>> i'll be headed down this afternoon and we'll be ready for the testimony. >> you're at the back of the train, it depends on whether you're front or back. >> it's throughout all -- >> you're going first. don't lie. you're such a bad liar. right now time for "squawk on the street." ♪ happy birthday to the 41st president of the united states, george herbert walker bush, man does he look great. we're live at the new york stock exchange. so much for that spanish-based rally, markets yesterday saw their worst start to a week this year. we will see if the green arrows we're seeing this morning can last over in europe. yields off the spanish climb awfully high. >> no surprise thor, spain

gets a bailout, but how about italy? as carl mentioned yields in spain are rising, the greek elections loom this evening, talk on the street today, whether fed stimulus in some form is on tap. jamie dimon knew two years before the losses, that's what the journal says. a day before jamie dimon sits before the banks committee. michael kors posting a beat, though there are troubling signs comes out of europe. and oil down for the fourth straight session, opecs releasing a report saying the market is amply supplied. ahead of its meeting on thursday you know, the lowest since october. futures are on the rise. will we see a similar scenario as we saw yesterday, when it shifted to pessimism. spanish and italian bond yields continue to climb this morning.

there are worries about greece's potential departure from the eurozone. we raised the fact there were many questioned yesterday morning. people started thinking about the debt being added to the balance sheet of spain, whether or not there would be some subordination issues when it comes to creditors. that came to the forefront and said, what is goods on here? is this a good thing? >> nine banks holding the world hostage, have way too much real estate. we're in that situation. there's a fabulous article today about families' wealth dives 39% in three years, it's about the decline in real estate values, the spanish real estate bubble far bigger than ours. there's just so many bad loans. you have to go back to 1990 and 1991 with the savings and loan crisis, as opposed to what happeneder where you had an

organization set up to liquidate 1,000 s & ls, we adopt even have any plan if you're spain. again i want to go back, because 2007, '08, '09 really fresh, but there wasn't a bailout at all because you had to put up equity, not loans, but no one seems to realize that. >> every bank in the state of texas, i was a beginning banking reporter, every one of them went out of business, not to mention the bank of new england and so many real estate-based banks. yesterday the marginal utility of the so-called saves of these actions that we believe are positive for slowing if not stopping concern, that margin utility used to be measured in months, weeks, days, now we measure it in hours.

so it does beg the question, what is really going to turn this thing around. i can't tell you how quickly things accelerate from here, but at the seem that margin has to be worrisome. >> last night you talked about unthe, quote, real deal comes along you are still into safe, dividend-plays names. you pit apple as a well funded, well run organization against spain as the polar opposites on planet earth. >> i liked the factive there, there was excitement and enthusiasm. i know apple in the end is just a stock and can be brought down like nels, you about the comparison should be stock, in that apple is well funded with billions being paid to millions of developers, but spain is a company devoid of growth. it's growth versus no growth. when you see that spain is bankly not told how you have to a growth pattern and they could

make the budget, carl, the enthusiasm, i'm not saying that we should invest in enthusiasm, but a company is different from a country action and i do always want to come back to the fact that -- >> i like melissa's point yesterday there were lines to get into the conversation in san francisco, and we're waiting to see if there are lines to get out of a bank. >> and which is the truee snapshot. you can make the point about investing in a company versus investing in a country, and that's well taken, but at the same time you tell investors, and they haven't missed out on much this year. it's a hard case to make if the stock is going to go down by x percent, it offsets the game anyway. speaking from an average person out there sort of feeling buffeted by the stock market, first we're saying wait you remember the greek elections, wait until what? it seems going on and on and on

when it comes to catalysts in europe. >> some of it is empirical. verizon was higher, at&t are higher, companies that are clearly visible. they're boring. duke, a lot of people pay a bill to duke. southern was downgraded, it barely went down. american electric power comes on "mad money" and said we're going to raise the dividend. it doesn't matter. are these needles in a haystack? what they are are defense stocks. you're absolutely right, a stock that goes down 10 percent that yields four is no good. they're not going down 10%. maybe the lesson is the moment we get a huge crack in europe, you should double down. vising is a u.s. company. it has done everything it can to be a u.s. company. when you meet with them off-line, here's what they say. first, they say we're a u.s. company. there aren't enough of them.

but we have retailers hitting 52-week high. i notice it's a refrain that's boring, but 1984, 1983, we had one refrain, which was by tech, and that worked. with you within -- i've got one refrain, buy domestic. it's working, but to that analogy with countries and companies and balance sheets, if you were to look at spain's balance sheet, you would not likely invest. that comes back to the big problem, doesn't it? the only investors seem to be the banks who have been buying sovereign bonds so, yes, good points all. but it hasn't been the case, because this is a mark run by people who take the risk on appeared rick off, and they're not going to invest in spain. i don't know who is going to, i don't know how it's ultimately going to end in terms of germany and the decisions made.

will they ever go joint and several on some sort of a euro bond. those are the things i think that override all those other points. >> people will see a few headlines referencing italy, and some of the restrains italy has, some of the weaknesses, how worried should people by about this migrating yet again to an even bigger economy. >> we're going to be here every morning and discuss the situation, and it's going to be the same in 2013, and the same in 2014. the idea there are a lot of people you're starting to read, let's get the collapse over with. an interesting article today in "new york times" when he's not writing about the ncaa -- kind of interesting -- >> which has been unbelievable, by the way, his coverage. >> i love it so much. >> incredible i want he says there are people who just say get it over with. get it over with doesn't work. that was paulson's line -- just get it over with. >> rip the band-aid off. >> we can't get it over with.

i was talking to amanda drury, and i said, what did you talk about? did you talk about spain and italy? how about talking about the wealth? >> i talked about the decline in wealth. when a store sis a family et cetera wealth dives 39% is a nice diversion -- i don't have that much. the los angeles kings do not trade. if the kings or yankees traded, i am taking it and bidding it, but we're stuck with this milieu, and it couldn't be worse. congratulations, by the way, to the kings. in the meantime, directors were reportedly aall righted by ricky trades two years before the bank recently revealed a more than $2 billion trading loss. the paper says directors were told those traders would not be allowed to take excessive risks in the future. it's a report before jamie dimon is slated to testify before a

congressional hearing. we'll bring you that coverage tomorrow, a lot of discussion about what he will and won't answer. david? >> my sense, knowing jamie, he's going to come clean to a large sterns. he's not worried about his job. he's probably worried a bit about his reputation. i've had an opportunity to talk to a number of senior people the last few weeks. i think more real is coming back at the company, to the extent it was injured at all, but it will be interesting to see him under the bright lines at the cap 208 tomorrow. >> even when at the said tempest in a teapot, which i'm sure are words her'll regret forever i want i know what happens at these banks. i know you get a run. i know the run shows things out of control. what was he doing? was he ignoring the run? i heard on squawk this morning guys talking about -- dompd

trump saying, listen, it's not that big a issue. it's a huge issue. if you didn't capture this, you really were not working. >> right. >> he should have seen it, or he saw it, and worst of all, he minimized it. >> the times did a very good story a number of weeks ago, a bit closer when we learned about the losses, and it does appear there was at least some willful blindness, if you will i want willful blinds in, i like that. >> interesting about it lyme disease, you know, but we'll see what he's willing to offer tomorrow. he felt an obligation to come out very publicly once they learned of the size of the losses, whereas another company -- >> would have just been losses. >> probably would have learned

about it at the quarter itself i want what about the run? you get a run, you get a run at these firms, lloyd blankfein, one of the most annoying things, he's looking at the hourly run. you want to say, lloyd, i'm over here. i mean, what was jamie doing? what was he doing? you get the run. it's showing this thing as out of control. he's telling people it's just fine? how can that be? let's say he knew, let's say he looked at the run and at the time it doesn't look so big and escalated into something bigger. has the stock been punished enough? if it goes from 37 to $33 a share here, it loses tens of billions in market cap, whether or not it's already been discounted into the stock and whether or not europe at this point is a much bigger factor? >> i would believe that has to be the case. the environment itself, jim and

i were talking about the environment for the big banks, whether it's ipos or trading in stocks. you know, i have a sense -- i have a sense when this summer sense, i would not be surprised if we're talking about layoffs. >> it has to. what over -- ipo numbers, you see the numbers, they had them in the "financial times. now you're talking about -- >> how many do you have in -- >> that was one of my favorites. dysthe ipo numbers? >> i stuck that in. >> $53 billion raised by companies so far this year. >> will you give me a break? >> a fellow, i happen to have a fellow right here. >> it's in my back pocket. >> classic. i love that. >> i've been the injure othing going, the jeff matthews, ceo

goes awop. planes, trains and nothing. but i come back and i search for a division -- i remember when i first interviewed at goldman sachs, they were hiring four people. four people in sales and trading. it was like, wow, i wanted to be one of the four, and there's so many business, maybe they go back to the four. >> you know, we will be discussion that. my sense would be, in answer to your question, that would be the overriding factor. but there's no down, he took a. >> what kind of several, is it? a personal suffering, in which case as a shareholder i really don't care. go home, have a drink, suffer on your own, i don't care, i only care about the shock. >> electric roe shock therapy, and when he culls back he doesn't have any recognition?

unlikely. i know, "mad men" it got like a three. shares are up sharply. operating profits, a nickel ahead of wall street's forecast, expecting same-store sales to jump 35% in the period. if there's one thing you want to poke at in the quarter, it's the same-store sales number out of the europe. so quarter on quarter it declined. that might be, you know, troubling. that's their big area, overseas. >> yes, i did find the outlook in total -- just a sec -- the outlook -- i have the release in my pocket. a 35% comparable stores increase. ralph lauren reported good numbers in europe, nobody cared. pvh reported good numbers, nobody cared. here's not so good numbers, and maybe today -- i don't know, how

longlasting will the rally be? and then slid down and the stocks low. people don't want to own stocks that have european exposure. this company is so funny. if they hadn't expanded in europe -- >> probably an american company, it would be a huge multiple like verizon. >> quarter over -- year over year, 58% revenue. >> david, i think they. >> north american comp store sales growth. >> they have a store in europe, i think. >> dunkin' donuts is just opening in california. they don't have anything in europe. so i like dunkin' donuts. kors is doing terrifically, but you start by saying if there's a fly in the ointment -- and this thing the fly turns out to be jeff goldblum, which was a great

show. >> often overlooked. >> i'll put it on my netflix queue. >> he was great in that. the lengths to which we'll go to avoid talking about europe. >> three coins in a fountain? later this morning, former gm vice charm on the annual meeting. to a weak stock, can the automaker overcome the bumping in the r50d. a lot more "squawk on the street" is live from post 9 at the nyse when we return. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. our support teams are nearby,

