♪ been down isn't it a pity >> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. the fed is wrapping up it's two-day policy setting meeting. economists seem to suggest the most likely outcome is an extension of "operation twist" set to expire in two weeks. that program lets the central bank sell shorter term securities and buy longer term bonds. the fed is going to be releasing its statement at 12:30 eastern time. then chairman ben bernanke will be holding a news conference at 2 p.m. eastern. you can watch coverage here on cnbc. european stocks are choppy in early trading. investors are also waiting to hear from the fed. treasury secretary tim geithner speaking on the sidelines of the g-20 summit. >> we're encouraged by what we heard from the european leaders today and by the broad focus of

what we're seeing, the need to strengthen economic growth. >> french president hollande says italy proposed using bailout fund. he is calling the idea one worth exploring. he plans to talk about the subject in rome on friday at a meeting between him along with leaders of germany, spain and italy. the real question is, what angela merkel has to say. there has been some thought that maybe she is, perhaps, looking at that as it could be a possibility. we'll have a live report in europe in a few minutes. first, andrew has the top corporate headlines. >> thanks. we've got some potentially market-moving head loinz this morning. procter & gamble lowering current quarter earnings guidance, seeing core eps of 75 to 79 cents down and below the street view of 82 cents. sales expectations also being lowered. here's what's happening. they say they expect annual earnings for coming fiscal year

to be between flat and up by only mid single digit percentage amounts. a big part of the story is exchange rates. underlying sales are set to show a 2% to 4% increase. ceo offering receipt vized forecast to investors in paris today. the exchange rate thing going on at procter & gamble it's important because it's happening elsewhere. pepsi now saying it sees unfavorable exchange rates hurting its 2012 profit more than it had previously expected. that soda and food company forecast foreign exchange translation to hurt by three percentage point. apple and google will be facing off in smartphone hearing. now back to mr. the new

larry kudlow. who did a brilliant job last night. >> thank you. larry ledge gend, they called t. they called larry bird that. i decided to call larry kudlow that. he'll be back. went through back surgery. he's comfortable, everything good, on plan. he'll be back soon. i think at the latest by next week. i was racking my brain trying to think about the last time procter & gamble was on, just last month, and there was something, remember, there was something, because i remember asking him why it didn't look quite -- there was some guidance. i thought it was on the revenue line. it was not quite -- i'm trying to think of it. this almost sounded familiar with what p&g is saying. exchange rates -- >> i don't know -- >> it shouldn't matter. you shouldn't sell the stock on it. it's sort of beyond your control. >> what happened they weren't expecting with exchange rate? the dollar? didn't seem to me like --

>> is it euro or -- >> the dollar -- >> the euro has held in there. who's caught by surprise -- >> on the relative base of the dollar, that doesn't do it? >> maybe. >> that's what i like, this guy says i'm now becoming the -- i could do worse. the ryan seacrest of business news. >> that's nice. i'd take that compliment in a heartbeat. >> i'd take it any day. >> there's nothing similar, especially paychecks. >> your hair. >> but he has more product going on a lot of times. a few other stocks to watch -- >> it's not just that with p&g, underlying sales growth. that makes more sense to me. >> and it also had to do -- i can't remember. it was some initiatives the companies were making that weren't -- >> high-end stuff, they were having trouble with the pricing, keeping the prices where they wanted? >> i wish i could look at the interview. maybe we can look -- there's

transcripts, right? adoeb reporting better than expected earnings and revenues late yesterday after the close. unfortunately current quarter earnings guidance was short of consensus and the company is also reducing its full year revenue target and also narrowing its range for its earnings management, putting some plame on softness in europe. jabil in line with expectations. do you know why -- i thought it was jabil. >> no, it's like a name, right? >> do you know where the name comes from? >> i see the world jail bait. i just want you to know, when i look at that word, i don't know why i say that, but i -- >> jail bait. >> you can't say that outloud on television. >> it's a guy name jay and a guy named bill. guidance falls short -- >> the mental image. i don't know. >> jail bait. >> and jobe -- >> the think about jail bait

