>> welcome to "squawk box." andrew and becky are on assignment. let's bring you up to speed. face back's ipo expected to be priced after the market closes today. at the top its range, the company would be $104 billion. filing yesterday revealed that insiders were selling even more of their stock in the offering. more in a few minutes. spain auctioning medium term dead today. this is a major concern as economists say spain's borrowing costs are already close to becoming unsustainable. check out the spread. it's getting wider. and the "new york times" reports jpmorgan's trading rosss have surged surpassing the bank's initial $2 billion estimate by $1 billion. losses could double. but the process has happened

much faster has hedge will funds and other investors take advantage of bank's distress. >> rbc and credit suisse have put in potential mishl bids to buy the nonu.s. wealth management business of bank of america. a deal could be worth about $2 billion. boeing aims to save more than a billion dollars in capital spending. ambridge plans a pipeline expansion. the projects are aimed at moving western canada and north dakota oil to eastern refineries and eliminating costly bottlenecks in the midwest. joe. >> walmart set to post quarterly results before the bell. analysts looking for the retailer to earn 1 popt $4 a share. revenue of 110 bpt $5 billion.

ich been a big supporter of walmart. >> a big supporter of bribes. >> you're not going to bribe people it in mexico some anyway, gaming shares rising in after hours. and shares of c trip.com getting a boost. it provides travel services in it china and earnings beat estimates. red robin beat the street but revenue fell short. and one more stock, limited brands. shares fell after the forecast for the current quarter fell short of analyst expectations. looking for 18 points of up side support this morning. but that's before the claims

mum. liesman will here because of the claims number. >> i'm not really supposed to say anything until then i think. >> if you would just play along. >> i'll cooperate. >> you're talking right now. stop. you're talking. 8:30. 8:30. >> i don't -- >> 8:30. >> let's check out -- >> not going to say a thing. >> let's look at the oil board. we could make under 90 at some point. ten year is 1.78. i was going to ask you the all-time low, but then you would have to talk. >> i'm amazed it started this early. i thought usually there was a grace period. >> you started on me the other day. what was weird, i read the -- i

never had anyone tell me the view of american exceptionalism and in wikipedia, said by a neocon would -- no one sending me talking points. like with the joush al's editorial page, i don't have to -- people say you get your talking points. >> it's like a squawk thing. and it went to your bay owe. >> it did, a picture of me there. let's look at the dollar board. trying to get to perry by july 20 parity by july 20th. do you know what a hotel, if you add in the euro conversion and the v.a.t. and all the other stuff, unbelieverable. and if you buy any of the tiny bottles in the mini bar, forget it. can't possibly afford to go over will. >> about you can explain this, if the world is really ready to he said in a horrifying way when

greek exits, you would think people would be putting money into a safe haven. >> do you love poking the gold bugs? >> at 1900, they've fully -- >> higher. >> they fully thought, up from 200, and it's this little coin that you can't even eat it. or a bar. >> not a hershey bar, but a gold bar. >> you can't fire it, you can't eat it, you can't use it for anything. but i'm still buying. i don't know. i know the printing presses are on and there was a time when paper money you had to worry about it, but you're talking about the full faith and credit of a really prosperous country. >> i was thinking about this the other day and it struck me that people are still going to work and getting paid in dollars. they're still using those dollars to buy valuable goods and services. still able to go overseas and exchange your u.s. dollars for the currency of another country

with which you can buy valuable goods and services. so despite what's claimed, you have not had a tremendous depreciation of the actual economic value. >> to keep that going, people have to see that we appreciate that they still use the dollar and that we're prudent. >> what is the crisis right now? that we're spending too much, is that -- people say $15 trillion is completely out of context. what is $15 trillion relative to a $14 trillion or $15 trillion economy? it's another mum for a $1 trillion economy. it's a lesser mum for a -- >> a brush fire spreading across the country. >> there's a time to make

intelligent decisions. >> unfortunately, we look at europe and we kind of feel good about ourselves. we think we have time. we don't do something soon, not right now, but if we don't do something, we have two, five, ten -- >> i feel good. i look at europe and i say we have a great economic union here. >> despite best efforts. >> whatever you think about whatever's happened to the laws in this country the past three year, they are still laws that are beneficial to -- look he oxymoron in the world today. >> don't you think we're taking on a lot of the same attitudes

against economic freedom that europe embraced 30, 40 years ago and now they're paying the price? >> no, he doesn't. >> i think there is a step towards a little bit of the safety net, but the differential is 20% to 25%. >> the health care reform bill was a huge step toward europe. >> if you look at the top two headlines of the day, it is like a definition of an oxymoron. greece europe melting down, united states about to do an historic ipo. what could be more different. >> facebook would never happen in france the prospects of the proper different leading powers could not be more different. my favorite editorial of the day, the future is more than

facebo facebook. social media is passe. focused on transportation, energy and manufacturing. so we'll see. >> still a great nation. >> facebook going to help california. my daughter actually put a little in her blog about that. not going to save california, but it's going to offset some of the damage the moon beam governor is causing out there. but when you see all these guys selling all those, these are people that got in and wait a minute, did you say $119 billion? and they're saying, yeah, okay, i'm good. here. here. here. some day it may -- but they're more than willing to say okay i

think i'm good. >> so facebook is yesterday's news? >> if you were one of these early guys i'll tell you what, you play the russian guy. which will be so natural for you. you play that russian guy and you got in at a ten the of where it is. if they offer you 119 as the valuation, what do you say? >> da. >> exactly. [ speaking foreign language ] >> perfect segue for the global markets report. a little russian introduction. kelly evans is standing by in london. >> we've seen more axle rating losses. we did get decent headlines, spanish bond auction went off okay. japan came out with q1 growth

figures. 4% annualized rate. but still about a 7:2, 7:3 ratio of red to green here stoxx 600 down about 0.8% on the day. it people pulling their hone out of the third's biggest lender. shares down 30% on the day and on high volume, too. a quick look at what we've got going on. krm 40 down 0.9%. italy 0.7%. a quick look at bonds. again the spain auctions going off reasonably well. but the yield there there at 6.32%. if you want to talk about flight to safety, we're at .084%.

the question of whether the economy will be strong enough to keep yields at such low levels remains. euro against the sterling, aussie dollar a little bit stronger against the u.s. dollar. the euro a little weaker against the u.s. dollar. b of a saying a greek exit could bush that toward the 120 range. >> give ross our best. >> yeah, he's here. but i think so he was scared off by this headline in the guardian today which about i can just hold up, this is the guardian. $1 trillion. that's what it's printed here. and it says governments prepare for the worst as the massive cost of a greek euro exit campaign. not a pretty morning. >> that's only a trillion. i have a pieces of currency that's 100 trillion. i to. it is a printed piece of currency, $100 trillion. and it's worth 37 crepts.

not talking real money yet until you get up to 100 trillion. >> pretty telling that's on the front page of the guardian today. >> a lot of zeros. you can tell me he what that would be in scientific notation? >> yes, it's one times 10 to the 7th. 8th? >> 12th? >> i think it's 12th. >> i think billion would be 9. >> just the number of zeros before the -- >> very good. >> your math teacher is like, oh, god, i knew. thanks, kelly. >> it's facebook day. if you correctly count the number of times we pay facebook, you can go golfing with joe, fly fishing with me, or lunch to michelle. kayla tausche joins us with

more. >> should i talk about something else? >> no, facebook. facebook. facebook. >> even though joe might think it's passe -- >> i was just channeling the journal. >> i think what they're looking at is the flat form of the i6789 phone and what you can build for that. >> not the san fernando valley. >> silicon couple valleys. >> if joe kernen joins facebook, that's the top. >> and i have not. >> so even if you're not excited, there are certainly a lot of investors who are excited about the pricing today. 34 to 38 is still what we're looking at. still a legal possibility that we get a filing this morning. if they do decide to up side that range, certainly some investors do think that they might price above that around $39 or $40 a share. but of course that's always

something that underwriters test the market for. they ask big cornerstone investors would you buy at $39 to $40 and that gives the sense that they could price will, but they're taking the temperature of demand. sparse what facebook thinks as a company, they said in the s-1, we're not a company, we're a social utility. our goal is to connect the entire world. >> they said we're not a company. we're a social -- >> our purpose is not as a company, we are a social utility. >> you can't be both? >> apparently not. and tonight they're celebrating the pricing of the ipo by pricing a hack-a-thon which means that all the company's engineers will get together and all throughout the night just road on whatever project they like. the only qualification is that it has to be different from what they do in hair day job. they'll have deejays and food

and according to the note that we got, no executive interviews. so unclear whether that means tonight at the event when it starts or tomorrow when they ring the nasdaq bell. >> so for fewers who don't have a science degree, tell what coding is. >> it's basically building html, the back end of what you see on the front page of -- >> people probably don't know what that is either. but okay. >> i don't know how else to more simply describe it. all the numbers and letters that end up building all the websites that you know and love. and in the morning they'll ring the nasdaq bell remotely from menlo park headquarters. but apparently no executive interviews. so holding true to their principles, but i think a lot of people will be disappointed if

you're not hearing from the executive. >> takes new day. this is a great piece, though. you remember when microsoft came public, valuation $780 million. and they did have probably more going for them in terms of underpinnings and actual fundamental. and the thing that i think about is facebook was willing to give its currency for instragram which had 11 employees. no -- >> 13. >> okay then. but sort of saying i realize my currency probably is inflated and i know i'm inflating yours. but do you remember when aol got together with time warner, i forget what it was, you add the market caps of those two companies now and it's much more in line with normal metrics.

