goal he appears to be achieving. the government could have a profit of $15 billion from the $182 billion in loans and guarantees it gave to the firm during the financial crisis. the progress reflected in the firm's 35% gain so far this year. and by the attention it's receiving from some of the so-called smart money. recent filings show that hedge funds hhc capital and de shaw take larger stakes in the firm. still, there's a lot of work to be done at aig. this is the property and casualty unit. it's been hurt by a number of issues reserve and underwriting issues over the last couple years. for two years in the first quarter, it paid out more in claims than it is taking in. so improving the so-called combined ratio remaunz a goal at the company along with going through with the long awaited ipo amid the aircraft leasing business.

all of this is part of the plan to get the company back to a double digit return on equity by 2015. of course, today investors will await that update from the ceo. he will oversee the third annual meeting since taking the helm back in 2009. on the docket today, just three issues, lekting telecting board directors and say on pay vote and appointing an auditor. back to you, simon. >> so you got 17 minutes. we'll let you get inside, mary. thank you very much for that. in the meantime, we have two big things to celebrate this week. we'lling live from the nasdaq on friday where facebook is set to begin trading. and carl will be outside facebook's headquarters in menlow park. traveling across country for that. and our own david faber came home with a big win from last night's "jeopardy." as we head into the break, let's

listen so that. this is david's winning answer on facebook. >> cheryl sandberg is the c.o.o. for this website born in a harvard dorm. it's users number over 10% of the world's people. david? >> what is facebook. >> yes. [ male announcer ] the inspiring story of how a shipping giant can befriend a forest may seem like the stuff of fairy tales. but if you take away the faces on the trees... take away the pixie dust. take away the singing animals,

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to provide a better benefits package... oahhh! [ male announcer ] it made a big splash with the employees. [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. ♪ ha ha! ♪. last night's "jeopardy" episode featured power players. our own david faber was there face-to-face against kareem abdul-jabbar and former white house press secretary dana perino. ears a recap from the brain right after the show. >> it went pretty well. i was able to come home with a victory which is good. i did well on that pop culture stuff. >> the purported subject of "the

devil wears prada" this voeg editor went to the film's premier wearing prada. >> who is anna winter. >> yes. >> the movie "rosebud". >> which is citizen cane. >> books? >> his best sellers are "lincoln," "1876" and myra breckenridge. >> the fact that i'm jewish -- >> a period of time, yom. >> whether is yom kippur. >> no. >> i did not know what the word yom means. that is big trouble. >> david. >> good. what is good? >> no. >> in fact, yom kippur, day of atonement. >> what is a day. >> that's going to come back to bite me in the. [ beep ] >> yeah, cramer gave him a hard time about that in the last hour. nicely done. can you imagine the pressure? >> yes. >> the timing has to be just right when you press that buzzer. he knew anna winter because he just sat down with her. >> i'm glad he knew facebook. that's useful to know that

facebook is -- can you imagine if he got that wrong? >> that would have been bad. he would have heard about it from this table, i'll tell you that. >> oh, wow. >> straight ahead this morning, it's the debut as a public offering, we're going to talk about facebook still pledging to step up the privacy controls. will new initiatives be enough for regulators? we're going to ask one from europe next. first, rick san tell ji working on the next hour of "squawk on the street." good morning, rick. >> good morning, simon. hey, we had some pretty decent data today. i want to discuss that and also talk about some self-inflicted economic wounds that may be inhibiting some of the better data points to translate into things like higher tax revenues and jobs. last, but not least, an important comparison between mf global and jp morgan with regard to on going and potential future investigations. when is that all coming? let me think. how about the top of the hour?

privacy of course is still a major issue for facebook. disclosing more information on how the data will be handled. the proposed privacy policy changes from the social network are in a response to a request

some say from the irish data protection agency which is just one of the european regulators. joining us now in the cnbc exclues i interview, the commissioner of that agency in dublin, billy hawks. thank you for joining us on cnbc. what essentially is your beef with facebook? >> our job is to basically make sure that they comply with irish and european data protection law because facebook ireland is responsible for the users outside of north america. we're responsible for making sure that they comply with their obligations under european law. for that reason, we carried out an audit of their activities towards the end of last year. arising from that, we produced a detailed list of best practice recommendations. one of those was a clearer data use policy which they have now po published and put out to their members. we are generally happy with the progress of facebook ireland.

