and you'll show off? usually spanish, but you'll do it with italian and french, too. >> he may go aftercarbs, next. >> he might. >> make sure you join us tomorrow. "squawk on the street" starts right now. ♪ feel the vibration ♪ >> a little marky mark to celebrate. the actor's 41st birthday, mark wahlberg, of course. good morning. live from the new york stock exchange after falling to a new low for the year, can the dow put an end to its losing streak. looks like a slightly lower opening here with the s&p. in europe, the g7's emergency conference call taking center stage right now. markets in london, we should note, they are closed for a second straight day in celebration of queen elizabeth's diamond jubilee celebration. >> our road map, still waiting

for headlines out of this emergency g-7 conference call this morning as spain says its banks need 40 million euros in additional capital. we're less than 20 minutes away from a meeting. >> polls showing 34 pnt of users are showing less time than just six months ago and users are not swayed by ads or comments. >> starbucks making a deal, paying a hundred million for san francisco bay bread. does this mean trouble ahead for pinera? >> and iphone 4 sales look to be slowing. is apple seeding market share to the likes of samsung and the likes of other phone sns. >> the last four sessions, it's the biggest four-day decline in almost two months. among the top concerns, the

banking situation in spain. germany said to be encouraging spain to accept an eu rescue to help it recapitalize its banks. high borrowing costs mean the country has effectively been shut out of the bond market. there has been a lot of discussion to what degree spain would try to continue to tap the public markets this weekend next. >> they've got a 2 billion euro offering coming up in a day or two of ten years. that's not very large, so it may not be a great barometer. we will be watching it closely. >> again, you struggle to figure out why if you're a person of any means, you would keep your money in a spanish bank. as great as the bank is, and it is, i'm not even joking anymore, it's now too dire to talk about that. but this is a great bank. bbba. a really terrific bank. but give me a reason why, if you're spanish and you can go to another bank, why would you keep it in a country where they could

wake up tomorrow and say you've got pacetas? >> that's been the key question. the most recent flows we saw only ended with april. we didn't see may at all. from what i heard, it's all anecdotal, of course. you have wealthy people in particular, and others, moving to the swiss franc. it makes it rather easy. it is rather important to draw the contrast that's been going on for a number of years now between our banks and the banks in sweden. criticize however you may want to, there's certainly a fair share of criticism for the bailout, so to speak. but the fact is we've regained confidence as a result of the stress test and the results of them taking the hits that they needed to win the balance sheets. that has never been the case in europe. that has been one of the key problems there all along. we know spain had a huge real estate bubble.

and those stress tests they had were a joke. >> meantime, raymond james today lowering estimates on 76 large cap banks because of lower interest margin, slower loan growth. we're still waiting on moodies to make their call on some of the big ones. >> this is a yield curve. i hate to talk about the yield curve, it's one of the most boring topics in the world. there's two ways they make money. they invest it in a very short-term instrument. greenspan -- or in cds if they're jp morgan. >> but if it's greenspan made it so that the shorlt term rates were so much higher than the or night rates the banks could just print money. we do not have that situation right now. >> i know a lot of people will say you want to be invested in u.s. centric banks. but at the same time, it seems like overall the environment -- whether it be at a macro level

or the interest margin level -- it is not the time to be in banks. if you had to put a dollar someplace, would it be in financial zfss at this point in the united states? >> until friday's number, i think the answer was we're geting there. maybe we begin to see some rates going higher. that number was devastating, melissa. it changed people's minds about the domestic banks. i still think they can make money. wells fargo lending 30% of the mortgage money. >> and then there's the front page of the new york times. europe's fade becoming a drag on u.s. sales which is, i mean, we've been saying it for a long time here, guys. but apparently, the general media is beginning to pick up on the idea that what happens over there is going to happen over here especially when it comes to tech. >> there are some industries that you know rely a lot more on not sales in the u.s. not domestic sales and europe comprises an important component

of that. there's more than 300 million people in the eu. it's an enormous economy. >> yeah, tech. >> those are all pornt areas. but, again, to your point, this is not exactly news. we've been watching that play out in our market for quite some time. >> you can argue once the times covers it, there's a lot of people who like to do this glib stuff. but remember, we've got a quarter going on now where the estimates could be too high. so you get this kind of thing. you say listen shs i wa, i wantm fish with cisco. you need to see estimate cuts happen before you get a bottom. >> u but i think the dilemma is they're being told to invest in high dividend yielding stocks. they're the very same stocks that have the same exposure. 22% are revenues that come from europe. we're talking what?

the likes of coca-cola. any of these con summer companies. autos, 27%, industrials, 16%, revenues from europe, these are the same companies they're being told to invest in. it's no surprise that they throw their hands up and say i don't know how to invest in this market. i'm stepping aside. >> one of the things i've been emphasizing, if it's domestic, more than others, before this signalled that managements were behind the times. what the heck, why aren't they over in europe? why aren't they coining money in europe. now, a company that moves over aggressive in europe is really viewed as a company at risk. let's talk pepsi. i think the quarter is going to be good. i think that the restructuring is going to be good. but their move was to be in europe adepressively. we're worried. how long will it really last that we penalize a company for being smart and moving over to europe and now looking dumb. >> rates around the world, austral ya cutting rates in part

because of domestic economy! they are a commodity-based economy. >> generally giving credit for raising when they have to and cutting when they have to. not a good sign. you know, after india, after china, central banks are raising some red flags, too. >> i was trying to compare last night on "mad money," is this 2009? is it 2011? and we do not -- we don't have brazil leading us anymore. we don't have india. india seems really terrible. employment is still tight in china. but at the same time, when china decelerates its coal, david, you mentioned its copper, its aluminum, we have many stocks that were really exciting in the fourth quarter in 2011 that were just devastating to people's portfolios.

>> let's talk about facebook. one of the big challenges, of course, facing the social media company turning its $900 million customer base into advertising dollars. a new reuters poll says 4-5 users have never bought a product or service as a result of ad or user service. 34% of ewers spending less time on facebook. this sort of underscores about facebook and its ability to monetize. we saw that take a soft to a new closing and intraday low yesterday. >> i keep coming back to was there a rapid deceleration? david, you said over and over again, they couldn't deviate from the s-1. i was trying to figure out what were the complications between the big buyers who could have stepped up to the plate. it's very possible. you could have reiterated what

was in a document and reiterate it in a way -- you know, we are saying that revenue might be slowing in the big selling accounts. well, isn't that a big buying account? is that a boilerplate? all morgan stanley's people have to do is say we are reiterating. you do it where a bit of force and a bit of intonation, a bit of link and people realize that maybe you can't bottom fish as fast as you'd like in facebook. >> i think morgan stanley said there was enormous demand at the retail and institutional level. and they will continue to point to that fateful day with nasdaq and they there was plenty of demand until there were screw ups and everybody pulled back and suddenly, the momentum was completely reversed. at this point, regardless, it's about facebook and its fundamentals. eventually, we're going to get a quarterly earnings report. >> and the journal today has a

sales force. google, a small purchase today. all centered around doing business. if facebook's fundamentals are bad, why are these big titans of tech making this investment? >> you're trying to say that facebook has always had a great relationship with the ceo sales force. but, obviously, social media is far bigger than facebook. the idea that this is some sort of affirmation of facebook's power was a dramatic overstatement of the media. this is not just a facebook play. is there a way to get the new espn.com? is there a way to make it so the facebook experience isn't destroyed by a 15-second gm ad?

>> i do not know. >> it might not be gm, but it might be somebody else. >> it might be fire stone or dow chemical. >> but here's what i worry about with facebook. this mobile adoption, which is just -- i mean, you know, by the day. look at that stuff that you just mentioned. people not going to the desktop. the desktop ad, i can actually see the desktop ad. i don't need 3.0 readers bought at wall greens -- no, cvs. >> you need me. i'm trying to figure out whether it should be colgate or crest. zynga, when i look at it, or when i try to look at the ads on scramble with friends, i need a mag nifying glass. i'm not going there.

>> is that like 1% on the tenure? >> meanwhile, starbucks is buying a san francisco bakery chain. a hundred million dollar cash deal. the company could provide some new competition for chains like pinera. they have been playing outside the box a little more lately. consumer products, jim? >> pinera, i love it. immediately people say panera is dead. i do believe that groupon is vulnerable to amazon because they have a better product. there is nothing in this acquisition that makes me feel that suddenly, howard schultz has the killer. panera is doing pretty well. panera does better when wheat comes down than worrying about starbucks.

>> it sounds like a long-term strategy that's wrought with potential problems. it's not just panera out there. every single coffee chain has some sort of food and chain offering. and that could be very big. but in the meantime, it's going to take a long time to do. >> starbucks did jump a lot. i remember in during the period of the sandwiches, saying listen, starbucks is diversifiid incorrectly to food because it's changed the aura and the aroma of a starbucks store. >> they needed scent-free food. >> they have a lot of croissants, already. >> i get the triple vent venti capuccino with skim. >> i think starbucks versus panera, this is not one of those

where there's too many bad guys in town. it's not high noon in the food business. >> no, it's a very small deal, of course. to become a bigger -- >> we've seen a lot of lately actually, huh? >> we have seen some very small deals and will continue to see at a level perhaps above a hundred million. but, yeah, we have seen some of these smaller deals. one move up in the stock price, one dollar up is 750 million bucks. >> starbucks down 3%, is this the kind of food company you would invest in despite its exposure to europe? >> you're investing with a man who has done a lot of turns. howard said europe. i would make it so europe is not an issue. then the question is how much

does the stock reflect the idea that he's made europe. it's like everyone is relying on the chart. i don't know if he's bankable at 48, 45 or 53 on the stock. >> channel checks, talking about apple, indicates slowing sales of apple's iphone 5 loss. canaccord also believes apple is well positioned for a strong 2012 and 2013 due to product introductions. it is anticipating the 5 launch to be in october. so typical slow down here. >> i think that's important. you have talked multiple times on this show about this gap and the market is trying to figure

out how much of this gap is in apple. wouldn't you say that canaccord is reaffirming -- >> you could have guessed that there would have been a slow down ahead of the launch of the iphone 5. we've heard this again and again throughout the past couple of months. channel checks indicate a slowing. channel checks indicate that the iphone is coming sometime in the fall. this is all par for the course. with the downturn of the markets, does even an apple fall with the rest of the markets because of the high correlations these days? >> i think that you just can't have any negatives. you can't say -- i was looking at caterpillar this morning. just to analogize this to another stock where people say the estimates are at risk. is it in shape for an estimate cut? no. is apple in shape for any estimate cut? no. nothing is in shape for anything other than great news. and ewe eyou've got to have gre news.