is -- that truly -- we are a federation, not a union, because it depends on which state your in. there's jail bait in some states, there's -- it's fine in other states, which is what makes it -- right? i mean -- >> i'm reading procter & gamble earnings. >> sorry. the stock traded higher in after hours on news it was select adds a selected go-forward partner for a mobile phone company. analysts say the customer could be blackberry maker research in motion. people from southern states write in and they're mad at me. i didn't even say southern states in where jail bait -- they'll get mad that i'm somehow throwing them -- but it is different. idenex -- you got me into this whole thing because you saw jabil and you said -- positive clinical data on lead hepatitis drug showing positive suppression of the virus. after the bell we'll hear

from bed bath & beyond, micron and red hat. gave up some gains toward the end of the session yet but still up 100 point. this morning futures are indicated slightly higher looking at dow or nasdaq futures. s&p futures are relatively flat at this point. everyone is waiting to see what the fed will say. 12:15 is when we get the statement, followed up -- or 1:30 is when we get the statement followed up at :15 when bernanke starts talking. that's what markets will be keying off not only here but overseas. oil prices are barely budging, 3.96. the ten-year note because obviously we could see surprises in the bond market or the stock market how they interpret what the fed has to say and what it does. right now the yield on the ten-year is 1.625%. the dollar right now, if you take a quick look, is down

across the board. 1.2692 is euro/dollar. and gold prices down about $8. it's down eight bucks to $1,016 an ounce. >> time to go across the pond for global reports. carolyn standing by. >> good morning to you guys. we were lower for the morning session, following the impressive gains we saw in yesterday's trading session. european stocks at a one-month high. all of that was because of hopes for more fed stimulus. we're picking up on that hope again. take a look at how european marketses fare. the cac 40 lower but the xetra dax up by five point or on. we're looking a little more positive here. and speaking of further qe, we got the minutes from the bank of england this morning. that showed us that only five members were against further qe.

but four members, including the governor king, were actually in favor of more qe. so i guess an additional 25 billion or 50 billion pound is baked in the cake for later this year. take a look at pound slaib sti ling against the dollar. jumped sharply after the minutes came out but in the meantime it's recovered and currently at 1,5725. take a look at shares in air lingus, up by a whopping 22%. uk budget air ryan air made a cash offer, with a 38% premium to yesterday's closing price. back over to you. >> appreciate that. in other news this morning, soda ban is coming to another city near you. the mayor of cambridge, massachusetts, proposed limiting the size of soda and sugar-swoetened beverages sold in city restaurants.

she's asking city health officials to research the proposition. the move following a similar proposal from new york mayor michael bloomberg. >> you can still do it in myanmar. it was the reno -- >> and twittered everywhere, by the way. >> think about this. new york city and people's republic of cambridge. it's perfect. the two places that -- i moon, new york, i wouldn't want -- i'd be embarrassed. >> you were at m.i.t., though. you need to guzzle a soda to stay up all night. >> there's harvard square and kej kejts square. >> but that's not technical -- >> it is across the charls. >> life expectancy in the united states is rising faster in new york city than anywhere else in the entire country. >> i don't understand that. >> it's now 83 years old. the om other place you have a life expectancy like that is in japan. >> the soda ban is only two

weeks old. >> i know. they're saying it's the smoking stuff, they've gotten healthier. >> i'm going to expose you across the bridge at some point. >> no, i'm not. >> i'm going to live longer. >> that was the tag line when i heard it on the radio, if you want to live longer, move to new york city. >> i saw john kerry yesterday, it was hot somewhere, so we're facing the end of the world. >> today is supposed to be super hot. >> first day of summer. what a shock. it's been happening that way seems like every year around june 20th it gets hot. >> it is supposed to test the records today. up to 96 -- >> the records are 150 years old. >> but it's going to feel hot. >> on a planet 5 billion years old. it's been warming since the last little mini ice age. >> you said you're in favor of global warming. >> it's going to open up a lot of drilling up in the north. there's trillions of dollars -- unfortunately, it's hydrocarbon. it's opening up because it's

getting warmer. but the shipping routes, we'll be able to quickly go right owe. >> and it will flood manhattan. >> yes, you could drive right over -- >> we would take a boat to see you. >> we have the jersey shore. it's not in millborn where i live. >> i just saw a promo for the new batman movie on the georgia wash bridge, which i drive over every morning, cut in half. >> that's a nice image driving into work. >> summer, we're very excited, preparing, rasping up interest of the new batman in my house. it's hot here and hot down in washington. >> you're hot. >> wow. thank you. you said that to andrew, too. >> you were standing up. is that new? you looked nice standing up over there. >> thank you. i appreciate it. congressional leaders failing to breck aa deadlock and

