this. good morning, everybody, and welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we start with the markets this morning. month of may, here st how the major average ves performed. the dow is up more than 3%. s&p is up nearly 4% and the nasdaq almost 5% as the tech heavy index is on pace for its best month since february last year. the dow by the way is on track to close higher for the sixth month in a row. the s&p and nasdaq are set for their second winning streak since 2009. a lot of records and here is another one for you. this will be the first time that the three major u.s. averages are up in each of the first five months of the year since the mid 1990s. as for this morning, there are some red arrows this morning. if you take a look at the futures pictures right now, the dow futures are down by almost 90 points below fair value. s&p futures are off by about 11 points. in europe this morning, you are continuing to see some similar moves there, as well. right annoy, the cac is down by 1.25%. drops of about 1 is% for the dax and for the ftse and in asia

overnight, the nikkei was actually up by 11.3%. but this comes on the heels of a 5% drop the day before. people are watching that closely to figure out how nervous they should be based on the oil prices in japan. oil price res down by 76 cents, to 92.85. the yield on the ten-year is 2.068%. it is the -- there's a page one story that focuses on what has happened in the month of may as bond price ves plummeted. the yield has moved up by about a half a percentage point over that period of time. obviously, still incredibly low by historic standards, but people are starting to debate about why the yield is moving so much higher. is it because the fed messed up, there's a concern about what is going on or is it the sense of economy is starting improving and you're starting to see what should happen as rates start to pick up. >> it's the big story in the

journal, reportedly. reportedly it's in the journal. >> our papers are late. >> no, i saw it -- >> have you tried to restepn line in the makeup room? there's no connectivity. >> and you have to be a member of the journal to read online, don't you? >> yes,o sfp. >> you pay money, you subscribe? >> i pay money. i am supporting the -- >> you're supporting rupert murdoch. which goes against everything you stand for. >> that's not true. >> yes, it is. >> i was singing -- >> yeah, what was your song? >> i was singing we're up all night to get lucky, we're up all night to get lucky. >> i thought you were making that up. >> no. this is the biggest song on -- this is the number one album of the week, we're up all night till the sun -- girls are up all night for good fun, but we're up all night to get lucky.

i don't know. are they gambling? who is pharrell? >> i know exactly what it means, it just never happened to me. but what is -- i must have been unlucky. i was up all night to get unlucky. there, that's what happened to me after i was up all night. >> pharrell is the producer. >> pharrell is? >> yes. >> he sings with dap punk. >> i don't know this song. >> we're going to play it eventually 37. >> we're going to get it after the break. but i don't know about this. >> we'll see who is going to get lucky this morning. >> papers are here. >> this market this week, i don't know. you know what i mean? >> i know. it has a weird feel. the big question is, there's a change in sentiment. we've been watching japan. >> volatility down, up, we need to look at that chart because it was up yesterday after reboundsing from that horrible day before. >> there's been much more

volatility through the course of the day. >> i don't know, andrew. i know you didn't think last week the taper tepper tipper tapper none of that mattered. i don't know. i feel different. >> you were telling me we're on a straight line up. >> until last week when you told me that it meant nothing, that the fed didn't change anything. and i said the second derivative of the derivative did change things. >> it's the last trading day of the month. this month has been really crazy. >> with europe, remember that one? we got that date in history where you said, no, no, no, and it all came straight down in yields since then. last week on thursday, it was with the moment. i think that was a moment on wednesday when they let us know that eventually they were just starting to close the thicket as our people spell it here. but i think it's positive long-term. i think the market finally goes up. >> rallies. but in the short-term, it's going on be --

>> well, i think initially in watching what happened in japan, too, is that -- the fed has been moving all of these markets around the world. but your boys on thursday night told you. now you forgot that. remember thursday night you were at the hedge fund thing and they said it's different. now you forgot that and you're arguing the other side. >> because you gave him grief when he brought that up, too. >> now, it wasn't grief about that. then i started questioning myself on the same. >> we have a couple of economic reports coming today that we should note. personal income and spending coming in at 8:30 eastern time. then in the 9:00 a.m. hour, chicago pmi and consumer sentiment will be here. for expectations, we should say personal income is seen rising by 0.1% while spend sg forecast to decline by the same amount. the other thing that's going on right now, becky was talking

about crude and is crude being 93 right now. opec minister res meeting in vienna today. that's where we find steve sedgwick who has more for us. good morning, steve. >> a very good day to you, as well. on the surface, you might see a 30 million barrels a day headline. yesterday for the production process and you'll see it again tomorrow. that doesn't tell anywhere near the true story of intrigue and paranoia that is going around the halls of vienna as these 12 ministers meet. they control around a third of 30 million barrels a total consumption of 90 million barrels. they produce just over that, actually. as we know and we discussed previously, a little bit of overcapacity there, overproduction, as well. but there are grave concerns that we're seeing a change in dynamics globally. demand is coming up from china. also falling demand for exported oil going into the united states because of the shale revolution. now you ask, six minutes what

their problem is with shale and they say no problem. but you get seven and sometimes they might let you in on the secret they're worried about. this is the nigerian oil minister who exports to the u.s. are suffering because of shale. let's listen in. >> i don't think that in the very immediate future on the short-term the shale oil or shale gas will overtly affect opec countries or opec's production and their exports at all. but it is of grave concern for us, even though we do respect the integrity of the u.s., of course, to be self-sustainable in terms of oil and gas. however, we are, of course, concerned in the medium term. >> so there is grave concern coming out of some parts of opec. others are just saying, look, it's not a problem. we're fine.

the oil has taken all the oil we produce. i was talking to the saudi minister earlier on and it was very much don't worry, be happy. >> what about the competition from u.s. shale oil? i mean, i know that at the current levels, the world will take every barrel of oil that is offered. but are you worried about this at the tail end of 2013 and 2014? >> let me give you advice. take out the words worry, take out the words concern and the world will be in good shape. >> isn't that lovely? take out the worry, take out the concern and we'll be all better. the only problem for me is that i've seen what's happened to other commodities, would a host of industrial metals that have had extreme volatility. oil hasn't had that. you have to wonder just how long we're going to see these stable oil prices. let's not forget, we saw record oil prices on an annual basis last year at $111 a barrel for brent crude. ten years earlier than that in

2002, it was only 25 bucks per barrel. this year, we're averaging $102 with w at this. so if we see slight changes in the supply dynamic and indeed the sign of demand dynamic, as well, there is a concern we will see the fall in the oil price. elsewhere, great intrigue between the iranians, iraqis and saudis who all want their man to be the next secretary general of opec. that's going to get rolled over, but it does expose the sectarianism that is flooding through the middle east because the saudis want their own man and iraqis and iranians have their own issues, as well. plus the fact if they are going to have to take some oil off the table at some stage, people are going to have to accept quotas. so there's a whole host of issues and stop blocks beneath the service which make this meeting for me very interesting, indeed. guys. >> okay, steve, got your vienna sweater on. it's raining, it looks like.

is it cold? >> pretty nasty, don't you think? i live in london and it's legendary for its wet, miserable conditions. apparently in advance of me coming over here, it's been the wettest week they've seen in may in many, many years. >> "sharp dressed man" we're playing for you, steve. i like it. i'd prefer it if it had a little zipper, if it was an actual sorkin sweater. but it looks good. >> look at him modeling. >> yeah, he is. look at the shirt. it has striped and the white collar and everything else. he has it going on, but he is in europe. he's on the continent so he has to. i want to talk now about sony, although i want you to google something. just google -- just go to google because there's a line of petri dishes. >> i saw that already. >> you know what those marks are. those are disgusting bacterial plaques.

and anything that you -- if you're not in a sterile room -- >> oh, uh. you spent a lot of time doing this. >> i did. >> oh, that's nasty. like to get perfectly clean agar plates, you need to be in a room with no germs whatsoever. and if anything is around, those grow. >> we did a science project like this. >> these are actually dishes from the tests done on andrew after he came back from vietnam. didn't you? you had to go to the doctor. is that all cleared up? >> it was an ear thing. >> if you've ever done this -- >> an ear thing. >> look, this could be from your computer. >> no, i know. let's talk sony. >> or not. >> what happened? >> you talked too long. >> i'll find it on my script. >> we have other news that we'll bring you, but rate knew, we're

going to the latest news out of europe. louisa bojesen is standing by in london. louisa, good morning to you. >> hi, hi. good morning. joe, another thing for you to do if you're on google, go and look at wa a dust mite looks like. >> i'll do that. i'll do that and show becky. dust mite and hit images. >> yeah. that's what you're sleeping on every single night. >> let me see. >> nice. >> i know. it's quite entertaining. let me show you what europe's markets are doing while you're googling the dust mites. we're lower. stoxx 600 lower by 1.9%. reversing some of the gains that we saw coming through yesterday on the close. our main european markets managing to take a leg up. and looking at the main markets, we're down somewhere in the region of 1.9%. i want to draw your attention to comments made by the italian central bank governor and the ecb policy member. he spoke around an hour and a half ago and he's saying that the ecb stands ready to

intervene again on rates. they are considering that to maintain credit conditions consistent with their monetary policy stance. that according to one of my guests earlier was saying that means the nonstandard measures. he talked about monetary reforms. he's urging a common euro budget, suggest ago joint debt issuance on a trial basis. that might be interpreted to mean some type of a euro area bond, as well. last but not least, you talked about the italian banks, too. they are at risk of being in difficulty. in particular, one would seem this means the medium size to the smaller sized banks. the likes of monte paschi still being quite weak. those comments coming through earlier. we saw it coming just a little lower on the back of those comments. indeed we continue to see a little bit of selling in the