we'll be carrying out a formal audit july next. >> i imagine down the line it's not where we are now, it's where next the europeans might go. and they they would restrict the use of data in a way that would actually impact facebook in a major way commercially. can you just give us a steer on that, if you would? >> yes. certainly, there are new european data protection laws which will be coming in to force in a few year's time. they reflect the fact that data protection is a fundamental right in the european legal order. however, the statement of the commission indicates clearly to balance and the one side we need to respect the rights of users wherever they are. and the other we must respect the rights of companies and the need to promote commerce in the european union and indeed internationally so i'm confident that as the text are negotiated in the next few -- two years, in fact, that they will be that

balance achieved and there obviously we expect facebook to comply fully with the new regulations and indeed in our audit we have anticipated the requirement of those regulations. >> mr. hawkes, i think facebook might for its part say if the user read the policy and agreed to put its information out there, whatever it schoozs to disclose then it's pretty much fair game to the companies. what do you think as far as how consumers should be policing their own information and whether that's a good argument in this case? >> well, i think it's a bit much to ask consumers to take full responsibility for this. so in our interactions with facebook we have been focusing a lot, for example, of inline information, providing information at a time that users most need it because frankly very few people read data use policies. they're very useful as accountability to essentially facebook's promise to the users as to how to use their data and important in fact and stress with facebook that they respect

the fact that users -- >> come on, mr. hawkes. >> -- and that it's important, fact -- >> but terms of agreement are there for a reason. >> but the decisions that you're making could have a serious impact on the line on facebook. it is not fair, surely, to say people don't read the agreements they have got with companies. isn't there an onus on the consumer to understand what they're getting themselves in to? surely that's legitimate. >> it is a totally legitimate request they should do so and we hope that they will use the agreements but it's a reality. users do not generally read these agreements. so it's important as far as we're concerned that actually they're provided with relevant information at the time that they're using the product and that they do not actually have to real a long statement of data use policy. but our focus has been to make sure that the data use policy is comprehensive and focused on what's in the policy.

facebook practices to make sure that they actually comply with best practice and data protection and the data use policy should reflect best practice rather than be the end product in itself. >> commissioner hawkes, thank you for joining us live from dublin. thank you. more on the market rally. the dow up almost 50 points, after this break. [ male announcer ] we began with the rx. ♪ then we turned the page, creating the rx hybrid. ♪ now we've turned the page again with the all-new rx f sport. ♪ this is the next chapter for the rx. this is the next chapter for lexus. this is the pursuit of perfection.

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time far little squawk on the tweet. after scrutiny of the lack of gender diversity on the board, facebook is reportedly working with an executive recruiting firm to find prospective board members and at least one woman and facebook coo sheryl sandberg is mentioned as a qualified candidate. our question is, sheryl sandberg aside, who's the perfect woman to join the boys on the board? tweet us. we'll get the responses i believe in the next hour. yeah. you -- >> i tweeted a response. the cfo of oracle. really skilled deal maker. she can do no wrong in my book. don't know the relationship between oracle and facebook out there. as good as anybody to put on the board. >> no thoughts on that, simon? >> sandberg is the obvious candidate and become increasingly important to the strategy of the company and crucially, of course, with the

advertisers and something we revolve around and an important question. >> european close a half hour away. >> we covered losses on the bond market and able to rally here. an interesting day. >> kayla, thank you for coming in. braving the traffic. >> next time i'll take the train. >> seeing a lot of you tomorrow. here's what you missed earlier this morning. ♪ welcome to hour three of "squawk on the street." >> this $2 billion is a joke. it's nothing. jamie marriag jamie manages risk better than anybody i know. >> i'd say if facebook can mainta maintain, go swidways between here and a year from now, that's a remarkable achievement. >> an increase of about 2.5% in terms of starts from an upwardly revised 654. >> targets back.

>> you think so? >> i think it's taking share away from walmart, crushing kohl's and i'm sorry, ron. target's killing jc penny. >> maybe gm is picking the wrong time to what i now regard as being a real in your face zuck. here's the way to play it. playing hard -- don't play hardball with a man that had nuclear weapons when you're playing with conventional. even if he wears a hoodie. >> you are watching the opening bell on this wednesday. and cnbc realtime exchange. >> alex said congrats and i walked off and then my wife and two kids said, i can't believe you actually won. we thought you were going to lose for sure. >> expectation, you know, for the rest of the year for business to get better. i thought the tone from ron this morning was to expect a gradual improvement and not to expect a hockey stick-type uptick in the back half of the year. good wednesday morning. welcome to the third hour of