120 billion or something. >> and also a big outfit story, what were they wearing. they weren't wearing ties. all matching blue shirts. >> and about a transformational change. you're ready for facebook to go to 100 today and then 200 and -- >> i'm ready for it to be monday of next week. i feel like we're as xwilt itity as anybody of talking about this, but we have to because there is so much sbr in it. >> as we've been accused of hyping it, almost everyone has said it's totally overvalued. >> i think we've done a great job of not hyping it. >> you think you've done a great job, too, right? >> why wouldn't i. >> i think the problem is the run up to this is where the hype started getting built. last year when you saw goldman sachs do the private placement and then general atlantic partners a month later. and there was this explosive run up in valuation and reporting

last june that $100 billion or north of that is where they would go public. and then the market softened quite a bit. and i think that people are stepping away frommed story we were telling a year ago. but what they remember is the story of a year ago. >> two days before is low. somebody was mad at somebody. >> that was unfortunate timing. >> i think it was deliberate about that. >> that's what i mean. gm's old line, maybe they're jealous of new line businesses or something. but knowing how oversubscribed it is, it's almost impossible not to have a huge jump. >> i think what they're trying to do is make it a very measured jump. >> you you don't think it goes

to 70? >> trying to report the percentage that goes to retail investors because that's where the demand will get volatile. a lot of the institutions that are buying the underwriters are making sure that those institutions are holding for trooe to five years. retail allocation if it's up to 25%, even though that might be a standard%, still a big chunk of an $18 billion deal. a lot of money to float either way. >> there is a destination for all things facebook. >> which is cnbc. >> cnbc is your destination for all things facebook. >> and this afternoon a one hour special at 1:00 eastern. i have -- hosted by kacarl quintanil quintanilla. >> it's qui.

>> i have a piece in that one one hour special. i'll and you can about the economic value. >> but you'll be here. >> he'll be where it's happening. >> coming up, wel weekly jobles claims. they put in a siren. we'll talk about the numbers and what they tell us. but first, this morning's sports buzz. devils rallying past the rangers the series tied at one game each. it facebook. teachers get the training...a ...and support they need? schools flourish and students blossom. that's why programs like... ...the mickelson exxonmobil teachers academy... ...and astronaut sally ride's science academy are helping our educators improve student success in math and science. let's shoot for the stars. let's invest in our teachers and inspire our students.

let's solve this.

spain had a tough auction and we're ahead of weekly jobless claims right now. oh, no, it turn ed negative but not by much. 67 cent per share loss. revenue also beat consensus. domestic same store sales did fall, but the company continuing to focus on improving its core retail operations. >> coming up, the $100 billion question. does facebook ads, do they work. or is there a way to figure out how to make them work. we'll ask an industry insider

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[ male announcer ] the tight-turning, space-saving, eco-friendly smart. escape your stuff. ♪ welcome back for "squawk box." we're approaching 6:30 on the east coast. so if you're somewhere else, you have to adjust your time accordingly. i'm joe kernen along with

michelle caruso-cabrera. steve liesman is here. >> not talking, though. >> andrew and becky are off somewhere again. not together, might be together, but they're so assignment. can't talk about it. futures were up, then down, now up. so i do think in it this sort of environment, we do wait it for -- even though the claims number comes out every week, people are interested. we'll see whether we get much movement before it comes out because it is a big economic data day. >> what's the number for claims,

55, 57? >> is that it? >> that and he pretty much it today. philly fed at 10:00. >> what's the lei going to be? >> i didn't look it up. good you're ready to talk constantly but you don't have the lei. >> i'm not ready to talk constantly. ann said go. >> but will there's michelle and john. >> about i weren't interrup if joining us, michelle and john here now, michelle, i have no idea what to ask you. >> you're thrown off. >> let's talk about the economy. last thing i saw, economy mi mistists were marking down q

1rks but taking some of the growth they shaved off and put into q2. >> we have an economy agreeing close to around 2.5%. some periods better, some worse. but the truth of the matter is i don't think we can expect a whole lot more than that. no reason to expect that things have to get a lot worse. no glaring imbalances. we're making progress in areas like housing. but there's too many headwinds and too much uncertainty for the economy to really take off to the up side. so when things look good at the turn of the year, can't extrapolate that strength too far forward, and now that i think thises are looking less robust clearly, i think the risk here is is that people start to get too negative and too pessimistic. >> i'm worried that it's not a trend economy. i feel like if we're doing under two, we'll take some of that and put it at 2. >> even with 2.5% growth,

there's a lot of unhappy campers. we still have 5 million fewer jobs today than we did at the start of 2008. that's not good. and that reminds us that it was deceptive and largely consequence of people dropping out of the labor force because they give up looking for work. i think it's still quite soft. >> if i do a top line number, here's what i come up with. we're 5 million fewer workers, but real gdp is as high as it was back then. so that means the economy is a lot more productive back then. >> a period of below trend polling a period of above trend growth. i think we've gotten to the point where firms have taken all they can out of the current

workforce. the question is which company is really out there wanting to boost output significantly. i still think you have a lot of caution. when it comes to increasing capacity and investing, i think firms are still being cautious. >> what's your outlook for the next jobs number? >> we haven't done it yet, but i think the trend is probably 175, 180. like i said, i will do it today after the claims number, we'll sit down and look at some of the stuff. >> will this latest annualized sales rate of what is it 13 to 14 million units is well under

what it averaged prior to the crisis. we used on do 16.7 million per year. housing of course is a glaring example of how economic activity falls considerably short of what we were accustomed to during the past ten years. >> what's wrong with the economy? >> what's wrong with the economy? we're still struggling to try to get over the mistakes that we made 2002, 2006 with real estate. there's no out about that. how can consumer spending go anyplace when roughly a quarter of residential mortgages are under water. >> what did you hear yesterday from the federal reserve? >> the most significant thing, everyone is talking about how more people, several versus a couple, thought we might need more stimulus. but also the change in the schedule to me, now that they've made two day meetings for the rest of the year and also are having press conference, i think take gives the fed more

flexibility because i think that they prefer all else equal to make an announcement about qe-3 at a meeting with the press conference. >> real quickly, your take on the fed. >> you get qe-3 if the average increase falls below 100,000 and if the equity market loses another 10% to 15% in the high yield -- >> 2%, 2.5% inflation? >> i think you would. oil prices are sinking, so i think headline inflation is moving every 2% year over year. >> michelle, john, thank you very much. john, i'm done for another hour 45 minutes. >> really good. our other big story today, facebook's ipo expected to price after the close. social networking giant is a gateway for many companies to advertise. joining us with more on the marketing ecosystem of facebook, micha michael lazaro, now, is this

today this is happening? i hadn't heard that. can i call you buddy? >> sure, you can call me buddy or wheeatever you want. >> the big question we have, maybe you have some insight, what was gm's problem? do they have a point and does 900 million just overrule any worries that we have when you have that many eyeballs potentially to aggregate? >> yeah, the gm story is just a silly story. >> what are they mad about? >> it's stilly because it's like saying you're not advertising on tv every again in 1950. of course you'll advertise at some point. i think what they meant is that

right now doesn't fit into their media mix. but eventually obviously they'll be a very big partner to takes book as a lot of the other car companies are. >> so how do they do it, though? i was also making the point at 25 times sales and when you look at instragram, it's almost like they're ready to use some of hair currency. might be at a good price to use for other acquisitions. isn't that like exchanging a $10,000 cat for two $5,000 dogs? >>that -- >> remember how much aol paid for time warner or whoever you want to say was the acquirer? >> it's a much different deal. this is a very early industry.

so i think minor shifts in strategy today turn into huge issues. what if yahoo! had decided instead of a billion to buy facebook for 3 billion, right? people would have said at the time that's crazy. buying facebook for $3 billion back six years ago when they had 20 million people, but all of a sudden when you see facebook has eaten the lunch of yahoo! and yahoo!'s market cap has gone from 100 billion plus to wheres it is today, you can see that if you don't play offense and defense in it a world where consumers use achs and spread apps faster than ever, you potentially get eaten by the next generation of apps. and there's into one better at figuring out what people want today than mark zuckerberg. in terms of online. no one who has done more than mark zuckerberg. >> i don't feel like seeing him in another hoodie.

