>> good morning, everyone. welcome to "squawkbox" on cnbc. i'm becky quick. our guest host this hour is miles nadal. he's the ceo of advertising giant nbc partners. we're going to talk with him about the ad indicator in just a minute. it's a unique way to try to evaluate the global economy. the other news makers this morning, former ubs chairman robert wolf and we have dan ammann. we have tom hoenig. here on "squawk" we get his thoughts on how he differs slightly from how he sees things from sandy wild. of course, it's not just business and politics this morning. we have the yankees marx teixeira joining us to talk business and baseball.

that's coming up at 6:50 eastern time a lot of headliners here this morning. much more to get to. before we do, let's get up to speed on the top headlines. the ecb is meeting in frankfurt today. last week mario draghi promised to do whatever it takes to save the euro. he said it could result in the market punishing the euro zone. this is the big news of the morning. we get it at 7:45. later in the 8:00 hour is actual comments. this is huge today. among the news being reconsidered, reactivating the bond buying program for spain and italy in tandem with the euro zone rescue funds. we will bring you that decision at 7:45 eastern time. the highlights of draghi's news conference at 8:30. the bank of england is meeting today. policy makers will stick with the current stimulus plan for now while assessing the impacts of other recent actions. they say more stimulus later this year seems like a done

deal. on the u.s. economic agenda this morning, weekly jobless claims for the market. we get fashgta afactory orders. they rose to 370,000. right now let's get more on the morning's corporate buzz and for that back over to andrew. >> the nation's resalers report sales today. costco was one of the first out of the gate and comps rose better than expected 5%. also hedge fund titan -- you know this guy? this is huge. he's going to be returning $2 billion in investors shrinking his flag ship portfolio by one quarter. in a letter he's suggesting that global market conditions make it tougher to trade huge amounts of money and that's a very, very big decision. we talk about it. we wait to hear from knight capital today. the technology breakdown at the trading firm of the different stocks that happened yesterday. you heard a lot about it on the network. the problems could undermine

fragile investor confidence in the stability of the markets. heavy computer based trading causing a rush of orders for dozens of stocks. they cancel trades in six volatile issues. knight told clients to send orders elsewhere, joe. >> there's a time where the sentiment about wall street is so negative and people are so untrustworthy that it couldn't go anywhere. >> there's a point where you can't get any worse. >> i think people feel a little worse. >> after this? >> death by a thousand cups. >> we know that most of the trading still done is done by big institutions. we've lost half the volume of new investors and what's left is mostly institutions. you saw bill gross talking about buy and hold. do you think congress -- it's like something happened in congress. this could hurt congress's approval rating at this point. how could it get any worse? >> off a fiscal cliff.

that would make it worse. maybe it drops from 12. >> miles nadal is here. >> it's like whether -- what if bond rates get cut in half. does it matter at this point from 1.4%? >> i think actually i asked a bunch of hedge fund guys yesterday, and they are marginally, marginally more confident. >> a little bit more because it's together. >> it's been so bad for so long, that people are starting to see. there's been some amounts of formation positive. housing. first july was positive. >> i think the whole -- >> i think also -- i'll tell you one statistic that was interesting. one guy that has a fund of hedge funds in credit, 90% cash. >> we saw louis bacon getting out of the market. if you're a retail investors -- we say there's no more anymonth more. to to the extent you believe in

the future to come back, and we want the economy to build, i think that's the ultimate cost. >> i mean after the first flash crash after then the bats and then after last bupt not least facebook. what does scare me now about it, is facebook still -- i've seen things saying that this will be the -- this version of the internet bubble bursting, that social media is bursting right now. have seen these negative prognostications talking about that the real -- what happened four years ago is just a warm-up for what's going to happen after europe really implodes. i saw things like -- i think maybe peter has the similar feeling. i don't know which one of them, but talking about unemployment above 25% and stock market down 90%. >> when you say stuff like that, don't you think this is the type of thing you need to say before the markets come back?

>> yeah. >> i think so , too. >> i didn't buy gold. you buy the gun with the gold or steal the gold with the gun. one or the other. you got any gold? >> no, no. >> do you have a gun? >> no, i'm canadian, and you're not allowed to have a gun in canada. we don't have guns. there's no nra. >> you can't have a specialist early as far as a doctor goes either, right? a lot of things you can't get up there. >> last time we were here, we talked about facebook going public. i said there's a distinction between the business of social media and facebook and its valuation. i just think the straulgs was completely misread relative to the expectations of a sustainable profitable growth rate. i still think they have a very good business. i didn't think they had $100 billion valuation business. if you understand the concept of the second derivative chshgs the

rate of change, they couldn't justify that valuation based upon increasing growth on a quarter-to-quarter basis. >> now they have a 446? >> they have about a $50 billion valuation. >> i thought about 45 billion down again. it was 49 yesterday i thought, wasn't it if? >> it was about 44. >> it was 44.6 now that it's down to 20.88. there are other stocks moves or expected to move today. teen clothing retailer abercrombie & fitch warnings that second quarter earnings are about half of what wall street was expecting. same store sales fell 10% during the quarter. retailer is planning to cut back on store openings. that's unfortunate. see, i guess we don't do business anymore, but we have 34 at the top. you can see where that's indicated. it's down at about 28. so, you know, if we're not doing the business there, you have to

look on the right and do the math for yourself. on the left it's between 27 and 30. >> we'll do the math for the futures for you. >> weight watchers reporting better than expected second quarter earnings, but the company slashing its full year's forecast after sales were hurt by the drop in the number of people attending meetings. >> you're fat. >> do you have those cards? >> i don't have anything with weight watchers. i can't imagine going to a meeting. do you have to say, hi, my name is joe, and i'm a recovering fat pers? what do you do at those meetings? are there 12 steps? >> no. you get points. there's a points system. >> have you ever been to an aa meeting or visited one? >> no. >> i have. i went as a sponsor for not an -- not an aa sponsor but with people to watch. everybody holds hands and it works for people. it's changed this world, this one guy. >> the weight watchers concept,

their online activity is growing. because any don't want the social interaction and fear of embarrassment, you can do it online. their online business is growing. >> you have to accept a higher power. unfortunately my pepperoni pizza is my higher power, which is what the problem is. you want to go to the global markets report? >> not necessarily. if you'd like to, we could. >> i think you need to. >> has kelly covered the business angles, because she wasn't that interested in the olympics other than from the business perspective. >> to the land of the olympics we go. our good friend kelly evans and standing by with more. tell us about the business of the olympics, if not the markets, kelly. >> okay. first of all, the olympics is very exciting. it is wonderful to be here in london for it. the business aspects of it, we look at every dirchgt angle of this from how the wealthy get to the games to the safety of food.

i will mention that muriel rabini said it felt like a recession around here because the streets are so empty. we fauk about what a ghost town it is. i'm not doing it front of the wall like usual, because we have a special go going on right now which we have here in europe programming because we're awaiting the rate decisions from the bank of england and european central bank. it's not just us. the world's eyes are on their institutions as we see if mario draghi can actually deliver on his promise this morning. markets broadly speaking we see in the green, the ftse 100 up about 2%, and the ibex 35 is up until 1%. we saw these gains add add a little bit this morning. this might have something to do with the peoples bank of china and comments about what it will do and further things to support

the chinese economy but not coming out with action. the investors trying to digest whether that means there's move from them today. there's increasing spec they may join, but they may join the move the fed started yesterday, which is to keep things on the sidelines for now. last point before i hand it back, spain is paying more to borrow at an auction of ten-year debt. it's now paying 6.65%. it's up from 6.4% in the auction just about a month ago. not a huge shocker there. spanish yields below that 7% level today and we'll see if they can stay there. back to you guys. >> thanks. our guest host this morning we introduced him we do it again. mr. advertising miles nadal is the ceo of the partners. they have a combined ad budget and they're some of the major sponsors of the london olympics. what are you doing here? if you're big pub ba is supposed to be over there right now. >> i'd like a large samsung hd

3d olympics to watch the olympics. >> can we talk facebook. how much of a disaster is this truly. fidelity is getting out of a huge position, probably it looks like at a loss. having said that, they got into the private markets also. there's two things going on here, so it's possible that their original basis when you average it altogether is lower. but the thing looks not -- as a stock not so great, but i wonder as a business, since you are on the flipside of providing them revenue, what you think ultimately -- how big the business really is. >> let's go to joe's point earlier, what's happen inning social media. let's tie it to the olympics. prote procter & gamble in the seoul olympics 10% from marketing was from social media. this year, four years later, 50% of the number of impressions they have is from social media.

so is social media growing? absolutely. is it a bubble? no, it's not. our valuations of stocks that represent social media have they be impaired? absolutely. the zinga story is a sad one about stock. think about it like this. they were pricing -- what were at the pricing facebook at? 65 times ebita. that was never a realistic valuation that was sustainable over a period of time predicated on the fundamentals. >> in hindsight they could sell the stock there. what do you mean it wasn't sustainable. someone thought it was sustainable. >> there was so much hype that everybody wanted a piece of it. it was like peter lynch said, you should invest in things you know. >> it's unbelievable we could see it happen in '99 and every time we talked about it with facebook, we heard, no, no, no. do you remember how many times you said it. i'm with you. sdwloo do i think there's a

value at which it makes sense? yes. >> is it there now? >> if you could -- if you remember what lee cooperman said about the evaluation, if i buy google ten or 11 times or apple at 9 or 10 times, why am i buying facebook at 65 times? to if you think that the sustainable profitable growth rate over a long period of time is 50%, maybe it's worth, you know -- >> it takes me out two, three, four years and assume they're an eureka moment about what they can do with mobile or whatever. as a percentage of a marketing budget for a big company like p & g, how big a slice do you think it ever is? >> well, look, if you think about it, the global market is $650 billion for advertising. what's their ad revenue? 3 or 4 billion?

that's a half a percent of global spend. what's google's revenue? it's 10, 15 billion. so, you know, nobody is going to get a dominant share. right now social media by itself is only, you know, 5% of global spend. >> what does the ratings that nbc has seen tell you? i'm trying to figure out what that's telling me. i understand content for something like this gets more valuable every year. super bowl or whatever. i mean -- >> i thought it was brilliant. >> what happened? >> they sent $1.18 billion to get the rights. they anticipated to it lose 200 million. based upon ratings they think they break even. >> why? >> i think that it's more popular -- >> the only thing that people still aggregate to do. >> you're very smart. the only thing that people look to are these -- >> i think you're smart for saying i'm smart. >> why do you think i said it? >> you did call me joe, too.

