jobs last month. if it did, this will be the third straight month that payrolls outside the farm sector increased by less than 200,000. meantime, the unemployment rate is seen holding steady at 7.5%. if you think you have what it takes to weigh in, vote in our poll. all week long, we've been talking about how this is building up to this number to tell us how the economy is growing. today's employment report, as we mentioned, could be a key one for the federal reserve. that's why it is a great morning that we're going on be joined by alan greenspan. he is ow newsmaker of the day, joining us exclusively at 7:30 eastern tim. so we look at his take on what all these numbers mean, on what he thinks the fed could and should be doing right now. u.s. equities reports are mixed. the s&p futures are up by about

half a point. the dow futures down by about 5.5 points. and early european trading this morning, you will see some very similar nonmoves at this point. it's flat across the board. in asia, this is a huge story. the nikkei slid another 1.7% overnight. it is right around bear territory at this level. they have been looking at down 19%. it was down by even more during the trading session. we are in bear territory now for the nikkei. that is a huge issue, as well. this comes after a gain of about 75% from mid november through may. joe, over to you. >> i'm hurrying because i'm doing my -- i just decided to go to the lows. if we're going to do the interday high on the s&p -- >> how about on the nikkei, too? >> no. i'm done with the nikkei. i heard you. i heard where it is.

it's bad. now i'm looking it up. the big turn around yesterday, we were down well over a hundred on the dow and it closed up 80. >> are we down more than 5%? >> if we do interday highs to inter day lows yesterday -- >> on the dow or s&p? >> on the s&p. 1688, 1688 was the high. yesterday, it traded at 1598. that gives me 5.3%. that might be enough. if this is a bad number today, that might be enough to get the markets going back up. >> yep. >> today is going to be a very per verse day. you're almost looking for a bad number. >> i don't know what you've got planned about pervisions and or anything else and i don't want to know and i don't think any viewers want to know. but let's focus on the market and business news right now. >> thank you. thank you for that. >> but 5%. people say 3% to 5%. don't they say -- so maybe this was enough. >> we're done? >> people -- the public still

didn't love the whole idea of this, anyway. and they would just get -- usa just published that piece. maybe this is enough. now i'm going back in. now i'm thinking -- >> but do you think it's a bad number? because what happens -- >> no, not necessarily. because i think tapering might be now with -- because we already think the i is the ism and all this other stuff. >> but don't you think that the fomc made the statement, that they had a sense of where we were? >> with the economy or with the jobs number? >> with the real economy. >> i had to read through that a couple of times because you would think if we had thoughts that the fed was going to pull out the qe, that would be good news or the dollar because there's less money pumped into the system. but i think -- reading through the article, they kind of get to the point where we're worried about the weak economy.

it's not the qe3, but if you're looking at the situation where the weak economy and the fed can't do a heck of a lot more. >> what we won't see is any of the people that i'm waiting for a 3% to 5% correction. they never say it. they never do it. they never, ever -- and then andrew, you asked me, how do i feel about this whole -- >> we're going to get there. >> we're going to get there? because al gore calls it an incredible abomination. >> what are we talking about? >> the nsa. he says it's an abomination. which i'm for it, then. and dianne feinstein says she's for it so then i'm against it. you let other people form your opinions? >> i will never come down on the same side of any issue with al gore except i also like high calorie cake. as for the markets, let's take a quick look. oil at this point is -- we can't really understand why it's $95

given that the entire globe is weak. but demand for oil, we're still going to go places. you know what? driving season it is. >> the summer is driving season? >> exactly. you know why? because it's the summer. so do these hurricanes and all this wet weather. the ten-year, you know who we're going to have on today to talk about this. that's your favorite indicator and that is the chairman himself, alan greenspan will be on later. 2.05%. there he is. still looks smart. >> yep. >> wow, look at that. >> turn up your set. he speaks softly now. you have to listen closely. >> it was a big sell-off yesterday in the yen, too, and now the dollar is even lower. sitting right at 967. >> and something happened with gold, which i didn't understand what the implications were. some central bank said something. did you see that? >> yeah. i saw it and i didn't read it. >> here you go. india boosts the gold import tax to curb the record deficit in demand. it increased the tax on bouillon

and the curb, a record current account dif set at a time when the world's gold council which we had on yesterday predicts an all-time high for quarterly demand for -- the guy was telling us, do not discount jewelry. don't act like that -- it's not all about epfs and central banks. >> yeah. jewelry. >> which i'm trying to bring back. after behind the candleabra. >> i want to see you come up with a bunch of -- i'm going to let you wear -- >> you can pay the rent. you can always sell it. matt damon ended up, when he needed some money -- i think it was for coke, actually. have you seen it yet? >> no, i haven't seen the movie. it's not matt damon -- he's playing a role. >> that wasn't -- identities they're not in love? >> it's just for the audience. >> what? >> you can't just let it hang out that that matt damon --

