want them to do, first of all understand, if they think of risk they have something too much of or not enough or scale into risk where they can. >> thanks so much. appreciate it. great two hours. >> that does it for us. right now time for "squawk on the street." one more session and the month of may mercifully is over. good morning. welcome to "squawk on the street." i i'm carl quintanilla. jobless claims rising for the fourth straight week. adp, slower than expected job creation as the markets get ready to say good riddance to the month of may. futures eroded after a disappointing adp number tooif week high, downward revision. europe, big referendum in ireland regarding fiscal compact.

we'll see where that goes later this morning. >> our road map starts with the markets. the worst monthly decline since september. nasdaq down 7%. how we're setting up for tomorrow's jobs reports as worries about spain continues. >> morgan stanley on the defensive over facebook at new lows. defending bankers behind the deals saying they worked 100% p with the rules. big disappointments from gap and costco. trade from retail analyst. we start off last trading seg for the month of may, down 6%, on track for the biggest monthly decline since september 2011. s&p, nasdaq and russell 2,000 down more than 6%. jobs picture taking center stage, 133,000 private sector jobs were created in may short of the 155,000 jobs wall street expected. that along with jump in jobless

claims shines a spotlight on may's unemployment report. tomorrow is the big event here. the jobless claims numbers, though, a little bit -- i want to say not clean. not a clean number, because five states had to submit estimates because of the monday holiday. so some people may want to poke holes thain. >> after last month, also a disappointment reflective of investor concerns about the state of our economy. but when it comes to the market performance for may you mentioned, melissa, europe is certainly the primary reason that we were down, many would argue. that continues simply to be the case with continued concerns, of course, both in spain. certainly we have greek elections a few weeks away. watch spanish ten-year yields, 6 6.6, 6.7, italian yields starting to rise. this the drum beat every day. some i speak to say i'm going to take my exposure off to a

certainly extent because i've seen this movie before. even though i don't know how it ends at the very end, i know how it's going to go for a while. >> interestingly the third spring in a row led you by fear. the month of may, the number of dow components positive for the month, of course not quite over yet only four, walmart, disney, at&t and verizon, four dow components positive for the month. worst performers, jpmorgan, cisco, financials in tech, great story about the first two quarters those sectors and all utilities. >> how much markets here are tied to europe, take a look at correlations between s&p 500 and europe. your dollar down by 6.2%. the 50-day correlation between the s&p 500 and euro is 0.92. the higher the correlation, watching play out euro every single day, there is a reason. that's because our fortunes in

the u.s., for better or worse, are tied to this movement in euro u.s. dollars. >> stocks interestingly, two had yields, walmart has a decent yield at this point having moved up very sharply since the mexican scandal, which is interesting to say the least. most of them don't have international exposure, walmart does, although a lot less you might anticipate, solely u.s. company, zero percent revenues from abroad. >> we pointed out before, believe it or not, walmart, west texas down 6% in the month of may alone. lower gas prices do help consumption at the low end. it may be about the yield in some of these names, david, but at walmart might also be about the prospect that $5 gas may not happen the way some worry about in the first quarter. >> that's what we're seeing for a lot of retailers. kramer talks about this in the context of retailers. when consumers get a break at the pump they spend more money

or have the ability to spend more money, that's playing out with dollar stores or walmart or costco. >> nation's retailers out with their main numbers this morning, a bunch of results out. target did beat expectations of 4.4% jump in comps. costco did miss despite a jump, a negative impact on overseas sales. gap short of forecast, same-store sales up 2% versus estimate of 3.1. the names interestingly -- you know what's interesting is the remodeling theme kramer has been touting, sherman williams. pier one, sonoma, bed, beth, and beyond all turning in pretty solid results, some pentup demand for fixing up your house if you're not going to afford a new one or go on vacation. >> or rent a house, make it look as good as we can. we've seen that play out, being the year of the landlord. >> we don't hear from some of the biggest retailers on a monthly basis any longer, walmart being one of the key ones, did once provide us with

that information. keep that in mind, given i think it represents unbelievable overall 20% publicly traded retailers numbers in terms of revenues. but it's been -- it's been a generally positive year for retail. we'll see whether investors take pause given some of these numbers. >> how about talbot's today? >> a little bit of a deal finally. we saw it last week talbot's. it's a very small company remember. we've seen huge moves. we saw it collapse when sycamore pulled out of a deal or during the period of exclusivity could not get a deal done and today a greater deal at a lower price. the price far above where the stock was. it's worth pointing out given incredible moves. a tiny market cap company, one you know given it has 500 locations around the country and canada. >> more on retail sales. retail analyst at keybanc capital markets. great to speak with you. >> hi, how are you. >> talking about a drop in gasoline prices, price at the

pump down 13% this month, the most since 2010. do you think that actually translated into the sales we saw this month? >> it probably helped a little bit. obviously lower and middle income consumers seem to be doing all right. right now our area of concern is the high-end consumer. >> high end, which stores in particular are you concerned? are you concerned because of their exposure to europe or concerned because of the ability of higher end consumers to spend? >> it's europe, headline risk. we saw weak numbers out of tiffany a week ago. nordstrom okay numbers, somewhat uncharacteristic for them. high-end consumer concerned about europe, watching tv and a little concerned about their personal we will being. >> what's going on with the gap, ed? i'm not sure you covered it directly. high expectations based on their previous quarter's reports that it was in the midst of a turnaround. it was the first time in that quarter in over a year that all three north american divisions posted positive comps. here we are with a disappointment. is it too early to say the

turnaround was premature to call? >> it might have been a little premature. gap benefited last month from strong collar and bottoms trend but clearly that customer continues to struggle. we think it's too early to call a turnaround. amazon making news this morning. looks like they will start collecting sales tax in new jersey. 7%. good news for the state as they built warehouses. i don't know if amazon is in your universe but i wonder if you think the field when it comes to tax might be flattening a bit across the retail universe. >> clearly a more consistent tax policy helps most retailers. we think the consistent policy will help the ones we do cover. >> you're avoiding lulu lemon, true religion, vera bradley. any themes running through those names? >> true religion that's a pant company that's seen its best days behind it. lulu, a phenomenal company, given what's happened to other stocks we think it could be time to take a breather there. >> what about 5th and pacific, this is one we haven't talked about in a long time since liz

claiborne changed its name to 5th and pacific. what are you seeing? >> they have a great brand called kate spade, mid and high end, an opportunity for operational turnaround, really one of our favorite stocks this year. >> ed, great to speak to you. thank you for your team. switching gears to facebook. shares, as you probably know, have lost more than 25% of their value since the company went public about two weeks ago and fallout spreading. published reports say online travel site kayak pushing back timing in the wake of that tumultuous offering. ceo defending his bank's performance as lead underwriter on that ipo. in a weekly strategy meeting he told employees the firm worked 100% among the rules, wasn't aware of dissent of $38 per share. as we said earlier, gorman will be on cnbc at 4:00 eastern time. it is turning into, david a bit

of a tete-a-tete, not visible. >> lack of. when you speak to morgan stanley executives, they will say the following. we'll never know what would have happened were it not for the glitches at nasdaq. it is bigger than you think it is. it created more than just a psychological idea that the stock perhaps was already overpriced. they will point out $23 billion worth of stock traded hands on that day that we sat through at the nasdaq, well above $38, in the 40s. they will point out, of course, the way they priced gm was similar in terms of increasing size and price, rising in gm and facebook in terms of the institutional book and retail book. they will point out that, hey, on gm we also had 20% retail involvement dollarwise given it was a bit bigger, that's about the the same we had on facebook. we saw a strong performance.

the underwriter of gm. they will have a series of reasons why they didn't feel like they did anything wrong here. both they will talk about comps to amazon and linked in. now, is it right? well, who knows. at the end of the day going up in size and price after they lowered numbers. >> was a gamble. >> to a certain extent was a gamble. >> the question is not necessarily did they do anything wrong but was it a successful ipo. you have to wonder whether or not gorman will actually say we did our job and this was a success. this was a successful ipo because at the end of the day we raised the money for the company and we didn't leave too much on the table. is that the mark of a success or is the mark of success what happens in the days afterward? >> that's always the key question. who is your client? clearly the client is the one you are selling the stock for but you also have clients you are selling the stock to. those are long-term relationships you have on a day-to-day basis if you're morgan stanley. this was obviously not a success one would argue in many ways.

although how you define success when it comes to an ipo is a good question. would it be $3 9d a success? is $55 not a success because you've left too much money on the table. those are all key questions when it comes to these. >> do you think this kayak deal is closely related to the problems? >> i don't know. hard to say. >> another one, graph pulling ipo in hong kong for different reasons about market performance. >> not subscribed at all, half the book was filled. >> people try to co-mingle these news events under one umbrella and that is that it's facebook fallout. >> as for morgan stanley they will move through facebook. they are still dealing with the prospect of three notchdown grade from morgan stanley. what that will mean for need to put up collateral for certain businesses. by the way we should mention they will exercise their option to acquire 14% of morgan stanley smith barney from citi group. that will take them up to 60%. that was expected. nonetheless, they will be parting with cash to do that.