all right. there are very few venues where people get mass exposure. the olympics is one and super bowl is another. 340 million funing into it. the academy awards, the music awards. there's only so many mass audience venues where you can get broad awareness. that's one of them. >> the more people complain about how it's covered. i saw this grousing on twitter. >> everybody is upset, the nbc failure on twitter. >> more people are talking about it. you have to watch it to know what you're complaining about, i think. >> that's such a small segment of who is actually watching. >> like the people that write in nasty e-mails. >> you know why people love the olympics? it appeals to families. >> that's true. >> except when the team is throwing a badminton game to get a different placement. that might not appeal so much to a family. >> the only other negative is because there's a five-hour time

difference and some of the things are taped -- >> you have to do it that way. >> it's working beautifully. >> you pay that much for content, you're going to be able to monetize or get back your investment. >> how many years does that work for? in four, five, six years are we watching on ipads and the family experience around the tv, when you think about how to market to people in the future? >> you need to have all medians of communication. nobody knows. is it going to be your mobile phone? is it going to be your tablet or tv or computer? it's probably going fob everything. what also has happened and it happened in the super bowl in a big way, there was so much activity that marketers used using social media and broadband content and marketing before, during and after the games. so it's not just the event of

the games itself. it's all the other active before, during and after that giving them exposure and also leading to initiatives to try and drive sales. >> we're going to continue this conversation. before we go real quick, have you seen a good mobile ad, one that's effective? >> there's lots of great ads with mebl applications. i think the domino stuff had unbelievable mobile apps. i think there's benten tons. nike has a lot of apps. apple has downloaded 25 billion, billion apps. so people are using them. it's growing probably 20% a year. i mean, it is incredible. the mobile application business is the biggest, fastest growing area of marketing advertising. >> we'll continue this conversation. thank you for being here. still to come on "squawkbox," a man they call tex.

the yankees first baseman joins us to tell us his new business venture. it's not easy to get the yankee mvp in the middle of a pennant race. the new york sports types love to have this interview. first, buy, sell or rent. i saw there was a star sighting in makeup. diana olickolick. she's here. what's going on? >> housing. we'll be fauk being it all day, and especially investors coming up. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 and with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime... tdd#: 1-800-345-2550 until i choose to focus on something else. tdd#: 1-800-345-2550 trade at charles schwab for $8.95 a trade. tdd#: 1-800-345-2550 open an account and trade up to

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we start on the low end, because this is where investors are the marnl players in foreclosures and steering steals and prices. d diane nan olick is here.

the foreclosure prices brought home prices and overall housing market crashing down. they're fueling the market and hungry investors looking for profit. from individuals at the courthouse steps to major investors, foreclosures are in high demand as rental radio weighed loom large. they fell for the lowest rate in over a decade this spring according to the u.s. census and asking rents are up over 5% from a year ago. the players are getting bigger, carrington, fortress, colony, blackstone, way point and land smith to name a few backed by billions. their demand has pushed supplies way down in markets like phoenix. in turn, pushing phoenix prices up over 11% fm a year ago. that has some already crying bubble. for others like small individual investors and first-time home buyers waiting at courthouse auctions, it means too much competition for too little

supply. >> i've seen a lot of single investors, and the competition is it pretty fierce. we're also looking in higher end areas. >> now, the biggest issue on the low end is supply. sounds crazy, right? the foreclosure is happens. it's keeping millions of delinquent loans in limbo. 3.6 million loans past dpu and 2.1 million homes in the foreclosure process. it's 5.7 million homes in some stage of trouble but not yet repo sesed from lender processes service. according to reality track, phoenix, las vegas and atlanta have seen the supply of bank-owned homes drop over the past year. what's actually listed for sale is even less. according to fannie mae just 22% of the foreclosures are lissed for sale on the market.

why? they're cautious dealing with tenants and former homeowners because we know about the lawsuits that have been happening. >> on the low end of the market sales are down 8% overall, but whether you go out west sales are actually down 36% because there's nothing to buy. guys. >> that's an important point to really why they're not signing. diana, good to see you. thanks for come sboog you the studio. coming up, mario draghi's challenge at the ecb. first mark teixeira, tweet us and let us know what you want to hear. his wrist is okay. he's picking up a bat on friday, tomorrow. our handle is @squawkcnbc. if there's a story about machines controlling stock trading and there's a terminator

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good morning. welcome back to "squawkbox" on cnbc.

as you can hear when we play this, it's got something to do with baseball, "put me in coach." he'll join us on set in 20 minutes. let's get up to speed on the top market headlines. number one, the ecb. finally this much-awaited meeting in frankfurt. last week mario draghi promised to do what it takes to save the euro. any signs that draghi overplayed or overpromised with that pledge could result in the markets punishing the euro zone. it would help the dollar. we did see a little bit of a rebound in the euro. among the options is reactivating the bond buying program for spain and italy in tandem with the euro zone's rescue funds. we bring the decision at 7:45 eastern, and then the highlights of the news conference which could be more important at 8:30. we are waiting to hear from knight capital today, a

technology breakdown although the trading firm roiling the prices of stocks yesterday. the problem could further undermine the already fragile investor confidence in the stability and really i guess even the level playing field that individuals have with computers. we have a rush of orders for dozens of stock. the nyse canceled trades in six volatile issues. knight had to tell clients to send orders elsewhere at one point yesterday. you can see again with that chart that most of the damage was done yet. it's rebounds a little today. it lost 30% or so yesterday. we focus on europe in morning as we said given the ecb meetings everyone is talking about. joining us from london is tom russo. he oversees 5 billion in assets under management. do you think initially we see anything substantive or do we need to listen closely to the

call afterwards, tom? >> well, i was surprised when draghi came out several days ago and said that the ec would do everything they could to support the euro. the market was completely aligned on a bearish euro trade, and over time, i think, the markets will recognize that there's some strength left in the euro. so i don't know what they'll say in the meeting. you can see how the market will react just three days ago when the euro strengthened sharply against the expectations it would continue downward. i'm focused on the companies, the companies that trade through europe and less on the currency. >> i guess the question is, just for the markets new jerk reaction on this, there were a lot of people that said last week, okay. we hear his words. now he has to show us the money and do something in terms of real action. i guess, do you expect him to do something like start buying bonds today and if he doesn't

what will the market reaction be? >> boy, i don't have any idea at all. it's a complicated process. the euro will find its own. i think germany still has an economic interest in keeping it together, and they're the core country to bank on. but it's a puzzle. as an investor in equities, we're exposed to this question. really, the european companies it that we own are so global that the euro becomes a rather secondary issue than the dprogr in their businesses and ability to stref in foreign markets away from europe where they receive stronger currency earnings over decades to come. that's what we're focused on. >> tom, it's miles liddell. there's been a flight to quality. what have you advised your clients in that respect in how to shift your investment themes in either categories or asset

classes as a result of what's transpired in europe? >> we've really stayed the course. my goal is to find businesses that can invest against their consumer brands with the free cash flow for mature markets like europe and the united states. to take the cash flow and develop the consumer brands in developing emerging markets, china, india, vietnam, et cetera. i concentrate on food companies, in which case you see nestles. very sizable holding and unilever is part of that. we focus the on the beverage industry and have sizable positions in the brewing industry around the world. heineken, sab miller, abi, anheuser-busch and the spirits history. all of these companies have storied european brands that have appeal around the world and

the companies are busily at work investing behind the capacity to serve the needs as the parts of the world grow in domestic product and consumer disposable income. that's the business we're involved with. it hasn't changed for a long time. >> have you changed since brazil, russia, india examine china's growth rates have declined recently? has that changed your philosophy about investing and where you go from here? >> no. i think the penetration in those markets remain so low that over a long period of time we have enormous white space to invest in. actually, the great news in the downturn is that those companies that maintain a long-term ambition are able to invest better in those markets as their competitors flee. nestle bought pfizer's infant nutrition business. they acquired -- which has a large business in china. they acquired a chinese confectionary company and beverage company, and they did it over the past 12 months when

the rest of the world was fleeing china for fear of the slowdown in housing and the government balance issues. nestle is making great commercial headway in that market during the downturn. >> all right. >> it seems true in other markets by other companies. >> thanks. we appreciate it. good huck. see you. >> thank you very much. >> if you have any comments or questions about anything you see here on "squawk" this morning, e-mail us as squawk@cnbc.com. our guest host has given us the ad cater. up next we talk cars and consumer confidence with autonation's ceo mike jackson. a sports legend is in the house. mark teixeira stepping up to the "squawk" plate to talk baseball and business. we'll talk about how his new business venture changes how people watch sports. born with. something

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if you want to see a bright spot in the u.s. economy, we have one right here. we have a 14% jump in new vehicle sales. it sounds like good numbers when you talk about pickup trucks. that's a good sign for the economy overall, krek? >> yes, absolutely. automotive remains a bright spot in this rather anemic economic recovery in the u.s., and autonation is a bright spot in the auto industry.

our 14% increase in sales that we had two fewer selling days in july compared to a year ago. if you do on a daily selling basis, we're up 24%, and the resurgence the japanese and recovery of the japanese led the way with an increase of 26% with particularly strong performance of honda up almost 40%. as far as pickup trucks, we're up a solid 10%. you know, the pickup truck market peaked at about 3 million units a year for the industry with the economic crash. they declined to just over 1 million units, so pickup trucks really took the hardest hit. but that's pushed out the average age of pickup trucks to 13 years, believe it or not. with the signs of a housing recovery, i think we're going to see a significant recovery in pickup truck sales over the next 12 to 18 months. >> go ahead, miles. >> mike, chrysler had terrific

numbers, bmw had very good numbers, toyota had superb numbers. do you see -- but gm had weak numbers. do you see a trend arising about who are the biggest winners of the upswing in automotive relative to the other competitors? >> i think comparesoisons with t year are difficult in that the japanese were dramatically supply con strictkconstricted. domestics were particularly strong there, and you have a rebalance this year with the japanese back in the game. so i see this strategic shift of share of multiple decades from the domestics to the asians as basically coming to a stop after rebalancing this year because of what happened last year with the earthquake. i see the domestics in the

mid-40s, the asians in the mid-40s with the europeans taking the balance. there's no question there's a renaissance in the domestic automobile business both with their business model and with their products. they're solidly in the game. with their core strength being pickup trucks and that market as i already said coming back over the next couple of years, i think the domestics are really in the game and will be very profitable and will be right in the mid-40s on market share. >> what's the hybrid story right now given what's going on with the price of gas? >> i would describe it like this, andrew. the price of gas pretty much determines the type of vehicles people buy. above $4 a gallon towards $5 a gallon, people freak out and downsize dramatically. $2 a gallon, they don't really care. where we are at the moment in the mid-3s, they are very

sensitive to fuel efficienceffi. we have a new proposition for the consumer today that we never had before, and they're buying into it. you don't have to trade off size and speed. we now offer mainstream technology that will give you a 20%, 25% boost in fuel economy. >> the margin on -- >> that's not hybrids, that's not electric that i'm talking about. that's the 95% of the market where we have this big improvement in fuel efficiency. hybrids are still 3.5% of the market including electrics. they're a very small part of the market. >> mike, always great talking to you. thank you for your time this morning. >> great seeing you this morning. thank you. >> coming up, we see plenty of ceos and celebrities and politicians every morning on "squawk." the green room is busier than norm a. every yanks fan in the building has made a visit today because mark teixeira is here.