republicans may need to find a new legislative vehicle to carry their plan to approve the key stone oil pipeline. also today the senate will plow through more of the 73 amendments to a $500 billion farm bill. it will fund the food program over the next five years. the senate is expected to vote on all of the amendments and pass the bill by the end of the week. it goes to the house where it could run into resistance from fiscal conservatives. we'll check in on the future pit for a read on today. plus he a live report from the weather channel on the first official day of summer. miami is one game closer to an nba championship. lebron james and heat rallying from 17 points down to beat oklahoma city by six, 104-98. miami now has a 3-1 lead in the final. our cloud is made of bedrock. concrete. and steel. our cloud is the smartest brains

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welcome back to "squawk box." you can look at the futures as we speak. dow looks like it would open up higher. so would the nasdaq. s&p would be off but just slightly. let's look at some headlines this morning. boeing launching a customers -- or looking for customers for its 787 dreamliner. they're getting a complaint. japan's all-nippon airway says the plane's electronic dimmable windows are not long enough for long-haul flights and the airline is asking boeing to come up with a new way to make the plane's cabins darker.

instead of having the physical shades you pull, it's like you press a button and they just dim like -- you know those sunglasses that -- >> those things don't work either. >> the glasses that dim -- >> the shades that -- like that inside the window. >> have you ever been in a bathrooms, a little scary, like glass doors and then -- >> oh, yeah. >> you close the door and it -- >> i don't trust that. >> this is what -- >> i'm not pulling my pant down on one of those things. >> where have you seen that? >> bathroom doors. >> where have you seen that? >> it's a bathroom door. it's glass and you close it -- >> no way would i trust that. i have an idea how they can come up with a new way to make it darker. put back the shades. >> i wouldn't worry about it. with me, it's -- you want to --. >> i've heard. >> you want to look, feel free. you might feel bad about yourself afterwards, but you want to look, feel free. you know what, it's not my -- avert your gaze. >> you're saying in the

bathroom -- >> like in the gym here. they're worried about people they work with. they walk around -- i've seen people go into the shower with curtains, they go dressed -- they go in there dressed, or with something on. they come out dressed. i'm like, how -- did you take -- >> you don't feel a little uncomfortable? >> no. it may sound weird. no, i don't. half the world has one. the other half does not. they have something else. they're all the same. they're basically -- you know, there's nothing shocking you're going to see. >> it's like public showers when you were in school versus -- like in ours it was all -- everybody had their own space. >> no way? >> yes. >> not when i went to school. >> when i went to school it was like a big room almost. >> yeah. >> right, right. >> i always felt a little anxious. just saying. >> well, you're being totally honest. that's fine. >> let's bring someone else into this conversation, alex wallace. do you want to join this conversation or would you rather

talk about the weather? >> just loosen your tie, alex. >> there you go. >> it's getting hot in here. >> it is. it is getting hot. it's going to get hot for a lot of folks as we work our way through this afternoon. east coast summer ringing in true, no doubt about it. we're talking 90s for you in new york city. get ready for that. meanwhile, a little further south, storms to deal with in florida. it will be a wet time there. also stormy in the upper midwest, a cold front dumping quite a bit of rain. south texas could be wet as well. houston to san antonio, 70s from seattle to san francisco. let's talk about this heat. all these areas shaded in brown, that's where we have heat advisories. daytime heat index values, what it will feel like to your body. that's what matters. what it feels like, nearing 100. d.c., baltimore, philadelphia, all way up into new england we have some heat advisories in place as well.

boston's going to be a hot one for us. highs in the 90s. again, heat index values nearing 100 degrees. we could be talking record highs. d.c. is one of those spots. maybe tying the record for the day at 99 degrees this afternoon. baltimore, the record's 100, but 98, you get the picture. it will be a hot, scorching time for many of these areas. all thanks to a huge ridge building into the north and east. this is going to be with us for today into tomorrow. very, very warm readings. thursday, high temperatures getti getting hotter in philadelphia, hitting the century mark. acs will be working overtime, guys. >> wow. i know. going to be hot. >> alex, thank you. we'll let you slide this time on the conversation. >> yes. the cftc moving to slow high-speed traders. a cftc committee is expected to propose a roughly 60 word definition of what high frequency trading would define it brootdly. traders are likely to be