>> that's between you and him. but to talk about his direction is a diversion from the the fact that facebook is a really important company. it has a billion people on one platform. >> but it is going to be tough to monetize. >> it started monetizing four years ago and it's four billion in sales. so early in their efforts, but show me any country that's going from a zero to 4 billion that quickly -- >> where do you think it can trade for today? >> tomorrow when it kind of goes out, it will be a massive kind of spike obviously. 100% brand recognition worldwide. so what happens this week or the next three months doesn't really matter. if you buy facebook, you have to buy saying i'm going to own it for the next five, ten years. i think when you look at this many people, they'll figure out

advertising, but up like google and some internet companies, facebook already has a commerce business. they'll get into other verticals that make sense for their users. if they wanted to own the dating industry, if they wanted to tell you water for a dollar a week, it just shows up at your house, you'll get 5 million people to buy that. so i think it's the idea that it's a platform and a platform will find the business model that will work and you have to be patient because they're not going to ruin the user experience. so you have to be patient with the company. >> is this a train wreck so? are you going to come back a year from now and say i tould yu so? >> it no, after listening to

buzz buddy -- >> you're on board? >> i won't join, that could kill. >> are you not on facebook? >> no i'm not. i'm on twitter, though. >> you officially cannot talk about facebook if you're not on facebook. >> i should not be. you're right. >> sign up for facebook and then -- people want to connect. they want to feel loved. >> i don't want to connect. >> joe is doing the world a favor because the minute he joins, eithit's the the talk of stock. >> and i don't want to connect. >> there's another service where they don't connect with anybody, they just sign up and they don't connect with anybody. >> even in my role, someone has to die before they can even be my friend. a through z is full. >> well, i'm glad we cleared that up. >> thanks, buddy. >> his name is not really buddy. but a good name. >> any questions, e-mail us.

coming up, the view from the middle east. ceo will be here and brings us unique take on the crisis in europe%. facebook's mission is to make the world more open and connected. >> facebook. it's everywhere. it chanced the way we speak and keep in touch. it turned a small group of college friends into billionaires. >> pot first time ever in a single day, we have half a billion people use facebook. >> we're asking the key questions behind what may be the most important initial public offering of the decade including is facebook something you you should invest in. see how much the facebook founders will be worth tomorrow and see how koornt america is cashing in now. >> the story of your life. >> facebook, the social offering.

today at 1:00 p.m. eastern only on cnbc. on cnbc. recently, students from 31 countries took part in a science test. the top academic performers surprised some people. so did the country that came in 17th place. let's raise the bar and elevate our academic standards. let's do what's best for our students-by investing in our teachers. let's solve this.

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welcome back. ceo of doha bank joins us. you're running the bank in the middle east in the midst of a pnks crisis. the price of oil plummeting. what's your view of the world are from where you sit? >> we're in phase two of the global crisis. monday it taketary policy and f policy are not aligning. it that will have global impact.

>> you think the dissin take gra dissin take grace of europe is coming? >> absolutely. look it at the whole converge e convergence. it has global impact. european banks also want to -- you have a president obama. clearly u.s. dollar is a safe haven. that's why the dollar gets defeated. commodities falling down. it's phase two of the global financial crisis. that's a reality. >> does that mean negative growth in the united states? >> europe is in technical recession. even the last three years, what has changed apart from liquidity

risk. >> he said disintegration. i'm thinking depression. >> you and i started having this conversation yesterday write sort of said greece leaves the eurozone and the world keeps spinning. but you started saying that means that portugal and others just fall. is that the domino theory of monday it taker currency? >> two options. deficit financing, bring the discipline up you find the currency and rebalance the economies. that's one option. option number two is to say, s yes, we'll go back to -- these are the options. you have to come to terms. there's no point -- there's the

possibility of greece exit. >> i would assume your whole world is driven by the price of oil. am i overstating it? >> we are stepping into diver l oil. >> they are running a fiscal surplus. but the banks are well capitalized. again, well driven by public/private partnership models. they're doing well. >> we've seen some reports as european banks have stepped back, u.s. banks have moved in. have you seen u.s. banks in your part of the world taking pieces of trade financing? has this been beneficial to banks? >> the balance of trade is

moving in the right direction. it's soared $100 billion, investment in sovereign funds are getting pulled back. it's a safer bet every day. we are in positive collaborations with the united states. >> thanks so much for coming on. >> pleasure. >> good to see you this morning. >> thank you. >> coming up, quarterly results from walmart. will it say anything about the mexican scandal? find out at the top of the hour. who have used androgel 1%,

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don't move because quarterly results from dow component walmart coming right up. plus the ipo of a generation. facebook set to price after the bell. and our guest host will put the hype into perspective. we're going to welcome wharton finance professor jeremy segal. hello, professor. facebook, it's everywhere. >> facebook. >> facebook fever is going on. >> it helped spur a revolution half a world away. it changed the way we speak and keep in touch. it turned a small group of college friends into billionaires. >> for the first time ever in asongle day we have half a billion people use facebook.

>> in this cnbc special we're asking the key questions what may be important public offering of the decade. including is facebook something you should invest of and see how corporate america is cashing in now. i went to a small high school. the teacher that comes to mind for me is my high school math teacher, dr. gilmore.

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with a squawk master. wharton professor and money man jeremy segal will provide wisdom. >> and could a big bet gone

wrong spell the end of wall street's risky base. steve bartlett weighs in. >> and walmart's report. what the numbers could mean for investors and the retail sector. the second hour of "squawk box" starts right now. ♪ i'm waiting for my moment to come ♪ good morning. welcome to "squawk box" here on cnbc. i'm michelle caruso-cabrera along with joe kernen and steve liesman. andrew and becky are on assignment. home foreclosures fell 7% in april from the prior month and 26% from a year earlier. reality track.

ceo jamie dimon says jopmorgan' losses could double offer the next two quarters. the senate is expected to confirm president obama's two nominees for vacant federal reserve board positions, which would leave the fed with no vacant positions for the first time since 2006. the futures are expecting a flat open. doesn't forget, we're waiting for weekly jobless claims. >> i'm waiting because that's when joe kernen and i can talk. facebook set to become the biggest internet ipo ever. after years of planning the public offering, today's the day it all comes together. who better to bring it together than cnbc's kayla. she joins us with all the moving parts. >> with 900 million users, 125

billion friendships, facebook would see pretty staggering. this historic ipo is no exception. the social giant planning to sell 421 million shares to the public. that's less than half of those the company is essentially creating for this offering. the other batch is from insiders and other investors who already owned a portion of the company. everyone is on track to wake up tomorrow worth about just about $16 billion more than they have at the mid point of the range. with a deal this big, though, facebook has enlisted an army of 33 banks to make sure there are no foul-ups. morgan stanley is running the show. each bank distribute a portion of the offering to their clients and cash in on millions in fees in the process. the ipo process doesn't stop tomorrow. bankers will have 30-day window to sell another 63 million facebook shares as part of

what's called an overallotment. it's designed to give the process a bit of a buffer. they can earn an additional $2.4 billion in proceeds. over the past ten days an army of salespeople from facebook bankers have been talking to buyers management and bankers are set to notice the final price after the bell on what can be a tense and high stakes meetings the minds. the challenge is maximizing value while making sure to leave a little pent-up demand, ensuring a positive perception. the public is on track to on just about 16% of facebook, even though it would be about an $18.5 billion offering at the top, that's 16% of facebook. >> thanks very much. joe, you got walmart? >> it's $1.09, which is above estimates of $1.05.

the company sees second quarter net of $1.13 to $1.18. the estimates are the $1.16. sales rose 8.6% to $112 billion. u.s. comp store sales rose 2.6% in the period. that was above guidance. positive comp store growth was also above guidance to the company. will the me get a quick look at where walmart is indicated. it april peers to be trading higher. >> the u.s. same-store sales excluding fuel up 3%. >> somebody's got to make the joke. >> no. this is excluding bribes. i already said that earlier. i only use my jokes once, although they want me to start doing it twice, like at 7:00

because people are new. >> pretty good joke. >> you like it. you're ready to throw them under the bus and all million jobs they employ in this country. >> latin american people -- >> are you also in favor of bribes, michelle? >> when in rome, when in rome. >> this is the portion position you're staking out? >> no, no. >> what we call a bribe in english down in mexico in span, is something totally business. it's the cost of doing business down in mexico. >> what is it, a happy payment? >> happy ending. >> everything from ipo to jpmorgan it's a great day to have jeremy segal, wharton professor. we want to talk about facebook. if you live long enough, you see a lot of things. what is the key metric?

it's probably not the 4d billion in current revenue because it's going to be a $100 billion valuation. is it the 900 billion users? >> yeah. that's what it is, although i heard your last guest say this is an ipo for -- maybe the long term for five years. unfortunately the research i've done is long term holdings of ipo is not a good investment. it's very much like a lottery ticket. one or two big winners, hundreds of losers, even a lot that were hyped at the beginning. and, you know, sometimes you can enjoy the pop, if you get an allocation where people can't get an allocation, a short-term gain but long-term performance of ipos is not good. >> a lot of the people selling are keeping a lot, too. should we read anything into the 25% bump?

share holders? >> yeah. i rather what happened with google. you're talking about larry page stiffing wall street and people -- >> they did a dutch auction. >> they did a dutch auction and all the rest. didn't kleiner perkins withdraw their share allocation because they thought it was too low? you got the smart money saying this ipo is going too low, and they were right. we see the opposite with facebook. we see inside investors increasing their sale amount, the overallotment percentage. it seems very, very different. google was very, very special in the sense it kept stiffing wall street and then it was straight up from there. >> i remember sam zell with that move he made in 2007 -- >> equity.