"squawk on the street." dow losing a little steam. had a nice morning. up 80 plus points but right now 50. s&p up 6 and change and nasdaq hanging on that 12.5-point gain. nat gas up almost another 3% today. nat gas companies riding the rally. range resources seeing solid gains. staples one of the biggest losers today after the first quarter did miss expectations on sales thanks in large part to some significant weakness in europe. let's get to the road map this morning. one of the most talked about internet start-ups around and warby parker will be with us live and if we can expect an ipo in the near future and ceo of delta airlines joins us from atlanta to explain why international business is becoming the cash cow. europe feeling the pressure as worries about greece weigh on the markets. how that shakes out when markets

overseas close in less than 30 minutes and the most free app on the apple itunes store. can it keep up the momentum? ceo joins us live coming up in the next hour. let's talk retail. retail earnings up. target posting a rise in sales. courtney reagan is wrapping up the numbers. >> unbelievable, carl. first quarter of jcpenny's transformation wasn't expected to be pretty but it was pretty ugly. a loss of 25 cents, consensus expected a loss of 11 cents but the estimates were all over the map from loss of 51 cents to a gain of 2. revenues disappointed and comp store sales down nearly 19%. also discontinuing the dividend using the cash instead to invest in the transformation. two things that ceo ron johnson

promised in january, complete transparency and that they would earn money through the transformation. but the retailer is abandoning its previous full-year gap year guidance and sticking to the nongap full year of 2.16. an eye-opening nugget that the ceo told analysts, we didn't understand or appreciate the extent to which customers were using coupons. jobs said coupons are like a drug and that's trouble for a company that's just gotten rid of them. now, executives did their best to turn lemons in to lemonade saying it's a big year to go through to the next era. consumers arensum confused. fifrs quaertd traffic down 10% and worse on the weekends and today at least investors are walking away, as well. shares of jc penny down if we pull up the chart to below the level of johnson was hired. that's trouble. but one bright spot, 110 designers have applied for boutiques and so far jcpenney

named 15 brands for collections including betsy johnson and jonathan adler. teen retailer abercrombie reporting profit in line but weaker than expected revenue. comp store sales down 5% for the quarter. the first negative overall comp since the first quarter of 2009. shares are tumbling, down 10.5%. big box retailer target with the standout first quarter. eps handily beating street by a dime and upping the full-year forecast. carl? >> all right. courtney, thank you very much. want to get to the cme group, as well. rick santelli with the exchange and economic data this morning and the industrial production number earlier today. >> absolutely. you know, nobody wants to see the u.s. economy show fantastic data points and more jobs more than i do. and today whether it was utilization rates or it was the

housing starts and i understand that there's a lot still wrong with housing, but we are starting to see some positive data points at least this week. but the issue really becomes, how can we translate that activity no n to more activity with regard to something like a gdp still 2.2%? my answer to that is we have to aggress the self-inflicted economic wounds. we have huge amounts of private capital sitting around collecting 25 basis points from the fed. do you not think that the companies want to make more? of course they do. why don't they? oh, there's a litany of reasons why. obviously, energy. we hold one hand behind our back with respect to energy. we ration our own future based on energy. there's been new studies showing how much, how many millions of barrels more of reserves we have. that doesn't include natural gas or the fact that health care's up in the air, reform up in the air and jp morgan. they talk about, oh boy,

dodd-frank, glad we passed it business needs to start investing. the last point and i alluded to it already. there's a lot of comparisons going on on this floor, on my train with regard to the activity by the department of justice or at least perceived activity on the fbi's side. all related to jp morgan. and listen. pretty much universally it seems to be accepted that when you invest in jp morgan, if they win, you make better money on your stock prices and if not all trades win, your stock goes down. that's a different ball of wax than the fact they're still 1.6 billion, that is, unexplained at mf global and those clients didn't want mf global to invest in a euro position. they didn't want the money taken away. at issue here is 160-year-old industry futures that rose based

on transparency and liquidity. i'd like to see more activity by the fed and the department of justice to protect that franchise and protect people whose money was taken without their permission with regard to how much risk that money was put through and how it just went adios. now granted, this fbi and department of justice might be following the 24-hour news cycle with jp morgan but if it isn't, having them pick and choose the industries they like and don't like for points of investigation, boy, it doesn't get any worse than that. carl, back to you. >> let's hope that's not the case, rick. we'll see where they go on that. it started with four friends in business school that came up with an idea to zigs, manufacture and distribute affordable and hip eyewear. since the launch in february of 2010, warby parker exploded on the start-up scene. it's a fashion brand, e-commerce company with a social conscious. they distribute a pair to a

person in need. two of the co-founders and co-ceos and join me and clearly eat what you cook. right? i'm guessing they're from the site. glad to have you here. >> glad to be here. >> fascinating story. glasses are expensive and a cheap way to get them in people's hands, right? where did that lead you? how did you start? >> we started the company because we love glasses and hated several hundreds of dollars for them and i was traveling before school. lost my glasses. cost my $700. so i went the first semester without a pair of glasses and started to talking about if there's a better way of doing it and we were able to create a brand selling the same quality glasses that you would pay $500, $600 for selling them for $95 at warby parker.com. >> and the list of investors, though, does it match what a lot of start-ups start with, lady