there's a lot of things, not just morgan stanley but the entire industry doing that, capital markets, no m and a and europe. in terms of facebook, interesting to see the stock trade higher premarket. take a look yesterday, let's say you hit the name facebook. you didn't know what kind of stock it was. terrible price action. sometime in the morning while we were on the air, outperformed downdraft in the market. good sign, right, then closes on the low. terrible price action in facebook. as a mental exercise, we dug up other tech companies and s&p 500 and we applied it to facebook's. what if facebook traded at the forward pe apple that, facebook would have a $6.30 stock. s&p 500 forward pe 12.8, facebook would be a $6.90 stock. this is just a mental exercise, just interesting to think that -- what a tremendous

premium facebook still trades at. you can argue it's a growth stock, new industry, new technology, et cetera, but still. >> amazon and linked in may have a higher forward pe i guess. >> it would. >> two of the comps underwriters looked at as defining where to price it. >> facebook would have to trade more than $70 to have the same pe as amazon. >> why some are calling facebook an option on the world essentially. >> exactly. >> bring in art and get more on what to expect with trading director of floor trading ubs financial services. good morning. >> good morning. >> great line talking about the euro, hard pressed to see that kind of short-term movement in a currency as we are below 124 now. >> yes. i will tell you i'm doing this -- i hate to admit it but over five decades. you rarely, if ever, see a currency move with that kind of sharp volatility. even back to when they broke the

british pound. it is rare to see. you might get it once in the final break. we've had enormous zigzags on this thing unheard of in currency mortgage. >> what do you make of it? for sometime it's been clear deposits might be moving in the eurozone into germany. but now it seems they are finally moving out of the euro entirely. >> that does appear to be the case. people are trying to get them to other seiche havens. that, i think, should be a very great concern to the european leaders, because there are two problems we've spoken about before. it's fine when we're having the leaders meet, decide what to do, but you run the risk of it happening in the streets of athens and the streets of madrid. if the people begin to race to those atms and start to take it out, the leadership has got to be thinking now what do you do about capital controls. that's a two-edged sword. you start to even talk seriously

about that, you speed up the run. so you have to in the dark of night impose them when nobody is ready for them. >> we've had zell eck, laguardia, monty arking for big policy like now. what's the pain threshold for entities to enact big policy? is it riots? what's it take? >> i don't know. hopefully we don't have a long hot summer. it's ceasing to be a -- it's emotional. you can't unring a bell. we have to pay careful attention. >> you've been pairing careful attention for sometime, the prior year and prior year to

that. give me a sense of your concern. is it higher than a year ago and a year before that in terms of where we stand? >> it is significant. on a scale of one to ten, i think i'm all the way up to an eight. >> really? >> yes, because i think the chance of this bursting aflame all of a sudden is higher than it's ever been. >> what is bursting aflame in your view? >> i'm sorry? >> what is bursting aflame in your view? >> again, it would be a run on the banks. a significant sudden move where things took place in the streets. let me add one other thing, i think tomorrow would be a real wild card. there are a lot of guesses around these payroll numbers may surprise everyone. there may be a 20% chance it's under $100,000. some of that has to do with that seasonality you were discussing earlier, this series of months people believe that from january into almost april, the seasonal

adjustment factors may have been distorted after lehman, that the damage was so great then that they distorted the thing for years since. >> that's going to be an interesting one to watch. maybe you'll come back tomorrow and we'll talk about it in realtime. coming up, pets.com and it's sock puppet synonymous with the dot-com burst. the now defunct online retailer shares lessons she learned and offers advice for ceo mark zuckerberg. let's take another check of futures on the last trading session in the month of may. it will ab close one. tune in to see how we open at the exchange. stay tuned.

fiscal second quarter earnings of $2.04 a share, $0.09 above estimates, cutting full year outlook moderating order rate and flat revenue for the next few quarters. shares rising premarket, network equipmentmaker operating earnings for fiscal second quarter beating the street by a penny. st. louis federal reserve president james bullard says more quantitative easing is more likely for now. he told reporters in tokyo the fed could resort for more qe if the u.s. deteriorates but sees that unlikely. new york city mayor bloomberg is planning to prohibit the sale of super-sized

sodas and other sugary drinks over 16 ounces in the city. as you can imagine the beverage industry in an uproar, which brings us to the tweet. mayor bloomberg, how dare you, need more than 16 ounces of soda because of blank. tweet us and we'll get responses throughout the morning. he had a great setup, sugar cubes and equivalent for each cup. >> really? >> some are -- >> it's only coffee. i don't drink soda at all. >> only diet here. >> only diet. >> who drinks 16 ounce sodas. >> a lot of people. >> they take in a lot of sugar. bloomberg early in his term, smoking anywhere for the most part. >> salt. >> trans fat. so we're a very healthy city and we're going to have bicycles all over the place to start riding

around. >> sparked debate about a a nanny state, the nanny city. >> the argument is new york city and new york state spent enormous on medical care particularly for diabetes, which is extraordinarily expensive. come on, you know, that is caused large by by obesity. >> all for your own good, new yorkers, as carl giggles. coming up food and reservation website taking steps to capitalize on the business of dining. we'll be speaking with the ceo matthew roberts. as we get ready for opening bell, dow down about 3 points. stay tuned.

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one more session before the month of may is over. the dow can go positive for the month if it gains 793 points today. >> like that's likely. not to be a debbie downer. >> never knows. >> a fund-raising event benefiting foster children. at the nasdaq neste oil, a refining and marketing company as we put this crazy month to bed. >> what's the number. >> 7 3 for the dow, s&p down 83 for the month, the worst month since september. >> if they find $2 trillion burr

yerd in somebody's desk in spain that could do it, turn the tables. >> maybe swap prices differently than various banks around the country. there as look at the s&p 1313. i'm sure depending how the day goes we'll start talking about targets at 1300. >> that's the number i hear melissa. >> down to 1200. >> amazingly for the month, we were unable to string two consecutive up for the dow. the last two days in a row, april 24th through the 27th. the last month in which the dow was unable to do that, may 2010, which coincidentally was the month of the flash crash. that hurts sentiment to a large degree. you could argue facebook did it this time around. >> facebook sentiment, europe the overhang, the jpmorgan trading loss certainly had an impact on certain financials. also perhaps a bit on confidence, hard to say.

in terms of keeping the retail investors on the sideline, more reason to say i'm not interested. there's no doubt it will have had that impact you'd expect as it trades $10 below the ipo price of less than a week ago. >> we are having, seeing the headlines at the bottom of the screen, jamie dimon will testify, june 13th is the date set. originally set earlier but to accommodate travel abroad they moved it. jpmorgan in today's session trading slightly higher as are a lot of the banks. it's amazing in the past month to see where it's gone, facebook, jpmorgan, the bix up 41% in the month of may. >> not as high as a year ago. going into a summer where bearish sentiment much worse than last summer, some contrarians like mark culvert say this summer might not be as

painful as the last one. the vix obviously a different story, not quite as high as a year ago. stock mutual fund outflows for the weekend of the 23rd, the second biggest outflow of the year. volley biggest since january. almost as if investors said i'm going to trade this month, i'm going to trade to get out. they did trade just not the way that would. >> second largest outflow of the year thus far. we've only had five months. outflows are somewhat astounding when you think about the opportunities or lack of opportunities that are out there for true investment with ten-year yield hovering around 1.65 or 7, yet people are choosing to pull out of equities, perhaps put in bond fund. while they are performing now, we can't tell you enough to warn you at some points if interest rates turn around, there will ab lot of pain in those funds. it is perhaps one of the

underreported stories of this year, that continued movement out of equities. oh, my lord, look at that, we're below 1.6. >> we joked about 1.5 yesterday. a few basis points away. >> no joke. mary in for bob pisani this morning. >> reporter: good morning. markets trying to find footing. mixed a little weakness in nasdaq, semiconductors weak there, dow a modest gain. traders saying really the jobless data disappointed earlier today, so that weight on the futures and continuing to put some pressure on the markets. also of course europe continues to be a black bolts. one trader said, you know, an absence of any major news out of the policymakers overnight was actually a positive and it's providing maybe a little bit of support when there's not any major news coming from europe. nevertheless they say europe will continue to be -- to overshadow the markets. one saying they expect s&p stay in the trading range of 1275 to

1350 with upside contrained by europe. keeping watch on 1300 level to the downside. that's an area of support. we held above it last week. critical, if we hold below 725 on the s&p 500. again, having a tough month like the rest of the indexes. one bright spot one trader pointed out in the gdp report today was the fact real final sales edged up from the first estimate first quarter gdp 1.7 to 1.6, they say that's a positive sign in the economy. of course today we're going to be watching retailers, same-store sales numbers so far mixed. some retailers better than expected same-store sales. target, macy's, limited, pier one, disappointing numbers from department operator polls as well as costco heard on the international front by the stronger dollar as well as the gap. keeping with that retailer theme, talbot's higher on the news taken private for $2.75 a share. guys, back to you.

>> mary, thanks so much. mary thompson on the floor. markets meantime difficult guessing disappointing data ahead of das jobs numbers. take a look at the details with senior economics reporter steve. the super bowl. >> two pieces of job data below market expectation raising questions whether or not the economy is slowing down again in this summertime for the third year in a row. adp data 183, markets open 150. a lot of data coming your way. take out your pencil and write it down april 113, nonfarm estimate which includes government and private sector 155, my guess that's coming down. claims data? 383,000. that's up 10. economists hoping for 370. continuing average coming up. continuing down that is for the prior weak, again, showing softening in the economy. lower gch dp.

a change from the first print, 1.9%. biz investment up sharply, government another tick down 3.9%. inventories going lower. that may be a good sign, not so much inventory buildup. i'll be back at 10:30 with economists reaction to the data and how forecast for that super bowl of data, the payrolls may be changing. melissa. >> thank you very much. steve liesman, see you later. check in with rick santelli in chicago. rick. >> the nice thing about government data is there's a lot of different rabbit holes we can go down. my sources, friends, have been sending me one of the best. this is u.s. corporate profits. they were down over 4% in this gdp report. that's the worst showing since the credit crisis in '08. look at a 20-year chart. this is not good. it's one of these subindexes

many people pay attention to. i think the graphics do it justice. that number wasn't very good. of course we see how the markets responded. small moves at hugely important historical spots with regard to fixed income. look at a 24-hour chart, ten-year note rates. yes, we did, eastern blip under 160. and the boone leading charge on historics actually in many ways traded under 1.25, under 1.25% for a ten-year boone in europe. obviously we know what the big story continues to be today. david faber, back to you. >> you know what, rick, while i've got you. you still there? >> yes. >> i never talk to rick. people forget, germany has an 85% sovereign debt to gdp ratio, it's not completely an island of fiscal rectitude yet 1.2 something percent. kind of shocking, isn't it?