>> so they were acting. thank you, andrew. they were aqua man. thank you. >> the other story of the morning that joe was alluding to, al gore and others making lots of comments including the "new york times" op-ed page. i don't know if you saw what they said. >> they hate the nsa. >> right. >> take a listen. >> here is the news this morning. he's going to read while i read. the nsa and fbi reportedly tapping directly into the central servers of nine leading u.s. internet companies. "the washington post" saying the highly classified an eye terrorism program allows investigators to examine e-mails, photos and others documents that can be used the track people and their contacts. >> anybody they want whenever? >> anybody they want. now, google, apple, facebook and -- i think there's some others, too, are now denying that the government had direct access to their servers. so it's unclear how this would work. the program is called prism. the post says it would establish

under president george w. bush in 2007 and has grown expo n exponentially during president obama's administration. it was targeting non-u.s. persons living outside the united states, but the big questions there. i can't figure out -- do they have access to verizon, a&t and sprintd. they have clearly have access to internet service providers. i would love to know whether cable providers, maybe comcast and others. they talk about if you have an internet service provider, that way you could access the stuff without necessarily google or facebook having access to their servers. i'm trying to figure out how this would even happen. >> i saw a statement that was put out by one of the nsa guys or somebody, one of the top officials there there kind of denying the scope saying that there were a lot of problems with the story that was reported by "the washington post" and the guardian yesterday about that. but it sounds like there's still a lot that's been -- >> you have to decide how you

feel about it. dianne feinstein said it's called protecting america. >> dianne feinstein sits on the intelligence committee. >> and she knows how many threats there are every day and we don't like threats and i don't like the idea of, you know, weapons of mass destruction or biological -- i would like to know about that whether before it hits us. >> just so you know, joe, even when you go incognito on the web and you put your searches in on your private browser, it's fought so private. >> they're not looking at that. >> i have nothing to hide. >> i'm just making it -- like woody allen said, what goes on behind closed -- i don't think that -- you know, go ahead. my life is an open book. do you want to see that? okay. >> i'm just saying that -- here is my point. your phone numbers, everything. >> when the "new york times" and rand paul somehow come together -- >> you know there's a time space continu continuum. you go far enough around this

way, you meet back over here. rand paul and the "new york times" are sympatico. >> do it again with the music, please. >> time space continuum. einstein. rand paul and the "new york times" are smack dab in the same place. how in god's name does that happen? >> if you get a contentious issue like this, you can get there. i told you there was a middle. there was a middle. >> rand paul and al gore are, you know, in the next -- behind the candleabra, too. they are sympitico. that makes no sense whatsoever. i think actually if we can glean something that prevents something really awful from happening, it's like, i've got nothing to hide. maybe you have some things to hide. >> i do believe that there are times that you can and should be following some of these things down. but this sounds incredibly broad. >> this is everybody. >> if it's not everybody, then

you miss the song. whoever that we're talking about. they're not looking at the content, right? they're looking at how long. >> no. this prism thing is looking at the content. search terms, photos, the other stuff. >> why do you keep bringing up -- you keep bringing us back to photos. >> i just think you have the right to expectation of privacy. i also understand. >> this day and era, we give up some expectation of that. there are things, you're willing to stand in line at the tsa and you're willing to take your shoes off and you're willing to say, go ahead, look through everything i'm about to bring in. there's got to be lines that you draw at some point. and the government being able to look at everything and anything whenever they want, there has to be a line. >> the other question is, president obama's meeting with the new president of china

today. the whole conversation is going to be about hacking. >> right. >> how -- so that's happening in china -- not in china, rather, but in california today. given this news, how does that all work together? if other countries say, if they do it this way -- >> the biggest concern is not only that they're trying and hack and spy on it, but it's happening at a corporate level. the rules of the game has always been, whatever you're doing, you're not trying to spy and hack on corporations. and that changes everything because you're basically -- they're trying to get ahead and get some sort of advantage by stealing things from us. >> i think when there are news stories that say we're hacking effectively our own people. for berth or worse, it makes it -- whatever moral high ground you have for all of this dialogue, it makes it that much more difficult. >> one thing that was pointed out to me yesterday was that if this was george bush and this was happening ta -- i mean, it's finally reaching a high level of interest from the media. how many of these scandals has

your -- has the "new york times" broken? andrew, did they break benghazi? no. did they break the irs? no. has mainstream media broken any scandals that the obama administration has been involved with? >> no. >> "the guardian" breaks one. another one with the ap, the ap found out itself. >> no. >> there's two people, jake tapper i heard and cheryl at so. and they're probably not going to be around too long with their employers. hello. >> i'm just trying to find you -- >> when you're at the "new york times," can't you ask someone to investigate barack obama instead of just giving him a -- can't you do that? >> i'll work on it. >> think if this was bush, he would be impeached already. >> what i was going to tell you is if you read that op-ed in the "new york times" today, they called the whole situation unacceptable. >> anyway, there it is. can you imagine if he had done one of these things, and meanwhile, obama has outbushed

