here's the top stories. hewlett hack ward reported nearly a $9 billion loss. that's the big biggest loss of history. revenue slid 5%. company is cutting its four-year outlook because of the slumping pc market. ceo meg whitman is urging investors to be operator as they implements a major restructuring plan. the federal trade commission has viewed instagram saying it poses no issues. worth about $740 billion. that's down, though, from $1 billion when announced in april. instagram has 80 million users. and china's pmi has dipped. this follows shrinking demand from chinese goods in europe and

asia. and the flash also showing chinese goods piling up. >> steve, thank you very much. steve and gary, guys, welcome. >> good morning. >> good morning. >> we have a lot to talk about the latest fed minutes. the central bank stands to take action sooner rather than later if the economy doesn't improve. this was more strongly worded than a lot of people had anticipated. the markets actually turned around after the release at 2:00 p.m. eastern time. the stock market, as you can see, ended up ending the day around 30 points. there were moves when you look at currencies, when you look at bond markets because this was a signal that a lot of people had not been anticipating. basically a move that it would be sooner rather than later. at this point, futures up about 40 points for the dow futures. s&p close to 5.5 points nasdaq

up higher by 6.8. charles emps said that the fed should do more to boost the economy. he's calling the job reports better but not good enough. the evans comments came in beijing overnight well after the release of the fed minutes. we have our own interpreter of all of these manipulates right here on set with us today. we'll get more opinions on what the fetd should be doing from today's guest host, st. louis fed president james bullert. he's joining us from 6:00 to.. 9:00. it's perfect to ask him what is combruflt. what qualifies? >> right. substantial and sustainable. >> and what's soon. >> i thought the words more more sharply -- is. >> there was more consensus around doing more. they said many members, it sounds like bernanke has the

votes to pull the trigger if he has to. i think the other thing that was interesting was the market reaction. as i gauge it, we were down 60 points we fell back down from being down 30. back down 60. up 30. >> we've seen that moving before. >> but hold on because there were a few other things. gold was more definitive of about what this meant. >> right. >> the euro. gold i think was up 1% yesterday. i don't how much of that came after. >> gold was actually above it's 200-trading range in quite a while. same thing when you look at the euro. >> rieght. and the gold going back to the comments. by the way, i'm reading something, the head line, i can't read much of it on tv, steve. a genuine disgust with the

minutes. >> why? >> we'll get into it with mr. bullerard later. just in the sense that you know this that many people believe further quantitative easing is going to have at best minimal impact. i'm excited in all the years we've been doing it, i've never had the opportunity with governors, and you and i talked about before going on air, people make decisions with capital every day. he love to get inside the head. when he gets up every day, what are the data points that he's looking at to make decisions about the economy. >> bullard strikes me ago someone who is more hawkish in this. i wonder how he's going to see that. obviously, we're hearing his opinions. >> i wouldn't put him all the way to the right. i think he's shown an open mind. and i think what he's been saying is that if things are substantially worse than we

suspected, then there's a case. >> but that's not the case that as laid out. >> no, that's exactly right. he would not, i'm expecting, he's not going to be in the consensus there. charlie all the way to left. charlie evans, he's the guy that has said, you know what i've seen enough. i've seen enough. it's fine. let's go, and why are we waiting? it's a little bit of a weird moment right now where what's happened, we talked about this yesterday, growth has edged up from 1.2 to 1.8. well don't hold your breath, let's not pull out the party hats. it's nothing to write home about. but it is somewhat better. is it good enough? is it sustainable and substantial? >> i don't think so i think what the benchmark the fed is looking for, show them 2.5%. >> steve, have you looked at growth estimates? >> no. >> goldman sachs joined us yesterday at the new york stock exchange, if you look at the

investments that are out there, hockey sticked from where we are now in terms of 2014. the fed doesn't -- i'm going to ask these questions, you look at wall street in terms of earnings. >> greenspan was famous in doing that. >> with growth in earnings estimates that are out there by consensus of most analysts, ideally, the fed will do anything based on what's expected. >> hold on. hold on. it's not a vacuum you live in, right? to what extent are the earnings forecast predicated on what the fed is going to do? >> it's all usurped. >> the other thing, we talked about the response in gold. the commodities went up on that and the euro. let's talk about what that means. that's an inflationary hit. a lot of guys make the case what the fed has done is pump up commodities and hurried through the inflation. i don't think the case is quite that. there does appear to be connection, the reason oil has come up. >> let's take a look at that

board. to your point. yes, crude oil was above the 200-moving day average. up another 6 cents. >> i was on set when reporting on the fed minutes but i thought it turned around. i thought it was down during the day. 2:00, the minutes came out. >> that happened early in the morning. >> august 2nd and what it did for gold technically it's done the same for crude. you've had these moves in commodities going back to august 2nd which is driven. >> and be a little careful. part of is the result, if the fed is going to step in and have higher growth forecast, then a higher forecast for oil. or is the liquidity neck. one of the things i keep hearing from a lot of policymakers is

that what has to happen in this world to get it right are is for the euro to depreciate. >> well, that's not happening. >> that's right. >> if the fed stands pat and the ecb moves you can see more parity coming in those markets. >> right. >> that's the question i have. >> this is what i have to say, i know we have to run, were you surprised how much they focused on europe in these meetings? >> no, i know they're really concerned about europe. i know also, by the way, they think europe should be doing more, if europe can do more, the fed can do less? >> they also think with fiscal policy. if you take a look at the ten-year, when you look at what was happening with the fed, these are bullish comments for the bond market. you see the yield falling down 1.69%. you'll see that the euro is at

15929. that's well high at the trading range. a lot of people think that weakness with the euro is what is needed to help euro out of its troubles. 78.58 is the dollar again. gold prices traded above the 200-day moving average for the first time since march 27th yesterday. $1,665, 90 cents an houns. time for the global markets. ross, good to see you, how are you doing? >> hey, gary, good to see you, too. thanks. lot of cross-currents you sort of touched on this. dow jones stocks, 600 behind me. just about waited to the upside. and outpaced and declined. we've had losses in the last two days. 1.5 for the uk and german markets. slim gains, they did pick up on

the fed. just under a third. up 0.2, e-dax is down 6%. mixed data out of china and japan playing into this. the pmis, flash pmis that came in, 36.6, 36.5 in july. in germany, particularly on services, they were worse than expected and the new orders, export orders, subcomponent below 40 since april 2009. more evidence of the core being affected economically speaking. and that now points to a negative contraction between minus .4%, and minus .5%. we've seen spanish yields a little high today. remember, we got below around 6.2%.

for spanish yields, but they have gone high this morning. there we go, 6.44 is where we stand. and china data, a nine-month low. there are still concerns about inflation charts but we're not sure what stimulus will do this weekend but the fed and chinese data, we've seen a swing around in currencies. the aussie dollar, for example, after the fed, dollar index went to a two-month low. the aussie dollar got up to well over 1.05. and the australian resources minister saying the boom is over for his country. the fed has qe. the dollar weakens, you would expect it to go up, but can they go up when the main client, china, is slowing and that marks that the commodities boom has come to an end. >> that's one of the ways to think about it. >> i just want to ask, ross, are

you happy it's over here, the olympics, everybody is gone, quiet sleepy london town now? >> no, we're missing them. i think for two weeks, the cynicism, steve, left. there was to cynicism for two weeks. the traffic is the best ever -- there was no traffic. i drove in every day. it was the best it's ever been. so actually, i think we're missing the olympics. >> steve, ross missed going to all the great restaurants. >> right, ross? >> that's right. the international visitors who were here for the olympics weren't in the west end. it's great. we loved it. >> ross, i have heard you talking about football. your version of football. it's starting up so you've got something else to fill your time, right? >> i know. i think the thing is the premier league, they're well paid. you have a guy that got

transferreded. percy. >> my man. >> you could thumb the training of team gb entirely with the one amount that was spent on one footballer. so it's interesting. >> sorry, ross, our producer in the back does not like to talk about soccer. he's just wanting to move on. but if it's an american football conversation, he'd let us linger. he doesn't want us to talk about this. we'll just move on. becky. >> great to see you, ross. >> see you, guys. today, we are featuring a number of companies disrupting the business landscape and one landscape that is rapidly changing is silicon valley. joining us from jay eller. jay, it's great to have you on the set. >> thank you. >> we talked to you earlier about facebook and saw the changes laid out for us. i guess this has laid out serious changes for silicon valley, the way the field is not like it used to be.

>> what's happening with facebook, with zynga, does any startup really want to go through this? or do you want to be like instagram and sell when someone comes along or yammer, and say, yeah, i'll ache a billion behind closed doors? >> or maybe next time, you want it all in cash? >> yeah. i think you look at that i think it's going to change certainly how some companies look at the process of being independent. >> that's one perspective, looking at it from the company's point of view. i kind of look at it from the investor's point of view, you used to think if you get an i , ipo,s especially with the tech stocks, that's the greatest thing ever. but one thing that has changed, if you're an investor these days, the idea of an ipo, forget it, it seems like the whole thing has played out. >> right. >> like i'm sitting at home going i wish i could get shares

of google. i wish i could get any of those. the event of getting any access nowadays, it's too late. the early investors already got that. >> because the sense that a lot of people from facebook ipo was secondary, it was just the stock around beforehand? >> right. that's what drove that in the private markets, 2 kept getting higher and higher. >> the wall street firms have a pipeline of technology, ipos they help to brig to market, despite what has happened over the last several months. are you saying that a lot of those companies that you're in touch with them in silicon valley and decided basically not to go public? >> like a morgan stanley, a goldman sachs. are you saying as a result of what has happened they're going to pull the ipos? >> i don't think, maybe with the

smaller companies maybe it is better like instagram or yammer. let's just take the 1.2, the $1 billion, let's do it behind closed doors. let's not open up our book and not be subject to the sort of scrutiny that we have to do and not getting trashed the way groupon has. think about what has happened, if you're at groupon, it's got to be seikaly a crush. >> the other side, what the broader mark has brought you is a massive amount of capital that you decide to forego, right? >> right. >> so you're associating with a much smaller set of individuals and it's not entirely clear what you're getting because you wouldn't be getting the market place. i agree, it's difficult for some people and in the past enriched a lot of people, at the same time, start-up investors. there's been a couple good examples, and jay has a good point, it's been a lot of grief for these equity guys.

