corporate america. splitting the chairman and ceo job is good, but this is not the place to start. jamie dimon has done a fantastic job. >> despite the whale. this bank is making record profits despite the whale and he deserves to stay. >> thank you for being with us. >> thank you for being with us. >> pleasure. >> make sure you join us tomorrow "squawk on the street" is next. can the dow make it 17 straight tuesday gains in a row? we're going to find out today. good morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the nyse. it's supported by decent macro data. we have good car sales in europe, german factory orders pretty clean over there. nikkei did get to work after the holiday and catching up from friday, back above 14,000 for the first time since 2008. that is a 3.5% gain.

our road map begins with microsoft this morning in the midst of what many are calling its new coke moment retooling the harshly criticized windows 8. we'll find out what that means for the operating system and for its biggest backer and that would be steve ballmer. google shares sitting at an all-time high and could it knock it from its pedestal? >> likely to face a much tougher battle in the house. we'll handicap its chances. >> and the big banks are some of the biggest gainers certainly yesterday as the markets continue to push higher. we'll round up all of those moves. >> we'll start with microsoft, the company preparing to retool the windows 8 and for the slump in pc sales. given the code name blue will not be released to consumers and businesses until later this year. this wound up on the front page of "the financial times" this morning, jim. then there say blog, a q & a

with the co-head of the windows business talking about this update that will be available later this year. >> it does make you feel that they released this product too quickly. as someone who likes the product very much. i await a new iteration. i know that doesn't fit the trend that ballmer screwed up. i just think this was a major, major departure. it's a good one and the new iteration could be better. the fact that it is not loved by some also should be contrasted according to all things enses digital, that's not that bad. >> no, this is being presented in the press and the ft has had the lead story as a new coke disaster. yeah, that's a fun thing to say,

but it doesn't seem to jive with the facts. >> you mentioned 100 million licenses in six months and not any better than the previous iteration had, and bet the company moment. >> you bet the company money and the former ceo of intel, and there will be a new intel product that comes out later in the year, the ultra which has very good battery life that could job with this. i'm trying to figure out why microsoft -- >> you know why microsoft has been going up and we've been sitting here talking about the fact that it doesn't have that much to do with pcs and you said that many times and that was the case made from value act which is up enormously from their stake taken only two weeks ago. >> xbox is about to be delivered. gamestop has been moving up because of that. best buy, there's a lot of

chatter. this is a major, major iteration. xbox plus netflix, home run, entertainment device and great for microsoft. steve was my classmate and friend. >> full disclosure. >> he was the manager and i was editor of "the crimson." no, don't say stuff like that, but it was said already. you can't take that back. >> gates was on yesterday and we asked him, not specifically about windows blue, but certainly about the future of the company when it comes to pcs and mobile. >> windows 8 is roevolutionary n that it takes the benefits of a tablet and benefits of the pc and is able to support both of those. if you have surface, surface pro you have the portability of the tablet and the richness in terms of the keyboard and the microsoft office of the pc. so as you see, pcs are a big market and it will be harder and harder to distinguish products

whether they're tabsts or pcs with windows 8, microsoft is trying to gain share in what has been dominated by the ipad-type device. >> so you would not call it a new cook moment. >> and it does sort of happen at a weird time when the stocks popped into the 30s and there is some cfo. >> look at this shocker. >> i think bill gates is a really smart guy. >> a shocker. they're certainly positioning it as not an about face, but a simple evolution to provide more options for businesses and give consumers more options for work and play. the update, also an opportunity for us to respond to the customer feedback we've been closely listening to since the launch of windows 8, but there has been a lot, to be fair, of negative feedback. some of the most loud,

vociferous krit sechcriticisms people who haven't seen it. having gotten an early one and liked it very much i have the misfortune of having seen the product. it would have been much easier to criticize it had i not seen it. the facts get in the way of the story. boy, i wish with i hated it. i feel so good. i'm like the people that haven't seen it. i'm stuck. i did the darn homework, and i like it. that's the last time i do the homework. >> your homework theme is a good one this morning. >> the iss and the homework that they do. this is all coming back to when i didn't do well in fifth grade and trapped in the dumb class. i have been a vociferous homework user when you are in the fourth level. when you get in the fourth level you want to move up. it was all in fifth grade, and it was a bad grade. i'm sorry, dad. >> i didn't do well. >> my son's in the fifth grade. i'll keep a closer eye on him this year. >> that was the breakdown of society for him and in sixth grade i didn't do that well and

next thing i know i'm doing homework and steve ballmer is the beneficiary. >> speak >> speaking of doing homework, google rising above $860. the internet giant's shares up more than 20% up this year and up 40% in 12 months after the surface that google's youtube will offer paid subscription channels over the next few weeks. we all remember when they bought this thing, jim, and now this notion that you could let a channel owner charge for access. does it change the game for media or not? >> i think that google has always thought they were going to do this and they've always had these channels. i pay a tremendous amount for channels and all i do is try to get past them. literally, from, like, 83 to 499. i don't want. this is targeted. i like that, and i'm willing to pay. the google glasses, by the way.

hey, if a bar won't let me have them, i want them. >> although the times tries to argue that there will be legal challenges and privacy challenges. >> even better. >> and be the target of the paparazzi. >> i just think that anything they don't want me to have is something i want. >> i think it is important to remember what they paid for youtube. at the time it seemed like an enormous amount of money. it was $2 billion. it's been an incredible acquisition for this company. no doubt about that. critics say they're going off in this direction or that direction and the fact is this has been a great acquisition and we have known all along this is the broadband and we get to a broadband-centric world. >> we'll do a segment later in the morning whether anyone is innovating at the pace of google. we keep waiting for generational products to come from apple and other competitors. >> i keep thinking of mark cuban on judge wapner's show saying there is no innovation.

i look at fwoogel and i'm amazed at what these guys do. i know so many people who sit there and watch little videos before they go to sleep thoor youtube that they think are very funny. if you said listen, you have to pay 48 cents for that, people would do it. there are lots of youtube channels already, but in other words, they give advances to people and we will average it against the advertising on your youtube channel. they've been -- for quite some time. >> i could do without the lithuanian-slovenian stations. >> there is a market for that. >> there are the stations for languages that i don't understand. i love all those countries. i think they're fabulous, but i'd rather pay for something i use. >> so at age 60, when you're up 20% for the year. too expensive? >> i thought you said age 60. >> are you kidding me?

>> age 60, age 60 is the price. this thing started going up when people started talking about the story. this is not an expensive stock. they are winning so many different wars and people have to recognize they have problematic advertising. they have pioneered away to make it so that they seem to extract more than anyone else out of advertising. they are getting such a huge percentage of the dollars. when my friend henry blodget talked about companies that were going to win. i do like bristol-myers. >> it is pretty amazing, right? >> i just think that these two young guys and eric schmidt -- these guys have got -- they just decided what some companies should do and then the product comes out and we like them. it reminds me of another company. what was that company? >> apple?

>> you -- you -- you are so smart. >> they had financial discipline in google, as well. that's been important, too. let's move on to the internet tax bill, shall we? >> it will force internet retailers to collect sales taxes. thanks to a bipartisan coalition. things in the house may not be quite as smooth for the bill given that you have any tax force there that has, in fact, vowed to kill it. being closely watched as you might imagine and still the chances are expected that it will prevail. >> maybe. i'd hate to see washington accomplish anything. >> can i just show you the cover of "usa today." you would think there is not another story in the entire country. this is like the pope displacement on this thing. >> i saw new jersey would pick up 200 million. that was great wall-to-wall coverage and that should make it so there's nothing coming out of

washington. you want nothing. the market has gone up tremendously. >> there's been a lot of debate. ebay has been with provisions that they believed it would hit some of their merge ants. amazon, surprisingly, has not been. >> this is one of those thing, retail has just been crushed and there are retailers who get up together and do this and small business and this is good for small business and grover norquist who speaks for small business is against taxes so he has to fight against small business because he gets taxes, right? is that too circular reason for you? >> no, it makes sense. >> in the end the no-tax people who stand for small business have to make a stand against small business in order to be able to be true to their earth. >> sounds like joseph heller. >> yes, it does. it's a catch 22 as opposed to the nra which is pretty darn clear about their positions. >> the right to make everyone armed to the teeth.

>> whenever you and grover go head to head. >> another classmate, ballmer, grover. what an era. did i experience a fabulous era? >> what a great institution producing those great minds. don't forget fdr. >> i never forget fdr. >> and jfk. we had three initial hitters. >> jjc, but not harry s. truman who would have been better. >> signers include a memo for the move and 52 conservatives demanded house republican leaders not bring a senate bill and the keeper of the no-tax pledge and he is a fighter for small business, except for when it's small business. we'll talk more about the bill's channes in the house later today, too. >> when we come back after a rough few months and apple mounting a comeback as you may know up almost 20% and the meantime, google trading near all-time highs. which one, though? which one do you choose? we'll tell you how to play it,u

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the big banks and some of the biggest gainers and all of the bigger players posting more than 1% gains this week. yesterday bank of america shares ended up over 5% after the deal with mbia although interestingly that stock was among the strongest of the sector well before we learned about the mbia settlement, but all of the financial, quite strong and we've also got j.p. morgan and an interesting intrigue of what the shareholder base will do in terms of the non-binding proposal from the ceo job which my understanding jamie dimon would be very, very angry about if it were to occur. it wouldn't mean it had to happen, but it would be the voice from shareholders. >> i think some of the problems with the bank his been that there was a worry about mortgage putbacks. >> i think what was interesting is i did not learn of the bank of america settlement until late in the day upon.

obviously, i was late to the game and the mbi. i believe radiant is the next to settle. i do think you have nation star mortgage saying mortgage is up big. it is a company, by the way, just so we are clear, does mortgage insurance and has been rolling off the bad. the housing story continues as a major play. >> have you seen core logic today? 10%. 10.5 year over year. i mean, that's a good feeling to know your house gained 10% in value on the year. >> there are articles today in the story. people don't understand that it punches well above its wait, only only 10% economy, destroyed our economy and that's what happened in 2006 and 2007. as it comes back. they've been amazing and that's because they did nothing wrong. they bought this bad stuff.