ga gaga, mike at kors. how did you make the contacts? >> we started really by boot strapping the company ourselves and sort of launched and a fashion brand and launched to "gq" and "vogue" and shot off like a rocket ship. sold out of the top 15 styles in four weeks and a wait list of 20,000 people so we had all the buzz and momentum. and then sort of worked at trying to find the investors we thought to add the most value and a fashion brand that did good in the need. >> how unnerving was that running out of the product and that they would have to wait. >> we felt terrible to disappoint the earliest customers because we didn't have products to sell them and did everything that we could to really go out of the way and make sure that they walked away with a positive experience for the brand and that's something we have infused throughout the company to this day and net

promoter score, 88, higher than zappos or apple or any other company published their benchmarks. >> you're cautious on the fund raising, too. how long to equity? to spread some equity around. >> 15 months. >> 15 months. >> we looked at trying to find some of the top angel investors out there like first round capital, sv angel and then we thought who are the strategic folks to help us? like you mentioned, you know, lady gaga's manager. >> how does one get to meet or pitch lady gaga? >> i think we were fortunate enough to built up traction without needing much capital early on and really conservative in mow we grew the brand and really focused on the customers without spending too much money. and i think that attracted a lot of investors and realized it was different. it's a huge market without innovation and we were starting to gain some real traction in the business. >> not to mention i'm guessing, i mean, talk about long-term

demographics at least in this one tri. a lot of people need some eyewear in the next 20 years. right? must have been a big part of the big business. >> looking at the industry, prescription eyewear about $17 billion alone in the u.s. of which when we were starting less than 1% was online and we saw this massive opportunity. we had seen companies like blue nile sell engagement rings online or zappos with shoes and thought why couldn't we do this with glasses? >> how often do you get asked about a public offering? every five minutes? >> all the time but we're focusing on value for the customers and building the biggest business that we can. >> would you prefer to, say, be your own public company or part of some larger conglomerate that's public, perhaps? >> yeah. i think what we want to do is see the vision realized. for us it's about transforming the industry and creating a model for how for-profit companies should behave and

thinking about customers, employees, community and the environment. so however we can best do that, that's what we're excited to do. we're still several years off i think from even really considering that. >> all right. great story. thanks for coming by. great to talk to both of you guys. big fans of cnbc so they say. when we come back -- actually, over to brian. a market flash with the dow up 41. brian? >> an interesting story hire on micron technology. the stock up more than 6%. here's why. we pieced the puzzle pieces together. there's a d-ram, a memory chip maker in bankruptcy. apple sources most of their d-ram or did from samsung. we know that samsung and apple are doing this, competing on smartphones. a report out that apple has now placed a huge d-ram order with alpeda.

micron is in talks to buy them. micron is getting a boost with a deal to buy alpeda it could have apple as a customer and apple as a customer tends to be a good thing. samsung is falling. there you go. back to you. >> thanks a lot. when we come back, airlines struggle domestically, international travel could be the saving grace. the ceo of delta tells us why international business is important for airlines here in the u.s. richard anderson after a break. [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade.

welcome back to the markets. we'll look at the dow. having lost about 60 points. at least some of it attributed to a reuters headline reads the ecb said to have halted monetary policy operations to certain greek banks. of course, the journal today reported that 1,700 million euro withdrawn from the banks on monday. the question is providing more liquidity if greece were not to meet the conditions under the terms of the bailout. a lot of weakness is the s&p up 3 points attributed to some concerns about the ecb apparently stopping monetary policy to some greek banks. we'll keep an eye on that. meantime, some of the airlines are looking beyond u.s. borders for big profit. phil lebeau has a special guest. phil? >> thank you, carl. i'm joined by richard anderson,

chairman and ceoo of delta in a spanking new international terminal. this is really key to the growth of international business out of atlanta, isn't it? >> it absolutely is. we serve almost 60 destinations, internationally out of atlanta. and this expansion is an important step over the next decade for us to continue our international expansion from the world's largest airport. >> international is really not only growth for the airline business but the first quarter, your growth in terms of revenue atlantic destinations up 22%. and so people are looking at this saying, this is the growth segment for the airlines, is it not? >> well, like any good, multi-global, multity-national business we have to do business around the globe and different economies perform in different ways, and for us, the international economies today, particularly in latin america and in asia, are performing at a rate much better than the united states. so we need a diversified