but i feel equity is not the best way to raise money for a company? >> andrew mason, groupon, probably wished in retrospect had probably done things dirt. if you take outside funding and you're basically beholden to people who give you capital for your business, and the other thing, you really have to do what they want to do. whether or not you believe it, that's the way the game works. now some of the vcs may decide this exit strategy going beyond the ipo may not be what we want. >> we see the vc the private equity. >> speaking of private venturists. peter teele, he made that $5 million investment, cashes out and petting hammered. >> not getting hammered that he is selling. >> right. >> but as a board member whose

going to heretically stay on the board to help this company, that's an issue. >> you've got a responsibility to the company. >> that's the reason he's on the board. he was in a difficult position. even other venture capitalists and others selling during the ielt po, them selling at 38 and now the stock has crashed it doesn't look good. it's sort of upward. they still have a ton to sell and they're going to enkurnt the tame problem that thiel encountered. >> jay, thank you very much for coming. >> you got it. is hewlett-packard a stock

to run away from now? plus, isaac is threatening more than the rnc convention. and several disrupters and reputation.com, that site helps you restore your internet implications that apparently i need to do. and if you need a doctor, zocdock, that's coming up here on "squawk box." [ male announcer ] ...forbusiness.com. ♪ ha ha!

orange juice futures jumped 6% yesterday to a six-week high after forecasters warned that tropical storm isaac will strengthen into a hurricane and could possibly hit south florida by monday. take a look at that. wow, that is some serious movement. florida is the biggest orange market, about 50 million boxes were lost when hurricane wilma hit in 2005. experts do note that frost and blight have historically done

more than hurricanes but again you have people paying attention. hewlett-packard meg whitman is urging patience with this turnaround. hp did estimates with the earnings. let's get right into it. we've had dell this week, we've had hewlett-packard before. what do you know as an analyst today that you did not know a week ago about not just hewlett-packard but the overall pc market and what the outlook is for the rest of the year? >> sure, gary. i don't think there's many changes. the market is pretty much the same. we've had macroheadwinds. the market has moved to tablets. as part of pcs, both of these companies are suffering from trends, as well as margin trends. not much you can do with that.

>> in the earnings report from hewlett-packard, you continue on the stock because you think it's a value idea. you think with the macro, you think meg whitman is able to execute on this turnaround. >> it's interesting. a lot of people want to see death, we actually see signs of life. basically what we saw on the quarter is intriguing for us. number one, earnings have gone down basically for the last three quarters, they beat earnings expectations and we're kind of pegged to the wall on annual basis. whereas, dell, they just were down 20% earlier this week. point number two, cash flow generation. obviously, the cash flow generation at hp has been pretty poor over the last several years. we're starting to see the turnaround, sequentially up 3%. i think that's a positive sign as well. >> let's go back to the macrofor

a second. was there any expectation built into the guidance that was given in terms of the overall economic growth, what may or may not happen, so you can interpret where the next move may be? upside supplies or earnings? >> sure. they haven't really given much in terms of the macro. the day is august 30th in san francisco. i think this is going to be a big deal talking about with respect to the market. i think we'll have much more visibility on october 3rd. having said that, what meg has said so far, we want to be a company that grows in line with gd. that's basically what ibm does, 2%. so we're still projecting share loss. revenue headwinds, et cetera. but having said that, i think there's a lot of leverage they can pull on the margin side, as well as cost, to keep that eps

at 4 bucks. >> thanks very much. have a good day. >> you, too. okay. coming up, some of the hottest places to invest are where tensions are high. we do globetrotting next. jim bullard is our guest starting at 7:00 a.m. eastern time. as we head to break we take a look at yesterday's winners, yesterday's losers. ♪ if you are one of the millions of men

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good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick along with steve and gary kaminsky. let's get to headlines. some concerns for investors in china. the managing index shows that manufacturing came in with a nine-month low in august. that is pressured by speculation that china will true now measures. at 8:30 eastern time, the changes expected from last year's report. the government is out with new home sales since july. the congress is looking for a 2.9% increase there. and jurors are expected a second day in the patent days in

apple. we did see instructions to the jury take up 109 pages. steve. >> to check on the markets this morning, becky, we were up a little bit before. let's see where we are now. we're still up a little bit. up 39 points, outlining yesterday's decline. what are we wait for, guys? >> jobless reports. >> i know, the fed, payrolls, euros? >> jackson hole. >> jackson hole. >> are you going to be in jackson hole, gary? >> no, i'll be here. >> friday is when bernanke speaks? >> and friday is when bernanke speaks? >> saturday. >> it's bernanke's show, so

drogy would not necessarily cup to u.s. soil to make big news. let's take a look. oil is here. ohio is the next thing we're going to look at. 98 bucks i think that was $90 a barrel. yesterday from the fed. ten-year note was 169 as i recall. that came down a bit after the fed's 2:00 announcement. the dollar was weaker, 1.25 against goods. you're right right around there. that also depreciated with the kinds of things you would expect. then finally gold took a big pop yesterday. 125 bucks. >> the summary of that data is simple. if you want to know the q trade on? >> it's an investment. in china, tensions are running high in certain parts of the

world. jackie deangelis takes a look at a few of the hot spots. >> good morning to you guys. meantime, there's always some risks investing abroad. but if geopolitical movements around the world, iran refusing to cease its nuclear weapons program. timing of a possible israeli strike on iran is key. many believe that netanyahu could do that before the next election, leaving president obama no choice but to back the attack. it could send oil prices hire. fighting in the region could disrupt iran and oil has already threatened to flow through the strait of hormuz. and fighting could also impact israeli's stock market. it's known for cutting growth and technologies. the tel aviv stock exchange is up 3%.

but we saw a drop in the story dominating the headlines. you can see that on the chart there. right at the beginning of summer, we saw a little bit of a drop. also take a look at the israeli shekel. israel's currency could see some pressure. aside from the concern of additional political destabilization in the region, syria shares its border to turkey and that is a market that's for foreign invests, 4.6% next year. those who note, bashir assad said he's not going to back down. so year to date, the istanbul stock exchange, that's up nearly 30%, but is it time take some risks off the table? of course, that's the big question. the turkish euro has fallen 5%

to date. the question is, can we go lower from there? so far, global investors haven't panicked just yet because neither of these situations have fully developed but having a game plan may not be a bad idea. guys back to you. >> jackie, thanks very much. more stories on the website right now, including europe's fastest growing economy and how you can make money there. head to investingin.cnbc.com. >> thank you for clarifying that. >> thank you, steve. >> appreciate that. >> all right, if you guys have any competents or questions about anything you see here on "squawk" e-mail us at squawk @cnbc.com. still, the little guy that has a chance to become an investor player. the cleveland clinic's toby

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welcome back to "squawk box," everyone. the futures are indicating. dow futures up by 35 points, steve, you're seeing action out of europe? >> yeah, i'm interested be about 3:40, 3:30 this morning, had an uptick in yields. especially in spain. i don't know if there's any news. if you take a look at an interday chart -- there you go -- maybe we have the inter day -- let me call that up real

quick. what you see is a 21-point basis rise in the two-year. and there's the ten-year which was up quite a bit as were el. let me just find out what those numbers are here, 15 biffs on the ten-year, 22 biffs on the two-year. that would come along with concerns that the ecb is not coming along. but i have not seen a story on that, we have a merkel and hollande meeting. i don't know if that spills over into how tough they're going to be on spain. there was another story this morning that said the ecb would target, i believe, a rate when it comes in. >> a specific rate. >> a specific rate, but it wouldn't make that rate public. >> what. >> it's weird that they would not make it public, making it public would mean that most of it -- gary, if you were a bond investor and they told you

that were going to target a spread, for example, of 100 over the euro area would you trade higher than that? >> no. you may have set up an albatross. going back to the fed minutes yesterday, the fact that they were so focused on concerns over europe, maybe a few people around in europe said, you know what, things are worse. >> you know what, these minutes came back the day before droggy spoke. these are the minutes, right, august 1st is when he spoke? >> i think what you have to remember, the markets are so thin right now. i know everybody is going to say -- on vacation -- >> everybody is on vacation. >> but in europe, they're incredibly thin right now. and a couple of head firms can move these euro bonds. >> let's bring in jim muriel,

tgn services down at the krmplgc.e. group. you saw the fed markets move a lot yesterday, particularly the bond and currency markets. what are you making of this whole idea what the fed seeing and what it's going to do for markets? >> becky, we saw rumors that the ecb is going to back every bond or whatever that rumor is. and we saw that the at the has an itchy trigger finger. one thing that i'm going to stay long on is gold and silver. the stock didn't have that great a move. some of that is from better data but some of that is from the existence that bernanke put back in the shadows of the room. and yesterday, all we did is get a confiration on that but the stocks can be disappointing. the most tricky part how to play it is the bonds. short term. you go with the fed.

but long-term, if that's the only reason you're buying that to piggyback, clearly, the move is in gold and silver. >> what do you think about the idea with europe with some of the yields being higher? >> well, for short tell rm, loo what the gary said, the euro itself has stayed where it is so i'm not particularly concerned with that. if they're really going to come in and put a floor on it, whether we know it or not, it's the same trade as bernanke put. sure, people are going to take risks. the short trade in euro has been going on for years so when it begins to correct right now and if they're putting floors on some of the bonds, you have to see some of that. so the euro could have a little more upside here but that doesn't take away the fact that it's a bad idea currency and it's going to sell again. the problems clearly aren't fixed. if they are fixed why would they be coming in so agressable? >> it jim, it sounded like you

said that gold was going to be the most liquid of the market, is that what i heard? >> gold and silver. i'm long those. oil as well. i'm concerned about oil we're comfortable long it, and all of a sudden, we get more talk about releasing the spi. so oil scares me a bit. >> what do you think about jackson hole and what you expect to hear out of that? does that kind of wake everybody out of their summer doldrums at that point? >> as you said, most it on vague indicatio vacation and i don't see what we're going to -- >> i think we lost jim. that was a technical problem on our part. >> maybe it was jim's part. >> well, it could have been. coming up, a disrupter -- speak of disrupters -- of proud funding. this say good story. i was reading up on this. the ceo of circle up next.

and coming up, james bullard, the news maker. we'll be talking to in just minutes to talk about the action the fed could take to boost the economy. "squawk box," we'll be right back. [ male announcer ] when a major hospital

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♪ aflac [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. [ yawning sound ] crowd funding is one of the hottest areas for investors and entrepreneurs with the number of crowd funding platforms to grow 70% this year. takes us inside this crowdfunding companies circle up. >> reporter: for entrepreneurs who make baby granola or baby skin care products circleup is fast. connecting them with credited investors. circleup accepts fewer than 2%

applicants. companies share business plans. little duck organics raised $1 million in just several weeks a fraction of time it would have taken. circleup is backed by dilemma author clayton christensen has closed four investments raising million since investing since april. >> joining us, ryan falder, ceo of crowd funding. welcome. >> thank you. >> i need to let everybody know what crowdfunding. >> give us the quick explanation. >> crowd funding whats a brought definition it basically means a group of people come together to fund a project or company. it could mean donating in a company or in our case, receiving equity from that business.

