good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. and let's start things off with the futures. they are indicated higher this morning. in fact, up by a lot. dow futures right now up by 1116 points. s&p futures up by 14. nasdaq looked like it would open up by about 30 points right now. in asia overnight, you did have some green arrows there, too. the nikkei was up by 1 is.2%. similar gains in shanghai. the hang seng was up by over 1%. in europe this morning, the early trade has some green arrows. the cac right 2340u is up by 1.5%. the ftse in london up by 1.6%. the dax was up by just over 1%. it may be a holiday shortened trading week, but we have a busy four days ahead for the economy. today we get the s&p

case-shiller, the richmond fed survey and the dallas fed survey. a second read on first quarter gdp. chicago pmi and consumer sentiment, but also it looks like we are start, some green arrows after strong trading days yesterday in europe. >> and we have some deal news with the long weekend. valiant pharmaceuticals buying bausch & lomb from -- i always confuse that. >> speak for yourself. >> for $8.7 billion in cash. the transaction was unanimously approved by both boards yesterday. i should mention, by the way, warburt pinkus is the private equity firm that took it private in 20307 within $4.5 billion. so this is double that money. they've already taken out about $800 million in a special dividend. so this sa nice payday.

>> it was the top, but it wokd out. >> also in the news, joe was mentioning it. astrazeneca is buying heart firm omthera for as much as $443 million. the cardiovascular business is a priority. omthera is a specialist in fish oil derived medicine. astrazeneca is paying $12.7 million a share. is that wrong? >> no. no. $443 million, i don't know if we need to -- we don't need to mention it every half hour, probably. >> we won't. >> $6 stock. i don't know. >> coming after the valiant deal. we have a third deal, though, that you will care about. i went there when i was younger.

club med's top shareholder -- >> have you ever been to a san did he ls? >> no. have you ever been to a club med? >> no. but given your week ynds, you might go anywhere. >> i went to a place where there are a number of "squawk box" viewers in the poconos. it was a great weekend for everybody. >> your kids are at appear age where the joy of watching little boys at 2 years old do a lot of fun. >> absolutely. >> you're going to have to get more and more going on as they get older, you know? >> a big slide will make everybody happy. >> andrew said he had fun. >> i had fun. club med's top shareholders want to take over the company in a roughly $700 million deal. chinese investor and acts of private equity said they would team up with management of the

french holiday firm. club med was a pioneer of the all-inclusive resort. the big news there is one of the major chinese investment firms wants to own club med. there are some questions about that. >> you did club med. which one? >> the one down in turks and caicos. >> were you single then? >> and i went on the -- wa do you call it? the trap ease. >> training for the circus. >> it was right after college, a went with a couple of friends. >> was the trapeze in your room? >> it was absolutely all-inclusive. >> was it, really? and there was a trapeze involved? i didn't know that. >> you might have gone a little -- >> a trap ease. >> that didn't happen in the poconos, did it? >> no. >> but there were other stuff, bumper cars, bumper boats. >> archery, rivalry, baseball.

>> did you boycott the riflery stuff? nobody needs that, do they? did you -- kids, get away, get away, those are guns? did you? no? >> it was off to the side. >> all right. in other weekend news, more trouble for the cruise industry. we just did club med. a fire broke out aboard the royal caribbean gran did he ur of the seas on its way from baltimore to the bahamas. no one was seriously hurt. fire owes ship. >> that looks awful. >> yeah. no one was seriously hurt. the newly renovated ship, newly rel excavated again, is based in baltimore and was on a seven-night cruise out of florida. it was returning all the passengers on the grand tour to baltimore. so on top of got getting their cruise, they're being returned to baltimore and the guests will receive a full refund and a future cruise certificate.

>> you had an awful time, come back soon. >> yeah, right. and we're dropping you off in baltimore. and a holiday weekend means block busters on the big -- no one was hurt, seriously. >> that's good. >> this is really good news for anyone that cares about zault companies and great management. fast & furious 6 coming out on top. the movie took in $120 million from friday to monday making it the biggest opening weekend for a universal pictures release. "the hangover part 3," why anyone would take a drink when that guy was around, the wolf guy, how could it happen again? i don't know. it opened in second place with $51.2 million. the last thing i need is to see the asian guy naked again. i'd rather -- i'm told the third is no better than the secretary. >> he's in the third one? >> oh, yes. and he's definitely naked again, i think. what is his fascination with the

guy's privates? i don't know. and "star trek into darkness" landed in number three. my daughter, who is not a trekky, saw it at a sleepover and it was awesome, she says. >> the new one. this is the second -- >> i saw the first new one which i didn't know -- it was bizarre. >> it was fast. >> i don't know what happened. this one has modern-day themes in it, terrorism themes and all kinds of -- but it was funny because she was saying, and there's this guy. he's half vulcan and he's half human and he doesn't really have emotions and i go, spak? she goes, yeah, spak. and i go, no kidding. and she goes, and the other guy that who ran the ship, his name was captain kirk. and i go, kirk, how do you is spell that? he's like more than 40 years old. >> yeah. >> this started when william shatner had hair, i think.

or did he never have hair? >> unclear. why don't we take a look at the markets this morning. you're going to see triple digit gains for the dow. i was a strong market day yesterday. maybe this is catch up would he have playing. it's better than 1% across the board. take a look at oil prices this morning. they're up about 55 cents to 94.70 for wti crude. the ten-year note, still yielding -- oh, wow. i was going to say below 2%, but it is above 2%. 2.093%. the dollar is up -- no, it's down again the pound, but up against the euro and the yen right now. euro is at 1.2926. euro is at 102.08. gold has given back a bit to $1,378.90 an ounce. karen tso is standing by in

london. karen, good morning. >> good morning to you, becky. we are seeing gains across the european markets again today. we're being propelled north 1.ta%. the ftse returning to the trading session today after being closed yesterday for a bank holiday. the market is tracking higher here by 1 is.6% on the ftse. the cac's 4,054 on the charts. the xetra dax is moving in the right direction to try and reclaim the all-time high that we saw on the index earlier this month. nonetheless, 1.1% higher today. the periphery has been strong this week. very saw the markets very much rathsed this week. the periphery had some fairly steep selling. let's move on to some of the individual sectors. you can see where the activity has been concentrated as a result.

in particular, we're seeing lows moving higher today and banking stocks. autos, 278% higher. the likes of renault, some of the big movers. this is helping out broader stocks. you can see it is a broad based sweep higher across the charts today. the risk on mode has been reflected in some of these debt markets, as well. we saw debt costs lowering. the yields on this, 1.11%. this is down from a month ago when the yeemd was 1 is.17%. so on the ten-year italian by comparison, we're still above the 11% threshold. last week we saw a sell-off on the peripheral markets.

the spread narrowing yet again. on the rest of the core markets, you've noticed it was a bit of a push higher on some of those yields. this is the latest on forex markets. 1.29 is the level of the charts. sterling/dollar has been weaker for most of the morning. but it is trying to push through the green and getting through the 1.51 mark. on this particular trade, dollar/yen, we're through the 102 mark. the market is still eyeing the stimulus for the bank of japan after a bit of a sell-off last week. but also on the dollar/yen trade, it is now reversing trend and going back to wa we've been seeing. commodity currency is trying to recover some of the losts last week, as well. it's been a fairly steep slight for that currency. back to you. >> thank you for that.

coming up, we're going to talk markets and the economy. plus, attention summer travelers. why consumers could find airfares even higher soon. i've experienced that myself. the details when "squawk box" returns. [ female announcer ] there's one thing dave's always wanted to do when he retires -- keep working, but for himself. so as his financial advisor, i took a look at everything he has. the 401(k). insurance policies. even money he's invested elsewhere. we're building a retirement plan to help him launch a second career. dave's flight school.

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welcome back, everybody. u.s. equity futures are indicated sharply higher this morning. in our headlines, we've been taking a look at the tax on the

airlines flights that could increase. the "l.a. times" reports that the ee bam ma administration has proposed raising taxes on air travel by about $14 a flight. as you would expect, the airlines strongly oppose this move, arguing that higher taxes will back fire and hurt the economy. by the way, affair lines pay a significant low. >> crazy. crazy. >> if you look at any ticket you buy, taxes across the board from federal to the local to the state. it's pretty -- >> -- it's matt massive. if you ever break it down, there are massive fees. some of that is to go back and sfaurt things that the airline industry uses and they've never taken any of those funds to update. >> how about that? >> we found one. think about it, though. don't be hasty, thrash.

>> let's get a check on the national forecast this morning from eric fisher who is standing by. we had a tough weekend. yesterday was gorgeous, but before that was -- you know, it was not may. >> in the northeast, you had three feet of snow in white face mountain in new york. it will be 83 this weekend. you want weather whiplash, that's as bizarre as it gets. routine moving into western p.a. it's a stormy outlook today through the shortened workweek. some of that rain pressing into philly, baltimore and d.c. it will be into new york by this afternoon. this is the price we pay to get into the warmer air. to get rid of the cold we dealt with over memorial day weekend. that front is going to move through tomorrow to bring in the warmth. new york city is southbound. anywhere south of new york, big hamilton, buffalo. well into the 80s. it will stay that way through the upcoming weekend. the other story we're watching, a lot of rain into the midwest.

this is not appear area that's in drought. this is actually holding back a lot of crops because it's been so wet the farmers can't get into the fields. we're expecting locally up to 7 inches of rain here through the upcoming weekend. it will be bouts and bouts of thunderstorms and showers and that will be rolling through. also, severe storms today. possibly as far east as pittsburgh. some bigger cells getting going here across kansas and oklahoma later on this evening and tomorrow looks like a very significant day for tornados, unfortunately, again. we could be talking about a spot like oklahoma city, even into the northeast some strong, gusty winds tomorrow. okay, guys, we've got the benefit concert going on for tomorrow night. storms will be in the area of oklahoma city. it's not anything anything folks want to hear going on in the forecast. >> eric, you're the good looking guy without the jacket. so we keep you straight here. and than there's -- is it wolf reynolds or reynolds wolf? >> you do it on purpose. poor reynolds, you always do the

backwards name. >> either is cool. either they're both first names, which is confusing enough and we're not a big fan of those except his are cool. >> he's always got the pocket squares. i think he has a tissue box at home. whatever he pulls out, he matches the tie and the suit, by the way. >> he kopd last week to knowing that he looks good, too. he did. we busted him so clearly. and it's true, both of you, if you've got it, flaunt it. i do. >> i would never claim something like that. >> thanks. a holiday shortened trading week to finish off the month. joining sus david joy, am re iprize financial. drew, this is the way database am i wrong? you've been bullish on the economy, but you still don't think tapering comes anytime soon. that should give us a double whammy, shouldn't it?