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placed in the steering while to bring up siri, called eyes free. a number of manufacturers have committed to it already. and that brings you to this morning's "squawk on the tweet." what is the worst thing that back-street driver siri could tell you behind the wheel. tweet us, and we'll air your responses. i've never used siri, so i'm not familiar with her capabilities, but what would be within the realm. >> i think making a left on

interon the new jersey turnpike. >> whether it's with facebook, yelp or tom-tom apparently, the war on google, some have argued got officially declared yesterday. >> what was it like, you sold the map -- is it much cooler? >> i've not seen the map firsthand, because i was not inside the conference. jon fortt was tweeting last night about his user experience, but google will have their conference, the i.e. conference later on and we'll see if they have a return like nadal against djokovic. >> i love the blue dot that tells you where you are within a block, i don't know if apple can beat that, but there's nothing like trying to navigate with the blue dot telling you you're right or wrong, and that's a google product. i hope that tim cook has the three different companies he bought that are superior. i don't know how you can be

superior. >> i know you love siri. >> i love siri. i was having a tough night. >> and what did he tell you? >> wasn't it be great to have a malkovich-like ad, but with cramer? i'm sure we could make an exception for that. >> i asked her a couple things, she couldn't deliver. i apologize for stressing her out. >> you're sorry for stressing a voice recognition program out? >> everyone's feeling this thing. >> you and siri. >> there should be someone who you treat with respect, who comes back and telling us at 5:15, you know, it's set for you, knows my name, knows my -- >> she's sweet. [ laughter ] >> she deserves better than what i do sometimes when i'm angry. coming up next, the stock cramer is getting ready to put under microscope. once more a look at futures. we are looking at a higher open, still. the dow looking right in and out

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four four minutes and change before the bell on this tuesday. time for "cramer's mad dash." watching things other than europe? >> soft drinks, the category has gotten better. dr. pepper has gotten very strong, wells upgrades it. do you know that the fastest growing, some would say the fasters growing carbonated soft drink worldwide is mountain dew,

which is owned by pepsi. dew and diet dew, both billion dollar brands. what's interesting is the convenience stores, dew has become the number one, so dr. pepper does very well, and so does the dew, which i do not do, because i'm so busy getting monster bench, because i like what it does to your cardiac system. >> people like their caffeine, jim. >> can your mom -- it is pretty amazing what it does to you. >> it does. howard schelts only wishes that his coffee does what the dew does. >> zynga. >> here's scramble with friends, this is word with friends, i imagine also, you know, they bought omgpop, which is drawing. i have to tell you, this is shocking to me, this is a facebook derivative. it's shocking to me, because all i know is people are just addicted to these games, but

this is cowen doing some work, saying look out, the games are in retreat. opening bell a few moments ago. go ahead ready for another big day of trading. "squawk on the street" is back in a moment.

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there is the opening bell. calgary-based pembina pipeline corporation celebrating its recent listing. and joseph a. bank clothier, retailer of men's suits. so, guys, worst start to a week for the major averages this year, the last six times, jim, the s&p has closed down 1% or more on a monday has finished down for the week all but once. does it set up a nice weak ahead? >> no. i do remind people that last week was a great week. >> best week of the year.

>> so giving back a bit would not be completely extraordinary. obviously at the end of the week we have worries about greek elections. melissa pointed out that everything's kind of subordinate to that, so you end up with the futures going down. >> it feels like stock market purgatory. we're hemmed in by the bailouts, and they have we have the green elections. from here and then we have nothing to trade on. after the greek elections, from that to the fed meeting. just continual periods of being bookmarked. >> texas instruments had i felt like a decent call last night, saying that communications are doing well we had some guys trying to call the bottom in optical, but these are not investable data points versus what carl said, which is look, guys, these are down weeks.

when someone hears that, they say, i ought to sell. i mean, the people that trade in and out. >> bernstein out with a note on boeing, saying there are a lot of macro concerns, but market demand needs replacement aircraft, going to stay strong, taking their target from 85 to 92. the 787 had structural problems, so the issue had been that they constantly had to come back and be sure that the planes were ready. now they're finally in mode where 787s are shipping. i don't think they have realized the margins, once you have that assembly line going, the margins explode. the margins have been terrible for that. they've been bailed out. meanwhile, airbus have been continual problems. i think boeing is in a multiyear cycle. i know no one can believe that any of these airlines have the money to buy, but it seems like a great tax deal to buy aircraft, so you get leasing companies that do it. i like boeing for a multiyear move.

and berkshire netjets making a move. >> bombardier doesn't trade here, so please be careful, but they've done some things right. >> we were note the move in seagate up 1.3%. that brings it up to -- that's up from 3.4%. he expects earnings tore $15 a share in 2012, also the fact that the company has a low multiple, but some people might say actually the company deserves a low multiple because of this terrible cycle that hard disk drive makers are in. interesting jux that position from yesterday's announcement and apple's announcement of the unveiling of the 15-inch macbook pro, this is only on flash.

>> one of the things i remember from that period after shoe gart had left seagate, and lucco is still there, he constantly said we're a cash machine, eventually they got tired of it and took it private. i think einhornly void by the yield, but once they companies are in supply demand, they pass the point they're in an eek wishium i want so you have tore careful if you're playing with this one at home. this time saying even long-term liquidity concerns are eased. still more to do? >> yes. another would say $8 billion. if you ever saw natural gas go up in our lifetime chesapeake would get a bit of a bailout.

you keep hearing companies are adopting natural gas, adopt. lng. i'm talking about chart industries. that gmt tls, not jim tan laundry alea -- and one of the things they do is make the cryogenic tanks and can't make them fast enough. there is a movement. and that would bail out longer terminal gas. >> we want to check in with david and bob who's floating around with more on what's moving, guys. >> as you might imagine we're going to head back to europe, which is an area that you typically like to focus on, and rightly so. >> we have a mixed open in europe. our futures have been higher all throughout the morning, but there are real signs of the political consensus fraying. over the weekend, they want there wasn't going to be any strings attached, wasn't going

to be the onerous troika deals like we had in portugal or in some of the other countries like ireland, for example. this morning he says, oh, no, no, no, there is going to be a troika, there is going to be supervision over this $100 billion euro bang bailout. who is right? i would bet the germans. >> what supervise means is also probably up for debate. >> it means there's going to be a troika, a team that will be sitting in madrid supervising where the money goes and how it gets paid back. apparently there is going to be subordination. this money is -- the germans are insisting this money will be superior. >> will you southbound order nat or above? >> above. there had be subordination of other bondholders. >> correct. to spain. >> to spain. i think this is an important

piece of information. was there going to be supervision? the germans are saying there is going to be. dysmaria fechter? she keeps opening her mouth an inopportune moments and said italy may be next for the bailout. that doesn't sound shocking, but in the polite world of eu finance ministers, this is just not done. >> why say something like that and exacerbate an already bad situation. >> it's causing anger around you we were. when you look at the lack of the budget deficit, yes, their gdp numbers are off the charts, very bad, but there's a lot of other things that aren't nearly as bad as they are in spain. >> and they have been making attempts at some kind of reform. it's just a starting point, but mr. monti, the prime minister constantly keeps say we are working in that direction.

i think fitch had interesting comments this morning, all sovereigns will face more downgrades unless we get decisive action to deal with the european -- that's a shot acrow the bow that the spanish bailout isn't nearly sufficient enough. >> if they do lose certain characteristics, other investors cannot even think about buys the sovereign debt. >> that's right. which brings us to the final point and the hottest thing, the european banking union. this is the hot phrase in europe, mr. baroso came in this morning and said we need it. apparently it's three ideas, seems to be a hash of different ideas, but guaranteed across europe, gun garen tee across europe, regulatory oversight, more government. that's what ms. merkel sell this morning. we need more upyap government, but everyone has to be prepared to give up more sovereignty.

it's going to have to happen. finally a point on india, did you what's happened? they're flatlining here. industrial output flatlined. 5% to 6% gdp. >> regulatory reforms are not coming, and s&p said yesterday, they better start doing something or they'll lose their investment grade status. over to you, jim cramer i6789s that's true, the austrian woman, just willing to say about anything. good morning, jim. yesterday 'reversal to the down side is the reason we saw the low yield closes yesterday, a

bit more mean reversion going on today, but if you look overseas, italy and spain a different scenario. if you look at a year to date of italy, the highest yields on the ten-year just under 620 since january, but it's important to open it up to a 20-years chart. the last time we were up here and acknowledge how different their fixed income market rates were action obviously, but it jumps at you for spain. if you look at a year to date, spain around 670, these are pretty much all-time yield highs until you go back to the pre-your ozone, so whether we actually see preyour owe zone structures emerging, i can't tell you, by right now italy says they don't need any form of a bailout. we've heard that one before. back to you. >> a lot of familiar refrains this morning. let's check out the latest news in energy and metals. sharon? >> jim, the action is really in

the oil market this morning. we have seen wti futures here bounce after falling to an eight-month low overnight right above the $81 mark, traders saying part of what we're seeing in the first half hour of trading is a bit of short covering after hitting that eight-month low, there are still some bearish factors that remain in the market. we did hear from the u.s. yesterday, several more countries that will in and out be exempt from the iranian oil sanctions, two of them, i haddia and south korea are some of the biggest ones that do take iranian crude. also from the saudi oil minister saying he's happy with the current output target, and the current target is about 10 million barrels a day. the current target overall is about 2 million barrels a day, so that is something that a lot of traders are focused on with that open meeting tomorrow or rather thursday, and then we also do have the fact that the

largest refinery in the nation that i went to the commissioning of two weeks ago ah we'll continue to watch that status. back to you. >> thank you very much, sharon. sharon epperson talking about crude. we should touch on what crude is doing. it has been a while. sharon has pointed out 74.95 a relatively good target near term, some support at 79. at what point does your tail wind argument turn into a real worry? i want we do need to see this refinery xae in both coasts expand. it doesn't look like it's going to. i'm still not concerned about the overall what it's say about the worldwide economy, because i think a lot of is is just trading back and forth. at these prices, a lot of the drilling we have seen is not going to happen. >> not economic.