>> so it's not a public offering. what if it's more than 500 people? >> that's right. it's not more than 3500 people. >> it can't be, once you get beyond 500, you have to stop the process? >> jobs act? >> back in april. >> and expanded it to what? >> 2,000. >> so wait, they did something positive. that's what i'll talk about with joe when he comes back. okay, so now let's talk about your company. you have a specific niche in this crowded, crowd funding business. >> we do, consumer products and specifically consumer products companies with more than $1 million. the reason we focus there fundamentally we don't think this industry or our company exists in five years if investors aren't making monies. it's an inefficient market so there are hundreds of investment firms in the country that invest in larger consumer products, companies with more than $1 million, and almost none below

that. >> becky? >> you walked in with the whole foods bag and with the little ducks, i just bought these for my 1-year-old. >> it's an organic kids snack business growing at an extraordinary rate, national distribution at whole foods and 4,000 other stores. >> the key thing with any company is getting international distribution. >> it's an important point, exactly why we focus on companies that already have $1 million or more in revenue. it takes a little bit of risk out of it for an investor. it's an alternate asset class and certainly a good amount of risk. >> if i circled off and put money into this project, a couple things, number one, how long am i locked into this and number two, when do i eventually get the payoff in terms of the exit strategy that i, if i'm making an investment will get a

return if successful? >> great question. you're investing as you would as an offline investor. you get paid when the company gets paid so if the company sells to a larger business, a general mills, you get paid out. can you make money in this asset class focused on consumer products. it takes several years. it's not like public markets. >> say he wants out after a certain period of time? >> legally you have to hold the shares for at least a year but there are secondary markets where you have the ability to -- >> but not within your company, in other words i couldn't sell them back to other investors in your company through that process? >> not yet. >> but that's another innovation you're going to have. >> it may. >> i just want to know what kind of protections does somebody have going in?

how are you screening these companies in. >> that's a a really important question so you know, there are a few different -- >> you're opening up the treats? i want to try something for grownups. >> 18 rabbits is the gran jola. >> tastes pretty good. >> the protections, we are focused on consumer products, we go through a similar screen that we would have. we let less than 2% circleup. some we act as broker dealer, we go through the registration. we conduct background screens and look at third party data to see how this company is performing and do a consumer survey to understand what people think of the brand, talk with entrepreneurs at length and do some indulgence products. >> do you consider yourselves cheap money, expensive money.

why would i go to you or the bank or vc or private equity? >> if you're a tech company you wouldn't come to us. tech companies funding for early stage tech companies it's an efficient market. thousands of vc firms and angel investors that will already fund the businesses but in consumer products it's very inefficient. consumer as an industry is 20% of the economy, only 4% of angel fund. i think those ratios should be the same, they're not. the reason they come to us first and foremost is difficult in terms of products business. the second reason is the community we're building so we have a number of different partnerships that we think help the companies on their side. >> general mills, what is the partnership with them? i'm not sure i understand. >> we're thrilled to announce we partner with general mills so general mills is certainly one of if not the most respected consumer company out there and they're excited about what works because they're always on the lookout for innovative small consumer companies to acquire that's one of the ways that they

grow and they view circleup as an interesting funnel to identify those brands. if you have ten granola bars that apply, two get on and one gets funding, there are several screenings by us and the thousands of investors on our sites. general mills pays us a fee to be part of our community and get to know the companies on our site and with the express purpose of playing a role with the company. >> you have $3 million of funding you raised so far and four companies? >> in the past three months, four of our companies have raised money a total of $3 million. >> and what's your goal? how big a company for next year in. >> it's hard to put a guess on next year. >> larger. >> we've already passed the goals for 2012. >> we have to go but thank you, ryan caldbeck. president jim bullard is

headed to the set, is he ready to take action to boost the economy? stay tuned. we'll be back after this. rade, you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. our support teams are nearby, ready to help. it's no wonder so many investors are saying... [ all ] i'm with scottrade.

the economy monetary policy and what it means for your bottom line. [ bell ringing ] st. louis fed president james bullard on the economy and abroad. a clean slate. why this next disruptor has the power to restart businesses with a troubled online past. and searching for that twinkie. >> there's a box of twinkies in that grocery store, not just any box of twinkies, the last box of

twinkies anybody will enjoy in the universe. >> the ceo of hostess is here, first on cnbc, and he's got a plan to get the company out of the red as the second hour of "squawk box" starts right now. ♪ ♪ ooh, yeah good morning! i am mocking kaminsky. good morning! welcome to "squawk box" on cnbc. i'm steve liesman along with becky quick and gary kaminsky. we have twinkies here, jim bullard, let's take a look at the futures here up just a bit, 44 points, slow erosion this morning, i'm not sure, 4 points to the upside after a 30 point decline yesterday in the dow. the s&p up four points, nasdaq up five. 0.26, there you go, gary, that's for sure.

>> sorry. >> i'm going to read, i just wanted to you see the percentage. >> i'm actually prepping, we've got so much to cover. >> it's a little late to prep, gary. here are the morning headlines. scotttrade bought stock in knight capital from some of the firms that rescued night a few weeks ago. blackstone group and getgo sold some of their holdings to scotttrade, victims of ponzi schemer bernard madoff will get another $2.4 billion, the judge approved a request from trust ye irving picard. $1.1 billion had been distributed already to former madoff customers and another 2.4 on the way. hurricane isaac is headed toward florida, threatening the gop convention and the state's orange crop. becky? >> let's welcome our guest host for the next two hours, jim bullard, president of the st. louis fed, here with us

exclusively this morning and it is a pleasure to have you here. >> thanks for having me. great to be back. >> perfect timing, what a coincidence to have you the morning after the fomc minutes come out. >> it's always a good time to be on the show. >> it's a great time to have you here this morning and we need you as translator. the fed minutes came out and caught people's attention. the huge news is the language was quite a bit more explicit than people had been expecting. first of all this idea that many members judge additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial strengthening in the case of economic recovery. what's fairly soon? >> well, i think we're being vague on that, so i'd want to preserve our options. i do think growth has not come in as strongly this year as we expected, and i think a lot of community members started

expressing that at the meeting. that's what came out in the minutes. we had to downgrade our forecast in the spring, and things haven't been where we'd like them to be. now, i do think that the minutes are a bit stale because we have some data since then that's been somewhat stronger, but i think that the tone of the discussion to me anyway, and this is my interpretation, was gosh, things are not as good as we thought and if it continues to decelerate here we're going to have to do something. >> hold on, jim, that was not what the minutes said. it didn't say -- >> there are some people who say, you know, 2% isn't good enough. >> right. >> there are others, like me, that say you know, this looks weak and we have to get higher. >> hang on, i really want to hone in -- what is the litmus test here?

many members believe we need to have, we need to do additional accommodation unless there is a sustainable and substantial change in the trajectory of the economy. that's different from saying it's good enough where we are. >> well, your' one-half percent growth in the second quarter, unemployment may be ticking up, that was rounding, maybe unemployment ticking up. i think people are getting nervous and they're expressing that, that that's too slow and that's not a good outcome. but if we were to resume, which i think we will, you know, 2% growth, maybe a bit stronger than that in the second half of the year, unemployment ticks down through the rest of the year, you know, that's not a great outcome but to me that's a good enough outcome to keep us on hold. >> but that is not the impression that i believe most members report back. >> this is a discussion at a meeting where no action was

taken. you say if you have a discussion at a meeting where okay now you're going to put something on the table, where is everybody going to come down, i don't know. >> that's an interesting point. >> is that fair enough? >> yes, you're saying that it's one thing to talk about the vague possibility of easing down the road. another thing when people say what is the proposal, how do i vote on it. >> let me say this, too. this would be unusual for the fed to take a really big action based on this data constellation, so just think about where we were last year at this time, markets in turmoil, things are much worse, recessions were high last year. right now recessions probably aren't as high, measures the financial market turmoil really high last year, not that high right now. equity markets down sharply last year at this time. now we're looking at all-time highs. european situation in turmoil

last year, not good, still a wild card, so i think you know, interest rates, longer term interest rates, you know, very low right now. so i think it's a different constellation. >> you're saying it's not bad enough to warrant a major qe program. >> i don't think so, but i think the committee has said and would be determined to act if things deteriorated further. whether you could just stay on a medium growth kind of a moderate growth track and have unemployment still declining and still people would want action, it's not that clear to me, but i'm just one member and it's not that clear to me where the chairman will come down on that. >> you're just one member but a member watching this discussion and your interpretation is slightly different than how the market interpreted the minutes yesterday, because the markets looked at this and said hey, this means that they could act in days, if not weeks. >> and i think probably the best thing to talk about here is what would that action really be.

and i think markets have the idea some gigantic action, i'm not sure the data really warrants that. >> jim, let's go back, would you say that it was an unfair interpretation if someone decided yesterday that the fed is prepping or thinking about a lehman like moment in europe that it was such a focus on the europe situation, is there a plan in house, what if europe imploeds this fall? >> sure, we've been worrying about europe for a long time. >> you said things are better than they were a year ago. >> well, think about where we were a year ago. we had the july 21st agreement in europe, then during none of that was ratified until the september/october time frame. that was the plan of the european authorities, but it was too slow. so you got really a lot of volatility during the august time frame, people were saying

the recession probably in the u.s. was 75%, that didn't materialize but that's what people were saying at that time. so we're not in that kind of situation right now. >> you're not going to make a decision, or the committee is not going to make a determination of u.s. monetary policy based on what may or may not happen in europe this fall. >> we're only reacting to europe as it affects the u.s., the economy, and the story on that has been that the direct effects from the european recession are, you know, they are there. they are tangible but they're relatively minor compared to a financial meltdown type of effect and i think the chances of financial meltdown, it's a wildcard but maybe down a little bit. >> let's go back to the u.s. policy here. it sounded to me as i read the minutes that the board, the committee is ready next month to extend the guidance. is that something that you think falls outside of the, what's warranted, given the economic data right now? >> i think the guidance, as you guys know, i haven't been a fan

