the internet is awful, the phone is awful, ilt's all awful. >> the roads, the bridges, the trains. >> so you're ready? >> thank you. >> all right, we'll see you tomorrowment right now, it's time for "squawk on the street." ♪ >> good morning, i'm carl quintanilla. walked on this morning and man, it was risk on until the ecb not to long ago. really did not deliver the meat, as one person said, that the dogs were looking for. the futures impaired their gains looking at a 50 or so point open. europe is looking at a positive action. but it may be up to other central bankers later this week to give the stimulus sthat invez tors want.

mario draghi refusing to take the pressure to fix europe's problem's. >> the journal today offers more hits that additional easing is not an impossibility. >> and more facebook fall off. the nasdaq considering offering trading discounts to firms that lost money because of the botched opening of the ipo. >> futures have given up earlier gains after comments from ecb president mario draghi. draghi is saying he sees increasing risks in the eu euroscene and that hiegtsenning remains weak. the european bank has left its benchmark unchanged. jim, they have cut rates, baugt government bonds, liquefied banks. he's clearly saying i'm not going to let the politicians off that easy. >> remember, they put their --

can you believe they put the two rate hikes last year? how stupid are they? they don't deserve the respect of saying that they're not doing stupid things. they don't deserve it. they have got the world under their thumb. and once again, they talk about growth next year. there's really nothing here to hang your hat on. we're all hoping that there would be something called lessing that would keep the spanish banks, solve it. at the same time, germany would give in. i don't know, guys, have you heard anything? >> i don't know, it's still going on. i was curious to hear if there's questions about deposit out flows. we get the numbers with quite a bit of distance. they know. that's a key question. hasn't been asked as of yet. the ltro three-month, we know. nothing really new there.

but, again, to carl's point, not at this point, anything unexpected. >> and at the same time, the stall worked of europe, germany. the economy there showing more signs of slowing down. industrial output falling down 2.2%. that is more than what economists have been expecting. we are seeing some stalling out there. >> again, i think our federal reserve sees the weakness. china sees the weakness. europe diters. i mean, we can all just say listen, don't worry about it. maybe things aren't as bad as we think. the moment that there are ten people in front of of it at 8:45, whatever time they open, after greece defaults is the moment maybe they say -- >> maybe more than ten.

all i can tell you is that they're a great bank run by a lot of fantastic bankers. but the fact is that they are in spain. >> right. and spain's banking system needs 400 billion euros to be recapitalized. >> that's a lot of euro. >> and where is it going to come from? and what is the mechanism by which it is delivered. what we come along with that, what restrictions would be put on spain spain, of course. also part of that. or does spain go for the full bail out, ala portugal and greece and then the real restraixs that come along with that, i think the greek citizens would say don't do it. obviously, they're going after the rich. the rich have no interest of putting their money into that sink hole. as soon as they get there, the local radio station broadcasts

their license plates so everybody can avoid them. the number of public worker x, jim, have been unpaid 23r months. >> it is chaos over there. and the ecb -- they're very calm. there are times when calm inspires kvts. and i like that vrmt. i would feel a little more confident. but this kind of calm with what's going on, it just seems to inspire the opposite. >> in some ways, if you can't act in a cohesive manner and do something that is going to be really effective, don't you add fuel to the fire if you just do things piecemeal. ? >> yeah. >> it's terrible and we don't know if we can do this. >> perhaps this paves a way for some sort of grand bargain or

graemt or coordinated intervention of sorts, koord naited action by all of the g 0 when they meet in mexico later this month. >> i think that what will happen is we have an election this year. a guy in wisconsin who was supposed to be out on his butt is in. i don't think it makes a lot of sense for ob to say, you know,we are the world, we are the people. to me, all this says is they've got to get it together. and once they get its together, then i do think china will be slashing rates. >> some hopeful signs today. australia's economy actually expanded a at a greater than expected rate.

>> don't you love -- i mean, i was watching the news at 4:00 because im'm a complete insomniac because that's all that matters. they had named it the kangaroo bounce. i said wow, the kwa la bounce. i want's incredible how quickly we hang on nick vanything. >> if the do is up today, it will be the first two-day ramally since april 27th. is that success in this market? >> yeah, slip some cash on the barbie. i think we do have some helpful si signs here. home depot is doing well. i don't want to minimalize anything when i say that the largest dollar store is able to price a deal sfan tastically. i hate to bring up america

because i know we're unimportant and we're really trading every min ut. >> sarcasm here, by the way. >> yes. but i think there are signs are where people want to invest. dollar general, last i looked, it is not euro general. you talked about it yesterday. i should point out this morning, bid the way, on that same topic, morgan also prices the secondary sale of stork. 63 million shares at 31.88. >> people want to buy american stocks. and they are not quite sure whether other stokes have come down enough. jp morgan trashes the semis today.

if you have an american company, i know it's small, but i'm try k to give you a sense on what the growth guys are saying. >> i don't know what ultra salons does. >> you get your hair done and it's really good. >> it's up 80% this year. really? >> people buy lipstick. small luxuries. >> you can sit here and talk about draghi or youf can make money. i prefer to make money. >> reelgts. well, you know, layer on top of this what the fed is going toe do. and that certainly is stoking some unsurgecertainty about the marktss overall. wall street looking to see sf thigh're going to consider new action to give a boost. more monetary action may be needed if the ugs economic outlook worsens.

the joint economic coverage at 10:00 a.m. tomorrow morning. i'm curious because i read that hills on the journal this morning and i didn't really think that anything in there was new. any different than what was rortsed earlier. >> you could compare it to saturday's piece in which they said the jobs number did not move. this was a long tweak. >> i think the first one was bad reporting. if you're the fed, you don't want to there and say ervverythg is fine. this is to buy gld. that's what trades up off the fed. you mechx ds the two-year gold miners. but the cost to take out gold has been reduced substantially. by the way, barek, did you see why they fired him? because he did a bad job. >> isn't that shocking? it's not because of a sex scandal or anything like that.

>> woel, actually, that was my problem. one doesn't always -- oh. >> good point there. >> houbts the bank? television nice to see someone getfired for doing a bad job. i'm sure he's a nice man, but i do think that gold is the right way to play the fed. >> challenger, by the way, 99 ceos departed their jobs there the month of may. down from 103 a year ago in may. >> meanwhile, today, the nasdaq is expected to make an announcement detailing plans to compensate banks and trading firms for losses incured during the problem-plagued ceo.

shares are up on the free market but still obviously more than 30% below. jim, lags night, you called it a shameful exercise. >> the interview with mr. gor man, that may have been the 52-week low. those who are expected to make money who bought this thing, you're nooef. i'm still try k to parse that. what that says is you at home, you oor kpluly. you're buying stocks? doeblt you know better? deals are supposed to be done so that everybody wins. that's what happens. >> you're saying an investor who expects to make money on an imo. >> we don't know whether facebook pushed a high price or the cfo did or whether the syndicate deal got it wrng. but sometimes there's nothing wrong with saying maybe we

mispriced the deal. >> you know, the overall assumption that there should be a used premium to those who are arable to get the stock on the ipo, i don't know is a true statement. i mean, i create a stable market. i create a market for the stock that reflects prance the fundmentedals at that time. >> i agree with you. but i do agree that investors had the right that day. if they wanted to sell in the pop, gauze there was a pop, ef even 23 it was just for an hour so or, they should have had the right. and there's nothing wrong with investors. >> i toe it will bli agree. one thing i wonder is if mother began sfan lee will sue the nasdaq. they feel that the dynamics of

trading, what had been significantly different. sfwl i was surprised. look, this is a great opportunity to be able to say everything broke koun. everything went wrong that day. there's no fault if they misprice. but sometimes it's better to say, you know, look, that was a real bad day for the individual investor. but the individual investor doesn't come up in the conversation. that's what the shame was. no one ever says with the backbone, the people who used to trade. the guy who is fry trying to get in. he's doing badly and we've got to try to help them. where is that rep? >> the whole argument, you know,id mor gab stanley will take you back to gm where they feel like they did a very good job priegsinging the deal. that i had enkriesed the size, they increased price and had a

retalt allocation over 20%. and it went well. and, yet, gm today, if you held off the ipo, you're not happy. >> china stopped selling gm cars. i mean, you know, facebook, maybe the reports today all said everything is fine, facebook. i read about the new way they're going to monetize mobile. i don't know. maybe the numbers aren't as good as we think. >> jp morgan taking down a bunch of internet names on macroconcerns, 4ed winds, softer international currencies. they still like priceline and amazon. and even among the small caps, pandora an linkedin, their favorites. >> 87% are up.

hours listened. that's kind of like eyeballs. i don't raemly -- you see there's two ie balls. >> well, you don't want to double count. >> exactly. at the height of the dolt com scandal. i think therpd koumpblting eyeball twice because there's two of them. all i want to .out is the little grie at home who's trying to buy 50 shares is just reich wac o whack me again. it's whackbleble. >> interesting, too, to listen to shawn parker yesterday talk about the mood in the valley sayisay ing look, a lot of these employees have sold minimal nunl ber of shares. >> i always feel so bad fwr rich people. >> if they're not happy, it's their own fault. that's my great, great uncle,

vlad lenin. >> i also think that we have to acknowledge that the peechl who got allocations were probably rich people. >> let eegs be honest here, jim. if you're saying let's not feel 3w5d for rich people. we're also saying we should feel bad for these investors. >> my work behind the scenes shows that a lot of people got stock that they didn't expect or want. and that's part of the syndicate problem here. that the retail network didn't want all of this stock and they got this stock vmt. i think as we report more and more, they shoved it to the lit lt guys. we should feel bad for all retail investors. >> look at the volume. we come here every day and the

retailers are saying why are u youing about spain? i feel for the guile who was me in 1979 trading in my dar. trying to buy five shares of bobby brooks, which went bankrupt. >> i baugt nine shares of american ag ro no, ma'amics and they had a frost immediately. >> speaking of facebook, jim says are we obsessed? probably. our question today is where do you see the bottom for those shares. you have until tuesday, about a week before the one-month an oers have ri of the ipo. >> all right. >> coming up.