>> and we see 75, you need 80 for a lot of the drilling programs to be able to continue to be aggressive. we saw what happened when natural gas breached and went--e breeped and went below three. we should also mention b of a with the fund manager survey, not only is cash at the highest level since january '09, when things were really bad, jim, the third highest ever in the history of the survey. >> these are things we would typically say buy buy buy off of, you but the contrary case has not worked. >> it's interesting, whenever we have the b of amount strategist on, she's indicated a lot of these indicators are so incredibly bearish, that you want to be bullish. >> yeah, but there's a nice contrarian debate going on i want there's plenty of firepower everywhere. we had the snap-on ceo.

i've been adopts his phrase, we are a -- >> coming clean. >> it's from snap-on, and cash rich, confidence poor, we have a tremendous amount of money. the money is not coming into companies like the bristol-myerss that are steady. i have seen where it can be tinder, where it can be the kingsford. and you've got a real first-class barbecue. but right now, i don't see the -- >> just don't put the gas on while the fire is going. that's very bad. >> people don't realize, getting horrible burns if you resource to gasoline. stick with lighter fluid. >> the psa for the day. >> facebook, how is that moving? >> where do you see the bottom with the shares, about a week to go before the one-point anniversary. hard to believe it's already been a month. today is the last chance to send us your predictions, to tweet us, use the hash tack

"faythenumber." the prize is a hoodie that's signed, and today's the last day. >> it is. >> >> maybe the corollary to this but sweepstakes is we're a buck away, on shares of mdax, which are down about a half percent. >> zynga. the voice of apple in this spot light, what is the worst thing that siri could tell you while you're behind the wheel. tweet us. we've got your responses straight ahead. as he we had to break, the early movers here on wall street, being led by first solar, up 4%. [ male announcer ] this is genco services --

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i think we're in a tough position. listen, we've got in a lot tougher position, and the economy is not herbal, it's just not growing the way it should.

people are looking at the election going forward, whichever side you're on, and saying i just don't know what i'm going to have, what my net will be after taxes except that it will be very consequential so i think i'll wait. >> that was lloyd blankfein appears with warren buffett earlier this morning talking about the economy, sort of coincides with this figure net 11% believe the. >> hard to see how that won't happen. >> we were talking about -- you get that contrary -- traced out a lot of -- it's very hard to

plan. i mean as someone who is starting to figure out what the tax will be what are we going to do? maybe the payrolls will increase? there are just a lot of questions. >> an uncertainty index, like we could create an un -- >> where you could have all these risk on/risk off clowns -- >> that's called the stock market. >> no, we have to deviate, like hold on, i want to buy some shares, and then we have these guys say they can trade aluminum off the side, like aluminum with friends. >> the cds market. >> yeah. [ laughter ] squawk on the tweet this morning, a button placed on the steering wheel, the feature is called eyes free. our question to you today, what's the worst thing that

back-street driver siri could possibly tell you while you're behind the wheel. stan writers -- please stop for directions now. that sounds like a siri. alex tweets -- don't look behind you, just don't. is that a google maps printout in the passenger seat? craig writes look at me when i'm talking to. that's probably not such a good idea. it will change the way people do a lot of things. >> this they can get the voice recognition perfectly, i think people will be able to say please put on "squawk on the street" to siri, and next year at this time that's going to happen. not three clickers, not the fiso senior comcast. >> it could be more specific, what is cramer like today? >> one of the things -- tell me if this is true, i heard she can give you ball scores right now you have to go so espn, are the phillies losing like usual? yes, sorry, jim. thank you, siri.

i live to serve. >> stock quotes, but can she answer buy, sell or hold? >> how about sell sell sell, very much in keeping with italy and spain. maybe she can upgrade. >> house of pleasure, something like that. dow is up 49 points. we'll see where we go today again after monday 'weakness, does not set up the week technically on a good note. we'll see what happens. much more "squawk on the street" ahead. coming up, how many stocks can you talk about, and how fast can you do it? see if you can do it better than cramer. six stocks in 60 seconds, when "squawk on the street" returns. laces? really? slip-on's the way to go. more people do that, security would be like --

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there's the logo. we'll start with one of your favorites, uri, united rentals. company bought the largest competitor. this is a sign that construction could be coming back. i line this call. >> barclays likes blackstone.

>> what does it mean? who knows what's in blackstone? be careful with these stories. >> qualcomm, some -- >> some earnings risk, melissa has often talked about the gulf between iphone 4 and 5. they think qualcomm will be hurt. >> match.com is a machine. it makes so much money. people have to recognize subscription businesses are really terrific. >> dress barn. >> this is one of those -- they just bought charming shops, a monster good integrator. >> and stock people cannot get enough of, green mountain. >> i defer to herb greenberg. none of the stories seem to be good, and i don't understand why you would want to own this. world capital says now is the time to buy green mountain. zyn zynga. for more of those names, sots.cnbc.com what about tonight? >> i've got to tell you, carl, i have to go to ireland to tony. his fare was the head of heinz,

tier drilling a lot of oil over there. and maybe we can talk positive about coal. i don't think so. we will see you tonight, jim. "mad money," 6:00 and 11:00. when when we come back, kors is hot. back in a moment.

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let let 'get the road map for the next hour. about a week to go before the one-month an verse of facebook's big debut. shares down nearly 20%, so why is one analyst claiming -- now may just be the right time to buy. gm holding its annual meeting today. we'll have the latest out of the general motors and ceo dan achor son in just a moment. michael kors blowing past the expectations, but are companies fast on the heels? we have your high-end retail trade. and the scores on facebook's advertising effectiveness earlier this morning.

julia boorstin has more. julia? >> that's right. the bottom line is that brand messages on facebook work, this according to -- people are much more likely to perform after seeing messages about brands their friends like, this according to the study that comscore put together in collaboration with facebook. this sunday necessarily good news for facebook's revenue. the study focuses on unpaid messages that people share. comscore reports within four weeks of seeing message about target, friends of target fans were 27% more likely to shop at target than average shoppers. starbucks fans and their friends were 38% more likely to buy starbucks coffee. now, the good news for companies is they can have a significant impact without spending a dime. does this mean they'll stop buying ads like gm did? facebook is hoping companies will spend to amplify these free communications by buys ads to reach 75% of fans or to

advertise just to friends of fans. in this study, comscore and facebook look to change the conversation about internet advertising, arguing that exposure to ads in a social context is much more important than click-through, the way online ads are usually measured. facebook is pushing to show that its paid ads also work, releasing yet soot com score study, this one it commissioned, users exposed to premium ads were 16% more likely to buy in store, and 56% more likely to shop online after seeing those ads. of the ad campaigns that facebook measures, it said that 70% showed a return on its investment of three times or better. the fact that the comscore study, the original study focuses on the power of unpaid messages may not satisfied those investors, but com score says their study provides, quote, more evidence that facebook can be valuable as a brand been

medium. carl, over to you. >> all right. julia, thanks so much. julia boorstin covering facebook for us. what does it mean for the stock? that's the big question. reiterated her buy on facebook with a $40 targets. she joins us on the news line this morning. laura, good morning. >> good morning to you. >> you can't blame investor foss being frustrated. on the one hand they get these poll numbers, saying that ads don't work, on the other hand we get the comscore numbers that julia mentioned, and similar moves by oracle and sailsforce, who is right? >> the answer is they ecosystems is still in development, so the measurement tools we have are probably too old for the types of impact that facebook has. we have seen oracle and salesforce.com spending a billion between them, buying companies that actually do nothing except essentially tract facebook's effectiveness, so

we'll get new high-powered entrance into this that are trying to measure the impact. >> but in the meantime, laura, you do have a buy rating on facebook and $40 price target, you say the better way to look at facebook, if that is the case, what is the part of the stock price that's the security principal part of the bond and the potential upside? >> well, i think the visibility revenue stream is tiesing, right? we can all argue about what scenario, how fast they grow advertising, so we're showing a doubling of the advertising revenue this year, but you can argue it's only a 50% or somebody can argue it's up double, triple. the point is you can put those into a discounted cash flow model, and we can argue and come out with a range of what visibility revenue streams from advertising are going to be. the harder and more interesting thing with facebook is there is a platform here that can be used

to participate in e-commerce which is a $500 billion business or payment of credit cards, which is a $200 billion business, all of these things generate revenue for facebook, very hard to value today, because they don't get a penny from those. we bring the option formula to those, and see each of those markets is worth another $10. if any of them work, it's another $10 of fable fable. that needs to be added to the. >> laura, when you talk about different ways to measure facebook's influence, can you give us some sense there to what you might expect from, for example, some of the acquisitions you just mentioned by the likes of oracle and facebook.com? >> sure, one of the things that's happening on the internet is businesses increasingly wanting to get a handle on how them having a pak on facebook affects their brand loyalty,

which is a longer-term metric than search. and so these companies look at -- they curate the conversations, which is they kind of eavesdrop the conversation, they get involve, the brand can get involved in the conversation, and they can targets people who are talking about these brands, and then try to influence them to actually buy or be loyal to the brand. what's interesting in addition to that, of course are the big players that are courting facebook. yesterday it was apple. do you think moving forward in any form facebook will be able to monetize the relationships it might have with other players? i want i sure do, and i think this integrate with the other big platforms -- one of the things we have seen is myospace or yahoo! when you do not have a vibrant ecosystem around you, these companies go up and then down. what is great about facebook is

the new amount pp store interesting grates through the apple ecosystem. the more these oral kay add salesforce are now part of the facebook system, they have an interesting in keeping it healthy. it makes more center facebook's long-term value creation, because they're now tied with facebook. i think the apple integration is very important. one thing i have not read much about, it sounds like the outsized influence of women on the future of this company. can you just explain that? >> sure. i think this is really important and the market is really missing this. women in a globally control 70% of all purchases decisions. in america they control 85% of all purchases decisions. women are about 60% of users on facebook and spend 40% longer than men. in the report we just wrote, we showed you that almost 50% of women say that recommendations even from strangers influence their purchasing decisions.