of putting these dates in. >> you hinted at that from the beginning. >> if you're going to put the dates in, you have to move them around when the data changes. we haven't moved this since the beginning of the year and we've said in other ways that obviously we've changed our forecast and things like that so why aren't we moving it? you should move it really at every meeting but i think people are reluctant to do that so it's created a quandary for the committee. >> we'll talk about the quandary in a second but, given that, it's, they're going to use a calendar date, and then you support moving it forward into when, late 2015? >> i don't know that i -- i have an earlier date. i'm like 2013. >> for when you think the fed should begin to raise rates. >> it's becoming, you know, i don't know how long i can stick with that. >> you may have to move your date forward. >> for right now i'm sticking with it but we'll see. >> so you wouldn't answer where

the committee would -- >> i don't know what the committee is going to do. >> may decide. >> one of the concerns there, you start going too far out into the future, how much difference does that make? there's so much uncertainty as you go a couple years into the future, that you know, whether you say it's six months early or six months later. >> you said the minutes could be dated, we have seen better economic numbers since the meeting august 1th. if you look at the numbers coming out is it fair to say the monthly jobs report is the most important number the fed's going to be paying attention to? >> high unemployment in the u.s. and jobs is a key issue so it is an important number. it's not the only number. you also have this sort of financial turmoil wildcard and many people say it's a rocky september/october time frame. >> the markets could be more important? >> i think markets are a factor and many other factors,

consumption spend income and decelerating through this here but we have good retail sales report and so i think you look at many different types of things. >> you mentioned the stock market, you were up here, if this was today and you were looking at data to see how the capital markets around the world adjusted to what happened yesterday, besides the stock market, what else are you looking at in terms of reaction to what may or may not be expected? >> reaction to the minutes? >> no, to get your opinion in terms of how the capital markets around the world are thinking about what you and the other policymakers are doing. you looked at stock prices and mentioned to steve stock prices significantly higher than they were months ago, are you looking at spreads on fixed income, are you looking at what's happening in the spot mortgage market rate? what are you looking at to make a determination that interest rate policy is flowi ining into general economy? >> we're a data intensive

organization so we're looking at tons and tons of stuff all the time. >> you have to look at something every day. >> i do but i get all kinds of reports, i watch and see what you guys are saying. >> excellent. i don't want to give the impression you can put this down to one or two indicators. but it's a big picture. >> let me ask the question a different way. if the stock market has a correction in september/october, that alone is not going to be a driving factor to make a determination on monetary policy. >> we're not going to act directly to the stock market absolutely not. >> down the road when you talked about policy and where you're going, what the benchmarks are. the fed's been considering a lot of different ideas. are you in favor of putting in benchmarks where unemployment has to fall at a certain point

or policy will keep going until that happens? >> i don't want to put numbers especially in unemployment because as you guys have heard my story on this before, unemployment is this variable that has behaved strangely in advanced economies over the last couple of decades and europe in particular at high unemployment, went higher in the '80s, never came down, it's never been below 7, 7.5% on a european wide basis so you wouldn't want to tie monetary policy directly to that because then if the labor markets behave badly, you have badly performing labor markets and pulling monetary policy off for a generation so i really don't think you want to go in that direction. obviously we look at labor markets anyway so i don't think we have to put numbers in that and tie it that way. >> it would be a communication strategy, that's the point that you would be signaling to markets an open-ended commitment to stimulus.

>> well, we can do open-ended in other ways i think and we can talk about that -- >> on the other side of the break. >> i don't think tying it to unemployment directly is a good idea. >> president bullard will be with us for the rest of the program. if you have questions or comments, e-mail us and follow us on twitter, @squawkcnbc is our handle. the ten-year note which in the past alan greenspan told us it's his favorite measure of what's happening in the economy, it's 1.695%. as we head to a break now, look at oil, oil after the minutes moving above the 200-day average for the first time in several months, you can see oil up 50 cents to $97.76. and up next, talk about needing dough, after emerging from bankruptcy two years ago hostess finds itself trying to do the same once again.

the ceo tells us how the company plans to do that, when he joins us, right after the break. it's g a delaware nonprofit that's providing training and employment opportunities, investing in the revitalization of a neighborhood in the bronx, or providing the financing to help a beloved san diego bakery expand, what's important to communities across the country is important to us. and we're proud to work with all of those who are creating a stronger future for everyone. [ male announcer ] it's a golden opportunity to experience the ultimate expression of power... control. [ engine revs ] during the golden opportunity sales event, get great values on some of our newest models.

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we're back. look at the futures still a little higher, 20 points for the dow futures, slightly below where we started the morning, maybe cut those gains in half. we'll see where things get as we head toward the afternoon. >> we had healthy snacks earlier, and now we have

twinkies. the future of twinkies hangs in the balance. hostess trying to work its way out of bankruptcy. joining us is ceo greg rayburn. let's get into it. lot of people see the twinkies here and say this company has been bankrupt a couple of times. what happened? why bankruptcy? >> well i think hostess went through bankruptcy about four years ago, they spent quite a bit of time in bankruptcy the last time, but if you overlever a business and you don't invest back into the business over a period of years you're going to wind up in bankruptcy, and i think that for hostess, we have a path to emerge, but it's a difficult one and it's a painful one, it's painful for the employees because it requires wage concessions and pension concessions and they've been

through this ringer once already so it's, you know, there's a way but it's not an easy way. >> we want to get into the concessions you're asking for but is it just an expense issue or is it a revenue issue that revenues aren't growing to bring the top line to the levels that would not make the cost cuts necessary that you have to make? >> that's a great question and actually what has fascinated me about hostess, i've done a lot of different businesses over 29 years, our revenues have been stable and so when you look at we've had everything you could imagine, two bankruptcies, bad press, corn prices like dust bowl levels which impacts us hugely because when you're in bankruptcy you can't hedge, or you can hedge for two months but can't hedge long-term. i wouldn't be surprised later today if one of my guys calls and says we have locusts, but revenues are solid. so the strength of the brand is

remarkable to me, whether it's the brands you mentioned, drake's cakes, dolly madison, there are powerful brands, powerful demand. the difficulty is the cost structure, the difficulty has -- >> how much are you asking the employees give up? >> a lot. you know, i think in terms of wage concessions it's about $40 million a year so this is an 8% wage cut, year one but i think the key to that is and what's different about this versus other deals i've done, it's total company wage concessions, it's not one specific union. in other words, it's management in everyone, so from my point of view, the only way to make this work is that everybody's got to get in the same boat. >> can we move this to the political sphere, which i think there's a big issue in this country that unions bring down companies.

is there another point of view sometimes the companies get overly financially engineered, and that the extraction of wealth from the financial engineers is something that brings down companies. what is the case with hostess? >> i don't think unions bring down companies. i think that's an overly simplistic point of view and i hear that. >> sure. >> there are aspects of union participation that are difficult. so in our case the multiemployer pension plans which are in the press quite a bit and the potential liabilities for those, that is a deterrent to investment. that's a difficult issue but it's not one that you can't deal with. >> just to be clear about that there's huge liabilities you have to fund down the road and that's something that deters further investment in the company. >> if done poorly. so in our case we've solved that. question stay in these multiemployer pension plans and i think that works for our employees, works for our unions but we have ways to make sure they're financially sound.

i don't think it's a union issue. financial engineering can always get you. >> in this case what caused the levering up to begin with? what was the problem? >> why was it levered up? >> that's history and -- >> but i think if you're a union member, you want to know is this done because we were asking for big concessions, we were asking for large payouts in terms of wages and in terms of pensions or is this because some earlier management team came in and took away all the good years of fruits that we'd built up? >> okay, so for what i do for a living, right, there's really no value in me looking sort of backward. >> you can throw the old guy under the bus, it's okay. it's common practice. >> the way i look at it is, i can do that, so i can spend my time on the battlefield bayonnetting the debt. there's no percentage in bayonnetting the debt and in hostess's case there's blame for

everyone. could you look back, was it this, was it this? frankly everyone gets complicit in this. >> steve eat the twinkie. >> i like the fruit pie. i'm not eating twinkie. after i do kayaking the fruit pie is my favorite treat. >> thank you very much for joining us. >> that was interesting. more from guest host james bullard. >> i want a bite. time now for today's aflac trivia question, who was the first female to direct a movie that raked in over $100 million? the answer, when cnbc's "squawk box" continues. c pays cash. aflac! ha! isn't major medical enough? huh! no! who's gonna help cover the holes in their plans? aflac! quack! like medical bills they don't pay for? aflac! or help pay the mortgage? quack! or child care? quack! aflaaac! and everyday expenses?

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now the answer to today's aflac trivia question. who was the first female to direct a movie that raked in over $100 million? the answer? penny marshall. >> aflac. up next, we have more of our exclusive interview with st. louis federal reserve president and ceo jim bullard. also you're going to want to watch shares of hewlett-packard this morning, the company reporting a nearly $9 billion second quarter loss, the biggest

in the company's 73-year history. operating earnings did manage to beat forecasts but revenues slid 5%. "squawk" will be right back. comments? questions? send them to @squawkcnbc on twitter. follow the show and look for updates from andrew, becky, joe and the "squawk" staff. "squawk box" on cnbc, and on twitter. what makes a sleep number store different? you walk into a conventional mattress store, it's really not about you.

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welcome back to "squawk box," everyone. let's look at some of the stocks in the news in today's trading. the federal trade comission ended its look at facebook's proposed acquisition of instagram. shares of guess lowered its earnings guidance for the second time on weakness in europe and lower north american sales. the company hasn't traded premarket but it is indicated sharply lower. a big drop for big lots, reporting a profit of 36 cents a share, five cents below estimates. same-store sales fell 9% during

the second quarter. let's continue our conversation with jim bullard, president of the st. louis fed. jim, let's talk about the fiscal cliff which is on the way. what is it that you would like lawmakers to do between now and january? >> i'd like them to reach a deal now. i think the biggest thing about the fiscal cliff we saw the cbo's estimates yesterday, i would say this. this is a probablistic statement about a stalemated congress. i would only put about 20% probability on that. i'd put 80% probability that -- this is my own subjective probably that they will reach some kind of deal of some kind either during the lame duck session or shortly after, so when you're looking at it from the economy's point of view or from the fed's point of view, this is a downside, a downside risk, but it's only a probablistic thing. >> that's a bigger probability than some people might anticipate. >> yeah, i just think it's so hard to read and hard to know

what will be the configuration after the election and so on, but oh you've also got this debt ceiling vote in there that's going to be very contentious. >> do you believe it's affecting the economy right now? >> yeah, so what you'd like to see is that we do not run policy based on this brinksmanship, puts uncertainty sitting out there in the future, markets pull that uncertainty to today, and then that has an effect on the economy today, that's really what the problem is. you'd like policy in an ideal world to be nice and stable, whatever you want to debate about, how the tax system should be set up or whatever, debate it, make a decision, and then stick with the tax code for a long period of time. >> so if one of the concerns among some of your fellow colleagues on the committee is that the economy is running below potential, if one of the reasons the economy is running below potential is because of concern over the fiscal cliff, then wouldn't fed policy now