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♪ >> as we mentioned, nasdaq expected to release details of a compensation plan to make up some losses sustained by banks and trading firms on the exchange which is estimated to be above $100 million. that brings us to this morning's squawk on the tweet. what should nas book do to make it up to face book enves tors. >> you know, backstage pass. what would you take? what would make this night? >> you're -- it sounds like

they're talking couponing. that's what would make it right is a hundred million. and nobody seems to have it. meantime, contra ver si building. it's a thousand -- they were planning a thousand, now it's 1200. >> 1200. >> this is their plan. this is a battleground stock. >> coming up next, cramer's mad dash ahead of the opening bell. see what he's talking about. we'll take a look at features again. still looking at a higher strengthening a bit here. more "squawk on the the head" coming up. purn push

the a a.l. summit. >> they have to raise a lot of money. while chesapeake, and we're going to talk about this with david later, chesapeake is making moves that should close the gap, the preferred is the way -- is the preferred way to play this. not the common. the preferred has been on fire. i think this company is making the moves that they warnt. >> we vhaven't mentioned the mattress business. what is going on? >> besides no sales? this was an estimate. it's just incredible how wrong they were. i don't want to describe

temperpaidic to a house number. >> the opening bell just a few moments away.

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♪ >> the opening bell here on wall street. actually, the ceo summit in the school of management celebrating the summit here at the nyse. one of those will be joining us in just a moment. at the nasdaq, hawaiianin holdis celebrating daily nonstop service between jfk and honolulu. there's an economic indicators. >> i hate that flight. that's terrific, carol. hawaii is one of the greatest places on erlt. et. earth. >> uncle harry's. >> people say hawaii is one of the gems of the universe. >> speaking of which, let's just

cover home depot once again. the affirmation of the guidance was important, but also the buy back is, too. >> i think they're taking share fr lowes. we got an upgrade today. there's a split going on here between the employment numbers, which would indicate that home depot should be doing worse and home depot itself, which is very good management. . maybe things are a little better on some funds. ray of sunshine, too much of a ray of sunshine? >> that's rielgght there with t s&p 5 hub. 00. >> and it's noticeable that the financials are leading this rally. bank of america is up by 2%. so is morgan stanley. this is day two of the rally in the financials. >> it is. i saw stanley above $13 a share again. >> you're being facetious. you're joining me in the fa

seerns facetious nature report. >> lastz night, you talked a lot about caterpillar. this is the other side of that spectrum. you said it wouldn't be all that surprising to see it fall another 20 bucks. >> we don't get a resolution in europe, then you're going to see the numbers come down tramatically. if we do, i think people are going to have to buy the stock. but, yes, if you get a 201 1 scenario where people get worried, this stock got really whacked -- 200 9d got really crushed. i'm watchi ining caterpillar fo sign versus world war stabilization. >> we are keeping an eye on draghi. we''re geng to be updated on that. we've seen a lot of different headlines.

but there he is. look at him. he's still talking. in epg lish, of course. >> and he's up a couple of pennies. >> achbd just in headline, he's saying we're nowhere near a post l lehman type of pom policies. and the basic obvious things that financial risk could bleed over into employment. commodities could see some medium term inflation. >> isn't that great. they got the wheelbarrows out for the deutsche mark. these guys really live in the past. h. >> that's their mandate. he also did say the esm, the european stabilization mechanism statutes would need to be chapged. one of the central questions is how are you going to bail out spain's banks which never took the marks during those poor real e state loans and the mechanism

not in place or agreed to in termings of trying the inject euros and confidence in the banking smt. >> people are probably confused at home. they're saying no og. i continue to believe that there is this secret meeting component that there is somebody -- there's people who are afraid to be short because of the idea that the germans, melissa, what you talked about, their ep conmy is slowing. they will have to come to the table because if they're going to be so austere to hurt themselves, that's whenl the germans will blink. >> hey, carl, almost up a hundred points before draghi started speaking. the aussie dollar rallied to the upside.

dow futures were up a 00 dpred. draghi started to speak and they just pulled back. but then things turned around a little bit. the euro got strompker. here we are up 95 points. we've talked about temperpedic. the ceo saying sales trends in our norlt american business have been disappointing and below plan. 2.5 year low for is that stock. credit squeeze, up grapds, both ryland comes this out this morning with an kpmt tax to profit and their orders are up 50% or so. very positive metrics. actually making munl. that eesz a big deal. you trust on home depot. the regulators getting questioned in front of congress today. we want to keep an eye on that. jim, the one thing we didn't talk about this morning or was

it late yesterday story? you saw what borrowing is for deer. 230 years for deere. 3.9%. just incredible that a company can borrow so cheaply. >> okay. before we speak to jeff seinfeld, let's go to rick sant santelli of chicago? >> calle >> well, a lot of markets moving. if you look at the ten-year, you can see rates popping up. bup pay particularly close attention to 830 eastern. look at the ten-year in europe. look at the 10-year spanish dets. look at how itse rates skoot up. why is all of this important? because some believe that mario draghi miegts have the right idea here.

what did he say, in my mind when i listened in red, what he eesz said is he's done what he can do. it's now up to governments and the banks. and in this country, votes in san diego, san jose and wisconsin say the people want some reforms. so maybe the tougher medicine is not bad medicine, but it is still refleblgted in some markt volatility. >> all right. thank you, mr. santelli. >> now time for a quick report on chess peek. jim mentioned it earlier and, in fact, can confirm a little bird story from yesterday about which he is bechesapeake being close selling a $4 billion stake in a pipeline. very comply kalted series of transactions that could culminate with what i am told perhaps a success of 4 billion tla

for chesapeake. and, again, the sale would cut down on capital expenditures. and, in fact, that would both raise money and decrease expenditures. so embraced is a positive. now, if you read a 13-b from investor carl individual investor icahn, he was asking the company to move ahead. but that had been in effect long before mr. icahn came on the sooenl. southeastern management is getting an additional three in addition to the one it holds. and we've got the annual meelting a couple of days away. most importantly is the case of

sales to keep up in order to balance out what goes outened what comes in in terms of kaush at that company. this is not an asset that many anticipated miegt be sold, but it is being embraced by the market. >> they've got to do something. i want to get jeff seinfeld for you fresh from the opening bell v vmt. >> david is talking about the idea that perhaps aubrey is appeasing. >> he's embraced. >> shareholder, gover nans. >> no one knows government like jeff. is this aubrey's olive branch? it is an olive branch. he's making great progeesz. gresz. gret strides. i think he's a brilliant man, a great corporate sitz zen. >> well, not a great shareholder

sensitive citizen, but in terms of dropping investments and being a paternalistic employer. however, it was a clear related party concerns that you can't understand how it made sense that nobody else 2in his busines needed if special deals. they didn't need to do this. exxonmobil. they dnt need to have the backing of third party financial firms to make a no-lose deal for him. that's crazy. despite all that we say this year about some of the challenges as we take a look at private equity, this is a reminder that carl icahn, he's an engaged investor and the third poibt point that issues at ya hoochlt. this is what makes kwapt lichls

work. this is having all the marquee names on the chesapeake names did nothing for them. >> yeah, engaged investors. i wonder if we'll see a change in the language. >> i think these people can build enterprise value. we have 20 manufacturers that are small. and graphics and jim in packaging: we're making money. they're all patient capital behind them. they are not being drifen by volatility of markets. >> so you see us graduating from a gecko-type kashlgter? >> i was just going to ask you about that? >> he says i can rebuild this. i the he meelgt be anyone to make it work.

but he's going to have a bofrd with some serious independence supervision. >> eegs still some investigations taking place. so we need to understand some of that. but, yes, they've come a long way. but it surely wasn't necessary. >> it's worth it to have even though we've seen the limits le's willing sto cross and how far he's willing to push the envelope. it's not an easy time for anybody, suddenly right now. but he zernly knows where the stuff is buried. and he has been quite visionary. and he eesz entrepreneurial. he needs to learn. hi board dnt teach him this when hefs growing. >> you know, it's interesting. we're taking a look at the current economic procedure.

the consultants are the ones who are most sin kl. but in terms o jobs issues, as you take a look at data, a lot of people are con earn issed that we don't look at the nominal data. we have 800, 000 jobs that came in. we have with us the guy in the seasonal adjustment factor. three years in a row, we're surprised. look what's happened with the may figures. who seasonally adjust ted out. it's con sdprooux jobs and our friends at the home builders upstairs. they're down by 70% em ploimt. sk >> those jobs aren't there. so we're overcorrecting. this happened last year and the year before. i tell you our friends about it, he goes and everybody looks at the numbers. stha say you know what, you're reeblgt vmt r right.

it will seasonally recorrect #the fall. if we look year over year, we'll see things are getting better. but the other correction is a problem. people are figuring that out right now. rather than complaining about regulation or this or that, they're really saying it's political gridlock. and they're also preetty excited about the goef nor's rush. >> plr. je jeff, thank you r thanks so much. skbl coming um. the world's biggest fool producers on growing he has company amid concerns about a slowing economy. take a look at in morning es's early movers. iron mown tanl up o 10% on its clams.