this is the kind of thing that julia was talking about with comscore. there's no question that women are influenced by comments on facebook and that therefore influences purchasing. it is hard to measure that, because the perform may happen a week or two weeks later, therefore the measurement aspect is challenging, but i think looking at where women are and how they buy products is a really important factor when we value facebook, because facebook has a huge influence on those purchasers. >> interesting stuff, and the way to push the ball forward. laura, thanks so much. always good to talk with you umts my pleasure. and speaking of facebook, where do you see the bottom for facebook shares with about a week to go before the one-month anniversary of the public debut. today is your last chance to send us your predictions, don't forget the hashtag "face the number." you could have the chance to win an amazing hoodie. david signed the entire back. >> i took an occasion to extend

my signature. >> it's a sight to see. i want you know, we want to send it over to courtney reagan, who has a market flash. >> thank you very much, david. take a look at shares of veriphone after the company lost a patent dispute. a jury awarded in honor of cardsoft. as a result, the company will have to take an $18 million expense hit, so they updated the february to april results to reflect that. >> thank you so much, courtney reagan. we do want to point out we showed you the headline at the bottom of the screen, the spanish ten-year bond topping the -- we are losing some steam in the market and we did see the euro just turn negative. this is something to watch. 6.743% right now. >> wow. >> yeah. well, quite the creative plan creating ground in germany in an effort to save the your

ozone. we'll explain right after this.

♪ i'm sittin' on the dock of the bay ♪ ♪ wastin' time the highly create i have been plan gaining traction in germany that might just safe the

your ozone. it's not your obonds more -- simon hobbs joins us and he will explain. simon? i want i'm going to show you a plan countrily under discussion that would enible angela merkel to trade her company's fiscal strength for a far more disciplined your ozone. the chancellor would have to agree to euro bones, but only in a clearly defined limited one-time deal. she in additionally rejected this plan when her own advisers suggested it in november. tomorrow they will demand she reconsider. ranging gown over here to one-fifth of that. now, under the plan, each national debt pile is split in

two. the portion of each national debt but the debts in red beyond that are transferred over here to a new european redemption fund. here you see the european redemption fund, and here are those piles of excess debt, if you like, sitting inside it. almost $1 trillion euros for italy, about $30 billion for the featherlands. each country is still responsible to each of thought debt piles. in fact each country would be legally required to detail exactly what part of the future streams the tax income will use to pay off that debt. all this debt would have to be paid off in, let's say, 25 years, crucially as collateral, and watch this, each country has to commit gold or foreign exchange reserves to 20% of the value of their debt. this is why they bother, because

like reifying your mortgage, the redemption fund is able to dramatically cut the costs for italy and spain to service these debts by refinancing the debts that are in the fund. in effect it borrows in the name of all 17 nations at a lower interest rate. so jointly issue debt or euro bonds. obviously germany is going to pay more to service its half a trillion euros. however, in contrast to open-ended euro bonds under which the german taxpayers subsidizes debt by poorer nations under the end of time, this scheme is strictly temporary. germans can see what they are liable for and the fund extinguishes itself in 25 years. that incidentally might help it get past the german constitution. the germans can also dictate the price of admission to the scheme. in return for getting those debts back down to 60%, member states would have to create a structure that ensured they never, ever again set budgets

that increase debts beyond 60%. hard debt breaks written into their constitutions. vitally for the germans, it also removes the need of the ecb to intervene and support national bond markets, albeit in a way that germany establishes for the first time the principle of joint debt and liability. now, there are many problems action and work is under way to solve some of them. el seat the most immediate as getting italy to put its money where its mouth is. the italians would have to commit, what, $190 billion euros as collateral, rome only has $98 euros of gold. what the italians really commit to losing control of the gold reserves now when a new poll today says 71% of italians now have little confidence in the euro and one third of italians say they would be better off returning to the lira. but, guys, it is an active conversation in germany and merkel will have to consider it tomorrow with the opposition

parties. back to you. >> simon, of course, as you point out, one of the main oppositions to the idea of an euro bond is going joint and several. exactly what you said, joint dead liability, which means germany is taking on the liability of other nations and not really in a position to control the fiscal -- so this would limit -- it's the limit on this that you think would be potential palatability to the german public, the idea that the refinancing would be of one size, one time and go away? >> one time, and of course -- i mean, there is work under way to ensure the liabilities for this country if this fund were to fail was limited in proportion to the gdp, but importantly you have the gold here. if if went through, the tailance would have to import $200 billion euros. they couldn't remove that. there would be collateral.

the question, of course, is how long would it take. >> we're raising flags to what might happen in the future. if things go the wrong way on sunday night with greece, i think everybody around the table would admit that things could happen very quickly in europe. and you might find that today what is rejected by angela merkel suddenly very rapidly came onto the table. ultimately they have to make a decision if the greek vote goes the wrong way. the bond market in spain is now the highest it's been of yields there. the italian bond spreads are spreadsing out. how else will they stop the contagion for further enveloping those bigger economies? >> now you have la guard saying it's a matter of months to do this, so chop-chop, as some like

to say. thanks, i'ming. michael kors reporting its profit more than doubled in the fourth quarter. will the global brand continue to steal share from those big-name competitors? we have your high-end retail trade after a short break. our cloud is not soft and fluffy.

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is is all this creating a buying opportunity? for that we bring in tim seemo, managing director, tim, always good to see you. >> always good to see you. >> is this concern warranted? >> on a pure economic and credit basis, no. india has external dead to gdp at 120%. it got reserves at 25%, but

india's got some issues that are not new, but certainly should be focused on. they have significant bureaucratic hurdles. there shall fiscal stimulus store are not that easy to pull off. and i think people are very frustrated here, so the market has underperformed. the currency is one of the weakest in the em sphere, which also had significantly weaker currencies. it makes a great headline, but the demographics here are unbelievable. we are all still waiting for the good news. the nice thing about this pick is it's not tethered entirely to india. in fact these guys are roughly

25% north america, also russia is 15%, and the rest of em is where these -- >> did you see 20% is a -- don't we want to be away from europe? i think the generic business gives them a defensive exposure, but they are grohhing in the biosimilars, in the pharma generic space that to me is one of the things up to be exposed to. 18 times earnings versus 33 times historical. very cheap relative to itself. this is a compete i think that's exposed to the groeb as well's india. >> do we get a different yield.

if you're an investor out there, it's a global world, and the choice might be the readies and pfizer or merck. >> i'd rather own testifia i don't think that that's a place you need to i think turn away from this investment. ultimately again you're buying a company that's value-laden and has the growth, but also gives you that more conservative profile, that global pharma companies give you in this environment. >> tim, good to see you. >> good to see you. see you tonight. let's get a market flash from courtney. >> take a look at shares of fusion io. they're winning a manufacturing deal with cisco, so the io memory will be used in cisco's new unified compute system.

shares were up as much as 9%. falling off a bit, but still up at this time. we'll let you know if anything develops there. david, back to you. >> thank you very much, course any reagan. gm is hosting its annual meeting today, and, amid the european operations. we're going to have the latest out of gm next. sometimes investing opportunities are hard to spot. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.

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♪ so darrell ♪ so darrell -- darling ♪ save the last dance for me. one hour into trading, about 7:29 on the west coast, 10:29 here on wall street. boeing is this morning's biggest gainer. bernstein upgrading the jet maker to outperform from market perform on what the firm sees as a better than expected production rate for the 787. shares of the computer maker down more than 30% in just the past three months. the spanish ten-year bond yield hits new euro highs. also fitch downgrading 18 spanish banks less than a week after the agency cut the sovereign rating. >> and as we are now one hour into trading, let's head to

chicago. he's at the kme group and he's there right now. >> hey, david. >> i was kidding earlier, but we do have a volatility index, at least in that ballpark. what are we seeing today, and what does it mean? >> we're seeing a similar pattern. yesterday it was primarily the july 25s and 30s they say, yesterday even as the futures were up so much on the opening so people are watching there for a bit of a headup or indication today. obviously with everything being right near the flay line a little tougher to get a read, but i think one of the important thing is we're at a key level, 1298 even, as a level we bounced off yesterday, a level that most

guys down here think we need to hold. if we break through that, we can kind of free fall all the way down to 1276 even, so for your viewers trying to relate that, that would be roughly 200 dow points further, so we're trading about 1301 right now, we're only three points away from that 1298. a lot of eyes on that level. >> we're heading into a weekend that could be significant giving those greek elections. we'll keep a close eye on all those yields. how will that be reflected in the vix as well? >> it's always interesting when you have news like this happening as we head into an expiration week, particularly one of so much anticipated volume, with the futures and everything else coming off. i would not surprise me at all if we see one of the patterns where the vix starts to sell off, and as the momentum of friday continuing, people come in to buy more volatility

exactly for the reasons ear speaking about, so much uncertainty into the weekend. it should be reflected in the vix, and people protecting themselves, also, as we know, summer sometimes tends to be lighter volume, as we head to the july 4th holiday after this big expiration week, so it would not surprise me at all if many people tried to provide protection. >> right. we do have, what, cpi, ppi during the next keppel days. any chance those reverse the trend? >> if we held this 1298 evening, there's some bullishes in. a lot of them really believe if we held this 1298 even level we could make the run of to 1332 even on the s&p, so that again equated to dow points about 400 points higher. the reason is so many of them saw es -- we went through it sunday night. yesterday morning, we opened there, couldn't hold the level,