there was a terrific article today on apple versus google. and these are the kinds of things that make it so that apple in 2013 along with the itv will be valuable. but you have this gulf. and any gulf is ak sen chew waited by how horrible the market is. >> when we come back this morning, a live interview with ericson's ceo and we'll talk about wa the crisis could mean for the equipment giant when we come back. we are hearing that the g-7 will not issue a statement. after that call today. so we're going to have to continue to build the narrative on our own which we'll continue to do when "squawk on the street" comes right back. back.wr streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor,

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welcome to the world leader in derivatives. welcome to superderivatives. earlier this morning, we told you about the reuters poll that showed 33% of facebook users are spending less time on the site than they did 6 months ago. what are you doing with all of that extra time not on facebook? we're asking you to send us a tweet at cnbcsquawkst. 33% is, i would argue, statistically significant. >> this is what i would regard as just being a terrible second quarter for facebook.

i just really believe that. >> the other stat is that 44% have a less favorable view of facebook after the ipo and actually did damage to the reputation. >> negative advertisement. isn't that interesting. typically, these ipos used to be the great way to get your name around in late 1999, 2000. i think you think it's still too early to buy web van. >> i'm holding back. >> e-toys. is it time to step up? >> actually, i've really gone all in in pets.com. >> wow, four out of five have never bought anything because of an ad. on facebook. interesting. >> do you know that there's a study that came out, l.a. times mentioned it that coupons, coupons come in the mail do better than facebook. i was looking at justice, dress barn, they reference couponing

as being a great way to build business. obviously jcpenney. >> are we 32% complete in the term? we were 29%. >> maybe we've retreated and we're down to 25%. >> 26%. never use a round number. >> we've got to take a break here. take a look also, again, ahead of the opening bell on this tuesday morning. we are looking on a slightly lower open. stay tuned, opening bell is straight ahead. ttd# 1-800-345-2550 let's talk about the typical financial consultation ttd# 1-800-345-2550 when companies try to sell you something off their menu ttd# 1-800-345-2550 instead of trying to understand what you really need. ttd# 1-800-345-2550 ttd# 1-800-345-2550 at charles schwab, we provide ttd# 1-800-345-2550 a full range of financial products, ttd# 1-800-345-2550 even if they're not ours. ttd# 1-800-345-2550 and we listen before making our recommendations, ttd# 1-800-345-2550 so we can offer practical ideas that make sense for you.

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♪ i know it's hard to remember the people we used to be. >> can't get enough of that song. time for the mad dash with talking some dollar general. also a secondary. >> yeah, i've been kompb fuconf him. mad, mad, "mad money." dollar general. but a secondary. before you panic, there have been three secondaries shs one at 34, one at 39, one at 45. they've all been home runs. they've all been worth being in. 7.5 million shares for all three of those. this was a monster quarter and they're moving to california. >> we've talked about good response to secondaries being a positive sign. not a reversal? >> no, i think that's still good. they've priced them in the whole. but facebook -- what angers people with facebook so much is

that everyone is supposed to win in those deals. but it didn't happen. come on, that interview was amazing. >> a lot more "squawk on the street" in just a moment.

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that is the opening bell for this tuesday. a look at the s&p 500 at the top of your screen. market vectors celebrating the recent victories. and over at the nasdaq, bed, bath&beyond celebrating its 20th listing anniversary. >> that company hardly ever does interviews. i love their coupon. when i was buying my quisinart, the woman right behind me gave me that 20% off coupon. just nailed it. >> it's free money. coupons are free money. >> where's the jc penney? that logo cutting numbers right here, right now. >> the dow, jim, is up in the past 23 sessions, it is up four

times. so -- >> isn't that amazing? >> yeah, it is incredible. >> no wonder everyone is so worn down. right? welt come proly tart. we talk about yield protection only because the tenure keeps going lower. but at 2.77 for the dow, if the dow were to drop to 8,000, you'd be getting a 4 pnt yield. there's a lot of doomsday talk. and i'm trying to put doomsday talk in perspective. >> as it is, we have an enormous over a 1.5% yield on your ten-year, given what is it? 2.7% roughly on the dow. the market is obviously telling us something going down all of those days. clearly about a reflection of people's words, not just about europe but by the u.s. economy.

>> is it october of 2011? is it august? is it 2009? what's the best analogy? >> we're checking shares of facebook in light of that poll. low is 26.70 on facebook. we're at 26.81. it's still holding in a market that is largely flat. we've got a 1% gain in bank of america which is below the $7 mark. went there yesterday and is still there today even with that 1% game. we're seeing them trying to move higher. so financials certainly in the spotlight yesterday. home depot and lows also in the spotlight. we've got estimates for the quarter as well as for the full year. they didn't like the decline with same-store sales that we saw from the fourth to the first given that it was perfect weather. it was great weather and sales should have been stronger. we are seeing some weakness. >> investor call for home depot tomorrow.

>> they're really powerful when they decide to tell a great story and i think that blake is a fabulous ceo. if he talks about a tail wind for housing, that could turn the stock around. but the stock was up yesterday. your citigroup call really slams the banks. i like to look at the preferred. the preferred is still hugging around 7. that is a good sign because the preferreds did spike to 7.5 and higher. >> we were talking about the yield on the preferred? >> yes. the preferred signal that things aren't as bad as the stocks may think they are. right. star bucks trading pretty sharply lower down by 3%. >> jim says no, but the stock is saying perhaps. panera bread is down by 2.5% or so.

>> disney is getting some broad general news attention because of these nutrition standards they're going to start introducing for advertisers on mare media properties increasing the healthiness of their food and parks. some moves by mechanic dona mcdonalds. it all might tie into the whole foods dynamic you talked about in this country. whole foods is apparently having a great quarter. dean foods has got a terrific product line of organic products. it is not necessarily a earnings killer these days to be able to have a healthier story. i want to just comment on something. we've got -- you know, we watch twitter. we're social media people. and someone said oh, every time you guys compare facebook to pets.com, it shows your age. facebook is a profitable company. i'm simply trying to figure out what the profit is worth. >> right. facebook, by the way, is up by a

percent now. so it is turning around a bit in today's session on update for facebook. people, you know, people also on twitter and in various other ways reaching the show. always pointing out how facebook hits new lows. it's not because we want -- we're just simply saying that it is. it happens that every day there is a new low on facebook and today it is trading higher. i believe this is the first day of trading up since the expiration. >> interesting. >> i just got some groupon literally a few min uutes ago. it looks like chiropractic and massage package. $600 value. this is incredible. i just got 95% off chiropractic massage. >> oh, jeez, you know. it's something to do with your feet. >> all i can tell you is this is the first deal in a while that i've looked at because i don't need that waxing. i was at the beach this weekend

and not a single person that i saw was taking advantage of the waxing deal of the male cohort. >> i wouldn't call it a rally in tech, but packard shares are up about 1.5% this morning. the new york times affected. this is just like when we did the special sunday night. oh, new york times calling a bottom. you know how you call a bottom? when you have a meeting and someone says we're going to bail out spain. it's not going to be because facebook hit 26. it's going to be because merkel has decided to no longer be the iron chancellor and starts playing ball. >> let's see what else is moving. check out with courtney reagan. >> it looks like the major indices are lower, but just barely here. about 6 minutes or so into the open traders, they're telling me they're going to be listening for any incremental headlines.

so far, the wires are indicating that the japanese finance administrator is of course the main topic is europe and they will not be issuing a joint statement. they're looking to capitalize any way that they can as those headlines continue to come forward. take a look at the numbers we've gotten from around the world today. china's p.m.i. apparently exp d expanding at the fastest pace in 19 months. we know that we have a number of different ones for that. but then the euro zone actually show an east lowest reading in three years. it means all of those economies are at least in some state of a detraction or a decline when you're looking at the services sector. spain's 11th straight month. france's lowest reading in 7 months. we were talking about some of the stocks raised here. relatively quiet. about a week later than what we saw from most of retailers that came out last week.

sales down about 2%. comps down about 6. that was buried a little bit in that press release. we'll watch for any movement and we've been talking a lot about the humphrey yield. >> a lot of people looking for 15 cent. i just want to clarify something. the $600 chiropractic massage package is for $29. i'll go over to englewood cliffs. let's shift over to bonds. >> thanks, jim. you can see, especially in europe, it's had a bit more volatility, of course, as they're trying to have hopes that the g-7 is going to, you know, get that big, strong box and unlock the master plan that they've all been sitting on.

if you look at what's been going on with the dox, the german stock market, what looked great a month and a half a go, they're flirting with their unchanged portion of equity valuations. and what's really interesting is, of course, the drop in the euro value, as well. so their net change on the year is affected by which currency you're holding their stock in. we've already mentioned numerous times that the composite p.m.i.s in service and manufacturing are hovering at all-time lows. 21 minutes from now, we're going to have servicing ism and i do believe that that's going to be important. ours are still above 50, even though chicago and the national manufacturing number has weakened three months in a row. carl, back to you. >> check out the latest moves in energy and metals. let's go to jackie. >> hey, carl, good morning to you.

we're watching oil prices very carefully reversing some of the earlier gain that is we saw. brent was under 99 and now it's hovering around that level as well. what's going to be key here today, of course, is what we see out of europe. it's the same kind of story and the pressure and the headlines that we may see out of there. we are also watching the fed very closely, whether they release the hawks or the doves are going to be very important for oil. in terms of gold prices, we are higher. trader is telling me 16, 15 is that key level and whether we can contain that and retain that momentum that we saw last week is questionable at this point. but if we drop below 16, 15, we could go everyone lower. you heard courtney reagan mention shares of walgreen down by 1.1%. more of a certain extent between those who distribute your pharmaceuticals at a store and the pharmacy benefit managers

that provide those drugs. if you may recall, walgreens and express scripts, and med koe, the largest pbm out there could not get a deal done in terms of what is express going to pay you in terms of reimbursement per subscription that is filled. if you take a rook at what's going on at its competitor, cvs care mark, they have a deal with -- they have a deal with express. does cvs. that's what we're looking at. significant decline. so they have gotten a bit better this most recently reported month, that being may. but you can see there, it has been nothing short of very, very poor, as a result of the fact that express made up about 12.7% overall of its prescriptions.