euro/dollar, down somewhere in the region of 0.5% against the greenback. owner that, in general, we are looking towards broadly flattish markets over the course of the month. i think it's worth pointing out you were talking about some of the commodities. there was steve a bit earlier on. we've seen gold rallying over the last week, higher somewhere in the region of some 2.5%, despite the fact that we've seen a lot of gold weakness. i think it's interesting to see what is happening in gold in the last month and whether we're going to see this flip-flopping. we've seen a lot of equity readjustments coming through for the month of may. a lot of equity weakness. excuse me, a lot of equity strength in general, weakness over the last week, but strength in general and a lot of selling taking place in the bond marketses. is that going to reverse? last but not least, did you know that 69% of germans, they tip when they travel. that's more than americans. only 57% of americans tip when they're on vacation. i was quite surprised. i thought it would have been vice versa. >> louisa, thank you very much and thanks for making me go

search google for bed bugs. now i'm totally freaked out. >> that's not new. >> no. but if you search, you can find pictures of mattresses that are infested. it was really disgusting. let's get back to the markets because it's more calming. the s&p is on track for its seventh straight month of gains. joining us now to talk about run away rallies and buying samp peat sess jeff stout chief investment strategist at raymond james. jeff, this is fascinating. this whole idea of a buying sta stampede. you coineded this one? >> back in 1997. there's been a few that have extended for 25 to 30 sessions, but it's been rare to have one go for more than 30 sessions. we're actually at a session, 104 as the dow joins industrial average has not had three consecutive down days since this buying stampede began.

>> so what's different this time around? >> i think the economy is improving. i think the liquidity is vast throughout the world. i think that the portfolio manager is not just here, but over in europe. i can't find a structured account in europe that is even 20% weighted in u.s. equities when they're benchmarked. the msci is about 44% weighted in u.s. equities. so i have been telling, in fact, on your show for the past number of months that i think the s&p trades to 1700 before the end of the quarter. and then i think sometime in july and august, we become susceptible to the first deal pullback. >> and a decent pullback would be, what, more than 5%? >> yeah. i think somewhere between 10% and 12%. but i think that's for buying. people are so focused on why stocks should not be trading where they are rather than focused on why stocks should be trading where they are. >> does it make any difference to you if the fed decides to start tapering? because that's been the huge question over about the last

week or so. >> first of all, i don't think the fed is going to taper. but i think if they did, i think the equity markets would assume that they're tapering because things are getting better. there have been three times since 1980 where the delta or the rate of change on the ten-year treasury yields has gone up 20% or more. and each one of those occasions, the equity stock markets have actually rallied. and we've had that just happen in the ten-year treasury yield. it's up about 20%. >> the other thing you say we should be watching are lumber prices. forget about copper. lumber is maybe more important particularly when you're talking about the home improvement front. >> well, i've had a lot of questions recently if the economy is strong and housing is one of the hallmarks of the stronger economic data, then why is lumber doing what it's doing? and if you look historically, lumber prices have tended to weaken in the spring. there was a phenomenon where there was a shortage of railcars to transport it. actually.

that's been self-correcting. you've had some of the timber mills and plants come back online. so we would expect lumber to be volatile over the next couple of quarters, but as the housing market strengthens and volumes pick up even better than they're doing right now, we think lumber prices firm again in the first half of next year. >> jeff, this is a soothing message, a calming message, but is there anything you would pay attention to that you would say maybe i need to reassess this for a little bit? >> i think if the price of crude oil for some off reason jumped and jumped strongly, i would be worried about that. or if you get a huge policymaker out of washington, d.c. but quite frankly, i don't see either one of those things happening. >> so even if there is a pullback, if we lose 5% down to 10%, you would tell people hang in there, that it's a great buying opportunity and maybe step up to the plate again. >> this. >> that's what i would do. i would look for the markets to

turn higher, maybe put in some downside hedges at that point. i do think we're vulnerable once you get out into mid-july through mid-august. >> so we go down -- >> actually, i think we're going to trade over 1700 into the end of the quarter and probably the first or second week of july. and then i think we become vulnerable, joe. >> what does the end of the year look like? >> i think the end of the year stocks will be higher than where they are right now because i think the know will be better. >> so we could end at 1700. you're not looking for gains before the end of the year been we run up there, consolidate it and maybe run back up there. >> that's what i think. >> okay. not a bad way to think. >> we'll see. but it does imply -- >> better than the alternative. >> but it sounds like paulson. you are saying most of the gains have been made for the year, jeff, or maybe getting another 40 or 50 s&p points. >> yeah. and then you get a hit.

and if you trade it right, you're going to get a chance to buy that hit and trade back up to, i don't know, 1750 by the end of the year. >> 1750 by the end of the year, okay. that's another hundred points. that would be pretty good. >> but you have to trade this properly. >> yeah, you do. you have to be nimble. >> he's saying you could hang out and just wait. and you'll end up where you are now. anyway, okay. thank you. >> jeff, thank you. coming up, defense secretary chuck hagel is warning of cyber threats. we've got the details, coming up next. but first, take a look at this. there is a new spelling bee champion, winning the prize with this word. >> k-n-a-i-d-e-l. knaidel. >> wow. >> this is the first year, we should note, that a xeertized

vocabulary test helped determine the finalist. >> then he missed his last name. i can't get that. i don't know. >> wow. way to go, way to go. >> as we head to a break, we have a bit of trivia this morning courtesy of a tweeter. can you guess which major econ policy was a -- policymaker was a local spelling bee champion? win the dillon county championship? >> that should give it away.

i'm on expert on softball. and tea parties. i'll have more awkward conversations than i'm equipped for, because i'm raising two girls on my own. i'll worry about the economy more than a few times before they're grown. but it's for them, so i've found a way. who matters most to you says the most about you. at massmutual we're owned by our policyowners, and they matter most to us. ready to plan for your future? we'll help you get there.

as we twoent break, we asked you, could you guess which major ee conpolicymaker was a spelling bee champion. this young man, ben bernanke. there's the picture from it. i can't say i'm surprised. top speller. mark that. in other headlines this morning, defense secretary chuck hagel says cyber threats pose a quiet, siddus danger to the united states and other nations. calling for rules of the road to giet behavior. hagel is on his way to a meeting in singapore where he plan toes address cyber security in a speech tomorrow. the topic is likely to come up in a brief meeting with chinese delegates on the sidelines of that conference. joe. let's get the national weather forecast from the

weather channel's jen carfagno. jen, wow, severe storms again. >> again. >> but fought as bad yesterday. we were all worried. we didn't see the worst case scenario, i guess, did we? >> no. and it's rare to get that worst case scenario. ef-5 tornados like in moore, oklahoma, account for about 1%. you might get one or two of those a year. but we see a lot of tornados here in this country every year. yesterday, reports of tornados. you go back over the past three days, 800 reports of severe weather. and relate, the month of may started off quiet. but now we look at the -- we've had a couple thousand reports of severe weather and 80% of the may severe weather has happened in the last two weeks. so it's been a busy end to the month and it's going to keep on going into june. we wrap up the last day of may today with severe weather. this same front that we've been tracking for the past several days is the same level we're going to be tracking for the next several days right into the

weekend, right to the east coast by the end of the weekend and into early next week. this is monday is this is still the same front going to cause thunderstorms from boston to new york to d.c. now, severe weather risks today, there is that risk of tornados. again, it's in some of the same areas. we're still watching oklahoma. there was a tornado yesterday near tulsa, oklahoma. today, central and east oklahoma 6 out of 10 on the tor con. the risk continues into illinois, as well. we'll keep that risk going tomorrow, too. tomorrow, the risk for tornados is a little less, but we have risk for torms and damaging hail. plus parts of texas, new mexico might actually get some storms, as well. that's one of our top stories, the severe weather. but the heavy rain is another top story, inches of rain across the midwest. inches of rain in florida. again, this pattern is not changing. everything focusing showers and storms on central and south florida. we just can't get a golf day

here in south florida. we're going to keep it going again today with this forecast through the weekend with inches of rain. and then the other top story is this heat wave we've got going on in the northeast. temperatures topping 91 degrees. new york city got its first 90 degree day today and we'll keep it going through the weekends. guys, back over to you. >> that's crazy. usually in may we get some 90s, earlier may. so, jen, we get -- what was that, an -- it's called an ef-5? what was the one? >> that's the big one. >> you get one or two of those every year, did you say, somewhere? >> we do. we get about one or two a year. >> okay. >> and it wouldn't be uncommon not to get one and it wouldn't be uncommon to get two or three. but on average. >> now we've got the idea that that was the first time it ever happened. >> lori david. biggest tornado in history. >> not the biggest. >> no, that's what -- i'm talking about lori david.

believe me, i know that it's not true. thanks, jen. coming up, the story i first promised you earlier this morning. you see, i said sony. there's a lot of people out there that have been waiting. spin off proposal. first, as we head to break, a look at yesterday's winners and losers. i have low testosterone. there, i said it.