and kind of fell hard the rest of the day. so many believe we have to go back up and test that, so pay ppi or cpi could be one of the things that springboards us forward. many of them believe we'll start to see buyers of stocks and buyers of the future. >> holding that level is key, and we just watched it in negative territory now. the vix is up. j.j., thanks for joining us. >> always a pleasure, david. thanks, buddy. in the meantime dan achor son is taking the stage at the company's annual shareholders meeting just over an hour ago, and sitting down with our own phil lebeau earlier today. we want to bring in phil as the meeting takes place in detroit. >> good morning. that meeting should be wrapping up relatively shortly. the big overhang is that gm stock is down dramatically, in part because the company has not been able to turn profits into revenue or stock growth. in fact, ceo dan acer son, as

the meeting began, talked about the challenge in facing this company. >> dan was ranked number five in revenue. when it comes to profit, gm was ranked 20th. we need to close it gap by extending the margins. >> how will they do that? the company says it's making process right-sizing its operations, also making progress, cost-cutting across the board for a company that's still bureaucratic and too big in many ways, but none of that has transferred into the stock moving higher. take a look at what it's done, down more than 24%, and when you look at the shareholders, the big question is, when will the government eliminate its stake in general motors is it remember the treasury department still owns roughly 25% of gm stock. dan acer son this morning on "squawk box" in an exclusive

interview said the treasury department is not in the boardroom, but it does need to come up with an exit strategy. >> i think a shareholders of this magnitude, and with the history that's associated with their participation in this company, in this industry, which i think has been positive, is they have to articulate a sell strategy such that it doesn't impact the stock disproportionately. >> keep in mind it's down 36%. the treasury department has not commented for some time. remember it was last year the treasury department came out and said we're not selling until we get above $33 a share. a lot of people are say they need to get out, especially here at gm headquarters. carl, back to you. interesting, phil, and in a sign of just how complicated some of these companies are, in

the journal today, he's asked, 20 or 25% in changing the culture? >> he talks about it all the time. tens of thousands of employees around the world, something like 110,000, i think, a lot of the culture in the middle has not been changed. you hear that when you talk to dealers or people in the company, that it takes forever for things to change. that's one of the challenges that is slow in happening here at general motors. >> interesting. we'll talk more about it with bob in our next hour, but phil, thanks a lot. phil lebeau in detroit today. courtney reagan has another quick market flash. >> you guys better talking about siri and the interesting grace in cars, bullish investors in harmon international are not thrilled with this idea.

they makes the entertainment and information systems used in cars. shares down more than 8%, down as much as 9%. siri could be a threat to what this company produces in cars. biggest customers include bmw and audi/volkswagen. shares surging after the company reported that the profit more than doubled in the fourth quarter, but how will the global brand fare in the face increasing competition? [ male announcer ] research suggests the health of our cells plays a key role throughout our entire lives. ♪ one a day men's 50+ is a complete multi-vitamin designed for men's health concerns as we age. ♪ it has more of seven antioxidants to support cell health. that's one a day men's 50+ healthy advantage.

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sfx: sounds of marching band and crowd cheering sfx: sounds of marching band and crowd cheering so, i'm walking down the street, sfx: sounds of marching band and crowd cheering just you know walking, sfx: sounds of marching band and crowd cheering and i found myself in the middle of this parade honoring america's troops. which is actually quite fitting because geico has been serving the military for over 75 years. aawh no, look, i know this is about the troops and not about me. right, but i don't look like that. who can i write a letter to about this? geico. fifteen minutes could save you fifteen percent or more on car insurance. take a take a look at the two-year spanish yield as well. that's up 107 basis points, basically in 24 hours. and, you know, there are people trading these bonds, and there's no doubt something is getting hurt there, perhaps, you know, you put it on the long side, because you think the price is going to go up, given news of

the bailout coming out. then you find out about subordination, and you have other issues, the yield soars on you, who knows, somebody probably hurt on that trade, melissa, as we watch it at the 5.2% two-year money. >> staggering, business is booming for michael kors, the newly public retailer, shares of kors continue to push high after jumping 13%. corina friedman is with wedbush securities. when i spoke to michael kors a few months ago, he made it clear that europe was going to be an engine of growth. what sort of impact should we expect? >> well, the stock has reacted

favoritably, we think, to the positive eps results, fueled in part by 30% comps in the northeast -- in north america, sorry, and 13% comps in europe, which is down from 34% from last quarter we think they sort of held back some security there, which manage did met, but they did say comps have reaccelerated and are in line with the north american business. >> in other words, you're saying they didn't have enough inventory to sell. that's what held back sales in europe, as opposed to demand being down? >> right. i wouldn't say that sales were held back, as 13.6% is very strong compared on the rest of retail operating in europe right now.

>> stacy, are you willing to look past the european issue? given the valuation of the stock, and yes it has amazing revenue growth, unlike a lot of reretailers out there? >> well, yes, i'm in the epicenter of retail panic in europe right now. it's up 14%, but less than 10% of its business here. and, you do have to worry a bit about the next couple quarters. >> and stacy, also, i mean, how much are we ignoring or maybe overemphasizing exposure to china, or at least the chinese that drives retail. >> sure, so as we've heard about, chinese tourism, especially in europe is huge.

it can represent as much as half of the business for a lot of the luxury retailers here, so that's a big deal here, michael kors is just starting to go into china. that's a huge opportunity here, whereas other lux injure with brand such as coach, saying the tier 1 business has gone in. so that's a huge opportunity here. corina, what accounts for the difference between a kors and coach or other retailers in terms of margin. when you take a look at the mix of production last season they were emphasizing the fabric bags, are they do current thing. >> the fashion watches are very high margin category. that's something that coach doesn't carry right now or doesn't carry in a large display as kors does. perfume is another high-margin

category. it's blowing out of the stores. yeah, less of an emphasis on apparel. >> stacy, you know, it's amazing to watch, at least from this desk, what's happened to lu lu lemon, tiffany, coach, they get sucked into this vortex, is there anything to subject that kors will be relatively immune to that. >> i don't think anybody is immune, about you their exposure to europe is less than 10%. it's a much bigger exposure, but obviously there is a slowdown in the market, so there's definitely some caution to be warranted here. >> so last question, corina, are you getting any indication the company may be holding back. are they holding back in europe because of the slowdown? >> no indication there. their plan has always been about ten stores. the measured growth, also

measured growth in japan as well. >> we have to leave it there. thanks for joining us. >> when we come back, chesapeake energy and aubrey mcclendon finally have something to be excited about. ed thunder making it to the finals, durant and lebron may be the new bird/magic. >> they can only hope. they are both at the top of their game. >> it will be a great series. we'll see in aubrey goes to a game, but first rick santelli working on the next hour of "squawk on the street." what's going on? >> we don't have phone booths anymore, but there used to be a time when we did. i remember when we -- and there will be a little sign that says "out of order." we'll talk about those three words, but more from a regulatory rupture standpoint. we're also going to alphabetize a couple acronyms that you have heard many times before. one side note -- a happy 88th

birthday to h.w. 41, herbert walker bush. happy birth tail. all at the top of the hour, by the way. laces? really? slip-on's the way to go. more people do that, security would be like -- there's no charge for the bag. thanks. i know a quiet little place where we can get some work done. there's a three-prong plug. i have club passes. [ male announcer ] get the mileage card with special perks on united, like a free checked bag, united club passes, and priority boarding. thanks. ♪ okay. what's your secret? [ male announcer ] the united mileageplus explorer card. get it and you're in.

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the oklahoma city thunder playing in the nba finals embattled chesapeake owns the team. as okc gears up for the game, what does the corporate hype mean for the thunder and mcclendon. darren. >> like the tale of two mcclendons. the best of times, the worst of times. the thunder and nba finals as the ceo is reviewed by s.e.c. after clooerg clear he was taking personal loans. you see the stock, the dip up is when carl icahn invested in the company. the company is so tied from the

thunder, name on the arena to millions in tickets they spent. we asked the company how many tickets they have, how they distribute them. they would not elaborate. figure out the value of the thunder's run to the championship is a tough one in regards to what chesapeake would get out of it. chesapeake is one of two corporate named arenas in the nba more business to business than a company that sells some sort of consumer product good like, say, an airline. the other being salt lake city which has an arena named after it, energy solutions, a nuclear services company. what does that mean? it means visibility doesn't have the same value if they were selling a consumer product. it makes sense they would invest in the thunder in terms of tickets to entertain clients, do deals. as b 2 b, not clear the signage, how many tickets. increased scrutiny on mcclendon and power on the wallet, you

have to wonder how much will be curtailed even if they do win the championship. >> wasn't there an obligation they had to buy tickets or already in terms of stepping up for those games? >> they did buy tickets associated with the actual box, in terms of having a suite. there were at least $4 to $5 million in additional ticket buys as far as how much they spent in the playoffs last year and how much they spent on regular season tickets. it seems like they spent about -- they had about 500 season tickets, which would makeup about 3% of the arena. again, the company won't say how they actually dished those tickets out. >> got it. i bet he's going to invite his new board of directors. i think that would be pretty smart. >> probably not. >> darren, thank you. here is an interesting story, slowing economy having an impact on the winning for the prestigious nobel prize. the nobel foundation says it will slash winnings by 20% to

$1.1 million. this is the first time the foundation has had to scale back winnings since 1949. wow, nothing escapes the economy here. tweet time. riding shotgun, apple working with manufacturers to place a button in the steering wheel in which siri can be called eyes-free, mercedes, land rover, honda announced they will invest in technology. what is the worst thing siri can tell you while you're behind the wheel? let us know at cnbc squawk. your answers straight ahead. looking for a better place to put your cash? here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank, like no-fee atms, all over the world. free checkwriting and mobile deposits.