take a look at some of the comments. there's cvs. they don't report quarterly or monthly, but it gives you a sense here. there's the pharmacy sales, as well. take a look at the teches from their recent quarter. first quarter pharmacy sales from cvs included a significant benefit asociety uasociated wit walgreens. they're benefitting from walgreens no longer being a part of it. you see there, they comprise 12.7% of prescriptions a year ago. they even held a conference call a couple of months back to go over express scripts earnings. when are they going to get back on board? it would seem that it's something they need to do because it affects front of the store, not just back of the

storeme storement. >> have you ever seen a more personal and negative company unable to solve their problems? >> it's nasty. >> it's nasty, isn't it? >> although walgreens has had a fight in the past with cvs and caremark, but they were able to resolve that. but one wonders whether the pbms may be involved in future negotiations and whether this is change in the dynamic there. >> david rksz wall greens has done this massive remodelling. it's been beautiful. they've done these gorgeous monuments. hasn't all of this been negated by the back end? by the pharmacy? >> it would seem to be the case at this point. it would seem to be. it's an interesting story that bears watching. you cannot go to walgreens to get your prescription filled.

but you can go to cvs and you can go to any number of others. of course, you can also do it through the mail. >> i know that i'm a big walgreens guy. i love it. when you go into your cvs, we can do everything. express scripts filled. it is just the most negative thing i've ever seen for one guy versus the other. the other guy doesn't know what they're doing. come on in. >> all right, as you know, a poll says 34% of users spending less time on facebook than they did six months ago. so what are you doing? tweet us. we want to know. we've got some of your answers coming up. as we head to break, take a look at this morning's early movers. there's a lot of bright spots including sandisk which is up 2.6%.

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well, it took some negative news to get facebook to pop, despite reuters saying 34% of us spending less time on the site. awfully close to the zuckerberg age cross of the 28. >> is that like the golden cross? >> maybe that's good or maybe that's bad. >> i don't know. >> time now for squawk on the tweet. earlier, we told you about that poll. it shows 34% of facebook users are spending less time on the site than they did six months ago. what are you doing wheith paul that extra time. planning a vacation to the diminishing list of places where we have no friends. michael tweets reading and exercising. better return on investments. my 18-year-old daughter has become more productive by spending the extra time on pinterest. i'm so proud. and gina tweets spending my

extra time on twitter. >> oh, man, we've seen some of the revenue projections for twitter. >> you've got to follow carl because you have the greatest pulse on wa people are really talking about. you have the pulse of what people are going for. you are what i've -- i've been clicking on your links. i cannot believe the links you provide. >> i can just still just do teches. carl has all of these things incorporated. >> you've got to follow carl. >> it's amazing. >> i would like to have a tengt of your follow ship. >> we're going to wait for the next it ration of the social media. >> the dow is up only 7 points. it's not down. a lot more "squawk on the street" still ahead. ♪ doctor, doctor, give me the

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a little duran duran. another famous song is going to join us at 10:00. >> we're gingrich oing to searce down over 50% over the past year. one of the feds primary dealers, the ceo of cantor fitzgerald. and could there be a bigger bounce than the 6% we got in chesapeake stock yesterday. carl, back to you. >> let's get the six for 60 with jam six stocks in 60 seconds. some news on caterpillar. >> west port, this is natural gas engines. very interesting here. it's been down. this is very positive. >> i know you love talking with the call on the bottom. >> look, if you can get

construction going in this country, you have another leg. obviously, it's employment numbers people haven't bought this. i like the stock. >> earnings this week? >> wow, this is a bold call by uvs saying buy it ahead. but cotton costs have come down dramatically. it's worthying about. >> kellogg is europe. a lot of these consumer package stocks have big exposure to europe. >> i think this stock can make a stand here. >> finally, netflix. jeffrey says it's building its own content delivery system. >> wow, this is horrible for lblt. this is a huge traffic generator for a company like apple to be careful out there. >> for more of those names, "mad money" tonight, 6:00 and 11:00 p.m. >> seattle genetics. i've been trying to feature nonek no, ma'am k companies that have been doing well. this company has got, again, all of these are anticancer.

don't want to get people's hopes up but these are companies doing remarkable things. >> we don't know what the ecb is going to say tomorrow. we don't know what was said on this g-7 call today. you're thinking about merkel and her strategy. is it a given that they are going to come around? they're just trying to figure out how to play their cards? >> i think, yes. i think merkel does have to make compromise. but it's going to be one of united unified europe. be careful if you're short. i don't think china needs to cut rates right now. if we get a deal, it's a rip-your-face rally. if we don't, well, then it's dow, just like at 2011. that's where we go. >> big debate this morning about how much we should pony up, either with money or with policy or even with political support. what is -- >> why should we bail out merkel? why do we bail out merkel? >> i could envision you saying something like we need a marshall plan. >> we could say listen, we'd like to help.

but the germans want the world to bail out europe? the germans are doing great? how can they ask us to help? we can volunteer some credit lines, but carl, this woman is holding the world hostage. the world. >> would you say she's the most powerful woman in the world? >> most powerful person. and i don't mean any slight to the queen on this jubilee period. >> finally, the vix had gotten elevated, not as elevated as it did to last year's sell off. did that bring you any comfort? >> the vix, that run the 26th was a precursor for this decline. i'm woerking tonight on the charts for an off-the-charts segment. this needs to come down. >> all right. we'll see you tonight. jim cramer, don't forget, "mad money" tonight. when we come back, ism services will get back with the market reaction as the dow continues to trickle higher -- no, actually

lower now by four points. back in a moment. it's very important to understand how math and science kind of makes the world work. in high school, i had a physics teacher by the name of mr. davies. he made physics more than theoretical, he made it real for me. we built a guitar, we did things with electronics and mother boards. that's where the interest in engineering came from. so now, as an engineer, i have a career that speaks to that passion. thank you, mr. davies.

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welcome back to "squawk on the street." we are seconds back from the may

rendition of the nonmanufacturing. it wasn't pleasant in europe. bank of canada did not alter rates. that was expected. australia, though, did lower rates to 350. the lowest since '0 t. oh, here we go, 53.7 is the may read for manufacturing. hey, that is actually better. better than we were expecting. can't say that much lately. and 53.7, well, if you look at last month unrevised at 53.5, this is the best number since march of '56. the high water mark for the year is 57.3 in february. but none the less, we'll dig through the index and continue to discuss the rest of the day any components that seem to stand out. carl, it's all yours. >> rick santelli had a busy morning already. starbucks making this interesting move announcing it will buy a company by the name

of bay bread for about a hundred million and move to further expand. >> is it enough to regain favor with investors. vanity fair contributor gives us her take next. >> plus, european debt rose and the shift to mobile disrupting everything from vps to social media. >> steve win saying today that the latest casino resort will cost $4 billion towards the upper end of what the market was expecting as the company places big bets on growth. showing last week that gambling revenue slowed on the growth slows very slightly to 7.3%. >> more downsizing on wall street. a continued struggle beginning to ware on the firms. goldman announcing it has laid

off 50 people last week. and on the higher end of the pay scale, morgan stanley cut nearly 3,000. >> and a conference call this morning, the group working together to deal with financial crises in greece. this after spain warned it could lose access to credit markets. simon, i'll turn to you. we haven't been able to make some calls and see the latest. they're not telling us what was on the call, which i guess is schedule today have end it at 11:00 a.m. our time. what do we know that we didn't know yesterday. >> one is about foreign exchange policy. but to the main point that we're asking me about about europe, this was actually built as a kind of proprietary call in advance of the g-20 leader summit. this is really interesting. i didn't realize this.

greece folks, are weak on sunday. and then all the leaders are in fact at the g-20 which is immediately after that. so you might think that the united states will have a bigger role together. and then you go into a fed meeting on tuesday. it may well be that that g-20 is, in a sense, leading the response or at least coordinating what we assume could be, i'm assuming, could be a global response to bad news out of greece. >> what's interesting is spain's take for a long time didn't want to give up anything and that has changed almost 180 degrees. >> the germans are going that's not how the rules work. if you want the money, you have to come in, ask for the bailout and we will come in and help you

run your economy. >> of course they're saying it eegs not that much. but, of course, we really don't know. >> not until they board out the americans, actually, to look at the books which is of course what they're doing. >> and the most worrisome thing is the slide that made some of the rounds on bridge water looking at total capacity and what would happen if, in fact, italy became a true target. it would be hard pressed to say there's enough money in the world to fix that. >> too big to vail. one of the largest credit borrowers in the world is italy.

so the expectation that you would have higher tax revenues to combat some of these numbers is not there. >> when i said the americans would come in and look at the banking books in spain, i meant the consultants. not the american governments. >> as mentioned before, starbucks with the $100 million cash deal is starbucks biggest move yet. it will move breads and bake goods for chains like panera. keith signer covers both starbucks and panera bread. great to have you with us. why wouldn't starbucks just have a partnership or develop its own brand? why does it go out and buy bay bread? >> i think what you've seen, evolution fresh from the juice platform. it's a move through to capture the full economics of the chain. 23 you take back to the the

fruit and nut bars that you can buy in a starbucks, if they had the hind site to go back, look at that company and possibly purchase it and roll those out and turn those into a legitimate brand, it makes a lot of sense. the other thing is by controlling it themselves, they have the total say over how to market it, position it, price it. and also roll it into a consumer price product. >> why does it need to be goods in order to make its offering more full. already, margins are quite good. they're turning around u.s. same store sales. >> they're not actually going out to make goods. what they're doing is taking existing baked goods in the store and upgrading them. much better quality. better presentation. they've had a lot of success with breakfast sandwiches, with

the petite offering in the afternoon. by going and upgrading the unlds lying core of baked goods product. i think it just -- it gives you an extra excuse to add some foods that take it. to keep people coming in and i think it's really about taking what's there and upgrading it. >> keith, just changing the subject very slightly, i was watching carl's excellent documentary last night which basically indicated how these big retailers are going right back to the source in the case of fine wines, actually, in france for example and really pressuring producers and working with producers. are you saying that the starbucks deal today indicates that actually vertical ownership will be where we go from here increasingly? >> i think that's exactly right. and what's unique about starbucks versus some of the other restaurants is the ability to take that product and leverage it across both the retail store system in the consumer products business which

is wholly owned now. it used to be a joint venture with kraft. now it's wholly owned. they can share those expenses and truly control the brand positioning. that's a big, big advantage for them! what's your take on the impact, if any, panera bread, which is now 2%? >> i think this is a little tough. panera truly bakes the breads, the soups, the salads. they have salmon, they have caterering. it's a different offering than just pastries and breads. i think, again, this is taking the existing competitive landscape and upgrading the quality of starbucks offering. it's less about truly competing for the panera occasion. >> keith, are there the stocks that you suggest we look at? they may be part of this takeover cycle. >> i think it's going to be little, small, private businesses for small dollars. little things around the edge.