>> shows you when everybody is trying to move their capital out of a little port hole that is one of the first places to look. as art cashin pointed out other places money are moving, none paint a good picture. in deference to germany if you look at the region stock market still up on the year. we know they are a vibrant economy. we're not surprised that investors are using that as a safe harbor, there just aren't enough safe harbors right now. >> exactly. the so-called tallest midget. thanks again, rick santelli. want to move to stocks in the faber report. take a look at sirius satellite up 2%. we got news this morning from liberty media. you may recall liberty owns a huge slice of preferred stock which is now going to be converting some of it into common. all of this as well as it tries. well, here is what's really happening. they are in a battle with the man who runs sirius. they are basically putting two things on the table. saying we're going to a 51%

ownership stake, get the fcc to agree we own this company. we're going to do that and everything that comes along with that. or, mel, you're going to agree to allow a reverse mortgage trust, tax-free manner to our shareholders. we include an operating business of some kind and therefore we get that tax-free status i referred to. so that's what you've got to deal with. you've got to make a decision here. your contract up at the end of the year. that's basically what's going on. may have seen the headlines, going after board seats. they are also increasing their common stake to 32%. really all they need to do is buy a few more percentage points in the open market to move to 50%. petitions fcc again to say we are, in fact, the defacto controlling shareholder here. but it all comes down to mel and the battle that is taking place here. by the way if you're interested in this and a lot more liberty is up to, tune in tomorrow, the president of the company is going to be our guest right here

on "squawk on the street." we'll certainly be talking not just sirius satellite but barnes and nobles, qvc, a lot of different parts when it comes to liberty. join us for that. >> j. crew, q 1, 16%. >> same store, 23% overall increase in sales and profitability. i know if it was a public company one wonders whether that stock would be up sharply today on those numbers. >> i mean, there's a sweet spot right now in terms of recent retail ipos that have been gang busters. if j. crew wanted to go public it might not be a bad time. >> i'm not sure they are ready yet but that was quite an impressive quarter. >> mayor bloomberg looking to do away with supersized sodas in new york city. we asked you to complete the sentence, mayor bloomberg, how dare you, i need more than 16 ounces of soda because -- and you fill in the blank. early movers on the street, last

trading session of the month of may. forest labs up 2.5%. ♪

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breaking news now, midwest manufacturing, go to rick santelli in chicago. rick. >> wow, what a drop. if we look at the purchasing manager survey it's dropped to 52.7. that is the lowest since september '09. we have alice with us from the people who just brought you that report, let's go through the subtext alice. these are according to you and we're discussing this as the bell rang. lowest figure sin the fall of '09. not alone, other in the category. >> the stats, barometer new orders, order backlog and production all at their lowest levels since the fall 2009. inventories and order back logs falling into contraction, prices paid lowest since september

2010. i think if you look, i like to look at the combination of numbers, you look at production down big prices paid down, that combination is a little lethal and tells you this boom we had since february to april that ha bankruptly ended. >> you know, you were here a couple of months ago, and telling me not only was the survey looking optimistic but survey participants had questionnaires in other parts of the survey. boy, they were optimistic. it changed rather quickly. are these recessionary type numbers? >> these are recessionary type numbers. when you have the overall barometer down consecutively three months in a row or three-month moving average down three months in a row, it will forecast a recession with a lead time of six to eight months. the barometer is down three months in a row but three-month moving average down.

either-or situation on that. >> let me play devil's advocate and look at it from the other side of the street. it's still 52.7, not 49.9 or lower. so we are above 50. we're still in expansion mode. does that change the answer to your question are these recessionary numbers. >> i think what you have to do is look at what the respondents are telling me. i look at what the respondents are telling me but also i have private conversations with these purchasing managers. everybody is cool as a cucumber. these guys have guts of steel. they are telling me we have seen this before, it always bounces back, this is just a lull. >> all right. from their mouth to god's ear. boy, did this thing do a reversal like doing a u-turn on the eisenhower expressway at 85 miles an hour. >> looks like rick, judging from those numbers. thanks a lot. rick santelli in chicago. "squawk on the street" thursday as you may know new york city

mayor mike bloomberg planning to prohibit the sale of sugar-sized sodas and other sugary drinks at restaurants and other places in the city. we're asking to you complete the following sentence. mayor bloomberg, i need more than 16 ounces of soda because blank. jim tweets, because it's the only weightlifting i do every day. anything lighter won't give me the same burn in my forearms. michael tweets i can't carry six small cups with my double meet, double bacon, double cheese, double-decker bigger. my dentist and doctor are counting on the income my thirst for soda will generate to stay in business. doctors, too, operating rooms and so forth, the whole point. >> the ripple effect. >> goes to the larger issue of obesity in the country and health care. front and center about a very

important issue. >> very interesting to see what the reaction is from the likes of coca-cola, pepsi, fast-food restaurants. they are essentially under attack. >> attempts to try to ban vending machines in schools, for example, that dispense soda and things like that. >> someone from pepsi or coke might argue, you know this more than most, growth is in other areas, waters and noncarbonated drinks. >> a bigger growth trajectory but revenue in dollars and percentage, bigger in carbonated. they need the carbonated to sale to sell the rest. >> interesting to hear comments out of chicago with pmi, this boomlet we had in the economy roughly ended calling 52.7 number on the chicago pmi recessionary type number. with that the dow went to minus 42. >> down s&p after yesterday's 1.4% loss. we're talking 2% over a little less than one trading day at this point. we'll see.

that ten-year falling as well. keeping an eye on that. mixed signals on the u.s. economy. we know where europe is. how much of this is about confidence. we talk about ceo confidence. certainly when i come back to my area of m and a, that is always perhaps one of the best areas or reflections of true confidence. there's so little of it out there and certainly none in terms of the transformative deal that ld show robust belief. >> liesman talking about data, harder and harder to argue it was seasonal, weather related, change in data. maybe we are going to start to see in the summertime real reflections of hiring in the business. startling. >> down 46 points, 830 points or so, carl, in order for the dow to turn positive for the year. we're going to keep on counting. >> it can be done.

it would be big news. >> we could have a flash -- flash boom. >> when we come back, royal dutch shell peter vosser. s&p losers, joy global and a couple of retailers on the list.

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at what's coming up at 10:00. good morning. >> good morning, carl. the next hour of cnbc is full of opportunity. would you like to make a 40% return over the next year? you can do it now by buying facebook today according to one analyst. going to talk about the market down 6% for the month. at what point does that become a screaming buy? an exclusive interview with ceo open table. maria, it may be the market missed something very big in its relationship with google. back to you. >> what an hour. simon, we'll see you in a couple minutes. meantime we are continuing to watch the markets here. >> you watch facebook so closely. >> it's on my screen. >> your don't need to look. >> it's down 1.7%. this will make an interesting backdrop, new lo for the interview with jim goreman this

afternoon as the shares go lower and lower, how much can he come out and defend the offering being a success. >> morgan stanley stock below 13 at $12.94. this was a stock $21 after earnings, which were decent, decent numbers. it's not facebook hurting as much as europe. worries about the moody's downgrade, will it be three notches. hard to imagine it won't be. morgan stanley heard as much if not more by jpmorgan's trading loss strangely enough. people get concerned about morgan stanley being it is smaller even though they have no justification for doing so. >> in an investor conference talking about the concept, damage from europe. he was saying the hit to the world economy would be much more damaging to bank of america than any sort of direct losses the ac will take from europe itself. got about $15 billion in loans, risks, et cetera related to

europe. he says it's the entire global economy that's the bigger impact, which is down 1.8. >> you watch facebook closely. i can't take my eyes off that ten-year and yield below 1.6%. the flip side positive, mortgage rates never been lower. >> housing and auto as daniel gross tweeted a few minutes ago, remember when they were the worst thing about our economy, now relative bright spots, housing and cars, incredible. when we come back, cautionary tale involving dot-com poster child, we'll talk with a former ceo of that former retail -- i think we can call it a failure? >> i think so. >> we'll find out if the lessons she's learned are still with her and her message for mark zuckerberg. later this morning on "squawk on the street."

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the street." the road map for the next hour bears after facebook, shares closing lower. yesterday another new all-time

low. is it time to place bets shares will plunge further or have we finally hit the bottom. >> last trading day the month of may as ten-year clocks in with the best trades of the month. how would you position for june, market panel to lay out the best ideas. >> booking a table at the hottest restaurant in town looks for further than reservation website open table. we'll sit down with the company ceo talk consumer competition and a whole lot more. just how bad for companies hoping to come to market in the wake of facebook's ipo. i can tell you as travel and leisure reporter today was the day kayak was to list at the nasdaq. not going to happen. the latest on a missed opportunity kayla. >> simon, kayak filed nearly a year and a half ago and was hoping positive sentiment post facebook would help the deal get off the ground. sources say launching the deal before the end of the second quarter is still a possibility even though the ground may appear a little shakier.