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take a look at the dow. the only dow component right now in the red. packard is up by almost 2%. the ceo at a conference in week in las vegas saying she is solidly confident the company will hit fiscal 12 guidance. so nice gains pretty much across the board here so far. >> we are in a moment where a lot of people feel a 200 day movement after ram. anyway, one of the ceos attending the yale summit this morning is here at the new york stox ek change. and he's the ceo of snaple and the maker of tools used nati nationwide and in europe. joinin joining" squawk on the street." sir, great to see you. you've got the pull because you've got some europe and you have some america.

america is in total bull market mode for you? >> i think it's pretty good. we call on 300,000 garages. every day they get up and they have breakfast. the breakfast is the news. the news is kind of mixed today, so they're vil very boztive. i think we say we are excessive. we make 80% of what we sell off those vans right here in the united states. so our model rises and falls on the u.s. market and we fell pretty good about that. the average car is 11 years on the road. >> not only do they get older, but they keep changing. if the president came out tomorrow and said i'd mandate 150 miles an hour on every cay, i'd kiss him. that would bid our business. >> well, european wiz is mixed.

we have for a long full-time warned the hair shirt of europe because e invested in spain about 15 years ago. so a big portion of business has been in spain. and we've been having that problem for a long time. despite that problem, we're up 7% organic growth. now, the middle of yeerp, they con trablgted in the first kwau quarter at single dimgts. but if periphery grew at double digits. it was a confirmation. >> you had a good read on the economy in general. what met riks within your own business do you take a look at to see whether or not we're approaching any sort of a turn to the downside or the upside. >> like i said, our business is repair-based. we serve the critical.

that's why people pay snap on level premiums. it's about the at feuds. so we watch. we want in terms of the venn view. what the bad news or good news is for breakfast every morning. then we look at big ticket items. people ll buy low or short pay back items throughout the resex. but they pulled black. we looked at those big ticket items. >> operating items were up another 70 basis pointss in the last quarter. it's the story of a lot of business. can you keep that up? >> one of the great things about being at snap on is for deck kapds, all we had to do was sell down this great channel with this great brand.

>> does that mean? >> to succeed at snap on, people love the brand. it's actually invisible mostly to the white collar people. when i came to snapon, i was unprepared for the intensity of this. you ride ashd a van and you call on two garages. and in that afternoon, two different guys will get on the van. and they don't want toy buy wrenchings vmt they want to buy snap on varsity jackets. harley is drk i kwnt speak to harley's brand, but every other law officer is draining of cruising free. but they're not thinking of repairing their cars with snap on.

>> boy, i've got to tell you, this is the real america. it's great to hear because it does not jive with the draghi spain situation. and it's obvious that there's part of america doing well. thank you so much for coming on and it's been doing terrifically. >> thanks for having me. >> got a bit of a ripper here. we'll keep an eye as some people led hope for a big rally and some of it tempered by the bc bx today. lot more "squawk on the street" is still ahead. fush push ttd#: 1-800-345-2550 let's talk about how some companies like to get between ttd#: 1-800-345-2550 you and your money. ttd#: 1-800-345-2550 at charles schwab, we believe your money should be available ttd#: 1-800-345-2550 to you whenever and wherever you want. ttd#: 1-800-345-2550 which is why we rebate every atm fee worldwide. ttd#: 1-800-345-2550 and why our mobile app lets you transfer funds,

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rjs. back for six in sixty. >> this is all discretionary play. and it's up. >> a buy back over united health? >> united health is just spewing cash. hey, remember, supreme court going to rule soon. >> that's right. upgraded in neutral. >> it's been a great as a sell. making this as the big ticket

tom. >> monster beverage? >> monster beverage and ulta salon are the two great growth stokes of the year. >> sherwin and williams? >> he didn't like it earlier, he still didn't like it. wake up and smell the paint. >> big data has kbn ream down. i like this call. skbl what's coming up tonight? >> my kind of stock, america and electric power. nice yield, dprout. real america niek likes snap on tools. cash rich, confidence poor. >> i like that kbie pinch hitter. that's america. that's an vesting view. when when he come back, a lot more "squawk on the street" when we return. [ male announcer ] this is anna, her long day teaching the perfect swing

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gets to the road map of the next hour of "squawk on the street." stick with his plan to continue easing measures through january. we're going to sort through those headlines and talk the moves. >> and the nasdaq is seeing the biggest percentage game compared to the other major indices. groupon helping to lead this charge. it is up sharply today although shares remain nearly half off. are the technicaling presenting to a lower leg? >>. >> also this morning, taking a look at the home improvement trade, home depot coming out this morning, reaffirming its sales giants for the year. the giant saying it now expects purchases of 4 billion this year, up from its previous guidance of 3.5. >> and another piece of news as we confirm chesapeake is advance

discussions to sell 45% limited marter in ship in midstream and other pipeline assets to global inf infrastructure. it could raise as much as $4 billion in proceeds. to be a part of the strategy to try to sell as selts as it faces a large cash flow shortfall. >> this morning actually strengthening here sto pledge to continue current easy members. well, failing to signal any new initiatives, a dive taking to reverse that sims, you're peen shares are reversing earlier at losses along with the u.s. markets here. interesting reaction that we've had u simon. >> yeah, basically, as far as i can see, he's said saying this is reading between the lines. the decision to not cut rates today was not unanimous. some of those countries wanted it cud.

he said the reason that they didn't is the projections are actually not changing that much. but he says thech faced financial tepgss easing. if you get a vote that goes the wrong way, my money would be that they cut on a sunday night. i woumd haveld have assumed so. >> interestingingly. he, on the ltro, he was suggesting that he didn't really indicate -- obviously, the door is open for a mass injection of a trillion. but he's not sure everybody's worked through the implications of the second ltro, particularly with collateral and maybe there was more that could be done there in terms of portioning lyric widty around the system.

>> perhaps there should be a little more honesty. >> yeah, some could say the pot calling the kettle black. >> i'm just the messenger. >> the other thing that came out of the conference is that we will get -- there are three investigations into how bad the span irk banks are. the first will be the imf to its board on friday. and he also said interestingly the fact that you have big pockets of liquidity in europe and lack of liquidity in others, you have a bik safety net that does have cash, that imbalance is not a monitoring policy problem. i don't know if you can infer from that this the ecb doesn't need to injury excused money overall. >> for more, you want to bring in our senior economics reporter

who can champl touch on what happened this morning and what we might can want to happen tomorrow morning, too. >> i think bernanke was living large right now. you saw that sell out and then it came roaring back. and there is growing markets concerning about spain in the wider banking system. but these comments are being interpreted by the burden of fiscal policymakers to solve europe's problems. robe, the central bank has a single mandate. so his comments were key to how the street interpreted them. >> while ine in ib flags rates are likely to stay 2% above the remabder of 2012, we kpcht price developments to remain in line with price stabilitity.

consistent with this picture, the underlying pace of monitoring expansion remains subdued. inflation expectations continues to be firmly accurate. in line with our aim of maintaining inflation rates below 2% of the term. >> so the key there was not lower than 2%. draghi said there was increased rigs k, but that's not interpreted by marks the way it would be if bernakee said it would blaf down the policy to inject liquidity into the market. >> and that is exactly what simon said it is.

>> in which basically to save himself. i don't know what your take on that was. on the one hand, he said i don't think deadlines are appropriate here and then suggested that a lot of observers standing ashd here at the stock exchange might underestimate the political adhesion. >> well, simon, you're about as an intelligent a european observer as i think there is. >> i'm not sure -- that cuts very much, cole. >> no, well, in the most complimentary bet? beting on political resolve in europe? or do you have much? you have an infi gnat amount of time? i don't think there's a critical

point because they can always come to the table and extend the bleeding or the pain. if you put the bar high as in let's try to solve this problem and let's try to make something out of it, yeah, you may have a certain amount of time. >> i don't think john was saying very much that we haven't said already, which is there's a big possibility. i am hearing some of the best fed observers out there. we had bruce yesterday, we had luke own in morning. i don't know if you have that shot from luke. is that back there, guys? yeah, why don't we run it and take a listen to luke. >> the solutions to ecb, i don't have. that's a tough one. in the near term, i think that the fed is going to decide that it needs to give us something on june 20th. we're going to gets a set functions in one form or the other.