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during the golden opportunity sales event, get great values on some of our newest models. this is the pursuit of perfection. >> listen up, sports enthusiasts. a new mobile app will allow you to yap about your favorite sports. mark text tear ya. we have to talk a little bit about the yankees. how is the wrist? you're back friday? >> i hope so. i'm going to the stadium after i'm done here and doing some treatment and work out and hopefully be xwogood for tomorr. >> what happened in july? how does that happen to a player. i look at you and you said he's just unbelievable physical

specimen. he looks like a big kid to me. you would do this if you didn't get paid, i think, although you're paid very well. you look like a big kid that loves to play and love what he's doing. >> i still feel like i'm 21. i talk it had to miles and he gave me a few tips. he got me on a hot streak. >> you don't know what happened. what happened to jeter this year? >> it just happens. >> did you think at the low spots that jeter that his best days were behind, or did you know? >> sports fans, when you see a guy at his best, whether it's jeter or michael jordan and everybody, you remember him at his best and if he has a couple bad weeks or months, he's done. derek jeter will be done when he says i'm out of the game. >> i saw a-rod. he's looking good. he's in a suit. i don't know which starlet, i don't know what's going on. >> he's doing already. he's a couple more weeks. he had a broken hand which is

tougher to come back from than other injuries because kwlurnds are everything. as i can tell you, i got a banked up wrist, but your hands hitter. it will take a few weeks. >> fitness is a big thing for you. do you think your recovery is shorter as a result? >> i heal well. i get a lot of sleep, drink a lot of water, eat well. >> all the things we're not doing. >> exactly. >> i take care of my body so if i get injured, i can come back quicker. >> i noticed and i was doing a little homework. you know i'm a reds fan. i'm a mid westerner that loves to hate the yankees because of your success. >> yeah. >> you remember 1978. that wasn't a great year for you. >> i wasn't born yet. >> let me tell you what happened. do you think the reds will be -- who do you worry about in the league? >> absolutely. in the american league, there's a lot of great teams. the rangers, angels. we have two or three teams in

our division that can win it all. in national league the team that gets hot will win. the reds with their pitching, once they get votto back. >> you would never say that either. >> this year you can. >> i know. >> that's a hitter's ballpark. tough park to pitch in. >> why? >> it's short everywhere and the ball flies out of there. >> great park. >> we have a short right field porch. every one of theirs is short. >> we talked about social media. miles says the stocks can get overvalued and maybe the prices are out of line, but it's not going anywhere. i look at what you're doing. it was a good idea. >> great idea. >> how does it work? you're sitting there. any sports fan watching can basically tweet three -- i use it as a verb. you can tweet 300 characters and talk to your friends about the sports game. >> i called it a yap, not a tweet.

when i tell friends about sports yapper it's a global platform to connect. it's global and local as well. when i'm watching a georgia tech football game and i get on twitter and start talking georgia tech football my 180,000 yankee fans say, mark, we don't care. stop talking about georgia tech football and they stop following me styles. sports yapper is a platform where you can be yourself. be a sports fan in all your true colors and connect with people all over the world. >> are sports fans nerdy enough for social media? >> it is so easy. >> this is perfect for you. you're not doing the sports yapping. you know how it works. >> i might. i could. if i was into, like, a certain thing, i might. >> it's 300 characters instead of 140. >> think the 300 characters

allows people to have a more elaborate dialogue about that. you'd be surprised how passionate a broad spectrum of very sophisticated people are and how passionate they are about sports. >> think of fantasy baseball. think of the minutae. if you combine nerdiness and sports love it will be huge. >> i think about facebook and other applications. you have to learn how to use them. when you get up in the morning what do you say? i'm going to see if the yankees won. open up the box score. yapping is the most natural thing for sports fans to do. >> what is someone who yaps called? >> a yapper. >> with a tweet you're a -- twit? >> tweeter. >> oh, a tweeter. not a twit. >> how many people behind this company? >> it's five partners. kenny victor, a friend of ours. eric goldstein, dave grossman, brian perkins of johnson &

johnson, the cmo for many, many years. he's running the marketing. spl it's a great team. >> it's an app with a high rating. >> four and a half out of five stars. >> on i -- what? >> iphone. >> think about this conversation. we have gone from the yankees. now we are talking to him about technology and social media. he's unbelievable. what did you see in this that you said, i think this is going to be a good business? >> this business is my life, just one step forward. every day i talk to fans and talk to the regular media about the yankees. in the off season i watch golf -- >> "squawk box". >> right. this is my life put into a business. >> there are a lot of players, mark, who have really strong

roots in business. i have talked to a-rod about his businesses that he has with real estate. is this preparing for life after baseball, too? >> absolutely. players have a responsibility to take care of themselves while they play but also after a they are done. we'll all be ex-players a lot longer than we'll be active. i hate to see guys that amassed, you know, small fortunes while they play only to lose it within three, four years because of bad investments or bad decisions. we all have a responsibility to take care of our families after we're done playing. >> and your charitable work is amazing, too. >> fabulous. >> talk about it. >> miles has been such a big supporter of harlem rbi. uh i introduced miles to the group that raises $13 million to $15 million a year. >> no way. a year? >> a year. serving over 1200 kids in east harlem. miles was the honoree this year

at the big gala. we raised $3 million which was a record and we are finishing off a $20 million capital campaign to build a new home for harlem rbi and charter school. >> you can't believe how incredible it is to see. they have 100% graduation rate. >> in an area of east harlem where 50% of the kids drop out. it's a tough statistic, but the kids at harlem rbi. >> www harlemrbi.org. >> go to dream team. that's my arm of it. we're having fun raising money for them. >> he's really active in it. it's not just his face. >> it's great you're a friend of the show. good luck tomorrow. hope everything works out. i'll give you tips on how to handle the reds. not the right tips. thanks for being here. >> thank you. >> and, miles, thank you. >> pleasure to be here.

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good morning, everyone. welcome back. i'm becky quick along with joe kerr nanne and andrew ross sorkin. we have been watching the futures. you do see the futures higher this morning, up by 45 points for if dow. s&p futures also higher. we have breaking news. >> the bank of england just out with the latest rate decision. it left the key rate unchanged at .5%. coming up at 7:45 eastern the ecb will have its decision on interest rates and policy. at 8:30 eastern mario draghi will hold a news conference we'll monitor to bring you developments in europe, updates throughout the show on what we

hear from draghi. >> the policy stuff matters. the interest rate will be nothing, i can imagine. >> it's the policy stuff if they are buying bonds. it's a busy morning. also in the headlines we have the labor department out with the weekly report on initial jobless claims. that comes at 8:30 eastern time ahead of the july employment report tomorrow. retailers are set to report july same store sales throughout the morning. costco has reported a better than expected 5% sales increase. and we are expecting to hear more from knight capital on trading goods that impacted trading on 140 of the big board stocks yesterday. it's got us talking about rise of the machines again and questions about what it means. >> hunter killers. >> with the latest fed meeting in the books the focus overseas. we heard from the bank of england. at 7:45 a.m. it will be the eastern centurile tral bank's turn. steve liesman joins us.

what do you think about hillsenrath. >> don't ask me. let's talk about today. looking at whether mario draghi translates strong words into action. his comments last week that different government bond rates in the euro zone were an issue. effectively verbal intervention and we are looking to see if he backs it up with actual action or firm promises by the ecb. oppositi opposition. a very important voice. let's look at two views of the ecb's job. the important draghi comment last week heard around the world. to the extent that the size of the sovereign premia hamper the functioning of the monetary policy transmission channels they come within our mandate. so different interest rates across the euro zone is something the ecb should deal with. this week bundes bank said the following, monetary policy

should focus on the mandate to preserve price stability. despite the disagreements investors expect the ecb to act. 89% see additional sovereign bonds in next six months. it could cut the refinancing rate or the deposit rate to zero. 66% think the ecb will launch another long-term repo opposition. with the duel mandates the fed doesn't have that quandary. it's now stalling for time. it cropped a sentence into the statement that it will monitor economic developments leading many to believe it would act in september or even between meetings if required. dan greenhouse saying the fed is clearly on a knife's edge with respect to providing additional stimulus. why wait? well with, there are two jobs reports before september. is the economy bottoming or accelerating to the bottom? the momentum important for bernanke. he'll want to build a case.