kayak would look to raise $150 million at evaluation of over a billion dollars my sources say. potential investors in tech ipos are still licking wounds for money lost in facebook's deal and not ready to commit more capital. running up by the same people reeling from facebook morgan stanley leading this deal as well, joined by deutsche bank. not just tech deals stalling, four ipos withdrawn last week and two postponed their offerings. upcoming calendar has one name on it. even that one has been postponed before and is not a guarantee. for kayak, a growing need for capital. for the first quarter of 2012 it turned a profit. its cash flow from operating activities was $2.5 million in the red. the companies started gathering its ipo documents in the wake of google buying competitor ita, a deal itself listed at the very top of kayak risk factors. following that with a few quarter of not so stellar earnings and kayak faced with a

tough road. underwriters were hoping to launch that road show if facebook traded above issue the first week as a public company. the delay doesn't come as a surprise since we know how that story ended. melissa. >> i'm curious how much people might believe this is a smoke screen, an excuse for not going public. you membershipsed the last couple of quarters haven't been stellar. if you look at direct competitors they have been doing pretty well. expedia a couple bucks from an all-time high. >> that's definitely an issue. as far as whether it's a smoke screen, maybe not so much because the company needs to go public soon to raise capital to be able to compete against the likes of google, ita, expedia, you named those. those are definitely the biggest competitors. i was hoping maybe i would be able to rally off the back of those not so great quarters with the success on the facebook deal. i think that's the story here. because that obviously didn't play out the way it planned, a new story on the street wildfire

a less strong ipo kayla, monks the pack because of the difficulty google has. you reported they basically wanted to see facebook as a benchmark above issue price for a week. i think they were saying that the day before facebookok launched. that was what we didn't see. >> we reported this the day before facebook pricing this was the bellwether for going public. this was one of the most well-known casualties of this facebook deal but no doubt a drought in the ipo market because a lot of ipo investors aren't trusting if they put capital to work they will get good returns. >> on that subject you've had an extraordinary month. you know it behind closed doors, your reporting on facebook has been extraordinary. you've really led the pack, congratulations. >> unless you're in the camp of tired of hearing about facebook, a lot of people probably changed the channel when they saw me come on tv. >> never. >> on that note we'll continue to talk about facebook.

no joke. continue under pressure this morning down 3%. new low today 2728 was that low after dropping 27% since going public. more on the fallout, victor anthony analyst who initiated with a buy $40 price target. rich greenfield co-head a mutual rating on facebook. victor, i'll start out with you since you're here with us. i know you're fundamental analyst. at some point the stock price, the fact of the matter is you continue to set new lows day after day after day. >> well, it does concern me a bit. the stock is down significantly from the ipo price for a multitude of reasons. the botched ipo process some believe was botched. you have competition. have you the fact they were looking to expand into building a phone, looking to make

acquisitions, questions about revenue growth, company guidance. a whole laundry list of items pressuring the stock today. some of it -- some of those items are legitimate. some are just noise. i think when noise dissipates, you'll start to see get the foot in, come out in name and fundamental buys will come in and stabilize the stock price. i think when facebook has two or three quarters of earnings under its belt, investors will get a lot more comfortable with the story, with the story management is pitching. you'll see the stock price moving up. i think now is a good entry point. >> if that's true, there's plenty of time to go to a buy of there's plenty of time with a 40, why not start with a neutral, see how the july quarter goes and see how the first two or three quarters go. >> $40 price target buy rating is based on the core business which we think is solid and is going fundamentally strong. advertising business is solid.

conduct checks with ad-vise and advertisers, facebook platform, the engagement and convergence not where they want it to be but moving in the right direction. because of that they will continue to allocate more ad dollars to the platform. fundamentally i think the platform is strong. business is solid. >> you point out ad platform. at the same time that is one of the reasons why you don't like facebook. you say given the generally unexciting, and we're being kind, seeing the screen shot of facebook embedded to the right in your report, quality of advertising today actually amazing the company is generating ad revenue globally in 2012. where should the company be on this? do you think the $4 billion estimate is too optimistic given what you see as the ad offering? >> when lou at a $400 billion advertising market and just display advertising being 25 to $30 billion. no doubt in my mind as you look out four and five years, there's a tremendous opportunity for facebook to grow its advertising

well below that $4 billion number. you turn on your television, it's crazy it turns on in most places to channel 2. you scroll through channels, it's not like facebook or facebook friends dictating what it should be showing you or would like or programs you'd like. there's lots of different buckets of advertising where facebook is going to influence over time. the question as an investor looking out over the next 12 months, what do you do with the stock. the challenge right now is most of their business is display advertising. it really takes a lot of work to really create a fascinating or interesting campaign. have you to be more creative and strategic. look what ford has done and on the flip side looks at gm which doesn't like the facebook platform from an advertising standpoint. you have to engage your consumer. it's more than a box in the upper right. that doesn't convert really well. the big elephant in the room question talked about yesterday is this question of mobile. 10% of overall internet usage is now mobile, up from 1% three

years ago. in a mobile world, what is advertising going to look like? we can't even answer that question today. >> so that said, i think melissa nailed you at the beginning when you said perception becomes reality. this potentially could become one of the greatest momentum stocks up or down on the exchange. there's such a polarization depending on the assumptions, could you accept you could have a significant rally at some point in this stock on the sort of arguments we heard before. it can cut both ways, can it not? >> timing is everything. when we look at it, there are big open questions about monetization. they just launched facebook, download and look at it. a wonderful way to look at pictures, similar to instagram. you can clearly see why they want to own instagram. no advertising in it. from a standpoint of facebook looking at this from the long-term.

i don't think they are playing to win over the next three months. they are playing to win long-term and investing for the long-term. when you look at the transition, twicing display ads to mobile, the same time the investment to build out that mobile infrastructure and build out applications, it's not clear that revenue growth and earnings growth is not going to continue to slow over the course of the next year. two, three years out, it could be exploding and growing rapidly. i don't know if we have that visibility today. that's why we urge investors from the time of the ipo to be very cautious with its stock until we understand the growth rates better. >> finally, victor, gm's marketing chief actually comments this morning, phil lebeau writing about it, consumers told them ads on facebook were distracting, they did not deliver in their view. they might revisit some point down the road, prior to what they said on the ipo, is gm an

outliar, a certain category of market marketer, or do they need to be educated over time. >> i think ultimately gm will come back to the platform. social media advertising is relatively new for advertisers. they are learning advertising makes sense, how to place an ad properly. cpms, should they use ads, video ads on the site. these things are still evolving, advertisers i've spoken with spending time learning the platform, learning how to drive conversation conversations conversions. i see gm coming back over time. >> one thing i would say quickly, gm is not abandoning facebook, they are abandoning advertising on facebook. a lot of brands can use facebook without paying. can you get tremendous number of likes and actually push content

out to users. facebook would say you have to spend to amplify that message. if you're really good and creative, brands can use facebook at no cost creating a brand page and being creative. >> somebody taactually took the trouble to call in and said facebook has it wrong, it should charge big companies for the number of hits on the sites. >> there's lots of ways it could make money over time. look how much internet traffic is facebook. imagine if roberts and zuckerberg sat down and zuckerberg said you should be paying us like someone pays cnbc for having content on the cable operator why doesn't somebody charge. that hasn't happened but lots of long-term opportunities for money but the problem is clarity in the near term. >> we'll leave it at that. thanks so much. >> thank you. get over to brian sullivan for a quick market flash.

>> gaylord entertainment, get. not a household name but they agreed to sell rights to manage and also branding of four different hotels to marriott for $210 million in cash. gaylord converting to a reit. they will issue a one-time dividend of $8.47 to $9.18 per share. so a pretty fat one-time payout from gaylord as they convert to a reit. the name is not a household name but their main property guys is. they are the owner of grand ole opry, carl's favorite vacation spot. >> is that branson, missouri. where is the opry? >> that's nashville. what do you mean where is the grand ole opry. >> i actually love country music, i honestly do, but i've not built vacations around it yet. >> you need to go to dolly world. >> dollywood. >> get it right,righ brian. >> tossing market flash is an

adventure. >> like a box of chocolates. >> stock market, s&p down the best part of 7%. however, as you can see it's been good news for the dollar. it's been good news, indeed, for treasuries. we're going to talk about that next. the sentiment on greece and spain. what can we expect in june. stay tuned. what ? customers didn't like it.

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on this last trading day of the month, dow, s&p on track for worst may since 2010. how should you be anticipating yourself ahead of the anticipated jobs number now and the month ahead. bring in investment strategist and david, portfolio manager. guys, good morning to you both. we'll be glad to put this month to bed. david, you do not see us losing this headwind for a while. what's going to be the key to you that demonstrates that things are going to get better in the near term? >> sure. what i'm specifically watching in europe, the spanish five-year yield over 6%, back to levels of last fall that needs to improve. second watching the credit market as a gauge for stock market, i need to see some improvement, at least modestly

in the high-yield market. it's held up respectively well but want to see flows back into high yield as a gauge for the equity market. then just briefly, carl, one of the cues the average viewer will be surprised at, if you go back to february 2010 when greece really began to show up on radars, u.s. stock market compounded at 10.5% per annum through may since february 2010. the u.s. market can grind higher at a very good clip and will this year. i just want to see some sign posted in the near term. >> that would make sense, russ, if the story had continued to be about greece and only greece but we know that's not the case anymore. >> greece is obviously a risk. the market was taken aback by the greece, a disorderly exit by greece at this point will disrupt europe, disrupt thept

market. as we've been discussing, they are broader issues. i very much agree on spain, spanish are a bigger threat to the eurozone than greece. we are concerned about chinese growth. we do expect a soft landing but i'd like to see target stimulus out of china. of course we have the overhang in the u.s. in the fourth quarter about whether or not we'll be able to avert the fiscal drag we're expecting in january. >> that's the big problem. >> isn't the more interesting question where you see upsiding in what's happening here and what you will buy. that's where you're going to make money out of this, not swirling around in a pit of despair. >> i agree. this is an important point for no other reason than as david mentioned in terms of the market has been able to grind higher and also worth reminding viewers cash paid zero, not the best strategy to hide under the mattress. there are places to make money, more on the defensive side,

dividend paying stocks, investment grade bonds, munis. none of them are offering particularly exciting returns. but i think there are places even in this environment to earn good high single digit returns even with all this volatility. >> david, talking about returns or lack thereof, look at our own ten-year, you mentioned junk market never lower. seems to be an unwillingness on the part of investor to invest given outflows we've seen. anything in your opinion going to change that. we look at stocks and dividend yields, multiples, high/low. >> 2.25%, advantage over the ten-year treasury already back to last fall's levels. back to 2011 lows. in that spirit you want to look back and say if the average stock is 15% off its 52-week