walk through the starbucks, seeing what products they don't own. that's where i'd expect them to direct their efforts. >> and, in terms of valuation, keith, that is, you know, what a lot of investors might point to you when they're reluctant about investing in starbucks. what can you tell us about the business there in china in relationship to this valuation here, which looks like a 28 forward pe. >> i think an important thing to keep in mind is starbucks managed to put up 20% or better the last couple years despite massive head winds. now, for fiscal '13 and fiscal '14, you're going to have material tail winds. i look at this and see a very clear path to 20, 25% eps growth for a number of years. let's say four or five years with very little capital required to get there. one of the main questions i ask is how do you replicate this?

this actually seems pretty reasonable for what you get. >> all right, keith. thanks for your time. >> really quickly, i want to draw your attention to what the dow is doing. we were looking at some mild losses prior to the ism services number and the pace of growth in that sector. of course, the vast majority of the economy up a tad in may as orders improved. the index up to 53.7 from 53.5 in april. a touch above economists forecasts for it to hold steady. of course, anything above 50 does indicate expansion. >> we should indicate that the home builders are doing exceptionally well after we had news from core logic that home prices rose 2.2% in april, the home builders are really rocking many of them up 4 or 5%. >> there you see it. chesapeake energy making a move to get back into the good graces of its shareholders after announcing yesterday it will replace four members with this board of directors.

is it enough to turn the tide? we're going to sit down with vanity favor contributing director and get her take next. at merrill lynch, we understand the importance of your goals. today, our financial advisors lead from a new position of strength. together with bank of america, they have access to more resources than ever before. a steadfast commitment to help you achieve your financial goals in life. that's the power of the right advisor. that's merrill lynch.

chesapeake energy set for this friday pending a lawsuit by group shareholders to delay that meeting. yesterday's announcement looks to be a win for investor carl icon and other shareholders. but is it enough to restore confidence in the company? of course, coauthor of the book the smartest guys in the room. the amazing rise and scandalous fall of enron. bethny, good to have you. we talked about this company back when the news really first surfaced about the involvement in these various funds. what did you make of the board's action? do you think they're responding appropriately or just rolling over? >> well, i think people are surprised by how quickly they rolled over and the question is how you interpret that. and some of the people i've talked to have interpreted that as really a sign of desperation. >> it's easy to see the story as

a larger than life ceo. it's also a financial story and one that i think has really large implications for our economy. >> when you talk about desperation, desperation for what? to sell some of these ads more efficiently? to get the stock up? >> desperation in financial terms. this is a company that has out spent its cash flow in 19 of the last 21 years. its plans this year are to spend some $9.6 billion. this is a company that needs money. so it needs its credibility. it's not just to make the stock price go up. >> then we had the report in the journal about their hedging strategy and i guess you can argue they bungle. it was that or a desperate need for cash. either way, have led them to the wrong side of the trade. >> right, they've made mistake after mistake and they're facing head wind after head wind. it's a decade low of natural gas with falling oil prices when

they're switching their production to be more oil intensive. >> obviously, we still have to learn more detail on exactly the loans that they have there. and that's one of the reasons why the shareholders are attempting to delay the shareholder meeting. i mean, how important is that, do you think now, to the reputation of the company, not least in the loans that it has to gain, but obviously, potentially, the asset sales of 7 billion or whatever? >> yeah, i see the ceo's financial issues, it's an important part of this story because it's pafrt of the history of the company. but, to me, the bigger issues are purely the financial ones facing the chesapeake going forward. are they going the be able to find buyers and what does this mean for the price of natural gas going forward. >> the asset sales are key here. that bridge loan that they did get, it doesn't have that long to run, as you point out. what are you hearing in the

marketplace? i hear different things as you miegts imagine in terms of the value of those properties. those believe that they are sharply under-valued. but there are those that believe they're not nearly as productive as chesapeake might make you think. i think the rolling over of the board on this issue makes me more inclined toward the bearish field because i do see that as a sign of desperation on chesapeake's part. but there's a really active debate. >> if you're looking at what natural gas will cost americans in this country for years, it's probably nothing more important than what happens to chesapeake. >> if you believe chesapeake's business model, that tells you it can be really low for years to come. that makes america low-cost energy company. that has huge implications for what kind of businesses here.

it needs to be much higher. it has reverberations on the other side. that's why some of the people that i talk to say this company is the most important of the economy for the future. >> yeah, fairly or not, some people want to include it in the same sentence as enron. do they deserve to be talked about in the same breath? >> well, there are a lot of parallels, right? the personality parallels are amazing. just the crazy story of this company is founding the fact that aubrey is who he is. there are more interesting parallels, charities are ub set that chesapeake is starting to cut some of its funding. but i don't think there's -- chesapeake is certainly a really complicated company. but we don't see anything like the level of financial

shenanigans that were going on at enron. so i guess the compareson is a little unfair at the end of theday. >> bethany, we always love having you. >> for some people, it feels very much like the calm before the storm with what europe and the fed might do. we're going to talk to one of the fed's primary dealers next. cheryl matthews will join us on cnbc. good morning if you're just joining us. [ male announcer ] this is the at&t network.

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it eegs often been said that when america sneezes, the rest of the world catches a cold. the een, the etf is down over 15%. one man never to give up on the opportunities abroad is tim siegel, managing editor of asset management. good morning. >> always trying to pitch the tail of emerging markets here. so let's talk.

>> hey, these are growth areas. but, clearly, they've been under a lot of pressure. >> commodity prices can go lower. the two names i want to talk about today and try to frame how you need to look at these. vale which is one of the biggest market caps in emerging markets is at levels that at 5.7 times earnings, it's at a very interesting level. this is real valued territory for this company. but if you look back in 2008 at the end and the share price here, it tells me this stock can go to $12.5. so when you look at this company, you have to look at where is this company relative in its cycle and where it is on evaluation bases. this company has never been cheaper in the last ten years. i think this is a fantastic story. tax liabilities is that they may be paying. at the end of the day, this has

really been taken down by eu and china. i think china is more than priced into iron ore prices here. but it's the caveat that if europe continues to dominate the headlines here, this is a policy call. around and what we want to point out is you want to be ready with your hot list to stocks. to me, you really have to reach out for the resource names because they've been the most bloodied. you have to understand the context in which you're investing. you need to buy the names that if you look at certain valuation efforts, you've got a great play. if you look at it on a pe basis, it could still go down from 7 to 3.5. so take a look at these companies and their full context because the resource part of the economies which operates in indonesia and peru has been heavily priced in.

but we all know commodity stocks get cheaper. >> you don't feel that china is, by the day, almost a bigger question? i'm of the belief that china has stepped away tactfully and tactically. i think the second quarter will be the chinese demand and what we see in iron ore. >> thanks, tim. nice to see you again. you can catch more of these global trades from tim every weeknight on fast money at 5 eastern and tuesdays right here on "squawk on the street." >> i want to head back to headquarters to cnbc. >> melissa, an innocuous statement that we bring you on the meeting that happened today. they said they reviewed the developments in the global economy and financial markets including what they call progress on fiscal financial

union in europe. europe. they will monitor closely. i don't think anything there, melissa, to hang a trade on. no hint on any progress or global response here. only that they're monitoring it. and i guess we'll have to wait for upcoming meetings of ministers in europe as well as the g-20 meeting in cabo later this month. >> yeah, hey, tell me, steve, apart from the official statements, what do you think this under secretary of the treasury said as he toured europe last week? >> not to overly correct you, but it would be "she" toured. >> forgive me. >> i think the message was 245 you guys have to get your act together. but they don't want to say that publicly. i think there's a fear of a backlash. i think they've been a little mealy mouthed. and to me, the strategy has not been working.

i think that's been the tact. not to get overly involved, but it strikes me that it's gotten to a point where that strategy has been ineffective. >> steve, i guess your best guess for when the dam breaks in terms of the rhetoric that's being reigned in? >> here's the global plan for handling europe. the idea is to let europe find their own way out of this. it's a bit like a terrible maize. >> that night r night, they are going to be out, surely. >> i think there will be, but i don't think anybody is under any

illusion that there's a central bang solution to this. to use carl's metaphor, to sure up the dam, but certainly not to solve the problem, which everybody realizes is fiscal and financially union. >> wem, yes. >> there could be for example, an ecb and an ltro. or i don't know where we are on swat lines. >> they're there. they're there for being used. this's in place. i mean, the next step, and i'm going to get shot down for this, is the fed going in and buying bad paper. so, yes, you're right. a third lto would be the next response. but two didn't solve it. a third one cocould potentially help the situation. but it's not going to solve it. no, nothing is going to solve it. >> it's a solvable problem. >> all right, if you issued euro bonds, which is never going to happen. i also think if you capitalized

the bank, you've got to -- yeah, you've got to do that. but the joint issue on euro bonds. >> i am pushing for a massive imf response for a second launch position after europe ponies up money. >> geithner says no. >> i think he's wrong on that. >> this is like waiting for it, but it's not nearly interesting to read. >> we should point out the banks. bank of america up 3.5%. morgan stanley up 4.4 or 4.5%. you see it there. of course, this is at least as good or gauged as you can get in terms of the latest feelings. >> we have this house price that has come through that is actually quite poignant. >> when we come back, fears of a china slow down and a shortfall in u.s. payrolls is all weighing

on sentiment. what's next for the markets? we're going to talk to shawn matthews and without any clear direction, no wonder the dow has been in a narrow range. up over 19. sometimes investing opportunities are hard to spot. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.