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that the bring up siri. a lot of carmakers committed to it. we're asking, what is the worst thing siri, as a back street driver, could tell you behind the wheel. would you like me to search the web for a meaning of those flashing rights. the worst thing siri could say as she does so often, i'm sorry,

i don't understand. >> dig. >> they are trying to remedy what has been seen as a disappointment. this great piece done this month, somebody argued if jobs were alive today he would have lost his mind over how embarrassing siri has been. >> i just saw the malkovich commercial. i found it hard to imagine. there are really lawsuits. >> apparently there's more than one lawsuit, we'll see how it goes, criticizing the company for false advertising. >> amazing to think of the possibility of siri speaking mandarin. if it can't get it right english, the pofblt mandarin are slim to none. >> we should mention a couple of stocks on the move ziynga, coul take away potential buyers, 499.

a very significant fall. >> social gaming, daily dau, daily users down 8.2% in may. the second consecutive significant month on month drop. as much as cramer talks about playing with the ceo it appears there's some bleed, as they say, some churn. meantime what's coming up on "fast" tonight. >> tonight ceo of united natural foods, a stock, retail distributor of organic foods. that's been a hot trend. stock up 24%. get the ceo's take on demand out there in this very hot niche. also top stock picker series, hunter keay, top pick, previewing jpmorgan jamie dimon testimony. doesn't seem to be hurting the stock. >> facebook is an interesting one to watch. if you look intraday today, interesting note on dow jones, stock has been putting in higher

intraday lows for the past sessions. in the words of one of the dow jones reporters selling facebook has stopped working. one of the first times we've seen that argument made by someone other than a bullish analyst, speaking of which brings us to face the number challenge. days the last day, you can mail in your guess as to where facebook bottoms out. you can tweet us at cnbc squawk st, use the hashtag. the surprise, incredible hoodie, you're not going to want to watch, he then they won't say cramer's autograph. >> what do you do with it. if you put it on the wall, i'm on the back so you won't see my name at all. you guys were smart enough to go on the front. >> we don't give away everything. started with golf balls, now giving away clothing. >> who knows what's next. >> see you later on. see you tonight, melissa. if you're just joining, here is what you might have missed earlier today. >> announcer: welcome to hour three of "squawk on the street."

here is what's happening so far. >> business owners are not optimistic about where we're going to go, so they are not putting their money on the table. they are not willing to take any bets. there's too much uncertainty. >> none of us that came here, none of us that are still here thought this would be an easy transformation from old gm to today's gm, to be more fleet, faster, more responsible. >> more nimble. >> more nimble. >> actions we believe are positive for slowing if not stopping concern, that margin utility used to be measured in months, weeks, days, now we measure it in hours. it does beg the question, what really is going to turn this thing around. >> 1983, we had one refrain, buy tech. 1882, one refrain, buy oil, that worked. i have one refrain. buy domestic. it's working. >> what was jamie doing? what was he doing? you get the run. the rupp is showing this thing

is out of control. he's telling people it's just fine. how can that be? >> there is the opening bell. take a look at the s&p 500 at the top of your screen. >> there is a platform here that can be used to participate in ecommerce, which is a $500 billion business or payments like credit cards, which is a $200 billion business. all of these things you generate revenue for facebook. very hard to value because they don't get a penny from those. >> good tuesday morning. welcome to the third hour of "squawk on the street." want to get a check on the markets this tuesday morning. dow hanging onto some gains. even though we got a bit of a midday early morning scare when fitch cut ratings on 18 spanish banks. the spanish ten-year on that news reached a fresh euro era high. a close eye but dow managed to get some back up, 48, snpds almost 3. crude oil another big story rebounding from an eight-month low giving power to energy

stocks, valero, tesoro, phillips. zy inform ga shares down sharply, falling 10% since their ipo last december. some concerns that the craze for games on facebook, which zynga makes, past its peak. the number of users down more than 8%. we'll talk to an analyst about that later on. road map, apple saying fairwell to google and mapping out its way to dutch navigation maker tomtom. we'll see if the news you need to buy into apple and what it means for google's bottom line. california hoping to solve its $15 billion debt dilemma with a big bond sale. is facebook to plame for some of the golden state's economic problems. the governor of tennessee joins us live to tell us why tax reform he's implemented in his state could work wonders for the entire company. general motors gathering in detroit. problems in europe and a weak stock executives have a lot of explaining to do. we'll talk to former gm vice

chairman bob lutz about what gm can do to bounce back. all that and more coming up in the next hour. start with squawk on the beat, raja gupta trial moving along quickly. closing arguments could begin as soon as tomorrow. bertha coombs live outside the courtroom in downtown manhattan. good morning, bertha. >> reporter: good morning, carl. an emotional moment as raja gupta's oldest daughter got off the stand after testifying. they exchanged glances and father and daughter both emotionally choked up, a very difficult time for the former chairman of mckenzie & company, goldman sachs, procter & gamble, insider trading is the charge against him. the defense is expected to wrap up its case this achblt the heart of their argument is raja gupta had no intent or motive to leak confidential information to convicted former galleon chief. the insider trading case hinging

on a number of key moments when he allegedly exchanged calls with former fund manager. most have spoken to his character, philanthropic, health issues, u.n., gates foundation. this morning his eldest daughter, who works for the harvard endowment testified on september 20th, 2008, two days before one of the key issues in this case her 30th birthday, she said her father was upset. he told her he was concerned about an investment he made with a galleon voyager fund. the judge did proscribe her from what her father said. she said during the fall her father was upset and uncharacteristically withdrawn and upset by the time it was thanksgiving over what had happened with his investment in that fund. the defense maintained by 2008, that fall, they had had a

falling out because the $10 million investment had been lost. that is going to be a powerful argument for the defense. we'll see if the jury believes that's the case. >> yeah. it's going to be interesting to see if losses make a difference in their mind. bertha, thank you so much. bertha coombs in manhattan. hope over to the santelli exchange talking a little regulation this tuesday morning. good morning, rick. >> yes. we're not only talking regulation. we're going to put some things in alphabetical order. we're going to talk about not only regulatory rupture but also talk about a bit of a hidden agenda. now, all of this starts, of course, with the notion of out of order. out of order can mean broke and it does in this instance. it also means this certainly isn't in alphabetical order but it is in some kind of order. let's start with jpm, jpmorgan. in terms of jpmorgan i was welcomed this morning with

jpmorgan new of risks in "the wall street journal." of course they did because it's trading. last i heard other than when they try to blame speculators for everything, there is risk in the market. i understand they need to investigate certain issues. why? we're down that rabbit hole. we bailed out the banks, now we have to protect the taxpayers. in the old days it's not really -- it wouldn't have been looked at as a 2 or 3 or $5 billion loss, it would be looked at as a trading loss against much bigger profits but we live in a new world. this seems to have gone to the top. why? think about what regulation right now is under the microscope? it's dodd/frank. once again, the reason this is out of order is because there is an agenda, an agenda vendetta. that's to further the notion of their regs. next one in order.

mx, morgan stanley. listen, i'm going to get into trouble on this. i know there are issues regarding facebook. in my humble opinion the exchanges kind of a force major, the exchange is going to be held highly responsible. here is something i find interesting. if the people that bought this had a nice profit and flipped it, i don't think we would have heard anything. to me it's kind of flipping whiners. that's the aggressive stand. now, let's look at this mfg. of course we all know that's mann financial group. what did i wake up to? loophole, headed for regulators. let me get this straight. let's go back to regs. we have 2300 pages and there's a loophole because some people in charge of compliance didn't have series 3. let me think, 2300 pages, all of this and that is what is going to be the loophole and we want to do more regs. oh, my god.

we've got to do the last one. this gse, government sponsored enterprises. they ought to be at the top. if we're going to put it in order at the top. here we're talking about profits they didn't make at morgan stanley, no, at jpmorgan. gses we're talking hundreds of billions of real losses. do we hear anything about that? no. regulatory problems? yeah. they made it. anybody who had a breath or pulse could get a mortgage. i think we have a regulatory issue. we have bad ones, we have too many that are uncompleted, incompleted but we don't have the right ones. oh, wait, excuse me, we probably do. we've probably forgotten them, they are so simple. back to you. >> rick, literally alphabet soup today. thanks very much. talk to you in a bit. rick santelli from chicago. after the big developers conference in san francisco,

tech giant macbook pro. peter misek, managing director at jeffries. >> good morning. >> we sat together and wondered whether apple tv would be announced. it was not. why not? >> there's a lot on the table here. they moved to app that incorporate siri in a big way, change in mapping function is a big, big deal. that was a lot on their plate. in fact, a lot more than developers could digest. that was probably over the top. >> you still think it's likely within, what, three to six months? >> we still think it's happening. you know, the same argument we gave you yesterday. the area where they are going to manufacture it has a tripling of production. why would they. the only one that makes sense is

apple. >> in an announcement of tv, that doesn't necessarily displace the announcement of an iphone 5 as well. >> no. we would think they would be separate events. iphone 5 for apple investors more important from a profit perspective. from a long-term media hub perspective, it's important. >> let's talk about what they did say yesterday. the macstuff, siri, maps, what was most important to you? >> really maps were important, displacing of google on the map site. >> explain why? >> well, what it allows apple to do, it allows them to actually get into the advertising game in a big way and allows them to control that revenue stream and allows them to really provide a new platform for applications for developers and advertisers to reach an audience on iphone and ipad. >> is it clear to you these 3d models which had leaked out ahead of the conference are necessarily a quantum leap above

what google max is capable of? >> probably not. but what is a bit of a quantum leap is the degree to which apple is going to incorporate theory and the degree to which access to apis. we think that's the value apple will bring. >> a lot of discussion, i know you don't cover a lot of the suppliers necessarily but garmon traded down on map news, tomtom seen more as a beneficiary. do some of those ancillary trades the way they went down make sense to you. >> absolutely. if you look at who is partnering with apple, if we step back again apple the single largest install base of mobile devices, ioss as a single brand. that is a big audience. tomtom providing the map data for that obviously should give boom to them. it's going to be competitive for the other navigation companies out there.

we would argue if you get great turn by turn on iphone or ipad you're not going to use a stand alone device. >> google has io conference later in june. we'll see to what degree they can answer some of the attack apple staged yesterday. is that going to be effective? do you think google has an answer? >> the challenge for google it's not an integrated system. the hardware, software and services are separated. usually by companies. google is mucking up the ecosystem by adding motorola. some partners are probably apprehensive. google needs to selling them down, show they can innovate and match apple. we think it's the best on the market and they are going to have to address that. it will ab challenge for them to address that. >> finally, peter, you kept your price target intact at 800. does that mean it's a down

conference or not? >> no. we tried to forecast and incorporate in our numbers a lot of what was announced yesterday. the mapping wasn't a surprise. we talked about that yesterday. siri improvement was not a surprise. we talked about that. the wrinkle, we did get tv more outside, that's probably why the stock traded off a bit yesterday. >> peter, good to talk to you. thanks for coming to the phone. >> thanks for having me. >> peter misek talking apple. the market has rallied in the last 10 minutes, a few digits away from going triple. >> a 123. tiny company, under $200 million market cap. up 25%, still $1.31 stock. again, it's pretty small some interesting news, the company says it developed new lithium ion battery for electric cars

that would eliminate the need for heat and cooling systems. that would brng down the price of electric cars and the weight. investors are responding positively by boosting the share. just three years ago shares were as my high as $28 a share. it's been quite a struggle for this company to stay the least. carl, back to you. >> that's a tough chart. thanks, courtney. up next, how california's million dollar budget deficit could lead to the state's biggest bond sale in two years and what role facebook could be playing in the debt problem. sit down with bob lutz, talk about the latest headlines from the shareholder meeting in detroit. the dow up almost exactly 95 points. tdd# 1-800-345-2550 the spx is on my radar.