>> he said i didn't know what it was worth. he said they came to me answered saw this number and i never thought in my lifetime i'd see a number like that. some of these guys that got in early on facebook and it didn't seem that early for the russian guy. but they say $118 billion and they say sold. they say i don't know what happens here but that's a good price to start with. >> you've never had an ipo where, you know, half the world or half the internet connected world already belongs to and uses to some extent. i mean that, is unprecedented. >> they're saying we don't know -- maybe we're not gm, the story they didn't get any bang for the buck with their advertising. you're supposed to trust them when you say we don't know how this is going to work out with monetizing. >> that's different can google,

too. google had already figured it out. it was already the plan on how to expand it. as i said, i don't do individual stocks so i don't do windows but i do follow and, i mean, again i see the big differences between when google went ipo and when facebook was an ipo. individual investors, you know, it's really -- unless you like to play lottery, this is a risky proposition. >> who is the guest you had on the other day, the private equity guy who founded staples who said i'm into facebook because i think of all the big brand names that we know and you should have been in them at their greatest growth periods and that's just such a simple and compelling idea. >> sometimes the biggest brand names don't become -- remember netscape and mosaic. i mean, aol was everything back

then. what becomes big brand names get swallowed up by something else. >> the ipo price itself, 38 or whatever, that's already taken up to like we said $16 billion more than people had yesterday but then the 38, nobody's going to be able -- none of our viewers are going to be able to buy at 38. they're going to be buying at 58, 78. who knows. >> probably not that big. >> 50? >> when you're getting up to a hundred billion as a company -- when you had the small ipos in 1999, you often got 200% jumps. >> your decision isn't the 38 -- >> no. >> the research that i've seen shows that date after these ipos, especially the big ones, tend to be market performers. there's no huge up side and not a lot of done side.

however, when it comes to the smaller ipos, that's where they're taking your money. and danger here is that you as a retail investor are out there essentially serving as the cash-out mechanism as in the stooge for the savvy venture capitalist. what do we normally see here? is it the initial investor who gets the better of the deal or does the retail investors? >> when you see the insiders increase the amount they want to sell, that's a signal they want to cash out. in google you saw the insiders withdraw the amount they wanted to sell. that's a sign they think the value is high. >> they're willing to take 38. you're going to have to pay 58. >>that's right. first of all, the liquidity is incredible. you get a lot of people who want to trade it. you get a lot of people into the ipos for day or an hour or less

just to trade on it. >> this is not the average. >> this is huge. >> microsoft's initial valuation was 780 million so it was able to go to 100 billion. to have the same kind of appreciation over time it has to go to -- what's 100 times 100 billion? is it 10 trillion? >> that's right. >> to have the same up side. >> and exxon mobil is -- >> apple is bigger than exxon. >> let's talk about jpmorgan and this company and what it tells you about, a, how much we have and haven't done in terms of financial regulation and what's going on inside with corporate controls? >> i think these are two different matters, steve. jpmorgan was stood up as the paragon of risk control and jamie dimon and all the rest.

you question about the risk control and that's looking at jpmorgan stock and what you should value at. a completely different question, which so many people are asking, are the regulatory implications of what happened on jpmorgan. here i think so many of the pundits have it completely wrong. it is 100% different than what we saw in 2008 in terms of the risks that were bearing down on the banking system, investment banking system. you know, i just don't see how a $2 billion or $3 billion loss, oh, my gosh, this needs more regulation. >> you know how washington thinks. they have depositor money and they're gambling with it. >> they should be making subprime home equity loans, as if those aren't riskier than most of the other investments. >> solyndra.

i think maybe a nice billion in solyndra. >> you were saying levin was demagoguing this issue? >> yeah. >> i think you're exactly right. i looked up what was in the statuary language and what was in the language that the fed put forward. the exception for portfolio hedging was in the statute. i think they took what congress gave them. >> you're actually backing up like an incendiary term with facts? i try not to let those get in the way with me. i called him a demagogue before i had any evidence. >> when you write about demagoguing and you're wrong about walmart and bribery -- >> the ends justify the means is not a good thing to live by but in 1% -- there's moral ambiguity in the world because the world is not perfect. >> that's true, that's true.

>> the world is not perfect. i'll be interested to talk to jeremy siegel. what the hell do you do in mexico, or in china or eindia? >> people want us to reform the entire culture. >> it's not going my way so i'm going to go to the tease now. e-mail us as squawk@cnbc.com. tack a look at the walmart bid/ask right now. walmart is up next. >> facebook's mission is to make the world more open and connected. >> facebook, it's everywhere. >> facebook fever is going on. >> it helped spur a revolution half a world away. it changed the way we speak and keep in touch. it turned a small group of college friends into billionaires. >> for the first time ever in a single day we have half a

billion people use facebook. >> in this cnbc special, we're asking the key questions behind what may be the most important public offering of the decade, including is facebook something you should invest in. see how much the facebook founders will be worth tomorrow and see how corporate america is cashing in now. >> it's the story your life. >> facebook, the social offering, today at 1:00 p.m. eastern, only on cnbc. [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. ♪ ha ha! 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, and the storybook narrator...

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walmart making some comments about the bribery scandal in mexico. this is on the call. they said they have been informed by the department of justice and fcc they are being investigated. they do not presently believe these matters will have a material adverse effect on its businesses and they are in the early stages of assessing and responding to the governmental investigations and shareholder lawsuits and they can provide no assurance that these matters will not be material to its business in the future. let's talk more about at that

and also the earnings. joe feldman is here with more. your initial reaction to the alleged bribery scandal in mexico money. >> no surprise there. you would expect them to address and and i think it will take some time before we get the exact answers and the impact of it. >> with the numbers coming in better than expected. what do you think about their guidance? >> all good. the walmart same-store sales number was a 2.6, the street was expecting about a 1.5. so really good numbers there. the guidance is very good, brackets consensus actually goes a little bit above, they don't often do that. it's nice to see they're feeling very good about the momentum in the business. >> let's bring the two together. we're talking about the earnings and about the alleged bribery scandal. how do you model in any potential effects, possible fines in the future, what about

the possible ouster of executives? what do you say about that when you're thinking about how to recommend the stock? >> right now we're just trying to look at the core business they have here, u.s., international, sam's club and it has been trending better and it makes us feel comfortable when the stock. i think the corruption practices investigation is going to take some time. it unclear that executives will lose their jobs just yet and if there were some to lose their jobs, they have a deep bench. they're very good at highlighting some of the management team around the world and they really put them on display. and as for fines, again, it's really uncertain what it will mean. and i think we're just going to have to wait and see. these kind of things take a long time to resolve. >> you're recommending the stock and at what price do you think it goes to in. >> we do like it. we have a price target of 65 to 67 on it, 12-month price target.

we see more up side. >> thanks, joe. thanks for joining us. >> thank you. >> the white house putting pressure on republicans to end their opposition to tighter regulation of the banking sector. we're going to hear from former congressman and head of the financial services round table steve bartlett. later we'll introduce you to mr. ipo, his view on the facebook ipo still ate. -- still ahead. ♪ ♪ why do you whisper, green grass? ♪ [ all ] shh! ♪ why tell the trees what ain't so? ♪ [ male announcer ] dow solutions use vibration reduction technology to help reduce track noise so trains move quieter through urban areas all over the world. together, the elements of science