>> it should. if you look at everything going on, there's not enough certainty for the fed to pull back. bernanke is an economist, so by definition a chicken and, therefore, he's going to take his time and make sure everything is going exactly the way he wants it to go before he does anything. >> it's crazy. aren't you at 2.5% for the year? >> we're closer to -- yeah, we're at -- it depends how you measure it. economist res always complicated. >> 2.5% plus? it was drive with the sequester? is that 1%? 1.25%? >> we're a little more optimistic on the drive from the sequester. it's a lot smaller. >> and it's an underlying 3.5% economy. >> i'd say it's over 3. >> and we still need -- >> not to contradict the hare. >> and we still need 85 billion a month. >> we don't, but they're going to give it to us. >> we don't need it. >> no. >> i think at this point it's counterproductive. >> you do? >> but you'll take it. >> you just keep telling people,

you know what? we're going to keep in this economy fine. we're never going to raise rates. if you give a ceo five years to make a decision, he's going to take four years, 11 months and 364 days to get back to you. >> you see whose method it's going to be, too, larry summers. did you see that? that was an economist who was breaking larry summers. >> i wonder if you'll have any women on his staff? who else did that? someone else said it recently. >> paul. >> jones. >> and than as the baby gets on your -- yeah. >> you can't think of anything. you can't focus. >> you can't focus, yep. >> it would be distracting. and annoying. tell us about it. what is it like? we need that -- hey, david, you're similar here, aren't you? not in terms of nursing, but in terms -- you don't think the fed is tapering any more soon, either, right? >> no, i don't. i think what bernanke said in

response to the questions last week was that maybe in the next couple of months, couple of meetings they could look at it. but i think that was just an olive branch, really, to the hawks on the fomc. but i do think it brings forward wall street's expectation that this wouldn't happen until the end of the year, maybe the beginning of the next. i do think it now bricks into play those september and october meetings. but the data has to be decidedly stronger than what we've seen so far. if we get more of the same, then it's not even going to happen in the fall. >> you know, you've got gray hair and i was around for other business cycles where we were doing 2% or less. i don't ever remember having a fed that was just so nurturing, that was so there. i mean, so with us with every little bump and grind in the economy. i mean, going back 30, 40 years, we've had business cycle tess entire time. i don't remember them being there like this holding our hand.

yeah, every step of the way, david. >> yeah. well, i think this business cycle is very different from virtually any other that we've had. >> but now? >> well, i think it -- no, i think it still is, absolutely. i think the fed is more afraid of deflationary pressure in the global economy than they are inflationary pressure. keep in mind, ben bernanke's entire academic focus has been on the great depression. and so he's going to hand hold this economy until he's absolutely convinced that it can stand on its own or he's out of gentleman job, which 34may happ first. this is a balance sheet type recovery, not a business cycle type recovery. so it's very different, in my opinion. >> you see the ceos will take their time if they can. we've talked to ceos and we don't think there's the support fof it or the demand for it. 2.5%, which is the same number you're looking at.

>> and none of them are spending on cap ex. >> well, you are if you're the railroads. >> but in the aggregate, a lot of these ceos aren't buying new things. if you look at m&a activity, there is no m&a activity. why is that? because most of them don't want their own capital stock. they're figuring out ways to get the same profits with less revenue .they're happy to make that trade. they're going to keep being happy to make that trade until they think the game is over. >> they keep getting rewarded by the stock market for making that trade, too. >> if you get rewarded for indecision or no decision, then you'll keep making those same decisions because that's in your best interest, right? and now the fed is telling you, that's the trade. and until the fed looks like it's going to step back, you're going to have weaker growth. >> how do you view the fed's balance sheet? what is it exactly? what is the -- because i'm thinking if four trillion is wa we need and what we're going to have, but we started with 800 billion, were we under capitalized before?

>> no. look, i'm not a member of the tinfoil hat club. but if people understood exactly how money works and how money is traded, they would get a little nervous. you know, the fed's balance sheet, all it is is it's a kraegdz of money, right? >> right. >> so -- >> were we under created before? >> no. we were fine before and a normalized balance sheet would be 1.25 trillion. so we're going to be about 3 trillion too high before this is all said and done. >> and that's not a problem? >> well, i think it's going to be a problem. but at the same point, we have big forces pushing us. i think if you look at the inflationary forces, deflationary forces, the question is are they coming from the economy or demographics? i think that's something the fed is trying to get its head around now. >> the market question is this. i spoke to people who say i've taken -- now in the past couple of weeks, people say i think things are so inflated, i've got to get out. i've got to put my money on the side.

almost as if they were back, if they were smart enough to do this back in 2007. you say to yourself, if there's no alternative, when does cash become the alternative? the question is when does this turn the wrong direction? >> when firms can no longer reduce the revenues and get the margins that they want. and so this is for the cap ex story comes into play. no one is preparing for the future. and so if there's some sort of pick up in aggregate demand, then all these firms that have been cutting back on their ability to produce will be offsides. >> david, who is going to buy the bonds? buy my 307bdz about. who is going to buy the bonds if the fed steps back? how much are they buying now? and if they were not buying any bonds, what would interest rates be? >> i'd say you'd probably seen the ten-year around 2.5% right now. >> they're buying 80% of the bonds right now. they step away, who, the chinese are going to buy all of them at 275%?

>> it's a good question. i'm not so sure. but at the same time, there arelty of buyers coming back into the bond markets. still, we haven't seen a great rotation. there are a lot of people who are not convinced that this recovery is sustainable, that there are deflationary forces out there. so i think you'll find some buyers there. but i think clearly the fed has had a huge influence on, you know, the rate structure as it now exists. but, you know, you get back to your question about the fed's balance sheet. it's the money multiplier that's been broken. we have huge excess reserves, but very little demand for money and very little willingness to lend what is there. and so, you know, you're not getting the inflationary impulse that you would get. if it was a normal environment, this would be inflation off the charts. >> so i need help from ame ameriprize. i've got $1 million.

will it put it to work for me? what will you do for me? >> be overweighted equities, be overweighted in the u.s. in terms of equities in the bond market. avoid treasuries. but it into corporates in the low part oovt investment grade universe, but keep your maturities in the short to intermediate range at best. and i would include in that the bank loan market because i think balance sheets are strong. i do think the economy of the world is getting better and i think that's important. so corporate bonds. >> okay, david. david joy, thanks. where are you right now? are you in a suburb of boston, just out of curiosity? >> no. right downtown boston. >> at the pru, prudential center? >> no. liberty square, right down in the financial district. >> oh, you are. all right. drew madison, where are you? >> i'm right here. i've been in that studio, though. it's a tiny studio, but it's a nice one. >> don't diss the studio.

>> i'm not dissing your studio. i'm saying it's small but pretty nice. >> i think it is. >> it's very convenient. >> thank you for coming here. we always like talking to you in person. when we come back, there's an opec meeting this week and if that catches you boy surprise, you're fought alone. plus, u.s. equity futures are trading above fair value this time. we'll take a snapshot with goldman sachs when he comes back. ♪ roomba, roomba ♪ roomba, roomba ♪ got a robot vacuum ♪ cleaning up my life ♪ and it's gonna cut through ♪ filth and funk ♪ just like a knife ♪ dirt won't come back again ♪ thanks to ♪ my brand new friend ♪ got a robot vacuum ♪ cleaning up my life

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good morning. and welcome back to "squawk box" here on -- discussion day. >> discussion day. >> i'm joe kernen along with becky quick and andrew ross sorkin. making headlines, opec ministers gathering in vienna on this friday. traders say the meeting is barely on their radar. the cartel's widely expected to keep its output posse. >> there's a story in the "wall street journal." >> there's a lot of tensions that i hadn't realized. nigeria and venezuela is have been trying to push the cartel to cut prices. >> the united states, the energy boom that is happening here. >> but i mean, is 95 like the new 75? this is like the normal price from here on out? >> 45 is the new 75, but we'll

see. >> saudi arabia has not gone along to this point, and that's interesting. let's take a look at the futures markets. they are doing really, really well. at least if you are a bull. dow futures up by triple digits, 105 above fair value. s&p up by just over 13 points. joining us on the squawk news line is jim o'neill. jim, you are a young man to retire. >> i wish i felt that way. >> yeah, i -- >> thank you for the compliment. >> yeah but, you know, we would love to get your perspective this morning. we look at the futures and they're up sharply. is this a reaction to the down draft last week in the markets? >> well, maybe people are having a bit of reflection. the thing that strikes me already having the distance i've got is quite interesting this year. the markets have reacted initially quite aggressively to fomc minutes being released.