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it's it's no secret california has some serious budget problems to the tune of $15 billion. the 30% decline in facebook stock over the last few weeks could make that problem even worse. our jane wells is live in los angeles with some more on that. good morning, jane. >> hi, carl. california represents 13% of the u.s. population, but 30% of the total state projected deficits for the whole company. that from the s&p report called california $17 billion deficit problem. this week state controller reported sales taxes came in below expectations in may again. now the state treasurer's office confirms cnbc is preparing to sell $10 billion in notes. the largest offering since the brink of collapse two years ago.

matt posner, california's bond yield widened over the last month over its benchmark index, the 30 year was 75 points above, now up 97. the ten-year gone from 63 basis points above to plus 76. why? two things have happened since mid may. we learned the deficit here much higher than expected and facebook ipo didn't perform as predicted. yes, blame facebook because everyone else does. the state budget remains overall committed to the fortunes of its richest residence with nearly half the tax revenues paid by the top 1%. california bean counters forecast anywhere from 1.5 to $2 billion in facebook related tax revenues. over the next 13 months predicting before ipo shares would reach $45 by mid november. hey, you never know. s&p says high-tech industry is good for california's credit kalt. quote, this revenue is also

subject to capital market uncertainties. really. legislative committees scheduled to meet to approve most of the budget plan. voting on the budget could happen by friday. if so, that would be the second year in a row that a budget has been approved on time. much of the budget counts on voters approving a tax hike in november. on top of that calpers reported it was down. on the plus side we won the stanley cup. >> congratulations to the kings. you can't make it up. we'll take them. we'll take the facebook gazilli gazillionai gazillionaires. >> we still have not learned how to have a tax system that's not dependent on the capital began of the richest residents. it's the same argument every year and it never changes. >> it's amazing. we all watch and shake our heads on this side, too.

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dow trying to stage a rally going into the european close. we've been as high as 115 points, just a shade below that now. also helping that the spanish ten-year yields came in from setting a euro era high early this morning. meanwhile today's momentum play, check out michael kors, the company beating the street with its quarter, 108 to 112, streets of $0.98. same-store sales 36%, unbelievable, as some worry about exposure to europe, 10 percent sales. cme group, rick santelli there with a special guest talking tax reform. >> absolutely. before we talk to our guest, there are nine states that have no state income tax, alaska, new hampshire, tennessee, florida, south dakota, washington state, nevada, texas and wyoming, and

there are a handful of states in the process of either considering or revamping or removing their state income tax, kansas, oklahoma, indiana, arkansas, missouri. now i want to welcome governor bill haslam from tennessee. thank you for appearing on our show today. >> glad to be here. thanks. >> listen, i was surprised. your state has never had a state income tax, although you do and are required to pay taxes on income, interest income, and dividends. so can you please explain how that's worked for the state and how that came to be they were one of the states that just never decided to put it on the books. >> i'll talk it up to the wisdom of forefathers and mothers who realize people have a choice where they live. so you can live in a high tax state of california, illinois or live in tennessee where your personal income is not going to be taxed. we think it's a competitive advantage. we actually have seen our growth be up this year considerably, in

a fairly obviously tough economic time. again, because people choose where they want to base their business, base their family. they are going to choose where it's economically advantageous to them. >> but governor, come on. you must hear the critics. if you're not collecting state income tax, you're not collecting a big pile of money that illinois and california are just -- new york are enamored with. how can your state run so efficiently? how can you make up that revenue? >> i have to ask, how is that working out for them? look at the states with the biggest deficits, the states with the costliest structure and highest tax burden. people are choosing where they are going to live. you know, remember obviously you all have been tuned into the whole private sector is doing fine remark. maybe what we should question there is that the public sector is not doing well. in tennessee our revenues are up year over year about 7%. that's solid in this economy. we're not laying off teachers. we're not doing all those things because we haven't let our cost

structure get out of place. the places that are hurting, whether it be municipalities or states are the states that have let their wages get high, mostly their pension costs get out of balance. that's what's driving the issue and not a fundamental issue that we're cutting back on public sector jobs. >> so if i'm understanding you right, your argument for the other states considering or maybe for the states that should is that without state income tax, you're bringing in a population of potential entrepreneurs, potential investors, and it's their activities and what it creates that generates more than you're losing. is that about right? >> right. but i'm arguing i hope the other states don't do that. it's a competitive advantage. i hope they keep a high cost structure in place. seriously i'll give you a couple examples. volkswagen built, spent well over a billion dollars in tennessee building a manufacturing plant. one of the things that made them decide to be here was no income tax. i talked to entrepreneurs all

the time where they are sole proprietors or sub s corps that move here because that did the math. i can move to tennessee and this is what it will save me. people have capital, they will deploy capital where there's no return. they are going to go to the state where they will get the best return for their capital. we think tennessee is one of those states. >> thank you for being here, governor. you know what i say about states who leave for a better tax structure, i call them happy feet states. they leave for a better deal. >> the european close after a short break. don't go away. our cloud is not soft and fluffy.

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>> the european markets are closing now. >> with those bells, simon hobbs back at headquarters in inglewood cliffs. >> a nice bounce coming through cutting on european close. trying to find out exactly what's going on. in general terms the big picture, of course, the promise of $125 billion, credit line for spanish banks hasn't broken that negative feedback between confidence, sovereign debt and, indeed, bank debt. if you look how we've traded during the course of the session, you can see in broad

terms it has been negative. those countries exposed to peripheral debt or with banks exposed to peripheral debt have seen stock markets move further into negative territory. the headlines you know tomorrow in the press about the european trade today will be all about where we went with spanish yields. we did break through 6.8% on the ten-year as they were selling sovereign debt in spain. that takes us as you can see to a level we've not been at until before we had that mass injection of liquidity in december from the european central bank or the promise of it. so we're back to november highs as you can see there. that's going to worry a lot of people. breaking out also the shorter end of the curve. if i show you where your for example on the two-year. you can see we're not actually up to the sort of levels we've had in november of last year but still it is a very serious situation. europe has been unable to prevent concerns from mounting as another drum beat gets

louder, of course, towards the greek election sunday night. what is interesting, i want to show you where we are with italy. arguably the focus is switched to italy partly because you're going to help out spain a little bit but also arguably less funds available for italy if you help spain out. see again broken up to 6.13% today on the italian market as again there is some pressure there. certainly the italian financials have been under pressure today. they make up the big losses you see at the bottom of the market in europe and other banks around europe fallen in sympathy, in spain, in ireland, and, indeed, in the netherlands. it's not helpful if you're in a group of 17 countries if one of those countries kind of starts getting a little bit loose in the talk let us say. the fact the austrian finance minister said she felt perhaps italy might need the bailout next. it's not the kind of thing you

say. the italian prime minister says it's completely inappropriate. she's trying to backtrack. it doesn't help when you're trying to shore up confidence. carl, can i just say finally the crew here are very proud to announce they now have euro proof.cnbc.com a special website as we count up down to the spanish elections now up and running and a lot of advice on where you can put your money to protect it. back to you. >> that is going to be a key phrase probably for months, if not longer, simon. thanks a lot. bob pisani here. do we owe this rally or not? >> it is the current buzzword, a banking union, deposit insurance, some kind of resolution fund also regulatory oversight. that's got people talking as well. that's definitely what's going on here. here is the problem. germany starting to push back. recently officials say we don't

want a banking union right now. look at the headline. this is the real crux of the problem going on here. they don't want a banking union without a fiscal union. what does that mean, the germans aren't going to transfer billions and billions of euros to southern europe under any circumstances for the banks, sovereign unions. here is the quote of the day from one of the bank officials. whoever accepts liability, that would be the germans, also has to have the right to control. that's the heart of the issue. germans want control over where they are spending money. how southern european brethren are spending it of that's the problem. they are not going to give up the sovereignty, that's why it's so darn difficult, plotting from crisis to crisis. to make the final hard decisions about the fiscal union they don't have it there, the consensus to do it. this the heart of it. i was just, carl, last night with a bunch of hedge fund traders discussing where the global economy was out.