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see how huge our newsroom is. welcome back to "squawk box." among the stories we are following, this morning walmart reporting earnings of $1.09 a

share for the first quarter, 5 cents above estimates. the company saying the justice department and the fcc are investigating. it can't provide assurances that will still be the case in the future. facebook set to price its ipo tonight and begin trading tomorrow. believe it or not, there are other ipos in the news, they're smaller. blooming brands, the parent of outback steak house is increasing its offer to 365 million. and kayak is planning an ipo. joe. >> thank, michelle. chief deputy majority whip peter

roskam is hosting a business round table today to discuss pending tax hikes facing corporate america. joining us from washington, congressman roskam and paul farr, cfo of ppl. how much of the talk today will be about the cliff at the end of the year, congressman? >> well, i think that's a looming sort of damocles that was over the economy and the leaders in the capital will folk news on exactly that issue. if there's no, a if there's no intervening initiative here, those tax rates are going to go up and going to go up dramatically. so today we're going to be focusing in highlighting capital gains rates, the impact on the economy and why we should work strenuously to keep them as low as possible. >> right now if nothing is done, what happens to cap gangs and dividends? >> well, caps began goes -- they

both just jump tremendously and it's very, very interesting because you look at how this is -- how this has an adverse impact on folks that are filing at less than $100,000, the folks that are claiming a capital gains are actually at 60% of taxpayers are at that number. so we've got to focus in and make sure that we're doing everything that we can for the economy to be robust and dynamic and moving forward and not doing any harm. >> is the point of this to try to have something done by the end of the year on the fiscal cliff or overall tax reform, congressman? >> well, i think it's a two-step dance. i think there is a long-term desire to do overall tax reform without question, but in the meantime we've got to make sure these rates don't go up at the end of this year. i think speaker boehner has laid out a plan and a pathway to be

taking this up next year in a very thoughtful way, but leaders like paul i think have a lot to say about this because it's having an impact on the capital deployment decisions they're making right now. >> is that true, mr. farr? >> absolutely. this is a very unfortunate time for a tax issue like this to come up because our sector has the capability to be very meaningfully additive to the economic recovery. we're forecast as a sector to spend closed to a trillion dollars over the next ten years. this tax increase will affect the cost of capital we're going to raise and, second, it has the capability to change materially the way we decide to return capital to share owners. to the extent the tax rates double as they're forecast to do, i think this isn't an issue that affects people who make $250,000 a year or more. it companies return capital by paying lower levels of dividends

because we picked a winner in returning capital via stock buybacks and cap gains, then that affects all dividend recipients. >> as far as ppl goes, what's more important, the end of the year or just overall tax reform? you'd like to see a two-step process as well? >> i think the practical reality is that it will be a two-step process. i think it's a mistake to make a singular decision on taxes and parity with capital gains and not address those in the context of overall tax reform. uncertainty isn't got outright but it would be nice to see those fixed jointly. we'd like to see an extension of the current situation for a meaningful time, keep the rates where they are today, leave them at a minimum in parity with each other and then address things on a broader, total reform basis down the road. >> i think what you're saying is -- what i'm hearing is that

waiting till the next congress to really get down to business, that would require some sort of an extension of the current rates at least sometime into next year. do you think that that's a possibility looking forward? because i think that if there's no resolution at all, that fiscal cliff on january 1st is going to scare the stock market, it going to scare the banks, it's going to scare the consumer and investors and firms. >> look, there's no question that it's a good, strong possibility and that's what we're advocating for today. as paul made the point, if you extend these rates for a meaningful period of time but then don't give up on the momentum. look, there's nobody that can defend the status quo of the tax code in its entirety today. there's a real opportunity for to us come together as a country and to come and say what we need is a tax code that makes the united states the most

competitive tax jurisdiction in the world. and we've got all kinds of momentum behind that. the house ways and means committee over the past 18 months have held dozens and dozens of hearings to lay the record. if you had to distill it down into one word, it is the word competitiveness. to paul's point, if you extend these for meaningful period and drive ford for a comprehensive agenda, it's where the overwhelming majority of americans want to see us going and that's what we're advocating today. >> we've got this fiscal cliff and now we've got speaker boehner talking about not raising the debt ceiling, that's going to be at the end of the year, too. we're setting ourselves up for some real fireworks here. isn't it all king off november, congressman roskam? i heard someone say once that's what elections are for. isn't that a what's coming up? we're not going to decide how to do anything of these things

since both sides are so entrenched to both of these things. it's going to take an election. >> the irony is the same independent voters sent two different viewers of the world. in 2008 they sent president obama, in 2010 they sent a check-and-balance congress that said, hey, slow that stuff down. to your point that has to be reconciled and it will be because the status quo is completely unacceptable. whoever has the momentum coming out of november is going to be driving the agenda next year. i for one say let's make sure these rates don't go up, let's move very quickly into a tax reform agenda that's comprehensive. i think based on what i'm hearing from my district in suburban chicago, that's what the lion's share of my folks want to see us moving. >> congressman, do you hear anything about the supreme court and obama? do you know anything we don't

know? it can happen any monday or could it be june? >> it could happen any time nine justices decide they want to release that opinion. the house has been meeting and anticipating various move. either they uphold the whole law, strike it all down or strike down parts it have and the house it poised to move forward on that basis. i don't have any more information than you do. we're all waiting for white smoke to come out of the chimney across the street and we'll see what happens. >> the big piece in the journal today -- there's 29 states challenging it and they're not moving at all. they're dragging their feet on implementing any of the exchanges and now the white house is trying to get involved to make it advantageous. they're assuming it going to get thrown out. do you think it's going to get thrown out? >> i sat in on one of the

hearings. it's dangerous to speculate what the justices may be doing. it almost inconceivable based on the questions and answers that this were going to give it its unbridaled imprimatur. that's my predictions. >> the reaction by the president, the next day or the day after with the lecturing of these guys, i think they were worried, too. we'll see. >> i hope he doesn't go that admonish route. they're a co-equal branch of government, they're doing their job and i'm sure that the opinion that he-they issue wille support of folks -- >> to get into the business of evaluating legislation, for the supreme court that sounds crazy. >> that's what they do. they call balls and strikes. >> i know. marbury-madison. it only been since 1802-1803.

>> that was a great baseball game. >> mr. farr, you can talk about health care, too. you can deal with what as well. i decided i'd go with the legislature. coming up, we're going to introduce to you mr. ipo. you're going o do thto do that . >> i know. >> we'll get his view on facebook's valuation. as we head to break, check out this clip in 2004. it's a very rare interview with mark zuckerberg by our own becky quick. >> what is the facebook exactly? >> it's an online directory that connects people through colleges and you sign on and answer questions about yourself and enter information such as your concentration and major at school, contact information

about phone numbers, instant messaging, anything you want to tell, interests, what books you look, movies, and most importantly who your friends are. are. right when you see them, they're yours, it's like, ah, it's part of me. it's me again. now that i'm retiring they all have plans for me. i'm excited.

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♪ la la la [ man ] whoops, forgot one... [ male announcer ] sustainable solutions. fedex. solutions that matter. how math and science kind of makes the world work. in high school, i had a physics teacher by the name of mr. davies. he made physics more than theoretical, he made it real for me. we built a guitar, we did things with electronics and mother boards. that's where the interest in engineering came from. so now, as an engineer, i have a career that speaks to that passion. thank you, mr. davies. we want to show you what's

going on with european markets this morning. there's a situation in spain we're going to show you. we've seen weakness there. the spanish finance minister has had to come out and say reports about deposits being withdrawn from a bank are not true. you can see the span inindex is lower by 2.8%. intra day with the euro, that's a one year, 1.26 is where it is. it's slightly lower but not a huge move intra day. >> look at that support back there, michelle. >> you're right. weep a we are right there at that support level. >> good eye, joe. >> you know i'm going -- i'm interested in this in july. 1.15 would be good. >> you going to plan to go to europe? >> yeah. >> let's move on. we're going to keep you up to

date on what's going on with spain. programming note, cnbc's special coverage of facebook's price and ipo begins today. facebook, the social offering, today 1:00 p.m. eastern time hosted by carl quintanilla. you don't want to miss it. >> let's go to steve. i want to get to the bottom of one thing. did the regulations that were put out by the regulatory agencies in response to the volcker rule when it comes to portfolio hedging, did they follow the congressional language or did they stray from the congressional language? >> i wish could i give you a clear answer. one of the problems is that the

statuary language is so vague and broad and in that sense the rgtory language followed that, quite complex, hard to understand and there's a controversy all over new york and washington as to what it means. that's one of the underlying problems here is that the rules, the statutes and the regulations are way too complex. some point in the next 12 months we need to figure out way to simplify it. >> where does the industry stand with opposed to the rule? >> we think there is and could be strengthened a prohibition of using depositor funds against trading. in the sense that the volcker rule goes beyond that, forbes, to prohibit hedging, that would create a much riskier system. we don't know that it prohibits hedging, that's the problem, it's that it's way too

complicated. hedging your risk is managing ris ng and reducing risk. it an essential part of not just the financial services industry but all injuries that deal with money. hedging needs to be encouraged, managed to be sure but not prohibited. >> the situation is so uncertain that even the questions are unclear. but i have to ask, the implication, though, is that in this case a bank was hedging and got in trouble because of its hedging. so how do you come back and argue that hedging is part of the solution, part of our risk mitigating technique? >> well, in this case the industry is strong, well man pajed and hjing is a pa-- manag part of the system. one institution found a mistake, and paid for it.