and i think this is the fourth consecutive -- or the three previous ones, at least, that have overreacted to what was a slightly hawkish message. and in essence, giving more weight to the average of the fomc participants rather than the leadership. and while it was clear from the last minutes of this group believes the fed should be doing less or taking away from as soon as possible. it's far from clear to me that that's the view of the fed's leadership, which probably has the dominance there when it comes to actually what they do. so i suspect there's a bit of overreaction last week myself. >> so you're in the camp that don't expect the fed to be tapering anytime soon. you don't think it will happen this year? >> well, i think we have to wait and see, like bernanke did say in his speech last week. it really depends on the evidence and the data. but the three things of relevance, first of all, he, yellen and dudley proep probably

dominate wa goes on so much and they're all leaning to a very sort of dovish buyer. secondly, the data has been marginally softer. which would obviously add to that inclination. very importantly, inflation remains so subdued. so i think for those to shift to the way that -- of what's been represented in the minutes, i think you'd need to see a lot stronger data at a minimum and maybe some more before we could be convinced that the fed is going to want to taper off so quickly. >> there are a couple interest stories, just speculation about the fed that have been out since the market closed on friday. one of them is who is next to take over? is it a situation where yellen is someone if bernanke doesn't stay? is she in charge or is it someone like geithner or larry summers? >> i read some of the newspaper stuff about this over the weekend. i've been assuming it would be janet yellen. obviously, we don't know, but

there's obviously something flying around for these other names to be given a bit more prominence, both of them highly competent ones over the weekend. but i would guess in any case given the way that each of those two probably think about things, it wouldn't in my view make that which difference to what we just discussed a second ago. >> the other theory that's out there is that the fed this time around really was trying to reign in the markets, that they were trying to make sure the markets realized they may not be going high frer here when that was the expectation from before. there's a piece in the journal today that lays out the back and forth. i guess my question is how closely does the fed monitor the markets? is that really driving this debate right now or is this an accident and we're all reading too much into it? >> i think database as i say, i think it's the market reading too much into fomc minutes. probably. i can't imagine the fed is using an fomc minutes statement to make some message about market

behavior, to be honest. although, of course, there has been a couple of warnings over the past month or testing of the market about how strong its own convince is in aspects of the corporate credit and other parts of the bond market. but i couldn't imagine they would be using the fomc minutes for that purpose myself. >> is the fed the most important issue for the market right now, the market direction? we see the economy starting to improve. drew mattes was just here and he said you're going to have an improving economy and a fed that stays in there for a while. >> i think that was right. if indeed the fed is going to taper off sooner, i think that would be an issue for the market. we've traveled so far the past several not only few years, but the past year, that from a sort of cautious valuation perspective, the u.s. market isn't cheap. and if for some reason the fed were to start pulling back a little bit, it wouldn't be a great thing. but as i've said, i don't think

they will. i don't think it's the only important thing globally in the markets. was going on in japan continues to be of huge importance and in addition to that, we have ongoing if not growing evidence that china is slowing. so you can get a whole set of forces going on all over the place. but of them, what the fed took to is probably the most important, obviously, for the u.s. market and probably for global markets. >> jim, thanks for joining thus morning. really appreciate it. >> my pleasure. thanks for having me on. coming up, why businesses might soon fight texas even more -- or find it even more lucrative. plus, we're going to talk markets and the economy. the stories likely to drive the action in this four-day trading week. we're coming right back. hat's g? do you want the long or the short answer? long i guess. chevy is having a great-deal- on-the-2013-silverado- but-you-better-hurry- because-we-don't-want-to-see- a-grown-man-cry-spectacular! what's the short answer? nice. [ male announcer ] the chevy memorial day sale.

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welcome back. u.s. equity futures, dow jones up triple digits. legislature has passed more than $1 billion in proposed business tax cuts. the package includes an extension of business franchise tax exemptions for small businesses and a rate cut for businesses of all sizes. the legislation now goes back to governor rick perry for his surnt. >> let's talk markets. global markets regaining ground after the long memorial day weekend here in the united states. talking to all of us about all these issues, we've got mark whitner, senior economist at wells fargo securities and on the market, we have scott clemens. scott, i'm going to start with

you. i've been running into people over the past week, everyone says, are we overheated? is it going to be a pullback? i'm running into people who are now saying they're either not investing or they're thinking about taking money out of the markets because they think something bad is about to happen. do you agree with that? >> i would say at the margin i agree with that. this market has come a very long way in a short period of time. if you go back to march 2009, we're up now, what, 130% from the lows. the good news is it's been driven by an equivalent increase in corporate earnings. the tailwind for corporate earnings is beginning to subside a little bit. we've dialed back a little bit, as well. are you not putting any new money in? >> we're still very heavily weighted to u.s. equities. it's a marginal trade. not calling a new bear market or anything like that. >> so you haven't been the slightest bit cautious for the past eight months? >> we have more cautious over the last eight months. we've taken more money off the

table. >> you can't see you're taking that money off now, we're up 2,000 points in the last eight moss. >> we've been taking money off in the last eight months. >> you were fully invested? >> yes. >> eight months ago, you weren't bullish? >> we were fully invested eight months ago and we've been trimming as the market has givens the opportunity to take something off the table. i pay a lot of attention to the vix, the chicago board exchange volatility index. it's close to all-time low levels. that says to me there's a great deal of conplace endsy. it doesn't mean there's a bad reaction. but -- >> these people that you saw weren't telling you they were buying into the market. people all along have been telling you they're worried about getting in, right? yes. >> but this is a different thing. on thursday night, i went to a party and ran into people who seemed to have a different view

as to where things were going. >> professionals? >> professionals. >> yeah, but that's -- i don't know. that's the same thing i've been hearing for most of the people you talked to for eight months, right? >> most people have been skeptical. >> i know, but haven't most people been a lot of every point up there has been skepticism. >> yes. >> so what was different about what they said to you this time? >> there seemed to be a more aggressive -- >> and the question is we're going to be up a hundred today after you talk to all these people. >> this is the ball of glory, right? >> and it never goes away. it's been consistent for eight months. i saw one of our favorites on closing bell. i don't -- i guess i won't mention his name. i've missed the open on this. he came on closing bell and said, oh, these gains are not going be nearly as easy any more and they're going to be grinding from here on out. this is a guy that we argued with four months ago that said don't put any money into this

market. the initial res j.k., just like my initials are j.k. but the smug arrogance that he exhibited as he was smartly saying now is the time when none of the people that he had advised had been in for the past five months, anyway. so the easy gains that he's in hindsight were saying were obvious, they weren't obvious to him and now they're going to be grinding and that's what grinds me. >> let's get mark into the conversation. where are you on all of this? >> he's an economist. >> well, i know, but he has a view about both the real economy and perhaps when the tapering happens or doesn't. >> well, i think that the cocktail party indicator probably is a counter cyclical sign. i think that usually when you hear cocktail party chatter, the market is going the other way. so that may be -- i know that i read that somewhere in a textbook a long time ago. but in terms of the tapering conversation, it is amusing to

see how much conversation has come about from so little that's been said. it seems to me that the fed is wa we used to call softening the beaches. they've gotten everybody talking about tapering so much that whenever they get around to doing it, it's not going to be a key surprise. they do not want to surprise the market when they get around to tapering, which probably isn't going to be until later this year. >> and you said later this year. when do you think it's later this year? >> well, at the risk of sounding smug, i would say december. i think it's going to be way at the tail end of the year. i think they would like to get something started this year. there's really no fire that needs to be put out right now. inflation is very low and it's going to get lower because the global economy is slowing. in the near term, we're going to get weak reports out of the manufacturing sector. and that's going to give folks the impression -- not just the impression, but the economy is

slowing. so there's not going to be any insurgent need for them to reduce their securities purchases over the summer. and i think that pushes it off until late this year. but they want to get started this year so they don't have to compress it into a very short time frame in 2014. >> scott, if mark is right about the softening of the beaches, if you will, what happens when we actually hear for the first time that they are tapering? >> well, i think mark is right. i think communication sess one of the sharpest tools in the fed toolbox. and what we saw last week was the fed beginning to lay the groundwork for that inventorial rise. this may be an example of selling on the rumor and buying on the news. it may be the opposite. but i think by the time it all comes around, bernanke and company will have laid the groundwork for that to such a degree that it won't have an impact on the markets. when we come back, we'll talk about some soft stories that have us squawking this morning. then at the top of the hour, roger a lltman will join us.

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welcome back, everybody. we're in the chairs. we have stories that have been grabbing our attention this morning. one that jumped out is money and investing section where it talked about what's happening in

the housing sector. we know this is been happening. we know things have been improving. expectations are for 1% gain in home prices. investors are starting to look beyond the obvious plays. they are talking about not just lennar, kdr and toll brothers, but they are looking at other places like whirlpool which makes appliances for all these homes being built. and ford motor truck. water technologies. trex, which makes the decking systems. boise cascade. and run through a lot of different ways to make that. when i opened it inside, it pointed out another record i

didn't even realize. there has been 101 trading days the dow has without a three-day losing streak, the longest in history. the last time was 1935, with 93 trading days without three straight down days. it speaks to the persistence of this run. we almost didn't see a gain on friday. you almost ended the streak at that point but didn't. 101 days. it is a record. the longest time the dow went without three down days in a row. >> i have a story that will make you sad. bearing down on health costs. we often talk what obama care is going to cost and this and that. for those who work for big corporations with cadillac health care plans, apparently we have the equivalent of cadillac health care here at comcast. i would say most fortune 500 companies, you get the benefit

of a $1,000 or $500 deductible. that, by 2018, is going away. what's happening here is they are decide to go scale back the programs. they have to do it by 2018. >> we will all have skinny plays. >> the $20 co-pay is going away. trying to make us more cognizant of prices. >> what if you're this guy, just minding your own business. this is a union leader. this is the cover of "the post" here. fat cat. they have him sleeping there. he's wearing a different shirt

in every shot. pictures of him sleeping. orange shirt, pink shirt. it's always after a big meal. do you go home and say, hi, honey? it's mean that "the post" does this. he makes 160 a year. the president of the local 983 union. the city's large blue collar municipal workers union. he it's a large meal, drops in dream land for the afternoon. >> everyone needs a siesta. >> his life is bad today, is it not? >> does he still have the job? >> yeah. >> i'm saying by the end of today? >> by the end of today, i don't know. i read my horoscope.