>> yeah. >> they are all getting their money back and things are coming back. citi holdings are coming back and michael corbat leading a revolution at citi. i do believe these banks are guys that are seasoned pros and it's all pretty good. >> bank of america, there is this belief that they're starting to get out from that litigation shadow, if you will, $46 billion has already been paid. there is still litigation to in, important litigation, but it does they're starting to outrun it. not without a heavy, heavy toll on the earnings including the mba settlement which is not insignificant. >> banks continue to loosen standards on real estate loans. some they say because of increased competition for that market, but also because of generally broad, economic improvement. the real ceo came on "mad money" and the average score, the fico score is 750 and how absurd that is.

you know how people who get loads is people who pay cash. that has to loosen in order to get things going. >> keep an eye on it, though, where loans are being made. let's just keep an eye on it, loosening needs to occur. i had the ceo of adt. that's the alarm company and we get some business and no one is talking about 1.2 million and there are 50,000 homes destroyed by homes and there's household growth is up to 1 million this year. you have people that want to buy and you have homes that are destrohhed and we're not putting up that many homes which is why the homebuilders continue to be the place to be.

>> yes. >> meantime, need to know what stocks should be on your radar as we get close to the opening bell? cramer is standing by after the opening about will and we'll get his mad dash after the break. take a look at futures and we'll see if we can hit some of the record highs including the s&p. we're back in a minute. ♪

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a little more than four minutes ahead of the opening bell. time for cramer's "mad dash "".

>> there are people who are betting that tesla. tesla, you could argue that elan is just a visionary and the stock. >> look at that move. >> when stocks go up, analysts who don't like it or even like it a little bit raised their price target. there's no stock to be had, david. it is the most genuine -- >> all right. give me, though. >> fundamentals. the cars are loved. that's a 57% -- >> i had tested one of the early a couple of years ago. >> not the sedan. >> i'm not that cool a guy. if i were to buy a tesla, david, you would rethink your view of me. >> i would? >> there's real torque, man. >> this is not -- this is a race car. >> this is like the -- >> can they actually make money from selling them has been the issue. >> david, why are you making that relevant? >> spoil alert and then the chevy that don draper is writing

for. this is one of the more remarkable stocks of the year. so a lot of people got shorted. sell stock right here. >> why doesn't tesla issue equity. >> he is a visionary. so i ain't going to play solar city is working. ? first solar, i did not like the quarter, but what they did was make a lot of money and the conference call was not that good. remember, the first solar panels, though, if you get them on your house they are a game changer because they're cheaper than buying retail electricity. so i'm not giving up on first solar. the moves in all these stocks was incredible. >> this was the short here. david, covenant light, short squeezes which brings me to, h-l-f. have you watched that stock? >> i have. >> it creeps up every day. >> there are smart people

buying. >> it could be the mother of all short squeezes. look at that. >> it keeps going higher and no word. no buyback going on. step by step, inch by inch, slowly herbalife goes higher. >> step by step, inch by inch, we get closer to the opening bell and four minutes away and another big day of trading ahead and a lot more "squawk on the street." ♪

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all on thinkorswim. from td ameritrade. you are watching cnbc's "squawk on the street" live from the financial capital of the world. the the opening bell set to ring in just under a minute's time. guys ringing the bell down here, clorox, which was started 100 years ago by five guyses with $500 making bleach out of the saltwater out of the san francisco bay. >> it's an incredible bay. it wasn't initially called clorox, but they recognized this thing had magical powers. one of the things it's been able to do it's healthy. clorox is the only thing that works against germs! >> i don't think people know they make hidden valley ranch, brita filters, pine sol.

>> dominant brand in latin america, clorox grab bags. one of the things the company did is reposition itself as a company that is a growth company based on sanitation and health and it's working. look at that stock. >> it has been a great stock. carl icahn's success from a year or two. >> of course, on "mad money" tonight. >> he's a terrific guest and he served in the army and he's a ranger -- he's an artillery man. donald knauss said to carl icahn i'll get there. i'll get there. boy, he's gotten more than icahn can pay, and i think knauss has done a fabulous job at clorox. >> 1-800flowers.com. don't forget this sunday is mother's day. you know what to do. >> i know, i have to get on that case. >> this is, by the way.

donald claknauss hires veteran. because he's a veteran that wants to hire veterans, clorox has the best record in doing that, too. >> we want to watch apple. it is up 18% from the april 19th low of 390 and street insiders saying david einhorn has added to his apple bet and said the company took a major step forward by issuing that debt to return cash to shareholders and said he's waiting for the next blockbuster from the company. interestingly, if you annualize the returns since that low, 3,375%. if they keep this trend going they'll have a good year. >> what i didn't understand is they gave you a 3% yield and they said they would buy back stock and everyone was negative on that and yet all we really want from stocks is yield and big buybacks so they gave it to him and it was not received positively. would you look at this yahoo? >> you know what?

these moves take your breath away. they are so '95 and '96. >> in a good way or a bad way? >> this is one of those periods where we're all trying to figure out what to pay for stocks and it's certainly higher than when we're trading at. fossil, fossil, the cinch. >> what they made yesterday to 1999 that you watch this. certain things happen. >> at a zero at the end and still the percentage moves are significant. yahoo moves as much, if not more than anything else. if and when it goes public the valuation of that company will be is as important as anything marisa meyers will be able to do. >> totally true. when i talk to my friends at yahoo! , the culter change is work ppg. >> did you see pictures of marisa at the met ball, the

costume gala at the metropolitan museum last night which had a punk theme and i don't think we can use the picture, multi-colored hair, streaks of blue. >> she got into it. >> she's young. she's still a young woman. >> maybe that's what you need. >> maybe that is what you need. so much for us. this part of the desk will get cut off. >> the latin american ebay up gigantically. i worked with david and the late mark haines and we would come in and we would come in and say why is it up eight? and i don't know, why is it up ten? and then it would turn out that some firm we never heard of recommended it. >> or there were rumors of a split. >> a split rumor. >> the split in sales force.com has -- not really, but, carl, it is a thing to behold when people

who don't own any stock, there's been so much stocks bought back that when you come into buy stocks there's no supply. there's no supply here. that's why you have to take it up. take it and bid it. take it and bid underneath and take the stock. michael coors going up 58 1/4. that's where people are doing, it's happening right now. >> a big week for media as we mentioned earlier, disney tonight and discovery already out which did match expectations and 64 cents and revenue was a beat and record q1 domestic viewership and audience grows up 16% as david zas layoff -- >> as you well know, international is vital to its company and many to its

franchises and many of them not crossing borders and that's been the focus. that's where they've been allocating capital in terms of making new investments and in line, we should point out directv much better than anticipat anticipated. >> mike white. >> formerly of pepsico. >> subscribers in the first quarter and shares of dtv up over 5% this morning. >> one of the smartest guys i've ever met in business. >> i was blown away. he is a young thinker. >> latin america is so vital to that company and its future, directv, i'm talking about. >> how about latin america doing a little bit better? >> these guys have to deal with venezuela which is -- who the heck knows what's going on in venezuela, but they refuse to pull out of venezuela. obviously people think that market will come back. i think venezuela is still going down, but they won't walk away from it. >> listen issue the strength of the subscriber edition number was driven primarily by latin

america. >> know. netflix could be out there doing it. netflix is down $2. get with the program, netflix! >> some of that might be, as others if youtube takes a lot of revenue and he was asked about this question whether he would have a direct consumer platform and his response according to the journal was the dual stream model works for now, but if that ever were to change they could put together a pretty good offering be it that they own a lot of the future. >> we had leslie moonves yesterday joining us and when with you look at the different revenue streams that have come available over the content, it does have value regardless of how it's distributed and getting paid for it, which is the new trends and they didn't pay for it at all or, think, netflix and amazon and other streaming services. >> here i am watching like everyone else in america, i hope, "the iron man 3" and john

pfa favros is watching "downtown abbey." >> that was from amazon. >> john is cooler than i am, too. there's a list. melissa meyer. >> he was so money. yes, he was money. >> he was the first endorser other than the people -- well, let's just say because i'm not supposed to reveal. he like mead in "iron man." he put me in "iron man." >> "iron man" one, and he sent me a statue of iron man which along with my sag, $20. >> you are bitter. >> can't you get with the worldwide acclaim that came with your appearance in "iron man."

david, i am just a dollar sign represented by a man. >> you mentioned iger on disney tonight. do you take a flyer that is hitting all-time highs. >> every time they report there's always some joker and some bozo who said there is not up to expectations and the stock sells often. i think bob iger is remarkable and not just because his birthday is mine, and you have to hope that it comes in. a guy says that isn't good enough because it's been a great company and the runway, here. they have star wars coming out. they did's deal with electronic arts, they have the avenge ares and espn. channel, one, two, three, four, five, six, seven, eight, nine, ten, 1112. you are so money and that was from "swingers." michael brown owe and my hair tweeted. >> my hair is all over it.