you learn from that and move forward in a better way. that's what is happening and what should happen and there's been -- every commentator in america has tried to use this one incident at a way of proving a case that they reached some years ago. >> nobody seems to understand that often times hedges will lose money because they're a hedge, whatever they're offsetting might be doing quite well. but it doesn't seem like that point has been well articulated by people in the industry. >> by definition. there was one very well managed company obviously that made a mistake and the hedge went against them and then they paid for it. so that's really all it was. the industry itself is safer by all cots is safer and sounder and stronger today than at any time before the precrisis and is able to handle this. >> what about the taxpayer? is the taxpayer now more insulated, less insulated or

unchanged insulated given the too big to fail prospect in the dodd-frank bill? >> too big to fail is over. doubling the size of the call tap cushions that are required, that may increase some more, dramatic reduction of of the risky activities and the new living wills where you preposition where your risks are. if a large institution were to fail now, the large institutions would fail, taxpayers would not be at risks regulators would unwind that large institution and move forward. we've achieved that at least theoretically. that's the big news is that the taxpayers are not at risk, were not at risk and in fact the system is now stronger. >> could you make an argument, steve that, if the liquidation provision, which is what you were referencing before is something that could work and if the capital buffers are higher,

then the volcker rule would become less important. you could go ahead and gamble because at the end of the day the equity is going to take that loss. >> the volcker rule -- the problem with the volcker rule is it's way more complex than anyone in washington or new york or i dare say on squawk has been able to understand so far. but that's because of its own complexity. so the volcker rule needs to be dramatically simplified and sort of set out to rifle shod on what it was designed to achieve. that's not going to happen in this context. everyone in washington is using this circumstance and the volcker rule itself o make their own case they decided ten years ago. these are fights that have been going back to 1934. >> thank you very much. i want to align myself with him and his criticism and dodd frank is a good-and-bad thing, it's not an all bad thung and it's not an all good thing. i think that's the way we should

approach the discussion. >>ism agree. there are few good things in the dodd-frank, the living well steve pointed out. >> and the resolution. >> it seems the soaker rule, this fixation, the financial crisis 2008 did not start in the commercial banks at all. >> or in derivatives. >> or in derivatives at all. >> coming up, canadian rail's ceo. romney supporter tim pawlenty will join us.

believe me, joe, you're the guy on every day. >> it is me. >> let's take a look at some stocks to watch this morning. i think the most important one, and we really shouldn't be talking about anything but facebook at this point, i think like we do on fridays, steve, do you think you want to -- what's your work showing? >> on? >> where is it going to open and where will it be in six months? >> the stock market? >> facebook. >> facebook. i don't have any work on facebook, joe. i'm interested in your question about whether or not this is a train wreck about to happen or some great, you know, place to get in on the floor. i have no work on this. >> that's when hindsight is so

good. >> i want -- if you were up calling your clients today, would you say, hey, i got a nice allotment for you, buddy? >> do you remember google, how really skeptical everyone was at $80? is this similar or opposite? >> wall street was upset that they were doing dutch auction and they leaked all these stories about how badly it was going to go. >> i'm amazed at the valuation but i'm mazed at a company that can reach 900 million people if it wants to put an ad out there. >> check out canadian pacific. this is a knockout punch by ackman. the ceo has bailed immediately after it became clear they were going to lose that proxy fight. >> that apparently is how you run a railroad. >> and i guess the other guy is

going to -- we'll see if bill can put the other guy in. do you know who this is? >> no, i don't. >> the wombats. >> coming up, walmart and the state of the consumer next. >> if you're just tuning in, you're two hours too late. >> i think the trend is probably around 180, 175, 180. better than we saw in april, not as good as what we saw around the turn of the year. >> the market is vulnerable. i think it's still quite soft. >> if you guy bbuy facebook you to buy it saying i'm going to own it for the next five to ten years. >> it's $1.13 to $1.18.

>> jpmorgan was stood up as the paragon of risk control and i just don't see how a $2 billion or $3 billion loss, oh, my god, this means we need more regulation. >> the rules, the statute and the regulations are way too complex. at some point in the next 12 months we need to figure out a way to simplify and make things a lot clearer. if you made a list of countries from around the world... ...with the best math scores.

...the united states would be on that list. in 25th place. let's raise academic standards across the nation. let's get back to the head of the class. let's solve this.

shopping for the real stories on the economy. >> it's $1.09, above estimates of $1.05. >> what walmart results tell us about the health of the company and the world. >> and they call him mr. ipo. we'll talk to the man who advised google about its dutch objection on its ipo strategy. >> and weekly jobless claims number due at 8:00 a.m. eastern. the third hour of "squawk box" begins right now. ♪ >> welcome back to "squawk box" here on cnbc, first in business

worldwide. i'm joe kernen along with michelle caruso-cabrera and steve liesman. our guest host is wharton professor, really an icon, jeremy siegel. >> good to be here. >> we are waiting for the jobless claims number, down 21. been all over the place. a very small percentage move across the board. making headlines, spain's auctioning medium term debt today, the country paying sharply higher yields. economists say spaen as borrowing costs are already close to becoming unsustainable. the "new york times" sports jpmorgan's losses have surged in recent days, passing the $2 billion estimate by a billion, 50%. the process happened much faster as investors are hit hard. when you become the market, it a problem. >> everybody knows the position, they gun right for you.

>> and walmart reported better than expected earnings and revenue the last hour. the justice department and fec are investigating. more on walmarta minute. >> right now in fact. joining us is rob carole. lady and gentleman, good to see you this morning. were the initial numbers as good as you expected? >> much better. the comp was up 2.6%, much better than guidance of flat to 2%. and most importantly the ticket continued to recover so that's the leg of the story everybody was looking for. so the bribery scandal is front

and center. >> rob is this enough to overcome we saw as a result of the scandal? >> it should be. we have done work quantifying and walmart overstepped that. with the 2.6% comp number and the ticket being positive is meaningful to traffic. it's really their investments in pricing are driving more people into the store. fcpa stands for the foreign corrupt processing act. help us have a framework for a way to think about what the impact could be for this investigation. >> we're working on a study that some academic himself done quantifying all of the 115 prior fcwa actions. if you look at what it's done to the public stock price, the average correction for all has

been 8% to 9%, and that's cumulative day where there's new information released. if you look at the end of the week when the "new york times" allegation himself surfaced, walmart was legging the market by about 8 points. while every other stock had seen that 9% cumulative design, walmart had seen it all in 3w7 2 hours. that average decline only goes about 3%, 4%. the reality is the stock is corrected, now we move on. >> the ceo said they don't believe the matter will have a material adverse effect on the business and they same time they can't provide assurances these matters will not be material to the business in the future. house of representatives do you model this? what do do you with it? >> that's a pretty broad disclosure statement there. >> you could drive a truck through it. >> you have to plan for the

worst case scenario. if you look at previous cases and see charges less than a billion in the worst case, you look at walmart's profitability and say let's focus on same-store sales moving in the right direction. they're getting the consumer back. >> there's no interest in this. you keep hammering -- you look at same-store sales -- you've moved beyond this already, haven't you? >> that's why i didn't start with this at the beginning. it wasn't my first question. i feel compelled to ask, though. >> you're not philosopher but if we wanted the fcpa to really have teeth, what should we -- it's almost like we have this law, we know it's there but it's never really had teeth which penalizes companies for doing this. it's almost like we're looking the other way, right? what's the maximum that can happen from this and do we really want to enforce it to the maximum extent of of the law? >> i think that's a good point. we have been looking the other

way because the reality is that's the way business is done in mexico. so the question is how far will they go? >> and you talk about shareholders and the great homer jenkins piece about the moral ambiguity facing shareholders. is there any shareholder that looks at one what an unbelievable beacon of growth mexico has been. it's been the success story of walmart. is there a share holder that would go back and reverse all that? >> if you ask whether there are shareholders who care -- >> oh, there you go with your high mind again. >> even the accusations put forth by the "new york times," the dollar amounts involved are -- >> that's not going to matter to steve. if it was $1 of bribes, steve would be high minded about this.

>> walmart takes a very aggressive stance. >> that's what we you a say with a wink and a nod. >> and where does it stop, mark? >> it stops at our corporation -- it stops at our corporations being truly domestic corporations because we won't be able to go to india, china, mexico, malaysia. >> and companies should go over and pay bribes to do whatever to make money, right? >> the laws of foreign lands should apply. >> they're exceptional. >> you're exceptionally thick about this. >> they did do it. >> you say you're right and you're smug about it. you're not smug on this one. >> they did do it and the stock is back to where it was. >> that's fine, that's fine. >> you wanted to get a word in edgewise, stacy? >> because the stock is back to where it was doesn't -- >> i just wanted to point out quickly and more importantly the

consumer doesn't care. you polled the consumer and they don't care. >> in mexico. i'll tell you, there's all these negative reports in mexico just like here in the united states, it destroying the mom and pop business, on and on and on and on yet mexican consumers vote with their feet. they love, wow, there's a parking lot, there's a place to put my car, wow. it air conditioned, wow. it's clean. it's changed the consumer experience tremendously. do you know what they call walmart? mexico? they call it an auto service store because you yourself go in and take stuff off the shelves. it's a very old idea for americans but in mexico you're still going into a little store, can i have that? it's crazy. >> but the real thrust of it is that it quickens the development of these countries to finally get to point where they can

change the law and not have to ask for anything -- >> but the unintended consequences. >> paying the president of honduras to raise taxes -- >> steve, it not -- >> it is the -- >> you feel good about yourself. >> you just dropped your microphone. i feel good about that. what about the unintended consequences, joe, of the image of america around the world when we're out there. we are the price maker, joe. we're not the price taker. what is the price bribes? we are setting that price. >> you said this the other day. i don't get your point. >> the level of alleged bribes in mexico probablysongle handedly raise their cpi. they're huge considering -- >> the good that is brought in by -- >> can we ask the professor? >> he already told you it was going the wrong way.