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a volatile global market. nikkei closing higher after another rough session yesterday. u.s. equities future are point to go a higher point at home, sharply higher >> we will call this takeover

tuesday. deals to talk about in pharma and tourism. and straight flush. the story of how facebook was founded. he is showing his next hand. the second hour of "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" on cnbc. the futures this morning have been sharply higher. you can see the dow futures are about 108 points above fair value. s&p up by 13 points. in our headlines this morning, qana's valeant pharmaceuticals is buying bausch & lomb. it specials in eye care.

>> they made a fortune, small fortune. >> interesting company. bottled water. it's like how do you -- people that don't get it out of a well. they just get it clean. they sell those for how much? that's like 20 cents for a bottle. >> when you have sensitive odds, i'll pay anything you want me to. >> it's just water. there's nothing in it. >> i want nothing in it. >> it's not that hard to get it that way.

>> have you ever seen where they have ironing water? >> you don't want any iron in the water. if you ever have ever on the back -- you probably have never seen the back of the iron. it gets rust stains. you have to be careful because you don't want the rust on your clothes. there's a reason for these things. >> they make a fortune selling water in bottle this is big for $8. >> they paid $4.5 billion for the company in 2007 at the top. and they took out close to $800 million. royal caribbean cut one of its cruise ashore. it is flying passengers back to baltimore where the trip began and canceled the may 31st sailing. no one was injured. the cause of the fire not yet known >> president obama is visiting the new jersey shore.

he will be touring with chris christie as the summer season begins in the area that was devastated by superstorm sandy back in october. >> the world to you, there are just germs everywhere? >> yes. >> this is a constant threat. >> yes. i'm very howard hughes like in my view of the world. >> so you have contacts? >> i do. >> they're bothering me right now talking to you. >> and you would pay how much money for water. >> clean water, yes. >> you see threats everywhere. >> do you know what happens when i don't wear my contacts. >> how about cicadas? >> i like the cicadas. >> roger altman of evercorp. partners. and lee, chief investment officer. one thing that i want to talk about quickly, it's going to be a great year for equities.

i think you're right about that. but you're wondering how much i think the term used was juice left in the lemon? i don't know if he can assume that. that seems to be consensus. maybe we surprise everyone and do another 15. >> we may have seen the lion's share of the gains for 2013, but i don't think we have seen them over a three to five-year period. the macro factors are underlying the market remain positive. i think what you're basically seeing is the united states healing slower than anybody would like but healing. you see that in housing of course as becky was saying earlier. you see it in autos, energy, retail sales and lending. we're slowly building the foundation for a stronger 2014, 2015, and 2016, which really ought to be good years in the united states. 3% growth.

yes, the international picture is mixed. europe is in for a long, slow painful slog and china is slowing a little. but medium term remains positive. >> i'll tell you what the key argument is, and that is when we do see some tapering, whether it's just short-term and it's back to the races or whether it becomes a bigger problem, we had tepper on. he said we need to taper. and the viewpoint would be when we do taper, that it is evidence that the fed realizes we don't need them anymore. it could be seen as a positive and give another leg. >> i think there's two big questions about monetary policy. that's the great, big uncertainty here. one is will the market actually be ready is what you're saying for that day when the wording in

the fed press release is to the effect we're taking our foot off the gas. >> i want that to be half full instead of half empty. >> question two, which is a bigger one is can the fed actually unwind its balance sheet in a way that is not disruptive to markets. >> you want it back to what? >> one reason i think the fed can do it in a way that accommodates the markets is because they can do it at whatever pace they choose. maybe 800 billion was too slow. maybe we were artificially too low. >> some who said on this show that the fed would keep its balance sheet in the $3 billion range for long term. >> right. >> i think they have many options. but the great concern when they

start to unwind this, very bad things are going to happen. it's appropriate to be concerned but i don't think necessarily it's going to be bad. >> talking about larry summers. it could have been you. you could have been treasury secretary. people like you are in a decision to make decisions like this. are you comfortable with 3 to 4 trillion? is that okay. >> the fed in general made the right choices. >> the textbook going forward for how to respond to a true emergency like that. i think the right steps were done. it's going to prove to be the model. >> history will judge based on how they out of it. bernanke, there's a part that wants to unwind himself. history will judge 2008 that way, i believe.

if you stay in for too long it will be harsh depending on what happens. >> i'm fairly confident, though, as you can see, that they will be able to unwind this. maybe very slowly on a way that is not disruptive either to markets or to the economy itself. >> two years, five years, ten years. >> i think they will play it by ear. they will assume very slowly. why wouldn't you? and i don't think the fed itself has made that decision. >> lee, just go back -- you have to manage people's money. so the rest of the year, we stay where we are. we go up or we give back. >> so we think there's a lot of momentum in the market. and you have had pretty strong earnings. the problem is only 46% of them beat their revenue forecast. so you're seeing past earnings led by cost cutting and stimulus on the table. not a lot of top line growth.

we say stay long equities but be cautious. keep bonds in our portfolio. we're not of the camp that says the fed will unwind its balance sheet any time soon. at fed policy, most is based rate of change and the run rate of interest rates and asset purchases. so the first step would be to taper off the $85 billion a month they have been purchasing, which frankly, we think is just as likely to increase the next year as it is to decrease. remember, we're still at 100% debt to gdp. we're in the very early innings of a 10 to 15-year deleveraging. they have been accumulating assets at a pace of 85 billion a

month. that's unrealistic. part of the view more constructive on equities is dependent on the fed maintaining a stance between 2015. >> 2015 at the earlier he says. >> at the earliest. >> if that were the case, multiples don't reflect the 2% tenure if you get up to 18 or 19. >> that's exactly right. i completely agree with you, joe. >> roger, play this parlor game with me. we have been playing it all morning. did you see about who was going to be the next fed chairman? >> no. i have seen a lot of stories to that effect. >> the new name. we have talked about it before. is whether larry summers could take the job and whether geithner would come back. >> you're inside the room. when will we find out? >> first of all, those three

people you just mentioned are all hugely qualified. any one of the three might be a good choice. i don't know what the president is going to decide. we'll find out not at the last minute. this is not the type of thing you do at the last minute. the term ends -- >> end of january. >> yeah. i think you'll find out two weeks beforehand. people i talk to think janet yellen is the most likely choice. but they >> tony: either. larry or tim, both of them i know so well and have the highest regard for, would be terrific choice. any of the three of them, if chosen, would be received smoothly and well by the financial community and by the markets and by the world generally. >> hey, lee, we don't have any time left.

if unemployment gets down to 6.5%, they will do something before 2015. you don't think unemployment goes down or inflation goes up for another year and a half? >> i don't. i think they have had a difficult time. they would love to see inflation. it would correct the imbalances they have particularly with pensions and other post retirement obligations. so far we haven't seen evidence that inflation is really becoming a factor. >> unemployment remains stubbornly high? >> the question is where is the nonaccelerating rate of unemployment. maybe 6%, 6.5%, i think the fed is more worried about where the bottle necks are showing themselves as opposed to targeting a particularly level of unemployment. if you look at the marginal employment, a lot of those

people have been temporary workers. so blame it on the obama care legislation or blame it on cautiousness on behalf of corporate managers. but you're not seeing a big surge in permanent employees coming in the employment numbers. so we think that's a factor too. >> lee, thank you. man with a lot of money down there. all those billions. roger, thank you. >> i'm with becky on the contact lenses. i'm prepared to pay whatever it is. >> you're both germaphobes. >> i had eye infections. they didn't scar me for life. >> i have worn them my whole life. >> you have had so many problems? >> yes. >> whatever works, you want it. >> i'm not that germaphobic.

>> if you have comments or questions about anything you see, including the debate, shoot us an e-mail. check out shares of tiffany. luxury retailer earning 70 cents. coming up next, making his way to the set. author of the accident al billionaires, the founding of facebook, and now a new book about online poker. ben mezrich. we'll cover tech from top to bottom. e. during the chevy memorial day sale, current chevy owners trade up to this 2013 chevy silverado all-star edition with a total value of $9,250. plus get america's best pickup coverage including 2 years of scheduled maintenance. sorry to interrupt, i just want to say, i combined home and auto with state farm, saved 760 bucks.