portfolio and international now about 40% of the business. >> are you worried about europe? given the economy over there and so much exposure across the atlantic. are you worried the impact on your business? >> we should be concerned about the economy in grurp but we're prepared at delta to match the demand in the marketplace. we would urge political leaders on both sides -- >> i think everybody would. >> -- on both of the ocean to solve the problems. >> jet fuel, you buy a refinery up in pennsylvania. a new piece of the puzzle. now you are going to be a refinery operation or the to a certain extent, what's your outlook for jet fuel looking over the rest of this year? is it moderating for the rest of the year? >> the forward curve is moderating for the rest of the year but i think over the long term we are in a pretty large commodity price bubble and that bubble looks like to be a very

long-term bubble whether it's energy or food. and i think all companies and enterprises that are commodity intensive have to manage the supply chain in this environment. >> you have to increase fares as jet fuel rises. what do you see as far as the pricing power for the rest of the year, domestically and internationally? >> well, we don't generally like to comment on the future pricing intentions but as a general rule, our business has got to reflect the cost of goods sold like a public utility, fed-ex or u.p.s. or a railroad. and our intention is to manage our capacity, be the best purchasers of fuel, vertically integrate in the supply chain and be certain that our product costs are fully covered in pricing. >> one last question as we wrap up. virgin atlantic says you can make cell phones in flight. any chance of that at delta?

>> no. we are very close to our business travelers and our business travelers telling us that's not something they want us to do. how about you? you have been doing this for a long time. okay? >> i don't like seeing people on the phone. >> you want us to have cell phones next to you all the way across the ocean? >> no. i don't like it on the train in chicago. i don't like it on a flight. richard anderson, joining us from the new international terminal here in atlanta. guys, back to you. >> looks gorgeous, phil. thanks to you and richard, as well. for more on the ecb alert, we are back to trading headlines and competing headlines. >> it is, carl. and this situation is fluid. reuters headline you hit a few minutes ago moved the market. saw a turn down. the euro drop, as well. basically the gist of the headline is that the ecb is freezing help to some banks. well, you had other headlines coming out of market news international for one that said that the ecb said they're considering freezing assets or

cash help to some banks. if they don't speed up the process of basically fixing their balance sheet. there's a gigantic difference as you know between freezing assets and considering freezing asets. it could be a lost in translation. it could be duelling headlines. reporter's misinterpretation. just that adding the considering word makes a mountain, an acropolis of difference in the markets will do. >> some down here wonder whether, brian, the ecb to try to strike the fear of god in the greeks and hard to know why to play like fire. >> by the beard of zeus, i agree. >> we'll see where it leads us. right now, dow up 11 points. thanks for that. we'll count down to the close in europe. only about seven minutes and 30 seconds to go. the closing action covered and closely watch the headlines when we come right back.

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keeping a close eye on the markets. s&p trying to rally right around 1333 on these headlines of maybe stopping monetary policy to the greek banks and recapitalization is not in place. the question is whether or not that's a shot across the bow to the greeks or a sign perhaps that the ecb will not keep greece in the euro zone at all costs. we have to wait and see. the dow trying to hang on to the gain. we'll get that close and all the details on this, how it might affect your money when we come back. this is $100,000.

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got a lot to watch with europe today. greece of course calling for elections in mid-june. money being taken out of greek banks. on monday. and now these reports, simon hobbs that lead us to believe the ecb may be trying to shake them a little bit. >> we're not sure if the ecb is intending to halt monetary operations to the greek banks or threatening to do that. the people, the analysts i have spoken to said it's a shot across the bows of the greeks. keeping the greek banks open because they can go in to their own central bank for funding in this issuance. don't forget they came through and said this is how we'll restructure and recapitalize and can't do that because there's not a greek government to finalize the details of it so what the ecb is if you can't

sort yourselves out we can't come in further down the line but the greek banks continue to operate and the smaller ones may have some difficulty. that may be where the rub lies. let's just get the close. >> the european markets are closing now. >> that's interesting and this has a lot to do with the trade here in europe, as well as the european sovereign debt is cut the losses on some of the markets. added to gains on some of the markets around europe but not all throughout the session. spain headed in negative territory. let's have a look at where we are on the euro. here we have as you can see this continual slide. not very nice. this continuous lead is a concern and keeping you updated. actually, the euro peaked higher and coming back down. just bear in mind this is a major dollar move across the board. it's not just the euro and actually some of the crosses have moved to greater extent