>> and the number he's looking for, guys, is $300 million worth of asset purchases. i'm hearing a huge tide of agreement, essentially. and it may be we've gotten to a point where the fed is going to want to meet mark expectations. >> i can lock my rate on where we are today with the bond market on friday. or i can wait until after the greek election. >> i will tell you if you end up thinking about how much money you're talking about, i will tell you. i have people come to me with this incredible question, should

they do their mortgage today or tomorrow. when you get to thinking about how much you're talking about on a monthly bay sisz, it's like 12.63. >> if the world falls out of bed -- >> steve, it's a $10 million mortgage. come on. >> these are very good rates, simon. take advantage of them now. do not worry about $12.63. >> so lork now. lock now. my advice to everybody is lock now, sleep wem. those are two things to look at. >> that advice is worth a lot of money. >> hey, steve, thank you very much. let's talk about the nasdaq. the nasdaq telling brokers it will sub milt a plan to the sec.

today, detailing its efforts to make up some of the losses sustained by banks and trading forms on the fisbook ipo. what are you able to tell us? >> well, it's not question that nasdaq will be on the hook. but the big question is how much they will actually have to pay. sources saying the exchange reached out to brokers yesterday. unreiffying em them. they were on the hook and they still had to trade on those glitches. the losses havest hated up to 13 million some. and then adding 3 million and liabilities as mandated by the sec. so even up sizing that number, which would appear pal tri when you look at the losses, they expect to cover all of damages. they ended the first quarter

with 525 million in cash equivalents. they declinedn't anoupszment today. they will have to be involved. we have finra handling the arbitration of the claims. and the sec is involved because they would have to allow nasdaq to pay more than the kurnt if i can your required. right now, the cap is at 3 million. nasdaq will want to save face and pay more. an announcement is expected to come today vee ja equity trader alert. we'll have it to you anz soon as we have it. >> i've got a question. is there a reason why the nasdaq would consider offering trading discould wants? is there some advantage? >> of course we don't have the details right now, but you would think some sort of trading disz count would only occur when the trauds took place.

if they do send you a lump sum pay out, conventional wisdom will tell you that's goichblg to take a big chunk out of their cash and earnings. >> keep us in forms. &you can now buy the shares for less than half the kmaeb r company 0e 1 ipo price. as the competition heats up, are the charts pointing further? >>

>> we have product x and we have product y. we are going to start with product x. the only thing i'll let you know is that it is an, affordable product. oh, i like that. let's move on to product y, which is a far more expensive product. whoaaa. i don't care for that at all. yuck. you picked x and it was geico car insurance and y was the competitor. is that something you would pay for year after year? i, i like soda a lot but for a change of pace...

welcome back to "squawk on the street." two stocks to look at. linkedin. there have been reports that millions of linkedin passwords may have been stolen. if you're on linkedin, you may want to go in and change your password. updating grouponto a hold. hardly a re-indorisment, but it is an upgrade to a hold. the fundamentals may have stabilized. also, he likes the e-commerce

possible tblty rather than being a groupon, coupon service. we've got the street signs today around 2:40 eastern time. >> brooinl, you do so well. >> carl, that is in there. all right, brooinl, thanks for that. we want to take a closer look at what the charts are saying. maybe rallying again today in part. gro groupon is down about 50%. so martin is the chief analyst. mark, it is great to have you come by. the first question i have is it's only been a publicly traded company for about six months or so at this point. how sound is the technical an analysis of a charts is tha is so short. in this case, the stock has had a fairly discern about chart plan.

really, it's been going straight down ever since. you've had an on going pattern of lower highs and lower lows. so my view is it's just a balance as part of an on going tread. i think that the stock is going to move back to low territory sometime over the next few weeks. >> ef even know it survived the lock up expiration and that increased slars by a hundred percent? that is a huge amount of stock on the market? >> wem, technically, you just haven't seen, really, the necessary improvement to think of a stock as bottoming out yet. if you look at how the stock has moved over the last few months, it's been down 60% or so. the stock on the downside has had much heavier volume. it's been up now 20% or so in the last two days just since yesterday's lows. i think it's good to take some off the table. >> is there a way to compare how

this name responded to lock-up expiration as opposed to others? is there a general rule of thumb about what a chart does when things expire like that? >> not necessarily. each stock is different in that regard. this stock, you know, just looking at the pattern, its's still somewhat bearish. and the last couple days have been more significant than what the stock has shown since that time. we've seen a little bit of a blanls. but we've gotten up above those prior may lows. in general, the chart is still overweek. >> what's kept you with the marks overall? i think it will be a belter buying turnt. i think you're starting to see signs of conditions. it's tough to get real real pozivetive. >> is it possible that europe,

since it has been sew much more beaten up, bottoms before america does? >> no, i think that's true. you've seen in the last few weeks, signs of a partial statement. it's traelly, really difficult thus far. >> mark, great of you to stop by. mark with grey wolf execution. a quick programming note here. tomorrow will be in groupon's hometown, that would be chicago with the one and only rick santelli. >> so are you leaving after the show? >> private jets? >> no. i don't live like you do, simon. >> when we come back, we'll sit down with the hedge fund managers with troubles over a year ago. back in a couple minutes.

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♪ 53 minutes into trading, it's a fascinating open. the dollar falling away. check out where we are on the australian dollar. that's a big move on a session overall. if we look at the euro, $125 more. now, anl day bush joins us from bmo capital markets. andy, what do you do here? >> yeah, i like buying the euro. so yesterday, we recommended every take out their euro shorts. basely, i want to go long. i want to buy ex-uros, 123.75. just down around 124 and a quarter. the market for risk often is overbaublgt. however you want to look at it, we're seeing a nice relief rally.

if you look at indicators like macd., rsi, whatever you want to look at over a tech kalg business. so the fact that the ecb left rats on hold and the euro has held up here, leads me to believe that we're going to get a nas relief. >> andy, are you going to stick your neck out? is this the bottom? >> yeah, i think temporarily, we have. it ee's way too soon to say. but certainly, we're in such oversold territory, we need to see a bounce here to take some of that tension and we will. there terms of the oversold indicators, did those indicat indicatorinindicators change within the past 24 hours or so? you've come on saying the trend is your friend. don't be too smart about it, don't be too cute. go with the trend. how sure are we that the trend

has been broken at this point? >> we're not. but juls reflecting over my technical indicators plus what the market is telling me, and that's praelly what i'd like to see. i'd like to see the price action and some bounces in here. >> oil has been down that many. so we're starting to see bounces in equities, commodities and the euro. >> it's interesting. andy, big day. bmo capital markets. be sure to catch "money in motion: currency trading." >> we've got rent back above a hundred. up next, we'll get some news on inventories.

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welcome to the world leader in derivatives. welcome to superderivatives. u.s. inventories driving the price of oil in the session. we are waiting for the data to see whether there has been, as expected, a decline in crude supplies with the flows now from oklahoma to the gulf coast on

that enterprise seaway pipeline that's now up to 150,000 barrels per day. that is the reason why we saw a decline in crude supplies for port last night for the past week. and now, an tis pticipating the. crude supplies have fallen in the past week, but only by a hundred thousand barrels. we were going to see a declieb of more like a million barrels. so this is much lighter nan kpmted. gasoline supplies rose more than expected. last week, up 3.3 million barrels. we're seeing a rise in diesel fuel supplies rising by 2.3 million barrel. we are looking at a greater increase than expected than the refinery rate. and some traders say we now may

be near full capacity. in terms of the rally we're seeing, it's off of the highs a little bit. keep your eye on the metals market. after the rise we've seen in the euro and to strengthen the aussie dollar today, that is helping to strengthen the metals. back to you guys. >> all right, sharon, thank you so much. about an hour into trading here. about 7:31 on the west coast. 10:31 on wall street. bank of america is leading the way,up almost 95 mnt. iron mountain, the biggest gainer. and temperpedec plum ets 46%. the mattress maker with weaker sales in north america. >> we're now in our one-minute

into trade and the yieldingss cg up to 1.6% on the 10-year. this is a big move in the bond markets. >> good morning, simon, yeah. it is a big move in the bond market. we see yields taking a bit higher. we're coming off of some levels in these treasuries. certainly when we flip to see what the ecb did, really, we didn't get much out. no rate cut. no hintover any additional ltro. but we're congresswomaning off such levels here, we're looking at retracements and a lit m bit of repositioning, in my view. >> kevin, you haven't mentioned the feds. many people believe that we're reallying partly because of the hills in the journal. this says the fed does standby ready to act.