high, what modifications can i make in a portfolio or trades can i make where i'm going to get opportunity, be, aerospace, 15 times earnings growing its earnings at 23%, very good cash flow. cvs on the retail drugstore side growing dividend, gaining market share from main competitor, pharmacy benefit management. ecolabs, a little safer but i think a global as well as a u.s. play, opportunities i can see in u.s. portfolios to name a few. >> let me just finish by major headlines, history in the making, 1.58, yield on the ten-year. that is a degree of monetary easing probably beyond the capacity of the feds. that must have a full implication, must it not, for growth in the united states? or have we so disconnected that monetary policy makes no difference? >> monetary policy still matters

very much. money is growing incredibly raped. the less valid number is velocity which is declining. that's going to improve as loan growth improves. never say bottom but i think we're close to a bottom in the ten-year. it's not consistent with what the overall inflation rate ultimately will be. >> finally, russ, i'm trying to think, is there any penalty for sitting out the summer in your view. is there a short-term bounce you think might make people wish in september they hadn't sold so much in may? >> i think so, actually. i do expect a more volatile summer. i think the sell in may go way, too simplistic. most of the pressure over the last few months focused on europe. different outcome to the greek election, some clarity on spanish banks. to david's point the market is cheap, a lot of pessimism built in. i think you can get a summer

rally if you take some of the risk associated with europe off the table. >> david, guys, thanks so much. >> my pleasure. thank you. >> can i just emphasize that point. if the greeks come through and actually have got a workable coalition that is with the eu in three weeks' time this market surely is going to rocket. >> what is a truly ungovernable at this point. >> when you have fiscal consolidators, don't have an opinion poll, are you for fiscal consolidation, they say, no, no, no i'm voting with the socialist. it's stronger in these situations. thatcher, time and time again. >> not without a lot of turmoil. >> they may not say in the polls how they are actually going to vote. >> don't fall into the pit of despair. >> swirling around in the pit of despair. >> very vivid. very vivid. >> one of the reasons why the facebook ipo did so badly over the last week or so, many

people, gm announced a little over a week ago it was going to stop spending on the social site. we're going to talk, in fact, with the vp of global marketing with general motors. have they changed their tune? stay with us on cnbc.

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super bowl ads and soccer ads but with soccer giant united. putting its marketing chief out there for the first time since making these headlines. phil lebeau outside headquarters with this story. a lot of people want to hear from this guy because he's going in some interesting directions when it comes to advertising. joel ewanick head of advertising for general motors. he said no longer spending $10 million on direct advertising on facebook. in the last hour, had a chance to talk with him.

he said still trying to figure out direct advertising on facebook. but for now they don't believe that it delivers. here is what he had to say. >> we have to find better ways to make those ads they pop onto or things go on their wall very relevant. we need to do a better job than that. the ads themselves. they said we don't like them or we don't click on them. >> that's joel ewanick talking about feedback general motors heard from customers and others who looked at the gm ads. in other words they don't believe they are getting the return on investment with the direct ads on facebook. that's not the only announcement joel ewanick has people questioning what gm is doing on the marketing front. they are going to sit on the sidelines this year instead of running ads on the super bowl for 3.8 seconds. in mr. ewanick's words it no longer pays to continue paying more for super bowl ads. >> super bowl is one where i have found a great deal of roi.

but at one point it gets to be too expensive where enough is enough. have you to pull back. it might be one of the most mature decisions ever made. it was a difficult decision but we have to say at one point when do you stop? when do you keep taking these increases year over year over year when you haven't seen an audience increase. >> both of these decisions super bowl and direct ads on facebook are the result of general motors and mr. ewanick essentially saying how are we spending money, spending $4.2 billion on an annual basis for gm marketing, mr. ewanick wants to know how to do it more effectively. that's why they decided to pull back on facebook direct ads. >> you're not mentioning here they announced united, it has two-thirds the fans facebook has online. this is a huge deal, a very different approach. stick it on people's shirts and make them run around the field.

>> absolutely. and they have 25 million followers on facebook mr. ewanick touched upon. the key here for the manchester u deal, all about global exposure for chevy. joel ewanick points out you go around the world you see hyundai, toyota, volkswagen. you go anywhere in europe, go to asia, those brands are everywhere. chevy, it's not there. that's what they need to push. man u will help them do that. >> phil, thanks. a lot of people wanted to hear from that gentleman for the reasons you outlined. phil lebeau. >> still to come when you think of the dot-com bust, the famous doing puppet comes to mind. sitting down with former defunct retailer who talk about lesson she's learned since her puppet went bust and get her thoughts on facebook. [ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine.

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it's a classic defensive rotation, s&p 500 down 7% for the month today. you see telecoms, utilities rising, tech materials in negative territory. the breadth of the move as we say good-bye to may, many people will be glad to do that. seven to one? >> no, no, no. >> what is it? >> three to one. >> seven wise the diviser.

here to help us sort through it all, steve liesman. >> you have to sort through positive and negative comments, the job was easier if a bit gloomier, all negative. weekday and past month raising real concerns about the economic outlook. here is from dan greenhouse at btig, more than anything else adp report enforces the idea for whatever employment growth accelerated likely to uncertainty over the path of employment growth in the u.s. in light of issues in europe. diane swonk at mesirow. she brought down her forecast tomorrow from 152 around to 130s. the $133,000 may increase in adp jobs, downside risk for payroll

investment. this, should the payroll number come in below 100 tomorrow, then the policy risk will shift from extension of twist to outright qe. certainly the fed is another thing in play. there was actually more weak data. corporate profits up 3% quarter on quarter, down from 3.5 prior quarter. the first we got on that. then the government did a dramatic restatement of real disposable income up 0.2, down 1.5 percentage points. wages and salaries restated quite a bit lower to up 1.7. that was down 3.7 percentage point. all that leaves out even more gloomier data, chicago pmi coming below expectations and a spike in layoffs reported by challenger leaving impression, folks, the economy is growing around that 2% range but growing weekly. now the real fear is a loss of momentum. melissa. >> having good fun. >> thank you very much, steve liesman. >> talking more about jobs this

morning, a lot to react to, two experts, ethan harris, head of global economic research, john chief economist with capital research group. guys, good morning to both of you. john, you write yesterday, the current slowdown extends well beyond europe and is global in scope. to what degree is our economy part of that equation? >> we're beginning to feel it. i think more in the future, some slow year to year growth of exports. at one time above 10%. not that particular mark. we've got to remember right now exports account for a record 14% of u.s. gdp. i might add today we got troubling news on industrial production from the dynamic emerging market economies of brazil and korea. >> ethan, you write about -- as if all of what we're seeing now is not enough, we do have a

fiscal cliff to worry about once we get closer to the end of the year. what's your bigger concern, the things we know are the problem right now in europe or the problem that we have not yet addressed in this country? >> i think unfortunately we're going to go from one kind of crisis to another. the european problem obviously is the key focus now. i don't think the fiscal cliff has really made a difference in the economy yet, although we are very worried about the cliff. think about what they have done in washington. they have put in place a threatened 4% of gdp fiscal austerity plan and no mechanism for how they are going to fix the problem. that's going to have a very negative impact into confidence year-round even as europe settles down, u.s. fiscal crisis will pop up at year end. >> it's like pass the baton of worries from europe when that settles down to fiscal cliff. overall what's your apartments

patience on behalf of impact on gdp or other metrics for the economy frf first of all, as the earlier report suggested we are slowing down here. this is happening every year. kind of groundhog day, big number in third quarter, we've already slowed to two. my guess would be third quarter would be 1.5. only one%, one of the lowest numbers on the street there. just too many uncertainty factors weighing on confidence. i think the consensus hasn't caught onto the fact the fiscal cliff doesn't just hurt growth in 2013 but hurts growth this year because you're going to scare the corporate sector into the sidelines as we go into year's end. >> as far as making money from the market, we have to acknowledge fear moves through the market far more rapidly than considered opinions of guys like you. therefore, my question is with the s&p down 7.6% for the month, john, is a lot of this all

factored in? in other words, have we taken our losses on the headlines on the market and be at some stage position for a bounce? >> i'm afraid to say we're going to experience perhaps more in terms of fear. the vix index is rising high-yield bond heading to 700 basis points. as investors become risk averse, it should follow that both businesses and consumers also might shy away from risk. of course that means less in terms of spending. >> hang on. if you're -- i understand where you're coming from, if you're on the market isn't the object to sell high and buy low. shouldn't the question be at that stage, at what point do i buy? >> at this point you want to proceed with a great deal of caution. i hate to say this, the only way we might resolve problems in europe once and for all is frightful, scary, terrible decline by financial markets globally. that might finally compel the

different parties to come together and develop a compromise that settles matters once and for all. >> the 2011 you are going to get me to jump into the pit of despair. >> swirl in the pit of despair. >> swirl before i fall. ethan, let me come to you. what could change your viewpoint, 1% gdp in the fourth quarter. you are low out there certainly. interest rates low, we've never seen them this low. gasoline prices coming down. i can think of a few other things that might get the consumer moving a little bit. anything else that might challenge your opinion? >> i think we'll get some help from the fed, with this weak growth they will step in with another quantitative easing policy. i don't think it will be enough to stop the slowdown of the economy and further weakness in the market. we can hope for a few months of respite in europe. >> ethan, why would the fed step in when it's as low as this qe

would be at this stage. >> you've got two choices with the fed, the weapon you have, which is quantitative easing. we've seen in the past it gives a small stimulus to the market, including the stock market and currency. it gives a little kick to the economy. your alternative of doing nothing is much worse. the fed can't step back while the rest of washington is in dysfunction and just say we give up. we've got no tools left. i don't think it's going to be very effective but i do think they will do it. >> all right, gentlemen. we have to leave it there on that up note. ethan and john, thanks to both of you. looking for a meal at one of the hottest restaurants in town? look no further than open table, time to make a reservation with the stock, sit down with ceo matthew roberts next. roberts ne, it can just be too expensive. yeah, so to save money we just made our own. oh no! what could be worse than ninety-foot swells?! typhoon! first prize!