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>> that's the story -- >> la, la, la, la. >> it is. that's the pharrell hook. now they go back to singing -- >> la, la, la, la. >> it has sort of a 70s -- >> not a fan. >> it really does. >> you'll hear it a few times. >> i like adelle. la, la, la, i'm not listening to this. good morning. s it sold like 4 had 00,000. >> no, but i've got a good song stuck in my head. i don't want this one. >> what happened with dell? i'm joe kernen. >> no, we have a bit of breaking news. probably as expected, but dell's special committee supporting michael dell's offers after a lot of back and forth over the past couple of months. >> you didn't know what a

knaidel was. >> i didn't. after a lot of back and forth over carol el iqahn's proposal. the committee has decided the best bid out there is michael dell's bid of $13.65 a share. you can see that stock trading at about 13.27 right now and they are recommending shareholders approval the michael dell bid. the final other offer out there was one by carl icahn and those folks i imagine they have something to say about all this. they have threatened a law previously. i don't know if they will continue to see that. >> i guess they've done their diligence. >> craziness? is that what it is? >> michigog, sort of a lot of -- >> back and forth. >> yeah. >> just an adjective for -- >> it's not crazy? >> actually a noun, it's a bunch of stuff that's crazy.

there's probably some germanic root in it somewhere. >> you're jewish. webman? >> they changed the name in germany. i said this back in the 60s. i come from a long line of draft dodgers. i was ready for the 60s. uncle sam didn't want me. he said, no, i don't want you. sorry. >> oh, i've got to read this now. >> we can't get to this sony deal. sony's ceo says its company's board is going to review dan loeb's proposal. in an interview on closing bell, he defended the electronics unit. >> given the proper focus, given the proper strategic prioritization of where we need to be in the business and really focus on executing these priorities that we can in fact turn the tv business around or the electronics business around.

a great example is the tv business where, as we had committed two years ago, we halved our losses the last fiscal year and we're on our way ahead of plan in turning that business around. so, again, it's a matter of focus and it's a matter of execution. >> yesterday, david faber first reported that sony hired morgan stanley and citigroup to help out out options in this case for its entertainment business. morgan stanley and citi groou. that's one of those stories. >> how many people? >> there's a lot of people out there. i wonder who sony is hiring, right? >> to those of us who cover the world of wall street, knowing the advisers -- when you wake up in the morning and you see stories, you want to know who is behind these, who it involves. >> because the other day we were talking about the steel food. >> i wanted to talk about bacon. and i was saying, how many actual people in the world are

interesting in who is advising smithfield foods on that offer? >> you, but -- >> but thaerss that's powerful. >> i know that. the. >> just the raw number it's probably -- >> small. but important. >> i'm trying to figure it out, maybe a thousand, 20,000? >> no. >> no, i figure 20/50, maybe. >> 50,000 people care? >> because there's a whole other world of people -- >> including people that know morgan stanley. >> no, it's a lot about the new york city economy. i care about u.s. competitors. >> you guys on the east coast are so wall street. >> i'm a nebraska boy. i keep reminding you of this. >> you've got a congress way. >> in some ways, anyway. in the past, samsung has used chips designed with energy efficient technology from the uk's arm holdings. a change would be a major win for intel as it try toes grab a stake of the mobile markets. >> and clear water is laying a

shareholder vote on sprint's offers to buy the half of the wireless network provider that it doesn't own. in the meantime, clearwire will talk with dish network about its rival bid and sprint had offered $3.40 a share for clearwire. dish just raised its offer to $4.40 a share. we're going to talk a lot more about this and much more in the telecon space with jack grubman at 7:30 who is making his return to the public world after about a decade. we're going to talk to him a lot of issues. >> and next week we're going to kick off another big round of economic data and that will include the may jobs report. joining us now to talk about the economy is jerry webman, chief economist at oppenheimer fund. we've got to get a shot of these cat in the hat stocks that he's wearing, too. i'm sorry.

>> i'm sorry you said it's cat in the hat and not -- if you're a 60 something-year-old man who is wearing a -- they're wicked witch of the west stocks. >> and you're under the desk. you know now that people that are listening to your forecast for interest rates and the economy are going to do it all in light of those socks. >> i'm a little less -- there we are. i'd like to be known by any ankle wear. you have to be a little less conventional. wait until you're my age. you want to do a few things to shake things up, joe. >> we all have been taper, tepper, tantrums. wa do they do and when this do they first doo it? >> probably they're start doing what they're currently doing by september the end of this year. >> september? >> i doubt it's as early as september. probably, you know -- >> a lot of people say that,

jerry. that's consensus. >> it is consensus and it should be. more than ever -- you know the old greenspan thing, if you understand what i said, then you misunderstood me. they told us what they know and what they don't know. >> they tried to change that and be more transparent about things. >> they just don't know. >> they don't know, either. the journal piece says there's two camps. one see tes the recent. they call it 50 basis points is 25% of where we were. they call it a swoon. but it's gone back to over 2%. is that because the fed has messed up and they're going to have a lot of trouble exiting and this is a pressage you're seeing this is what's going to happen or is it the economy is improving? >> i think it's because the economy is improving. so many people ta trade bonds are worried about this extraordinary stuff they've done

and we should be. and the fed, if you listen to them, they're worried about how they're going to get out of this, too. thou you're just barely getting real rates to be neutral. not negative relative to inflation. so i think this is the healthy adjustment that this economy is not going to fall apart anytime soon. higher rates are a little bit of good news here. but there's definitely this uncertainty. i don't know if they're going to get out of this as smoothly as they claim to think they are and they're nerve justice about it. you can tell from the toni of voice. they're nervous about it, too, which is a good thing for us. >> what's 2013 gdp going to average and wa about next year? >> so this will probably -- so we just found out the first quarter was weaker. weebl probably be in that 2-4 instead of 2-5. >> western, it's 3-4. >> we're not going to get back to see quester. so it's going to be 2-5, something like that. it's okay. it's not great. but i think we'll have decent

growth this year. the nice thing about the revision downward was that most of that revision came from a slower build up or inventories and with reasonably good demand, good durable goods numbers we saw last week. lower inventory sess a good sign for the future. so what do you tell -- i mean, i assume that oppenheimer funds uses you for an overall view of things. would this -- would people that work there take what you're saying and do something specific with people's money? what would they do? >> we're very bottoms up. oppenheimer funds is a very bottoms up shot. >> but they still employ you. >> they still, thank god, employ me, at least for the time being. so there's a give-and-take. but i also spend a lot of time with our clients trying to keep them focused on where money is being made and less on what headline news is, what they're seeing day by day, get them to focus, where there's good valuation, where there's growth, who is making money?

maybe get people to pay less attention to the politics. >> i mean, are you telling them domestically it's good? >> right now, more than we have over many years, we're telling them that we think the strongest part of the economy is the u.s. economy and u.s. companies look okay. >> somebody pointed out, those are witches -- wicked witch of the east socks. >> glenda was good. >> the west was the bad one, but it was her sister that got squished under the house. >> i guess because i'm from the west, i figured both sisters were wearing the same socks. fair enough. fair enough. >> what about the monkeys at the end snft everybody is -- >> they wouldn't make that movie. >> it could be too scary, right? >> yeah. all right. but that's a -- you're a confident man, i will say that. >> i'm -- well, you have to be. or maybe i'm trying to --

>> you can't see them when you're walking, right? >> not too easily. it doesn't show up. >> and you didn't think the camera would see them today. >> you know, it's hot outside. we're getting into the silly season. >> i see those. >> that's your hang up, not mine. whatever works for you. >> how about getting you out of them sock sess what -- >> i can tell you where you can find them. >> thank you for joining us. >> my pleasure, as always. thank you. >> no, it was ours. anyway -- >> still to come on squawk this morning, former ceo brad anderson on jobs, the economy and keeping america great. then we'll talk about the profitable business of garbage with the ceo of waste management. then jack grubman makes a return. it's a squawk exclusive you don't want to miss. [ ice freezing ] [ wind howling ]

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welcome back to "squawk box" southbou . time to learn more from my experience with the pros. today we'll be hearing about getting a feel from the game from mike and stephane wineberger, senior portfolio manager at matrix asset advisers. joe, you can make fun of me now. >> ever practiced? >> i don't do any of these things, which will be good for investing, by the way, too. >> just like investing, you have to start with fundamentals. it's learned game. i don't think there's any natural golfer. other than tiger woods who probably may be the closest

thing to a natural golfer that ever came along. but everything is learned. >> how do you get a feel for the game? >> i really think it's experience. you learn over time about yourself, what you're good at. i think in golf, it involves a lot of practice. >> you see, anyways beautiful. >> taking lessons. sometimes it takes you a while to absorb those lessons. and lessons in the market. it's oftentimes just from experience. >> people say the better you are as a player, the more frustrating it can be. do you feel the same way about the markets? >> no. i think the market is constantly challenging. i know what you mean about in golf, some people get to a high level and they expect to maintain that level when they fall off. it's frustrate postponing. >> but that's the hard part about investing. you can have a killer year and then all of a sudden you have a lousy year. >> forget you ever saw that shot. >> what you do in investing, you have to stick with what you're good at. sometimes it's not.

but over the long run, it's all about compounding, the rate of return over time. you can have a so-so year. you just don't want to have a disaster year. those are hard to recovery. you want to stay out of the hazards as much as possible. you can fall behind very, very quickly in golf .in investment. >> sometimes i will hit the ball and it will be a great -- the ball will go exactly where it's supposed to go, but i know it's a lousy shot. meaning i know i did everything wrong and it happened. then i think, i should do that again. >> you have to be consistent. that one time it may happen, but it's not going to happen time and time again. >> with you're playing golf, do you go for it or do you lay it up? >> it depends on the shot. i know i'm not a long hitter, right? if i think i have to swing too hard or swing for the fences, i'll lay up. but if i think i have a reasonable shot, i have confidence in my swing, let the club do the job, i'll go for it.