>> he's got my arms. twitter is funny. it does make you laugh. by the way, pepsico thinks that it's -- disney has been doing. >> espn has been doing stuff with twitter. >> we keep coming back to that name, too. >> google is -- you can't get a job. >> my friends who are -- >> the sum cum laude during the apollo program and the gemini program, they're impossible to get. you need to have the right stuff to work at google. the right stuff. i sound like my grandmother. >> what's wrong with you? >> let's get to pis an oani on floor. >> i'm not his grandmother, but i may be his uncle. god knows. have you watched the stock market rally? it's continuing. germany hit a historic high this

morning. i mean a historic high and it's joining the united states at historic highs. portugal is at least a 52-week high and japan, five-year high right now. there's your global stock market rally and have you seen the european banks? i know, they're a mess and they're selling off businesses and the troubled loans are declining, societe generale had a decent report, hsbc, decent report, commerce bank and jefrm me. barclays is trading up and credit suisse is trading up and the european banks are looking a little bit better and other than that the big talk was microsoft and the windows 8 update as they're calling it. apparently eliminating the traditional desktop launch has alienated a lot of people. we can all agree, microsoft has had one great success and xbox, kudos to them and it's been a terrific product and they haven't been able to integrate that success with with other platforms like the pcs or the smartphones. in theory, they've got all of

the right ingredients and xbox has a huge subscription base that has a lot of online products that they sell and they haven't been able to integrate it very well. they've been stunningly slow that the partnership with nokia is higher and i don't know how the we'll do, the jury is still out. >> since april 18th, they were up sdeen%, but the entire tech business has rallied since april 18th. the number one sector is up about 10% since then? apple is up 17%. seagate is up 24%. western digital is up 18% or 19%. my point is the entire social security has rallied and microsoft, we all know has been the $25 to $33 stock for about ten years. other major stocks i want to talk about today is emerson and this is one of those big multi-industry company and they do power systems and generator

systems all over the world. unusually downbeat comments and normally the ceo as of these big multiindustries say business will improve in the second half of the year. here's what the ceo said, we do not see a catalyst for growth over the next six to nine months and that's one of the rare downside commentses we've seen in the multi-industry business. >> i did my tv show. i do want to point out that bob is so right. deutsche bank just on fire program remember the equity offering? i do remember someone on the panel saying europe had turned. maybe it was you, david? >> no, it wasn't me. >> let's sthoift bonds in the dollar and rick santelli at the cme group in chicago. >> interest rates are moving up a bit right when most of the stories over the week was how everybody guessed wrong and they moved lowerower instead of high. german factory orders for march played into that and the number on a seasonally adjusted base up 2.2% and you can see we're

approaching the 180 mark, but maybe more importantly, opened the chart up to april 1st and you can see it looks like i'm going to revisit higher yield in the upper end of the range. many believe the pivot is 180 and the high band will be 2%. if you look at boon, they're more developed and the irony is it was just several days ago, thursday, they had their low historic yield close at 116 and here we are at 130 and a quick turnaround and a risk off day and a risk on day, it would be a surprise because even though they're selling on the high quality and guess what's moving down with buying and that is yields on italy and yields on spain moving down. this is important. the euro currency itself moving high or that data, but as many have told me, it's not only the factory orders data, they'll also wait to see the more specific auto registrations dhrp very soft on last look. >> thank you. >> why don't we go down to share

the energy in medals with sharon epperson. >> brent crude above $105 a barrel and nymex crude prices barely able to make it toward the $96 mark. the traders are weighing two very different issues and the big supply gains that are potentially coming in next week's report -- this week's report from the energy department and they're also looking at the situation in syria and they're weighing the geopolitical tensions there. another factor to consider are the supply issues coming from the north sea, the potential shutdown of the north sea pipeline due to maintenance has helped to lift brent crude prices and you can see how that's played out in the spread between brent and wti, as well which fell to $8 in the previous session and it is up close to $10 in today's action and that spread action is another factor that is adding to brent's games. we are looking at gold prices that are lower and continue to lose momentum as a lot of

investors prefer equities, keep it at $13.49 a level for gold. >> thanks very much, sharonener son when freeport mcmorran announced this intricate and not particularly well-received deal -- as we hear some applause on the floor. we'll see who the applause is for. not sure who that is. >> military. [ applause ] >> i'm told a trader who was involved in the ferry xat, is back at work. for the first time in a very

long time. that's quite an applause. there's still a great deal of camaraderie. >> lower manhattan making his way back to the floor and that is a round of applause, the like of which we do not hear very often. >> there he is. >> not at all. >> excellent. >> nice. >> that's great. >> it does give a window into the camaraderie that still exists on this floor. no matter if you think it's been replaced entirely by machines, it is not. >> there are still people down here and people with emotions and there's 50,000 exchanges, that's true. >> that's true. >> let's try and get back to what i was talking about before we got that incredible round of applause there which is pxp and freeport. if you recall freeport announcing that deal. it was not well received by its own shareholders. freeport having been a copper

and gold company now suddenly wanting to get into the exploration for oil and all sort of things and oil essentially and its own shareholders saying we don't have a voice here. we don't have a vote and pxp owned 31% and fast forward to today, the worry is not about freeport or its shareholder base, but the shareholder base of plains petroleum. today i can tell you that arrow grass capital partners owns, and yesterday you had iss weighing in as well saying we think this deal should be turned down by shareholders and the vote is may 20th and if you look at the peer group of which pxp is a part you'll see it has risen dramatically. meanwhile, freeport has suffered as a result of declining prices in copper. so you're looking at a may 20th

vote which is very much in doubt for a deal worth about $45.53 that based on the ratio and $25 bucks a share that you get for fr freeport. let me give you a sense as to what shareholders are saying. >> they point out the recent, strong operating performance that has been demonstrated at pxp as well and they go on to say, look, we have that and straightforward deleveraging path here. we have an exceptionally strong performance in the gulf of mexico assets. de-risking in the exploration portfolio. there are a lot of things, jim, that they cite and they'll say you know what? we'll vote again tht deal because this has become a key issue. >> take a look, eog. the ceo. eog is up 11 points. now eog has got some similar acreage. so they are giving this company away. i mean, these stocks have moved. the eagleford is worth a great

deal. gulf of mexico's risen in value substantially since this started. >> right. >> the announcement by anadarko last week with the exploration portfolio is what they say. >> i have to tell you, the change in the gulf -- the change in eagleford, this is all part of the energy self-sufficiency and these guys are smack in the middle of it. >> so interesting how the dynamic has completely shifted from freeport to now plains petroleum shareholders are saying no way. >> unbelievable. >> still ahead, microsoft trading slightly lower following the news that it is retooling windows 8. rick sherman will talk to the co-head of windows about the move and he'll join us live to tell us what he said. we're back after a quick break. [ driver ] today, my ambulance knew all about a bike accident,

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that is exactly two times all of last year's gains which were 7.26. when we come back, what a cyber in rome new york has in common with the movie "ghost busters," that's up later, but up next -- coming up, investing in this market can be as tough as an obstacle course. a dirty, muddy, ugly race, but we've got cramer here to steer you in the right direction. "six stocks in 06 seco60 second next. hit the showers, we'll be right back. he scotts turf builder plus 2, man! it kills weeds while it feeds and strengthens your grass. feed your lawn. feed it!

let's get "six in 60" with jim. >> gap. >> it's still expensive. >> you mentioned radiant. >> mortgage insurance problems. >> energy, we had markel son on last night and this was a ""barron's" article and the transcript of what we did last night and make a decision. >> quiet period ending for pinnacle foods. >> remember they were on duncan, and people wanted to own a food

stock, own that one. >> f5y think is next. >> this is where people gave up on a lot of these stocks that are internet, related. >> which was the last you had? was it jcp? >> it had a $9 price target and the prefer has been doing terrifically. i don't know whether the $9 is right right now. >> that one continues to perk away. >> i don't have a reason and there's been no buyback and there's been nothing said by the company, but herbalife has been a continuing theme, remember, carl icahn is involved. you do have a big show tonight. >> clorox. >> mark papa is up ten. dr pepper snapple, and everything that's not coke and pepsi it's dr pepper and it's insider valued. >> people still like bubbles as andrew likes to say.

that's right carbonated soft drinks and hawaiian punch has been bad. >> interesting. >> david, would you like hawaiian punch before you go to las vegas. how would you like a hawaiian punch? >> punchy with the crazy hat, yes. >> these ad campaigns that don draper came up with i'm sticking with. >> we'll see you tonight at 6:00 and 11:00 eastern time. >> simon is here to tell us what's next. >> should you do the same up 15%? two weeks or is google a better bet? we'll discuss that. rick sherman, analyst from microsoft is talking to the company now about what they'll do with windows 8. he'll be live on the program and also look at the states. texas, florida, arizona, tennessee all likely to pay more if the internet sales tax goes through. is it right for this economy? both sides of the house. we'll debate live on the second hour of "squawk on the street," stay with us on cnbc.

welcome back to "squawk on the street," let's get the road map. shares of microsoft, the company shake up its windows 8 program.

he'll give us the lowdown on that meeting coming up. >> plus google at an all-time high and apple shares are making a major comeback. which tech company should you be buying now? we have a special panel to debate it. >> if you're an online shopper, listen up. the internet sales tax clearing the senate last night might not be so easy in the house. we have congressmen from both sides of the aisle. >> let's start off with microsoft and the changes that may be coming to windows 8. john ford is in san jose and he's got the details. john? >> windows 8 has not been a big hit for microsoft since it launched in the fall. that much is clear. pc sales were down 15% according to idc and microsoft's own earnings report, a lot of the strength came from long-term windows licensing deals rather than from people going out to stores and buying new pcs. now microsoft is doing something it's done in the past with windows releases and an upcoming release called windows blue is expected to bring back old

standbies like the start button and the option to boot directly into desktop mode instead of the tile mode that defined windows 8. in a blog post on microsoft.com, tami reller said windows blue will bring businesses more option. a lot of them were crying foul that they couldn't customize windows as much as they wanted. when i talked to steve ballmer before the windows 8 launch. he talked about the pc market and tablet market as one converging thing. >> you ask me what will happen to the pc market and i say hey, the pc market and the tablet market, we can't tell them apart, with one arrow, windows 8, we've gotten, if you will, gotten two words, tablet and pc. >> that doesn't seem to be playing out quite the way ballmer suggested. for example, apple's ipad revenue grew 40% last quarter while the pc market shrank and microsoft and intel have completely changed their tunes about tablets over the past few

quarters which they once said wouldn't cannibalize main street pcs. now they are main street pcs. they're getting touch pcs in a low enough price to spur adoption. microsoft is having to go back, retool their strategy and have a more pclike track for the people who want the start menu, perhaps and the more tablet light track who want the tablet which is is a lot of people these days. >> people are trying to put a coke label in this turn around. is it that dramatic. >> it is like switching to new coke to coming back to old coke in a sense. windows 3.1. a lot of people don't remember this, but when microsoft first removed into the mousier a windows, the initial versions didn't come off that well. they did 3.1 and it took off. they're hoping this works out that way. >> that's still to come. we will talk to rick sherman later in the show.