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welcome back, everybody. take a look at the futures this morning. again, you are talking about triple digit gains. dow is indicated up by 116 points above fair value. s&p up by 14 points. in our headlines, anti-trust regulators want information on whether iphone distribution deals may be aimed at shutting out rival smartphone makers. a nine-page questionnaire was september to mobile telecoms last week. ben mezrich, best sell author of bringing down the house is out with a new book

straight flush. the story of six college kids who dealt their way to a billion dollar empire and how it all came crashing down. we thought you were a big deal. now we know you are a big deal. when you get your picture on the back of the book. >> that's the sign there? >> most people get it on the flap inside. >> my hair is going to raise the stock market and book sales. >> and you're wearing sunglasses. >> it's rock and roll. >> very rock starrish. >> tell us the quick story. >> the quick story is it was a group of frat brothers at the university of montana, very poor backgrounds. one sold a cow to buy his first car. they used to play underground poker in the basement of a bar in montana. they decided to put it online.

it was one of the biggest sites in the world. ultimatebet.com was one company. absolute poker.com. the u.s. government passed a bill that essentially made what they were doing illegal or a gray area at least. they ended up now they're fugitives. essentially one of them is in hiding in antigua. they are all spread out. >> do they have a lot of money still? >> nobody really knows. they're not billionaires or anything like that. one ended up in prison. he had to pay a big fine. he's left with nothing. >> there was some cheating going on. >> there was a scandal within the story where there was cheating going on which was taught by players. players figured out based on -- there was someone who was working there who was essentially seeing cards. so there was a cheating scandal. it was one of the biggest online poker cheating scandals. the rise and fall of this company is an amazing story.

the government, in my opinion, passed a hypocritical bill. now it's starting to come back. now it is starting to be legalized. but these guys were the first people and they are kind of paying the price for being too early. >> kevin spacey has done your previous -- >> he has been involved in a lot of my movies. we did negotiable network. >> and 21. >> bringing down the house. it's been a great relationshipment kevin is awesome. this book will hopefully be a movie as well. this is the first stop. >> thank you for joining us. how does a book like this happen? >> how does it happen? i game the go-to guy for every kind of crazy story, especially involving college kids. i get 20, 30 e-mails a week. half of them are from prison.

they are pretty amazing e-mails usually. >> i get offers of matrimoniy. >> i might after this. this one caught my eye. it was college kids. they were making a million dollars a day bringing in -- there was girls. a big brothel essentially right next door to their office. it was a crazy story that had everything i was looking for. >> we're all looking for that. >> i'm intrigued my gambling, whether it's legal or not. whether they took it too far. or whether they just got screwed because they were in the wrong timing in terms of their industry. they were days away from being mark zuckerberg. instead, they're in prison. a few weeks ago we were all lining up for powerball tickets.

that's fine. but online poker is not fine? >> i'm trying to think back to the genesis of those laws. i think part of the was it was unregulated. you brought up the cheating scandal. that was something that was brought up. probably there was some of the casinos saying, wait a second. >> the casinos definitely wanted to quiet it. now they are getting into that business. they are partnering with people. but i think you're right. it should be regulated. these guys want it to be regulated. they were asking to be regulated. it's legal in many countries. most countries it's legal. it's regulated, taxed. the countries make a lot of money off of it. and there wouldn't be these cheating scandals because there would be this oversight. it was like prohibition. they were like al capone because they could no choice. there was no clarity to what was legal and what wasn't legal. so they were operating in this gray area of business.

they were in costa rica, which is essentially the wild west. it's a place where everything is up for grabs. >> if they came back, they would be arrested? >> it was called black friday, the fed and the doj and prosecuting office, shut down all the sites. they lost tons of money. these guys were give themselves up and face trials which were uncertain. they know where they are. they just didn't come back. >> and you're staying for the rest of the show? >> absolutely. >> still to come, a closer look at the oil and currency markets. m back in fighting shape. ♪ [ male announcer ] see what's happening behind the scenes at ducktherapy.com. [ male announcer ] see what's happening behind the scenes lets you talk face-to-face and share whatever's on your screen. blackberry z10 with bbm video. built to keep you moving.

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welcome back to "squawk box" this morning. in the headlines, a fresh read on the u.s. housing market. that's coming up in 90 case. case-shiller report on home prices expect to go show 10.3% in march. that compares to a year earlier.

a fresh read on consumer confidence. that comes at 10:00 eastern time. looking for confidence, monthly index 72 for may. that compares to april, which was 68.1. fast&furious 6 topped the box office in north american ticket sales. second biggest opening of the year behind disney's iron man 3. over to becky. >> andrew, thank you. crude prices hovering around $95 a barrel. joining to us talk currency ises nick bennenbrook. head of currency strategy. we have the president of oil outlooks and opinions. i know you think at this point the dollar is poised to go higher. what are the biggest reasons? >> what's important is we had

mr. bernanke. early tightening could put the tightening at risk. at least for the near term, if that continues to be talked about, then that's going to under pin the dollar. >> there were comments from one of the bank of japan, maybe the head of the bank of japan talking about how they think the japanese economy is improving. they tonight understand why we have seen it tumble. >> it is interesting. more concerning than anything was the spike we saw last week, jgb were up to 1%. we are seeing a recovery in the japanese economy. with what we are seeing in the bond markets, we will see additional liquidity.

also the dollar/yen could be a good buy. >> at this point is there any surprise left from the shock and awe? >> no, i don't think so. as i said, i think things should overall calm down from where we are. the main issue of the japanese yen is it is extended in one direction. the shorts are very, very short. so you have to have the episodes like we have seen last week. i think the trend is lower as far as the yen is concerned. >> we have opec meeting coming up on friday. it lays out some of the tensions between some of the opec members. at this point you've got players like nigeria and venezuela who are very concerned because they need oil prices to stay higher. they are very worried about what's happening with u.s. oil production. how does this all play out? >> the funny thing about the

opec meeting is they really need that money. they have a lot of social reform. it's going to costas it goes forward. it's not as easy as saudi arabia raising production or cutting production in this case because they need the money just as much. dealing with sanctions right now, they want the production cut too. so i think oil prices are supported when it comes to opec. they're not going to see these prices or let them drop too much further. >> i remember when it used to be $40 was a fair value for oil in their eyes. then it was $50, then $70. is $100 a fair price for oil and they're not going to allow it to go beyond that? >> i think $100 is about right. it's a fair price for oil. the bigger issue with opec is their validity. if there's no real production costs or if they can't agree on production cuts, i think we're looking at the dissolution of

opec at some point. there's no need for them. oil production globally is fine. they can't control prices whether they go up or down. >> do oil prices do anything if it dissolves? >> i don't think so. at least not here in the u.s. we're going to do better globally. the production and supply is fine. shale gas coming across the world. i think we can do it on our own. everybody right now needs money for themselves. and so dissolution is not going to make much of a different. they're not controlling prices. >> if it's a fair price. if we have all of this massive production that people are ramping up around the globe, why is $100 a fair price for oil? >> i think the one thing you have to remember here is economies are still growing. china, asia and europe are slowing down and kind of stabilizing. but the u.s. keeps growing.

as long as we have seen the economy grow, we're still growing. it's not like we have never seen oil prices drop. >> what if we actually got our act together and got closer to 3.5%, 4%? then what would fair price be? >> actually, i think we saw growth that much. right here in the u.s., the way production is here right now, prices for oil -- grout would rise. but they would be gradual. we wouldn't see spikes like we saw in the mid-2000s. we would go up to 110, 115. it's the unknown. the things we don't expect. the conflicts of war. syria, for instance, iran. those are what made prices go up to $125, $150. >> carl, nick, guys, thank you. >> thank you. coming up, we'll talk tech with our guest host ben mezrich. clients are always learning more

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welcome back to "squawk box", everybody. futures are indicated higher this morning. we are following what happened in asia and europe. dow futures up close to 130 points above fair value. s&p up by just over 15. >> we are talking tech this morning from google and facebook over social mapping application waves. remember we were talking about that the other day, joe? apple undergoing a major makeover. our next guest is watching it all. we just call him the boy genius.

jonathan geller. did you come up with that? >> somebody else called me that and i ran with it because nobody knew who i was. i was 17. >> tell us a couple things. iphone, iphone 5, 5s, we're going to get one soon? >> i don't know if we will see it in june. we will definitely see new operating systems. it will look different. >> he's running the whole show. i think we will start to see features we really want on the iphone to make it more of a desktop type of platform. >> what does that mean? >> you will see ios and osx, mac and mobile operating systems start to merge more together than we have. >> becky and i just saw laptops

where you can swipe right on the screen. do you think we will see that soon? >> i don't think they will make a mac with a touch screen. >> i have a 3-year-old. you know that's the future. all they want to do is swipe. they swipe the tv set now. >> and wonder why it doesn't move. they come out with something every two weeks. you fall behind by shutting your eyes for an hour. it's crazy. >> is your sense that apple can catch up to google? >> i don't know they are so far behind as people think. i think if you look at what apple has done, i think they have literally invented this entire market. look at the smartphone market before apple it was completely different. i don't necessarily think they are that far behind from google. i really don't. i don't see that separation that a lot of people claim to see. >> there was blackberry before. that's my definition.

>> it's a sore subject right now. i have this junky, old, outdated blackberry. >> there were no smartphones before the iphone. that should tell you something. >> i liked the new one that i had. i got a replacement one that is a piece of junk. >> all dow is gossip. >> tell us about the ways deal. >> this is like google map except it's crowd sourcing all the traffic information. >> does it work better than that apple thing? >> i think it might. >> it's amazing. >> if you pass a cop, you say passed a cop. and everybody knows there's a cop sitting on the palisades. >> hazard, road closed, traffic. it is collecting crowd source information.

it's absolutely incredible. >> facebook wants to buy it? >> apple was said to be poking around a couple months ago. >> google? >> google. it's definitely a hot property. the issue is it's an israeli company. they want all the people to stay in israel. they don't want to move. i think that's a hiccup with negotiations in addition to cost. >> hulu also up for grabs. >> yeah. i don't know why they would want hulu. well, maybe. >> it's like literally marissa myers trying to replicate google. hulu, youtube. flicker with picassa. tumblr. >> were you a a fan of tumblr? >> if you look at numbers, they paid 16 times more for geocities. i'm sorry, 30 times more for

that. reaching 16 times more people. so it's a great deal. >> everybody wants a foot hold in television online, right? hulu, i used to love it because you could find all the crappy '80s television shows. you could watch stargate for eight days straight. it's all about the content. if you don't buy all the pieces what are you getting? >> there's less shows, less things you can watch. it's so commercial. it's a cool product, but i'm not sure it's the feature of tv. >> one question. everyone keeps saying everyone is going to gravitate to watching entirely online. do you agree with that? >> no. i think it will be an internet connected television. >> i love netflix. >> i watch on my computer.