>> i think that the bar was certainly raised a long time ago. as we looked back to last friday and that dismal jobs number, certainly we're getting to a point where the fed is going to be forced to kt a. maybe it's some kind of global coordinated act. but i think the fed is going to be forszed here sooner rather than later to do something. so in terms of what to do at this point, i think frsh ris are still a good buy down here. but the problem is the stocks have to be kept rather tight. we could see yields rise a little bit more. >> so what's the time frame on this sort of trade if it could be capped by some sort of action. is it the g-20 and going out and it could possibly be as erltly as june, maybe later? sk >> i think it could be a little bit later than june. i think in the meantime, these

rates will hover around 165. but i do think it's going to be after jum after june. it's to get some further data points. >> kevin, thank you very much there. i think i'll lock. >> steve, good. >> you'd be very happy that rates are where they are. some analystsest mait jp morgan's trading loss could amount to 4 million dlarsz. could the wounds heeld heel for the bank? jason goldburg is an analyst. great to have you with us. you took the price target down by about $5 here.

i wanted to ask you about that loss. are you getting any further indication as wern progressing along the kwaurtser that the loss could be bigger than $2 billion? another analyst put it at $4.2 billion earlier this week. >> yeah, certainly that number is going to move around during the course of the quart other as marketer moves. they may have other, you know, hedge ins play. they may have taken gains to help mitigate the losses. ceo jamie dimon speaks in the senate. i think it will give us a lot more details. >> in terms of your estimates being trimmed, though, that's pry mayly wauz of the markets? >> yes, clearly the way the

quarter has progresed, it's been a bit weaker than we would have expected. both in terms of dead issuance, kind of rerisking. serply a way for activities during the current quarter. >> the company is kind of tempered its buy back out look. it's still trading with six times earnings, which is one of the lowest levels we've seen in quite some time. >> i think it's the lowest in 20 years, right? but jason, what gets the tok going again is aulgs we about the dividend and those impressed metrics. but none the less, questions about risk control. what changes the tune?

something interesting came out this morning. so coming from, you know, something from the fed is typically an antibig bank. we thought that was encounseloring. but looking out, here is a company that konts to take market share in the majority of businesses to compete in. we think there's some secular trends in their favor. clearly, weighing on some of the deposit businesses. all the though law lowes, in thor th thor in term, you have evaluation that's atrablgtive. >> for those analysts this week who've chosen to focus more on the net interest margin and this slowing growth, are they overplaying those issues?

>> i've been covering this issue for 16 years. it's not necessarily a new phenomenon. you noi, loans do continue to grow. you looked at commercial loan growth. you looked at 10 of the last 12 weeks. there's certainly certain pockets of strength. the mortgage environment, given where low rates are, 23 you look where evaluations are for some of the bet ir position,banks feel very comfortable owner stocks longer term. >> i mean, if we get the usual seasonal bounce back in economic data here, that could be a catalyst. >> it could. data with the 10-year treasury go down.

and, you know, that goes part in parcel to what's coming out in europe. people feel better yesterday than they did last week. >> all right. jason, great to speak with you. thanks for your time. jason goldberg. >> hands it over to brian sullivan. the dow up 157, brian. >> yeah, pretty good day. we're going to talk about gold because gold stocks have done fairly well. golds stocks have out performed the market. but we also have a managements change at barek gold. abx, in fact, ousting the ceo citing disappointing. that stock is down about 30% over the pags year. >> all parts of a 2008 board

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♪ oh, oh, all the way ♪ oh, oh about 49th street, down on a barge. it's been in a hanger at kennedy airport for about the last few weeks, a month. >> was that a dream? >> it hits -- yeah. >> no, the space shuttle is fine. >> i was taking a flight the other day, driving -- driving into j.f.k. looked over to the right, the shuttle was right there. it's so jarring. it's gorgeous. >> how appropriate to pick david bowie? he's still in venue on the 17th where the shuttle is going to come very close.

yes, it will. >> we will be taking the kids. >> the criminal trial earlier this week, testifying last year. and the judge who presided over that insider trading trial. judge, always good to have you back. good morning! how essential was this testimony? >> really not essential at all. all of the testimony that mr. blankfein gave could have easily been given by prior witnesses that have testified at trial. really, what we're seeing is a civics lesson run by the prosecutor who calls to the stand one of the most powerful men on wall street who came up through the ranks as a trader.

and the government, through the moth of mr. blankfein, is saying you shouldn't do this. >> how effective is that to a judge or jury? >> the judge doesn't look on it cynically. i'm sure the judge understands it for what it is. with respect to the jury, more likely than not, they have no idea who mr. blankfein is. he's a big name for us in the business world. but if you go to mom and pop on main street, they know what wall street is, but once you get passed wall street, the names elude them. >> he does look like a kind uncle if you talk to him. >> yes, he is a very congenial witness. he's improved his practice the second time around, of course. >> yea yeah, he's gotten better. >> meantime, the defense is

pivoting around what you call the spaghetti theory? >> yes, they are going to attack everything that the government pupts puts in there, raise a reasonable doubt in the minds of the jurors. this remains a circumstantial case without any direct evidence of leaking of information. but the circumstances are coming in. there was one taped conversation between the defendant. no inside information was revealed that was traded upon. but it shows that the two of them were talking about what happened inside of the goldman boiler room. >> become more substantial beyond sort of a celebrity witness play for the jury. >> well, that's up to the defense counsel. the question for him is a

strategic one. do you do what's called the safe cross-examination, hello mr. blankfein, what a nice day it is, you een an important man and mr. gupta was an important member of your board and a nice guy to. or do you go after the government witness and say snt it true that the five past tender offers the market has jumped a half hour before the deal was announced. and dunt that tell you that there are people inside your organization who are leaking information? >> now, that's a dangerous cross because blankfein is a smart wnsz. but that's the alternative. >> what about the idea that mr. gupta did not get a benefit typically conferred in insider trading? how important is that going to be in ternls of explaining what benefit it was he got then from giving potentially inside information? >> there's been a lot of discussion about that element because it's true.

that in order to get a conviction for insider trading, the government has to prove that even though he didn't trade, we're seeking some quid pro quo in return for leaking the investigation. but, in fact, the jury charge that is generally given by judges in this case, it's very weak. and it could be simply a matter of friendship to the individual. and there has been a lot of testimony, of course, as to the business relationships and charitable relationships between the defendant. so it's -- it's a point, of course, but i don't think it's as big a point as everybody has been making it. >> overall, you think the government is plowing ahead? doing what they intended to do? >> i haven't seen anything to lead me to believe that government isn't doing precisely what they intended to to do.

the big question mark is what does the defense sweintend to d? and argue to the jury reasonable doubt? or will they put the defendant on the stand, the high-risk proposition that brings rewards and dance off. >> judge, always good to have you here. thanks for your answer. rachel joining us here. >> by the way, i was correct. the left wing of the intenterpr was damaged yesterday. >> so it's still david bowie, not bouie. >> tough crowd this morning. >> and you could still have dranked it, simultaneously. >> i don't dream about spaceships. >> well, you mentioned it. >> ahead on the program, facebook trading lower in its last 12 sagss. session. so is this an opportunity to get

in in? we're talking the fall out amid facebook. >> first, rick santelli. on the? today is a big day, tomorrow is a big day, but last night was a big night. we'll talk about the difference between solutions and illusions. solutions may be found in places like san jose, san diego and wisconsin. illusions, well, the fed may be acting but acting more like robert de niro. there is a big difference between idling the car because you're waiting for somebody whose telling you they are almost ready, but they just want you to sit in the car and idle. we are not going to be idling. we are going to be aggressive today. all at the top of the hour.

well, news out this morning that morgan stanley is considering selling a minority stake in its commodity business. kelly brought that story earlier and has more on it now from hq. kate? david, interesting to see share rally of morgan stanley with shares up 6% partly on this news.

i think there are a lot of concerns out there about the volcker rule, seeking to look into the trades that firms have if they consider they are too big to fail. mainly competitors like jpmorgan saks and morgan others, those things may not be allowed to stay part of the company in a future under the volcker rule. obviously, that remains to be seen. the bank holding act raises questions on how morgan stanley currently does business that have not been currently ironed out. that said, this would be a big change for morgan stanley. they have been active in this business and the leading franchise over the years. i'm told this business raised a billion to $3 billion depending on the year in revenue.

i think it was more of a profit in the earlier era, now it is a tick lower, but essentially this is a core thing they do. for them to bing be i think in a minority investment may not be a game changer, but it is interesting to see them contemplate this. given what's going on with congress and the regulators. >> they may not realize that it is an important business for them. as you say, they own terminals, but i'm curious, kate, what would selling the minority position for them in terms of dealing with the volcker rule problems? >> right. it's a bit of a head catcher on that score. essentially, it would raise capital, which can't hurt. you have sippy buffers to worry about, capital constraint in this business and many others across the board, and the other thing is bringing on a partner may pave the way for a little more deal making down the road. it may be the person takes a bigger stake in the business. >> but kate, it's not the point,

they would like to raise cash at the moment and why not spin it as a response to regulation. >> absolutely, simon. that makes a world of sense. it seems like a safe excuse to say, we are concerned about the regulatory landscape, there are a lot of uncertainties and we need cash. moody's threatens and morgan stanley could lose three notches. this could loom larger. i don't know what all the motivations are, but i think capital could be one of them. >> kate kelly, thank you for bringing that to us from headquarters. meantime, we have a market rally underway. much more on all that coming up next. [ male announcer ] when this hotel added aflac

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we should point out tomorrow you'll be live in chicago at the cme on a day when bernanke is speaking, that's huge. >> it will be interesting. i'll be there with rick santelli to preview the testimony. it is just like when i joined cnbc a million years ago. >> look at that. wow. much younger then. young and innocent. >> david, enjoy a few days off. see you next week, i hope. if you are just joining us this morning, here's what you may have missed earlier today. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> was the company effectively affected in price. this was an unknown and this is the first company that's come to market with that phenomena as well. >> ecb is leaving things unchanged at this point, just as expected. there are significant deleveraging that needs to go on in the european banking sector. it dwarfs the size of our banking sector in terms of bank

assets to gdp in the region. they don't deserve, they don't deserve the respect of saying they are not doing stupid things. they don't deserve it. they have kept the world under their thumb. we don't know whether facebook pushed a high price or whether the cfo pushed out the high price or whether the deal got it wrong. but sometimes there's nothing wrong in saying, maybe we mis-priced the deal. and here's the opening bell on wall street. >> america's in top bull market view, isn't it? >> we call on 300 garages and meet with those people on the mechanics. they are all positive. the last couple of days are simply hard to balance this as part of the downgoing trend in this stock. the stock is moving into lower territory in the next few weeks. certainly a mixed picture in the near term over time. you have an evaluation that's attractive and the company should continue to take share. good wednesday morning.