than that. back to europe and where we are on the session chart overall, spoil the story in other people's minds. not mine. this is the move from the major markets throughout the session and see how we have cut losses or made gains throughout the period and then you have all this nastiness of what the ecb may or may not be doing and going to negative territory towards the close and you will see that wall street has come down. the dow now much lower than it originally was. the bond markets in europe today, i want to show you where we are in spain with the yields there and the spanish market continued to fall throughout the session. we actually have this nasty little spike higher as you can see. this nasty little spike higher at the beginning of the session which took us way up on the yields and people sold out of the debt for fear of going with the banks and so on and then this move down. i'm not very good at this today. move down coming through on the

yields as people -- there was support of the bond market and then you go maybe the ecb is intervening. it appears not. it appears to the fear to intervene that just -- told medium to perhaps cover their shorts there. let's have a look at italy. and there it's kind of a similar story. as you can see, again, you see the way in which these yields have come down from the spike and i think that's importantment it's a reason why we cut the losses or rallied on the equity markets in europe. one more thing. that contagion. a huge amount of talk of money leaving the banks in greece at the beginning of the week and interesting the way in which some of the other banks around europe, spanish. santo over in portugal. i think i'm right in saying and carige in italy. this might be the other way but you see the second or third-line banking institutions beginning to fall in europe. you have to ask the question whether that's not, again,

people hedging themselves for the possibility that you could have increased people trying to cash out wherever they are around the periphery of europe for fear their governments might have to forsake the euro. i have an unconfirmed report and probably told off for hugely. an unconfirmed report to limit the amount of money to take out in greece at $50. i haven't been able to firm that up yet but that's something -- >> caps on withdrawals, essentially? >> yes. 50 euros. >> a colleague points out, if this is all true -- >> the ecb now? >> yes. sort of what they did in italy before burierlusconi left. then when he's out, step back in with a government more to your liking. >> the situation here is potentially much more dangerous and i would just add that today dragge came out and he said that he very strongly preferred that greece stay within the euro zone

because, of course, if they try to manage the exit, the ecb asked to come in and hold it together in some form. and that there will be a huge debate behind closed doors how you do that so you don't obliterate one part of europe or hold the firewalls up, intervene on spanish and italian debt. >> we need more clarity. >> i'm sure the ecb would like more clarity on the politicians. >> thank you very much. glad you're there today. speaking of which, sill vie owe spoke toer have man chancellor merckel and joins us from berlin with some of the highlights on that. sill via, good morning to you. >> good morning. certainly, it was meant to be an interview ahead of the g-8 summit and everybody was just talking about greece and euro and a couple of clear messages out there. about the ecb having a strong preference for greece staying inside the euro, the head of the euro group 3u9 it more

dramatically earlier this week saying we have an unshakable desire to keep greece inside the euro zone. chancellor merkle didn't put it dramatically but the gist was the same. we want to work for greece, staying inside the euro zone. but that must also mean if we have to help greece further, first of all, greece whoever might be our counterpart to talk to us when we have a new government must acknowledge that we have treaties, we have signed them, we have obligations. we want to meet them. even if we can't. if we can't maybe we could help you. this is what the chancellor said. >> all right. thank you very much. appreciate that. sylvia joining us in berlin with a heck of an interview of merkle today. >> i want to bring in bob pisani discussing the headlines and some bankers' responses this afternoon. >> we need to clarify this from the ecb.

you're not sure but my understanding is there's no shutting banks down or any of that going on. they're refunneling the risk exposure and perhaps now going to the greek central bank and deal with it rather than banks to the ecb. let's get some more clarification before we go out with that. one thing to get people excited in the united states, ge capital paying a dividend. why? dividends are hot. investors need some kind of dividend play. they need some kind of income. it's a rare dee seeing ge up more than 3.5%. announcement earlier than expected of a dividend from ge capital. and the fact that regulators approved it, generous one, very good sign for ge and regulators approving these kinds of increases. i have a lot of inquiries of where else for dividends. some of my favorite etfs hot with inflows this year. people need these. here's one. sdy. write this down. s&p dividend. a yield of 3.2%.