rjtsz. one hour till trading here. the institute for supply management nonmanufacturing coming in better than expected. up two tenths for a 53.7. any number above 50 indicates expansion in the sftss sector. home builders among this morning's biggest gainers in the s&p 500. it's a very different story for kellogg. shares falling to new 52-week lows. >> and as we were one hour into trading, we want to go to chicago. joining us, chief trading advisor at one-stop option dot com. no real clarity which might have been the catalyst to get something moving. in the absence of that, we're looking at a couple of short squeezes in some semis and banks? i think you're starting to see some signs of stabilization. we saw a key reversal in the dollar on friday.

we saw a key reversal yesterday. that's really a positive sign if you look at the bigger, bigger picture. you've got to remember this is not 2008 or 2009. we're down 10% off the highs. we're not negative, really, on the year. we're just back to where we started. i think there are some good opportunities here. and you've got to put it in perspective with the fact that your wife might have been expecting some diamond earrings and she got a blender. i think people are getting very, very negative when they don't need to at this time. >> we can talk about that later. you think the stampede into gold and silver might have been ratcheted down a little bit? >> i think the price action leads to something. you know, that there's a possibility here that the dollar is not sustainable.

here are 14% and the dollar. that's just not realistic from a fundamental standpoint. that's what's going to drive this market. people are going to realize that u.s. equities are still very, very profitable. i talk about stocks down 10%. so i see some value there. if you wanted to look at a call spread, 33, 34 and a half call spread, cost you about $1500. look for the dollar to resume this overall trend. >> yeah. well, finally, walk me through lumber and copper. just because we're so fascinated today with what's happening to some of the home builder. >> well, i use lumber as an example that we see it in all aspects. lumber has had a pretty nice leg up when you wouldn't think so

with the economy slendering down. they've recovered at the half way point. so there are bullish opportunities, even in the macro, you know, in somewhat of a seemingly macro negative environment. >> yeah, it has ratcheted up. that's for sure. allen, thanks so much. >> all right. let's stick with the markets here as we are seeing, basically, a flat line here in the markets. we are gearing up for an all-important-ecb meeting as well as the elections in greece. joining us again shawn matthews, ceo. shawn, always great to see you. in terms of what the markets are pricing in, in terms of a greek exit, a spanish exit, what would you say is the most likely scenario? >> i think everyone is looking for some sort of resolution. and greece will probably have to be out of the union at some point in time. we really have an interesting

marketplace where you look at from a business cycle perspective, most traders try to work their way through the business cycle and trade accordingly. right now, we don't have a business cycle in place, which means you have very low interest rates. you have low volume because people don't understand how to trade. so you look for safety first and foremost. so from your perspective, other lines of business, what sort of opportunities are you taking advantage of given bond yields where they are. you're creating products, for instance, that fills the need or desire for safety but with some yield? >> abshutly. we're looking at this as a 3-5 year time prize. the financial services landscape is changing aggressively. the regulatory environment is changing. in is an opportunity for us to gain market share and wait for when the business cycle occurs again. that's when trading volumes will pick up substantially. >> you know, shawn, talking

franchise, you think of as a fixed inside shot. so what is that ten-year, 1.5% yield telling us. a lot of people are asking the question, what's your answer? >> it's telling us there's not better places to put your money at this point in time. i think from a long-term perspective, owning the 10-year at 1.5% is clearly a losing trade. now, at this point in time, we have a carry trade on. we have occurred flattening because of that. and you're going to be in a scenario where people want to hide. and they hide with positive carry. so that's what's going on here. the curve has flattened down. but now we're starting to look at a position when real estate bottoms. that's going to be the key metrics here. when real estate bottoms, you want to be an aggressive seller at the long end of the treasury. >> shawn, we should be clear that people make money out of the capital appreciation in

treasuries. about 60% over the last five years. even when the markets were falling heavily last month, you could have gotten about a 2% return. it's not all about pointing to the yield and and saying why hold onto an asset that just pays you 1.5%. >> i don't disagree. it's going to be much harder to -- >> so do you believe that we are not on the verge of a deflash nar crisis? they were screaming yes we are. >> i think we're in a much different position. when you look at the consumer, the u.s. consumer, they are vastly dimpblt than a japanese consumer. you look at the banking system and what happened in japan versus what has happened here, there are significant differences in place. we are going through a time when over capacity was clearly put in place and we are now just trying to work our way through that. so it's a long time. it's a slog. but certainly, the overcapacity

is coming out of the system. and you're starting to see at least some hope that real estate is starting to bottom. >> shawn, i wanted to ask you about a specific prukt that your firm is in the midst of arranging. that's a fund of $20 billion of asset commercial paper to help finance banks. what sort of collateral are banks putting up against this? and what's the appetite right now for this? >> we're actually going through a launch, so i can't comment on that at this point in time. >> thanks for your time, shawn. appreciate it. let's check with brian sullivan for a quick market flash. >> i want to focus on limelight networks. here's the story is that there's talk out there that netflix is working on its own video content delivery system and maybe looking to bypass some of the commercial traffic provoiders that has a lot of exposure to netflix. other firms are the ones that actually deliver the content out.

reports out there, netflix may be looking to go it alone. dow jones saying this wouldn't be netflix first effort. you can see that stock is down nearly 12%. back to you. >> all right, thanks, brian sullivan. up next, europe foundering and the shift to mobile disrupting everything from pcs to social media. so what does the ceo of ericsson have to sigh about all of that? we'll sit down first on a cnbc interview next.

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is now a good time to buy? what is going on in this area of technology. john, over to you. >> thanks, simon. yes, hans, your company is blue chip in europe. about a third of your work force there. you've gained market share. tell me, first of all, about the economy in europe and the mobile economy. how is growth looking? how is the consumer doing from your perspective? >> if you look at mobility, the demand is mobile networks more and more. they come in new devices, everything from smart tablets all around the world. we're now in the first quarter to all hand sets was actually smart phones. and having a smart phone and lost 6 billion subscriptions. so with continued demand for it

and a very transformative way of using the networks right now. then, of course, when i talk about europe, we have seen for the last 3, 4 quarters, a little bit more caution. i think it's very normal when you look around in europe what's happening right now. we are handing out a large company. we're looking all of the times to assess it. but from an end user, we still see a demand, a new technology, a new innovation and using the network in anyway. >> now, you've got this mobile report that's making projections over about 5 years. and i believe you're saying about 50% will be covered with 4g in 2017. what are the implications for business once you've got that kind of coverage? >> i think it's huge. we are in 180 countries.

we are rounding networks all around the world. and i think the change is going to be that is a lot of change for us consumers. but for enterprises, new ways of working processes in a society with digital health care, we're building for operators and we need to understand how they will be used in the future. we will have three times as many people of today. which three times more. meaning they will actually access it through mobility. >> simon, i know your company well. i've interviewed your predecessor when he became chairman of bp. i don't know how many jobs you cut in tend. but the issue here is you've got falling prices. you have been devastated by two chinese competitors. nokia has been driven towards

the end of extinction. are the chinese dumping on you? and if so, what do we do about it? your industry is in a very serious situation to which your share price testifies. >> i think that if we looked at the market, i totally agree. we have changed the landscape 5-10 years. it's all one with the same shape and form. we have a chinese competition. i think we've had that for 10 years. for us, it's only on technology leadership and we are twice the size on number two. we're one and a halftime services. we see the underlying demand going forward. however, we need to understand that our business mix is building networks in a world who has a much higher degree of coverage. so that phase will prevail for a couple of quarters. but i think this industry is so pornt. >> and is that enough?

as you attempt to push your products up the quality chain, is that enough if these chinese competitors are bringing prices down in general? let me ask you specifically. are the chinese illegally subsidizing your competitors? >> for me, that is not important. it's regardless of what is happening. we are competition and we really need to win that race and that we're doing by technology leadership, service leadership and we are sort of spending some $5 billion u.s. dollar in ip dust ri, which i think is extremely important and we'll grow in importance in years to come. >> and the market continues to be challenging. cisco coming out with its axr 5500 today. the mobile platform trying to compete with the likes of ericsson hans. thanks for being with us. >> thank you. >> john, thanks for bringing that to us.

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welcome back. we have turned negative on the dow and the nasdaq. we're seeing a nice rally in the financials with morgue an stanley up by more than 3.5% right now. citi up 2.6%. worth watching groupon as well. shares are higher by 6%. a nice gain considering the massive declines that groupon has seen since the lockup expiration earlier this week which flooded the market with 100% shares. >> around $6 billion market value. interesting to note i believe google is worth willing to pay that when they wanted to acquire groupon prior to its actually going public. just interesting to look at that. of course, zenga still down almost 2%. it continues to fall as does facebook.

zengaed -- zenga a $4 billion market worth. >> it's close to that low set in yesterday's session. we're seeing it down by .5%. >> i think it's interesting how because we didn't get much clarity out of this conference call today, down some two points. it continues. i guess if you're short, simon, you can't make too much of a bet on what the ecb might say in 20 hours from now? >> i think we got to assume they're going to try to hold their fire. why you would start firing off whatever you've got left in advance of greek vote when you might need it after the greek vote. what will be interesting is tomorrow when london comes back after that two-day public holiday for the queen's diamond jubilee which david faber has been excessively focused on. >> excessively. there is no such thing as excessive diamond jubilee.