the key issue is commodities are the key to understanding what's going on. let met just put up what's been going on. look at brent crude here. this is why a lot of people are rather gloomy about the global economy. we're down, brent crude down 22%. the good news this is what's tied to gasoline. gasoline prices down 15% in the last several months. that's a good sign, not a good sign for global growth, nor is it copper, exact same thing. a big debate about corp. 15% in the last two and a half months to the downside. indication of slower. oil and copper down 22 and 15% respectively, that's an issue. a lot of discussions yesterday on what exactly gold has been telling us. boy, did i have some debates with people last night. you all know gold could play on inflation and what's going on. gold has been in a down trend even if we've been up recently. either deflation is coming or deflation is here or qe 3 is not

going to be put into effect or qe 3 and this was a hot debate, would not be effective if put into debate. everyone is confused on what gold is saying and there's a lot of different opinions right now. let me show you what's going on with the overall markets here. energy and materials and industrials. s&p 500 down 6% in the last two and a half months all these sectors are suffering the most. global growth sectors, economy, global stock market sending clear signals on slowing global growth. >> good to see you again, bob pisani. zynga slowing. analyst writes market for games on facebook is in an accelerating user tailspin. doug joins us on the cnbc news line. good morning to you. thanks for coming to the phone. >> thank you. >> walk us through metrics for

may in terms of user growthor in this case decline. >> sure. zynga's daily active users as measured through facebook, they were down around 8% in may and n that was on top of a 12% decline in april. take a 20% decline in two months and annualize that, that's a pretty severe rate of decline. >> 8% in may, 12% in april, second big drop with all the big titles herding. you write the company strategy of accelerating release is resulting in more churn of existing users. what's more important, their strategy of releasing the names or the migration to mobile overall? >> i think there's two things going on, one of which is i do believe that the pc and content consumption device on the way out. people consuming more and more content on mobile devices

because they can have them with them anywhere, any time. zynga had a strategy for this. they are moving into the mobile space very aggressively. they recognize that. there's also an issue of they put out a lot of games. i think a lot of their games are very similar to each other. i think when they put out a new game they cannibalize users from older games, so it's not driving the kind of growth better than the stock price when they went public. >> interesting. you also cover other names with pretty significant gaming exposure, electronic arts outperform, disney shares, have you a neutral. where does zynga rate in terms of your universe? >> you know, i think all those companies are both aggressively going after social platforms, facebook and mobile as gaming platforms. i would say the differences at zynga is the dominant player on facebook. that's where advantages lay.

a shift from social platforms to mobile for gaming disadvantages zynga where it's not a plus or minus for any other players in space. >> a neutral on zynga at least according to the last night i'm looking at with a target. what is your target on zynga right now? >> we don't publish our stocks. what i would say shares are trading ten times earnings plus cash, which is not significantly above where electronic arts is trading at or other traditional gaming companies. i do think zynga has a real business and there is a value for it, but i also think that where this company went public and where it traded subsequent to the ipo in the $14 range was pricing in an enormous amount of growth to which there are a lot of risks. i think we're seeing one of them, which is facebook is not a great gaming platform compared to mobile. >> interesting. well, the stock feeling it today. doug, appreciate you coming to the phone again. thanks so much.

>> my pleasure. >> media and entertainment analyst at cowan & company. european slowdown, slumping stock price, two of the challenges facing gm as the automaker holds its annual making. we'll talk to former vice chairman bob lutz who never pulls any punches. we'll get his take on the future when "squawk" returns. who have used androgel 1%, there's big news. presenting androgel 1.62%. both are used to treat men with low testosterone. androgel 1.62%

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money guys. mark fisher, one of the most successful commodity traders joins us as a guest host. we'll ask him the best way to play the big drop in oil we've seen. billionaire t. boone pickens will stop by to unveil his top energy pick. carl, a pretty big show. looking forward to it in just a few. >> always good to talk to boone. see you in a few minutes. gathering in detroit for the company's annual meeting. phil lebeau is there. just talked to an angry stockholder. what have you got? >> listen what they have to say, down 30% since the ipo. he characterized the frustration main shareholders have. >> i received common shares paying no dividends at $32 a share, which is roughly $0.35 on the dollar and they have since deteriorated. now you've made billions of dollars. we're putting money in plans, funding the pension fund. this is all good. i frankly doubt i will ever buy

another general motors product until i am made whole. >> that is just a taste of some of the frustration from gm shareholders. om heard from a few like that. we hear from a number of people saying when will it appreciate. when will the stroke reflect that. >> pretty interesting sound. phil lebeau. more insight bob lutz, former chairman and cnbc contributor. bob, good morning to you. >> good morning. >> hard to argue with that sentiment or can you make what do you make of that shareholder and what he said at the meeting? >> well, i think it's a minority view. there are obviously -- i'm a gm shareholder myself. i received a lot of shares and i bought a lot of shares and i'm also under water and i regret it. but it's certainly nothing that management can cure by making

less billions of dollars or not correcting the pension liability. if you compared gm stock to ford stock, ford stock is doing just as poorly. what there is is a general lack of confidence on the part of the market in the automobile industry. >> do you think the problem is external in terms of consumers being drawn to the brand, or is it something internal? is it the culture fix, he's a fifth of the way through. >> no. i don't think it's anything management can control at this point. global sales are at near record levels doing great in china, solving the problems in europe, reduce the pension liability by $26 billion. i think management is doing everything right. in the next 18 months we're going to see a veritable onslaught, 70% of gm's name plates are either going to be fitted with new products or with

substantially renewed products. i think ackerson and team are doing everything right. it's one of these cases where the company is hugely profitable, solving all its problems and the market just doesn't get it. >> of course akerson said at the meeting coming in 20th in profits, that is a problem, bob. that is something you would think management has some control over. >> management has control over what? >> the fact that they are fifth in revenue but 20th in profits. >> well, okay. there's a lot of work to be done. europe is obviously a drag. but if you look at the company's progress in the world's largest automobile market, china, that to me is the guarantee of future profitability and growth. >> people talk about this target of $10 billion a year in europe, $10 billion a year overall. is that still reachable or are

we going to have to give up the ghost on that one. >> i think that losses in europe are diminishing. gm is consolidating plants. i know that the alliance with sit citron is going to bear fruit, not immediately. unlike past administrations, this administration is desperately and stubbornly focused on fixing the problem in europe no matter what it takes. >> akerson in the journal quoted, the good thing about our bankruptcy it took 39 days. the bad news is the bankruptcy took only 39 days. if we had been there longer, people would ask more questions and look at things pinching margins. do you think they should have spent more time in bankruptcy? >> no. i think that is a misinformed or uninformed comment. a long time spent in bankruptcy

would have absolutely destroyed the dealer network would have had a serious impact on suppliers. people will buy airline tickets from an airline that's in chapter 11. people will not buy cars from a car company that's in chapter 11 because they are worried about being stuck with an orphan. so i think the fastergot in and the faster we got out, the better it is. >> i remember having that conversation with consumers when we were beginning to ponder the potential for chapter 11. finally, bob, you mentioned you're underwater. i hope you won't mind me asking what your cost basis is right now. >> my cost basis, i don't know, but it's certainly in the 30s. >> all right. so we've got some work to do. >> yeah. >> always good to talk to you. thanks for your insight. >> okay. thanks a lot. >> bob lutz talking gm this morning. when we come back, will jamie dimon win when he testifies on the hill.

a preview of dimon's testimony before the senate banking committee after this break.

market trying to market trying to hang onto gains, triple digits, 104, we were up to 115. a lot of hopes pinned around discussion out of the ecb looking at how deposit insurance across the eurozone would work. of course that come in sides with the european close a few minutes ago. meantime jpmorgan ceo jamie dimon testify before the senate

banking committee tomorrow. will he come out on top on what is sure to be tough questions from politicians. live with more on that. >> good morning. capitol hill is a strange place with some of its own traditions and cultures. jamie dimon knows all this. he's been up on capitol hill before. he's faced what he's going to face tomorrow several times in the past. the trick is for any corporate ceo testifying on capitol hill can be a very dangerous moment. there are ways you can win quote, unquote, in a congressional hearing format. with that let me give you the five ways to win a congressional hearing. first is you have to be humble. no one on the dais wants to hear how great you are. that want to hear how great they are. second, be deferential. congress is shockingly open to flattery. you'll do yourself a favor.

also, be vague, avoid specifics. don't give them anything it hang their hat on. that's an important point because members of congress are going to be probing for particular factual information. generally speaking the advice to people testifying is don't give it to them. the other piece of advice is stall. members of congress are subject to time limits while they are questioning you, you aren't. longer answers mean fewer questions. i once got advice from a lobbyist who prepared some of the highest profile congressional witnesses. whatever you do, he said, he always tells his client don't accidentally blurt out the truth. carl, this is advice that companies pay a lot of money for. i gave it to you for free. that's how you win a hearing on capitol hill. >> advice to panel members, documentaries on security. great stuff last night. >> thank you. >> keep those tweets coming. apple is working with car manufacturers to have a button on your steering wheel that will bring up siri. new feature called eyes-free.

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>> >> "squawk on the street" tore tuesday. apple working with carmakers to have a button on your steering while that the bring up siri. called eyes-free. a lot of carmakers on board. our question to you is what's the worst thing siri could possibly tell you while you're driving. don writes beware googleless driver on right, beware google mapping behind you. come on, grandpa, we don't have all day. i hear enough of that from my wife. oops. that would be bad if siri said that to you while you were driving. a quick check on facebook, trading in positive territory but down 30% from the ipo price. by the way, a series of higher intraday lows according to dow jones, which means, in their opinion, perhaps the selling of facebook is no longer working. brings us to our sweepstakes. where do you see the bottom for facebook shares. maybe it's already done. one month after the facebook

public debut today is your last chance to send in your predicts. tweet us at cnbc squawk st. hashtag and the number. the prize, even zuckerberg wants one of these, the hoodies "squawk on the street" signed, melissa, gary, rick, today is the last day to tweet your prediction, simon as well. a takeaway from rick santelli, rates in spain and italy, why they have spiked mid-morning and why they have come back a touch. >> well, i think obviously the close and various tensions with regard to traders and even the banks holding the paper. as to how aggressive, a better band-aid or solution coming. in the end what i find fascinating is where the rates on the ten-year side. also, and i think david faber brought this up and it's a great point, look at the two-and three-year notes on both they are the biggest performers in terms of lower priced, higher

yields, 30 basis points for each of the countries today alone. when things -- when anxiety levels start to run up you see more inversions and more anxiety in some of the shorter term paper. that's the way greece played out. we need to monitor that and all the inversions, carl. >> rick, we talk a lot about uncertainty. investors on the sidelines, investors fleeing to bonds. these metrics out of the b of a fund manager survey, cash holdings, the highest since january '09, third highest in the history of their survey. >> pimco raised their treasury presence i believe in april it was 31%. i think they moved it into may at 35% on treasuries, i believe, for the total return fund. that says it all. >> rick, i'm going to take a break, get into breaking news from scott at hg, i believe. scott. >> that's right, carl. a deferred prosecution agreement just filed in cour