there is skepticism about what good any fed action would do and create consensus. that's what made jackson hole important. >> he used that to roll out big things in the past. >> he said in august before qe-2 it was an august thing. then september, october, november. jobs, jobs, jobs from here. jobs claims today will be important. it's the first clean one we have with had. everybody threw out last week's 350 because it was bounced back with the auto plant closures. it's jobs on friday and it's jobs again in early september when we get the august numbers. those are the keys to fed action. it's not in stone. they could still not act. they could act between meetings. that's where we are now. there is no other reality. what was your question? >> part of it you can see what the ecb will do today, too. >> huge. >> some people said they won't do anything. they want to see what the ecb offers. in the wall street journal piece there is a line i want to run by

and see if you run with it. translation, the fed will move if growth and employment don't pick up on their own. is that where we stand or things have to get worse? >> i think you raise a great question. i don't know. does it have to get worse from here or is where we are now enough to prompt the fed to act? i do think we are in between. i don't think it's bad enough now. what's happened now is the q-2 number which was 1.5% gets revised up two ticks. all things being equal. 1.7, on track for 1.9. watch the unemployment rate. >> did you see vince ryan hart on yesterday? >> i did. >> he said they'll be hesitant to do anything before the election. >> i don't agree. >> the supreme court wasn't supposed to listen to public opinion either. you could see it happening there. >> i don't think that's true. >> you think they are just completely immune to anyype of

perception? >> it matters to them. i don't think it's going to be an argument, joe. >> you saw what happened to bush one. >> dpreen span. >> he still holds it against greenspan. >> the economy wasn't as bad. >> you didn't know it at the time. you never find out anything until a year and a half later. >> right. i think the fed, if it does act, it will be obvious it needs to act. that's the answer to becky's question. >> you don't think bernanke is influenced by the perception that he'd be a little bitle call animal? >> i don't. >> what was your interpretation of the article? >> today? >> yeah. that he's still pushing. >> hillsenrath? >> yeah. what's that about? >> i'm in a difficult position. let me politely say we had the fed right. i don't think john had it wrong. i think there was an impression that john had it wrong that was based upon the story he wrote

earlier and how it was released. >> i'm so confused. >> there was a story last week. >> say what you're trying to say. >> there was a story released at 10:04 as a news alert that gave people the idea that he was channelling the fed, that it was going to act. >> this time. >> that's not what my reporting had led me to believe. then the new york times followed the wall street journal on the story. >> so the next morning both papers -- >> many people think -- >> expect something. >> if you read john's story carefully it really didn't say they were going to act. it gave an impression. i'm not sure john is responsible for something being released as a news alert. >> this story is a continuation -- >> i think the story is more strident than many on the street believe. >> it's on the front page of the paper. >> the tone of the article closely monitor means they are closer to easing. >> okay. >> and i think the key is that

they could also act between meetings but the data has to get worse is my interpretation. >> mark grant sent me an e-mail. he's been watching the ecb very closely. he says that this conversation, this statement that the ecb is putting out at 7:45. that's less than 40 minutes from now. is going to be a defining moment in his estimation that draghi's reputation is about to be put squarely on the line. now we see what it means to do everything to save the euro. do you agree? >> i agree with that. this is a milestone moment in many ways. first, understanding how deliberate draghi is at communicating with markets. did he mean to send a signal last week in terms of raising market expectations? >> the market sure ran with it. >> the market is wound tightly. it's wound more tightly to the ecb than the fed now. that's important. very important for him now to step up.

think about what we have had here. verbal intervention from both central banks. my take is one central bank has credibility on the verbal intervention. bernanke has acted in the past when he said those words. i'm not sure the market understands draghi the same way. >> you're not sure he's going to act. >> i'm not sure. i did get mixed signals from the bundesbank and i am among those in europe who do not fully understand the dynamic between bundesbank and draghi. if they are saying, i put up the quotes of the mandate. they say price stability mandate and the ecb is saying sovereign risk man date. two different views. >> which is why this is huge. we'll have you back again to talk more about it again. this is a huge decision today. that's looming. 7:45 is when we hear from the ecb. when we come back, former top executive at ubs robert wolf will be talking about breaking up the big banks and his former firm's big loss on facebook. in the next half hour, house

majority leader eric cantor on the ongoing tax continue server. and the cfo of gm. we'll be right back in two minutes. >> announcer: comments, questions? send them to @squawk cnbc on twitter. follow the show and look for updates from andrew, becky, joe and the squawk staff. "squawk box" on cnbc and on twitter. no problem. you want to save money on rv insurance? no problem. you want to save money on motorcycle insurance? no problem. you want to find a place to park all these things? fuggedaboud it. this is new york. hey little guy, wake up! aw, come off it mate! geico. saving people money on more than just car insurance. yeah, you -- you know, everything can cost upwards of...[ whistles ] i did not want to think about that.

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checking the futures right now. after really in anticipation of so many things today, including the ecb and the claims number and what's going to happen tomorrow. but we are up at this point a third of a point in percentage terms after a wild session yesterday. once again the hks, the rice of the machine we saw in the terminator movies once again took over. most of the trading and any solace the individual investor found since the last mess known as facebook quickly evaporated as of yesterday. and we're back wondering is the playing field fair at all this morning? you wonder why bill gross thinks buy and hold is dead and why we are all earning 1.3% on our money and happy to get it. >> we talked about this before. those are the type of things that make me feel this is a good

time. >> that's the wall of worry. the public gets in after a lot of times just at the end to hold the bag. this is not necessarily, but if you really have trouble trying to figure out how to make money, what is comcast up this year? >> 35%. >> 35. >> 35%. >> that was before yesterday. >> yeah. >> we have a guest to get to. he's known as the executive who has the perspective of k street, wall street, and main street, and the white house, too. robert wolf, ceo of 32 advisers, former chairman of ubs. we should congratulate you. this is a new role for you. you left ubs. >> yesterday was my last day. >> out immediately talking to the press. awesome. >> no, no. >> i know. >> but you're lean and mean, too. >> looking good. >> i have a few more pounds now.

>> we all do. >> my goal is to get back to college weight. >> you played football at penn? >> yeah, running back. >> you were number 32 which is why out's 32 advisers. >> exactly. but i don't have 32 advisers. >> nothing to do with o.j. >> i was told by my wife not to say it on set. we all grew up at the time when jimmy brown and o.j. were good players. >> we have to get through a ubs question. >> go ahead. >> front page of the new york times a month ago. >> uh-huh. >> talked about some of the things going on internally at ubs. you're a famous friend of obama. obama bundler. there were questions about -- not what was going on but worries in terms of your relationship with the president at a time when wall street wasn't that happy with the president. and then you have a new job. >> i turned 50 in march. i know you can't tell with the

makeup on. i talked to my family, my college roommates. it's something that's been in the making for a while. i'm happy we worked it out where they are actually my first client. it's exciting, amicable and i hoped to pitch and grow the term. >> you can't say anything bad about ubs. but broadly speaking, ubs now, we have the libor scandal. there is a lot going on in wall street. we talked about trust. we talked about the trading, libor, the whale, facebook. how do you think about this? >> listen, it's a dynamic industry. things are moving and shaking every day. right now there is a lot of focus on the negative. there is a lot of positive as well. >> is this the worst it's been? you have been on the street for a long time. >> it's been a tough four years. >> i used to say every fifth

year is lousy. i have not been able to use that pitch the last four years. >> is it deserved or not with the context that some peel would argue that president obama who you support. >> yes, i do. >> has created a little bit of this, if not a lot of it, of the rhetoric around the negativity on wall street? >> i don't buy that. we should be clear that the president, the dodd frank regulation. i was there the lehman weekend. we need regulation. not 5,000 or 10,000 pages. i sat there and you wrote a good book. the fact is we didn't have the tools that weekend. we need the tools. i would say things like a systemic regulator, derivative transparency, resolution authority. those things are critical for the future. >> what do you think about the rhetoric? to me, on my side of the table. i don't know how everyone else

feels. >> you know how i feel. pick an industry. >> it's even more than the pages on dodd frank. >> pick an industry. you're just on wall street. pick an industry. insurance. >> mm-hmm. >> oil, just go down the list of the industries that have been -- >> oh, come on. >> i don't agree with that. >> i think if you have made enough money that you should stop. >> are you going to let me answer the question? >> no. you need to hear what the question is. >> i was answering andrew's. i don't agree with that. when you have warren buffett on, go ask different questions. there are businesses that are growing extremely well. manufacturing, we should be clear. doing the best they have done since the 1990s. our exports are a country as a percent of gdp. the best it's done in decades. there is a lot of positive going

on. we should talk about the private sector, joe. that's what you like to bring up. we have created more jobs in the last two years than the bush administration has done in eight. we should just be clear -- >> the bush administration had the same unemployment rate as the clinton administration for the eight years. it was down in the fives. >> unemployment is one gauge. the average hour work week has gone up -- >> adding 3 million jobs when you lost 8 million, you're still down 5 million. we're at 8.2%. you can't sugar coat jobs now. >> the average hour work week has gone up almost two hours. that's two million job equivalents. 32.7 to 34.5. >> even the administration would probably say we haven't done enough and there is a lot left to do. >> i would say absolutely the pace of the growth is too slow.

we need to speed up. >> you don't feel a lot of solutions are more government-oriented than private sector oriented and that's the approach recently? are we at all tending to a european style? >> that's not the direction i believe. >> nothing about the redistribution is true? >> i think we should pass the middle class tax cuts for 98% of the country. if we all want to debate clarity, if you have a group that wants 100% to passing the tax cuts. >> you don't think they should extend all of them? >> you won't get that done. >> but you won't get that done either. >> you should be able to. >> you should be able to get the other done in a recession. >> same argument. >> i want to go in a different direction. >> can't get either done. >> what do you tell the president when you talk to him about the way your colleagues on wall street feel and how to deal

with it one way or another? >> with respect to -- >> with respect to this sentiment that joe espouses or so many guests -- >> so many ceos, business people. you have friends in the business. you don't have to fend off the attacks? >> for every person you mentioned that doesn't like his rhetoric i can give you a person that likes the direction the country is going which is why we are 50/50. mention donald trump and i'll mention warren buffett. you can mention someone and i'll mention bill gates. this is where we are as a country. it's polarizing. to say there is not business support for the president isn't accurate. >> in the first year and a half you think there was an emphasis on jobs and job creation when we were heading up above 9% and 10% rather than obamacare?

you don't think they were focusing on the wrong -- they even concede the thing. >> a year ago today the president announced the america jobs act which a republican strategist said -- >> you have all -- okay. >> wait. >> he was the designer of the stimulus. which i believe is a republican -- i don't look at it -- >> let's talk bipartisan, how's that? >> hubbard or. >> bipartisan. infrastructure. the president has been a huge proponent of infrastructure. it is the fastest multiplier of gdp growth. for every dollar spent it's 1.6 times multiplier. for every billion, 25,000. he's come up with public-private partnerships. nothing like fannie mae or freddie mac. it can't get passed. >> we have had greenspan say straight to us just deciding infrastructure, central planning of infrastructure, you're going to waste assets that the private sector needs. >> i don't agree with that.