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welcome back to "squawk on the street." leap wireless is now down but was up more than 3% earlier today. they announced they are going to start selling the iphone, the first prepaid provider to do so and the stock spiked initially on that news, guys. it looks like the costs are starting to spook out investors because leap also saying the deal will cost them an estimated $900 million over three years. and the iphones will not be subsidized because you're not locked into a contract. that's leap's whole thing. the iphone cost $499 and $399. for a company that prides itself on lower cost prepaid plans now you've got to get people to pony up $500 books. leap making a leap on the higher end. >> news on leisure beat, restaurant a far richer experience. online reservations for straupts is expanding its international presence, launches a redesign of

top table site in the uk. google meanwhile yesterday announcing zag arts will become cornerstone of free service plus local. the service will also, and this the important point, integrate opentable as its reservation provider we now believe. in a cnbc exclusive interview from london we're joined by open table ceo matthew roberts. matthew, welcome, nice to see you. thanks for joining us on cnbc. >> thanks for having me. >> yesterday, come to what you were announcing in a moment. has the market got it wrong? yesterday at one point your stock was down 7% when google said going to put zagat online for free now looks like the headline may be buried there, you are the connection for that service. what is the relationship? >> yeah. most people don't understand we are language partnership with zagat and google and actually

600 other partners. we actually are the reservation functionality on all of those sites. all of those sites while important, it's important to note they are aggregate 5 to 10% of business. specifically relative to google and zagat, a great partnership with them. as you pointed out as part of their new google+ local solution we now have an enhanced more deeply integrated solution reservation widget that's part of that solution which we think is going to produce even greater experience for restaurant reservations. >> so talk us through what's happening today and the announcement in the uk. >> top table is our consumer destination site in london in the uk. when we acquired top table the vision had been to take the leading consumer destination site, which is top table, and marry it with open table's best of breed technology. we thought that solution would bring the best available to the

best restaurants to diners. today we really mark a major milestone towards accomplishing that vision by the relaunch of top table site and our mobile applications. >> oppenheimer is suggesting you might be sacrificing growth here in the united states with the effort you're putting in in the uk. it's great you came through at the beginning of the month with detailed full year guidance for the first time since you came to the market but that guidance has disappointed many people. what would you say to the criticism you may have overemphasized the uk at the expense of america? >> we have a significant amount of growth opportunity as a business in total. only 12% of restaurant reservations online today and in north america. our international segment, uk, germany and japan, it's even earlier, more growth opportunity. uk is an important component of that. that's why we've invested so much of our development resources in making sure the top table experience is great from a

diner perspective and also from a restaurant perspective. we think that's going to lead to meaningful growth for us in the uk over the long periods of time. it has taken up significant development for us and we're looking forward to now with the relaunch being able to reallocate relaunches towards other priorities which will also drive meaningful growth opportunity. >> so i use the service, i enjoy it. investors didn't enjoy your last earnings. the stock was down 19%. your operating experiences grew faster than revenues. you call it investment and development. how long does that go on for before that trend reverses? >> with only 12% of restaurant reservations, we think we have a lot of opportunity to drive for growth. our investments overall are geared toward the long-term. i think overall a business generated over 50% in north america alone last time. so our business model has tremendous profitability and operating leverage associated with it. not focused on driving near term

profitability at the expense of growth. our objective to drive growth in the business and tons of head room both in north america and international markets to accomplish that. >> you can see into 8,500 restaurants here in the united states. you recently launched the oep table index to demonstrate the heath of the industry. i have two questions, if you can be brief on both. to what degree can you monetize this sort of data and this sort of technology in new revenue streams moving forward? >> the restaurant industry index that we put out is because we have a unique vantage point of reservation taking restaurants versus a broader category of restaurants. what we've seen is that the restaurants have enjoyed sort of a modest year-over-year improvement in the 2% to 3% rate. starting in march and in april that sort of flattened out to sort of flat year-over-year

growth rate. so that's what we're seeing kind of more recently on our industry trends. as far as monetizing it, we put out the data as a way to help our restaurant customers better benchmark themselves and understand how they're doing, as well as for industry observers versus a monetization opportunity. >> it's nice to have you on the network. do you think as you come through with quarterly earnings now you'll come on each time and talk to investors through cnbc? >> i'm certainly happy to come on and visit with you. thank you. >> good to meet you. i guess you'll have a great table for dinner tonight. thank you for joining us from london. >> i would hope he would have one every night being who he is. the stock, by the way, the 52-week high 90.89, it's come a long way. >> wow, that's great. >> tweet time. this time we are talking drinks, not the alcoholic kind but the

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welcome back. i want to get a look from melissa of what's coming up on "fast." >> the vice chairman of lions gate, talk about the company's unexpected loss but also talk about the pipeline, what is coming up jond "hunger games in the fall. >> people asking how can you have the miss when you had "the hunger games"? >> the marketing and acquisition costs in this quarter and profits from the movie get recognized in the future. >> down the road. >> exactly. >> if you spend enough, this is a real big hit, the payback down

the line could be huge. >> exactly. we'll ask him all about it tonight. >> i'll see you tonight at 5:00. see you tomorrow, david. thanks again. simon is going to help us close europe in about 30 minutes. here's what you might have missed if you're just tuning in. welcome to hour three of "squawk on the street." here's what's happening so far. >> i don't think that we have measured well the negative impact of uncertainty. uncertainty has a real negative economic impact. it has a cost. it's like having a higher cost of capital. >> total private sector growth under what the market expected, 133,000, april revised down from 119 to 113,000. >> survey says initial jobless claims moved up from 373 to 383, new math up 10,000. first quarter gdp, 1.9, matches expectations, it just doesn't match the expectations that we all had a couple of quarters ago.

>> when you speak to morgan stanley executives, they will say the following -- we'll never know what would have happened were it not for the glitches at nasdaq. >> and the question is not necessarily did they do anything wrong but was it a successful ipo? >> one more session before the month of may is over. >> wow, what a drop! if we look at the may chicago purchasing managers survey, it's dropped to 5 2.7, that is the lowest since september of '09. >> it's not necessarily the best strategy to hide under the m mattress. we like dividend paying stocks, investment grade bonds and munis. >> welcome to the third hour of "squawk on the street." right now crude oil up. -- up

2.2 million barrels. the dow is down 82, make that 83. the s&p down almost 12 and the nasdaq down 30, of course unable to string at least not even two up days together for the dow in the month of may. facebook shares retreating again today. the stock down almost 28% since its ipo. several other recent ipos in the red today, groupon, pandora, linked in falling sharply. >> t.j. max and walmart up. nike is divesting its umboro and control haan. is this a step to buy armor?

>> the former ceo of pets.com is here for an exclusive interview. and one of the company's biggest unions is going after private equity. glass lien gasoline refineries. linked in, its growth prospects may be better. julia, good morning. >> good morning to you, carl. well, linked in may very well be the anti-facebook, not just because its stock doubled in its first day of trading a year ago in may. here at the conference, mary meeker, now a venture capital investors called out linkedin in her presentation as an internet ipo stand out. when asked whether linkedin --

jeff weiner stressed linkedin is about making ceos more effective. >> i think more importantly is the exclusive focus on a professional context. >> and linkedin has had a volatile ride but shares of up over 100% since last may and 50% year to date. and citigroup's mark mehenny jumped on the bandwagon, upgrading the stock to buy and boosting the price target to $125. unlike facebook which makes money mostly from ads, a small percent and of its revenues from gaming fee, linkedin has three revenue streams, the fastest growing is hiring, recruiting

tools and marketing, as well as sales tools to help users in their jobs. now, there's no question that linkedin is smaller than facebook. with 161 million ususers, ceo weiner says the target audience is the 641 million knowledge workers around the globe. that's smaller than facebook's total user base today. many of them pay to access the service and companies pay to recruit them. back over to you. >> julia, interesting stuff. that call by citi did get a lot of attention yesterday. i want to go to steve liesman with breaking news on consumer debt. >> a rare bit of good news this morning. the new york federal reserve releasing the 2012 first quarter total household debt numbers and they are down to 11.4 trillion.

this shows the deleveraging process continues except for one area, that's student loan debt. that's up nearly $300 billion from the third quarter of 2008 and the people with all other debt is down 1.5 trillion, consumer mortgage balances down and delinquency rates falling. that's good news. new delinquencies were up for student loans and home equity loans. new mortgage delinquencies were down nearly $14 billion. credit card balances also down 2 2%. who are the spend thriftiest and debt per capita was highest in california, new jersey and nevada. according to this data, lowest in texas, ohio and michigan, carl. where do you put yourself? >> i'm not sure about that. but interesting data nonetheless, steve. nike is announcing today it plans to divest it's cole haan

and umbro brands. >> it's always been the rumor, why does nike want to buy more cash and it goes potentially to underarmour, even though it's roughly 1/20 of nike's size. i'm not sure where they're going there. how much money can they raise with this sale of umbro and cole haan? fiscal 2011 the brand hit $518 million in sales. and nike made maria sharapova a spokeswoman. that's what big returns. her ballet flat is the best selling woman's shoe over the last 24 months but didn't fit

neatly into the portfolio, much like the starter brand which was also pushed off because it land synergy with the main nike brand. nike bought umbro but didn't sell the brand too much. it seemed like a good buy but nike was embraced quickly enough in the european soccer game so they were cannibalizing their own brand. nike share down a little bit today, as you can see, now 1.4%. they're up about 12% year to date, still hovering around all-time highs. carl? >> that would be an interesting deal if it were to happen, darren. we'll keep an eye on it. thanks a lot. >> breaking news this morning on dollar thrifty. kayla tausche has that. >> you'll see them spiking intra day as the market thinking mabel they'll finally reach a deal. traders thinking maybe they're

getting into a room and ma'amering out the last negotiations. don't expect a deal to be immediately imminent. it's common sense that hertz is still there and they're still looking at dollar thrifty but as far as what they need to get done on the regulatory side, the is are not dotted and ts are not crossed yet. they did get a sale of the advantage under way. that's a key regulatory concern. they're hammering out the final terms that much with the potential buyer of advantage. not to mention the ftc has so dissent decree. they want to make sure whatever they tell hertz to do after a potential dollar thrifty deal, that they're all good on the fact that that wouldn't hinder competition. as far as the regulatory side, still working that out, don't expect a deal to happen in the next few days. >> kayla tausche back at headquarters. thank you very much. over to the cme this morning, rick santelli. they tell me you're talking about the capital detour. explain.