85 companies from the s&p 1500 increasing the dividends for at least 25 years. that's had a lot of inflows this year. 3.2%. the s&p below 2% right now. another one with a lot of inflows and etf of the past is the pff. this is the preferred. i shares preferred. 6% yield. preferred stocks. less volatile and the guarantee from the preferred is really important. these are 230 u.s. domestic preferred stocks. both getting a lot of inflows this year. by the way, dividends are at a record this year. thank you, ge. helping along. by the way, thank you, apple. here's the chart going back ten years of terms of billions. we'll get $282 billion in dividends paid from the s&p 500 this year. that is a record. it was going up for many years. this is a ten-year chart.

see what happened after 2008. they stopped paying the dividends. the bank stopped. now that's coming back and this year hitting a record. and yes, carl, i get the, oh, well, ap sl a cl is a contribut that. that's right. 30% of the ge capital to dividends. we need dividend. investors need income. breaking news and sending it to darren rovell with news on s ke chers. >> they will pay $40 million related to misleading advertising for their toning shoes. skechers shape-ups and other branded shoes they had out. this is the big rise to the toning shoe market emerged and became a billion-dollar market in 2010. we might remember reebok in

september of 2011 forced to pay $25 million. they stood by their claims. as does skechers today saying that while they will pay what will amount to about $50 million, they do say that they have vigorously denied the claims of the ftc. that 19 peer reviewed reports do say that these toning shoes actually do work and they will continue to sell them as for where the market goes, i spoke to adidas ceo and adidas owns reebok saying that the u.s. market is soft and worldwide these shoes still sell. carl, everything that kim kardashian endorses might not be perfectly truth willful but, again, skechers stands by the claim. >> good to note. a heck of a battle between the two sides. thank you very much. >> okay. straight ahead, heading to the windy city and rick is watching the important trades you need to know about.

that's next. first, the losers and winners of europe's trading day. dow up some 24 points. ♪ dave, i've downloaded a virus. yeah. ♪ dave, where are we on the new laptop? it's so slow! i'm calling dave. [ telephone rings ] [ male announcer ] in a small business, technology is all you. that's why you've got us. at the staples pc savings event, for a limited time get up to $200 off select computers. staples. that was easy. for a limited time get up to $200 off select computers. today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site.

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coming up on the halftime report live from the iris zone investment commerce where they're all sharing their latest big investment ideas. plus, whitney tilson tells us why he's buying more jc penney stock today as it tanks and finding opportunities as gold briefly touches a bear market low. lots to trade at the top of the hour. carl, see you in a few. >> from salt to the iris zone, can't wait to see it. let's get to rick santelli watching liquidity and the ecb. how apropos. >> absolutely. we have dan hessick today. let's start at the most recent topic. the story may have been reported wrong. listen, news media, the tape bombs with huge. at the heart of this story today, dan, is that money is leaving the greek banks. so why would the ecb put in

front or depositors or taking it, out the back door? >> it doesn't make sense. is it going in to the mattress? being in greece right now, i think the mattress. so, you know, it's one of these things and as far as the reporting of the story, as you said, the words are powerful. neither of the stories are good and one is way worse than the other and a six-point move in the market. but you know we are at that point where a little bit of news, one way or the other, pushes this market around a lot. >> absolutely. now, did we just learn something new today, though? no matter how that story was reported, the facts in many ways as we pointed out are accurate. is the ecb and all their liquidity provisions, have we now reached a point where we could see where that chain gets broken? in other words, they'll do everything they can to hold this together but ultimately whether it's through the ballot box or through a withdrawal slip, people in these countries are the final diviner whether this continues or not.

>> right now you have both of those aspects. you have the ballot box coming up in greece. who knows what will happen in france again? and the deposit withdrawals. they're having a big impact. more than anything. because there's no clarity on the issue, just playing havoc with the markets right now. we don't know what happens next. everybody assumes it's terrible. >> look at france. i don't have a degree in speaking french so i'll say hollande. you say hollande. in the end what moves markets or not is whether he and the socialist party have the nerve to put france in a scenario where they're at odds with the financing markets and the funding markets. i don't think he's going to do it. >> i'm with you 100%. we all know what politicians do to get in office. they make a lot of promises. we had a bunch in 2008. i haven't seen anything come through that's substantial. you see the same thing in france. they'll run the same course. talk nice about it. but i don't think you'll see much change at all. >> does that mean there's going to be a no-confidence vote

sooner rather than later in france? people voted for something and i don't think the politicians can deliver. this political cycle is going to also wear down the longevity of central bank strategy, is it snot. >> that's correct. not so much in france but in greece because if the greece citizens step back and saying, what's going on here? what do we really want? they might back off of their initial movement. >> to me, what goes on greece and the reforms and the promises made to greece really weren't for grus but for the other countries to fall in to that curve of more insolvency like spanish banks and potentially french banks. carl, back to you. >> rick, thank you very much. rick santelli in chicago. good insight on the ecb headlines. when we come back, now that thatsta-gram is the winner of sharing pictures, we'll talk to the ceo of one of the biggest players in the space.

when we go. i had three kids. and she became the full time mother of three. it was soccer, and ballet, and cheerleading, and baseball. those years were crazy. so, as we go into this next phase, you know, a big part of it for us is that there isn't anything on the schedule.