effectively be bailing out the fiscal side and wouldn't it be unwarranted for that reason? >> i do worry that we're facilitating debt buildup in the u.s., and that's, this is the wrong time in the global situation to be building up a lot of debt. you're just seeing terrible consequences in europe from doing that, and so i do worry about that. i don't think anyone on, involved in fed policy is intentionally going in that direction, but maybe unwittingly we're supporting that outcome. >> i just want to make sure i'm understanding this. you think that -- how are you facilitating the debt buildup, keeping interest rates low, buying through quantitative easing? >> absolutely. >> you have a concern that the government is looser than it would be with its fiscal policy? >> i don't think anyone's, like i said i don't think anybody's intentionally doing that or wanting to do that. they're looking at macro economic, and i am, too, looking at macro economic conditions

when making monetary policy but it is a very important consideration and what's the interaction between the fiscal side and monetary side. >> if you can't control the fiscal side of things and all you can control is the monetary, is there anything you eventually to try to rein in -- >> let me give you a geeky thing from the macro economic literature. you have a fiscal authority issuing debt and monetary authority trying to stabilize the economy through interest rate adjustment. there's such a thing as a passive fiscal regime and active monetary regime so the active monetary regime means that you move more, you move interest rates pretty aggressively in response to conditions and the debt just gets issued sort of in the background. but there's another way to do that, an active fiscal policy regime and passive policy where guys are issuing debt like crazy

and we're not reacting much to macro economic conditions. this is a bad regime and can lead to bad outcomes so i am concerned that some of what we're doing looks a little bit like that. >> is that a reason to raise rates? >> we'd like to get better fiscal policy? >> not do qe3? >> i'm not trying to relate that directly to qe3. >> if you're saying the fed is facilitating a wrong-headed or badly misguided fiscal policy then the fed should maybe stop that. >> it's a concern of mine and i think everyone's. i don't really think we're there yet but i would be concerned. >> many in the republican party say this and it's an interesting comment that the fed is fa sill

sill tating a loose fiscal policy and more debt than should be warranted and that's a problem for the country and a reason for the fed to change policy. >> too much debt is a problem for this country and we have to get it under control absolutely. >> jim, in terms of too much debt, let me give people something else to potentially worry about. one day interest rates will go up, one day there won't be quantitative easing and a strong recovery and the fed will have to exit in terms of this huge balance sheet. a couple of days last week you had a huge move in treasury yields just on the fact it was a simple amount of supply. how does the fed ever exit the book they've built up here? >> to the chairman's credit he's led a discussion on the economic strategy, the committee has laid out at least some thoughts on how to do that. i think that's been sidetracked in the last year but i think it

would be a concern about further qe, it would complicate the exit strategy. i think operation twist frankly is complicating the exit strategy. >> so a year from today, what is it, steve, when are we going to get economic recovery, three years from today? >> we're having an economic recovery now. >> strong growth, strong growth. >> it's not zero. >> you think that would be a major focus, now we're growing and raising rates, how we're going to get the balance sheet down? >> i think if you had a couple of quarters of 3% or 4% growth it would change the discussion dramatically in the u.s. and change the market attitude dramatically. >> let's talk about europe and what's going on over there. what would you like to see mario draghi doing now at the ecb? >> i was in europe in july for about two weeks.

talked to policymakers, private sector, the debate is rank russ, terms are not defined well, solutions are far-fetched, some solutions are far-fetched, so i'm kind of pessimistic coming away from that discussion. i don't think that the european institutions are really in place to deal with a crisis of this magnitude. so i think that our best scenario is really to muddle through and our worse scenario is something worse than that, but i've become pessimistic on europe's ability to deal with this. >> when draghi spoke back on august 2nd and he said basically the ecb can and will do whatever it needs to support -- >> the ecb is just the central bank. they can't do all the other things that need to be done to really fix this situation. and the countries that have high

indebtedness, it takes years and years to get back on fiscal track, and they don't seem to be moving as quickly as you'd like, plus they're in recession so you've got this downward spiral, you've got the private sector, you talk about a united europe and a united market, the private sector has already divided up europe into countries, i talked to american executives, they're not talking about investing in europe, they're talking about investing in specific chills, so the common market idea is at risk here and i'm very worried about it. >> we just had hostess tell us in terms of what it's like to operate in an environment, if you want to use the hostess analogy you can't do things to reduce the cost structure. they can provide liquidity and buy interest rates but they can't reorganize the. can. >> the ecb is being cast as savior but there's only so much they can do. you've got lincoln's been shot and lincoln's surgeon says i'll

do whatever it takes to save the president's life. you know, there may be limits. >> but there are 75 basis points of positive interest rates in the benchmark rate. plus they haven't engaged in a classic quantitative easing style program. do you think they ought to do both of those things? >> i think, so one of the things i'm very concerned about, i don't like to give too much advice but i will, anyway, i have not liked the smp program which is the program where they buy individual country debt, individual country debt so that would be in the u.s., that would mean u.s. buys california debt or something like that. we do not do this thing. >> is that because they are picking winners and losers? >> they are absolutely helping particular sectors and particular regions of europe and you might say that's because of the nature of the crisis. i would not go in that direction. if you want to do quantitative easing in europe and maybe it's warranted, they are in

recession, if you want to do it, you should buy debt across the board, gdp weighted and you should say that i'm doing this because it's going to help the european economy, not because i'm going to help one sector or another sector. this business of helping just a particular group or a particular region, you know, what are you going to do then when other regions are in trouble and when there's other problems? it politicizes the monetary process. i'm concerned about that for the future central banking globally. >> should they use what's left of their positive 75 basis points? >> it sounds to me like they will make a move in that direction, i think for now that they can go in that direction, but if they really had to do a lot more, then i think i'd advise that the gdp weighted qe approach. >> why are you worried about what it means for central banking around the globe? you think this has repercussions on the fed, on china? >> you start saying well, every central bank is going to design this program and that program to help a specific sector, that

sounds like things parliaments are supposed to be doing and fiscal policymakers are supposed to be doing, not things that central bankers are supposed to be doing. this is an unelected group of technocrats you're supposed to be doing a broad policy that's helping the country as a whole, and do as much stabilization as you can, but not any more, and leave it at that. >> jim, real quick, what is the correlation you believe between monetary policy around the world and what happens eventually with inflation? what's the a to a correlation? >> growing up as a monetary -- i think it's 100%, the central bank controls the long run, medium and long run rate of inflation in the economy at i think over a period of certainly over a period of five years, central bank can determine the inflation rate and that's why i like to look at the five-year tips expected inflation, not the out years because over that time flame we should be able to get the right inflation rate. >> we're going to have much more

to come from jim bullard. >> lots more on the u.s. economy, too. lots more. >> we're going to get the guy from circleup, the venture capital against the hostess, and host less get some more products. >> you're trying to do an m&a deal. >> what are we taking, 7%? what's our fee, ga ary? ? >> on this deal, strategic deal 12%. >> all the twinkies you can eat. we have a lot more to come from st. louis fed president james bullard, with us throughout the program including reaction to tooled's jobless claims, the strength of the jobs market, we have that number hitting at 8:30 eastern today. also coming up at the top of the hour, january ha hatzius. when you google yourself, do you like what you find? if not our next disruptor can help. we'll talk to an internet security expert from reputation.com about how to

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we continue our disruptor series with a man who can help you fix your internet reputation. >> who says there's no such thing as a clean slate? reputation.com says it can make it happen for people or companies worried about their online past. it scours facebook and twitter for negative press, removing negative web pages from google's search results raising the ranking of positive ones. it won't reveal its formula or customer numbers. just saying its user base tripled in the last year. the online persona comes at a cost, annual fees range from $99 to thousands for individuals more for companies. the more common the name and the more embarrassing the track record the more reputation.com charges and google investor kleiner perkins are amazed, the company raised $67 million. >> joining us on set is mike the

furtak, rep. tas.com founder and ceo. do i need to be worried about my reputation online? >> not just you, everybody does. we all have a digital reputation. everybody looks everybody else, if you go on a date a ply for a job, going on a tv show, everybody gets googled and the first thing we see is what shows up on top of the search engines. then everybody makes decisions based on what they found about us online so 70% of employers, 80% of employers look us up online and reject us or accept us for an interview based on what we see about the other person on the internet, same with someone who is looking for a date, same with someone who is looking for any kind of life moment or transaction so everyone's got a digital reputation to protect and enhance. >> if i retain your services, i do this through a subscription model. >> it's a subscription so the average customer mom and dad will pay us about 100 bucks a year not just to protect their reputation but also privacy. most of our customers use us not

just for their digital image but personally identifiable information so all of our information, your information, everybody out there who is listening, who is watching, their information is in a set of databases run by data brokers that are in the business of collecting our information and selling it, first thing we do is scrub you out of the databases so people can't find your personal business. that's our baseline product. the bigger products tend to be hey, you want to enhance your reputation as a professional, you want to make sure that people see the best article you've written on the web versus the thing -- >> you will be able to move, and somebody puts in gary kaminsky in google you'll be able to move the search results so certain things that becky may want to be on the front page -- >> you may want to be. >> you may advise me to have on the top of the page you'll be able to move that data? >> that's exactly what we do. >> i've listened to your commercials before and it was kind of pitched as the idea where you are maybe a doctor and you had some client who didn't

like you and is trashing you online and getting rid of it. trying to erase your history, sounds almost like you're gaming the system. >> that's a fair question. i think underlying the question is a set of assumptions we should surface. i think there's still a latent view to audiences that goingle is a god. it's a machine, an excellent machine, it was created by people who are certainly fallible, writing algorithms for a game. most of our customers have everyday interests and everyday lives. you go to medical school, spend ten years in training, spend all this time getting for your practice and what google knows is you finished a marathon three years ago. that's not germane to who you are. if you're a journalist and written some big investigative piece of which they're very proud, conversely if you look them up on the web there's some cat in the tree story they wrote

ten years ago when they were in the college paper. google is, somehow it thinks it's impervious to infallibility but it's also a random combination of stuff on some level and it's in your interest but i think it's in everyone's best interests to just correct their record and make sure they curate their results. it's malpractice i think not to do so. if you're any person with any digital life, anybody in any profession or commercial life s you into ed to make sure you're putting your best foot forward. it's a digital pr for everybody. >> michael you privately held venture capital fund. we had a guest on earlier in the program said a lot of what's happening with groupon and facebook has made companies such as yourself highly probable not to go public. is that the case? >> i don't want to talk about my own company but i will say we are in a substantial bubble. we've seen very high overpricing in the private markets. we've seen multibillion-dollar pricing for companies that have tens of millions and low tens of millions in revenue and income,

some growth, but not necessarily measurable growth beyond what we'd normally want in that pricing model and there's been punishment in the public markets. that punishment in the public markets is now rolling back to the private markets and we're seeing unfortunately adverse consequence of the private market. silicon valley swings a lot more than wall street does. wall street is fickle in its own ways but silicon valley is fickle times ten so we're seeing a lot of overpricing. there's a narrow battleneck of ipos. i hope that bottleneck opens. >> thank you very much, michael and good luck with the expansion. >> thank you. in the next hour another disruptor with a prescription for success. the ceo of zocdoc says how his business keeps patients connected with doctors and gets you in the door when you need to be seen. tomorrow a look at health care and your money. we have a great line-up all morning long, including toby cosgrove, ceo of the cleveland