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"squawk on the tweet." we told you about this poll out of reuters showing that a third of us are spending less time on facebook than we did just six months ago. pretty fascinating statistic. brings us to this morning's "squawk on the tweet." what you are doing with all that extra time not spent poking and friending on facebook? watching facebook's stock plummet. that's not funny. miller writes, my extra time spent advertising my business on other sites. and walter tweets, less time on facebook means way too much time on twitter. we got a couple of those, too. >> a theme there. >> losing share to twitter. but fascinating statistics. and what was the number of people who feel less positive

about facebook? >> 44% feel less favorable because of the ipo. >> yeah. >> and jim made a good point. usually the ipo is a great time to reconnect with consumers out there, getting the brand name out. >> 44% of users are less favorable because of the ipo. >> that must be mainly here in the united states. that can't be in india or china. 900 million is a lot of people but not in the united states. >> that's true. >> who knows? who knows who conducted the poll. was it conducted by google? >> good point. >> meantime, busy session even though the numbers don't prove it. what is coming up on "fast." >> social media is the rage. how about social trading? social trading, want to trade with your friend with, a colleague? we have the ceo of ditto holdings to talk about. that we're also taking a sneak peek into apple's apple os and trading the fiscal plus. lots ahead. >> we'll see you later. simon, the european close in a half hour.

if you're just joining us, here's what you may have missed earlier this morning. >> welcome to our three of "squawk on the street." >> the euro-zone lacks the tools it needs to bridge itself through to the type of fiscal banking and economic policy integration which is ultimately needed. >> it's very difficult to make significant capital investments with the regulatory and tax uncertainty that businesses face. >> give me a reason why we should if, you're spanish and can you go to another bank, why you would keep it in a country where they can wake up tomorrow and say, you've got this. a lot of stocks were really exciting in the fourth quarter of 2011 that are just devastating to people's portfolios now. starbucks versus pa nara.

this is not one of those are wr are there too many bad guys in town. you know, it's like wow. it's going to be one guy versus the other. it's not. it's not high noon in the food business. >> that is the opening bell for this tuesday. >> they have the total say over thou market it, position it, price it. and then also roll night their consumer products network, something that can be a lot trickier to deal with if you were in a partnership. >> you have very low interest rates. you have low volume because people don't understand how to trade. so you look for safety first and foremost. that's why you're seeing violent swings but getting nowhere. >> good tuesday morning. welcome to the third hour of "squawk on the street." let's get a check of the markets. not moving around a lot. we did not get a g-7 statement out of the emergency conference call this morning. a lot of shorts and longs afraid to make a big bet ahead of the ecb meeting. dow is down only seven. s&p 500 up one and change. nasdaq up is one and change.

home builders bouncing back after getting news that the home price index is up more than 1% year over year. lennar, pulte and kb homes are up this morning. starbucks did say it would buy bay bread for $100 million. let's get to the road map. wisconsin voters heading to the polls in a recall election for the state's governor. they lection could have ramification that's extend all the way to the nation's capital. rim is trading like it's 2003. we'll see if there is any profit left in the research in motion trade. there are all eyes on the g-7 meeting. we'll see how the headlines affect markets overseas and in the u.s. when european markets close in less than 30 minutes. and the internet company that is challenging linkedin.

we'll talk to the ceos of identified.com about their company's recent round of funding and what they're planning for the future. that is in the next hour. first we start with "squawk on the beat." voters deciding whether to relekt scott walker or tom barrett. this could have huge implications for the republican party as a whole. our john harwood is live in madison, wisconsin, with more on that. what a day it has been. a long time coming. a lot of eyes on that state today. >> absolutely, carl. but the conversation is shifting. this started out as a backlash against governor scott walker's attempts to curb or eliminate the collective bargaining rights of public employee unions. lately the dialogue has shifted toward broader economic conditions which governor walker says is an indication of the changes he's making having been successful. think about it. they don't talk about a reform anymore. why? because they're working. we've documented more than $1

billion worth of savings for the hard-working taxpayers. >> now, of course, tom barrett, the mayor of milwaukee who is challenging him hoping to win has been batted badly outspent. he is making some of the same arguments about the futures of the american middle class that president obama's making. >> i know it's a trade. this is really an election about the state. and to have a governor who is going to fight for the middle class. >> now president obama's kept his distance from the race. he did tweet out last night that he is supporting tom barrett. that is not what tom barrett wanted. he might have used a presidential visit. but it's clear that there are some walker-obama voters in this state because the same polls that show scott walker with a lead of seven or eight points also show president obama with a lead of seven or eight points over mitt romney. >> how about the future of walker himself, john?

win or lose, how far does his star rise in the republican ranks? how big of an impact does he make in tampa this summer? >> if he survives this and especially if he survives it decisively, i think you'll hear a lot from him in tampa at the convention. we've seen governors around the country trying to take on public employee unions, challenge some of the pension benefits and pay that they received. they've been fighting back. most governors shy away from the attempt to take away collective bargaining rights which many in business would like to see happen. so taxpayers would like to see happen. i think the more successful he can show and survivable he can show that step, is the more of a political celebrity in the republican party he'll become. >> so much more on the line than two statewide candidates today, the future of how america views government in their lives. john, a long day and night ahead for you. john harwood in the wisconsin

capital. let's get to the cme. rick santelli with the santelli exchange talking about the cost of borrowing, rick. >> the cost of borrowing is part of this. i think when we think about borrowing and debt, the real story i want to get down to today is the debate that steve liesman and i had this morning. we're going to still have in the afternoon, i believe, a little after 3:00. and that is should the u.s., can the u.s. help europe with its issues? and some say like steve that, you know, the maybe the imf, i don't want to say that too loud dhoechlt have good security on this floor. i don't think people are going to go for. that the story starts earlier. you have to understand something that was happening in the beginning part of the early 0's and culminated around 'o 6. the only thing that french, in my opinion and many europeans like better than pastries and cookies are derivatives and

financial engineering. when was a broker, i did a lot of business with the large french banks, large dutch banks mshgs of the european banks. and the financial engineering, the horsepowered derivatives really was something that was widely embraced. so that's one of the exports that i think europe wishes they could decay at this point in time. but why is that pertinent? the reason it's pertinent is that at this point the problems that face the u.s. as john adams said, if you want to enslave a nation, there are two-ways to do itment one is through the sword, the other is through debt, debt. i think that we need to start looking at the world in terms of trying to build it from an equity vantage point versus a debt vantage point. and -- this is a really big issue -- right now in the political climate we're in, there is definitely a rush to find pretty much any excuse to spend some money because it always seems to have that

temporary sugar buzz effect. so whether it's pulling forward military programs in the future which i had a debate on yesterday, remember, any addict that is truly addicted the way the world is addicted to credit will find any excuse, any reason to come up with more ways to convince you to spend your money. so in the end, i think we can help europe. it's through history. when this country was created in 1776, it was guided by the articles of the confederation. it wasn't until 1787 that we had a constitution which didn't go into effect for a year and a half. but until you get a constitution in europe, every road is going to be a dead end. don't help them with money. help them with sending them the notion of free markets. back to you. >> yeah. then there is the whole political worries about what happens when you let one country start taking over the social and financial structure of another. in this case, germany. rick, we'll talk more about it later on. thank you so much. our capital markets editor looking at the s & p over the

past year. gary, i'd like to see what -- >> i got a little setup here. let's not give away the secret a men to rick on. that i spent a year working with the french as partner and we sold that front. and they liked their derivatives and they like their structured products over there. s & p call. we have a chart of the one year. we know where we are tactically. i want to read something here. after a volatile trading day on monday, investors will start tuesday amid more gloom in the u.s. futures are tumbling. premarket trading early tuesday morning because of threat of a greek default and another possible banking crisis in europe. the final trading day of the fourth quarter begins -- i'm sorry, the first trading of the fourth quarter begins following a weak manufacturing report from china. now obviously that's not today. the reason i read this to you right now is that was the premarket opening buzz on

october 4th, 2011, a couple months back. now why am i reading that to you? i got an e-mail call from our favorite secret trader out in aspen, colorado, last night. i have not heard in terms of his market sentiment what he was thinking in the last several weeks. but he says to me, we're setting ourselves up for an s & p move much like we had on october 4th 2011. i had some sort of vivid memory that we were very, very negative. i didn't remember exactly what happened. so here we go with the big reveal. take a look what happened after october 4th. this is what happened the six subsequent trading days. there was nothing new other than the fact that we had been oversold. sentiment was where it was. what i just read new terms of that premarket buzz, we could have basically rewritten it, taken out fourth quarter and taken out the words. that's where we were coming into yesterday morning after friday's close.

so i bring this to you only to tell you that i'm in the camp. i've been in the camp. i detailed at the end of the program yesterday. you raise enough cash so you can sleep at night. but there is also the camp out there. this is what always makes the markets. this may be what we're setting ourselves up for next couple of days ahead. >> interesting. essentially a snapper rally. even though the vix and the peaks it reached in the past? >> correct. i don't know how the great traders sort of look at the various signals that they look at. but i just know that they're right more than they're wrong. so when i got this note last night, i wanted to see where we were in october. not much different than where we are today. obviously, the ten year, some of the bond -- some of the things we look at in terms of correlation is not exactly the same. but i don't think many people remember the snap back rally and how fierce it was. >> yeah. i love it when you take history and throw it in our face. that's good stuff, gary.