>> absolutely. you know, when you're on a road and there's a detour, you have to go to a different direction and kind of take a round-about way to wherever your ultimate destination is. capital, money, it's taking a money. what is it avoiding? bad parts of europe and bad designating peripheral economies and banking systems that have issues like spain, like portugal, like greece. but if you look at how rates have moved from april 1st to may 1st to today, it isn't just the u.s. that has low rates or that the rate of change and how fast rates moving down is accelerating because, yes, investors are showing us what they think with their wallets. art cashman talks about that a lot. spain. let's make spain our benchmark. on april 1st, their ten year was at 5 hadn't 5.44, where is it today?

6.53. the acceleration between may 1st and today, up .76 basis points. now let go to the rate board. the rate of change between may 1st and today in japan, down 6 basis points but 82 is their ten-year. hong kong, 1.03. now it starts to get exciting. germany, no surprise. their boone was at 1.66 on may 1st, .45 basis points. finland, 1.51 today coming from 2.05. as you look at these back rates, what you really want to pay attention to is how much more it's accelerating since april. now we start to get to the u.s. the u.s., minus .38 basis points, 1.94 versus 1.56. the u.k., the guild, 1.57,

minus .53. the winner is the netherlands. it's current lirr at 1.63, mi s minus .61 basis points. we can read the papers or get sick of talking about europe but this really speaks volumes about why we have to worry did it. from the u.s. standpoint it isn't necessarily about our own economy's numbers, it isn't about who we export to. it's the fact that if capital continues to get somewhat impaired, you'll have more data points as investors not only rethink about their capital but everybody rethinks everything in the capital structure that makes business go round. back to you. >> rick, good stuff. see new a bit. when we come back, one of the most dot-com busts to date, pets.com. they went from ipo to liquidation in nine months. should facebook and the other modern dot-coms take note? we'll talk to the former ceo

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lions gagat ♪ it's a long way to the top if you want to rock 'n' roll ♪ welcome back to "squawk on the street." a market flash on facebook because facebook continues to fall. it is down below $27 a share. it is now off about 29% from its

ipo price. you have s&p lowering their price target and cutting estimates for this year and next year. they got a $27 price target on facebook, which is essentially where the stock is right now. they did say they expect the negative news flow to subside just a bit. still facebook -- facebook, by the way, is a social media company. might have heard about it. they have a lot of people that go on it a lot. >> we get criticized a lot for not covering it enough. >> coming up, why kansas could be the place for the next bakken like oil boone. we're back after a break. fter a.

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one of the most recognizable dot-com busts is pet.com, floundered after just nine months of going public. what can facebook learn from the

last era. julie, good to you have with us this morning. thanks for being with us. >> good morning. >> a lot to talk about. i'm sure you've been paying attention to what's been going on. an eight-year-old company goes public, instagram gets bought with no revenue for $8 million. are we make the same mistake as back then? >> i don't see how can you compare the two. it's a completely world. >> what's different? >> let's start with the audience. 1998 to 1999 there were 250 million people on the internet and mobile didn't exist. now there's owe over 5 billion and mobile is major platform. so that number alone changes the dynamics. >> you talk about credit card privacy, security. i didn't realize this.

back then had you to hire customer service people just to answer consumer questions about credit card security. obviously now there's a lot more infrastructure in place to make people feel safer. >> the world has changed dramatically. when we first started, i actually had a company before pets.com, called reel.com, which was the first site to sell mo movies online. we had a small team to make people comfortable with giving their credit card online and now the world doesn't think twice about it. >> you run the real reel trending toward $12 million in revenue this year. what are you doing different this time? >> well, it's a different world. the comparisons are just so vast. way back when, you know, most likely when most other people watching m possibly in high school, they were just getting used to computers and everything

was different. we had a build code from the ground floor up. now you can plug and play to get a product up. so many of the fundamentals in terms of treating -- making sure you have a good value proposition, treating the customer correctly, making sure that -- and i've always been in the e-commerce side that you ship on time, that you meet your obligations to a customer, those fundamentals haven't changed. the way you get there, the way you build the business is completely different and social is a key component of that. >> you do say get funded while you can, that you and your board back then turned down an investment of about $100 million right before the ipo due to dilution concerns. you say grab the money when it's available? >> capital can dry up and capital can be abundant. in any case, businesses need

capital to continue their growth. we did turn it down. pets.com was a pioneer. there are probably 50 pet sites now, one of which amazon owns, wag.com. if you look at timing, if you're early in a segment you need more capital than a later stage and a later stage you have more competition. if we would have taken that money, the company most likely would still be here because it was based on fundamentally good business principles. >> yeah, especially on a day like today when pet smart is trading at a record high. people do spend money on their pets no matter what the economy looks like. cnet called pets.com one of the greatest dot-com disasters in history. i wonder if that hurts, if you agree, if you're sensitive to it at all. >> well, i don't know what measurement that is. i think it may get eyeballs to the site and it certainly has helped sell newspapers and

creates a lot of sensationalism but i've never seen any data that supports that and have i no idea what the motivation of the writer is. so i look at that and say versus what? there were i think during that time 1,100 companies that went out of business. pets.com, i chose to shut the company down and give money back to shareholders so on a loss basis we didn't lose more. in fact, we lost less than most companies. we created an enduring brand. there were eight other pet companies, some more heavily funded than pets.com and no one seems to remember those. so i just look at it and go i hope they drew a lot of eyeballs to it. it's really good to have sensational statements if you're trying to get viewers. it's not and very seldom supported by facts. >> we'll always have the sock you puppet. julie, thanks so much for your time. >> thanks. >> meantime kansas is seeing a

huge influx of business from energy companies hoping to reap big rewards but is the state ready for the business? bertha coombs joins us live with that story. >> we're just across the border from oklahoma where some of this production has already started to ramp up. it's now entering here. sandridge energy is one of the biggest players here. they are putting up rigs all the time. the one you're seeing here went up just a couple of weeks ago. they're doing horizontal drilling here. tom ward, the ceo, says think of this area the way north dakota was five years ago and in another five years it is going to rival, he says, bakken production. >> we're anticipating that peak production in the mississippian lime play will be around 500,000

barrels of oil before 2020. >> that 500,000 barrels a day, the way we're seeing now in north dakota. you can see it's an area that stretches across the state borders. they've already seen the sort of boom town effects in oklahoma. they're preparing for it here. towns here in southern kansas, they're really small. this town has fewer it and a thousand people. they're banding together with rivals to meet demand, particularly with this early stage of temporary housing, setting up what they call man camps to try and do it in an organized fashion. the other thing that's hard for the companies here is competing for workers because some of them have already gone off to shale and to try to get those better, more qualified workers. some of the recruiters here are trying to offer better benefits. >> every company out here that's drilling is -- they're all great companies, and they're all after you have to be willing to go

that extra mile and bring in the good, quality candidates. >> one of the things that they are doing, jared who you saw there, is a former air force veterans. he's looking among former veterans for personnel. we could see 100,000 new jobs in kansas. in power lunch, we'll look at how the towns are preparing for it. >> that could be a real economic engine. thank you very much. when we come back, the european close after this break. [ male announcer ] this is the at&t network.

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the europeans are closing the markets. >> what is interesting is there's one standout coming through and that's the greek stock market. it's not a terribly good guide of what's going on. the greek stock market has made some gains. i don't know why that is or whether it's short covering. there are two polls showing the pro-democracy could win the election it's early days but just be aware we've made those gains in greece today. not all stocks in greece have

gained. the banks are in negative territory. coca-cola has -- it's now turned negative. so there you go. we're all over the place as far as greece is concerned. but we close out the month in europe. that's important. you'll be aware of the bearish effect it's had here in the united states. we have spain down 13%, italy down 20% for the month, as we have it on those charts anyway and the clear focus is the contagion and whether or not it actually spreads to spain and still of course a huge amount of pressure on the spanish bull market as we trek towards 7% on the yield there is and a key test is they have to auction some government paper next week. into the fray, it's important as we look to the long term and bringing time horizon closer, that mario draghi stepped up the pressure for the joint guarantee

of bank deposits. he said depositors' money will be protected if they build this fund. he told politicians to clarify the europe that they want. take a listen. >> debt configuration that we had with us by and large for ten years, which was basically considered sustainable -- i should say, i should add, in a perhaps myopic way, is being shown now to be unsustainable unless further steps are taken. >> the ecb pushing along with probably half of europe to get this joint guarantee. the question is will the germans bend, the finns bend, the dutch bend. we have a referendum under way on the pabt in ireland. the opinion polls indicate that

that will go through. all the opinion polls have suggested that from the onset in february. however, there is a 20% undecided pool who could swing it and cause trouble. the polls close at 5:00 a.m. new york time. >> the most amazing stat for me today was u.k. chamber of commerce projecting teen unemployment next year of 41% in the u.k. >> wow. >> so it's not just spain, if you know what i mean. >> it's tough. >> thanks a lot, simon. >> over to rick santelli, talking pessimism over realism. >> i love simon like a brother. i think he nails so many of these topics because of course his vantage point is more european than many of us, but what i have a problem with is this is realism. if i wanted to get you all