>> now are you a long hitter when it comes to investing? >> slow and steady win tess race. i don't shoot for the moon. i know there's things i don't understand. i stick with what i know how to do well. >> how do you pick with? >> i often pick people who are better than i am. i can learn from them. >> there it is. what do you think? >> tough to do. >> you saw me top the ball? i like the black glove. >> i had a white glove and black glove. i think one day i didn't have any. >> the white one is a sequinned glove that you wear sometimes? >> michael jackson? >> yeah. >> where are you? you're invisible. you're not part of the show. >> mini golf.

>> i would like to do mini golf. >> i don't think that counts. i think we need you out -- >> i can't golf. >> that's what we want to see. coming up, the the stories that have us squawking this morning. former best buy ceo and current board member brad anderson. stay tuned for that and a lot more. a big show coming ahead. [ male announcer ] my client gloria has a lot going on in her life. wife, mother, marathoner. but one day it's just gonna be james and her. so as their financial advisor, i'm helping them look at their complete financial picture -- even the money they've invested elsewhere -- to create a plan that can help weather all kinds of markets. because that's how they're getting ready, for all the things they want to do. [ female announcer ] when people talk, great things can happen. so start a conversation with an advisor who's fully invested in you.

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welcome back, everybody. it is the end of the month. the last time we will see anything in may this year for 2013. so far you have red arrows. dow down 65 points. s&p down by seven. but they're off their worst levels this morning. futures down 90 points earlier today. by the way, even if we end at these levels, you're talking about major gains for the month of may for all the major stock averages. we are approaching the top of the hour. when we come back, a number of newsmakers including brad anderson. his take on the turnaround strategy. and jump starting the u.s. jobs market. that's just what we were talking about off set. coming up at 7:15 ceo of

waste management. what they can do to conserve energy. plus, jack grubman makes a return nearly a decade after he fell from grace. we are looking forward to it today. don't forget, personal income and spending coming up 8:30 eastern time. busy friday still ahead. stick around. [ engine revving ] ♪ [ male announcer ] every car we build must make adrenaline pump and pulses quicken. ♪ to help you not just to stay alive... but feel alive. the c-class is no exception. it's a mercedes-benz, through and through. see your authorized mercedes-benz dealer

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jobs, the consumer and the

global economy. best buy ceo brad anderson joins us to discuss a wide range of topics. why he thinks slow and steady will win the race. >> the hunt for value. >> it's rabbit season. >> duck season. >> rabbit season. >> duck season. >> a stock picker who thinks like a private equity firm. we hear about what's working now. >> jack is back. almost a decade since he was banned. find out what he's doing and what he thinks for the fight for clearwire. his first interview in nearly 10 years. the second hour of "squawk box" starts right now. good morning, everybody. welcome back to "squawk box" on cnbc.

s&p futures down by eight. of course been looking at the month. still a strong up month for all the major averages. chief executive dell. a letter says the takeover bid at $13.65 a share is the best alternative available. a special meeting to vote on that deal is set for july 18th. boeing has won a $6 billion order for 60 of its 737 max aircraft. the buyer is tui travel, which has the option to buy 90 more. it will burn 13% less fuel than originally anticipated. procter & gamble will be regrouping its brands into four sectors and each will have its own executives. lafley is expected to set aside

in two to three years. interesting way to do it. that's what happened to g.e. opec is expected to leave output policy unchanged. saudi arabia's oil minister set the stagement they said world markets were in good shape and balanced. >> apple is hiking the price of ipads and ipods in japan. it is the latest and high profile brands asking japanese consumers to pay more. ipad prices jumped $130. tiffany recently hiked prices as sales jumped by 20% in the first

quarter. the yen has fallen 20% against the u.s. dollar. also, reports this morning that samsung has chosen intel to power a new version of one of its top tier tablets. it would be a major victory, which is trying to gain traction in the global market. clover trail plus mobile chip will power the galaxy tab which competes with apple's ipad. samsung previously used chip's designed for the best-selling mobile devices. >> sony ceo says the company will review that proposal from dan lobe to spin off the entertainment business. he defended sony electronics unit. >> given the proper focus, given the proper strategic prioritization of where we need to be in the business, and really phone us on executing these priorities that we can in fact, turn the tv business

around. or the electronics business around. great example is the tv business where as we had committed to years ago we halved our losses. we're on our way ahead of plan in turning that business around. so it's a better of focus and execution. >> that's more that they did it not who they hired. >> it's more that they hired advisers. >> you kind of have to. >> it would be hard not to do something to show they're at least trying. >> did you care? in years. >> i cared more about a sweep in the national league. >> i can't believe you want to talk about spitzer.

talk grubman. best buy is in the midst of an effort to turn things around. brad anderson is former ceo. were you founder? >> no. i started as a salesman. there 36 years. >> and a board member. member of the jobs creator alliance. when you were on, i don't know what, maybe a year ago, and i told you that story -- >> yeah. >> -- that i bought something on friday and the price went down saturday. it was a tv. so i went back the next week and i said you lowered the price on saturday. they said, no, no, we can't lower it for you. i said but you'll take it back? i said you'll take it back and then i can buy it on amazon. i told you that story. you were beside yourself. you don't need to go on record with that. but i remember that happening. the stock went to 11.

do you know where it is this year. it was 11 earlier this year. i think a lot of people it was greatly exaggerated of brick and mortar. what happened in the last year or the last eight months or six months to get it back on track? >> that's one of the raw stories. it was one of the raw stories. and i think it's what happens when a retailer tries to -- some of the struggle we just heard at the top of the hour, when you're under pressure there's a pro cliffity to go back to the places for profit and you can do it from the center. makes no sense in any way, shape or form. that's the structure of the company that had been doing that. so you lose focus on your

customer. very quickly they can start to get into trouble. i have to be careful because i'm a board member. it's what we saw that was so devastating to the long-term future. bear started to move the company in another direction. >> were you surprised they had been as successful? >> well, it's still early, right? the company isn't making any claims. >> it sounds easy.

it's probably difficult to break down barriers and change the way people think. >> yes, it is. because the industry is so dynamic, there are also stories -- like, you know, we're hearing trouble with sony and those kinds. the great thing about the industry is it's always moving. >> i'm not an amazon person. i don't know where to put the credit card on the computer. i put it in that thing and it got all chewed up. >> it is one of the most exciting in the world. >> you know what else? people say if you could be cradle to grave, show me how to do everything. and that got off the -- wouldn't you like that? the service at best buy.

>> oh, yeah. the geek squawk. >> you can't talk bit. >> i can't talk about it. i can talk about the industry. great companies like august have been. by focusing on the customer, specifically on what the customer can do and do what the customer is looking for. we did a video five years ago. you get the same thing. i want to do this in my life and i want it to be simple. whoever solves that puzzle. >> that model doesn't need to fall by the wayside.

by the way, it does not have to be just brick and mortar. >> you're in the newspaper business. >> right. >> and he pretty much thinks a lot of businesses -- your experience firsthand is zero. can you see brick and mortar? it's hard to imagine. >> there are certain types of products like a tv. or i was talking about a special audio room called the magnolia. you can't do that. we always talk about the amazon effect. the big competitor is not amazon. it's walmart. >> even bigger has been apple.

apple did the most counter intuitive thing you could think to open retail stores. and they did it because they had a specific point of view about what a customer experience should be. it was the polar opposite of the one you had. >> right. >> they engineered that into the experience. >> geek squad can do the same thing. i said give me. you come to my house and make it work. >> you can't say six weeks. >> no. it takes time. >> the stock seems to be saying that something is happening. it's discounting that steps can be taken along that direction. >> you're a great free market guy too. i remember that when we were on.

we'll talk about what we need to do. a little better in the country despite a lot of things. >> for big business i think it's actually pretty good. i got involved because i'm concerned about small business. after spending 36 years, it was a tiny little business. and the pressure and most creative part of our economy comes out of small business. people are breaking peyer dimes. >> obama care. >> i'm on the board of mayo clinic. >> i didn't know you were on that board too. a lot of boards. >> i flunked retirement. >> will you be on the squawk board? >> that's typically what i do too. you guys are fun. >> if you have comments, questions about anything you see on squawk, shoot us an e-mail. follow us on twitter. coming up neck, the business of

trash. the role of garbage in the u.s. economy >> and telecom. former telecom analyst jack grubman. hey, what's going on here? 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. 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. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air.