>> have to be looking both ways. >> that's right. art cashan joins me here, director of floor operations with ubs. people trying to ride a narrow lane here in the absence of any real news out of europe. >> yeah. so far everybody had, i think some false hope that the g-7 conference call would turn into something. you know, it was benign. nothing came out of it. that was fine. to tag on to gary's little history thing, it is fascinating to watch the european crisis being managed by two very bright and powerful women. it recalls for us old-timers another woman who dominated european politics and margaret thatcher. she was no friend of the euro. she fought against it. she called the euro the greatest folly of the modern era. she says prophetically that germany would be too worried

about inflation because of their history and that the southern nations would be handcuffed by a fixed currency when they couldn't be competitive. it reads like the page of the newspaper today. >> unbelievable. funny how leaders, at least the best leaders, when they make strategic calls rarely makes sense to people around them at that time. >> absolutely. >> that only comes into full view later. >> absolutely. you're talking close to 20 years ago. an amazing foresight. let's hope they can still resolve and get this out of the way. i think traders are going to kind of hunker down. today could be a turn around tuesday. you're a little oversold. don't know if anybody wants to move in front of the ecb tomorrow. unlike the fed, they've got more latitude in this since they're still at 1%. there is going to be great pressure for them to do something. >> especially with inflation

coming down a little bit over there. >> absolutely. >> and the key is the paradox of spain. it's the spanish bank that's need the money. they keep telling -- they, the other europeans, tell the spanish government we'll give you the money. you give it to the banks. and spain rightfully believes that would kind of use up their credit card and so who they came to market to borrow from folks for normal government duties, they wouldn't get it. so that's why they're almost willing to play a game of chicken here that's got us biting our nails. >> yeah. finally, ben is a couple days out when he talks to the joint economic committee. any expectation at all around here that he would go near this at least right now? >> i think he feels great pressure to do it. of course, if paradoxically time is running out, if he waits until too late in an election year, it will look far too political. but if you read fisher's speech earlier today, very hard nosed. talked about really if they cut

any further, they will be guilty of possibly starting some harmful things in the economy. >> all right. greenspan earlier this week -- i should say on jobs friday saying we could be close to a late '70s scenario where revenues spike in the near term. >> that's the great problem for everybody. if some event occur that's would cause rates to go up, it will hurt both the fed and their balance sheet and it will shuhu the government. if rates were to spike three points or, so the government can't pay its debt. we're getting away with murder at 0% and 1% here. >> art, thanks a lot. >> my pleasure. >> meantime, walt disney says they'll stop accepting junk food ads on tv programs, radio shows and web sites aimed at children. you're looking at a live shot at the first lady. she and the head of disney are making that announcement. interesting statistics coming

out on the percentage of children in this country who are obese. under the age of 6, nearly one in five, one in five overweight or obese according to the bipartisan policy center. we'll see what eger and the first lady say about this new measure later. when we come back, is this a good move for disney or will the company find itself in sugar withdrawal? a literal food fight. right now, back to brian sullivan with the market flash. >> i did not get into your coffee there, carl, and put that "squawk on the street" in there. i appreciate it. oracle is buying collective intellect. they do basically social media analytics. you tweet stuff, put stuff on facebook. they can track what you're interested in. we have buddy media get bumped up yesterday. sales force bought raidian six earlier this year. bottom line, this is the latest

deal in a social media deal. we should have started one of these companies. too late now. cnbc and collective interlekt announced a content collaboration earlier this year. thanks again for the "street signs" promo. i'll get all juiced up on sugar cereal. >> you juiced up on sugar. that i have to see. >> has rim reached a bottom? the tech company is trading below $10 a share. down 20% in the last month. we'll see if there's any upside left to this downer of a stock when we come back. tdd# 1-800-345-2550 the spx is on my radar. tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550

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research in motion is around the $10 line. holding steady right now, 10. .. >> is there any chance on making money on the company that makes blackberries? what a great debate around this name. it keeps getting better. you distilled your view into form. i will ask you to read it. >> all right. it should be assumed that new blackberry phones are going to sell. >> that says a lot. >> that's it right there. >> the answer? >> well, you know, we should not

be assuming that. the smart phone ecosystem continues to evolve so fast. by the time the blackberry 10 comes out, you're likely to have a new iphone. you'll have ary freshed windows phone. you'll have the google io. this is a platform that is in serious trouble. you have to be looking at this as a special situation stock. >> all right. alex, i don't think you disagree. you see all the competition that collin does. even you say the blackberry 10, it's unclear it holds that much promise. >> i absolutely agree with that. i think what really matters for research in motion right now is that it finds strategic outs for the predicament that it's in. if that means an outright sale of the company or partnerships like what microsoft and nokia are doing, there are options for research in motion at this junk tour. there is still an ability to preserve and then potentially create some shareholder value. >> you write in our opinion the rim investment proposition is entirely driven by the takeout potential. i'm looking for a target though. i'm wondering if you added one

given that special situation is going to be a little more difficult to read. >> well, i think if you look at the $2.1 billion and growing cash on the balance sheet, you think about what nortel got sigh detectived for when it dissolved in bankruptcy court, the value created there. you think about the other m & a deals, the most famous being google for motorola to the tune of greater than $12 billion, you can get to a sum of the parts valuation based on ip, based on the value of the brand, based on the greater than 70 million users out there that does get you to somewhere between 5% and 50% upside for the stock here. >> is that reasonable? >> you know, the issue i have is that i still think we need more time to go by the 52 week high. this is still north of $39. it's got to be difficult for any board to accept a bid plus what about all the, you know, regulatory concerns with the government stepping in? so a strategic buyer is going to have roadblocks. a financial buyer needs to be

nervous on the cash flows. i don't see it happening any time soon. >> do you think the bankers are going to suggest it? you just don't think it's doable? >> i don't think it's doable until we get past ten. you still talk about a transaction that is north of $8 billion when you put a premium on to where we are now. that's a big dollar amount. can you hire a lot of programmers. the only company that would want to pursue this kind of thing is someone who doesn't have a footprint in the smart phone business and they want that. there are only a few companies that would want to pursue such a transaction. >> finally, alex, the value of the patents, cash on hand, lack of debt, is $10 a floor or not? >> so i wouldn't say that it's an absolute floor here. one times cash is still about a 50% decline from here. i think that's the absolute floor. but like today where you're seeing a 5% pop in the stock, there are some up side scenarios here. i don't necessarily think that it needs to wait for the next

blackberry 10 fenz to cophones out. i don't think they're kidding themselves about the very real threats presented to it now. they auousted the former ceos. i know there is a sense of urgency. they're restructuring. we'll see what happens. at least for the near term i think the risk/reward is evenly balanced. >> good to see both you guys. thanks for coming by. we'll count you down to the close in europe in a few moments, a little more than five minutes to go. to go. schools in six states enrolled in the national math and science initiative... ...which helped students and teachers get better results in ap courses. together, they raised ap test scores 138%. just imagine our potential... ...if the other states joined them. let's raise our scores. let's invest in our teachers and inspire our students. let's solve this.

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the bell is about to sound across europe. we're not talking about the diamond jubilee. we'll get the european close.

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the european markets are closing noun. >> london haend traded for a second day. that shouldn't be showing red at all am we cut our losses for much of the session. we put on gains on some of them. we're waiting for two events. it goes without saying, the greek election in 12 days and now we have the g-7 according to the jap fees saying that g-7 will work together on both of those fronts. it's interesting we -- wouldn't you love to know what was going on in greece? you have an opinion poll blackout at the moment.

it's a crucial question as to wh which way that re-election will vote n athens, we have closed down at the lowest level on the stock market for over 22 years. so wherever we were on the crumbling stock market a month ago, we've lost further 30% of that as can you see on just that one month chart there. many of the -- what's left of the industrial quotes have come lower. banks are under a huge amount of pressure. also a telecom company that should be defensive, coca-cola is also down in negative territory. interesting note, the fi in. s may be handing an olive branch to the greek electorate. they suggested today that maybe a second restructuring of the debt might be required. and that basically means the ecb would be writing down debt, you know, with all the public authorities at least. and in an opinion poll in germany today, nearly half of germans want greece to leave the euro-zone, two-thirds want angela merkel to keep them on austerity there.

as far as the markets around the rest of europe are concerned, we cut the losses or put gains in. there you are on those that are open. france, italy, germany. don't forget london closed for a second day for the diamond jubilee celebrations of the queen with a huge impact on gdp. let's leave that for another day. and just in some of the big banks have made gains to day. i don't know what it's worth. bank of ireland slightly higher. i guess the question is for many people, where exactly are we on some sort of eu wide or euro-zone wide bank guarantee? clearly the germans are holding out against the full monte. interestingly the germans on the ecb, the german member as mentioned today was talking about some sort of movement there. so obviously we wait for that. and the other things that happened, of course, is that spanish explicitly today or at least the budget minister

suggested that spain is locked out of the bond markets which we know the situation is bad. we know the yields have risen recently. though over the last few sessions they've come down slightly. they have to try to auction two billion of bonds on thursday. why? they make that statement now is a bit of a guess for many people. obviously this is not a form am approach to the european union. let me just show you this one. this is just the spread, the extra that people require to hold spanish debt over germany. it's down slightly recently. but still exceptionally elevated and above 5%. >> you know, you cover this market so well. when you use phrases like the full monte, i just lose track of time. you know what i'm saying? >> i haven't officially asked for the entire bailout and full discipline. they don't want to do that. that's a minefield. if spain asks for a bailout, what will that do for confidence? the germans want to get in there and discipline them. >> that's true. that's true. spain is the one to watch.

thank you very much, simon. our capital markets editor is up next with his keys to gauging sentiment around the world. gary, what are they. >> you know, carl, after tomorrow i'm going to be gone and won't have access to information. i was trying to think if i wanted to get a sense of the global macro report and there is so much information out there and you really can only look at a couple things. i was talking to some producers, what are the three things i would want to look at every day knowing that i had very little information? so i kind of tried to get it down to three things. the first one no surprise if you know me, i want to look at the junk index. i want to look at why high yield bonds are trading. i do believe very strongly in the correlation between the high yield index and what happens in the global equity markets. you take a look at the junk or high yield index. then like to look at the apologies for the back here, new highs and new lows. today is not a good day to look at the new highs and new lows.

no real theme there. you see the number of new lows on the 22s? not a big surprise. there simon actually, i hope he's still listening, set up the third thing that i would want to listen to over the next month which is that spread. he chose the ten year german bund and the spanish currency. if you look at low risk, no risk and high ris sovereign credit, those are the three thing it's you're able to get in touch with me next month, let me know how the world is looking. it's not about earnings. it's not about facebook. it's about those three measurements. that will tell me what the world is thinking in terms of risk/reward and equities and other financial assets. >> you're going to be off the show for how long, gary? >> i'm going to be gone four weeks. you know, i'm going back to kilimanjaro. i will be calling in. i am going to bring a satellite phone. we'll be checking in periodically with you from the mountain assuming technology works. >> you better. because you're picking a heck of a month to leave us without your

guidance. >> yes. >> we'll talk at the end of the hour. >> you got it. >> let's bring in courtney reagan who is here on the floor. >> hi, carl. markets still paying attention to what's going on in europe. very hard to ignore any of that. but that being said, that ism manufacturing number did help lift us a little bit. stocks got a boost. we fell further. now we retraced some of that. traders are still keeping their ear to the ground for any other tidbits of information out of that emergency conference from the g-7 in case we get any more of that trying to capitalize where they k if you take a look at the financials, this roughed up group is helping to lift the broader market. we have bank of america and jp up helping to lift the dow. that is despite this report out of isi that is estimating the logss could be e$4.2 billion. it doesn't seem to matter to the markets. financials are trading higher along with morgue an stanley and citi despite a number of financial down grades from raymond james. 7 total.