>> i've got to get there. >> it will end up going back to the television set. >> should we talk about microsoft? >> yeah. >> xbox is out. >> xbox is going to be big. it's going to be huge for about a year or two. >> for a year or two? >> yeah. when you look at microsoft strategy and the console in general, it's such a long play time. it's eight years, seven years. so this box, which is gargantuan, will be outdated in a year or two. or ipad will be faster than the xbox. >> it has all these other capabilities now about music, entertainments and streaming. >> absolutely. you're right. but i think also what does happen with apple tv, this is microsoft's way in, from what we have seen so far it's not exactly that incredible.

there are more xboxs than apple tvs by a mile. >> absolutely. >> why haven't they been able to take advantage of that? >> content. licensing. >> it goes back to hulu. >> you have to plug your cable into the xbox. >> you have to do what? >> you have to take the hdmi and plug it into your xbox. so it goes through the xbox. >> i could do it. it's an extra wire. >> it's something apple would never do. it's not the right way to do it at this point. >> that makes more sense than a stand-alone set top box. >> it does. >> since you pretty much hate all the technology, what's the one cool thing that's out there that you're excited about? boy genius? >> i'm excited about what apple will do in the fall f. they don't come out big we will see some of the stuff unravel a little bit.

i'm positive on apple a little bit. >> what were you doing at 17 that you were called boy genius? >> i was leaking all information on technology before anybody had it. blackberry. i had the phone before anyone had ever seen it outside the company. so i was putting this online. >> i used to press refresh on that page multiple times a day because he had stuff nobody else had. >> that's the book right there. >> it was crazy. crazy. >> boy genius, thank you for joining us. >> andrew, you still have an iphone? >> i do. >> how many times can you go like that? >> four or five screens.

but i put them in folders. >> you're very organized. >> on accuweather, it will tell you the probability of whether your hair is going to frizz on any given day, five days in advance. >> i can tell that. i know my own hair. >> but wouldn't you like to look five days in advance? >> you need this. but you don't know on saturday if it's going to be a low frizz day. download this app. . when we come back, much more from our guest host today, author ben mezrich. in the 8:00 hour, recovering in the housing market. before case shirley home prices we will talk to chief economist

at zillow.com.

welcome back, everybody. a few headlines this morning. chevron is lend 2g billion to a joint venture with venezuela's state-run oil company. this loan is aimed at boosting production. trulia is being upgraded.

it is closing the valuation gap with the competing firm zillow. news corp. is reviewing whether it hosni record of a subpoena from the justice department for fox news reporter's phone records. the company says it has no record of it. >> i just don't -- i mean, roger, he's like -- sleeping dogs you should let lie. >> this is a series of journalists -- >> i know. it's almost like a cliche the irs would pick on fox. >> that's a book for you. >> i don't know how it's all going to pan out. a lot of bizarreness going on over there. >> you look the other way on

every other scandal. but your like, what? what? barack? we love you. what happened? >> ben mezrich. six college kids dealt their way to a million dollar empire and how it all came crashing down. i talked to you about content. we can watch whatever we want whenever we want. and i love sitting watching stuff. >> yeah. the voice. do you have an idea what the future looks like in terms of how people make money? >> how they make money? it's interesting. everything will be on demand. people skip commercials. >> all la carte.

>> pay a fee and you get a certain amount. i think netflix model is interesting. i like the idea that there's a monthly fee and you get whatever you want. i don't think every studio has its own portal. product placement or placement within shows is always going to be something that makes money. movies make a lot of money doing that. having a bmw they end up selling afterwards. it's ape good question. advertising to me is one of those things that's got to go down. >> i foresee, because we just talked about sons of anarchy. the tutors. >> awesome. >> i should be paying more for the amount i want to digest. why isn't it costing more? >> i think they're trying to

grow the numbers first. get you hooked and then find a way to make more money off it. >> house of cards. >> spacey. >> is amazon good for you or bad for you? >> in terms of being an author? you know, there was an interesting moment. ebooks are $12.99. at that rate it's great. nothing wrong with ebooks. >> did you do better now than you did before? >> you know, it's a difficult question. the closing of borders. the hard cover book is hard to keep it alive. and i love books. ten years from now will people carry around a 30 pound book or $30 book. the problem is if it starts going down, down, down. i want to buy books at $1.99. if ebooks are $1.99 you will see

that in the record industry. a few artists will make money and the rest get hurt by it. we did a promotion on barnes & noble on the nook. one-day only one of my books was $1.99. and it made number three overall book. you lower the price and people will buy it. >> we have one more hour. we will see ben, much more from ben.

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we will talk to the cofounder and chair of ultimatepoker.com. the third hour of "squawk box" begins right now. welcome back to "squawk box", first in business worldwide. i can say volatile if i want to. i'm joe kernen along with benny quick and andrew ross sorkin. our guest is ben mezrich of the new book straight flush. the true story of six college friends who dealt their way to a billion dollar poker and how it all came crashing down. first, becky has your morning headlines >> the biggest story has to be the markets.

if you haven't seen it already, take a look at this. u.s. equities up sharply. 116 above fair value. s&p up 14 points. this is all coming after what we have seen not only what happened overnight in asia but what happened before manipulate you can see the nikkei up 1.2%. similar in shanghai. the hang seng up over 1%. in europe, things are on a role. you can see right now that the cac is up 1.3%. ftse is up by 1.5%. dax by 1%. we're following what's happening there. plus the gains yesterday which we still have catching up to do. >> more trouble for the the cruise industry. a fire broke out on grandeur of the seas on its way from baltimore to the bahamas. no one was seriously hurt. it was on a seven-night crew toss florida and the bahamas. no one was seriously hurt.

but that is scary looking pictures you're taking a look at. royal caribbean is returning all the passengers to ball. they will also receive a full refund and a future cruise certificate. in earnings, tiffany was out. they reported a quarterly profit of 70 cents a share, 18 cents better than the street was expecting. revenue also beat consensus with same-store sales. shares are up 30% this morning. they will see a gain of 5.5%. >> valiant pharmaceuticals buying bausch & lomb. the the transaction unanimously approved by boards of both companies. that deal is like a home run. if you leverage it up, they bought it for $4.5 billion in 2007. and there you have it. and almost 800 million. that's not a bad way to live.

valeant stock up as well on the transaction news. all right. ben, we're going to talk to you some more. >> yeah? >> yeah. >> carnival cruise? >> i would talk about the fed's exit strategy. that might make a good book. >> a tweeter, a twitterer, tom short, we have a young richard dreyfus on the set. >> i get that. i get that a lot. let me try something. we need a bigger boat. >> yeah, that's good. >> i need a beard. >> you would be more of the richard dreyfus. what's -- you get 30 a week. i want to hear what your next might be. >> my next book? it's crazy. some of the pitches -- first of all, any big story you hear, i will get a pitch from somebody. anything from a charlie sheen type pitch. i get everything.

some of the pitches are like, you know, i can beat taps. which is probably not true. i don't want anything that's too dangerous. i was getting a pitch one time the girlfriend of a very big cartel owner. i said i'm not going to get involved in that. i was getting pitches -- all sorts of things. i remember, yeah, i don't know. i will get in trouble for talking about them. >> how about charlie sheen? >> i get calls saying would you be interested in working on the charlie sheen story? my wife wasn't going to let me hang out with charlie for a year. so that went downhill. brett favre texted his -- the the girl's people that were talking to me. >> did anthony weiner's people come to you? >> they have not. i think there's a story for me

there. remember kim.com. i decided i didn't want to do that. you get all these things. it's just looking for that kind of -- i got a pitch about the largest brothel in the world is a very big brand name hotel in china. it's a crazy scenario. i didn't end up doing that story. again, my wife nixed that one. >> what city? beijing? >> it's a very famous -- >> joe is booking his ticket. >> you get everything you can think of. some are big stories. some are little personal stories that are fun. i remember i was getting a pitch every night at 2:00 in the morning. i wouldn't respond. i said tomorrow morning in your mailbox there will be a cashier's check for $50,000. just call me back.

and i went downstairs. it was like cash. of course i had to call the guy back. he made billions in hedge funds. then he was the rein carnation of jesus christ. so at that moment i was like, i'm not cashing this check. you get every story you can imagine. >> i think charlie might cooperate with you. >> that would have been awesome. i would have loved it. >> he might work with you on things. because he's in on the whole joke. >> if prince harry is watching, how awesome would his story be? he's not going to be king. he's living as the guy who is second but living that life that everyone dreams about living. he's not going to ever be king. you never know. harry, i'm here. >> the offer is still open for him to guest host. he's in on the joke. he's in the turkish bath where you run into charlie sheen and

he just looks at the guy. you know charlie is in on it. >> oh, yeah. i think he's a smart guy. >> crazy. coming up, housing numbers do out this morning. the chief economist of swre zillow.com. more on the new frontier of legal gaming with ben mezrich. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers.

welcome back to "squawk box". let's take a look and see how the market is setting up. 123, 124 points higher. nasdaq up 30. >> case-shiller home price index will be hitting the tape at 9:00 eastern. for more on what to expect is chief economist for zillow.com. you expect we will get strong numbers later today, right?