thanks. all of that microsoft talk brings us to our tweet question. help microsoft out, what changes should it make to improve windows 8? we're asking you to tweet us atsquawkstreet and we'll get your answers later in the morning. it's a techoff while google keeps pushing higher and this is from the lows -- this is, what? two, three weeks and apple up 15% and google up 9%, 10%. which is going to make you the most money moving forward? does apple have new momentum or is google still the better bet. jim munster is an analyst with piper jaffray and joins us on the cnbc news line. you are making the case here for google. how far, how fast do you think it could run? >> so google has had a nice run, as you pointed out, but just to put it in perspective, over the last two or three years the

stock hasn't had that much of a run and has underperformed vis-a-vis the rest of the internet group. that said, we still think it has another, you know, $50 or $100 upside short term. this is a company that's growing at 20%. there's a potential for even acceleration if they hit it nicely on display and valuation is still very, very attractive and it's traded nine times cash flow, you know, and almost cheaper than the s&p 500. >> people who look at the charts so far this year may make a more simple observation and that is that an cell down 12ers, 13% plus google has gained 22%. that's a huge move in opposite directions and a huge spread there of 30% and they might be tempted to think, therefore, that google might lose moment up. you don't think so in your view. >> there are two drivers and there's top-line growth and margin. i think in the case of google, you have improvement certainly

on the top line and with margins and motorola has brought those margins down a little bit and we think they're trapped in here with the expectations of them re-accelerating and i'm not too close to apple and if you look at the published estimates, google is growing faster and with better margins. >> let me bring in gene who does cover apple. how far do you think the stock could go? >> there is 50% upside which is a huge number and over the next 12 months and part of that is driven by the buyback and part of it is driven by the bigger parts driven by new products that start in the fall and go through 2014. so i think i would agree with you except that google is a great, long-term play, probably the safer long-term bet and if you had to put money to work next year, apple is the better bet. >> what are you, are the be all and end all. what, in the meantime, are you seeing in the market? what is the mobile traffic data

telling you, for example? we track it positive for ios and the quality of how apple is doing in the u.s. and specifically as we look at the 10 of the top 100 mobile assets and android and ios has gone from 65% in january to 59% in april. the whole theme about apple is losing out to android and it isn't playing out in the u.s. globally in emerging markets that's happening and the brand is very strong in the u.s. which is a big backdrop for new products in the fall. >> they can't monetize when you've described for us in the way they can monetize an iphone that sold in china. >> right. they can't do that, but the brand again is strong in the u.s., so that will be a good launch point and they can monetize the products and ultimately they'll come without this, and the market share from

zero to 10% outside of the u.s. >> so, gene, you think there's 50% upside in apple. remind us, how much upside do you think there is in google? >> short term i think you're looking at 10% to 20%. so not as much as 50, but considering where the stock is right now we still like it. >> and that's the point. thank you very much. >> gene munster from piper jaffray. >> when we come back, how ghost busters is becoming a reality in cyberspace. we'll take you inside a cyber crime lab and then later on the internet sales tax passing the senate faces big senate in the house and we'll talk to congressmen on both sides of the aisle about how they plan to vote when we come back. looked a. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 that kind of focus... tdd#: 1-800-345-2550 that's what i have when i trade. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab...

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>> aereo is -- streamed broadcast television channels over the internet to its subscribers. cbs ceo leslie moonves joined us here at post 9 yesterday on "squawk on the street" and had this to say about his company's battle with aereo. >> way too much has been spoken about aereo and written about aereo. it is not a serious threat to us. we think it's an illegal service. we think they're taking our signal and they're not just passing it on to people. they're charging people for passing on our signal without giving us any money. we think that's illegal and as

they open up into a marketplace, we will challenge that as well. >> of course, he says that it's not a big deal, but perhaps it's a bigger deal than they let on. >> i think the legal department and the court would probably argue they are treating it like a big deal. >> they are are. and aereo has won so far in the court cases that have occurred and there are more to come. interestingly, they chose to turn the tables on cbs as opposed to the other way around. >> the launch is thursday. >> and to his point, it is not in many homes right now. they have a bunch of antennas in brooklyn not far from here that they use and they do have people paying for it and not like you put your rabbit ears up on your television. >> as he said to you, still holding the card of potentially going to a subscriber model for network television which fox has broached as a subject. >> i don't know, either and you've got that spectrum and the private service aspect of it. you have a lot of that.

>> there are a lot of unanswered questions. >> moonves moved the ball forward, i thought yesterday. >> for the first time the pentagon directly accusing china for defense contractors. our eamon javers is at a lab in upstate new york that works closely with the u.s. military and here's more on that story. good morning, eamon. >> good morning, carl. we are in the cyber incident response center. it's a defense and intelligence contractor and they deal with a lot of the nation's most secret secrets and it's a fascinating day to be here because just yesterday the pentagon made major news on the espionage front for the first time, naming china explicitly against u.s. defense and industrial targets, targeting the united states' military and economic edge in the world. here at excelis they're dealing with those attacks and this is the room where they respond to them and let's take a look at how the pentagon put this just

yesterday. >> china's military continues to explore the role of military operations in cyberspace as the modern warfare and continues to have doctrine trading which emphasizing technology and operations. >> so inside this room at exelis is dealing with those phishing emails that we've heard so much about and figuring out what's in the email and isolating the malwear and figuring out a way to respond to it and particularly tricky if it's something they've never seen before. a lot of the folks here are u.s. military veterans and what they're telling us is fascinating. this is a much different battlefield than many of them have been on before. >> the history, the battle between offense and defense and most military operations have been fairly balanced at this point in our history. i think most people would agree that the offense has a huge advantage. >> guys. that's exactly the opposite of

military doctrine and ooh easier to defend than attack and in cyberspace it's just the opposite. it's easier to attack and defend and that's a real challenge for the folks that are trying to defend and one tip we picked up yesterday that i thought was fascinating and you see the emails that come into the inbox and a lot of them have bad grammar and bad language, and what's going on there is they are intentionally creating bad grammar and bad spelling because they're not looking for sophisticated, well-educated people with a lot of these phishing attacks. they are looking for people who are uneducated, unsophisticated and might not realize that it's bad grammar. those are the folks, they think, the attackers think might be naive enough to respond to those emails. they're bad on purpose which was surprising to me. i thought it was just guys around the world who didn't have good english, they're screening out well-educated people by targeting people that might not

believe the email. >> they have some complex attack, so to speak. they can find somebody's -- they can find the facebook contacts of somebody and therefore, you think it is coming from a friend of yours and it says photos or something like that and then you open up that malicious email. >> and what the folks here are saying about that is that the adversary, and that's the term they use to describe the enemy here is the adversary. they say they're very creative and constantly coming up with attacks and as you say they're referring to social media, but at the top, they're looking at facebook to see where you might have been or where you were last week and crafting an email that feels realistic. >> i did go golfing with that guy last week so it's natural i would get an email from him about the golf trip and when you

open it up there's malware. they can use social clearances and once they get you to click on the lenk, they can get into your computer. it's just which companies are willing to admit that they've been compromised. thanks for that reporting from rome, new york, of all places. coming up, microsoft hitting a return on windows 8 after months of pressure and rick sherwin will give us his take on the move after meeting with the cfo of windows this morning. we're back after this. everyone's retirement dream is different; how we get there is not. we're americans. we work. we plan.

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publicly-traded fund and highlights are he added to his apple position. apple, of course, took a bit of a dive year to date about 14% now trading in the $450 range. einhorn's been an active and very bullish holder of apple and has added to his shares in recent quarters including the last quarter according to the call. the other point of news is that he made money on the weakening yen. of course, with abenomices and an aggressive monetary push in the country, sending the yen weaker as well as causing the stock market there to rally. einhorn was yet another hedge fund beneficiary, carl, of the weakening yen during the past few months. >> how about gold, kate? any headlines from gold? >> not from einhorn, i although john paulson took a real bath on gold, i'll have the details on that later, but it appears that his gold fund which is a small part of the overall hedge fund

is down close to 50%. >> all right, kate. busy day for you shaping up, too. >> thank you. let's get back to headquarters and check in with josh lipton, this time on fossil. >> that's right. we are watching fashion accessory here, fossil, specifically. the retailer charging higher. the company guided below consensus for the current quarter and raised the full-year earnings estimates and what investors are excited about is revenues are coming in stronger than expected and fossil sold a lot of watches and the sales up 22% for that category and up about 15% so far this year. carl, back to you. >> that's a move you don't see too often, thanks, josh. i want to get back to microsoft this morning which is planning to give a much-hyped windows 8 a makeover. the tune-up being announced today, but will not be released to consumers and businesses until later this yore. here's the chairman talking about pcs, tablets and windows 8 on "squawk box" yesterday.