>> high speed rail? >> unfortunately we have to go to a break. but you have a new tv show online that's coming out. >> yeah. we're going to announce it later today. maybe i'll get fired for this. >> you can't get fired by your own firm. >> that's a good thing. we'll announce on web cast that i will have a weekly show on the reuters channel for youtube. i'm excited about it. >> we'll google it every week. thanks for coming in. >> thank you. >> good luck with the new gig. >> thank you very much. >> when we come back, eric cantor on two big tax reform votes coming up in the house. plus we have earnings from gm. has the euro crisis sent recovery plans on a detour? we have the numbers from detroit and an interview with the gm cfo. sfluz . >> announcer: coming up, breaking news from the european

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welcome back to "squawk box." in the headlines this morning the bank of england leaving the key interest rate unchanged at 0.5%. next up the european central bank at 7:45 a.m. eastern. phil lebeau has the numbers. >> we have the second quarter numbers for general motors. looks as though gm will beat the street by a fairly wide margin reporting 90 cents a share. the street expected 74. revenue slightly lower than expected. 37.6 billion versus 38.58 billion. of course the real focus, what

people want to know, how much money did general motors lose in europe? there were estimates it might be as much as a half billion. gm losing $361 million in europe last quarter. we just talked with dan ammond regarding the rest of the year, what to expect. he said they are not making a prediction as to when profitability may happen there. at this point the gm two-q earnings at 90 cents a share versus the expected 74 cents. we'll talk with dan first on cnbc in a few minutes. back to you. >> all right. we'll look forward to that. in the meantime, the controversy over taxes continues with no end in sight. eric cantor. nice to see you. you know who we have on later? we have this other leader. leaders lead. i have heard that. you're like decider. i know it. we have stenny on later, the former leader. say some stuff we can put in

little sound bites we can play for steny. keep in mind we may be doing that later. we had bob wolf on who said let the bush tax cuts expire -- not expire for 98%. that's what we should do and we can get it done. i said, no. why not let them all be extended with with unemployment so high. he goes, no, no, that can't get done either. he told me in his view and obviously bob wolf isn't a politician. but here we are. neither side will be able to do anything here, right? >> it comes down to the question if you want to put a priority on economic recovery, jobs and growth, you ought not raise taxes. you either want higher taxes or higher growth. that's the bottom line. this insistence that somehow it's not fair that somebody's not paying enough taxes right now. i think for some it's a priority. for me, and more most of us on

the republican side of the aisle, the priority is jobs. we have to win the war on jobs globally and get people back to work here at home. we saw that ernst and young put out that the plan the president will supports will cost the economy 700,000 jobs. if we are interested in jobs the president's proposal says that 50% of the people that the tax hike applies to are folks that get at least 25% of their income from small businesses which means you're taxing the very people we want to go out and invest to create jobs. so it just doesn't make sense. out's counterintuitive to me that anybody would say that. >> all right. so i'm not optimistic about anything between now and november obviously. but now i have a vision of the

new senate. i don't know what it will be necessarily. i see patty murray and ted cruise, the senate's going to turn into the house the way things are going. that doesn't mean the election will solve anything, eric. we're so far apart. how is this going to work out? you saw what she wants to do. the whole fiscal cliff. the country needs to go down in flames to stick it to the republicans. >> i'll tell you one thing. the house has acted. we have gone about every week putting solutions on the table to pass the bills. it may help if the senate could start producing something out of the morass over there. there are a lot of people in the senate now who would like to bring the whole economy and shove it off the cliff. we don't believe that's something helpful. we believe we can work our way back and start the economic engine in this country again. we've got the talent. we understand there are more

ideas here than anywhere in the world. we have the capital base. we have to talk about restarting the engine, get about the investments this country knows how to do in the private sector. we have to take away the uncertainty in washington that starts with tackling the fiscal issues, getting entitlements under control. reeling back the overreach on the regulatory side by putting balance back into the equation. >> although -- >> we need to make sure agencies take into consideration job growth when they act in a regulatory manner. >> to be fair when we look at what's happened or what has not happened in the senate, senator coburn is blocking or threatening to block the panel vote. this is a block coming from senator coburn. >> well, the senate, as you know, was set up to not move as quickly. it's a set-up to really have a

60-vote threshold which neither party has. >> right. >> so it will move slower. it really is incumbent upon, i think, the members of the senate to come together in a way that frankly could help and be productive. nobody is going to get everything they want. but at least we could say let's focus on job growth. that's the difference and that's the problem with the senate tax plan they just passed versus what we did in the house yesterday and what we'll do today on the floor. chairman camp of the ways & means committee is bringing forward a bill that will lay out a procedure for the tax reform that we insisted upon yesterday in our bill. >> romney's campaign. i'm reading, is adding more staff to work with the candidates vice presidential choice, an indication that it's drawing near. is that true?

so he doesn't pick someone boring? >> i have no idea. i have always said paul would be a great pick. >> you have no idea? you aren't hearing anything? >> i have no idea. >> about when it's going to be? >> i have no idea of that either. governor romney is going to be the candidate that will win this election. i believe strongly he's the only one out there with an economic plan. glen hubbard is in the wall street journal today with a fantastic piece that talks about the difference between the obama record which is full of stimulus, a myriad housing programs, dodd frank, obama care, regulatory reach versus what mitt romney is proposing. mitt romney is proposing to get ahold of entitlements and the spending problem to ignite a pro growth tax reform policy and to get the regulatory reach under control in washington. >> thanks.

we have plenty to work with. we're going to hear from the other side with steny hoyer. [ snapping fingers [ [ laughter ] >> up next! the ecb decision on interest rates coming up at 7:45 eastern. mario draghi's news conference at 8:30. including the gs and is. [ engines revving ] because control is the ultimate expression of power. [ revving continues ] ♪ during the golden opportunity sales event, get great values on some of our newest models. this is the pursuit of .

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gm out with earnings a short time ago. phil lebeau joins us with the first season cnbc interview with the cfo. the stock is trading higher on the news. >> thank you, becky. we are joined by dan ammond. the stock is higher. i know you don't do things based on the stock explicitly, but let's talk about the quarterly earnings. you beat the street. 41% decline though in quarterly profits. when you look at the second quarter is it glass half full, glass half empty? >> from our perspective it's another solid quarter for general motors. four out of five of our segments around the world, we have been profitable year to date.

we have new product coming. we feel good but we have more work to do. >> the focus for investors is europe. you lose $461 million for the quarter. you lost more than $600 million this year. you can't predict when the losses end. >> it's a challenging environment in europe. at the same time we are taking decisive actions. we are continuing to invest in the product portfolio. we have important launches coming in the later part of the year. we are taking action on costs and capacity. you have seen the announcements over the last few months. we are bringing new leadership into the business. we brought in people from the outside that want to be part of the future success story there. we feel good about the actions we are taking, the progress we are making against a challenging environment. >> do you even have a sense of comfort in terms of looking at the landscape in europe? you don't, do you? >> we don't have a crystal ball better than anyone else's in terms of what will happen in the fundamental macro economic environment in europe. that's the biggest single driver of what happens over coming quarters. >> which brings up the question can we expect losses to go over

a billion dollars this year? >> we are not going to make predictions about the second half of the year in terms of profitability. it remains a challenging environment. you have seen the results for the first half of the year. you have seen the actions we're taking. we are doing everything we can. >> one last question. your transaction prices improved last month here in north america. when you look at the north american consumer now, are you cautious in terms of what they are showing you in the show room? >> we're cautiously optimistic. we are pleased with the product portfolio we have in the show room and with what's coming and how people are responding to that. we are maintaining the pricing discipline, matching supply to demand and it's going well. >> dan joining us on a day they beat the street. it's all about europe. that's what's dictating what happens with the autos and the auto stocks now. back to you. >> phil, thank you for that. let's check the futures now as we await what should be a big decision from the ecb which we'll be getting in a minute or

two. let's look right now. looks like the world could change in a minute and a half. now the dow would open up about 45 points higher. s&p four points higher and the nasdaq would open about four points higher. let's look at the european markets ahead of the decision. you are seeing green arrows across the board. >> the question is this going to change at 7:45:50 or is this going to be something where you react? >> no, no. they are cautiously optimistic. >> that's the word. >> or is it something where you have to wait and hear what he has to say at 8:30 when he comes back with comments from draghi. >> unless they make a pig announcement right now at 7:45. mark grant has been talking about this. >> put up or shut up. >> this is a defining moment for draghi and the ecb. might be the most important decision ever for the ecb. >> reminds me of here.

we're ready. >> for another can kick. >> draghi pushed the ball forward last week and had markets expecting action. even the deputy treasury secretary. >> let's get you steve liesman who's got the information. >> i don't have it yet. sometimes it comes out later. we are waiting for that comment. i think it's interesting. there we go. leaves main facility unchanged. benchmark unchanged. i'm not seeing anything particularly here. keeps refi rate unchanged. the question is whether or not in a separate release -- i was trying to figure out. >> unchanged is 0.75. >> whether in a separate release it announces nonstandard measures. i was looking at how it previously released information on those nonstandard measures. it's not part of the regular monetary policy statement where it anoupss what it's doing with the refi and deposit rate.

there was no change at all in those key benchmark rates that the ecb does control. now we have to wait for two things. an additional release, if it's coming. where nonstandard measures might be announced. at 8:30 the press conference from mario draghi where he'll have an opening statement to lay out the economic landscape and take questions from reporters. i think he'll have questions to answer if, indeed, this is all we are getting from the ecb today. >> i'm confused. the markets haven moved either way. >> you don't know what will happen. >> and whether or not. >> we were just going through this. one of the ltro guys was announced on a nonecb day. the other was announced a day they had a meeting and it was a separate press release. i'm not seeing additional press releases here. it is unclear if anything will happen. the key will now be the comments draghi will make, the opening statement from the meeting and questions he answers from

journalists. >> one thing we can say is we have heard from marty feldstein. he wrote the op-ed for the ft where he said they can do things like lower rates to bring the euro down. he thought it was something that could help spain out. one thing they could have done would be to lower rates. they chose not to go that route. >> that's right. there is a good question as to whether or not the euro economies would benefit from a weaker euro that's been down in the 123, 123 area. the dollar strengthened yesterday. there was a bid in currency markets on fed action. certainly there is a bid and should be a bid in on potential euro action. interesting to see what happens. the euro would probably strengthen if this is all we'll get from the european central bank and stock markets. if you look at the past month and you see what amounts to a hill when bernanke spoke. quite a good spike when draghi

spoke. stocks around the world are geared toward ecb action. that's all we can tell you now. they haven't made any changes at all to the benchmark interest rates. >> it looks like the markets are standing pat. there is more to come. >> it's not clear that is all there is to come. there is no signal either way at this point. >> we'll be back with you in a little bit. up next though, four years ago she was on wall street. now she's on the streets of london. we'll meet the former lehman banker who is now an olympic cyclist. at the top of the hour an interview with former kansas city fed president tom honig. lots to come from the ecb as well. >> announcer: tomorrow on "squawk box" it's jobs friday. the number that moves market and could change the landscape of the november election. the july employment report is just one day away.