disappointed because they were looking for narrow language. critics argue a surge in high frequency trading has left wall street more vulnerable to computer-generated failure. duncan needer meyer is expected to testify today. ira, we're yoined from the cme. in terms of the s&p or dow, we pulled back. didn't quite get to correction range. now it seems like we retraced more than half of that and pushing back towards -- we're not that far -- we're aways but it's recovered well in the face of all this still happening in europe. what do you make of it? >> i guess, joe, it's liquidity, liquidity. as long as the market feels it's going to be provided, it gets -- says, okay, you know, i can play in this arena. there's enough quality returns, especially when we get the retracements when he were down at 1270, 1280. when was this? i've been in japan so i'm a

little jet lagged. when was that? ten days ago. we've had a nice correction and people are looking for bargains in there. i don't like they put that out yesterday because it puts the market now -- well f they don't get something aggressive from the fed, the market will sell off. that's okay from a trading standpoint, though, because let's get a good taste of that today. i think you're seeing it in the gold market. gold is soft this morning because what if we don't get -- gold is built on more liquidity, and more, and if the fed doesn't deliver, gold will be under pressure, as will equities. >> has anyone gone back and matched up over the last 2, 2 1/2 years the fed action with the -- with the market and the economy? remember, we've had these spring swoons after they thought things were improving at the beginning of each year. every time we take the training wheels off, it seems like that's when the swoon comes. we think there won't be qe3

or -- and then they come back in and then the stock market goes up and then the economy seems to improve. and then we think they're going to go away again and then they're unable to because we can't seem to go without the training wheels. is there anything to that, you think? >> yeah, joe, that's the great -- that's what makes you the scientist on the -- in the room because that's really the important question. but you can't -- we're not in the laboratory so we can't just abstract out everything. a lot of that swoon comes out of the european situation. because for 2 1/2 years we've been dealing with this debt situation. and every time we think we're out, and at least getting tepid growth in the u.s., 2%, 2.5%, the european debt situation comes back to haunt us. >> the other time it was japan. doesn't matter what the negative externality is. the fed comes -- we get to stall speed or things are sputtering, here they are again. >> you live in a globalized world and everybody has to be

held accountable. but the fed is the one -- is the biggest, most mature entity in the room. the europeans just don't get it. you know, i read through that communicate last night and again this morning. wow. everything's in there. in fact, i saw rosemary woods, 18 minutes of the nixon tapes were -- >> nick santelli says they do get it because we don't want to show up with a wheelbarrow full of dollars to buy a loaf of bread. maybe they do get it. maybe we don't get it. >> some will tell you it was the austerity of 30 and 31 that was far more important than the 1923 action of the inflation. so, there's a lot of discussion to take place in there. they don't get it because they haven't announced -- or not announced but they have not come to terms with what the real problem of this is. and that the euro was put together in a faulty way. >> they have a socialist entitlement state system. that might be something to come

to grips with, too. they have to reform a lot of stuff over there. >> well, yeah. so, now we have bernanke on the hot seat. why is he on the hot seat? he's been talking about, well, we go back to jackson hole. that's the jackson hole of 2010, august 27th of 2010, is a very critical date. that's when when he made the portfolio balanced channel in which he was going to pick up the mantle of the greenspan wealth effect. get the stock market up. you get the stock market up, juices will start flowing. now he came out -- i still don't understand why he talked about that fiscal cliff so openly. i think a fed chairman walks a very dangerous path when he goes -- talks it. so, in my mipd, the way the market sees it, i think we see this to and fro, the market is caught between portfolio balance of jackson hole of 2010 and his most recent comments about the fiscal cliff. where is the answer? that's where we're going to and

fro. i hope he clarifies -- >> great skiing, that's all i know what you're talking about. lots of black slopes. we'll see you later. when we come back, is the fed ready to twist again? we'll talk more about that by preparing by today's fmoc decision. we have a top wall street analyst and a fed federal government. as take a look although yesterday's winners and losers. [ male announcer ] this is the at&t network. in here, every powerful collaboration is backed by an equally powerful and secure cloud. that cloud is in the network, so it can deliver all the power of the network itself. bringing people together to develop the best ideas -- and providing the apps and computing power to make new ideas real. it's the cloud from at&t.