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welcome back. look at the orange juice futures up about 6%. they jumped yesterday thanks to tropical storm isaac. that price is still well below the records set back in january when the u.s. restricted

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"squawk" goes inside the federal reserve. >> the tone of the discussion to me anyway, just my interpretation was that, gosh, things are not as good as we thought and if it continues to decelerate here we're going to have to do something. >> one more hour with st. louis fed president jim bullard. putting europe back together. >> we want the money, lovbotsky. >> before draghi's much anticipated speech at jackson

hole we'll ask goldman sachs jan hatzius what eu leaders need to do to get the economy back on track. >> we thought we were getting $1 million. >> it's not fair. >> fair! >> disrupting the world of health care. the founder and ceo of zocdoc will tell us how his website is changing the way people find doctors and schedule appointments. the third hour of "squawk box" begins right now. ♪ ♪ i've never been moved this way ♪ ♪ nobody's ever made me say welcome back to "squawk box" on cnbc, first in business worldwide. i'm becky quick with steve liesman and gary kaminsky. jim bullard has been with us for the last hour, he'll be with us for another hour, it's a good thing because we have a lot more to get to. look at the u.s. equity futures this morning the dow futures are up anybust over 4 points, coming

down by being higher by 40 points. s&p futures are barely positive and the nasdaq futures have turned slightly lower. hewlett-packard reported a nearly $9 billion second quarter loss, the biggest in the company's 73-year history, the loss is mostly related to the writedown of its acquisition of eds. earnings beat forecast but revenues slid by 5%. the company is cutting its full year outlook because of the slumping pc market and continued weakness in western europe and china. earlier we spoke to brandon marshall who covers hp for isi. >> a lot of people want to see death but we see signs of life. earnings have gone down basically for the last three quarters, beat earnings expectations and we're kind of pegged to the wall at four bucks in earnings on an annual basis. >> again, that was brian marshall of isi. hp's ceo meg whitman is urging investors to be patient as she tries to implement a major restructuring plan. also the federal trade

comission clears facebook's purchase of instagram. the deal for the popular internet photo service is worth about $747 million, down from the $1 billion it was when that plan was back, announced back in april. lot of this is because of what happened to facebook shares. take a look at that, 19.49. in our global market headlines, some fresh numbers out of china could cause concerns for investors. hsbc's purchasing managers index shows manufacturing activity came in at a nine-month low for august, sparking fresh speculation china will institute more measures. joining to us talk europe, gakz jan hatzius. >> nice to be here. >> did they change your mind with what's going to happen with the fed? >> no, i think they clearly

reinforced the idea that ease something sllikely, probably at the next meeting but they didn't really settle what type of easing it would be. we expect an extension of the guidance, maybe even a reformulation of the guidance, i think that's, that was clearly in there as a possibility. and i think there's a strong possibility of qe at the september meeting, but my guess would be that it's going to be a little later, but certainly possible, and there's still a lot of important data to be released. >> so there's two pieces to this, one is the guidance and the other is quantitative easing. you said reformulation of the easing, that's a big word, it's a long word and unclear word. what do you mean by that in. >> basically making the guidance more directly conditional on economic conditions, such as the unemployment rate and the inflation rate. you know, chicago fed president evans has of course suggested basically setting minimum standards for the unemployment rate before a hike in the fund's

rate would be implemented. >> you want a statement to come out where you basically link monetary policy to a certain trigger rate in employment. >> president evans wants that sort of -- i think it's a very serious proposal. i think it has some benefits. >> it would be a disaster for the bond markets of the world. >> well, it -- >> it's a disaster. >> i don't think it would be a disaster, because it would potentially indicate an even longer period of no rate hikes than what we are showing at the moment with the late 2014 guidance. >> if i'm buying a bond, we talked about this earlier. >> i didn't agree. >> okay, but if i'm a bond portfolio manager and trying to figure out interest rate scenarios and duration, trying to figure out what my risk is in terms of the bond, if i've got to factor in, does jim have to make a decision based on a specific employment data point, how am i going to determine what i'm going to pay for that bond? >> you do have to make an

assessment of where the economy is going. >> right. >> as you do now, because of course the fed's calendar based guidance is not the only thing you need to take into account but of course figuring out the economy is going to become even more important for your monetary policy expectations, but that's the way it's supposed to be. you are supposed to be -- >> should have to figure out the economy, or figure out unemployment. >> employment is a good -- i sit here all day long and figure out jobs and -- >> jim, can the economy improve and employment not necessarily track to the same improvement in the economy? >> i think these thresh holds have this other problem. you're dividing the space into the four quadrants and then you say okay, as long as we're in this one quadrant we're going to stay easy. it's not that clear what you're going to do as you move into the other quadrants, and i think if you set the thresholds and then

the community feels you're implicitly saying if i cross these thresh holds then i am going to take action. the committee feels i want to reserve judgment. you could say not perform but -- >> so your problem -- >> how different is this from what we're already doing? what kind of, it's not going to be very different. >> i think what it does is it resolves your problem with the calendar date, which is that the calendar date -- >> it's fair enough president evans, you know, was trying to think about what can we do that would be more -- and i've been complaining. he's been good in that sense. >> one question is how good a summary measure is the unemployment rate for the state of the economy. i think it's pretty good but of course it's not perfect. >> no, it's not because what about history in europe over the last three decades. if this goes up and stays -- >> we have to explain the history. >> unemployment goes high and stays high. >> you have a pillow you sit down on a couch, you sit down on the couch and it's supposed to bounce up.

what if you sit on the couch and the cushion doesn't bounce up. >> you put your finger in the twinkie and it doesn't bounce back. >> it doesn't bounce back and that's the concern that the chairman and i guess others have said with unemployment, which is what if it goes up and doesn't come back down. >> i don't understand why you hem yourself in putting out arbitrary numbers that you're then stuck to. why not allow the committee to reserve judgment and measure things as they see them coming? >> that's what i think the tradition has been that and i wouldn't really tie it to any specific number, even in an inflation number. >> let me point out the concepts evans has talked about has not been simply on unemployment. there have been other ideas that are out there, there's a nominal gdp number idea and also combining that with for example inflation number and an unemployment number. >> i think the bond market longer term is okay with everything other than employment. >> but hold on, because the fed's mandate from congress -- >> you can't get -- you can get

economic employment. >> jan, we were separating out the two things, the guidance question we got into a big discussion on, the nuances of guidan guidance. the more important one is quantitative easing. there's a discussion now it could be on a monthly basis, a different qe in the sense the fed doesn't announce a big number, they do it on a month-to-month basis. what is your expectation? >> i think either is possible. i this i there is a lot of justification for thinking about sort of flow rate and open-ended qe, meaning that you basically say we're falling short, we're going to start buying, and we're basically going to continue to do that until we think we're no longer falling short on a forecast basis, so i think from that perspective it's a very logical thing to do, but whether that is what they're going to go for i think is an open question. >> that's the market question. >> get to jim. >> as you know i've been advocating as an approach to qe,

advocating this since 2010 and i do think it makes more sense. i think the committee has been haunted by these end dates, which are arbitrary, the end date comes along, the data may or may not be cooperating at that point, and so i think it is a better way, just as a way to implement policy, that's sort of a separate question that we should do it or not. if we do do it, that's the better approach and i've appreciated that there's been more support, quite a bit more support on the committee than there has been when i first started this. i was an army of one when i first started. i think president williams and president rosengram and others have come out explicitly in favor. >> how would this express itself, there would be a meeting and awe announc at the meeting the amount of treasuries and/or mortgage-backed securities to buy? >> simply explained it would be to do balance sheet policy as the exact analog of interest rate policy so you would say

we'll purchase a certain amount from, during the intervening period and we'll have a continuation value, which would give us some bias toward whether we're going to continue at the next meeting or not but we are going to review at the next meeting, look at the data and we reserve the right to say we'll change the amount or we'll go on pause or whatever. >> let's go back to jan. >> that means exactly like interest rates, you go 25 basis points, you say maybe we'll go another 25 at the next meeting but we want to see more data before we do that, and then you get to the next meeting and you might do it and you might not, and then markets, goldman comes out and says we think they'll have to do eight months of this or whatever. >> can i ask you something about jackson hole. i need to understand next week, when steve is reporting, next friday, what will disappoint global equity markets next friday, if steve reports this is

what was said at jackson hole? >> a lot of people are focused on weather chairman bernanke gives a strong hint that qe is coming at the september meeting, i think if he doesn't do that, there may be some disappointment although he has not always indicated eminent policy action in these sort of, the speeches in jackson hole, so last year, for example, in the run-up to twist, there wasn't really anything about concrete policy actions in the speech so it's not always a reliable signal if it's not in the speech. >> jan, this is backwards, we usually start off with your forecast, we didn't get your sense of what your outlook is for the third quarter, the rest of this year and 2013. >> we're looking broadly 2%, so a touch better than what we've seen recently so the level of activity is unsatisfactory. the growth rates unsatisfactory, but the change in the growth rate i think is actually getting a little better, we've seen some positive numbers, we think it's going to be a little stronger

than the very disappointing second quarter. >> does the existence of quantitative easing change your forecast? >> we have quantitative easing in the forecast, and if we took that out and left everything else the same, we probably would take a couple of tenths. >> two-tenths. >> i argue the potential growth for the u.s. economy is probably lower than it has been historically, probably some damage was caused by the financial crisis, that's why we're growing slowly and that's why you shouldn't expect a period of, you know, really rapid growth in the u.s. economy. what do you guys think about that? >> i do think it's a bit slower. i think we've lost potential output. there is some historesis, people dropping out of the labor force after long-term unemployment but by and large i still think this is mainly a demand issue and we have a big shortfall in demand and the reason why we're not growing faster than 2%, in my