welcome to the third hour of "squawk on the street." take a look at the markets today. we have not strung two days back to back up on the dow since the end of april, but we may actually do it today. the dow up 173 points. positive once again for the year at 12,303. and if we got above 200, that would be the first up 200 day since march 13th. looking at pretty interesting numbers today. iron mountain, a document storage company, leading the s&p after the company says it will look to convert into a rate as part of the conversion. the company would distribute more than $1 billion to shareholders. the losers today led by the mattress makers. tempurpedic trading at two-year lows. time for the road map today. looking at facebook's magic number, the number it has to hit before investors start buying again. there is a number.

we'll see how low the social network could fall before it sees a bounce. and the future of chesapeake. we'll talk to the founder about that market now. and we'll countdown to the european close. we'll get the take on europe's economy on the back of the ecb meeting this morning. then groupon, their biggest deal ever. we'll find out why the online coupon company turned down the multi-billion offer from google a couple years ago. what went through their minds and do they regret it now? that's coming up next hour. first, we'll start with facebook. the nasdaq telling brokers it will submit a plan to the sec today detailing its efforts to make up some of the loss sustained by banks and trading firms involved in the ipo. kayla is back at headquarters with the story that keeps getting more interesting. >> it does, carl. unless nasdaq comes out today to agree for all the brokerage losses, you know they won't be happy. at prenlt estimates up to $200

million in losses at market makers, responsible for executing trades on behalf of retail client who is would like to make a trade. cidale securities is one of them. and td ameritrade we know. the brokerage had to keep the shares because nasdaq eventually did confirm the trade. not nasdaq will set aside $13 million for the losses, which is only a small portion of what they're estimating. and the exchange had $525 million in cash on its balance sheet as of march 31st. some roughly double what retail losses could be. and that number doesn't include potential losses at investment banks underwriting the deal. now, to pay more than it has currently allotted, nasdaq will have to reach an agreement with the sec to revise an existing cap on liabilities to higher than the $3 million where it currently stands. and then finra will sort through the claims. quite a regulatory cocktail for

the nasdaq. we'll see what they announce today. >> still a lot of questions about grifield's future as well. thank you, kayla. wall street seems to have found the dislike button on facebook with the exception of today, which is -- it's amazing how it swirls between the positive and the negative right now at 44 cents to 26.27. stocks down a third since the ipo, but experts say the stock could be close to bottoming meaning an opportunity for long-term investors to like the stock once. one such voice is roger cay, founder of inpoint technologies. good to have you back. >> thank you, carl. >> is there a magic number at which it finds stability over the medium to longer term? >> well, first of all, carl, you have to realize that values are always basically an agreement between two parties. so there isn't a magic number unless two parties agree there is one. that having been said, around 20 the stock feels a little bouncy.

i have friends that say, it could go to two, and then it is still a $5 billion company and that's a respectable evaluation, except for all the guys who paid more than a few bucks. that could be a problem. >> what makes you think 20 is significant? >> well, i think that people have heard a lot of bad things about facebook. its inability to monotize mogul. it's a lack of response between page and ad revenue. there's a lot of things taking the stock down and the fact it was mispriced in the first place, all that bad stuff. but there's underlying goodness there, the reason it was valued higher in the first place. i'll give you an example. if you have a couple of applications, like social cam, the instgrams that you can post easily with your friend. those guys, if you go to the facebook search box and put in social cam, it will say that 67

million people access that application in the last month. if you can get 67 million viewers for somebody's application, then you're a key maker. facebook is still a king maker even if they're having trouble with their stock price. >> that's a good point. i wonder what you make of the reuters poll earlier this week, yesterday, in fact. serving users, asking them if they are using it more or less than they did six months ago. 34% sayless. are people beginning to cut the chord from the website, even if it is incremental and slow over time? >> there's a problem there because as facebook monotizes it will put ads in your stream. if you see that in your news stream, it is like, i didn't want want to see that. this is not the facebook i originally signed up for. some of them leaving with the college kids, the reason that the thing got going in the first place. yes, there are issue there is, but even so they have a

tremendous amount of subscribers. they are going to easily hit a billion subscribers, and that's a lot of people. as long as that's the case, they still have a pretty good argument for why they are an important player in the new social market. >> interesting, too, that even the analysts who are relatively bullish on the name don't rule out the possibility, roger, of $10 swings either way for a while. >> it certainly could be quite volatile, but at some point the undervalue of the stock will be realized. people understand this is an important hub in the new social media. and it's going to be there for a while. yes, there have been companies in the past, aol and myspace who were important and becameless important over time, but i still think we are in the facebook era and it is not over yet. >> before we let you go, your own position in the name. where are you? >> i don't have any of the stock, so in that sense, you know, but i would there eticly be a buyer around 20. >> coming from you that does say something.

roger, appreciate your time, as always. joining us as founder of inpoint technologies. to the cme group, rick santelli has a lot to talk about today, good morning, rick. >> buckle up. we are going to go fast. i want to talk about solutions versus illusions. solutions, concrete solutions. things like controlling cost. having the type of reforms that can garner some growth. for solutions -- i'll tell you, there have been so many comments where people say, listen, the fed needs to do something. even the illusion of activity, they can't appear to be idle. they need to be seen as acting. but acting, not acting like de niro or perk peche, hey, you looking at me? they need unemployment, low interest rates, we haven't seen any victim there is. so really, who is the big cheese? it is not ben bernanke or mario

dretti. i'll tell you who the big cheese is. the big cheese is wisconsin. i'll tell you why the big cheese is wisconsin. wisconsin voters not once but twice go to the polls because they have a feeling of what would work best. and i'm not going to argue whether pension reforms are good and bad, but they are reforms and they are going to try to control costs. so the big cheese is you, the people. you, the people. my hat goes off to you. it doesn't end there. we need to take care of business and taking care of business means for you to be heard. so it is not just you the people in wisconsin. look at you in san jose. governor brown, are you listening? mayor bloomberg, are you listening? governor of illinois, are you listening? because these reforms are going to have to start from the bottom up. bottom up. states, municipalities, cities.

they need to balance, they need growth. and it's going to work its way up to the top. top down never works. grassroots, feet on the ground, you know how you get things done in this country? voting. and sometimes, the first time doesn't take, you have to try it again. back to you. >> between madison and san jose and san diego, you took a big step in a certain direction this morning, rick. we'll talk to you in a bit. when we come back, chess pooe reportedly working to sell most of its pipeline assets for more than $4 billion. that's a nice chunk of change. what are the implications for the nasdaq market? what are the most influential voices on gas? before the break, one more look at the markets. up 185 as the rally continues to build steam.

the markets do feel pretty good today. and so do investors in diagio. they are investigating nearly $2 billion in the scotch whiskey business. people out in india, russia, brazil, china, they want their scotch. and diageo wants to sell it to them. investors like the news saying it is a big opportunity going

forward. $1.7 billion in the u.s. gary co minski will drink a quarter of that. >> brian, thanks a lot. the next guest is the hedge fund manager who first warned us of the balance sheet issues at chesapeake energy. the question is what is next for chesapeake energy overall? joining us is rob raymond. gary cominski is joining us. it's good to have very smart friends. rob, as carl just mentioned, you have been so right on a number of things. you have a call for a number of years. what's your outlook in terms of the commodity? >> we are still cautious. there's been a rally here over the last sick six to eight weeks. a violent one off the bottom. 30% to 40%. in the near term going throughout the course of the summer, ultimately supply and demand rules the day. so we just have a view that supply will remain relatively

resilient. that's the view for the next 16 to 18 months. on the demand side, it is a function of fuel switching between coal and natural gas. and so it's sort of, if you will, the proverbial race to the bottom as the two industries are battling it out for market share right when you've got way too much inventory in both coal and natural gas here in the u.s. so it is going to flow throughout the course of the summer, but we are still fairly cautious. >> so you are saying the loaf continues. >> yes. >> in terms of chesapeake, you brought the issues in terms of the balance sheet issues to us a short time ago. give us the outlook of selling midstream assets. you know what's happening, tell us how you view chesapeake? >> our view on chesapeake is they have some very interesting assets. but with other assets in the balance sheet that are not so interesting, we can go through the whole issue of financing or being funded over time. but the short answer is that we

think with some of the board changes, and more if you discipline a strategy of the company as you're seeing today with the sale of the midstream assets, that starts to, from our perspective, make sense. the reality is this is a company that in some business lines they had no business being invested. midstream we can debate the service side of the equation as well. at the end of the day, the question becomes, once you rationalize the assets, what is the earnings power of the remaining assets in the portfolio. number one and number two, what kind of prices can they garden her? >> i want to ask you, there's an issue, you can sell assets, there is an issue, are there buyers for the assets as they sell them? >> i think there are. there's a price for everything, right? the question is, at what price? i think some of the initial assets that were on the block for sale probably have been, if you will, augmented with additional assets here that may garner higher values.