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welcome back, everybody. it is time to talk trash.

waste management is taking on the challenge of converting waste into energy and helping companies find value in their garbage in unwanted materials. joining us is chair and ceo of waste management. more of what he calls green squad. great to have you here. >> thank you. good to be here. >> before we get to that, your stock has done incredibly well over the last year in particular. i was just looking back. up to 42 from down around 31 or something. a lot of what's been happening is just the single stream recycling that's been going on in the industry. we changed over to that in our town. we used to have to recycle in a lot of different bins. now it all goes into one. how does it work on your end? >> the idea is to make it simple for the consumer. in europe, japan, folks are raised to do what they need to do to recycle. the united states is a little bit different. we have to make it easy.

in the past you used to have to put glass in one, metal into another and plant in a third. we will use technology at the plant to sort that. it is about extracting the value. if we make it easier, we can extract more value. we can do what's good for the environment and make a little bit more money. >> are you able to charge more for that? you charge townships or individuals for doing that. >> generally we will take that and split the proceeds. we will do a 50-50 split. it actually makes it more cost-effective for the municipality. and more profitable for us. it also makes us vulnerable to swings in the commodities prices. we're seeing a little bit of swing in the commodities price. that's driven by demand it of china. >> okay. let's talk about the squad.

is this a real idea that you can take trash and turn it into energy. that sounds like turning lead into goal. >> we took the opportunity to say what can we do for our customers to help them extract more value of the materials. we had a company that was a manufacturer. they had metal shavings that fell on the floor. they considered it trash. we said that's not trash. that's something that's valuable. we showed how to separate the metals from the garbage. they made $300,000 a rear by doing that. what we do is send folks into a manufacturing plant, into a large customer like a walmart and show them what they need to do to extract the value. >> what does walmart have that's

valuable? >> think about it. cardboard, shrink wrap, a lot of metals. a lot of different products that as soon as they go to a return center, walmart has to do something with them. we help them manage that flow to pull the value. it's reduce, re-use, recycle. we have to figure out which "r" is more profitable. that's exactly what they do for them. >> the natural gas is amazing. how many trucks? >> 22,000 trucks a day. >> think about that. it's like a boone pickens, he's dreaming about that. you have to build out the infrastructure to do this. everyone wants the government to build out this infrastructure. this is the public/private partnership that we are dreaming of. do you see hesitancy?

they wanted solar, wind. in spite of the government. here it is ready to go. you could have 22,000 trucks using the stuff we're getting from the fracking. >> and we're doing that. joe, before we even talk about cng, let's talk about garbage. we put a lot of money into solar power. one company, waste management, we use garbage for twice the amount of electricity in the united states. >> that doesn't sound right. >> and by the way, we're base load. when the sun doesn't shine, we're still producing electricity. >> you've got to get with the program. it just doesn't sound as good. >> there might not be a lot of sizzle. >> i'm with you. >> but with cng, we're going to build the infrastructure. for us it makes sense. we will build 25 plants this

year. slow fuel cng. obviously we would go faster if we got help from the government. >> you have 22,000 trucks. >> we're at about 13% to 15% of our fleet. when we buy trucks right now, we'll buy anywhere from 1,000 to 1,400 a year. 90% to 95% of that will be cng. the only time we won't buy cng is if we have have to replace a truck where we don't have the infrastructure. our biggest concern we have these fueling stations. we call it slow fuel. we also put a public pump for school buses or taxicabs. people say we see you have $1.99 gas. can we fill up? it's a different type of gas. >> are you opposed to natural

gas? >> for us it works two ways. we create electricity out of waste. electricity is driven by natural gas. we do better. obviously when natural gas price go up we don't do as well with our fleet. it's sort of a nice hedge for us. you know, look, that's natural gas for me is not a waste management question. it's a united states economy question. it's a national security question. and a free trade question. first and foremost, i'm a free trade guy. my personal opinion is that if we can export natural gas, it's not only going to be good for the united states economy but for the world economy. and it's going to continue to allow us to explore and produce natural gas in the united states. >> but if you're never going to have bacon again you draw the line at pork. >> i've got to tell you, joe, i'm a turkey bacon guy. >> oh, no. >> i know you say it's not real

bacon. nothing tastes quite the same as real bacon. >> when you listen to this guy, though, you remember wayne. is there anyone who says, ah, don't come this week to empty my dumpster? no one ever says that. come every week. i think wayne was like scratching his head. he was 20 years old or something. they rented dumpsters. >> founded a great company. left my great legacy. obviously did a lot of great things after. >> david, thank you. come back soon. appreciate it. when we come back, jack grubman. his thoughts on his case and what he's doing now. "squawk box" will be right back. time now for today's aflac trivia question. which nba player holds the record for most three-point shots attempt indeed a playoff

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now the answer to today's aflac trivia question. which nba player holds the

record for the most three-point shots attempted in a playoff game? ray allen. he made nine. >> i don't think any of us got that answer right. comments or comments about anything you see on squawk, e-mail us or on twitter. jack grubman in his first live tv interview since the early 2000s. take a look at the futures right now.

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welcome back to "squawk box" this morning. in the headlines, in annan hour, the latest read on personal income and consumer spending. income is expected to edge higher by 0.1. trustees for social security and

medicare are set to release their annual reports today. an update assessment of when those entitlement programs will run out of money. medicare would run dry in 2024. that's sooner than a thought. social security in 2033. and toyota reaping benefits from the yen. a good chance of selling lexus models. 80% are made in japan. 90% are exported. we will switch gears and talk about jack grubman. he covered the telecom back of the 1990s. he is advising the industry in an op ed piece he wrote this week. raising red flags about dish's bid for sprint. got a note about 10 years ago he settled an sec lawsuit over accusations he issued reports

that citigroup, his employer at the time, were advising. he did not admit or deny the allegations. he was barred from the securities industry. he is a telecom consultant, founder and ceo. thank you for being here. >> great to be here. >> i want to talk about telecom, dish and the present, where we are. this is the first time you have been public and been on our air in about a decade. you were barred from the industry. >> correct. >> there's still some questions that i would like to ask. because i think people want to understand what took place. i'm thinking a lot about this. when you think about the research that took place during that period that you were doing. bloggett was involved in this. research analysts were promoting companies being advised on the

investment banking side. when you look back at that period, do you think what you were doing and what was happening in the industry was wrong? >> the chinese has an old saying, lightning doesn't strike short trees. i would say we all did research based on the companies we followed, the industries we followed. i could point to a level 3 report i wrote in 1999 where i had a circle of demand, band width, video going over nontraditional medium. guess what's happening today? unfortunately part of what was going on then was you had in the

investment banks between research, banking, sales, trading. everybody was working for the same enterprise trying to maximize the profitability. i don't know if anything was right or wrong. i would add one thing. here we are 12 years after the grand settlement. maybe the question is has anything changed? i would say not really. there's change in form but not substance in terms of today's wall street research. >> but you don't think the research you were conducting or others were conducting then is different than what we're seeing now in terms of that? did you feel an underlying conflict? >> no. at the time i could honestly say there was no under flying conflict. whether it was me, mary meeker, let's be crass about it.

if we wanted to maximize our personal income the way you did it was to be highly ranked by institutional investors. because if you weren't every pitch book on wall street for every ipo that went down then, the analyst section, the the first thing they led with was i pulse. if you were not held in high esteem by the investors who thought you were nothing more than a sham, guess what, you dropped precipitously. i would argue that analysts then and i guess now, you know, first and foremost, had to have the best reputation they could in the eyes of their institutional investors which meant doing good research. >> you would have been suspicious in terms of taxing the edge of that because of pressure they might have gotten

from their institutions? >> that's an interesting question. it goes back to my chinese proverb. there's an article today or yesterday about crumbling walls on wall street. it's on your home page. so here we are all these years later. i can tell you for a fact back then if you were pitching for an ipo, yes, the analyst and bankers would come into the same meeting. they would talk about the firm, the distribution. we would talk about our investment thesis. guess what happened now? two meetings instead of one guy. >> they aren't the same guy. but the overall entity could perhaps put pressure on both sides. good research. >> joe, i will tell you for a

fact that -- because i know people on boards who see these presentations. the analysts will come in separate from the bankers. so they're not in the same room at the same time. big deal. but they will still pitch for the ipo just like what happened 15 years ago. >> the question has always been how do you get good independent research. >> tried that. >> it is sort of an interesting thing. one of the unintended con questions of this so-called reform that happened was the independent research. guess what is part of that independent research? export networks. we know what that got us. >> right. >> one more question on this, and then we will go to the present. eliot spitzer was on the new york post. >> did you plan that? >> we did not. >> agreed to be barred from the

industry. do you look back now and say that was appropriate, that was right, that was wrong? i wish that wasn't the case in the context of everything you just said. >> look, at the time i decided to settle, put it behind me and move on and focus on the next stage of my life, which is the the right thing to do. >> you are advising a lot of telecom companies. you have no investment in. just to be clear and put that out there. you wrote a piece where you said that this proposal by dish, the takeover sprint is a big mistake and reminds you of some of the deals you saw back in the 1990s. >> it's funny. i was listening to you o'dell.

it's amazing what's going on. >> you know he's crazy. you think it's in a good way. i'm not going to put a value. >> make the case. what's the problem? >> okay. i want to get back to the crux of my op ed for a second. let's step back. clear wire is the other leg of the stool. to take joe's characterization, which i will not argue about. charlie fancies himself as a poker player. he's considered a master poker player. the problem is that he doesn't have a great hand. in this case all his cards are face up. not just dish but the whole industry is in secular decline. if i told you over one-third of

u.s. households would not have a land line phone you would not believe that. that's the case. there are already 5 million homes that are zero tv homes. i don't know what that will look like in 10 years. but 10 years from now, watching this at a super bowl or whatever on a big screen tv is not going to be the the only thing you do. he got a waiver from the sec to offer service. so i would argue that in his heart of hearts he doesn't want to really own clear wire or sprint. he wants to agitate, which i guess he's good at, to get a network access deal from sprint.

let's face it, he's a smart guy. you need 75% to win the the vote. >> right. >> that math doesn't work. he understands that. >> talking about bacon. >> right. >> bacon is fine. i don't have a problem with that. >> so that was one of his big things. you know, the other thing he kept talking about, which i found amazing, is that the soft bank deal would -- he was talking about synergy and overlap and cost savings. that made no sense. he's not going to get sprint or clear wire. he's hoping they will figure out a network access deal. >> why would sprint do that?

it seems like a bigger loss. >> why not go to sprint and say i would like to network share. lease capacity from you. strike a good old-fashioned commercial deal. but the problem with the sprint/dish proposal is that if soft bank never appeared you would look at this in a somewhat different way. i just look at column a, column b. you know this well. sprint's problem for a long time was they were overleveraged and they didn't have the financial wherewithal to build up their network, to really compete with at&t and verizon.