view, is still mainly a lack of aggregate demand. >> what's the difference between slow potential growth and citing a lot of headwind, oh, gosh, the housing market is depressed and there's special factors in the labor market and you've got the european situation impinging. if those go on for four or five years is that the same as saying we're not going to grow that rapidly over the medium term? >> it would be hard to distinguish in practice but it's demand side versus supply side. in principle i don't think the distinction is hard. you can look at inflation outcomes if you have slow growth in a high inflation environment you would say this is clearly a supply side story, if you have slow growth in a low inflation environment it's demand. >> hold on, we don't want bullard asking you questions. we ask questions of jim. you get a couple of shots. >> i guess my question is, when you say the data have obviously

been a little better, minutes are stale, how should we think of these minutes, should we think of these minutes entirely as where the committee was three weeks ago or how much does it tell us where the committee is at this point? >> it's a fair statement where the committee was three weeks ago and we didn't take any action at that meeting but i think people felt like they were nervous about the situation and if we don't get some better data pretty soon there is going to be a lot of support for doing more. and as you pointed out and i thought was very good, that it doesn't say too much about exactly what that would be, and i think different, i'm just one person but my sense is that different people would do different things in the situation, so it is up in the air and the chairman hasn't made a decision on that yet and he's probably holding his cards close to his vest so he can get all

the data in before he makes a decision before the september meeting. >> jan, we're out of time. given what jim has said, what is your probability right now of qe at the september meeting? >> i'd probably give it 30%, maybe a little more. >> only 30%? >> 30, had % or 40%. >> 100% on the guidance? >> highly likely. >> only 30 on q snere? >> jim, does jan sound like he's in the ball park with 30%? >> i think it's not as high as markets in the sum per. >> markets didn't price in 30% last week. >> and markets have this idea that qe, there's qe1 and qe2, so qe3 must be the same as the previous ones. it's not that clear to me that's the way this is going. >> so 30% probability. what about if i asked you, jan, over the rest of the year, through the end of 2012, what is your qe probability? >> i'd probably give it about 70. >> so 70.

jan hatzius, thanks very much. much more coming up with jim. we'll continue this conversation with fed president bullard and we come back, we'll ask him what qe3 might look like and our series continues with the website changing the way people find a doctor and try to schedule appointments. we'll talk to the founder and ceo of dozocdoc in the next hal hour. tomorrow our guest host is cleveland clinic ceo toby cosgrove, and the ceo of mt. sinai medical center and many more. stick around. "squawk" will be right back. [ male announcer ] let's level the playing field.

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welcome back to "squawk box." jury deliberations resume this morning in that complex patent case that pits apple against samsu samsung. it took the jury two pores to pour through 109 pages of instructions from the judge. experts don't expect a verdict to be returned any time soon. qantas canceled its order for 35 dreamliners, cutting costs after its first full year loss in 17 years. it has been affected by fuel prices and union troubles. when we rush, more from our

guest host, st. louis fed president james bullard. we'll bring you the data and market reaction from initial jobless claims. "squawk" will be right back. need a doctor, fast? >> doctor? >> doctor? >> doctor. >> zocdoc may be the website you're looking for. >> doctor. >> doctor. >> doctor. >> we speak to the company's ceo about their per prescription for success. >> we miss anyone? ♪ moon river >> somebody get me a doctor. [ male announcer ] eligible for medicare?

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former citigroup chief and banking legend sandy weill caused quite a stir on "squawk box" last month when he said he thought the big supermarket banks that he created the model for should be broken up. today, william harryson, the man

behind the merger that created jpmorgan chase back in the year 2000 wrote an op. ed in the "new york times" defending the big banks, things like the combination of commercial and investment banking he said is unnatural, that the banking giants, he takes on the idea the banking giants caused the financial crisis in the first place and that the large financial institutions are too complex to manage. harrison argues it would hurt customers, clients and the broader economy and inject new risks into the financial system if the banks break up. we have a new guest who can talk about all of these things, st. louis fed president jim bullard. jim your thoughts on this, is that the big banks should be broken up. >> yeah, i support my colleague, richard fisher, on this one, and my former colleague, tom hanig who argued these banks are too b big, i'm not against bigness per se but they have an impolicity

insurance and that has really been costly during this crisis, i think he'd be better off with smaller firms and my metric for smaller is if they're small enough you feel comfortable letting them fail, you're at the right size. >> harrison brings up it wasn't the big banks necessarily. i take that back, citigroup needed help. his point is that some of these big banks also helped out, you looked to somebody like a jpmorgan to help take care of some of the other banks that really got into trouble. >> i think that's true as you just want an industry where you feel there's plenty of competition, you feel like there's not an implicit guarantee coming from the taxpayers and you know, because you have big corporations, you'd have to have big banks. i don't think so. those corporations have access to capital markets all by themselves. they don't really need to go through banks so i don't think that's the right argument. it's the insured deposits,

insured deposits have to be with smaller firms that are tightly regulated, and then you can let them fail, and we do let smaller banks fail, and we have a good process for that, and that seems to work prettile, those are tightly regulated institutions, but that seems to work pretty well. >> given your concerns about europe and the fact that they have very large banks and very large financial supermarkets there, what does that mean about europe and the banks? >> europe has a similar situation, and it's even probably worse in some ways because each country feels like they have a national champion and they're going to stick behind that national champion so then you've got sort of you know, maybe monopoly situation in some of the countries or monopolistic competition. i don't think it's a good situation. you could do all of this with smaller companies. and i do think they're too big

and complex to manage, if you look at the organizational charts on some of these companies, they're very complicated. >> we have to leave it there, jim, but i do want to ask you the question that other people ask, which is great idea, how do you do it? and we'll come back to that. coming up a few minutes away from the closely watched weekly jobless claims day tax as we head to break look at u.s. equity futures. sometimes investing opportunities are hard to spot. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.

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welcome back to "squawk box." initial continuing claims hitting the wires, initial claims are up 4,000. they would have been up 6,000, but that 366k originally released last week is now moved up to 368 so 36, tack on 4, 72,000. continuing claims they're hovering higher than 3.31 million, no real feature to that area at the moment. you know, it's fascinating, we see that the boom yields have done a beeline towards 140. yields intraday about 40 hours ago, high yield was 186, we're now at 169, we're at 173 before

the minutes to the last fed meeting, so i think some of the issues in europe resurfacing as august starts to wind down and the agida of global economics starts to wind up certainly seems like the big dynamic. the dollar index of course really was tagged in a lasting way yesterday, down a bit today and the euro currency is closer to 126 than 125. back to you guys. >> rick, real quick, what's going on, i saw earlier today looked like some of the spanish yields ticked up. was there more concern about europe not doing the right thing or not -- right thing, i don't want to make editorial comment there but not coming in, the ecb not coming in and buying bonds? >> well, i think that the debate is growing more intense. you know what? i like that freudian slip. stop right there, not to pick on you. what do you think is the right thing, and i'm not trying to give you grief. i'm curious, what do you think, if you had complete control like

the merlins you have sitting at the table this morning over spain, what would you do? >> i have long maintained that in order to have a single currency you've got to have a single central bank that acts like a central bank and i think a central bank needs to be able to back up a currency and i don't think you can have it both ways. >> don't you think that's a significant violation of the tenet no taxation without representation considering a country -- >> or violation of the master treaty, yes, i completely agree with that. i'm saying i think the master treaty designed is wrong. let's ask jim bullard, stick with us, rick, you may want to weigh in on this. is it right to have a central bank that cannot go into the markets and not really back up a currency? >> i was saying earlier i don't like intervening in particular

markets by the central bank either by the fed or the ecb. i think it's bad press tent. you're helping particular countries or particular markets and where is that going to stop? that seems to me to be a road to the politicization of the central fwanbank. europe is in a very difficult situation here but still i want them to behave as a central bank. i want them to do things that are good for europe and rationalize their policies because they're the right thing to do for europe as a whole. i sure don't want the fed to get into, hey, we're going to help these guys over here, this little market over here, that seems like a disaster to me. >> i would argue even that the problem is that they don't have a fiscal authority, the one fiscal authority that speaks for the entire -- >> i don't disagree. i don't think that's the only problem. i think it's also a problem, you get to a point where you're at

the zero bound and in europe, effectively your policy tools are done. >> hostess, baby, it's hostess. you heard what it was. jim agreed, like hostess. >> kaminsky why does everything now relate back to twinkies for you. everything relates back to twinkies. >> rick, go back to the ten-year. it was only i think 48 hours ago when you and i worked at the new york stock exchange, a bunch of people telling us you saw the low print in yields on the ten-year and in fact, interest rates are one direction the rest of the year move higher. what happened in the last two days, right? >> i'll tell you what, listen, it's hard to call every bump in the road, when you have the boys on mt. olympus tinkering with our markets. over the last 72 markets most of the people i talked to think the market has reversed and it's evident by some of the relations in europe. even the spanish yields has had some flattening, which i

wouldn't have paid attention to a few months ago. things have turned a bit. >> rick, stay there, because you'll want to hear the answer to the next question. more from our guest host jim bullard. yes, steve? >> i want to ask a real question -- a real quick question. 370 on jobless claims consistent with what kind of payroll growth? >> i think it's still consistent with moderate payroll growth, 150. >> okay. >> on the claims number i wouldn't get concerned unless it went over 400 again. >> that's the threshold. . >> the threshold works surprisingly well and so i think as long as we're hanging around below that we're okay. >> can i ask another quick question? >> jump in. >> i know you don't like tying this back to qe3 and what it means for qe3 but if you see numbers like 370 on the weekly jobless claims, you see numbers like a 150 on the monthly jobs report, job creation of 150, is that enough to keep the fed at bay? >> i think you know, 2% growth,