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the olympics is front and center for all of us as we watch what's been happening over the last several days. let's get to london. michelle caruso-cabrera is standing by. >> next to me is evy stevens. she used to be a utilities analyst at lehman brothers. four years ago you pick up a bike on a lark. three years ago you quit your job. on sunday you come in only 27

seconds behind the gold medalist. congratulations. thanks for being here. how exciting is it? how hard was it for you to give up your job and decide to be an olympic athlete. >> when i left my job i didn't think too much about it which is why i was probably able to do it. i had a gut feeling i had to go on an adventure. i was 27. i was worried i would wake up doing the same thing day to day when i'm 39. i thought, hey, why not now. i didn't think professional athlete, olympics. to be an olympian. i still get goosebumps on my body. it's an incredible honor. >> 39 is old. absolutely. you go to lehman brothers, tell the boss, i'm leaving. do you ever miss the money though? that was great money, right? >> you know, i'm fortunate i had the opportunity to work there and make the money. fortunately i'm a frugal person so i saved it.

it gave me a wonderful cushion to go take a crazy adventure. i have a nice cushion now to support myself. but i make a lot less money but my quality of living has gone up greatly. >> i would imagine. the ecb is announcing a decision today. do you pay attention to that stuff? >> i try to pay attention to it. when you're at the olympics you become so focused. at the time you think cycling is just the center of the world. you come to the olympics and i have been doing a lot to ice bath and one of the amazing things is the other athletes. there are amazing shooters, divers. all these incredible athletes here. i try to pay attention when i have down time. fortunately i get zoned into my sport. >> only four years ago you got on a bike on a lark. i read stories that you didn't even know how to clip on the pedals. you're a natural? you started winning races like

crazy? tell me about the process. >> i have always loved to exercise. uh played tennis at dartmouth. for me working in investment banking it was crazy hours. exercise was this release. >> outlet. >> felt like i was flying. especially in new york city. it's an amazing city but the bike allowed me to meet new people, go outside the city. so i guess it was just -- it fit my personality. i had never been that good at a sport. i was always the person fighting to make the last spot. all those years of fighting to make teams made me -- i failed a lot which cycling is quite a challenging sport. >> sure. >> it allowed me to get a bit tougher. i found the bike and i just loved it. >> there is something called rule 40 at the olympics which means i can say who your sponsors are, specialized and lululemon, but you're not allowed to. does it bother you athletes aren't allowed to monetize their fame at the moment? >> for me the olympics is about

the sport, the passion, representing your country. it's about the amazing spirit. there are so many in the world. in that olympic village all of that's put aside. we are here competing for what we love. for me, that's what i'm focused on. you know. it's different. yeah. i can't even -- i have never been to an olympics. it's a very different, new experience for me. >> back in four years? >> i'm already thinking about what do i need to do and how do i need to get better? i want to come back strong in rio. >> we'll be rooting for you. thanks for joining us. >> thank you so much. >> back to you. >> we think alike. i heard the same thing, you know, i don't want to wake up some day, look around and be 39 and be sitting -- i was like -- [ laughter ] -- and both of us. you heard that immediately.

andrew's nodding. yeah, i know. >> absolutely. i'm with her! congratulations. >> this is it? 39? >> yes. >> absolutely. >> wow. >> coming up -- that's great. we wish her luck. another news maker. former kansas city fed head. and steny hoyer. we'll be right back after a short break. no, no it's her dad. the general's your soul mate? dude what? no, no, no. he's, he's on my back about providing for his little girl. hey don't worry. e-trade's got a killer investing dashboard. everything is on one page, your investments, quotes, research... it's like the buffet last night. whatever helps you understand man. i'm watching you. oh yeah? well i'm watching you, watching him. [ male announcer ] try the e-trade 360 investing dashboard.

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a wook ago banking legend sandy weill shocked the world. >> split up investment banking from banking. >> tom honig grease and has his own proposal to strengthen the financial system. >> let the games begin. ♪ ecb chief mario draghi is ready for his moment at the podium. will his words move the market? we'll find out in 30 minutes. >> and in the last hour, house majority leader eric cantor talked about tax cuts. >> if you want to put a priority on economic recovery and jobs and growth you ought not be raising taxes. >> now we hear from the other

side of the aisle. house minority whip steny hoyer will be our guest. plus, the rise of the machine. trading glitches at knight capital sending jitters through the markets. the third hour of "squawk box" begins now. vi . welcome back to "squawk box" on cnbc, first in business worldwide. i'm joe kernan along with becky quick and andrew ross-sorkin. checking the equity points. we have had different news coming in. but it's news that's like stay tuned news. like the ecb did stuff we'll tell you about. stay tuned to see what it means at 8:30. we have a stay tuned for the claims number. we have a stay tuned for tomorrow's employment report.

>> this is one big tease. >> nothing really matters. >> our fed didn't do anything and probably won't until next time. maybe they do something between meetings. >> let's get you caught up on the teases joe is talking about. the ecb did leave the key interest rate unchanged at 0.75% as expected. the real story, as we were teasing could come at 8:30 a.m. eastern. that's when ecb president mario draghi begins his news conference. we'll bring you the details. this is what i think you were going to say. steve liesman said to us -- you know, we were talking about whether the numbers and the announcement we were going to get would include larger policy issues. buying back bonds, for example. that's something that historically doesn't come until 8:30. that's when we might, if we do hear the news that's when it would come. let's talk earnings news. general motors reporting second quarter earnings of # 0 cents per share, higher than the 74

cents the street expected. revenue came in line a little lower than expected. one closely watched number. gm's performance overseas. the company losing $361 million in europe in the last quarter and gm cfo dan ammann spoke to us earlier about the challenges the company faces in europe. >> we are continuing to invest in the product portfolio. we have important launches coming in the later part of the year. we are taking action on costs and capacity. you have seen the announcements over the last few months. we are bringing new leadership into the business. >> the teasing headlines continue as we wait to hear from knight capital. a trading break down royaling the tax prices of nyse stocks. the problems could under mine what many say is fragile

investor confidence in the stability of the markets. heavy computer-based trading causing a rush of orders for dozens of stocks. knight told clients to send orders elsewhere. take a look at shares of knight right now and see what's happened there. looking at 7.15. that's not good. >> did you read your dennis -- >> i saw an e-mail but i didn't read it. >> he says this is wonderful that you can find a gem in a local newspaper. this was in a virginia paper. i hope michael phelps doesn't take too much credit or pride in winning those medals. someone else had to build that swimming pool, fill it with water. >> wow. >> dennis writes in frequently, too. >> he's a big thinker and a commodities genius and a social commentator. i get it. that's good. >> a week ago sandy weill turned

the banking world on its head with this statement on "squawk". >> i think what we should probably do is go and split up investment banking from banking. >> his controversial comments spurred a debate on the future of the financial industry. joining us now is a supporter of the plan to break up the big banks tom hoenig, former fdic director. great to see you this morning. >> thank you. good to be with you. >> you were out talking about this before sandy weill said this. you had an op-ed in june in the wall street journal. why do you think the banks should be broken up? it's different from sandy's line reasoning. >> yes. i have the perspective of the fdic. you need to break this will up by lines of business and the effects will be greater competition, for example. greater accountability of the

institutions and, very importantly, i think it will begin to rationalize the use of federal deposit insurance and the government's guarantee behind these institutions so that we can fine it to what it was originally intended for and that's protection of the safety net and the intermediation process that goes on in commercial banks. i think our proposal that i put out addresses issues of the shadow banking industry. the proposal is forward-looking and i think the effects will be beneficial. in an important sense, i think, spur new activity and wall street and in the united states. so i'm very strongly supportive of not cutting them by size. >> the first of which the fdic

funds are paid from the banks and the big banks pay the lion's share of the fees. these aren't taxpayer dollars we are talking about with the fdic. >> there are two safety nets. the fdic is the first line. let's be candid. behind it is the federal government's guarantee. that's reflected in things such as t.a.r.p. and other forms of bailout. it is the federal backstop that came into play in this last crisis. i can assure you it will come into play in the next crisis should the largest institutions again find themselves threatened. >> this is something that big banks exist around the globe. what you're talking about would be action that would only stop banks based in the united states. can you really make massive changes if you are only making changes here in the united states? >> i think you can. i think you should. the united states is leader. i would point out a couple of

things. i have had many people tell me the united states wouldn't be competitive, that corporations want one company to go to and borrow. my experience over 20 years is i have talked to ceos. they know that they have to have multiple access to credit. if they had to rely on just one or two major lenders it would be a very foolish thing for them to do. this will actually open up, i think, the markets, the capital markets. i think it will invigorate the industry and be beneficial to u.s. corporations. and i would -- very importantly point out that right now we have a very concentrated -- increasingly concentrated industry. i think it does mean that there is a certain lack luster element to our financial system since they have been able to form rather than before when our capital markets were the most vigorous in the world as we competed globally, even then and

very successfully, i might add. >> i want to talk about the international banking system which is to say that in most other countries, if you look at the g-7, for example. we actually aren't nearly as concentrated as many other developed countries. so the question becomes is this not only -- i understand the safety and soundness issue. i wonder about the competitiveness issue. perhaps even more broadly, our ability so use and leverage the financial world to be a power engine of the economy. >> well, i think, frankly, that the united states -- first of all, if you look at the rest of the world, i'm not envious of that model. they are in deep difficulty now. they are not as competitive as you would like to believe. it's obvious. i would point out that in our 200 years of history and in the last 56 years of history where we have had a less concentrated

financial system with banks across the country, we have been the most competitive, the most innovative. we are the entrepreneurial center of the globe and we have benefitted from that. i don't know why i would give that up for a model that i respected very much but is not as dynamic as ours has been and i think our wills not be as dynamic in the future if we go the way of other countries where they have allowed themselves to be highly concentrated. i think very lax in the sense of their competitive vigor. i think we should not buy that model. we should not buy the story at all. >> if you're right, why are so many leaders on wall street against doing what you say in the context also that your argument suggests that actually there could be more profits in the future if broken up. >> the subsidy has a lot to do with that. people are reluck at that particular time to give up subsidies. this too big to fail subsidy, this safety net, the government

guarantee gives them important funding advantages that they don't want to give up very easily. i think that's the impediment. for heaven's sakes i don't know where sandy weill was on this, but if you are trading at 60% of book, i don't think you necessarily can offer that model as the way of the future for success. >> mr. hoenig, bear with us for a moment. >> sure. >> we have to slip in a quick commercial break. we'd like to continue the conversation. we have a lot more questions. will you stick around with us? >> i sure will. >> thank you, sir. still to come, we'll have more of the conversation with tom hoenig and house minority whip steny hoyer sounds off on taxes, responding to comments made earlier by house majority leader eric cantor. we are less than half an hour away from weekly jobless claims. 20 minutes to be exact. take a look at the market indicator. green arrows for futures right now.