and probably leads to a faster path to rationalization of that balance sheet and ultimately stabilization of the company, which is why the stock is up so much. having said that, one has to wonder in the world of $4 gas long-term, what is the earnings power of this that remains post-rationalization. >> okay. we'll talk about investing in energy right now. in your overall market value, you specialize in the sector, what do you do in terms of trying to be optimistic here? >> we have been pretty cautious through the first four to five months of the year. once oil gets above $100 a barrel, we don't think that's a sustainable price. recently with the sell-off in the market and specifically in energy, things have started to look more interesting, both on what i characterize as an absolute aren and relative basis.

these markets are as cheap in the market in over a decade, so energy has been hit harder than the broad market has. that gives us an opportunity to look at some of the sort of bigger oil names, if you will, and hedge them against the broad market. >> what are some of the names of the companies? >> oxy, apache, some of the big liquid names. there's a whole list of them going into our book as sort of exemplary of that opportunity would be a couple of those names. >> in creating the hedge fund, you create the hedge fund in looking to the s&p, you basically create that ark arbitrage. >> we are finding interesting value in the market and on the midstream side, sort of generically tying the next generation of these for sale together with things like the golf coast where you see the renaissance and refining in the u.s. over the next three to five years. >> rob, before i let you go,

we'll see you again sometime after this -- do you think he survives all this at chesapeake running this company? >> yeah, i do. i do. look, there have obviously been a lot of issues. i like aubrey. my view of aubrey is that at the end of the day he's -- he's brilliant in terms of what he does. he might have gotten a little over his skis here in terms of right capital allocation and being invested in certain assets where it doesn't make as much sense, et cetera. anybody that wants to bet against aubrey, that's a tough bet. >> rob, thanks, as always. carl, it is good to have smart friends. we goed got to give a shout out to the move in the overall s&p today. >> it looks every bit of good this morning. thank you so much, rob.

thank you, gary. talk to you in a minute. as gary mentioned, markets are in rally mode after that mystery trade. they did call for a face ripper today. it's happening up 195. whether it is due to the scott walker victory, word of the potential win in greece? we'll watch the close of europe in nine minutes when we come right back. if you are one of the millions of men

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and once again, look at the home builders, welcome back to "squawk on the street." ryland group is being upgraded along with pultegroup. agents are selling new homes points to higher prices. low interest rates are helping this group as well. ryland and pultegroups both up on the news.

back to you. the shuttle "enterprise" is making its way to the intrepid. this is not our cameraman. you should be clear. this is a pool feed available to all sorts of networks, but the shuttle is making its way after a one-day threw delay threw to the weather which will be an amazing exhibit for new yorkers for a long time to come. we'll bring you that closer and closer as it gets to its knock. in europe's trading day, we'll get the closing details on the impact here. the dow is up 206. we are back in a moment. coming up, europe calling it a day. will the market close bring people to happy hour or to bed? we'll head overseas to find out when "squawk on the street" returns.

when it comes to europe today, an ecb meeting, wrathing impressive meeting and some miserable economic numbers in germany. people are wondering if problems in europe are beginning to affect the best thing they have going. >> for sure. a very strong powerful rally coming out of it. london coming back to trade today. have a look at where we are

going with the banks in the u.k. and the global miners. 7% to 8% gapes. have a look at the other banks around here. kbc in the netherlands is doing extremely well. acts for the insurer, bank of island, up 7%. there's the perception that we are going somewhere, the perception we are going somewhere on getting money into the spanish banks. and now we learn we'll have the imf report on quantifying that, the fist of three on friday. at the same time, not only have you got the journal article, but the fed stand ready to move. but today the decision not to move on interest rates, not to cut interest rates in the eurozone was not unanimous. so some are saying you should cut. in fact, if the greek election goes the wrong way, a weak monday or sunday, we pick it up monday morning. then the inference is that you get reaction from the ecb. we'll have a look at peripheral side of the equation, those

markets n particular, have done well during the course of the last week. we'll have a look at those in a moment. first, we'll focus on the map. >> the european markets are closing now. >> so london comes back to trade. you can see it is up 2.4%. the reason we mentioned london is because so much of trading activity is directed across the continent from that financial center, albeit calls from frankfurt and paris. this is where we have been the last week. to try to demonstrate to you the degree to which we have been rising or falling on the peripheral nations depending on this, it does not really work, but you'll see here the degree to which this happens over the past week has raisin by 5%. you'll see the degree to which greece has fallen by 6%. the point i'm trying to make is a lot of the peripheral nations are beginning to turn, though not all, greece in advance of the election. year to date you'll be getting

hammered, so you are really coming down. you are only kind of -- my question to you is, are we bottoming? it is a genuine question. you'll laugh at me and go, we have the greek election coming. we have so much activity. of course we are not bottoming, but actually the price is actually quite strong over the last week or so. i want to show you, for example, where we are on italian yields. if you are able to separate the spanish banks from the spanish solve soverance, this is where we are over the last week. this has fallen substantially. yes, it is very elevated, but the pressure is just yeezing. despite suggesting they need to be in the bond market, check this out. a lot of people make a big fuss when you see the spanish debt over german up over 5%.

let's note this. that is where we are at the moment. the other thing i want to mention to you coming out of this news conference is that a lot of the market was hoping that you will get a second ltro, sorry, third injection of money into the banks in the eurozone. in fact, if you listen to what dragge said today, to me it seems to be pouring a little bit of cold water on the idea of the third round. check this out. >> we have opportunities offered to be fully explained. the operations are so significant in their size and so complex in their effects, we don't think they are totally exhausting all their effects. >> clearly, the read between the lines, interest cuts are in the cards, if financial stability worsens. >> australia this week did not

get ecb today, but the market is showing more. thank you so much, simon. gary cominsky is joining us. what's on your mind? >> i want to stay right where simon was. remember at this time yesterday we talked about paying attention to the spreads. and simon just showed you what was happening with the spanish bond. i don't know if he showed the spread with the german, but this is one of those things being watched closely and having an impact on the overall markets. we'll continue to watch that we have day. >> what do you think the markets are pricing in? do we the -- are they counting on a best case global unified response or something in between? >> i just don't know. i honestly don't know. that's why i refer to people who have a much better feel in terms of the short-term perception out there. but i do also want to remind people, we touched on this at the end of the rob raymond segment. our friend out in colorado, his point yesterday as it relates to europe, when i read you the news release from october 4th, 2011, i read it at the top of the hour

yesterday. if you remember, we are essentially exactly where we were. in other words, there was nothing new. and i think the sentiment coming in after this, what was a very bad friday and the thoughts over the weekend, was we know, we've been here before. we know exactly what we are going to get out of europe. so again, this idea that there was nothing new. and honestly, do we think there's going to be something new in the next three months? it will be a little bit of this and that. watch the spreads because the spreads will tell you when capital is flowing. >> amazing how we bounced off the 200-day at 285 and now at 1307 on the s&p and made up for a lot of the loss we sustained on the jobs friday. we'll talk to you in a few minutes. now we'll brink in brian shankman. >> it is refreshing to hear gary say, i don't know. you are talking five traders here about why we are ripping 200 points to the up side. you have five different answers and three of the five will be completely canned. people don't have a sense. we go from the gdp to what the

fed might do. there's a sense of an unknown. i can tell you that just about all of them, though, are legitimately interested in what facebook has to say. we'll see that at 2:00 p.m. eastern time. take a look at the sectors, energy has the best day since the first day of the year. that was january 3rd. financials also doing incredibly well with materials that were on top earlier. look at bank of america. this shows you the financial strength that's been building throughout the entire day and the big banks have been on top. you have citi, jpmorgan and morgan stanley doing extremely well. the credit squeeze upgrade in housing, i have to point out how they made money and are losing it. people are not buying new beds to fill it. people talk about what happened with tempurpedic, but yesterday we had mattress firm with disappointing numbers, so it seems the whole segment, funny, i don't know if it is funny for the people with those stocks,

but the whole segment is crush today. >> funny how you can't put it in the european banks and the mattress firms. rick santelli is talking about why the whole financial structure in europe needs to be changed. rick? >> and i think the best place to start with the financial structure may be to start with our own fed and working our way over the ocean. jim is our guest, welcome. >> thanks. >> it seems after i read some of your notes that you don't think it is a good idea to do any more quantitative easing. low interest rates are low and i don't see unemployment moving down low, but it seems like it will be moving. your thoughts? >> when you talk about the fed,

what will they do and what should they do? given the story today in his interview from a few moments ago, we are all set to go. we are going to get qe sometime this summer unless the summer dramatically improves. should they do it? no. the economy is out of e qua libry yum. we want to let capitalism adjust everything, but we are preventing the readjustment problem. it doesn't create unemployment or gdp growth. it does create volatility and is nice for the floor. it moves bond prices around and stock prices around, but that's not the objective of what the fed is trying to do. >> okay. let's let the markets speak, although they are a bit muffled due to the managed nature of the markets. i see the dollar down quite a bit. i see equities up a bit. i see grapes grains denominated in dollars. how many times do we have to see when we talk about more quantitative easing and more fed programs, doing the twist, the first collateral damage is the dollar and then all the commodities and energy moves, is this going to play well in november? >> probably not because you're going to get a two-fold effect. let's say it works. we are going to get higher risk markets and higher stock prices. lower bond yields but higher

commodities. the stock market may be higher by the fall, but so will gas prices and commodity prices. if you ask the white house which would they rather have, i think they would rather have lower gas prices. they go hand in hand, stock prices and gas prices, in a world of quantitative easing. >> listen, we'll quickly hit on europe. mario dragge, is saying, listen, it's time for the governments and the banks to deal with this. i wish ben bernanke could repeat that phrase because i think our banks and our government maybe post-elections will be up for the challenge. my proof might be wisconsin, san diego and san jose. thoughts? >> you know, with europe, it is simple. 17 countries using one currency doesn't work. you have to change that structure, a fiscal unit. more of the united states than europe. if you don't do that, you can put all the money through the imf or anything else in the europe to recap the banks, but it will get drained out again.