many of them were financials. and european financials higher. we noted that spanish bond yield is lower today. it means treasury minister says that the country's high borrowing costs shut it out of the market. take a look at the home builders. we talked about individual stocks. if you look at the itv index, we were up 3.4% intraday. so some interesting moves here for the home builders. back to you. >> all right. thank you very much. rick santelli is in chicago watching mortgage market rates and security prices with a guest. rick? >> absolutely. robert kendry is an independent broker. we go back decades. rob, last week was a big week for treasuries. we dropped, what, 35, 36 basis points in a ten-year yield. we dropped down close to 50 basis points in the 30-year bond. okay. drum roll, please. how much did mortgages drop? >> i'm afraid mortgages only dropped over the last month have dropped from 380 to 375 to five

basis points. that 50 basis points is over the last month. dramatically so in the last week. >> absolutely. now, you know, most people out there understand mortgagesment they understand refinancing. we're describing here is kind of called the basis. you have something in the form of a ten-year note. it's very similar tool to a mortgage. it isn't a mortgage. and there are dissimilarities cause the relationship of how they vam u against eavalue agait each other to ebb and flow. what is the current fannie mortgage? >> 3.5% coupon. you would think it would be lower. because the mortgage rates -- lending vat 3.75%, the current coupon is actually 3.5%. the problem is those bonds are trading at $104, almost $105/dollar price which makes them susceptible if there are any prepayments to incurring a lot of losses. the bond owners would be paid

apart. >> let's try to make this even more simple. if you have a security that is at 100, it's at par. this is securities trading, five points above 100. you think that makes it a bit vulnerable to the securities investors that are holding those mortgages. >> that's correct. the yield on that property is -- that bond is only 219. if you look at that as a strepr of 64 basis points that, is tight. they're willing to buy them. they anticipate that the fed is going to be interested in buying notes in the next qe. >> now the unintended consequence. so what you're saying is that you think based on looking at the values that you don't think are logical with the on the run fannie mortgage that's the fed may target that market to kind of in essence put it back in line? or give it sponsorship? >> you certainly would say that what he has been saying all along and he's been in the room -- >> and he's been in this market.

>> and been in the room as far as at the fed. imagine money for them. he believes they're buying mortgages. the fed would like to see that lending rate come down. >> so they'd like to see my basis tighten up? >> absolutely. >> rob? doesn't this guy know a lot about mortgages? carl, back to you. >> beautiful segment. we were just here on the set nodding with your insight. thank you, rick. what is the euro crisis mean for fixed income? we have head of global rates investment over at black rock joins me here this morning. eric, good to you have. >> welcome. >> interesting coming off their conversation. ten year at 1.54 now. do you think we just saw in the last couple of days the point of maximum pessimism or not? >> probably not, carl. there is probably some more to come. we may take a break here for a bit. there is some reasons to believe that. you have an ecb meeting coming up. it may be somewhat dovish in the press conference. you have fed meeting -- i'm sorry, bernanke is making a speech on thursday in front of the jec. he should be dovish.

we should talk about. that more importantly, there may somebody solution here in the interim between spain and maybe the esm that we can get something going for the month. but i think as not progresses, you're going to see more bouts of lower yields. >> so 1.5 is not -- how you would characterize it? >> i wouldn't characterize 1.25 as out of the question. i would consider u.s. yields in the context broader of safe assets. they don't look that bad. the payroll number on friday depends again on what the fed is going to do, how it's going to respond. my gut is it is going to respond. if it drags its feet to respond, i expect u.s. yields to continue to decline and get to thatted 1.25 level. >> when you say bernanke should be dovish. what does that sound like? >> since the humphrey hawkins testimony in february, the fed has really put itself more on the fence. it hasn't exactly committed to further easing. it's left us kind of hangi as t

what's next. they have to move to a significantly harder easing bias. >> not just duration? >> not just duration. i would say that they need to open up the june meeting to more policy action and not say we're data dependent and no longer be concerned about euro. we've got that already. we have seen the payroll data. three-month run rate of under 100,000 jobs. that's not enough to meet the requirements. the euro-zone crisis is getting worse, not better. time for more action. >> you think the ecb, a nonplayer here? >> ecb is a nonplayer here. they will be in coming months. probably not now. you want to wait and see the greek election and what the summit brings at the end of the month and probably next month or not after, they want to act. >> finally this notion that summers raised in the ft this week about how look around. i mean the perfect time to refinance. if the country were a household, it would be trying to refinance. she we move?

should we lock this in? politically is that not feasible? >> that's not where they're thinking. the yields are going to be us with for a while also. i would consider that. but don't underestimate the refinance sensitivity in general of the u.s. economy. that is these low corporate rates, low mortgage rates. now you have low gas prices going to be coming through into the second half. this is going to be powerful stimul stimulus. so at some point i expect you do get this rise in interest rates from here. >> zbuf. we'll see what thursday brings. >> thank you, eric. >> when we come back this morning, an internet start-up taking on the likes of branch out and linkedin. the ceos are us with live. with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen.

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don't think i can't get in a carment see new a few minutes. brian sullivan is back.

brian. >> i have natural gas. maybe they're related. westport soaring after making a deal to develop natural gas powered engines for off road and heavy duty equipment, the stuff that caterpillar makes. they've had a rough couple months. the stock is getting a nice pop today. i apologize for the tie in. >> no worries. it's almost lunch time. no sin talking about food, brian. thanks a lot. "squawk on the street" is coming up. don't go away.

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take a look at facebook this morning. wasn't in positive territory. down not that far really from the post ipo low of $26.50. $26.69 right now. that brings us to our brand new sweepstakes revolving around, yes, facebook. where do you see the bottom for the stock now that shares are public? you have until june 12th to send

us predictions. where does it bottom out? tweet us. the prize is a hoodie, a cnn hoodie, appropriate for facebook. everyone here on "squawk on the street" has already signed. don't forget to tweet us. and we'll reveal your answers to today's twitter question a little later on. a new reuters poll shows that 40% of facebook users are spending less time on the website than they did six months ago. what you are doing with all that extra time that you're not on facebook? tweet us your answers in just a moment. if you are one of the millions of men

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this is big news. in light of all that happened with facebook's disappointing ipo, our venture capitalists still vetting on the facebook generation? our next guests are the co-ceos of identified.com and they say, yes, they just raised $21 million in funding for young professionals. joining us this morning in a first on cnbc interview, they join us this morning. congratulations on the new round of funding. i'm curious, you know, we've been spending the past few weeks talking about facebook and the fallout. and now there are takes on how

startups in the valley should ab proechi should be approaching the funding. did the landscape change? >> on the one hand, there is operati operationally what it's doing. i think the answer is, no. obviously facebook is very focused on building a platform and operating system for applications like identified to build on top of. the other way to look at it is financially. and to be honest, identified in many ways resembles more like a linkedin type of property. a lot of our revenue comes from the enterprises and we're much more focused on professional data. a lot of people are talking about it, especially on wall street. but i would say it is kind of business as usual out here in silicone valley. >> you started this together. you're bone from stth from stan. you lived together. you worked on the street. brendan at goldman and you at ubs and mckenzie. what did it take to leave the security, relative security of those firms and do this on your

own knowing that the future was so volatile, funding is volatile and even the future of the technology is volatile? >> yes. so actually identified as my second start-up. i started a social network before in spain where i am from called 20.com which was sold for $100 million. so for me, i already had the experience of leaving my job at mckenzie and starting that. i decided to come to stanford. i wanted to have my next challenge. and after i met brendan, for both of us it was the same. it was a really big problem. and, you know, i it made sense and i sold it. >> has your view changed in terms of the strategy of how quickly you get cash, how quickly you raise money and how quick will you you spend it? >> things definitely are moving faster than we thought. we just launched in september. and at the time we thought that we were not going to raise money

for two years. but after passing the five million user mark and now we're ten million users, yes, things are moving faster. >> and you know what i was going to say, there is really bad in silicon valley, a lot of people are talking about a bubble and how much money is flowing into social media startups. that is true. you're seeing a flight to quality. the companies that are really going after the biggest markets and have really interesting opportunities, they're commanding large financing rounds. i think it's really exciting what can happen today in the space. you have these opportunities to build so quickly with platforms like facebook. >> yeah. brendan, it's the fastest growing career site for professionals 18 to 29. ten million users. on the fundamentals of the business, if employment slows down to a large degree, how does that affect you? >> sorry, can you repeat the question? i couldn't hear it? >> i was just saying if, employment really slows down in this country, impact on the top

line, bottom line for your business and your rivals, too? >> yeah. i think what our service does, we try to help people understand what skills and what professional backgrounds and what educations are most in demand by company. so we're kind of trying to correct that mismatch between what people are graduating with from school and what jobs they're going to enter and where they want to get in their careers. so i think you're seeing a lot of unemployment especially amongst our demographic, identified as 90% under the age of 30. and that's where unemployment is the highest. but i think that's exactly the area where you want to correct the skills mismatch by telling these young people, hey, if you want to get to a certain point in your career, what are the things you should be doing right now? and that's what we try to show them on identified. >> yeah, i have feeling it's not the last time we're going to hear from you two guys. when there is an ipo or a purchase, i hope you'll come back. good to talk to both of you. >> thank you very much. >> thank you. >> brandon wallace and the co-ceos of identified.com. let's get a take away from rick

santelli watching this rate cut in australia. rick, which has been considered by some to be among the more astute ten tral bancentral bank world. >> i couldn't agree with you more. the real story plays out in the foreign exchange market f we look at year to date chart, this is in terms of the aussie dollar, the australian dollar and the green back, there isn't a lower level in that 97.25 below parody on that chart. you have to go back to the fall of last year. but here's the point. my sources tell me another way to look at this aussie dollar trade is that it is a proxy for a less than soft landing in china. that's a big piece of information. >> that is a key piece of information. finally, gary, we coudo have on more show with you tomorrow before you go to kilimanjaro where you're going to plant the "squawk on the street" flag. >> sure, we have a big show tomorrow. we have this election in wisconsin tonight. and, carl, i don't think it's going to have any impact on the