>> windows 8 is revolutionary in that it takes the benefits of a tablet and benefits of a pc and is able to support both of those. so if you have surface, surface pro, you have that portability of the tablet and the richness in terms of the keyboard, microsoft office of a pc. pcs are a big market, it will be harder and harder to distinguish products whether they're tablets or pcs. with windows 8, microsoft is trying to gain share in what has been dominated by the ipad-type device. >> let's bring in rick sherwin from nomura for his insight. he just met with the cfo tami reller about an hour ago. welcome back. >> what did you learn? >> i wouldn't call it a u-turn on windows. windows 8 has usablity things that we'll see worked on. it will be expanded to address

devices under eight inches so smaller form factors, but i think at the end of the day it creates a very good new notebook, touch notebook operating system, but tablets are still going to be a challenge, i think, there's tremendous competition in the consumer market with android tablets and ipad, but there are probably reasons to be more optimistic about new generation touch-base notebooks and the ultra books coming forward. windows 8 addresses more use ability things and addresses smaller foreign factors and it's an important catalyst in trying to get it started for them for back to school and the end of the year when they give you much longer battery life and we're starting to see more availability of the touch-base notebook. i think the opportunity is more on the notebook side than the consumer tablet said? >> would you say it is an evolution or is it a walk back

and reversal the way some are trying to paint it with a broad brush today. >> yeah, so, i think the pc users like to get right to the windows experience and not have the tablet user interface kind of get in the way. so they haven't announced yet exactly what they're going to do on the useability's side, but i would think giving you the ability to go directly into desktop mode and not having to be distracted with the tablet stuff if that's not what you want to take advantage of right now. all, just in terms of how you use the product there's a way to come up the learning curve faster. >> i don't think this is a radical change. i think this is more incremental. >> rick, is there, nonetheless, an admission that perhaps they're partly to blame for the slump in pc sales that we've seen rather than invigorating them and it was a very tough first quarter and what are the implications for steve ballmer who we should not forget at the

launch of windows 8 said it was a bet the company moment for microsoft. >> yeah, so. i think that harm has been done, the acknowledgement that you can do a better job with windows 8 is a step in the right direction and try to improve upon that. so, i don't think there's implications for ballmer from, you know, announcing this a owe 1 version ever windows. that's been in the markets for the last six months and you've seen a rot of criticisms in the press already. >> the elephant standing in the room is the chance -- david faber has done a lot of work on this, enterprise is good for microsoft for which ballmer can take some credit. how can it change to where the share price goes given what the rest of the business is. >> with pc units down% in the first quarter. that's a sell in number, and sell through has been stable and

it's kind of plateaued. we need to see more hardware and i see reason to be more optimistic in the second half of the year with more and better hardware coming out. the rest of the business is doing reasonably well. the enterprise business is a good business forum. the office business will ultimately follow the windows business, but for now it's growing 5% to 7% so it continues to hold up really well because it's more of an annuity business, the enterprises pay an annual subscription for windows. it's not as transaction driven as the windows business itself is. >> finally, rick. we're into the 30s here. you have a neutral rating and you had been, as i recall, pretty bullish on the prospects back in the 20s. why so cautious? >> i probably let simon beat me up into submission, but i actually do like the story here. i think that there's been a lot of bad news out already. i think it probably looks better going into the second half and

we have bad news on pc sell-in this past quarter and i think that's probably the worst of it, so i think you still have all these same issues of tablets and android is free and that's a really tough price competitor going forward, but i think it's probably not as bad as you might think and it's just, you know, it's kind

>> the internet tax bill which requires online retailers to tax customers and send that tax to the state in which they live easily passed the senate last night, but the bill could face tough challenges now in the house. representative steve danes is a republican and joins us live on no sales tax and representative david killner is a democrat from washington and he's a co-sponsor of the bill in the house. congressmen, thank you for joining us on cnbc. >> good morning. >> congressman danes, this passed so easily with bipartisan support in the senate and why would you oppose it in the house? >> they're two democratic senators in the senate voted against that bill in the senate.

i've been in business for 28 years and one of the fastest ways to slow down growth and innovation is to tax it and regulate it. this is a $23 billion tax increase coming right out of the pockets of hardworking american families and men and women and it will add a regulatory burren. there are tax jurisdictions that they will have to comply with if this bill is passed. >> it's probably important to note as the front page of "usa today" points out that there's inevitably certain states around the union that will have much bigger tax bills than others. texas, florida, arizona. this is really a geographical division, as well. >> at the end of the day, the reason you've seen business groups around this country support this, and you've seen bipartisan support is that it's about fairness. you have bricks and mortar retailers in every state in our country that are right now put at a competitive disadvantage. i spent the last decade work ing

in economic development. >> this is a step toward trying to level the playing field so that they can compete. >> congressmen danes. i'm curious, you raised this idea of a lot of paperwork, perhaps that retailers would have to go through, but i understand advocates say there's a lot of technology out there and it will make it possible to make this very simple and, in fact, a lot of the states that want to collect the tax will provide the companies with the free software to do so. >> thanks to technology that will help and the legal challenges that need to be dealt with. >> big business has the accountants, lawyers and so forth to comply with this law, it's the small businesses right now that don't have the lobbyists up on capitol hill that are going to lose here because they don't have a voice here in washington, and that's why i'm speaking on behalf are the small businesses that are starting up with new i onvation

and internet. the last thing i want to do is raise taxes and put this regulatory burden on top of them when they don't have the arm of consultants that big businesses do. >> there is one group of people that is clearly absent in this debate and that is the small businesses that over the last decade or so who were on main street and have been thrown to the wall because they're undercut, and it is okay for ebay to present itself as the champion of businesses and it's a very been-sided champion. >> setting ebay aside, there are thousands across the country that don't have a voice on capitol hill and they're trying to grow their companies and hire more people and the last thing we want to do is take $23 billion out of the pockets of americans and add these regulations on top of them. >> at the end of the day this is about growing jobs and not about growing taxes. you can come to a community like

mine. a few weeks back when we went to shop for a bicycle for my daughter sophie for her birthday, we went to the local sporting goods store. she was able to drive the bike around. why should that business be put at a employ coettive disadvantage having to have us pay sales tax on the purchase when we can go online and buy the same thing without sales tax. that puts the main street and small businesses at a kochetive disadvantage and why we see the retailer's federation. >> congressman kilmer, where are we to actually carry the day on this. >> you saw a very strong, bipartisan vote out of the united states senate last night, but congressmen like john mccain and others supporting this bill. >> this is not a democratic and republican issue. he has small businesses compete at a time when they can have every need you can get. >> we are running busses surp s

surpluses in the state of montana. we need more revenue taken out of the pockets of americans. i think it's important that states balance their budgets and my good friend from washington comes from a grit state and they're running budget deficits and you can balance your budgets without having sales tax and online revenues coming from a tax like this. i'll tell you the folks in mono toon will have that legislation? >> i'm sure you would say it's about fareness than tax collection, but when is the timetable for the vote? when do you expect -- you've seen a strong focus by democrats and republicans andy appreciate my 14's steve in montana. you you have breaks and the mortars are, and this is the way to try to help them and i hope

the house will act. >> congressmen, thank you for your time. have a great day. >> thank you. major retailers and local stores could be the big winners if the house follows the senate in passing that internet sales tax. joe feldman is assistant director of research and joins us now. am i right to think it's more or less what you think? the online guys, maybe not as good for them and better for the brick and mortar sitting on main street or the big box? >> i think that's the way to think about it, but even the online guys like an amazon has been preparing for this, i've been -- i think it's the small guy trying to take a bite and the consumer was supposed to have been paying tax on these goods anyway. >> yes. but they probably haven't been, right? >> correct. >> no, i realize that, but i guess my point is it's just shifting the burden of the tax

collection on to the retailer as opposed to taking it away from the consumer because the consumer wasn't paying it. it certainly raises revenues for the states and i do think it levels the playing field and you're seen it, with a company like best buy, for example, one of the companies that i follow where they are starting to pick up with better collecting sales tax on online sales. >> you've seen a real impact on best buy as a result of that. >> absolutely. we've had a good quarter where amazon had the big ticket electronics, and they've seen a little pressure there and you are seeing a big dwant in many states. >> many men ge think it's a draying drag if this goes tlie. does it hurt so much that it will take a knock? >> any tax will hit the power a

little bit, but i wouldn't think it would be that much of a drag. look, the consumer is used to paying tax if they go into a store anyway. for those shopping online and now it will level that playing field and i don't think they're going to think twice about buying that tv or buying that new cell phone or whatever it may be. they may think about where they buy it and getting service in the store versus online or something and having it shipped to your house. so the decision process may be different, but i think the consumers will still shop for it. >> this will be as we noted before, concentrated in certain states. typically, you don't pay tax at the moment if the business you're buying from doesn't have a physical presence in the state that you're in. so texas will pay more. people in arizona will pay more. it will be a disproportionate hit to certain states, will it not? at the consumer level. >> well, that's correct. >> i mean, look, by the end of this year, maybe it's 13 states or 14 states will be cleshthing

sales tax and it will be 45% and you're hitting new york, texas, pennsylvania, massachusetts, jersey. so that is, in fact, true. you're absolutely right, but i think that it's still leveling the playing field. if i'm that local mom and pop guy and i'm on main street in one of these states and somebody is able to ship into my state from elsewhere and not have sales tax be collected and that's a 7%, 8% advantage in some cases, it just doesn't seem right. >> well, we'll leave it there, joe, and we'll see what the u.s. house of representatives has to say about it if they take up the measure. joe feldman. >> thank you. >> when we come back, des me out with earnings tonight after the bell and the street's anxiousry awaiting how its theme park is at its highest levels since 1956 as comcast cited strengths in its parks and our own jane wells will dig into the resurgence of

the theme park a little later on. plus as google hits new all-time highs after an all-time high is the tech titan owning the innovation? that's next. [ male announcer ] my client gloria has a lot going on in her life. wife, mother, marathoner. but one day it's just gonna be james and her. so as their financial advisor, i'm helping them look at their complete financial picture -- even the money they've invested elsewhere -- to create a plan that can help weather all kinds of markets. because that's how they're getting ready,

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>> the return of the theme park, comcast cited strength in the theme parks division. seaworld went public a couple of weeks ago. our own jane wells digging deeper into the theme park resurgence. good morning, jane. >> reporter: hi, carl. they're getting universal studios hollywood spic and span before it opens in a few hours. it was a billion dollar business in 2010 and it could be a $32 billion business according to global industry analysts and what you might call pent-up demand for tourists is

unleashed. >> the mcgee and perret families are coming to a theme park for the first time in three years here to universal studios. comcast, our parent company reported a 12% jump in revenue calling theme parks a standout. analysts expect to see these companies grow by investing in new rides. this park breaking ground on a new harry potter attraction like the one they have in orlando. disney is investing and reporting after the bell. it expects to see double digit revenue growth at the parks and many anticipate better margins as people are willing to pay more and feeling more confident. >> we're a family that saves our money and we don't throw away on big cars and stuff like that, you know? we invest, you know? and then we can enjoy. a couple of years ago i was looking for jobs and i couldn't find anything and i had recruiters calling me every day. there's always something open. >> both disney and comcast hitting all-time highs. disney yesterday and comcast

today. six flags and cedar hair hit all-time highs two weeks ago. remember when six flags went bankrupt during the recession? seaworld just went public. six and fun had dividends of 5% and 6% each. had the stocks reached the top of the roller coaster and it's time to come down whether p-e ratios were pretty high for the pure plays, carl and analysts say they're putting up good numbers and even when the consumer is doing okay. they say what might happen when the consumer is doing really well. back to you. >> you have on top of that, jane, who knows what the next few weeks bring, but gas prices have gone nowhere, but down in this country and that cannot hurt. >> no, it can't. some of these parks are doing very creative things to help the consumer who is not that confident. cedar fair owns disneyland and they have started an installment plan for annual passes so you don't get sticker shock right up front. >> smart, interesting.