it solves their biggest problem, the balance sheet problem. i said in my piece if this sprint/dish bundle could show substantially more growth than sprint stand alone, it's sort of like if you invest in a developing company you will take the risk because you think you will get outsized return versus u.s. treasury. that's not the case here. because the whole premise of the thesis is sprint/dish can offer a bundle to the home. i would argue they're late in that game. secondly i would argue, as i said in my piece, the bundle notion is going to fall apart. as time goes on you will have much more a la carte services. band width will be very key.

google network will be an interesting player. so i think the premise of the thesis is late. they can't compete with verizon is and comcast. >> where does goggle play in all of this? do you see them as a player in all of this? >> yes. . there was a report, presidents council of advisers in science and technology pcast. one of the authors is eric schmidt. it came out late last year and advocated sharing spectrum.

it allowed to share spectrum with the november and the department of defense and what have you. as long as they could show they don't interfere. google is a big proponent of that. some argue that's a seattle way to get into the wireless business, along with finer networks. >> if charlie accomplishes that, if that doesn't work, and it has a lot of regulatory challenges, google -- they're working on -- >> pcast. >> thank you. doesn't this give another option? >> sprint or google? >> google. >> i don't think google wants to own sprint, google, t-mobile or

anything like that. i think they want to go in the side door. >> thanks. >> i would like to talk about where this whole industry. comcast, for example. >> right. >> with the way we're going it's frightening because it's so daunting. if you wrote about level 3 you can write about something that may help us. can you do that? >> i could do that. spectrum is oil. spectrum is the gating factor. i don't think people get this. back in the day when they belt these, that was true. >> that was true. because the laws of physics, they had technology that could

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welcome back to "squawk box". value investing is the focus of our what's working segment.

$12.5 billion. value investing. everybody talks about it. you do it a little bit different. >> we consider ourselves the value investing alternative. why? it was really the outgrowth of two guys named benjamin graham and dodd. nobody has really read it. whitman got so upset that he wrote his own book. what we believe is the modern paradigm. >> marty whitman. the quality of a company's balance sheet. what's in that company's assets and what the liabilities are on and off the balance sheet.

>> but that doesn't matter unless the tide comes down and everybody is naked in the pond. for us to predict the future. we want to make sure we have some safety. we talked about in terms of margin of safety, right? we're really getting deeper into a company and trying to figure out what it's really worth. set a value for that business and hope the market gives us an opportunity to buy at a discount. >> i wish we had more time. we should do individual stocks. a lot of people like to see that. what gets through that screen and comes out? >> we come up with pretty eclectic portfolios. we'll end up looking wherever we can.

one of the holdings i talked about was a chinese listed conglomerate, probably one of the greatest blue chips that nobody talks about. he runs 43% of a $40 billion market cap company. it has investments all over the world, although not in the united states of america currently. he has investments in real estate and hutchison lampoa that is the largest port operator in the world. this is trading 80% of what we think nav is. >> hong kong company? >> hong kong company. in march of this year they merged are jeffreys. we had a chance to meet with joe

and richard and think the combination of those two businesses with the potential that jeffreys creates for that interview making great investments is an interesting opportunity and for the the first time in a long time a stock relatively inexpensive. the housing market has really boomed. we love the business. three components. home builder, timber and other real estate investments. it's a great company. >> do you have any theory about where the street is going that leads you to find the value propositions? >> no. we pay very little attention to what the macro is. i get upset with you guys because you speak the macros. >> you mean us not him. >> we can't predict what the future is. we look individually at businesses, fundamentally try to

make an analysis. it's an appraisal of management. we want to make sure if we invest for the long term, which we do. >> thanks for coming in. we'll come back. grubman on. thank you. >> check the futures. it's been down most of the session. down 69 points or so. ♪

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at ducktherapy.com. hurricane season starts in the atlantic tomorrow. there there's a storm coming, buddy. there's a storm coming. >> refinery row. board member of social navigation app. google, apple, facebook. the third hour of "squawk box" starts right now. ♪

welcome back to "squawk box". i'm joe kernen whraopbg with becky quick and andrew ross sorkin. brannon tker son, former ceo of best buy and a member of the job creators alliance. on this final trading session, major averages. how they perform for the month today. the dow is up for than 3%. s&p up 4%. and the s&p up 5% as the tech heavy tech is on pace. it is on track to close higher for sixth month in a row.

they are set tore their first seven month winning streak since 2009. this will be the first time the three averages are up since the mid-1990s. this morning it is a slightly different picture. futures are indicated lower. dow down 68 points. s&p down 7.5. art points out an interesting trend. how our markets, our premarket and early morning market is trading on the after market. it is having a rough session. that's been the tail wagging the dog here. not what exactly happened in the session as it closed for the nikkei but what happens in the after market. so weakness would indicate, the nikkei indicated some weakness here. it's done the same thing to europe. ftse down 1%. germany, dax off of a percent as

is the cac. opec has agreed to keep its outlook unchanged. it will meet again the 4th. they're down 82 cents to 92.79, below $93. sony ceo saying his company's board is going to be reviewing investors dan loeb's spin-off professional. he defended the electronics unit. >> given the proper focus. given the proper strategic priorization and we can in fact, turn the electronics business around. a great example is the tv business. as we had committed two years ago we halved our losses the last fiscal year. and we're on our way actually ahead of play in turning that business around. again, it's a matter of focus and it's a matter of execution.

>> and help to go sound out options for its entertainment business. that news breaking yesterday. also, reports this morning that samsung has chosen an intel processor to power its top tier android tablet. major victory for the chipmaker as it tries to gain traction into the mobile market. the mobile chip will power the newest version of the galaxy tab, which completes with the apple ipad. samsung previously used chips by the arm holdings for its best-selling mobile devices. >> we have talked tapering nonstop really since a week ago thursday, wednesday. fears of the fed driving market volatility. we will be watching it closely. and the employment report a week from the day.

you think the fed was testing the water. >> i really do think that. i think it will be vigorously debated. >> we were talking about it after last week. >> sometimes they will start gradually taking it off. when ben bernanke tells us they don't want to do it prematurely or if they would they wouldoff set it or go in the other direction should be comforting in the market. >> they started 10 or 15 billion or so. the biggest risk is they start too early. >> there is a risk they start early. ben bernanke addressed that issue saying they're going to be very careful if they start early and reverse it if they end up getting the impression that they started early. i think in that accepts we have nothing to fear.

you feel pretty good. 180 to 200 next friday. >> next friday we will get somewhere in the naked of 180 to 200,000. the numbers are continuing to get better. car sales are strong. consumer confidence at five-year highs. this is all telling me that consumers would not be this excited unless labor market conditions are improving. i know we lost 8.6 million jocks. but when you see numbers being cattyive in terms of jobs you can't ignore that. >> all this in light of what we see and what it does to equity prices. are we still intact near upturn in stock prices? >> oh, i think so, joe. i think the volatility we're seeing is to be expected with some concerns about interest rates rising and the tapering of qe. fundamentals remain sound as the other guests noted. consumer spending, auto sales,

rising prices. rising rates could force people off the fence and provide a little boost for housing. it clearly is providing a boost for the sentiment around banks and for bank lending opportunity with a steeper yield curve. rising rates doesn't have to be will boogie man. it can be in difficult active of a stronger economy. it could be positive for stocks over the longer term. >> bonds did get hit a little bit. as a lead story in the journal today, will we eventually get to the point where everybody is waiting for? is it starting? >> i think so, yes. absolutely. and i think that's something we have been waiting for. a lot of money going into stocks this year has been from money market funds. to the extent we see investors selling bonds and buying stocks that's really the rotation we have been waiting for for what, five years now? i think that can provide another

leg to the market. there's money on the sideline and so much money in bonds. over the past few years we have seen a significant amount. investors are underinvested in stocks. that rotation could be very positive. >> if mortgage rates go up, do you think people get off the fence? they don't necessarily stop. that could help housing activity, david? >> i think it could. remember, joe, that housing affordability remains near all-time highs. so an increase in mortgage rates of 25 basis points isn't going to kill the housing market. you're still talking very affordable housing. prices are still in an affordable range even though they're going up. as a buyer or someone looking to refinance. if you're just kind of procrastinating you see rates going up. that will get you off the schneid. >> what is that? >> i'm not sure what it is.

>> it's a texas term, joe. >> are you in texas? >> he's in texas. >> we're in dallas. >> you really are woody from toy story. where are rates going to go? >> i think there's only one direction. >> but how far? >> i think that is is certainly the next 6 to 12 months we will see the 10-year treasury rate move in the direction of 2.5%. and i think every year after that we will continue to see 30 to 40 basis points increase. the biggest motivating factor for someone deciding whether to buy a house or not, is what is the outlook. case-shiller going up 11%. that is a much stronger motivating factor of 25 or 30 point increase in mortgage rates. the last couple years mortgage rates have been low. people haven't bought because they were fearful it would

decline. more people are qualifying for mortgages. and less under water mortgages as prices continue to go up. all those things just feed into that pent up demand. >> we almost hit two, three earlier this week. saying we go to two, five in the next year, that's very -- >> i think that's a median forecast. as i said, every 12 months -- >> the problem would be is if you're wrong and if it got, you know, not nearly as the stability -- if it went to three and it spiked to something like that. journalism applying the fed could lose control. >> the real fear is not so much where they go but how quickly they get there. >> but the fed has not lost control? >> they're willing to move in any direction. >> it's good for us. >> what are you expect to go sustain that? >> we will see real gdp in 2013.

in the neighborhood of 2%. we will see real gdp in the neighborhood of 2.5%. and fit will gradually improve. the numbers are suggestive as more and more join the band wagon. we are seeing business equipment expenditures. moving forward, we will see other expects join the band wagon. >> we're smart to be in the market. >> i think that right now over the next couple of years as far as the eye can see, 8% to 10% rates of return in the equity market are very reasonable. and in fact, if you look at historical price earnings ratios of 16.2, we're still below whether you look at trailing earnings or forward earnings way below the historical norms. as profits continue to grow, we can see multiple expansion profit growth. 8% to 10%. >> did you switch any sectors? i mean, get out of the dividend stuff or utilities? are you moving out the spectrum?