the structure of europe is flood. that needs to be fixed. it is a bad structure and they are not doing anything fast enough to work on that. >> you know what? we don't need to get the imf to europe. we need to send them a constitution of we the people. just insert a little carat, we the european people. back to you. >> we'll see, judging from this, the imf may get involved sometime soon. the next guest says the low-inflation market is good for credit. george is joining us this morning. always good to have you. welcome back. >> hi, carl. my pleasure to be on the show. >> coming off the near record low yields, how crowded is the trade exactly getting? >> credit has been very popular. if you look over the past, say, 2 1/2 years since march of '09, you have about 500 billion worth of new money into credit. so the environment of low growth, low yields and rising bond prices has been very

beneficial. it is drawing in a lot of money. and it has been very popular. >> overall you say keep the market, weight, go with high yield. walk us through more of your strategy. >> yeah, sure. credit has done very well. like i said, spreads have widened up a bit over the last couple of weeks, but by and large total returns look good. investment trade and high yield have generated pretty much about a 4% total return for the year. i think if you look forward, all the factors that everyone has just mentioned regarding europe, regarding the economy, regarding the uncertain outlook, suggests you want to be a little moderate in terms of how you position your portfolio. what you have seen today is a huge recovering rally. from that perspective we stick with the investment part of the story where, a modest yield enhancement related to treasuries is doing pretty well. you get a nice protection of any meaningful volatility shots and you are pretty well protected heading into these upcoming kind

of policy announcements. >> sectorwise, you say u.s., but liking retailer, home builders and autos, under paper, medicals and chemicals, why are you choosing things more consumer exposed? >> as the previous speaker mentioned, as energy prices come down, if we are getting the monetary stimulus, that should help consumption and the u.s. consumer is doing reasonably well. we are seeing that flow through in terms of retail numbers and the home building numbers. and even in sectors like autos, you are seeing the consumer come back. and i think the consumer is going to continue to hold up going into this year. the moments of moderation, by and large, consumer spending should drive corporate earnings. and that's where it will be from the portfolio standpoint. >> when you are in or below one

five-year or ten-year environment, it is like an unchartered map. a sailor or pilot is aversed into going into territory that is well uncharted. is there danger on trying to call a low on the ten year? >> i do think it is tough. systemic shocks could really hurt the market. systemic shocks could push down interest rates. and we are in unchartered territory. from my perspective, i wouldn't want to be short systemic downside risk from here. >> interesting. george, thank you so much for your time. he is joining us over at ubs talking credit strategies. the markets are continuing to rally up 205 points. we'll talk to the one and only art cashen after this ek brachlt tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 the spx is on my radar. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550

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the board today. talk about the market and the dow up 208. the s&p at 1308. i want to give you insight on what's behind the surge. we are joined here now, we could be due for a turn-around this week. how important is it? >> well, i think it is a case of almost perfect timing here. said monday that we might be looking for a turnaround on tuesday or after. that was based on a couple of things. some short-term cycles. number two, the sharp sell-off that we had came out of something called a head and shoulders top. it was a minor one. and when you do this from head and shoulders, you can measure from a target. and sure enough, monday, as if they were following in script, they took the s&p right down to that target and held. so that set things up. and then today when you turn to europe, the authorities said,

look, we are not ready to do anything specific yet, but we are here if needed. that reinforced what you and i have discussed as the lehman put theory, after they saw the disaster with lehman, they went in and saved aig. the public said, okay, i get it. if these guys see it coming they won't let it happen. right or wrongly there's that suggestion. we went from the oversold market, reaching the bottom to hope that is the authorities are onguard. so you get a snap back rally at 200 points. >> if there was a lehman put once, what is a qe put? s&p is not down as much as it was before prior installations of qe? >> yeah, i think the fed is between a rock and a hard place. i would recommend they give access to the richard fish speech yesterday. read it and send it to your congressman.

he identifies the quandary they are are in with trillions of dollars lying fallow in bank reserves and they are not going anywhere. that's part of their frustration. i think there's hope that tonight at 7:00 janet yellin will set the stage for her siamese twin, ben bernanke tomorrow, and maybe get things going. but again, i think this is probably a reasonably short-term bounce with a life span of one week to at the outside three weeks. and then we'll see again. >> interesting. volume tell you anything? >> the volume is certainly much better than yesterday. if they can continue throughout the day, that would be good, but recently we have seen the volume fall off after europe closes. >> there's a phrase circulating on twitter and other online sites, the hill and rally, here's a piece on the fed's

intentions and they have the best phone connection as anyone, of anyone. is that fair? is this all about tomorrow morning? you mentioned yellin tonight. >> i do think it is partly about that. i do think it was interesting to watch, just as it reflects president clinton making a statement and getting corrected, over the last few days they have made a couple different statements. that reinforces in people's minds he may have gotten a call that said, no, john, that's not quite right. it is more like this. if he's going to issue corrections of hymns over a three-day period, that reinforces the period that maybe somebody else is helping him. >> that's the high wire up for sure. mark, thank you for coming by. more 'squawk on the street" is coming up after this break. don't go away.

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interactive brokers, the professionals gateway to the world's markets. the music abruptly ends meaning we take a quick check at facebook trading in negative territory. positive territory today, down 30% from the ipo price with 38. that brings us to the brand new sweepstakes revolving around facebook.

where do you see the bottom four shares? you have until june 12th next week, about a week before the one-month anniversary of the public debut to send us your predictions. tweet us at cnbcsquawkst. the price is a cnbc hoodie. appropriate for facebook, everyone here on "squawk on the street" signed it. good luck. don't forget our twitter question of the day today. nasdaq is expected to release details of a compensation plan to make up some loss sustained by banks and trading firms due to the botched ipo. short of money, what should the nasdaq do to make it up to facebook investors? that's @cnbcsquawkst. send me your responses. seal you after the break. ...the united states would be on that list. in 25th place.

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across the company. around the world. turning a new trend, into a global phenomenon. it's the at&t network -- securing a world of new opportunities. ♪ "squawk on the street" this wednesday. facebook's botched ipo on the exchange, as kayla reported, is estimated to be about $200 million. that brings us to this morning's tweet. short of monetary compensation and money, would washington

should nasdaq do to make it up to facebook investors? michael tweets, dinner with a so-called winkle twins. and nasdaq should just like them on facebook, and post something on their wall like, you're the greatest investor ever! are you paying attention to in this? >> of course we are paying attention. this is not about whether the food tastes good or not. the fact they are serving the meal at all is a market-moving event. site on seen, i was talking to energy traders and asked them why the market was up. the topic of the day is one that we are going to extend with the twists and have other programs in regards to quantitative easing. it is a barber. the good news is without a lot of the programs or the notion in

the last statement about extending them, the dollar was able to stand up tall. but now that it is tall, it is tall enough to slap it back a bit. it is always the collateral damage when we get on the topic regarding the fed's programs. >> it is kind of hard to hit. it is like the bouncing dummies when they punch down and they come back at you. meantime, gary, you are about to go climb mount kilimanjaro. we are going to be without your services for a couple of weeks. >> yes, back to kilimanjaro. i was back there in 2008, i didn't think i was going back, but i'm going with two of my sons, my father at 73, my father-in-law at 75. it will be quite the adventure. if technology works, i'm going to be checking in by sat phone. unfortunately, i was given a cardboard flag. i'm going to bring the jersey up. bringing a cardboard flag is not the best thing to do when wearing a backpack and the limit of weight you can have. >> we'll be thinking about you.

you will call in, we hope, but you'll miss the greek elections. you'll be gone for the eu summit. there's a fed meeting coming up. june will be crazy. what thoughts would you be leaving investors with that can sustain them the next few weeks? >> i would tell people to continue to pay attention to the spreads in europe, the risk on/risk off spread. bond traders are smarter than equity traders. don't ever forget it. watch the spreads. that will be your tell-tale in terms of what's happening. my sense is when i'm back here in july, europe is still going to have a lot of the problems they had a month ago or a year ago, i guess ten years ago. so we probably will still be talking about a lot of the issues in europe. but the equity markets could have a violent move to the upside as we pointed out yesterday in the interim. >> on the premise on the master plan. it will be interesting when you come back if there's something concrete on the table, even though getting it approved is a