>> our jane wells out in los angeles. >> let me show you the biggest attraction in manhattan for travel and leisure profits. >> this is the $900 million breakaway new york. this is a cruise ship that arrived at pier 88 earlier today on its maiden voyage. will be the largest ship to home port from manhattan. in other words, it will come in and out from norwegian which, of course, ipoed in january. the stock has done phenomenally well. the innovation that you see on this ship can drive margins for this company up 400, 500 basis points and make it the most profitable of the three cruise ships in terms of margin, and we will be live from the breakaway new york, the norwegian krouz line breakaway new york. >> will you do the water slide? >> that water slide looks great. >> am i doing the water slide? >> that would get me to do a cruise because my kids will literally do nothing, but that for hours. >> if you do cruises, actually

everybody wants to do the new ship. people will flock to this. do you cruise, carl? >> i've never gone on a cruise. >> nor have i. >> you can leave them to roam. go and eat. >> people can tune in this afternoon and see you go down the blue one or the yellow one? >> come on, simon! >> if i do the water slide i will forever be the guy who went down the water slide in a suit. >> day of tvid and i have no pr with that. >> the latest thing is to have a plank off the edge and a harness. >> i don't see how people can't watch that, faber. >> i'm rescheduling harness. >> i'm rescheduling my afternoon, simon. >> i want to see you in your scuba gear. i want to see you with the snorkel coming out and the whole thing. >> thank you. >> you're welcome. >> when we come back, santelli

taking on the problem of pension payouts. and from the makers of jibjab come do-it-yourselfers for kids. this is a special video just for us. >> you look great. >> thank you.

welcome back to "squawk on the street." on the santelli exchange we're going to weigh in on the big debate. we had two pliticos up a few moments ago, both sides of the aisle, talking about the internet tax bill that passed the senate. well consider this. i haven't heard many speak to the notion that there's many ways to deal with issues. there's an old jerry lewis movie out. i believe the title was don't raise the bridge, lower the river. you see where i'm getting at. the talk is brick and mortar is at a disadvantage because they pay taxes. their customers have to pay taxes, thus raising their price. but very little discussion is really concentrated on the fact that maybe the problem isn't to have customers on the internet paying more in taxes. maybe it should be brick and

mortar should find relief on their taxes, but the problem is states can't afford to because they have large liabilities that are on auto pilot. and that's the theme for today. there's a great paper written by the manhattan institute that came out for april of 2013 titled government crowded out. i want to put an excerpt on the screen by daniel disalvo. in 2013, according to new york mayor michael bloomberg, every penny in personal income tax we collect will go to cover our pension bill. think about that. that's the issue in so many ways. further, nicoas a subset, nicol celinas pulled this. bloomberg's final year, the city will spend $8.7 billion on the police department, nearly double

the 2002 if anything year and three times the rate on inflation. will spend more on cops benefits than on salary ls. in order to deal with this, states have to raise taxes, fiscal gimmickry, more debt or spend less. and believe me. i don't mind spending less. we need to be honest and deal with this on a federal level. and instead of lowering the bridge, we are going to be trying to tinninger with the river. back to you, simon. >> that is definitely a hot topic. no doubt about that. rick santelli, we'll see you in the next hour. when we come back, microsoft is retooling windows 8 after a backlash from customers. should it think of retooling management, too? why one wall street insider says now is the time for the company

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guests live. on wednesday i'm joined on "squawk on the street" by bill varattos from one of the bigger hedge funds out there. peter schoenfeld led the charge and got what they wanted. and a jeffrey with kls diversified. we'll talk a lot of fixed income and john burbank. not to mention anyone else in the hall who may want to talk. >> for those who don't know, it's like for the real world. >> a lot of the hedge fund industry will be there. and all the people trying to pick up the management fee, it's very interesting to meet with them and see the eco system at work. >> i expect to see you full of experience. have a safe trip. we'll see you later in the week.

if you're just joining us, here's what you missed. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> i think the culture has to do with the culture of the banks. they entered into this agreement. they had other illegal operations. they feel like they can get away with anything now. >> the economy in america is not a zero sum game. and it's you and i lose. you create more opportunity so i can win, too. politics is what you're saying. >> it would be so much easier to criticize it i would say another thing that he did wrong. the facts get in the way of the story. boy, i wish i hated it. i would feel so good. i would be like all the people who haven't seen it i'm stuck. i did the darn homework and i like it. >> do you think there's not another story in the entire

country? this is like a pole placement on this. it's the whole thing. >> the whole thing about apple losing to android is not really playing out in the u.s. the brand is still very strong in the u.s., which is a good backdrop for new products in the fall. >> this is not a democratic or republican issue. this is a bill really about trying to help our small businesses compete at a time where they need all the help they can get. >> good tuesday morning. we're live here at post 9 at the new york stock exchange. yet another tuesday that is positive for the dow. . this makes it 17 in a row. that's a record unmatched in the history of the data we collected. the s&p is up two, almost three points. a lot of big cap tech names are seeing a relatively weak day.

office max is declaring a special dividend. $1.50 a share. they were a little bit higher on that news and goldman is downgrading shares of aig. firms seeing limited up swrn side following the recent outperformance. let's get to the road map for the next hour. we'll get to microsoft 8.1. we'll have a look at what it means for the biggest advocate to date and why one guest says a succession plan is needed. and googed shares are on a solid run mostly throughout this morning. could it be that google simply owns innovation right now? and the economic ipd cay tor you should not be overlooking. ed lazir will tell us why. first up, new details about his investment in apple. kate kelly is back with details

on that. hi. >> so einhorn remains bullish on the name. he continues to add to the position of late. however, he's happy tw the developments that occurred, mainly that they're returning more cash to shareholder tlus dividends among other things. so continued bullishness there. he also said, and you asked about this earlier, he continues to be something of a believer in gold, and he's actually a bit surprised at the way it's performed of late. but in another macro play he did well in his trade shorting the yen. the yen has taken a dive as of late. as we see the new japanese bank of japan monetary policy unfold. he'll be speaking more tomorrow, carl, in manhattan, which i'll be covering. we always look to hearing what he has to say.

so we'll see if he's long, short, some combination. >> and great poker player as people try to read his face, which is often a poker face. kate, thanks so much. einhorn says he's waiting for apple's new blockbuster product. google has many products in the pipeline. investors are liking it as well. hitting an all time record high this week and down just slightly today $5.50. guys, good morning to you both. >> good morning. >> james, we like to call this optionalty, right? the idea that you might get all or nothing out of something. when it comes to glass or wiring the towns with fiber, what is google up to, do you think? >> yeah, you have a company with a great business model primarily based on advertising, and

they're investing heavily in some new innovations which it's hard to see how they will be primarily monotized through advertising. so gives them potential down the road to look at new business models. exactly how they're going to monotize glass. whether it's going to be a hardware play. it's hard to know. it gives them an opportunity to look at new business models and new technologies down the road. >> lance, you know, for a long time we gave this company a lot of grief for investing in driverless cars. we kept a close eye on their sgna saying the costs were getting out of control. you think to say they own innovation right now overstates it a bit? >> yeah, i think it does. i don't know that any company owns innovation. google created what? this is the shiny thing. and for the we feel like google owns innovation.

but there's so many unanswered questions about that. if most of the companies google, apple, microsoft, it's a longer play. the road of innovation has a lot to do with the developments and the things they're going to say in the next 45 days. they all have developer's conferences coming up. that's going to tell the story. with apple we know no new hardware is coming out until the fall. they're going to have a big event. a worldwide developer's conference in june. that software is going to be a driver for the hardware. in fact, that's going to tip their hand about the kinds of things they're doing. never -- we can never say that one company owns it. i mean, there's so much more to know about what is happening in r&d and even companies like microsoft which does a tremendous amount of research and development on all sorts of insane projects.

do you think the investment of any of these i in the pie? do you think they will try to create some distance between that and them? >> i think for the investable time of a year or two, it's unlikely that will occur. google is doing less sexy innovations in the core market. that's how they monotize search with enhanced campaigns that they began rolling out in february. so i think that's what is going to drive the stocks lower. it's truism of wall street that analysts are better at predicting estimates than multiples. google multiples expanded by around two the turns to close to 14 times basically since earnings. and nothing in the innovation

area could really be -- could give you visibility on that. >> yeah. finally, lance, we had you onto talk about glass. you brought it on the program. you've been in the "today show." a big think piece about if this is going to fit in our culture. from a cultural standpoint, a legal standpoint. you have this on right now. is this something that our society will, in fact, live with as a technology? >> you know, as i've said, wearable technology is the future. we're in a very weird point right now where if you're not comfortable using it in the open. i got a lot of strange looks. i was on the train last night. i actually didn't talk to it because i felt uncomfortable. i was worried the person next to me would think i was insane or doing something i shouldn't be doing. and that is going to be an issue. people have to be comfortable wearing their technology and engaging with it, wherever they are.

that's how they are going to get the maximum benefit. all of the things that google does tends to be about sucking in eyeballs. even if it's a single eyeball from google glass. >> i have a feeling you're taking a picture of the camera right now. >> i have. >> okay. glass. >> take a picture. >> thank you. turn back to microsoft that announce they're planning to give the windows 8 platform a facelift. it won't be released to businesses until later this year. what does it mean for the future of the company? our favorite bill george, former chairman and ceo and a harvard business school professor. bill, good to have you back. good morning to you. >> carl, good to be back with you. >> you have said for the better part of a year it is time for this company to lay out a clear succession plan. is the heat because of windows

8, or is the heat off of balmer because of how the stock has done over the last couple of weeks? >> well, i don't think it's off. i think you can't look at the short-term shock mood. microsoft is struggling to become from the old. and frankly they've been a day late and a dollar short. the transition on the windows 8 shows the struggles that we're having. you just talked about google. there's a great example. if they're just coming up with new idea after new idea after new idea. i think microsoft needs to get into the game, but they're struggling. they should manage the older business as a lucrative cash that they need to get into more exciting things like they have with x-box. but they haven't done that. high-tech companies need new leadership every day kad.