>> no. we're not moving out, joe. we still like dividend players and consistent earners. it is interesting to see the cyclicals and financials. that's something we need to keep a close look at. that's something we vice president had a n a long, long time. that's something that clearly is positive from particularly the banks. that's something we need to keep an eye on. overall we still like the dividend players but are encouraged to see sick cals outperform which is what you see in an improvement economic environment. >> thank you. andrew, that walk the moon is the name of that band that we heard? but they also happen to be from cincinnati. a lot of cincinnati references. walk the moon is from the police song. that's where they got the name, walking. >> walking on the moon. >> yeah. they had a couple of hits. our producer plays them amount. he likes them.

>> maybe we can tee up a little anna sun. >> initial investors and board members of waves, the navigation app generating a lot of interest. takeover from google and facebook. gulf coast making preparations for hurricane season. scott cone is in refinery row as companies get ready. scott? andrew, another year, another hurricane season. the refineries and further out there the gulf of mexico. we will go out there next and show you how they're getting ready when "squawk box" continues. we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪

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back to "squawk box". look at futures right now. red arrows across the board. dow will open 62.5 points. s&p 500 off 7. nasdaq off 13 points. also note the stock market may be hitting record highs this year. but a new study saying americans rebuilt less than half of their wealth lost to the recession. the new analysis from the st. louis fed. let's continue a little bit of that conversation in a little bit different way. the atlantic hurricane season

officially begins tomorrow. forecasts are calling for an active one. it could spell trouble in the gulf of mexico where preparations are under under way. scott cone is live in nor co, louisiana. good morning, scott. >> good morning, andrew. it happens every year. june 1st, another hurricane season. they are a fact of live here on refinery row, out on the gulf coast. wherever you are, if the supply of oil is disrupted of course you feel the effects. the challenge, one of the challenges is keeping that disruption to a minimum. but more importantly, keeping people safe out on the rigs. here ashore. it's a massive challenge. we got a look firsthand. >> we're 30 miles out on the gulf of mexico, and this is one of chevron's closest offshore facilities. >> we have to be very gentlemen. >> the platform produces 2900 barrels of oil a day. 60 people live and work here.

two weeks on the rig, two weeks off, including operations supervisor david bond, a 33-year offshore veteran who showed us around. >> you like it out here? >> oh, i love it out here. >> out here, hurricane preparations begin well before hurricane season. even a tropical depression 200 miles away can trigger phase one. moving nonessential workers and equipment. hurricane season is also construction season out here. but this scaffolding would have to come down. >> in the event of a hurricane, we would have to get all of this stuff, rig down. should take us a day and a half or so. >> then nonessential workers are airlifted out. >> as we finish out and go through phase 2 process, well, then it starts to hit home a little bit. >> on a normal day, chevron has 2,500 people working in the

gulf. if a hurricane or tropical storm is approaching, pretty much all of them have to come ashore. that would be a huge challenge even on a good day now they're racing against the weather and they're racing against time. as bond and their team make final preparations, the storm is bearing down. is it scary or just something you go through every year? >> you just keep working through it. >> in the control room, they make sure every well, every valve is shut and secure before they, too, leave their second home behind. >> you always think, will it be there when i come back. >> actually that aspect of remobilizing after the storm is in a lot of ways more challenging than the evacuation because they don't know what's out there. they have to inspect all the rigs for damage. then they have to decide how quickly they can move people back. all of this is a massive challenge, as i said. it's coordinated from a central command center. we will take a look at that a little bit later today on

"squawk on the street". they have learned a lot of lessons, including where that command center is actually located. >> scott cohn, thank you for that report. >> coming up, personal income and spending data for april 8:30 a.m. eastern. later, we'll talk to a board member on the social mapping app wave. an early investor in the israeli company. elon musk is cool. >> 10:30 a.m. >> terrible picture. ♪ [ male announcer ] a car that can actually see like a human using stereoscopic cameras ♪ and even stop itself if it has to. ♪ the technology may be hard to imagine... but why you would want it is not.

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wowy, a former microsoft executive plans to create the first u.s. national marijuana brand. he says that he hopes to eventually import pot legally from mexico and sell it by legal dispensaries. >> i have news for what's his name? you might want to go a little south of mexico. you know? not for nothing. that's what i've heard. >> life expectancy is going to be short. >> south or west. >> i'm just talking about the quality. i didn't even think of that. >> who are you going to buy it from in mexico? >> mexican pot? come on. >> i've never used it. >> acapulco gold. >> we digress.

>> hawaii. steve case owns a couple islands. you missed a lot. what was your favorite pot? this guy is importing it from mexico. come on, dude. mexico? >> breaking data. >> amanda bynes. >> right now take a look at the u.s. equity futures. dow futures down 78 points. this is probably because of what's been happening in japan and the after market. they ended up more than 1% for the nikkei. but in the market, things got hairier. that has been influencing our futures. we'll be right back. (announcer) at scottrade, our clients trade and invest

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welcome back to "squawk box", everybody. we are less than a minute away from personal income and spending numbers for april. rick santelli is standing by at the cme. steve liesman just arrived on the set. getting ready, getting miked up. better hurry before it comes. we have been looking at futures. if you want to take a look one more time, we will show you the

numbers. this is the last session for may. the dow up 3%. s&p up 4%. nasdaq is up by 5%. so it has been an incredibly strong month. this morning we do see a little bit of weakness. dow futures down 78 points. as we have been talking about, we have been pointing back to japan and the aftermath that. has been the key. right now let's get the numbers. rick, take it away. >> personal income, goose egg. unchanged. last month up 0.2. now up 0.3. down 0.2 spending equation. that's the expectation was the unchange. we could look at some of the internals. some are more interesting than others. we're expecting a down number. it was down 0.3. i don't know if that's going to give the answers to your strategies a year over year

basis. it was up 0.7. i'm not sure any of this data is hugely significant outside of the fact that spending is negative. that is significant. soft equity bias. i don't see that changing much. really we're at some of the lowest interest rates since the spiking began. we're under 210 on a 10-year note. it makes sense. 2.50 was the area. pretty much the market did what you would suspect especially in an electronics driven platform where the rush was in. 2.23 is the high yield. 2.17 is closing high yield. this would be key. >> back to you. steve, stick around.

>> i think this can't help but be a disappointment. a group of economists are a little more upbeat than i am. when i look at jobless claims. when i look at income, which you always want to do. you want to figure out how they're going to spend. 0-2 in march. nice bump in february. disposable down negative.1. personal consumption 0.2. inflation numbers year over year. 0.7 on the overall headline. not even one hand on it. 1.1 on the core price index. down from 1.2, 1.#, 1.4.

steadily coming down. we have not heard many fed members make much of inflation relative to qe policies. i will tell you a bunch of economists are. they are saying these low inflation numbers will do away with a fear of a july taper. what i gauge to be the most dovish. >> it's weird, right? >> he is the only one i have seen. the only one who said you know what, this has me raising my eye but and may be a reason i may not want to be tapering the quantitative easing. >> he only has one eyebrow? >> i don't know if i can do it. both is like whoa! >> what if you only have one?

>> oh, that is just -- >> in other words, you don't -- >> right. >> i do not. >> what are bond markets doing right now. you're under 2.10. we have had the strong move from the 180s, 190s. now in the 205, 210 area. >> it will be the important to see how it behaves. >> right. >> let's put it this way. if we have within two sessions of testing 205, if we settle below it i would think we can revisit the 160s. if we don't settle below after testing it i would think the new range would be 185 to 215. >> rick, you saw that front page story on the wall street journal talking about this huge plunge in bond prices. >> it's impossible to tell.

nobody can interpret the tphals. the lines of communication, all the things historically we look at. yes. even all the research. all the different variables. all of it is distorted by the presence of the fed or the government in various areas of the marketplace. it's pretty much impossible to make that decisions. when i hear people ignoring all the inflation on the fed balance sheet, and being worried that we need to do more qe to combat that. i just don't think there's any hope that we can make true assessments about interest rates for a long time. >> hey, rick, i just want to point out the guys who i talk to who are the most freaked out are the mortgage traders. i think they feel they're the first sack official lamb in the

tapering. >> i don't feel sorry for them. >> i don't disagree at all. i'm with you on that. i just know that has an impact on the availability which it doesn't exist right now eventually of private sector mortgage insurance to take out some of the market share of fannie mae and freddie mac. these guys right now obviously what they have told me is they're concerned about the lack of definitive regulation. i have seen two things. one is absolute mortgage rates have risen. also the spreads to treasuries

have widened. relatively they are getting more expensive it seems to me. >> that's why i think the seven-year note auction was a much better auction. because it matches the duration pretty closely now of the mortgage. >> doesn't it speak to -- comes having pricing power and no discretionary income. anything that breaks that cycle? >> both of that is true. how far do you project that forward. and how concerned the federal reserve is about that. some fed guys said you know what, if i see deflation or disinflation with low consumer spending and otherwise a lack of economic activity that will get me nervous. there's stuffsome stuff in the year ago that went down sharply. gasoline prices that will wash.