pessimistic about europe, i could paint it way more aggressively. if you take a step back, just listen to the comment that you just made, carl, u.k., talking about certain segments of the society, 40% unemployment, spain, certain segments at 50% unemployment. this is not good. it isn't a question of being pessimistic. if you take a step back and you look at the fact we're not talking about a flowers.com disappearing, we're talking about as possibility. let's say it's only 20%, we see a complete default in a country like spain. that default percentage needs to be 1% or 2% or less. the fact that 20% or 30% is just a number in my opinion, these are significant. what if i told you there was a 25% possibility you were going to get hit by a meteor tomorrow? i think we cannot underestimate a notion that the large swath of the globe is basically insolvent and to walk around and talk about it as being pessimistic,

it's realistic and we need to stay realistic every single day on cnbc so the viewers' capital doesn't get protected because at this point protected is like how they protected people from cuba from leaving. >> thank you so much, rick. mary thompson is here watching the markets, which have come off of their lows to quite a surprising degree here, mary. >> significantly, in the last two minutes or so you've seen the dow move just about 40 points or so. that disappointing data received earlier today on jobless claims in the chicago pmi continues to keep some pressure on the markets. a quick check on some of the sectors we've been watching in a broad range selloff today, in large parts because of concerns about globals, technologynd pressure. telecom had been the bright spot. it's the best performing sector

this month, being the only sector trading to the up side for the month of may. we're keeping watch on the s&p 500. it's bounced the levels from last week and a strong move to the up side. a quick check of some of the dow components. caterpillar was a big winner earlier this week after reports of an expected chinese stimulus. exxon mobil, ugly chart i looked at yesterday. it continues to slide along with the weakness we are seeing in oil prices today, b of a also under pressure. look at a chart of jpmorgan, it's the worst performing stock this month. company's ceo jamie dimon will be testifying before the senate banking committee later this month on june 13th, still to be determined when he testifies

before the house on those trading losses. quick check of the retailers because that's another story today. the may same-store sales numbers issued by jpmorgan say they are disappointing, especially given the warmer weather. as one trader told me earlier today, also the decline in gasoline prices you'd expect them to be a little bit better than they were. again, well off its lows of the day. >> thank you very much. this morning at 5:35 the world's first commercial space supply ship pulled away from the international space station. jane has more on that. >> let's look at nasa tv right now. the main pair a shoots are being deployed as the dragon capsule prepares for reentry, to splash down in the pacific. its main shoots are deploying. can you barely see them as it comes back into the atmosphere. that's a pretty good shot of

them right there. spacex will retrieve the dragon capsule. it will then be reused in future missions by spacex. nasa is monitoring this but this is a spacex operation. this was only a test mission. spacex has 12 contracted missions to the space station in which it hopes to start later this we're. of course it has other plans counsel the road for a craft, its rocket and a heavy rocket. so very big deal. by the way, as this is happening, it's really been a big week for private space, carl. we've had richard branson's virgin galactic get faa approval to start test flights later this year and the google lunar x prize have been meeting to get their funding together to land a rover on the moon by the end of

2015, perhaps using a spacex rocket. >> unbelievable arm race that just started out of nothing. the first journalist on the moon, jane, you know who my vote is. >> i actually applied for the journalist in space for the space shuttle trip back before challenger. i'm still healthy. >> yes, you are. in the meantime, hard right turn here. a big day for economic data. brian westbury joins us, chief economist with first trust visoadvisers advisers. after the data today, some people probably wish they could get on a rocket and go into orbit. how disappointed are you? >> people are calling this disappointing. it was a little less than consensus.

i sift through the data and we're way better than we were a month and a half ago when initial claims were about 400,000. they're not down to 380, 370. chicago pmi was weak but the milwaukee number was actually strong. and when i dig through the gdp reports, if you take out the decline in government, in fact the economy was growing pretty darn close to 3% in the first quarter. yes, government spending has been weak but the private sector where we're getting spacex from, where we're getting the cloud, where we're getting the ipad from, it doing pretty well. >> so you think the fed should stay away? you think some of these comments -- the feds speak this morning that qe is no where in the long term is where it should be? >> absolutely. do i not think we need qe at all. if you look back at the past three years, it's been one thing after another to worry about.

you know, we've been worried about greece, we've been worried about default and downgrades, the dubai. the list goes on and on and on and yet the economy keeps growing. i call this the plow horse economy. it ain't going to win the belmont but it ain't going to keel over and die either. and that's where we are. the fed does not need to come into this. the plow horse continues to plow. to move. >> let zero in just for a moment on this ten-year yield. i mean, you're looking at some remarkable numbers where you're competitive with stocks to date, right, and stocks so far this year, not far from where the ten-year is yielding right now. >> right. >> where's the bottom and what's the sentiment surrounding the continues to plow into personal income. >> core inflation, for example, is over 2, which means you're

losing money in that ten-year treasury relative to inflation, i see this and it worries me because i believe in markets. so i worry about this 1.6% yield. but do i think we have a couple of things going on. first of all, with europe there's a flight to safety in these bonds. banks don't have to hold capital when they hold treasury bonds. as a result there's an encouragement to buy them but there's a this flight to safety the second thing is as long as the fed holds the federal funds rate at 0%, it's really hard to see any kind of increase in yield. so i'm not going to buy into the fact that 1.6% means there's some kind of armageddon coming. i think right now it's flight to safety and the fed that's causing it to be this low. there's 260, i think the number is 260 i think that's the place

to be, in stock, not in bonds. >> we got to go. really quickly, your number for tomorrow? >> we're at 145. >> 145. >> 145 for the number tomorrow. we'll see that in the morning. good to see you again. >> now on cnbc.com, see how holder americans are learning new trades as they try to compete in a tough labor market. straight ahead, why one of the latest investments in private equity is coming from a very unexpected place. back in a moment. [ male announcer ] introducing a powerful weapon

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. coming up in just a few, is facebook really worth $20. the man who called the ipo drop says the stock has further to fall from here. the number one ranked bank analyst will tell us why he's not buying the wells fargo hype. and retail sales in may, we trading the numbers and finding your best buy in retail. we'll get a visit from henry blodget, too. >> the private equity industry has been front and center in the political debate. you might be surprised by who is investing these days. eamon is live with those details. >> if you've been following the teamsters and what they've been saying about bain capital and private equity, you might think

it's just the opposite. here's a look at what hoffa had to say. he says mitt romney represents everything that is wrong with our financial system. he made his money on bain capital by destroying american business and filling his pockets with millions while putting workers out on the street. does that mean that the teamsters themselves don't invest in private equity? no, it does not. the regional pension funds have more than $1 billion invested in private equity. in fact, one of the private equity investors inside the teamsters organization had this to say. take a look at what the western conference teamsters pension trust investments chair, he said "i'll be honest with you, i cringe sometimes when i hear them beating you on private equity for the sake of beating up on private equity. can you do so-called social investing and make just as much money as these others," telling

me that in fact the teamsters don't have any money at all invested in bain but they do invest in what he calls worker friendly private equity funds. he said they go out and find those private equity vehicles that are not slashing jobs, that are building companies for the future and make sure some of those private equity funds they invest in, for example, don't buy walmart stock or anything that's difficult for the unions to get their arms around. clearly even the teamsters like private equity, but a certain kind. >> even with those caveats, such a great story. when we come back, the ceo of royal dutch shell is with us live. back after a short break. ♪ ♪

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the unmanned spacex dragon capsule has landed. >> they have spotted the chutes. if you look inside nasa, they have mission control for hawthorne and they're waiting to make sure the capsule is in good shape. the chutes have been spotted. boats are racing there to try and free it from the chutes and

retrieve the capsules. the splashdown, they did not get a visual on it. things are on standby at mission control as they wait to make sure the capsule is fine. you can see elan musk in the front row leaning forward in a dark shirt. no celebrating yet until he knows for sure that this hundred million dollar investment of his own money and others, about $1 billion total has worked out well. when it's retrieved, we'll let you know what shape it's in. >> it's exciting to have a live space event to talk about. incredible pictures there. gasoline demand may be waning here in the u.s. but it hasn't stopped shell or saudi with an expansion.

>> i'm here at one of the world's largest refineries and the largest refinery in north america. peter voser, thank you for joining us. this is a 600,000 barrel per day refinery now, more than doubled its capacity but this is happening at a time when gasoline demand is smalling afa the economy is far different when you made this agreement with saudi-aramco. >> we take a long-term view. we have a refinery with all the latest technologies, a lot of flexibility to take different crude and different products. we can serve the u.s. and canadian market but we can also export in other parts of the world. overall the gasoline or the transport fuel market will increase by some 26% between now and 2030. so there's plenty to be done. >> you talk about the export market. there's been a growing debate

over export market and how we have become a net export petroleum product. how does that benefit the u.s. consumer. will it really help lower pump prices? >> i think the pump prices or crude prices are set on the world stage. i don't think you can have regional setting of prices. but the refinery was built really to serve the u.s. market first. with our distribution assets we can reach half of the country. this is a very flexible refinery that can generate value and it generates value for the community and shareholders, et cetera. you need to take it from that rather than just looking at the rather short-term demand. >> and it's also flexible in that it's processing heavy crude as well. saudi-aramco, one of the largest

refineries. how much of saudi heavy crude will be processed here? >> that depends. we can take heavy crude, light crude. the value of this refinery is we can take lots of different crudes. saudi arabia will sliver sodeli of. >> you made a major investment in the canadian oil sands. how much will come from there? >> it depends on the pricing. this refinery could take a lot but we don't depend on canadian crude and don't depend on pipeline, et cetera. but if available and we think had will in the longer term obviously canadian crude will come down to the u.s. as well, we can take it. >> i thank you very much for joining us here in port arthur. peter vosser joining us here at the one of the world's largest refinery and the largest refinery now in north america, motiva refinery. >> for the month of