>> that's right. we think case-shiller will be up 10% year over year. with he think it is a little bit overstated. we think it will be really effectively half that if you remove the foreclosures and look at a broader swath. still half that rate is extraordinary appreciation. >> when do we get back to the point where we are somewhat near the level of value in 2007? we're nationally down 17%, 18% if you don't include foreclosures. we're growing at 5% a year. so, you know, we would be back in nominal terms in five, six years probably. >> what do you think is really happening beneath the surface? is this a real recovery at this point? >> well, i think it is a real recovery.

i think it's a real recovery in we're having a strong balance off the bottom. high rates of equity. nationally we think still one in four homes have a mortgage are negative equity. a lot more people are effective negative equity meaning they don't have enough equity in their house to afford on the next loan. we think we are recovering but we're seeing a lot of high appreciation in the sun belt states are artificially high. we expect them to cool. we are concerned about emerging bubbles. >> which markets? >> well, some of the california markets are a bit worrisome. san francisco, san jose are both growing 25% year over year. phoenix and vegas were down 65%. san jose and san francisco were not. while the bay area markets look quite affordable right now they don't once you crank in 5%, 6% mortgage rates. that's what concerns us.

>> my next question was going to be, how closely do you tie this recovery to the fed keeping rates so low? >> incredibly tightly. without low mortgage rates they would not have had near the recovery. so it has been that combination in a sense of potent brew that has helped keep demand high. that's meeting supply by this negative equity. in a sense what we are seeing is the high price appreciation is a bit of artificialality in the marketplace. we are recovering, but we are getting a little bit of a false read. it's very positive but it's not, you know, nationally it's not 10% up year over year. in the pay area markets it shouldn't be 25%. but we are recovering. >> we're not expecting the fed to do anything in terms of changing interest rates any time soon. but if the fed were to start

tapering and stop buying 85 billion a month in mortgage-backed securities, then what happens to house prices? is it healthy enough to be able to sustain something like that? >> yeah, definitely. i don't have any concerns. i don't think they're going to do that near term. of course what they're trying to do is not necessarily related to the housing market. they will see it go through the broader economy. they will continue to keep their foot until they see broader moves and gdp numbers. the concern is by trying to effect the broader economy they will goose housing a little bit too much. >> thank you very much for joining us. >> okay. thank you. coming up, ben mezrich's new book, straight flush. and the co-founder of the first legal regularing lated online poker site in the united states. ♪ [ agent smith ] ge software connects patients

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skpwhrao welcome back to "squawk box", everybody. fast&furious 6 topped the box office, the second biggest opening of the year behind iron man 3. universal pictures is owned by our parent company, comcast. the latest installment of the

hangover came in second, followed by "star trek" into darkness. >> for more what the fed will do and what to make of the recent market swings is chief market strategist of banyan partners in connecticut. bob, i think if i just summarize what you're looking at, we have seen no correction but some rotations. and the rotations are good for the market but maybe even those are not going to continue. what do we do? just continue to move higher? >> i think a lot of folks are worried about what's going on with the federal reserve. you know, people are -- in this market but they missed out on what was moving in the first half in the first quarter and into the beginning of the second quarter this year. so they're going after the defensive areas. now people who are still seeing the market continue to move higher are looking for opportunities. they see the cheapest parts of the market will be the

cyclicals. and that's where we're seeing that rotation going on. now, the talk about the federal reserve possibly they are tapering back their purchases or maybe interest rates starting to move up or concerns about japan or china, you're seeing that rotation, which was really obvious day to day start to begin to not be so obvious. but we think as the the year progresses and you still see the federal reserve still pumping in this additional liquidity, you will continue to see that rotation. people want to be in the market. they want to look for cheap stocks. and i think these are the the areas of the market that are sort of the best priced right now. >> not everyone i think really realizes it, but starting in november, september, october of just a couple years ago, 2011, we were up 50%. even more than that. have there been times when you thought this was too much, or did you get in late?

where have been postured? where have you been positioned? >> we didn't exit out because of the election or because of the fiscal cliff. we thought it was really in everybody's best interest that they would work together to get things satisfied and worked out. it really happened at the last positive minute. we were positioned in the cyclical areas, things like technology, financials, consumer discretionary. they didn't perfect as well as utilities, telecom and staples. now these are the areas of the market that are obviously getting lifted with people looking to get back into the market. we think that, again, those areas are going to be the areas that are going to be best for, you know, what's going to happen for the the rest of this year. going back last year, year and a half, we've been riding this wave, the cyclicals have been doing well. industrials have been doing

well. we have been getting out of telecom and utilities, raising and lowering these various sectors as the market concerns started to wane. >> vice chairman at aerial investments. give me an idea what your target was, charles, say a year ago and whether we hit it, whether you're raising it, or whether you're saying, you know, i'm going to stick with that target year end and not add anymore money. where are you? >> we tend not to focus short-term targets. we think nobody can predict the short-term. we did think the market was cheap. we thought it was going going to be strong. >> when was that? >> a year ago. that's why we have had very good performance. i would say a year ago we thought the market was table pounding and there were some fat pitches. today we could call it closer to fair value. you have to look at sectors like

investment banks that are cheap. the overall market is closer to fair value. >> all right. so if you had put in a target on the s&p or the dow, you're not ready to hit the target you had. you're not ready to go up another 10% on your target? >> no, we are. stocks grow 10% naturally because of earnings growth. >> so we're fairly valued now. if they go up 10%, we get another 10%? >> yeah. maybe a little bit more. we're actually a little more bullish. we're looking close tore 110. we think about interest rates ticking up you could get a multiple 17 times that. >> 1800, despite. >> that's right. >> so 1800 on the s&p. so if a client came to you today you might say, all right, let's buy a quarter or a half and see what happens. you're investing today?

>> well, i want to know what we own today. if we own any bonds, i would say sell all the long-term bonds you have. get out of those because they're going to go down. and you should be more invested in the stock market. we're seeing big institutions who are our clients. lots of pension funds own way too many bonds. lots of investors are still afraid who own too many bonds. one thing i'm close to sure of is those bonds will go down in value and the equities are a much better opportunity. >> all right. you heard some of the sectors bob was talking b. are there specific areas of the market that will do better? >> yeah. the housing market took the foremans down and it is going to take financials up. morgan stapp stanley is trading right at about tangible book. when you get a little bit better rate environment, morgan stanley will be able to charge customers who have cash balances a small fee. they will make a lot more money.

they will try one and a half times book. goldman sacks 10 times earnings. they will trade closer to 15 times earnings. all the energy-related names. with all the boom in north american development, some companies like nov, even exxon, chesapeake, should trade a lot better. they have been trading badly. they are 11 times forward. we think it can become mid teen moment. >> gentlemen, thank you. we appreciate it. see you later. when we come back, we will talk fed, tapering issue, debt, housing and all the other stories of the morning. sure that we were on schedule. the first technology of its kind... mom and dad, i have great news. is now providing answers families need.

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welcome back to "squawk box". let's take a look. we're talking about the bike thing in new york. and you have not joined? but you have a guest who has. we're going to talk to him.

let's look at stocks to watch. the company is rye for restructuring. it could increase shareholder earnings. >> omthera is a heart drug specialist being acquired by astrazeneca. $433 million. a big gainer today. 88% premium for friday's closing price. any felt national buys lender processing services for $33 a share. national will pay half the deal in cash, the other in common stock. lender processing shares. nice name. had risen last week when reports of a potential deal first surfaced. ever heard of them? >> never heard of them.

>> but we're interested. go ahead. among some of the other stories we are watching this morning, the tax on airline flights could increase. the obama administration proposed raising the taxes on air travel by $14 a flight. it may not sound like a lot until you start digging into all the taxes that are there. there was a times story recently that pointed out 20% of the cost of an airline ticket, if it's a $300 domestic flight goes to taxes already. the airline industry is fighting back saying higher taxes will backfire and hurt the economy. >> joining us now, "newsweek" and daily beast global business editor ben gross and ben white. you had a couple of items. i want to talk about the housing

boom, which i know you're optimistic about, shockingly. >> dust up. >> it seems more like a battle royale. with crudeman over the weekend. >> i saw something that said discredited economist. >> that's going a little far. >> they are fighting back. the larger point a lot of not great for economic growth. >> so we need a study for that. who are you siding with? >> i don't side with anybody. i do make the the argument that they played a way outsized role in the movement towards austerity. they are due criticism for that. >> roger altman pointed out the

countries had no choice but to go to austerity. >> our bonds are yielding nothing. >> what austerity have we -- >> cut a lot of spending. look at where the deficit is now. >> we have cut absolute spending. >> a team of economists come out. you have to have your money on crudeman. he does not hesitate to sock people in the nose. >> by the way, you're very optimistic. you are usually pessimistic and skeptical. >> i did a book last year. >> you have to hold on to that. >> i'm vested. spending on college education by states is going up after being

cut. we should stop being surprised. qaa chas a surplus. the federal deficit by $400 billion in a year. housing prices are rising. life is very pro sick cal. when things are moving in the right direction, they keep moving in the right direction. >> this is all fed induced. it's a bernanke-led -- you don't think it's real? >> no. the real economy, i was just visiting a company that didn't exist four years ago. makes a consumer product. billion dollars in sales from nothing. >> can you tell us what it is? >> greek yogurt. >> chobani? >> yes. taking milk from upstate new york and turning it into something people want. for the last few years the story was if they are 70%, 80%, you're

doing well. if the u.s. market is the whole thing, you're in trouble. something has really switched. they had their sales in the u.s., including housing are doing quite well. and people are having a tougher time. >> switch gears with me for a second. you have a story about morgan stanley today. they were having a conference in shanghai. canceled it because of the bird flu. >> right. >> well, they moved it. >> to new york. that has me very nervous. >> i think a lot of people who had signed up to go to shank lie looked at the current deaths and said i'm not so psyched about going there. it changed to new york. it doesn't mean we will have a global pandemic. >> how many people live in shanghai? >> more than five. >> how many is it now? >> 113k. >> 33 cases and 13 fatal.