in the race to become the insta gram of videos an app is

gaining steam. recently nabbed a big seed round of funding of a who's who list of investors. since facebook highlighting the app, socialcam went to 50 million users today. socialcam's ceo joins us this morning from san francisco. michael, good to have you with us. good morning. >> thank you. great to be here. >> 50 million users. a list of angel investors that somebody said reads like the roster of the "avengers." are we at a moment where video is truly going mainstream? >> i think so. i think for the first time you have millions and millions, hundreds of millions 0 of people who have video cameras in the pockets for 15 hours a day and i think this is the time to make video really explode. and we're excited to make it happen. >> there seems to be a real debate of how it happens. competitors trying to convince people to make video in a different way or present it in a different way. and then there's probably a generation of user who is are

like, you know what? i don't know if i can do this. it's more complicated than photos. how do you fight that? >> well, i think that you're exactly right. it is more complicated than photos. mainstream for photos actually occurred decades ago. what we're looking to do is say, hey, 90% of the work is done. you have the device in the pocket. if we can make a product to make it really easy and fun to create videos, we get you over the hump. >> interesting. talk about what it's like to start something that's growing so quickly. i mean, my vision is that you come in to the office and thinking looked differently on a day-to-day basis. how do you keep up with it? >> it's hour by hour. most people don't know that we're actually a team of four people. three in san francisco. >> four people? >> yeah. so needless to say, not a lot of sleep over the past month. this is what you live for as start-ups and what everyone dreams about so it's really exciting and you don't get a lot of sleep. >> what's been your strategy in

terms of accepting funding, courting funding, how do you parse the people to want a piece of it and what's the long-term strategy in terms of approaching the markets like the one i'm sitting in now? >> we have been lucky in raising money before this whole thing happened so we have been laser focused on product and scaling. to be honest, we had to go from 15 servers to over 120 servers in the last 3 weeks and taken time and effort and probably a lot of e-mails in the inboxes not responded to yet. >> servers aren't cheap. >> no. but we're using amazon web services so it makes it easy for us to turn them on very quickly and, yeah, we are kind of taking it on the chin on the cost. >> 50 million users is a lot. people will always wonder about churn and that won't end no matter how successful you become. what is churn like? what's acceptable to you? what's unacceptable? >> so i think that the video creation cycle is longer than most people might think.

if people take a video once a week, we're happy. looking at the numbers of that perspective, things are going great. a lot of focus is how to drive people to install the application. essentially driving everything from web use and to mobile usage and once an application's on the phone, most people don't like to take it off very quickly. that's been very helpful for us. >> probably true. a big week for facebook. what's it like riding that train? what's your view on critics who say not just you but any company that rides that train is too reliant on facebook? >> well, i think once again it comes back to having our own application and driving people to install our own application. you know, facebook is probably one of the most powerful distribution mechanisms that exists but when it comes to products like ours, we're trying to get people to do slightly different and become creators and so we love the distribution but the work isn't done with people from facebook. >> michael, i have a feeling this isn't the last time we'll

speak. i hope you'll come back. >> thank you very much. >> out in san francisco. don't forget to send us your tweets. we mentioned facebook. reports that say that the company's looking for a woman to join the board. so, sheryl sandberg aside, who do you think is the perfect woman to join the boys of menlo park? cbssquawkst. we eat get your ideas after this break. ♪

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qualified candidate. aside from sheryl, who's the perfect woman to join the boys of menlo park on facebook's board? barbara kor koran. carli fiorina should be on the facebook's board. and kayly writes down hands down got to be oracle cfo safra catz. rick santelli with time to die yers the headlines of europe and look at the euro has and hasn't done over the past 24 hours. >> yeah. you know, it was a former trader, the first thing i think is very important is, when the euro dropped on that headline hitting the wires, it did not trade lower than it did at 3:00 in the morning. certainly it did violate 127. why is that important? it wasn't able to expand the range which tells me that much of what that headline depicted

whether you believe all of the facts or not is being and has been priced in the market. i'll tell you, carl. in my opinion, i think the chances of all of this holding together whether it's the people that share the currency, the people that just share part of the european union, i can't see how it's all going to hold together. because in the end, you can't make people do things they don't want to do and i think withdraw slips and ballot box is compelling and decisions they arrive at might not be the best for their country. >> yeah. you know, i know some argue, rick, if greece is going the leave then the euro wouldn't be catching a bid the way it has. >> well, and people ask me in a joking fashion for six months now, where's the wid mark trading? there's the lot of ways we hear about backup plans in italy, plans in many countries in europe. i think we need to be prepared and not surprised that these headlines are going to be probably on the tapes