they're watching for it. what i'm watching for is people who joined bullard saying this trend is influencing my thinking about policy. i haven't seen that very much. >> rick, we've got to go. you know, you make a point that we don't know if the old price that we moved from was a real price in terms of price signals. we don't know if the new one is. the fed has been so active. are you convinced we would be much higher? the economy is so weak i'm not sure they would be without the fed. are you sure they would be that much higher? >> well, you know what, if i hold true to what my statement is, i can't even answer that. but i will tell you this, one thing i'm positive of. the risk/reward profile on how to price interest rates is destroyed. that's one thing i'm absolutely

positive of. >> but we don't know. >> wouldn't it be crazy if they could be here at all. >> i think your answer will come from gentleman a pan. where they basically tried to do the same thing we did. within five weeks their fixed income market rejected it. now you see some of the leadership saying we never really wanted interest rates down. it's much better they're going up. it shows a strong economy. it echoes the same snake oil comments. >> rick, steve, guys, thank you very much. have a great weekend. >> coming up, social map and navigation app generating interest from google and facebook. a venture capital investor who got in on the ground floor. ♪

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welcome back to "squawk box". our disruptor earned recognition as the first venture investor in pay pal and the social gps app waze. joining us is john malloy, general manager and co-founder of blue run ventures and he's also on the board of waze. good morning. >> good morning. >> i used it for the first time i will admit this weekend. and it worked remarkably. i was just explaining, maybe you can do a better job than i can, that this service allows you to crowd source traffic and where

the cops are, and people that you literally saying there a problem here and accident. and i had like 100 cars around me. i kept changing the directions knowing there was traffic coming up two or three miles ahead. is that a december way of describing what it is? >> i would sa thy that was pret good for a first time wager. >> you found these guys and brought them to the united states. tell us how that happened. >> sure. i've been in the mobile industry for a long time. the two founders were based in israel. i met them at a trade show in europe. when i saw it, i immediately came to the conclusion, please, you must bring this to the united states actually worldwide. what this does -- to explain the service, it solves the age-old problem. you're sitting in traffic. and i wish i knew what was going on around me.

that's a very human reaction. it resonates with people all around the world. what it does technically is it uses the gps trace of your phone to create the advantage for our members. >> now, one of the things steve liesman was spoking -- if you see an accident or camera at a crossing, pretty the button and everybody around you knows where it is. has that created in problems of the physical touch of while people are driving? >> well, no. because we also have speech recognition technology on the app itself. if you just wave your hand over the phone you can speak into it and do everything you need to do without ever taking your hands off the steering wheel. that's very, very important issue for us. >> i didn't realize that. when you look at what other folks in the mapping world are doing. people clearly are so interested. a lot of speculation that people are looking to buy the company.

when you think about maps broadly. who else is doing it really terrifically? obviously google does a great job with it. is there anybody else that you're impressed by? >> that got me so excited from the beginning. there's really not that many cartographer countries in the world. there's only two waze and google, who are creating real-time maps, which is really the future. >> when you think about apple's maps, which have been criticized and waze as a potential target, can they catch up on their own? >> so, apple, first off, gave us a kind endorsement at the end of the year, which we very much appreciated. what apple is doing right now, they're trying to create their own map by amalgamating a lot of different data sources.

what's difference about us and them, we are building based upon the hand set traces of our members. so our map is much more dynamic and becomes more accurate over time. the thing about mobile, it's the most scaled industry in the world, right? so the more users you add, the better you get. not only do we have advantages in real-time, but we also have advantages in the long tail of the world. so it's not just relevant. i'm sitting here in boston or where you are somewhere in new york. it's relevant in jakarta. there's mobile phone users everywhere. that's the advantage that waze has that's unique versus everybody. >> if you and google are the only ones who do this from a mandatory perspective, can they buy waze? >> we're a start-up that really just started in 2008.

we still have a way toss become before we become a world leader. when you think about the other platforms, facebook, yahoo! or google or apple, is there one that is more attractive to you pwraoldly speaking? >> so, first, i can't comment on any acquisition rumors have that be rampant of late. my goal is to create options for my company. it is certainly not the goal for me or as an investor. >> thank you for joining us. >> thank you. >> i'm going to use this on the way to the airport.

>> you have a driver. you can see cops in there. >> you don't want to be ran doll. oh, there's a cop. here's a gas station. if you wave it over and then talk it's better. >> i remember reading a study that say if you talk on the cell phone even with a headset it's like driving drunk. >> you're still contracted. >> a lot of distraction. you can have kids in the car. >> you do it the right way. >> i lived in new york city. >> i know that. you contract it out. you have a guy. you have a guy for everything. >> when we come back, get ready for the last trading day of the

week and the the last trading day of the month too. we'll check in with jim cramer right after this. next week on "squawk box", the unemployment report likely to drive trading. a good jobs numbers might not be good for the markets. find out next week on "squawk box" starting at 6:00 a.m. eastern. (announcer) scottrade knows our clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company." [ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business?

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>> welcome back to "squawk box," everybody. jim cramer joins us from the new york stock exchange. art cashen has put out this theory that it's getting moved around in the after-market in japan. that's been happening for a few sessions now. have you noticed that, too. >> when we got to 330. you have to come to play if you're driving a tesla it changes your life. i still think that we're very much hostage to europe or to japan, but we shouldn't be either, we should be hostage to our own country, which is not that bad. no one talks about the management. how about good management, bad

management? that's where people are making money. the financials are so perfect at this moment, why not pick among the best financials. we don't have to give up the risk on, risk off stuff. that was yesteryear and i keep hearing. >> it what are your favorite financials. >> j.p. morgan and wells fargo are amazing. i think that corbat is turning the thing around. john stump, amazing stuff at wells. jamie dimon came through this whole whatever with flying colors. i like the smaller regionals like ubs. key is really good. these companies can mint money here even as we're -- look, this yield curve is great for them. this is 1981, 1991 and the only reason i know that is because i'm old. >> i do not consider you old, my friend. >> really? you just made my day, becky. >> i do consider you lucky. you brought up tesla and you get to have tesla there and elon musk. are you driving one of these thing around?

i had one last night and i must have gone from 0 to 85. it's a 12 lane into two. no one could touch me. the beamers on the road, beamers are a joke after you've had a tesla. >> whoa! look at that cool guy. this thing is an incredible wonder. now i know, that means people will say the stock, he likes the stock and i'm talking about driving the car and it's just a blast. there's the nio. >> very cool, very cool. >> we will see you coming up in just a few minutes. >> good to talk to you. >> coming up, our guest host this morning has been brad anderson, ceo of best buy and we'll talk to him about jobs when "squawk box" returns. . if you want to know what's going on behind the scenes at "squawk box," always check out talking squawk. it's a wrap up of the highlights and embarrassing moments and they are sometimes a little

embarrassing. go check it out and read it over the weekend. ♪ ♪ fly me to the moon ♪ let me play among the stars ♪ and let me see what spring is like ♪ ♪ on jupiter and mars ♪ in other words [ male announcer ] the classic is back. ♪ i love [ male announcer ] the all-new chevrolet impala. chevrolet. find new roads.

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we have seen some improvements? >> yeah. >> why? >> the macro economy. this is still the strongest economy in the world and it's growing and big companies are holding on to more people. the reason i got involved with the job creators' alliances, it should be growing faster at this stage of the economy. it's not growing because it's really hard to start to formulate and grow a small business and most of my experience was a tiny business trying to make it and it wouldn't have taken much to push us over and that's so critical in terms of regenerating new jobs and getting income to grow for the average employee. get some leverage to the average employee. >> what do we need to do to help small businesses? >> i don't think from a regulatory climate that they're in the experience of trying to start a business. i have this guy who works with me, and a tiny business and he's outsourcing the employees and he's looking at the health care program and et cetera and he can't charge anymore which we

also see in the macro number. to his customers, he's got no pricing power and he's got inflating costs from his employee base and that's where his margin is. he's got to find something he does and that's at the expense of income of his employees. >> you're not each talking about reform for the big companies. you're talking about the little companies. >> i think big companies are fine. in part they're fine because the other companies can't compete with them. we went from a small company to a big company. we created tens of thousands of jobs. >> is there funding money from the banks? >> that's the other part of the problem when we talk to bankers. at some point somebody has to make a gamble. this management team is actually going to do it and the first person that makes that gamble is a bank. you talk to bankers right now, they can't make that gamble even though they know it's a bet. >> and because of all of the abuse in theaters. >> it's been great having you

here. >> it's been great. >> thank you so much. and you know, you brought some great people and so far, so good. best buy is a great buy is a better buy, maybe. >> thank you, brad. >> of course, have a great weekend, everybody. ic ma sure you join us monday. "squawk on the street" begins right now. good friday morning. welcome to "squawk on the street" as we close out the month of may. i'm carl quintanilla with jim kramer and david faber at the new york stock exchange. futures are fighting a bit of an uphill battle thanks to a miss on personal income and spending. the data out of europe not so hot either, and germany retail sales are amiss and a record 12.2% and the nikkei did manage to close higher after thursday's 5% sell-off. our road map begins with the market. whos to sell in may and go away.