>> and how many people live in shanghai? >> when they report that much, you know it is much more. >> are we going coach or business? >> it's a concern. the hedge flyers don't want to go get bird flu. >> i don't know if you covered it in the newsletter this morning, ben bernanke, tim geithner. >> ft piece by ed loose basically arguing for summers as the most likely successor i don't think it will be larry summers. there's no huge argument against her except she's dovish at a time when you might want a more hawkish person in the job. larry summers is no hawk either.

people don't like the guy much. as smart and brilliant as he is, he rubs people the right way. you want a guy who is can tankerous. >> debt per capita? >> 22 million. >> you're right. but this is 2010. >> why not go investigate the whole bird thing for us. >> what i'm worried about is the chinese scientists that put the bird flu together with the swine flu. >> there you go. great conspiracy by the chinese to poison everybody. >> i don't know. but you know they did do that. >> they did mix the two. >> they get out. >> that's an odd experiment. >> they wanted to find out the transmission mechanism. they were upset that you could do that. >> i would be as well. >> sounds like a bad idea.

before the tides rise i would worry about this thing getting out before i die of carbon monoxide poisonng. >> dan, who do you want? >> fed. >> none of them are particularly i would say appealing. but i think yellen is sort of the obvious choice. continuity. a radical thing to actually appoint a democrat to that post. and summers is not the person for the the job. can you imagine the congressional testimony? >> right. >> what about the idea of bernanke sticking around. >> i don't think that's going to happen. i don't think he particularly wants to. you know, he sees a team of transition from the firefighting fed to the fed that needs to potentially -- >> get a place in boca. >> two other quick headlines. you recently wrote a pretty

interesting piece about tesla. over the weekend, better place which is an electric car company that has ambitions. it was almost like a cell phone model. they give the car free. you pay a monthly fee. it just went bankrupt. >> i don't think if there's any connection with tesla. >> it's not a question. a round of boasting. he was like taunting the other car companies saying we paid back all our government merits. we're not government motors and ford and nissan. the business model is still reliant on tax payer subsidiesu.

every time somebody buys a car they get a $7500 credit on their taxes. and zero emission credits which is 12% of their revenue. they're playing the system very intelligently. but it's not like they are simply making money by buying cars and selling them. on to one other topic, you have a piece, your colleagues do. on john boehner. they effectively call him a loser. >> they say he's weak. >> there are some caveats. if he took a stronger approach with his members and tried to force them to do certain things it wouldn't work so why even bother. but the most interesting thing about that was hoults he talks how little he talks to president obama. >> speaker boehner said he

hasn't talked? >> and obama said they talked about five times. it tells us a lot about washington&the way it works now. >> maybe white house was just listening to his conversations. i don't know. it is going to be the house. how can you not be talking to the speaker about the strategy going the forward for getting a bill through and not talking about anything. this tells us why washington doesn't work. the people in power don't talk to each other. >> not bad. >> and the senate. >> they could still get filibustered. it's a huge slog in the house. >> right. >> the majority doesn't like the amnesty.

>> they could get out of the senate. the house is the problem. >> i joked about bloomberg. does that story have legs, or is it done? >> the bloomberg story. >> they create their own messaging system. it's a larger issue of the company that is selling you something. even if you're paying a lot for it they're still getting something out of that. >> that's the case with all these things. >> i don't see anybody overtaking bloomberg. go back to the ticker. >> dan gross, ben white. >> you use the bikes yet? >> no. >> show us. >> his mike just fell off. . >> what does that do? >> it is sponsored by citi.

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welcome back. our next guest made history less than a month ago when his company became the first to provide legal online gaming in the united states. chairman and co-founder of ultimatepoker.com. congrats. your timing was much better than the guys he writes about. >> i would say so. so thanks for having me on this morning. >> what can you tell us? i don't know how much detail you can give us. but how is it going? >> it's going good. we launched in nevada, a state of 2.7 million people, 40 million tourists. we have dealt over 2 million hands as of last weekend. so there's no question there's pent up demand for this injury. estimate is 50 million poker players in the country.

we have had registrations in every state in america. people want to play. you can register and deposit from anywhere but you can only play within the state of nevada. >> tom is one of the sharpest guys out there. he used to own the golden nugget. he is responsible for bringing back old vegas. how do you know they're in the state of nevada when they play? >> well, first of all, ben, you and i have have this relationship where you wrote bringing down the house we were the two youngest casino owners. now you write straight flush and we're in the regulated world of online gaming. i appreciate the blush for my book as well. here's how you know. we owned our own technology. the two things we have been focused on is making sure people are who they say they are.

so making sure they're 21 and over and making sure they're in the state of nevada. it verifies your ip address. no vpns. we pin you with a cell phone making sure you're within the state. we hit you with you have -- we send you a text message and you have to reply to that. it's a combination of technology. it's pretty complex technology we have been working on several years. >> how many states in the u.s. is online gambling legal now. >> nevada was first. we commend the governor on that and the nevada regulators. new jersey is next with full-blown casino becaming. and delaware has also approved it. and then there's about 10 other states that have looking at it and are very serious about the legislation. all eyes are on nevada that we can prove players can be protected and revenue can be generated. finally, jobs and taxes are coming back to america after what i call the lost decade.

we all wanted in this business from 2000 to 2002. we were told to get out by the doj when they sent a letter to regulators. we have been sitting on the sidelines for a decade. we're pretty excited that jobs and taxes are coming back. this looks to expand beyond nevada. and tax dollars. we generated the first tax dollars in nevada that morning of april 30th. >> nevada was first and new jersey looks like it will be second when they have las vegas and atlantic city, which would be the last place they would want online casinos. does it take away from the visitors, the the people who would be going to the casinos in las vegas or atlantic city? >> well, i think there's two different approaches right now. year seeing nevada, which with poker-only legislation and then new jersey that is going with

full-blown online casino legislation. what you have to look at is, if you look at the previous months statistics you see nevada is seeing a percentage growth and new jersey is seeing a decline in revenue. a little bit of that is recapturing revenue. it is looked at as a revenue source. it represents 1% of gaming revenues. you will see as states look at this, they will go down the path of nevada and you're seeing california and states like michigan that think that's the appropriate path. and i think you will see other states that go down the path of new jersey. for me, our partners, frank and lorenzo, own station casinos. they're also owners of ultimate fighting championship. we're going to do nothing that jeopardized that land-based operation here. and we're already seeing over half of the people that are playing here in nevada are visiting properties of station

casinos, making deposits and withdrawals. they're going to participate in loyalty programs. for us it's about the integrated online/offline relationship. that will be interesting as this rolls out in the months and years to money do you think there is in online poker? >> the estimates are that if you had a national system for online poker that it could be a $10 billion marketplace so this thing will either play out one of two ways. it's going to go state by state which will play out as multiple states adopt legislation that includes pocker and then i think it evolves into a multibillion industry or there are multiple bills in washington, d.c., right now for poker-only legislation and if that plays out you have an opt in or opt out clause where states will make a decision whether they want to participate and that will be a $10 billion marketplace. >> the way you do it, it has to be from a 52-card deck.

i'm trying to see how the poker players can't see their opponents whether they're twitching or bluffers. they must be looking at which cards are showing or what the probabilities are or just be a pure haphazard chance, isn't it? >> it was interesting. we signed on antonio esfandiari. he's one of the best poker players of all time and one of his strengths is to read his op bonent and bee have 50,000 poker players descending upon las vegas to lay in land-based events and we think we'll log on to play ultimatepoker.com. you guys have been talking about it all morning with the two different screens and this new wave of technology. people like to play online poker and offline poker and this is the world of two screens where people will watch tv. >> you can't read your opponent. >> you hear someone twitching.

>> you have a terrible poker player. >> you see guys end up winning in the world series of poker. >> it can't just be a random generation of cards without 52 and then they put all of the shoes -- i don't know. i'm confusing myself, tom. i won't confuse anyone else. >> people love to play both, that's for sure, but it is totally different. you get two cards and four decisions to make once you get the two cards. you deal three times as many hands online and people get's burst of entertainment in a matter of a few minutes. >> those guys do it all. say i had to those guys. we've seen them before. >> coming up, we'll unveil the unstushl list of the world's 100 largest hedge funds. plus the last word from our guest host and here's a hint, the number one person who likes to meditate a lot.

you can guess, we'll come back. tomorrow on "squawk box," two squawk newsmakers on set for an hour. first, house budget committee chairman paul ryan. then black rock chairman and ceo larry fink. it's a special edition of "squawk box" you can't afford to miss and it all starts at 6:00 a.m. eastern. but we can still help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. all stations come over to mithis is for real this time. step seven point two one two. verify and lock. command is locked.

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welcome back to squawk. the dow will open 131 points higher and the s&p 500 about 13 points. institutional investor are releasing their hedge fund 100. this is a ranking of the world's largest hedge fund firms and i was hinting before, ray dalioa's bridgewater. he does meditate for 20 minutes twice a day. bluecrest capital management and och-ziff capital management. cnbc institutional investor will once again team up for the conference in new york city this summer. that's on july 17th and go to delivering alphacnbc.com.

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[ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ] let's get back to our guest host for our last word. i find out you were $2 million in the red when you got out of

college? >> in my late 20s i had a number of books and i ended up largely in debt. bringing down the house was the first. >> good luck with the book. when you do come back we'll hear more about that story. >> leave that hanging out for there now. >> that does it for today, make sure you join us tomorrow. "squawk on the street" starts right now. ♪ ♪ good tuesday morning, we are on rally watch again. welcome to "squawk on the street." i'm carl quintanilla withel kelly evans and david faber. jim cramer is off today. the numbers just released and we'll get you those results later as we talk more about them. in the meantime the bulls snapped four straight weeks of gains and up 132 on clearer signals of policy support both in japan and in europe.