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♪ in the summertime when the weather is hot ♪ good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. prok toll and gamble lowering its quarter, earning gipd answ guidance and sees core down and below street view of 82 cent. it's the sales we're talking about here. expectations are being lowered. they said they expect annual earnings for coming fiscal year to be between flat up and by single digit amount. a part of the story is exchange rates. however, underlying sales are set to show a 2% to 4% increase. ceo bob mcdonald offering revised forecast at a presentation in paris. and looking back, when we had

john muller on, we referenced this the first time at 6 a.m., and they were talking about reducing fourth quarter and fiscal guidance. it was reflecting, he said at the time, price controls in venezuela, which would hold down, and also a couple of competitive adjustments we had to make in a few markets which sound to me like prices were too high and they had to come down to remain more competitive, which would cut -- may not cut unit sales but cut revenue numbers. >> peter pulled the numbers from their april 27th earning release. foreign exchange was expected to reduce sales by 3% and now expected to bring it down by 4%. one percentage point. organic sales at that point they were saying expected to grow 4% to 5%. this is a sales story more concerning -- >> organic backs out the exchange difference. >> what about pepsi story? they were -- they were arguing

this exchange rate issue is a problem for them, too. >> it probably is affecting all these companies but it's more than just that, at least in the case of procter & gamble. i'll look at pepsi on the next go-round. >> i'm sure people in a slowing global economy probably look for better -- you might migrate to not premium products as well. that would cause p&g to be more competitive in pricing, you would think. also today's top market story is a fed decision and a news conference by chairman ben bernanke. joining us right now is ira jersey, credit suisse of interest rate strategy and randy crossner, university of chicago booth school professor. welcome to both of you. professor, why don't we start out talking about what you see right now. randy, i'm guessing you're glad you're not sitting at the fed right now, trying to make sense of what to do today. >> i think this is one of the most challenging decisions they've had since i left the

fed. very reasonable people have very different views. sometimes people who have extreme views and we know they're going to disagree. i think the reasonable center will be talk about whether we need to twist again or not. >> in the case of that confusion, do you think bernanke's gut will tell him to stand pat and see what the next data steps will tell him or will he be pushed toward moving? >> i think he feels there's a foundation for doing something, or at least continuing the twist a bit and so i think he'll probably do something, what i usually would call an open-mouth operation, talk about how the economy is facing a lot of challenges, continuing significant downside risks from europe and perhaps elsewhere. and so, what might make sense s to exchange twist a bit, because this is typically what's been done with the other programs, rather than just have them fall off a cliff. extend them a bit. that gives them a little more time to see where things are going. >> ira, that sounds like status quo, we're not going to end any

programs. how does the market react? >> it's housekeeping. i think if we do twist, i think risk assets, stocks and riskier bonds, probably sell off just a little bit. there is an expectation out there that the fed will do something. i think the markets also pricing in a little bit of the probability of qe2. we put that possibility at 10% or 15%, but i think the chairman will get significant push back from some members. and qe itself, if they do -- >> but qe2 -- >> so there's qe3 and then "twist 2.0" which ends up being two different thing. the market's response is much different. if they do quantitative easing, when you look at qe1 and qe2, fmoc will say that got the wrong kind of inflation going and we don't want to do that because that will hamper retail sales. talking about a single company's sales recently, imagine what happens if all of a sudden everyone's paying more for gas and food, are they going to go

out and buy premium products from that firm or go to the discounter, as joe suggested? >> you know, randy, there was a great story in the wall street journal's front page yesterday talking about how the fed is facing this dilemma of how they created all this liquidity but only people who don't need the money can get access to it. it's the people who don't have great credit scores and who would like to tap into these mortgage rates but can't get them from the banks because they don't qualify these days. how frustrated is the fed by that? what can they do? >> i think the fed is frustrated with it. you can see whenever chairman bernanke testifies he focuses a lot on the housing market. the fed sent a white paper up to congress at the beginning of the year saying, we've done about as much as we can do. it's now up to you, congress, to do other things. that arrived like a lead balloon. there wasn't much focus on that. what the fed can do is try to bring the spreads between treasuries and the mortgage rates down even further.