150 on jobs claims down below 400, that's kind of middling data. i don't think that the fomc at least in my view can take gigantic action based on sort of just the fact that you've got muddling through kind of data. now, if recession probably started to go up sharply and you were worried about the future, something like that, then i'm sure the committee would come in, but this kind of going along at the slow pace is not enough to justify gigantic action. in normal interest rate times you might ease a little bit, ease 25 basis points in that situation, you wouldn't say oh all hell is breaking loose. >> you say not gigantic action, that doesn't mean no action. >> doesn't mean no action, that's the question that's on the table for the committee, what exactly, if anything, but what exactly -- >> jim, hold on. sorry, i got to follow up on

this. >> we got to get to him. you just don't want me to ask a question. >> i do, i love your questions and completely support it but i need to follow up on becky's thing here. >> yeah, yeah. >> you were' saying you would potentially support a decision of the fomc to do a monthly incremental meeting quantitative easing? given current circumstances in the economy? >> i wouldn't do it right now. if it was just me and we just have the data up 'til today i wouldn't take a decision right now. i've said in the past i'm willing to support this in some circumstances. i'd like to see some kind of deterioration or indication we're going to slide down further and then i'd become more sympathetic, and if we did it, want to do the month by month thing i've been advocating for quite a while. >> jim, with apologies to my buddy, steve, here, because he may not like the answer, you

know there's a million plus people in this country that have followed the rules, they kind of planned for their retirement the right way, they've been severely penalized. >> tens of millions. >> well, we know it's in excess of a million. i use the number in excess of a million that have followed the rules, basically invested in fixed income because they planned for a retirement, and they did not live above their means. they write in every day, here is just one example, what about this impact on low interest rates on those people that followed the rules? they are the most penalized as a result of all of this manipulation of interest rates, what do you tell them how they're benefiting as a result of everything that happened with quantitative easing? because they certainly don't feel like they've gotten anything out of it. >> i know they don't. i am sympathetic to this savers are being hurt by the policy. this is going way beyond business cycle dynamics.

business cycle dynamics are supposed to be six months, a year, 18 months opinion we're talking five years, seven years so this is going way beyond what you'd normally do in a business downturn. you'd come back and people get their higher returns. here you're knocking out a whole generation of people that are close to retirement and trying to get returns here. our models do not take proper account to that and i think we need to pay more attention to it. >> you're not giving out specific investment advice but -- >> here's another way to say this. this country is overindebted and all of our countries are encouraging to take on more debt. if you decide to cut back, government borrows on your behalf. i think our bias in the monetary policy world toward everything's got to be let's run up more credit when the economy is down is as a macro community we don't have our heads around this

problem. how are you damaging saving over five, seven years when you have this really low interest rate policy. >> it's a big concern. >> and very legitimate. >> when we come back more from st. louis fed president jim bullard, ask him about the saving bes issues and the founder and ceo of zocdoc, a website that helps you quickly find a doctor and schedule an appointment usually in one to three days. "squawk" will be back in two minutes. [ male announcer ] at scottrade, we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying...

[ all ] i'm with scottrade. [ woman ] welcome to learning spanish in the car. you've got to be kidding me. this is good. vamanos. vamanos. vamanos. gracias. gracias. gracias. ♪ trece horas en el carro sin parar y no traes musica. mira entra y comprame unas papitas. [ male announcer ] get up to 795 miles per tank in the 2013 passat tdi clean diesel. that's the power of german engineering. see your local dealer for special lease and finance rates during the aahn for all event. [ male announcer ] when a major hospital

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care. cnbc's julia boorstin joins us with "inside zocdoc." >> reporter: two of the biggest ceos in tech, jeff bezos and mark benioff are betting zocdoc will change the way people find and book doctors. the service allows people to search for doctors based on location, specialty, insurance and reviews and book them online. now in 20 cities, more than 1.5 million patients use the service for free, to find a doctor or dentist each month. doctors pay subscription fee to fill the 10% to 20% of appointments canceled within a day or two, making their practice more efficient. zocdoc has raised nearly $100 million, including 75 million from dst global and goldman sachs last december, giving it a $700 million valuation. >> joining us right now the founder and ceo of zocdoc, cyrus massoumi. thanks for coming on the set today. >> thank you for having me. >> when i first heard about the

concept, seemed like wow, great idea. why didn't somebody think of this sooner. the idea of trying to get to a doctor's appointment, how long is the average wait time for on an individual? >> the national average is 20 days an average to see a doctor when they need one and some places like mabs massachusetts as high as 50 days. zocdoc can get people in to see the doctor the same day, if not the next day. >> this came because you had your own issues flying across country, got an ear infection. >> i was flying from seattle to new york, had a sinus infection and ruptured my eardrum and needed to find a doctor on short notice. i went to my insurance company website, which a lot of people would do, and had no one and took me four days to get an appointment. i thought there had to be a better way and i wracked my brain and thought i do everything on my life on the internet from buying my travel tickets to groceries, buying my underwear on the internet and i couldn't get a doctor. seemed pretty backwards, so i went to one of my colleagues who

is a physician and said why can't i start, can we start this company? we quit our jobs and started five years ago. >> how does it work? there are inefficiencies for doctors who have smaller offices. how do you take advantage of that? >> if you think about it, scheduling in a very fragmented market is incredibly inefficient. so from a doctor's office perspective, doctors have 10% and 20% of their time last-minute cancellations so many of us, when we want to find a doctor we can't find one. if doctors have open appointments we can't get access to, we integrate to the doctor's calendars so we know within seconds if there's an open appointment, feed that time to the internet and people over the web or iphone are able to access and see the inventory of appointments, they can sort doctors by which insurance they accept at the plan level, you can see pictures of doctors, read reviews and all you need to do is click on a single appointment time and a few seconds a firm deployment. it's completely free for the patients and they get access to health care 24/7. >> what do doctors pay to get

into the system? >> about $300 per doctor per month and it's a flat fee. they use it for their existing patients and get access to new patients, it's a great win/win for everyone. >> how many doctors are in the service right now? >> we actually, being a private company we don't talk about that, it's a direct line to revenue but i'll tell you it's growing triple digits literally every six months. >> if i'm the consumer using it if i do it only in new york or seattle? >> we're in 20 markets, 20 of the largest markets in the united states, we are planning to be across the entire united states within the next 12 months. >> and you have big guns like jeff bezos, one of the smartest people probably on the planet. >> yes. >> if you have him buying into it, what does that do in terms of trying to get investors to take you seriously? >> obviously they're great people to learn from, so we figured jeff bezos revolutionized e-commerce and mark benihoff the software

industry, and mark thiel consumer finance, paypal, and they're all revolutionizing the business so for us we're thinking big. health care is a $6. trillion industry globally, and we sit between the patient and the doctor and this industry and there's so much room to innovate, so many things people hoped for in health care. >> it's worth pointing out the macro economics of this, you effectively expanded the supply of doctors. >> absolutely. >> by getting rid of the down time and the wasted time, which has price effects and everything else like that. >> it's a huge impact of health care reform, despite whichever side of the aisle you sit on. >> we need more doctors. >> a huge shortage. >> and we need more technology to wipe out some of the inefficiencies. >> why is it so hard, though. what percent of it is that the doctors are not efficient in scheduling their time? >> well, you know, if i was to use the travel example, imagine if you had to book a travel from

new york to boston a flight and instead of going to expedia or even the delta website, you would have to go to each individual plane. >> each airline. >> and call each plane and they're all small planes and call each small plane to see if they have a seat and how inefficient that would be. you can't use the internet, you have to use the phone and that's what people were dealing with in health care beforehand and that's what we helped solve. >> cyrus thank you for coming in today. >> thank you for having me. >> interesting story. coming up, stocks on the move ahead of the trading day, we'll head down to the new york stock exchange for the latest buzz on wall street. [ male announcer ] it's a golden opportunity

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welcome back to "squawk box." the futures open up down 0. let's get down to the new york stock exchange. jim cramer joins us. hey, jim, have you been listening to jim here this morning? doesn't sound like he got the bazooka ready to be loaded like a lot of people thought yesterday, huh? >> no. in april 29 of 2011, "wall street journal" said that he expected that there be a tightening by year end and that rising inflation was upon us. the st. louis fed has always been hawkish.

that was not a great call. so i guess i'm not -- i think that ben bernanke has our back and i'm not as concern. always good to have some hawks, but being hawkish in april of 2011 was not the best call. >> you heard jim. >> it's probably not my best moment, jim. you know what it's like to make a bad call. >> i just want to point out if someone has to protect us from president obama and congress. if they're going to fight each other, we need somebody to have our back. it ain't the chinese, it ain't the germans. i don't know who will have it. >> we did get in a little bit of a discussion about whether the fed by stepping up and doing things where nobody else is, congress in particular, not being able to get this stuff done, does it allow the fiscal authorities to not have to take up the responsibility that they should be? and is there a point where that worries you that we get into that? >> i just think that i'm less worried because of what bernanke

is doing. i really look a backstop. i don't want to do that everything he does is a side show. he's too powerful and important. i heard what steve liesman was saying about spanish yields. i'm more focused on banko -- than i am of banko america. i'm changing dell and hewlett-packard. two great companies that were overcome by a commoditization. the only good number was printers. they talked about it i don't use it. they're talking about things that the shorts love. this was a really, really bad conference call. when you're finished with it, we need an easy and we need it yesterday. >> jim, thanks very muchen thank you. >> jim and i both are old enough to remember digital equipment

and unisys and all those dinosaurs that went bye-bye. >> thank you, jim. when we come back, some final thoughts. stick around. with the fidelity stock screener, you can try strategies from independent experts and see what criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments. the expert strategies feature is one more innovative reason serious investors are choosing fidelity.

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has never been stronger. call me maybe, the stock of the day. tumbling in premarket trading after missing estimates. steve, how are you going to dance to the call me maybe? >> you called it. >> my band is hoping to do a song after 1980, "sometimes soon." that's where we have high hopes. we do actually have a couple songs from 1990. that's about it. i don't want to waste your time on that. jim bullard talked about one thing we haven't talked about,

cutting the interest rate on excess reserves which is 25 basis points now to 0. do you think that would have an effect on the economy. >> i've come around to this. in the past i said this, this is a dead-end policy because you'd have to stop at zero. >> right. >> i'd be willing to consider or get more thought about going in the negative direction. you could go to even minus 25 or lower. where right now we're subsidizing banks to hold on to these reserves. i don't think that that makes that much sense in this environment. so i do think that there's more potential there. people have talked about, well, what are the implications for money market funds? i don't think that -- i don't think that a small move in rates like that is going to be the deciding factor for that. also, i wouldn't hold monetary policy hostage to reforms that need to occur in the money market sector. those reforms that need to occur. but we're going to do what we need to do for monetary policy anyway. >> just so we can hold your feet

to the fire when you come back next august, what's the economic growth and the unemployment rate. >> the best way to look at this is, we've got a lot of risks out there but the economy will be stronger next year. it is stronger this year than it was last year. if you look at employment growth, based on year-on-year total employment growth, july 2010, about 0, july 2011, about 1.1%. july 201, 1.4%. things do get better, headwinds do abate. i think we'll be in a better situation next year at this time. presidential election have any impact later this year on what happens to fed? >> we have to work with whoever comes in and i think we do try to, you know, be fair to all sides in this and not get too involved. that's our goal.