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let's get back to our conversation with the news maker of the morning.

former kansas city fed president thomas hoenig. great to see you. >> thank you. >> let's go to europe. in 15 minutes we'll hear from mr. draghi. you have 15 minutes to advise him on what to do. what would you tell him? >> well, i'm not in the monetary policy business anymore. so i would tell him to work on the structure of their industry as i'm trying to do here now. so i will let them work through my successor of the federal bank of kansas city met earlier this week. i hope they have listened to her carefully. i will leave it at that. >> we can get back to europe in a second. >> okay. >> i want to ask the question in a different way, but not about europe. >> sure. >> what do you expect our fed to do for qe-3? what percentage would you give it of happening? not whether it's good, bad or otherwise. but what do you think the likelihood is that we get a

qe-3? >> i'm happy to talk to you guys, but i'm not getting into monetary policy. >> okay. >> seems like we have heard so much -- okay. how about this? >> okay. >> the dual mandate. do you like it or not? >> if you look at my record it's been one of focus on your basic policy around stability. i will leave it at that. >> okay. >> i'm sorry. >> that's fine. i can read between the lines. we have had you on before. >> absolutely. my record is pretty strong and clear. >> yeah. the fed has a lot on its plate it is being held responsible for. sometimes it seems counter productive. >> i'm going in a different direction. >> all right. >> we're failing a little bit -- >> not really. we have to ask. >> let's go back to too big to

fail. i want to go to moral hazard. this is a big issue. you just suggested, i think in one of your answer bfrs the commercial there was some moral hazard in all of this. do you believe when executives and bankers make trades, make real risk decisions they sit around and say, you know what, i will shoot for the moon because ultimately if i fail i'm going to get saved? >> i think what they do is they say, i'm smart. smarter than everyone else. this is the right thing to do and by the way, i have access to incredible amounts of fun because there is a safety net out there. i can raise money below what i would otherwise raise it. i can hold capital levels that are significantly low er. we make high returns for the

risky'm taking on but the risk is shared by the -- >> that's different. these guys -- nobody likes to end up like the lehman guys. >> of course not. >> nobody likes to see their stock go down to a dollar. you get the lower funding. that enables you -- >> not the banks though. if you look at aig, lehman. >> if you got away from the subsidy the market prohibits these trades. >> why is the solution not higher capital requirements? >> that would be a part of the solution. it's not all. you have the incentives. remember this. the real capital levels of the largest institutions when you look at tangible capital, not -- take all the deferred credits out of it. it's 5% to 6% at the highest level. less than 5 at the lowest level. before you had the safety net in

the modern 20th and now 21st century, the capital levels would be more than double that. can you force it? we're in the process but that's getting as much resistance in terms of raising real capital levels as the fwraeking up proposal i have. -- breaking up proposal i have. >> am i wrong that the u.s. government has a subsidy and the fed enables the u.s. government to have a subsidy and because it's too big to fail we are also in danger of generating the same type of issue as a country as you're talking about with banks that are too big to fail. we couldn't do -- i mean, the u.s. government has an incredible subsidy from what the fed is doing allowing it to do all this stuff. that would be a much bigger problem than banks could ever engender and you were part of the fed. >> the ability to be a reserve global currency as we are gives us a great advantage.

and in a sense a subsidy relative to the rest of the world. there is no question about that. if i could though, andrew, back on the capital question, one of the things that's complicating our ability is bazel three. one and two didn't work. now it's three which allows you to assign weights which don't shuft as risk shifts. so the industry is following those incentives. going back to a very clear fundamental, tangible capital level would be a great improvement for the banking industry. then, joe, to your question, as long as you're a reserve currency and you can print this money, you have a period of time, a longer period of time than other countries to either make things worse or correct them. i hope we choose the path of correcting them as soon as possible. >> i want to tell you about another company we have been watching closely. again, not a big bank. certainly one that's caused massive problems in trading.

this time it's knight capital. we saw what happened yesterday. the company is making comments that they see a realized pretax loss of $440 million. they say they have traded out of their entire erroneous trade position on this. also saying they don't think clients were hurt by erroneous orders but a lot of other people were. there were massive movements yesterday morning. they say the brokered deal subsidiaries are in full compliance with the net cap requirements. the stock had initially traded slightly higher on this. as you can see it's down 40% on the news after massive losses yesterday. down another $237b9 80 to $4.15. this company also making comments that the software has been removed from the company systems. again, you're talking about a company that is not a bank. just like the big banks, we are not the ones that really keyed things off in the financial

crisis. it was aig. it was lehman and bear stearns. how do you protect from these issues in companies that aren't banks that are making problems? >> you have to start with the understanding that capitalism is not about not having ups and downs or not even having a crisis. it's the impact of the crisis that you have to be mindful of. when you subsidize the banking industry and allow them to leverage up the crisis becomes more difficult. when you allow them to intermix the trading, high risk activities where it is win-lose with the banking activities which is win-win then you get bad outcomes. you have operational risk which is true for all major financial companies and i think the effect of this, i hope, will be far more constrained in the sense of you don't have an enormous subsidy then spurring them on to ever greater leverage. we'll hopefully correct the operational risk.

but you're always going to have these events in the capitalistic system. it's how big you allow them to get. and then how well you are able to manage them because of their size in the crisis. >> i agree 100% on the leverage issues and on the capital requirements. if you look at the big banks they were the ones helping to clean up the mess by absorbing some of the huge problems. >> let's first understand lehman. they were acting as commercial banks. the fact that they were able to do money market mutual funds and they were able to do repos. they were borrowing short and lending long. then they put smaller banks at some points for clearing and so forth. they were acting as banks. remember this. yes, these banks help clean up the mess. but remember, the treasury put in the first level of capital. the fed put in the second level in terms of the liquidity of that. this wasn't capitalism where these institutions on their own stepped in and bought these

companies. these were, if you will, funded and supported by the government safety net. t.a.r.p. was an enormous government enterprise. it wasn't individual banks. >> we have to go, but one last question. is the fed too close to the banks today in terms of how they are regulated? >> well, here's the issue there. i think all the regulatory agencies have a pretty questionable time that our job is to be first of all knowledgeable and second of all willing to be confrontational when it's necessary. and that's when we have to step up our pace, all of us, including the fed certainly. and the occ and the fdic as well. >> thank you. we appreciate it very much. >> you're welcome. >> coming up, breaking economic data at 8:30 a.m. eastern. the closely watched jobless

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shares of knight capital are taking a beating of a press release from the company. bob pisani joins us with more on that now. more bad news for this company. >> my screen lit up with people saying 440 million? how could they lose that much? the volume was titanic in the first half hour. at the top of the ten we were at nearly 300 million shares on the floor of the new york stock exchange, more than twice the normal volume you would see on a typical morning in july and august. the nyse yesterday really gave them problems by deciding to only bust the trades in a half dozen stocks. basically they said they are clearly erroneous execution in a half dozen stocks. the rest are standing. what happened is there are many duplicate trades made over and over. we saw it at the beginning.

people were astonished. they kept pushing through the system. over and over again to buy and sell. at that point once the nyse decided, this is it. we aren't busting anything else. knight was on the hook for all the other money. so you can see 150 million, 200 million more shares traded than normal. just add up the numbers to get to the 400 million eventually. >> i guess that's similar to what we saw with facebook in terms of all the duplicated orders and everything. but the nasdaq is only responsible up to a certain limit. out's a paltry limit like 3 million or 15 million. >> the legal liabilities of knight may be different from the nasdaq as an exchange itself. this is certainly a matter that securities lawyers were talking about last night. knight's legal team was all over this. one thing that was good news for them is while this was a shocking number they made a smart move to essentially declare the whole thing over and

done. 440 million. you can see the stock is trading down big here. they're probably only going to make $10 million this year. you can see why the stock is down. it's a shocking number. at least it's behind them. now the problem is reputational risk. they have a huge retail base they use. the issue for them is can they make sure those people will continue to do business with them? >> the company also saying -- making the point that the broker dealer subsidiaries are in full compliance with the net cap requirements. they have to be looking around. they say they will continue the trading and market making activities. huge questions about what this means. they say they are pursuing strategic financing alternatives to strengthen their capital base. thank you. this is obviously a story you will be watching. >> i will. >> we are seconds away from the weekly jobs claim number. rick santelli is at the cme in chicago. jpmorgan chief economist bruce cassman joins us as well. we are also waiting on mario

draghi to be talking at the same moment. steve liesman is monitoring and will bring us anything as it comes out. if we are going to hear more at the press conference is where we would be hearing it. first off, where do we start with the jobless claims numbers? >> initial claims from 357,000 up to 365,000. so we are up 8,000. but keep in mind it would have been a smidge more because the number originally now reported 357 was 353,000. so we are up a bit. if we look at continuing claims it's a bit different dynamic moving from 3.29 to 3.27. not huge changes. it has been vacillating between 3.25 and 3.33 million. of course we are still digesting yesterday's fed statement. as i was walking in there was quite a few comments regarding what did the fed actually do. is this like the world series of

federal reserve or central bank -- is somebody bluffing? i would like to talk to steve to see if mario draghi is one of the super mario brothers or not. you hearing anything, steve? >> i'm just watching mario draghi take the stage with the dep tu governor. we are waiting for comments. let me lower the volume here. watching two-year and ten-year italian and spanish debt fall precipitously this morning as if they knowing something, as if there is something going on. we'll wait to see it. i would be happy to talk with you after the comments here. >> that's terrific. >> let's bring in bruce now to talk more about the jobless claims. bruce, what's your takeaway? how should we read the number? >> we are starting to go beyond the period where the noise from the shut downs on the factory side matter. i think we are getting a comforting message. the company is not doing well now. but we are not seeing lay-offs

pick up in a way that suggests momentum is shifting downward materially. it's a little bit of a comfort around an economy probably not growing more than 1.5 or 2%. >> what do you think we'll get tomorrow with the jobs number? >> a number that's comforting that momentum isn't deteriorating more but not a strong number. we are looking for something close to 100,000 on the payroll count. >> if we get what you expect what does that mean for the fed? the wall street journal says the translation of yesterday's meeting, if things don't improve the fed will step in. oers say, no, no. things have to get worse before the fed steps in. what's your statake? >> i agree with the journal. they are inclined to move to quantitative easing unless they see improvement. the payroll number we are expecting friday and next month isn't probably strong enough to stop them from acting in september. >> rick, what is the market