if they wanted to do so by buying more treasuries. but i don't think the spreads are particularly wide. we know the ten-year rate is down at pretty low level. so, it's really got to be on other policies to try to get the housing market moving. there's so many challenges in the housing market, different across the country. the fed, i think, has done almost all that it can possibly do and now it's up to others to try to work on that. >> if i may interject for a second. i think that the federal reserve probably will go in and buy mortgages and buy mortgage-back the securities to get the basis, the spread between mortgage-backed securities and treasuries a little lower. i think the signal aspect here is very important. if they do additional quantitative -- do additional twist or quantitative easing, i think the signal there is that to banks and other lenders is that, hey, interest rates will be here even longer than you thought. >> taking money out? >> basically, the spread between what we call the primary/second rate. the rate between mortgage-backed

securities and where you and i can get a mortgage is still actually pretty wide. we need to get that down. i think one of the reasons why some lenders are reluctant to do that is they're worried six months or a year from now rates will be a little higher and, therefore, you know, why -- you know, to hedge myself, i'm going to keep that primary/secondary spread wider. one of the signaling aspects can actually be helpful. >> how do they signal we're japan and rates are never going up, so loan the money? >> they've almost done that already. >> randy, i mean, that's a quandary for the fed. you can create liquidity but you can't make banks loan it to people who would, in turn, turn around and buy a house. >> sure. one -- remember, this is kind of a funny conversation given that a few years ago the complaint was that too many people who really wouldn't be able to afford to repay were getting mortgages. so, perhaps, we've come a little too far back. we had to make some adjustment. >> you had to make an adjustment. the pendulum had to swing. >> for sure. we're making loans on a much more sound basis, perhaps too

much of a sound basis, because it is difficult to get those loans. that has to come more from broader economic stability. the fed can be very helpful in that but it's not the only game in town. we have a few issues on the fiscal side and a few uncertainties from europe but i think you're still making some lenders wary, and with good reason. >> it's great to see you today. appreciate it. >> if you have comments or questions about anything that you've seen or heard on "squawk" e-mail us. coming up, the shipping indicator. what's inside the world's cargo containers and what it tells us about the state of the global economy. that's next. blackrock's global head of fixed income, peter fisher, what he expects to hear from the fed. first, sports news. roger goodell and senator durbin will hold a news conference this afternoon. they'll talk about bounties in professional football and coaches. yeah, bounties like the new orleans saints.

they were -- it's not a great story for hard hits getting bounty. they were suspended, a couple of saints after the league accused the team of awarding cash for big hits. goodell and durbin are expected to discuss possible reforms to prevent bounty systems in the future. optionsxpress, where you can trade your favorite products,

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back.'re the we're back. the shipping industry has had its fair share of economic headwinds but the strength of the lng market has been a big source of both short-term and long-term strength for our next

guest, peter everenson, ceo of tnc t.k. corporation. we promo'd this saying you know what's inside all the cargo. a lot of liquid natural gas these days. give us the state of the world in terms of lng right now, given how much you're moving around the world. >> well, actually, the amount of oil isn't really growing very much. up to 1% a year. but it will really be the golden age of gas because natural gas will grow 2% a year but lng will grow 4.5%. you'll find lng, 9% of the natural gas market, will grow to 15% over time. that's because the problem with gas was it's very hard to store. when you make it very cold, it's a liquid. it's at one atmosphere. therefore, we can ship it all around the world. that's what's happening. >> talk about sort of the

import/export around the u.s. in terms of lng. >> if you look at our last new building, it was -- it was four lng carriers from angola. they were supposed to bring gas to pascagoula, mississippi, but we're not going to import any lng to the united states anymore. instead it's going to asia. it would have taken seven ships in order to go between angola and mississippi. but now it will take 12 to go out to china -- >> yeah, so on a percentage basis, how much more are we going to be exporting? >> i think we're going to be exporting a lot of gas. the real story is 2015 going on. we have about 98 lick we faction plants around the world but 19 are on the drawing board. you won't get a lot of gas coming out of australia, coming out of norway, coming out of the arctic, when you were talking about climate change. that's going to be a big change. >> what does that do in terms of your plans, capital expenditures? >> it means we're investing a

lot of money. in the last year since i took over as ceo we agreed to invest $3 billion. we have a new floating production plan, a $1 billion fspo. when you see how big they are, one of our fpsos can produce 140,000 barrels of oil a day. just to put that in context, that's the entire daily production of wyoming. so, you can see just how much deep water fspos, why international companies are going there. we're a big play on this build out of energy infrastructure. >> you said recently i'm a person who believes the u.s. has an energy policy but it's being made by business, not government. >> absolutely. >> if you were government, what should the policy be? >> they should let business go ahead and get on with it. by the way, business is getting on with it. if we look at our tanker franchise, we're bringing less oil into the u.s. domestic production is rising and all of that oil is instead going to asia. the energy policy is already the