>> every decade. >> what is magic about every ten years? >> could be 10. could be 12. the problem with a lot of tech companies, the founders tend o hang on too long. he's close to it. 30 years. and the transition makes a lot of sense to have new blood at the top. look at what ibm did. they brought in new leadership. took the company to new heights by devising a strategy built around the core. i think microsoft needs to do this same thing and think more like an company that's managing the old an the new. get creative. they're spending the money and already $10 billion a year. they're producing a lot of profits but not getting the grou that they ought to have. >> isn't it funny, bill? at least in media, we've seen companies really try to separate the fast-growing businesses from the slow-growing businesses and in some cases trying to separate

them formally with different classes of stock. are you suggesting that microsoft should actually split, or just manage those two businesses in different ways at the same time? >> i think manage it different ways at the same time. they stubbed the toe trying to merge the two. they are showing great signs of new life in many ways. i think they can do exactly the same thing. that would give them the energy to keep the old while growing the new. that will get the stock on fire to go forward and get the growth. they say the other companies are doing it. like google. >> if cramer were here, he would say do something regarding mma. buy a netflix, which given their cash position would be easy to do. dangerous or not.

everyone said they paid too much. i thought it was a good move. i think buying some things gets you in the new business. they could use that kind offal entd. look what pixar did for disney. maybe locate it in a different place. not everyone with the windows office culture. they need to break out of that as other corporations have done. >> yeah. >> well said, bill. i always love getting your insight. good to see you again. >> thank you, carl. >> speaking of microsoft, we want to get to your tweet answers. we did ask you what changes microsoft should make to windows 8. james writes rename it xborks wind windows man, you should see how much of those we got today. and may black it back it up.

cloud base is not the end all. we'll get your responses later in the hour. should investors take a second look at the economic indicators. we'll talk to the former president's council of economic advisers next. first rick santelli looking ahead at the mortgage later on. >> we will. we'll be looking at things like prepayment speeds, which is pranslated into english as how is the re-fi business doing? we'll kick the tires on the conventional wisdom of the housing recovery that is definitely moving along at a quick pace and the pros and cons of how many in the inventory with regard to housing is being purchased for rental. all that in about 15 minutes. bottom of the hour. clients are always learning more to make their money do more. (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning

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the latest economic data points have beaten expectations. our next guest says the numbers are not always the best indicator. ed served as the chairman from 2006 to 2009. under george w. bush. currently a hoover senior fellow and professor school of business. good to have you back. welcome. >> nice to be back with you. thank you. >> i would love for you. knowing your background in labor statistics, to backtrack to friday and the jobs number where the number was sort of in line with the revision trend. the household survey also matching. i wonder if it was as clean a number as you seen lately.

>> well, you know, i was surprised by the reaction to it. people seem to be almost euphoric about the data. i guess given the expectations, that may have been true. actually, to my mind, that was not a very strong report. and the reason is if you look at the number of jobs created it was on average for the past year that you have. but the hours dropped. so total hours worked during the month declined substantially. the fact that we added more people does not mean the demand for labor was up. it looks like it was down during the month. i read the report somewhat differently. i didn't find it particularly strong report at all. >> and you tried to quantify the hours worked as the equivalent of how many jobs on a net basis. >> that's exactly right. we lost two-tenths of an average

weekly hour. that's a lot of jobs when you think about that compared with 165,000 or so that we created. so i think you want to put this in the total context of what's going on in the labor markets in terms of overall demand. to my mind it wasn't a particularly strong month. >> did rescissions get your attention at all? >> they did. you know, it's interesting that you ask that. i did a study a few months ago that i wrote up in an op-ed and what i concluded is the error in actual monthly report is very large. and this is no surprise to the people who put these numbers together t bureau of labor statistics talks about this all the time. but i think the public is not aware of how large the errors are. in a typical month we are off by about 73,000 jobs, which means when you're getting a number like 165,000, that could beer in

between 90,000 and 240,000. so when you see a revision in the neighborhood of 50,000, it's not all that shocking. it's on par with what we have seen historically. >> as liesman likes to say, no way to run a country. some suggest you wait. maybe we get the job numbers two months after the jobs period just to get some clearer granularity on what is actually true. >> well, you know, there's a tradeoff there. i don't fault the department of labor for what they do. they want to get the numbers out quickly and be as accurate as possible. so they kind of take into the middle ground and what they do is get numbers out quickly. they understand that they contain error and revise them as they come along. it gives us some information. it's not that the numbers are wrong. they are just estimate of what is actually happening in the labor market. they're unbiassed in the sense that on average they're right, but obviously you're not going

to get them to be perfect when they first come out. so i think the strategy that they've adopted is probably the right strategy. >> so with all that in mind, ed, how are you approaching the data as it comes out other the next tu months. everybody is on alertd for some sort of macro swoon. how do you approach new numbers as they come? >> well, i look at a couple of things. the two numbers i find informative. one is the deployment of population ratio. it's in the standard. it doesn't get as much focus as it deserves. if you look at the employment to population ratio, the number of people working divided by the working age population. so it tells us essentially how many people out there have jobs. and that number was 63.5% before the recession. the it's now at 58.5% and it's been hovering there for a long

time. one piece of good news in the last report is that it kicked up a lit bit to 58.6%. that's a move in the right direction. it's staggering when we think how far we have to get back out of the recession. with the kind of job creation that we have now in order to get back to prerecession levels of working age population, we're talking literally a decade or two. we need job growth in the 300,000 range on a consistent basis. >> we do that. it's great talking to you again. we'll see you soon. >> thank you very much. we'll see you soon. >> a slew of big names reporting. disney, whole foods, directv is out today. how can you play all the earnings on deck? we have an earnings squad ready to lay it on the line. plus david and simon may have

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dow hitting a fresh record high still hanging above 15,000 with 18 points to scare. . >> well, one-third of the highs mark financials. some names, wells fargo, citi, bank of america and blackrock. >> thank you so much. the bell is about to sunday across europe. we'll get the close right after this break. your money. that's not much you think. except it's 2% every year. does that make a difference? search "cost of financial advisors" ouch. over time it really adds up. then go to e-trade and find out how much our advice costs. spoiler alert: it's low.

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the european markets are closing now. >> we want to bring in michelle to talk about the european close. >> german factory orders are what you're referring to. it's really led to a broad rally across the continent there. y can see it was all in the green and even though we're talking about programs in the unemployment rate around 20%, some countries over there are hitting historic highs. germany is at a historic high. portugal is at a one-year high. so we're seeing a lot of

similarities to what you're seeing in the united states. what is also crucial in germany is germany may finally drop off position to a banking union across the continent. that has driven bank shares higher. that is lifting the overall averages. germany has been doing that, but they want other can'ts to shut down the junky banks that will go away. at this point they're going to drop off position. additionally what's happening in europe, we're getting back and forth about austerity. so the finance minister of germany speaking today. saying, gosh, we do not want a more german europe. we think that's a terrible idea. we fight that every day. a lot of people don't believe him. we don't think there's noesly one plan fits all. we don't necessarily think that

just because you're balancing a budget it's anti-throat. there's a lot of things we have to do to get the economy to grow. of course, referring to reforms. back to you, carl. >> yeah, quite interesting in debate. it's not going anywhere so long as they stand for re-election. let's bring in bob pisani to see what's moving here. >> germans driving opposition to a banking union would be huge news over there. they need to find some ways to close down inefficient banks that's uniform. german is going along with this. that would be one of the biggest concessions in the last few years. and that's why the bank shares are moving. people ask me what is going to happen next. should i put more money in? what is going to happen in three months? six months? i'm very pleased by the fact that the transportation stocks have caught up with the overall industrials. put up the dow transportations and industrials here. four days in a row now.

the transit index has been hitting new highs as well. here you go. united parcel and southwest air. people say how do you get transports growing when global economy is so slow? if you look at it, what really matters is volume growth. how much the the companies grow the amount that they're shipping? the numbers are not that bad. global airline passenger gout is expected to be up 2% to 4% this year. shipping containers up 2% to 4%. where you get the problems is in europe. like freight. passenger freight. any kind of movement of goods in europe is zero do down. but the market seems to be happy with roughly 2% growth in global volumes in terms of the transports. that's the important thing that's going on here. one thing that worries me a bit. put up the sectors here and i'll show you what's going on today.

we'll continue to see materials and industrials and and energy stocks lead the market here. but technology, which is also a market leader, isn't today. some of the big names are notably weak today. they've had a great run. i'm talking google, apple, microsoft. you can put those up and see that they're having a problem. if you understand what the market is doing in technology, none of this should shock you. show google and apple what's been going on here. people may complain that microsoft has problems with windows 8. since the earnings report, the stock has been on fire. apple has been up. goog google has been up. it's not surprising all of these are outperforming. i think it might be time to slowdown a little. the real key are the transports now hitting new historic highs

and the global growth is fair. global air passenger growth, 2% to 4%. that seems to be good enough finish the market. 5% earnings growth in the united states seems to be good enough for everybody. >> we love the story. we'll see where it goes. thanks, bob. rick is in chicago taking a look at housing. >> hi, carl. yes, my guest glenn schultz knows an awful lot about mortgages and a big day for you was yesterday when you did some of these prepayment speeds and information. . we talk about prepayment and fannie mae, 35 years to simplify things. . less refinancing activity. less turnover activity. now this is the third straight

month they have been below expectations. government refinancing. that was 42 cpr this month. that was up from the previous month and the month before. >> cpr. >> that tells you how much of the mortgage is going to pay off in one year's time. 42% of the outstanding balance is going to be paid off at those speeds. >> when you look at the ineligible loans, we can break those into two types. higher coupons, and those that cannot be refinanced, lower coupons. investors have been being to pay up for the higher coupon mortgages that can be refinanced because they have been paying slowly. and the idea is that these borrowers are locked out due to credit and tight underwriting. but we saw the federal reserve lender survey showing underwriting standards have been coming down or loosening up to the borrowers.