set-up? if we hear no action from draghi after the tough talk he was making last week, how do you think the market responds. >> we're seeing a good glimpse of that now. the euro currency is powerful. we are hovering around 123 and three-quarters. they didn't alter the rate landscape from the historic low rate of 75 basis points. that, in and of itself, without lowering it 25 that's giving the euro a boost. if you look at interest rates, as steve said with regard to italian and spanish rates, i understand the dynamic. but the funny rates are still too high. it doesn't matter how much they have come down. the question is what can they afford in terms of funding? so we have to watch that. our rates are giving us a glimpse of reality. it flattened and now it's steepening. that means rates are solid above 1.5%. out's possible we could see

rates stabilize around their level that would equate to that which is anything above 1.4 yield. >> we are watching the futures pick up steam. i'm not sure what you would ascribe that to. the dow futures are up 84 points. again, the biggest gains we have seen in the morning at this point. draghi is making comments that inflation should decline further in 2012 saying they still see a lot of problems. turned lying pace of monetary expansion remains subdued. not surprises in those comments. >> no. the euro currency continues to move higher, getting closer to 124, 123.72 last. we see our rate is now 156. they are joined at the hip. partly because there is no super aspects that i have heard so far. the stronger the euro gets, that's an interesting trade. but i think on the american side our guests and everybody nailed

it. you know he called it a ponzi scheme. whatever you call it. the fed's game of shadow boxing with regard to the equity markets is what's going on today. john hillsengrath's article may have helped that along. hope springs i terneternal. i think this is a bluff but it's working. >> we had a little bit of a move. trying to understand if it was something draghi said. >> the euro is irreversible? i don't know what that means. >> steve has more. he's been listening. >> draghi said the ecb in context of the mandate may undertakeout right open market operations. that was the one comment he made saying they may undertake these operations. hold on one second. >> rick, we knew they may do it. is this a situation where we need to see action to believe it or will comments like this keep the market thinking they really might step in in the next couple

of weeks? >> may doesn't mean they won't. >> steve has more. steve? >> i cut him off too soon there. he's going to design over the coming weeks appropriate modalities for such policy measures. he made strong comments that what's going on now with the differences in sovereign bonds out in the marketplace now is unacceptable. it's something for the ecb to address. it doesn't sound like we'll get specifics here but the comment was over the coming weeks we'll design appropriate modalities of policy measures. i will listen to the press conference. >> >> we are going to design what we would do with with measures if we were to use them. we'll talk about this. it doesn't sound like we'll see concrete measures today.

>> no. as a matter of fact, i don't want to sound like a broken cd, but i urge everyone to read the financial times op-ed on the 29th of july, i believe. it's about how you are supporting through purchases, programs, other countries, bond purchases bringing down yields. taxation without representation. think about it. they are not the united states of europe. so making one country indirectly via taxation by paper of another country that doesn't have a political overlay is highly questionable. i don't care what mr. draghi says. my own opinion, i want merkel and the german central banks to say out. i haven't heard it. >> let's look at some of the charts that have been moving again. the futures on the equity markets have come down a little bit. last i saw the dow was up 50, 55 points. what matters is when you start looking at sovereign bonds. look at the ten-year onto the

italian bonds. 5.726. the yield picked up a little bit there. also let's look at spanish bonds because that was the huge issue. you're still talking about relatively high, incredibly high on these. >> i want to go over what draghi said. he said there will be operations of a size -- of adequate size, concerns over private investors overse over seniority will be addressed and further nonstandard measures. he's saying there will be action from the european central bank. sounds like at this moment they are not prepared to release or say what the actions are. he created a whole preamble, i guess, that said it's unacceptable to do so. it does sound very much like he's promising action from the european central bank. >> talking about the ba zoo ka in his pocket. don't make me pull it out. >> i would be looking at the

ten-year spanish bonds, the two-year, see how they were reacting. >> 6.617 was the last ten-year on the spanish. >> there's the italian ten-year. we need the intraday on that. i would be interested to see where we are on that. again, 6617. it was down -- the yields were down quite a bit. >> sounds like he's ready to do it. >> yeah, yeah, yeah. >> with with an interesting -- >> what rick said. can he do it? while they are designing modalities you have bundes bank and the germans can weigh in for the next three weeks and say, hold on, you're not going anywhere. >> i think he can do it if he chooses to, but will he? >> bundes bank made strong statements in the past. those have been overruled and overcome by others on the ecb who wanted to take action, resulting in resignations. >> he said he's going to do a certain size, they will design it, do a certain size. >> last week he said it.

does anyone have a can we can kick on set? >> this is different, think, andrew. >> already 123 now. >> it's down. >> so it rose. it's stronger. it's stronger, rick? >> much weaker than it was. >> 123.5. it was 123.5. >> we were close to 124. now down to 123. losing speed. >> we expect him to do something. we'll see if it happens. coming up, we're going to keep monitoring the ecb president mario draghi's news conference. we'll bring you details. and house minority whip steny hoyer. e belief that bringing you better technology helps make you a better investor. with our revolutionary e-trade 360 dashboard you see exactly where your money is and what it's doing live. our e-trade pro platform offers powerful functionality that's still so usable you'll actually use it.

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earlier house majority leader eric cantor joined us to talk taxes and the president's job plan. >> the president's plan will cost 700 million dollars. let's not raise taxes now. >> leader hoyer, i stille call

you leader because i have also set up a battle of the leaders. >> that's why i love coming on the show. >> i know. so does congressman frank apparently. i like it when he says he doesn't like sparring. come on. anyway, what do you think of -- how would you respond to leader cantor? >> i think leader cantor knows the programs he supported in the past of his tax cuts which he said would grow the economy and reduce the deficit have not done either unfortunately. it won't do either now. what leader cantor has done and what the republican party and the house of representatives have done is once more snatched delay and defeat from the vau jaus of victory. the senate passed a bill which would give 98% of americans assurance that they would have no tax increase january 1. the republicans have now deep-sixed that, unfortunately. they know full well that the bill they passed yesterday will not pass the senate.

frankly they assured that by joining today a proposal for a tax principle as they call them which they know clearly are not agreed to in the united states senate. >> leader hoyer -- >> let me just finish. had they taken the senate bill we could have had the president sign the bill next week. >> don't you think maybe because of what happened last time the president agreed with the republicans to extend the bush tax cuts for everybody which seemed like a good idea then because the economy wasn't growing much. and you know the argument that raising taxes on anyone is probably not a good idea. because of the response and the backlash from that, now your side is saying, no way we just let them all be extended. even for just a year. don't you see how that's an example of the same kind of intransigence that isn't really helpful at this point? >> no.

let me tell you why. we have an agreement. senate republicans agree. the house republicans agree. senate democrats agree and the house democrats agree that nobody under 200,000 as ab individual, 250,000 as a couple should have any increase in taxes on january 1, 2013. we have agreement on that. there is no disagreement. the american public continue to be frustrated when they know there is an agreement, but that agreement will not be passed by the house republicans. >> all right. >> as a result, we still have uncertainty. we don't give confidence to middle class taxpayers which under mines confidence in the economy. >> the tea party doesn't look like it's losing strength. that's the way the house republicans are going to be. you know, you see what happened in texas and the strength -- the influence doesn't seem to be waning for people who aren't going to allow the last 2% for that to happen.

here we are. >> we continue to blow a hole in the deficit and raise the debt which we did, of course, throughout the bush administration. frankly we did it with reagan and the first bush administration. over 6 trillion dollars of operating deficit. in the clinton administration where we didn't allow that to happen we had a surplus. after eight years. the tea party wants to balance the budget. i agree with them on that effort. you're not going to balance the budget by continuing to spend which the republicans clearly want to do, notwithstanding their rhetoric. because they want to set aside the sequestration. >> we appreciate your time. thanks for responding. we'll do it again soon hopefully. >> thanks a lot. >> steve, what else? >> are you coming to me here? >> on draghi, yeah. >> he is just right now explaining the notion of do the governments have to go to the esfs first before the ecb buys bonds and i think he's saying

no, you have to go to the efsf if you want help from the broader government rescue fund. but notwithstanding that the ecb has the ability to act and a need to act because of monetary policy actions. that's where we are now. we are in the q & a period. go ahead. >> on the wires the comments are the governments have to go to the efsf. there was a comment from peter bookvar saying it is up to the governments to request it. >> they were reacting when he was not finished with his sentence. he said notwithstanding and the following comment was the ecb still can and should act, i believe. >> do you see this as him saying, i'm doing this. we are designing a way to do it right now. >> i do. >> and we'll do it of a certain size? >> i do. >> you don't think anyone can stop him? >> i don't think it is kicking the can down the road. they have made a decision. they need to come up with a mechanism here, a size and to talk more about it. it sounds to me like they are on

the road and he's at a point now -- >> the market is down. we were up 80. now down. >> i think you would back this up. in the first several minutes after a major agreement -- i would follow the bonds in euro land. i think they are down. the yields are down substantially over there. they are smelling this correctly, in my opinion. >> thanks, steve. more from mario draghi's news conference. take a look at european equities.

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markets, at least, expect that draghi will eventually act. it's a similar story if you look at the italian. 5.799%. that's come down from about 5.82%. so not massive moves, but if you're watching and you figure that nies are the players who may have the best read on what draghi is saying right now, they seem to suspect he will eventually move. we've watched the u.s. equity futures and they've all dropped substantially. at one point we were up about 80, 85 points with the dow futures. now looks like we are down about 20 pints for the dow futures. as joe and steve were just saying, these knee-jerk reactions, it's hard to wait and hear what happens. in fact, the dow futures down by about 55 points right now. >> okay. coming up, we're going to get for on the ec b's decision and talk more about what this all really means.

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welcome back to "squawk box," mario draghi lending further evidence there's something more here than kicking the can down the road.

he said the purchases will be in the shorter part of the yield curve there will be some long-term purchases but the purchases will be in shorter part of the yield curve. he insists it falls squarely within monetary policy. he's saying it will be very different from the prior programs that the ecb has conducted, and he also rejected the idea of a banking license, saying it's not an issue for the ecb and i said in the past it's not something -- the idea of leveraging up the rest of the rescue funds, but that's not something in the cards here. shorter part of the yield curve is where they're going to concentrate their efforts when they do so, guys. >> steve, thank you. more in a moment. [ female announcer ] e-trade was founded on the simple belief that bringing you better technology helps make you a better investor. with our revolutionary e-trade 360 dashboard you see exactly where your money is and what it's doing live. our e-trade pro platform offers powerful functionality

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the u.s. stock market is indicated lower, the euro giving back most of its gains for the day as well. we did rally a lot on this news. there you can see the euro. some people saying it's another plan to develop a plan. that's andrew's take.