high oil prices are having their effect. it's the end of cheap oil. what we're seeing is we can develop oil all around the world because oil at 60, $70, $80 -- brent is what i'm talking about here -- will force deep water production. >> charlie monger and others have suggested we shouldn't worry about what's happening in saudi arabia as much as we should focus on our own natural resources. if that becomes the case where we're looking at all the natural gas we have and policy in washington decide we shouldn't be exporting, it we should be saving it for ours, what does that mean? >> that will mean lower gas prices here in the united states. but the problem will be, it will be lower than what you need to develop the gas. in a weird way, we won't have enough jobs because the price will be too low. it's really a strange -- >> what's the optimal price? >> well, look in australia. the price to develop lng in australia is $10. here the price is $2.50.

the price of lng in the uk is $8. because it's oil-linkedin asia, the price is $16 to $18 a cubic foot. that's why we all want to export. and it just makes good sense. >> peter, thank you for being here this morning. appreciate it very, very much. when we come back, we'll take you inside a cnbc town hall featuring americans getting back to business. coming up at the top of the hour, we'll welcome "squawk fan favorite," jack welsh tells us how he would fix everything from washington. concrete. and steel. our cloud is the smartest brains combating the latest security threats. it spans oceans, stretches continents. and is scalable as far as the mind can see. our cloud is the cloud other clouds look up to.

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welcome back. tonight, "getting back to business." brian sullivan is here with us. >> first ever "squawk box" appearance. and he's giving me the business about my ears. >> do you know why i said that, though? >> was it out of love? you got to deal with this every day? >> i think you're so egocentric you don't even know what i said when i showed you those pictures. >> i'll explain it to you after. there's some good stuff in there. but you've got this great event.

>> it really turned out so much better than we thought. we have five panelists, a couple hundred people in the audience, they're firing questions at the panelists, kevin o'leary sold his business for 3d billion, real world advice for people who are struggling, want to be entrepreneurs. i believe we have a sound clip. instead of me yapping about it, why doesnn't we toss to a clip. >> how much easier is it to be on the offensive because the big guys clamp done, get nervous and that's when the small business owner and entrepreneur -- >> when the big companies are playing defense because of the economy, worrying about making their quarterly result, reluctant to invest, that's when the young entrepreneurial companies play offense and capture markets that otherwise

wouldn't be there. that's the story of america, is america taking risks. we didn't become the leading economy by accident, it was the work of entrepreneurs and entire industries and that's what's driven us to become the world's entrepreneurial nation. >> this is a global competition we're in now. it's not just about america. it's about competing with everybody. we have to be just as good as they are, just as competitive. that's the challenge. weep should face that and deal with it now. >> so this sounds great. steve case, we talk to him pretty often on "squawk box," too. he has some serious ideas. he tries to work with both sides of the aisle to find this entrepreneurial spirit. >> it takes guts, it takes credit, it takes an idea. we talk about how to get all that stuff. you may have the best idea in the world, andrew, but if you don't have credit, you're not

going to go anywhere. it gets tough and heated. we scrap a little bit. >> biggest single issue that comes out it have? >> credit. with a side order of regulation. >> they can't get credit -- >> i don't want to give it away. >> it this was a big story yesterday. >> in our special we have a guy that had credit, has a profitable, growing company and the credit was yanked. he's like i'm free cash flow positive, i'm making money and growing, why should this happen to me? >> randy, the former fed government said we needed more stringent guidelines but perhaps the pendulum has swung too far in the other direction.

>> regulation is a big issue pip know you're never a critic of red tape. >> no. >> as of today, right now, folks -- >> can i just show you one thing? if you've watched "squawk box" over the years -- >> from the very beginning. >>we play a lot of yoko ono when we play the animal orchestra. she tried her hand at music. the great thing is you watch her husband, john, and he was like back there going, she's my girl friend, i got to do, this i think this really sucks and it went on and on. she's an artist. so i don't know whether you can see this, this is her exhibition in a

done muselondon museum. it's three piles of dirt and it's called "to the light" and it implies world peace. she has had some other art -- >> it's something. >> there was another piece of art she had where you had to climb up on a ladder to see it and it was on the ceiling and the word "yes" was inscribed. >> and a great band, yes, by the way. >> because we need to come up