>> some companies call it fees, others call it bribes. i have sympathy with the fact that i think the mexican consumer is much better off as a result. >> right. >> and can you change the culture single handedly? can you compete around the world and eventually bring a higher moral level to the practice of government. >> you were feeling good about yourself, steve, feeling virtuous. >> if i just admit it's okay for u.s. companies to go around the world paying bribes -- >> operating under the laws to compete where they are. >> if they did elect -- >> is that okay, too, joe? >> yes and no. yes and no. >> it's not black and white. it a gray world. >> we'll talk politics with romney campaign co-chair and former minnesota governor tim

pawlenty. but first, as we head to break, check out the "squawk box" market indicators. >> still ahead, they call him mr. ipo. he's the man behind google's dutch auction ipo. professor jay ritter will join us at 8:40 a.m. eastern to break down facebook's initial public offering. keep watch being "squawk box." [ laughter ] ♪ [ female announcer ] each one of us is our own boss. ♪ and no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. ♪

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welcome back to "squawk box." the futures right now are suggesting a slightly negative open. we are waiting for the weekly jobless numbers in just about 15 minutes and maybe we'll see decisive action. making headlines, senators casey and schumer will unveil a bill. the senators want to stop him from paying the 67 million in taxes by renouncing his citizenship and it would bar them from reentering the u.s. if the reason they renounced

citizenship was to renounce taxes. . >> he was born in brazil. >> naturalized u.s. citizen. >> could a romney victory mean a turn around in the u.s. economy? joining us, former governor tim pawlenty, currently romney for president co-chairman. we've been talking about the cliff a lot, financial cliff. glen hubbard, a guy we have onshot a lot and a well phone economist, i think dean at columbia business, he says the plan is to do an extension and then try to figure out what to do after the turn of the year, right? does that make sense? is that going to be the romney policy? >> there's a big cliff coming, the bush tax cuts, the expiration of the so-called temporary payroll de, did you

the mathematical challenge of potentially raising the debt ceiling, all of that coming in a very close window of time. you would hope we have a president of the united states that would lead and we can get this down so we don't have to wait until then but we have a president who kwontwon't addres in meaningful way. find our president's specific proposal on within of the most pressing issues, reform of the entitlement program. you can't find it. this is not a courageous leader. >> when do you date the start of the campaign for the president? >> when do i date it? >> yeah. how long ago? >> he won. >> what you're saying now is it's not new. there was a speech during the debt ceiling, there was the kansas speech as well that i remember burr nothing has really been attempted for at least six months at this point -- there's

no budget. how long has it been since there's been a budget sp. >> he's basically just given up. you have a president who authored the book called "the audacity of hope." he called president bush unpatriotic and irresponsible and deck lace because of his record on deficit spending. president bush's record makes president obama's pale in contrast. >> my hero -- can i drip with more? it's ibt for me to mention shameus on the roof, if i'm going talk about her. she talks about romney's speech. romney said he would extinguish

the blaze with spending and tax cutting. the noncommittee on federal and budget said it would do nothing whatsoever this plan for the economy. >> governor romney's plan, to answer your opening question, would improve the economy. you have governor romney's view of having tax reduction stimulating the private economy. and by the way, tackling specific major spending areas like entitlement reform. then you have president obama who ducks, bobs and weaves on these issues. >> you're just being a hatchet man here today, governor. let me ask you just one ning. how with all the cut, cut, cuts will anything be done in the romney plan about -- do you just assume that if you get rid of regulations and lower taxes that the revenue coming into the governor is going toin crease, even if you lower marginal

rates. >> governor romney has a very detailed proposal. it's 52 points and many pages beyond that. it's reducing taxes 20% across the board on marginal rates, reforming regulation, not that we don't have any but that we have effective regulations that are easily understood and don't hamper the the priority private economy and flow of entrepreneurial capital, we need labor republic form, spending and entitlement reform. governor romney has proposed a comprehensive plan to get this economy turned around and unlike the president, governor romney knows what he's talking about. >> is he going to make some concrete proposals for cutting entitlements, as unpopular that is with seniors. ? >> he already has. he spoke to retire years about over the time the possibility of raising the retirement age for people coming into the workforce, the possibility of means testing, season aspects of

social security in the future. again, not for current retirees. for the the wealthy he's talked about capping medicaid and block granting it to the state. he's got a specific medical reform proposal to it, preself-ing medicare in its current forms for retirees or anybody close to retirement. that is dramatically more specific and courageous. can you not find of the united states on one of the most issues of our time, he's nowhere to be found. that's a shame. >> what do you think is the probability of an extension or do you think that everything will end on january 1st and revert back to the old system? i'm wondering, is the republicans, are they working in congress to try o get at least a

temporary extension? and what probability do you think that would be of actually occurring? >> well, a couple of things. one is i would hope they would resolve these problems rather than just kicking the can down the road until december or january. it doesn't appear that they're capable or willing to do that. i did note that speaker boehner the other day indicated he would like to get a comprehensive solution but if not he's open to a temporary extension o buy a little more time so they can address it under a new administration and a new congress. >> have you gotten response from the democrats about whether they would go along with the the temporary extension to work it all out next year. >> i think senator reeds was critical. s government hasn't been allergic to these temporary extensions. at least the speaker if you're -- >> do you know how the vp selection process is going at

this point, governor? when do you think we'll hear something sm. >> well, the romney campaign and i'm one of of the national co-chairs of it, has a policy of not discussing the vp process so we're not going to get into that. mitt is going o have a lot of great people to pick from. anybody would be honored to serve, if asked. we want to do all that we can to defeat brock brock and have this country headed in a better direction. >> so you have no idea. before the convention, that's all we know. >> if history is any guide generally they pick before the convention. >> where's the convention, tim? >> the convention is in tampa, florida. >> charlotte might be opening up for the republicans. i'm not really sure. they going to keep it there? >> you talking about the democrats in north carolina? >> i am. they don't like it there now. they might not keep it there. >> joe, i don't think north carolina is going to go for barack obama but i was the host governor -- >> he's done 8 points there now.

>> there's a lot of work that goes into it. to chang locations at the last minute would be very difficult. >> that's pretty funny the way it all worked out. thanks, governor. we appreciate your time today. >> thanks for having me on. >> see you later. >> coming up, breaking economic data at 8:30 eastern. we'll bring you the numbers and the instant market reaction. 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.

making headlines, bill ackman winning his fight against canadian pacific. company ceo fred green is out ahead of today's annual meeting. ackman is set to get seven seats on the board. human jeanne only adopts rights to plan to ward off glaxo. >> i'm going to pay a bribe, joe. >> everybody, watch next week, see if see is on.

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>> all right. we are just seconds away from

weekly jobless claims data. it's become a very important number now as we wait to see any improvement in the markets and the labor market. we have steve liesman for discussion about what all it means. rickster, we are two seconds, one second, beep! >> blastoff, 37,000, which is unchanged from a slightly readvised 367. 370, remanins unchanged. it pretty much seems to be hunkering down at this level after all the seasonalities. continuing claims is a portion of what claims were carrying through beyond initials.

so both metrics aren't surprising. the response in the marketplace is very much about the same as the unchanged number we're looking at, not much. yields at 1.75 on the ten year. looks like today we're going to have our fourth possible close under 180. we've had three in a row. preopening equities are improving just a bit. futures only down about 15 now. back to you, gang. >> all righty. steve? >> there's going to come a time -- maybe jim wants to comment on this, when we're going to be disappointed we're not getting an improvement from the level. last week we breathed a sigh of relief when we got down, the numbers reversed from the spike we had. jim, when do we start to be concerned and worried and disappointed that we're not

making more progress from this 370 level getting back to the lower levels we were at at 350? >> i don't think it's today. it's only been two weeks of decent numbers so much i think it's okay now. rick said we're hunkering down at these levels. the market thinks these are okay levels to be hunkered down at. we'll put this aside. the last three days the way the stock has traded where they tried to make a day earlier in the day and then closed on their heels, that's not inspiring any confidence in me in the stock market and i don't blame it. things seem to be coming to a close but it seems more pointed now than it has in the past. the stocks have a lot of reasons to go lower. when things are starting to settle a little bit there there, where are hedge fund managers going to put their money? we're the best horsethis race.