a little bit of home price appreciation. they had two or three years to make on type payments. they've opened the door enough for the borrowers to refinance. we've seen speeds pick up there. so investor who is are paying a premium on the idea that these borrowers are locked in my may be in more a surprise. >> all that sounds hopeful yet when it comes to homeowner ship, it's 65.2%. which is a 17-year low. >> that's right. >> what do you think about that? >> i watch the number a lot. that number was stuck in the low mid 60s sings the 1950s. so the clinton administration wanted to come out and boost the number. the bush administration followed through. the barney-frank dynamic.

they push it up to 70%. basically you take a bumpl ofnc c-class renters and turn them into e-class homeowners. >> i like the equilibrium. not everyone is meant to own a home. through march. remodeling has fallen dramatically. so family formation remodeling. so the benefits really have to do more than more with owner ship than renting. >> investors have been buying homes to put on the market. that's driven remodeling up. when the homeowner is confident about the future of price

appreciation, they're willing to invest and remodel. so this index is coming back down. >> we're almost out of time. very simple answer to this question. who will remodel more? a homeowner or a renter? >> a homeowner. >> i think i know what you mean by that, rick. thanks. streaming music service pandora out with number this is morning. >> yeah, pandor reporting april numbers for listeners. analysts saying the mobile cap implemented in march is curbing total listener hours and radio share. total hours increased 24% year-over-year but we're down 12% month other month. they're telling clients the mobile usage will increase the rpm. the profitability. jpmorgan saying it remains their

top pick. that has been a monster, carl. >> interesting story. thanks a lot. fossil is proving to be very much alive. our earnings squad finds out how it plans to keep on ticking along when we come back. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

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welcome to the earnings squad where we dissect the earnings stories everybody is talking about. we trade the earnings story you may have missed. i'm joined with my partner herb greenberg and today mary thompson joins us. today to the scorecard. 85% of companies have reported so far. 9% met us and 23% have come in below forecast. i've got to start off with the big earnings movers of the day. fossil shares are up 8% after beating on both the top and bottom line. they also raised the guidance on strong demand in asia. directv beating an all time high. adding more than 500,000 subscribers in latin america. and emerson electric falling after missing expectations. the company says orders were weak in february and march and

more importantly the firm does not see the economy improving over six to nine months. they are trading higher after cost cuts. mary took a look at this one. what did you see? trading is at a 52-week high. the company cease ceo is basically on a three year-set out a three-year plan to cut costs at the company, which is europe's largest bank and he's done a tremendous job. 42,000 job cuts. the relate, the kpoen had strong results. this is behind the better than expected numbers. remember this they're running off. terrible time to buy it, right before the crash. we're at 14.9%. there's an investor day. and they're wondering if they will lay out more cost cuts because in the low rev new,

that's how banks are boosting their bottom line. >> there. they were deceptively weak. they are looking for derivatives. he was raising questions about the earnings quality. >> there have been some complaints they're not quite as got some people would think. the market is looking at what they are hering. they are getting perspectives about the world. they see the chinese economy accelerating after a first weak half. the eurozone will continue to crack. >> and let's talk first solar here. initially rising after the earnings release yesterday. but it is now down by 9%. the context for this move is the fact that the stock is up 77%

since the end of march and also has 31% short interest. most of the rise in terms of the stock price on the back of an analyst meeting which they gave very aggressive and bullish guidance for the next few years they said they pulled forward business from future years in order to pad the profits now. >> you had a fabulous interview on "fast money" a few days ago who was calling us out. gordon johnson who has been negative. going to be on "street signs" today. this has been the issue here. everything was not going well for the company. suddenly -- >> all the sudden, great numbers. you look at the earnings transcript. this was interesting to me. the large portion of the pipeline are early in the stages. meaning that development cycle is 12 months to 24 months. they're focusing on building the pipeline in 2014 and beyond. 2014 and beyond, folks. so what can happen in solar

industry? a lot between now and then. all right, just quickly. >> yeah, perrigo is interesting. that's with the could and flu season here. the numbers are very negative on this. he says he's concerned about next quarter. could it be a nuclear bomb? they will not be able to bail them out. revenue growth has really been going down. it's been a jim cramer fave. >> allergy season doesn't help, huh? >> it should. >> it's pretty bad. >> this would be a good one for them. it offset what they don't have from the global food. >> that's the earnings squad for this morning. follow me on twitte twitter @melissaleecnbc. meanwhile, a company that may have your 4 to 8-year-old very excited. it actually got me excited. a squawk breakthrough name that's educational and

interactive for your young ones ats home. greg from jibjab is live right after this. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪

up next on the what does the dow 15,000 really mean for stocks? and first on cnbc, chuck junis on first quarter earnings and how his company is dealing with the price of gold. and aol near all-time highs, but is it a buy ahead of

tonight's earnings? two traders square off in one classic debate. carl, back to you. >> michelle, thanks so much. what happens when political satirists grow up and become parents? the co-owners of jibjab looked at the way their children were consuming content, and they saw an opportunity. the result is their latest venture so-called storygots for kids that ep courages multiplatform learning. greg is the co-founder of jibjab and of storygbostorybots. it's great to have you. >> thanks for having me. >> i have to imagine that after the incredible success that you had with jibjab, the pressure to come up with a really solid second act had to be huge. how did you do it, and what is storybots? >> well, we're very lucky because between my brother and myself, we have five kids, 2 to 8 years old. so in our own living rooms, we see this massive shift in how

kids are consuming media. and so we were inspired. we said, if "sesame street" were created this world in connected devices, what could it be? and that was kind of the spark, the inspiration, for storybots. >> right. 7 million videos have been views. 7 million? >> yeah, that's just our a, b, c video series. and starring you videos where you can actually put your child into the videos to classic songs, over 500,000 videos have been made so far to date. it's been very successful. over 3,000 starring you books have been created and read by parents and kids. so we're off to a good start. >> and so now this new pricing model, $4.99 a month, gets you what you're calling a family pass which basically allows you to access to all the apps, books, videos, activity sheets. when you were planning your distribution model for this new business, what was the thinking about, all right, do we try to

send this into itunes? you say that that was sort of a crowded room, so to speak. >> sure. yeah, i think for us as parents, we realized a couple things. one is that repeat in-app purchases, advertising, all of these things we wanted to remove from our products. so that was really important to us. and the other thing is as busy parents, you want a universe of things. you don't want to have to shop for all of these apps all the time. so our mission is to really create a portfolio of apps for parents and one price unlocks the whole world and you're all done with kind of the commerce piece of it. you can feel good that your kid's learning and playing in a safe place. >> you were a wharton grad. you were at goldman, bear stearns. you were no stranger to creating a new business in what is obviously a tough cutthroat tech environment. >> yeah. >> what would you say the secret is right now to all the entrepreneurs out there who wish they were doing what you're doing? >> my brother and i started jibjab 14 years ago.

you just have to see -- you have to have a vision, and you have to stick to it. and you have to change and evolve all the time. and today we're very lucky. we've kind of kept our nose to the grindstone. we've got 50 amazing and talented people working with us and excited to be pushing with jibjab and storybots together. >> jibjab, of course, backed by big names in venture capital, polaris, overbrook, sony. raised $18 million. you make money. what was the thinking in terms of bringing in partners versus retaining some sort of autonomy amongst yourselves? >> oh, yeah. i mean, the partners really helped us scale the business faster than we could if we were dependent on our own revenue. we were in business 6 1/2 years before we raised money. and as you mentioned, as a former investment banker, i didn't want to raise money until i really saw the economic opportunity with clarity. and so 6 1/2 years in, we raised money. and those partners have brought not just capital but incredible

experience to the table that we've been able to leverage and grow the business with. >> you must have some pretty good insight. we had discussions here every day. i'm sure you do, too, about the tools we're going to use in the future to access content like yours, right? i mean, there's a big debate about if a tablet is really the future or if it's going to be some sort of hybrid that we're not really familiar with yet, i mean, how do you think distribution's going to change? >> i think there are going to be screens everywhere. and so what we're thinking about with storybots is not so much whether it's the phone or tablet or what's the context of the experience. so obviously, if the kid is in the back seat of the car, there is content that we're producing specifically for that that will appear in a smartphone. and then again, in bed at night with your kids reading "starring you" books, the tablet is a perfect experience. i think screens everywhere, and we think about it more creatively from the context of the user experience than the specific device. >> that's interesting. well, as the parent of twin

3-year-olds, i must say, you know your audience because the back seat of the car, that is prime real estate. >> yes. >> i hope you'll come back. >> i hope you have me back. thanks for having me. >> co-founder and ceo of jibjab media and now storybots. take a look at this. this is marissa mayer at the costume gala last night. the theme of the party was punk, hence the red and blue streaks that were added to her blonde hair. you don't see ceos doing that a whole lot these days. good for mayer. meantime, keep those tweets coming. microsoft retooling its windows 8 operating system on the heels of some customer complaints. we're asking you what changes should microsoft make to make windows 8 even better? we're going to get some of your answers after this break.

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let's get the "squawk on the

tweet" on this tuesday morning. microsoft saying it's going to make changes to windows 8 following all those customer complaints. we asked you, what changes should microsoft make to improve windows 8? yihaok writes, microsoft needs to focus on innovation in products such as a multiuse gaming console expanding into the television industry. "microsoft should integrate skype with xbox." a lot of discussion about those two names today. before we take it back to headquarters. take a look at blackberry, down 4.5% on a call out of cleveland research. they say they believe blackberry is cutting their build forecasts based on early reads of the q10 launch, something to watch. back to headquarters, mcc and the "fast money halftime." thank you, c.q. welcome to "the halftime report." here's where we stand now. dow above 15,000. you saw that on friday. here we go again. the s&p at 1620, the nasdaq is

lower by nearly 4 points. here's what we're following on "the halftime report." golden opportunity. the precious metal has been only ordinary in 2013. prices tumbling 13%. but what impact has it had on the miners? are they the better way to play gold? gold corp ceo chuck junis will join us with an interview you'll see