i don't worry the stock market will fill out hard but i do think we have a little more to go. >> i've seen a lot of different things about what this jobless number means. but another big mover out there right now and we have professor jeremy siegel on the set here, is the euro this morning, 126. professor, is there a number you think is the right number given what's going on in europe? >> i think it's a lower number for the euro. the last ditch effort for the ecb to try to save the euro, which it looks like it's crumbling is to get the euro down in paired to the dollar. it also helps germany also at the same time but it very, very serious what's happening. >> i think the ecb would argue its inflation mandate makes that a difficult proposition. >> right in. >> wick rick, what is the talk about the euro on the floor this morning? is there a number that's out there as the next step from the

level we're at right now? >> many traders completely avoided the euro for a long time, but it certainly caught up quick, as the professor has alluded to. the level down here is basically not too much lower than it's currently trading, right around that 126 level. a lot of traders want to cover their short but don't want to go long. the whisper number is closer to 120. but their thoughts, like the professor said, if this escalates, you're finally getting paid but they believe whether the euro common ground breaks up, whether greece leaves, whether they don't that, that event might mark a bottom. >> real quick i wanted to point out this idea that the stock market's been fighting the weaker euro and the stronger dollar, which is a correlation we had in the past. can we break that cycle? >> no. they're fighting it very well.

but i think when the euro finally takes out those early january lows and really does spill, i think that will be a little too much for the stock market to bear at that point. because right now the trade-off in the euro has been somewhat orderly. there hasn't been any days where there's been several hundred ticks lower in the euro. to me it seems like there hasn't been as much of a panic. i think people of are widely short the euro around the world. that's why i think the euro might bounce off those old january lows. >> good discussion. thank you, rickster. good to see you, jim. >> coming up, it's the most wildly anticipated ipo in recent memory. we'll break down facebook's public offering with the man they call mr. ipo. i wouldn't want people calling

me that i don't think so. but first a look at mark zuckerberg's first interview. you might recognize the interviewer. >> what is facebook exactly? >> you sign on, make a profile about yourself, answer questions concerning questions such as your contact and imagine at school, phone nms, instant messaging screen-ins, anything you want to tell, interest, what books you like, movies and most importantly who your friends are.

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welcome back to "squawk box." check out shares of sears, the company announcing it plans to spin off a large part of its stake in its canada market. the stock is higher by 7%. we want to show you shares of bankia, this is a troubled spanish bank. the finance minister of the

country has had to come out and say all the reports about potential high withdrawals from bankia are not true. still the stock was lower by nearly 20% earlier on, it's down about 10%. our reporter in madrid said there are no line ps. he said no lines. that doesn't necessarily prove anything in an electron being mood. >> sheryl sandberg, who is she? >> she's jokingly referred to as the grownup at facebook. she oversighs its advertising business, any privacy issues, as well as human resources and hiring. she meets with ceo mark zuckerberg every monday morning and friday afternoon but the two of them talk constantly.

before that sandberg worked for larry somers as chief of staff of the treasury between 1996 and 2001. in the four years since sandberg jond facebook, she's helped the company become profitable and grow its user base by 13 times to over 900 million people while creating a new social media economy. >> i think i was brought on to do lots of this evenings, working with mark and the rest of the management team to help grow the company and growing revenue is a really important part of what i do but not the only part of what i do. >> she sits on the board of disney and starbucks and she is also mother it would have and has become a role model for women in business. her speeches have been viewed online hundreds of thousands of time. at facebook women are responsible for 62% of all

status updates and comments on the sites. facebook has drawn quite a bit of criticism for not having a woman on the board. we'll have to see if sandberg becomes the first. >> we're joined by the man called mr. ipo. joe ritter advised google on its dutch auction. he advised me this week on the piece that i'm going toing doing at the 1:00 special on the macro economics of ipos. gon good morning, professor. >> good morning. >> what kind of returns can investors expect if they take a piece of this? >> my concern with facebook is at the valuation that bik market investors the buyers will be buying in at, there's very

little up left. if facebook is going public at $100 million, microsoft went public at a valuation of $700 million. that left 13,000 upside potential to get up to $100 billion. >> right. joe earlier today calculated if facebook enjoyed the same rise as microsoft, what did we come up with, 10 trillion or something? >> $10 trillion. >> $10 trillion. it's fully priced in but does that mean it's overvalued out of the shoot? >> not necessarily. certainly the bullish case for facebook is as google has demonstrated, targeted search can be an extremely profitable business. and facebook has that franchise for -- with social networks and it's a very defensible business model.

>> what do you think if facebook this had used the google model for going public, the auction, what do you think the word is just or better? >> the big issue with a dutch auction, if it turns out to be really hot with a lot more demand than anticipated, the demands are different. with an auction the underwriters have an incentive to raise the offer price as much as investors are willing to pay with. underwriters have an incentive too keep the offer price low and leave money on the table so that the company doesn't raise as much money because the underwriters are also gaining revenue from soft dollar commissions thattin vestors paid. >> you're suggesting they could have priced it even higher?

do have i that correctly. >> it very possible that with an auction that the selling shareholders and company would have been able to get a higher offer price than they will get tomorrow. >> wow. >> good morning, jay. i want to ask you, again comparing it to google, if i was right, i think kleiner perkins withdrew some of their price as the price kept going down and the dutch auction, they were playing it down, it was a very different atmosphere than here in facebook where you had the insiders announce that they were increasing their sales and you now have this overallotment possibility of new shares on to the market.

do you have feel that this has been a significant difference on these two companies if. >> well, it is true that there was buyer resistance with google, which is not happening with facebook. but the key difference in terms of the reception of institutional investors was the road show. in google's case, it was a case study in how to not conduct a road show. in terms of the questions and answers that came up, management answered the questions if it's not in your perspective, that's none of your business. that's not a way to inspire confidence on the part of investors who are wondering if it should be priced at a price earnings value of 80 or 100. >> that was worse than the hoodie he wore. >> there's a difference between

satirial remarks and not answering questions. >> coming up, we look at ipos, whether they add value or take your money. >> i wonder, does he tell people stop calling me ipo? stop call mei xiang that. it a stupid web sight. >> it has any piece of data. >> i love the concept of a dutch auction but i'm surprised some banker hasn't like taken him out because all the revenue justice goes away. >> coming up, the stocks that are moving ahead of the opening bell. we're going to head down to the new york stock exchange next. plus, where do you think facebook will closes first day in the opening market?

submit your guess at facebook.com/cnbc. here's muck through the years talking about facebook's user base. >> when we first launched we were hoping for maybe 400, 500 people. we're already at more than 90 people. >> 200 million people are using the service to communicate and stay in touch now. >> in europe, 500 million users. >> we want to make sure the next billion people can get on. ad thl night-vision goggles, like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering, web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account.

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let's get down to the new york stock exchange. jim, i got it three questions it for you. would you buy as much as you could it if you could get in on the ipo, it that's number one. number two, would you buy how much on it that opening trade on the first print, how much would you buy. and how much would you still own in a month. >> okay. great questions. yes, i would be in on the deal because i think it will be priced well below where it opens. no, if you you buy at the opening, that has been ten out of ten times wrong with social media deals. how much i would own, one thing we have to realize, it's facebook versus europe. europe is more powerful. the answer is unless the stock goes below the offering price, i

don't want to own it. >> so let's say it's a $38. i don't know. somewhere around $38. where does it open, $50? >> i think it could open -- possible it could open up to $60 and i prefer to profession off seagel. and i don't like the sellers. this is the most i've seen and they're all sophisticated. professor was right as google went down, they pulled out. if this goes up, the more they're selling. >> even if you were like the russian guy, where did he get in, 80 billion or something. doesn't it remind you of sam zell where people come to you with a price and say i don't know if it's a good time, i don't know if the financial crisis is coming, but i love your price so much you can have what i have. >> that's definitely the case. is the russian thinking about

what zuckerberg can do with mobile? no he's saying i have an opportunity to raise some capital, i'll sell facebook. >> it is fun. and how about the great 780 million was google, so if you get the same appreciation with it facebook, it has to go to 10 political i don't know. >> just ridiculous. i handled some of the accounts from microsoft. they were more inclined to be buyers. do you hear zook, anybody wanting to buy the deal? i don't hear a soul. >> jim, thank you. see you in a couple minutes. >> coming up, a final lesson from "squawk box" professor jerejar seigel. tomorrow, the countdown to the facebook ipo is on. we'll get you up to speed before

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. stock of the day is walmart. shares rising on better than expected earnings and revenues. multi-year high with $62.63. so almost become it to the multi-year highs. we'll see whether it's material. and when you talk about facebook, you could talk about walmart because walmart will be valued at more than facebook. but you look at sales or all those tedious details and it's -- >> i was just thinking $100 billion in market cap, not a single smokestack, not a single part. they don't make anything. >> yes, they do. they make friends. >> our guest host is squawk master jeremy siegel. and like i said, hindsight so

great. i just wonder do we -- when we look back at google urks we say it was obvious that it would go from 800 to 80. but at the time beforehand, people were really negative. i won kerr what we'll talk about this time in hindsight. do we say all the warning signs were it there or do you say you can't argue with 900 million users? >> i agree with what jim said. i think it will open up from the ipo price, but i bet it closes tomorrow below that opening price. >> not the ipo price, but below the first -- >> it will jump up and then move down and at the end move closer down. and it will be frenetic trading. that is naturing to see everyone going against each other. >> are you on facebook? >> no, i'm not. you're not either. >> wow. >> i have enough friends. although a lot of people tell me it if you want to find out what their children are doing, you got to it be on it facebook.