bush on the whole security stuff, hasn't he? gitmo. he wasn't done any waterboarding yet. >> that's usually the way it works. nixon, he was able to go to china. >> i think it's funny that the left is -- you know, he's getting attacked from the left. now i kind of like him a little more, right? >> you're a hawk. >> i kind of think it's like go, barack, yeah. anyway, time for the global markets report. those people get in fistfights in the house of commons a lot of times. you're used to this, aren't you, ross? >> yeah. >> and being a spy yourself -- you've done a little spying yourself as 00 -- what were you? >> 007. >> yeah, no, he's got a different number. 00 -- i don't know. but you're used to it. what do you think? your paper, we need your press over there to figure this stuff out because we don't really --

you know, we don't really like to investigate the messiah over here too much. >> yeah. this is interesting. we had the phone hacking scandals over here, right? and then everybody was coming into the big commission and weather the pressure would be reigned in or not, whether you should have less press freedom. but, of course, what the press does do is hold governments to account and digs up stories on politicians. actually, we want that to continue, don't we? i guess as voters we want to know when things are going on. and the interesting thing about using security as an argument is where do you draw the line on that? right? because they probably say the same thing in china. they want to monitor everybody's e-mails. yeah, they want to know that the state is secure. >> that's true. that is a good point where -- it's a slippery slope. and that point, andrew, is negative. i if we want to have high ground when we're talking about china with hacking, it's hard to have

high ground. >> i have something for you, joe. this is the op-ed of the "new york times." the administration has lost all credibility on this issue. that's the sentence. mr. obama is proving the truism that the executive branch lead any power is given and likely abuse it. that's much farther than -- you guys -- this is like your new paper. >> no. i'm for this. i already told you that. if they're saying that, then i'm for it. anyway, i saw -- did you see the bounceback yesterday? is that helping your market today? not really? >> no. we can't do anything ahead of the employment report, joe. we are weighted slightly to the downside. not by much. five to for decliners outpacing advancers on the wall behind me. about five layers of red down below. we are near the session low, though, at the moment. the ftse 100 down another 1% yesterday. it was 2% down on wednesday. so 3% cumulative in the last few

days on the ftse. the xetra dax is down 0.4%. the ftse mib is down a little bit, as well. let's show you where we stand in terms of the sector breakdown. just three up. so we are weighted. telecoms is down a little bit. worth looking at here, down 0.35% here. some of the german carmakers a little bit under pressure. technologically bmw. they got porsche down 1.3%. bmw down 0.8%. there is now a trade spat with china that stepped up in gears. at the u said they were going to slap anti-dumping duties on chinese. china has responded saying they're going to go up to french wine. now it appears somebody has launched anti-or retaliatory trade complaints with the chinese ministry on all of those and are now saying they're focusing on cars with engine displacements of two liters or more built in the year.

preliminary investigations will begin in early july at the late latest. they're saying they are taking this threat extremely seriously and its trade relations with china and europe decline further, we could see tasks imposed on european autos, the more luxury come september. so these stocks are weighed down a little bit by that and it will impact the german automakers and more around europe because they are the premium luxury segment that does most of the business in china. so we'll keep our eyes on that, as well. for now, back to you guys. in a free and open way, i will hand it back to you. >> we were just talking. the president's approval rating has stayed stable. and i know how. he loses andrew and then say i don't -- and then he gets me. basically, that's how it stays. >> we swapped today? >> yeah. he loses the "new york times" and he gets -- yeah. i think that's why.

it's amazing, since it? >> it's the opposite of a -- >> there are two statements that are out from the director of national intelligence. aman sent these. on the one hand, they're saying -- there's a new statement out, too, that says the highest priority of the intelligence community is to work within the constraints of the law to do these things. nondenial, denial. but one with talking about the nsa and the other is talking about the prism. neither mentions which is which. there's one saying the stories are wrong and there's another that says we work within the law. >> i still want to know if you're appear, google or yahoo! whether you're providing this information. how does this work? >> i don't know. >> you saw that -- >> verizon's statement yesterday was basically we're not allowed to make any comment on this. if there was a court order like this, we would have to comply

with this. >> that's what i don't understand. >> which makes me think, yeah, that is the case. on that one in particular, the director of national intelligence basically says it's an outrage that sensitive court documents would be leaked, which makes it sounds like that is kind of a -- yeah, we're doing that thing with the phones. >> so maybe the phone thing is different, though. >> than the prism situation. it sounds like they're arguing against that. the phone thing is probably true and they point out that they would fought be looking at any of the actual conversation and the content, rather looking at -- >> they don't address what i call cable providers or internet service providers. because if you actually own the wire, you can actually figure out everything that's going on over the wire. >> right. >> all i know -- the granny one, you said she's 84. she has 3 hunl something million. >> yes. the woman who won the powerball. >> lano says they don't know

what lump sum to give her. she hasn't registered as a democrat or republican so they don't know what level to tax her at the irs. doesn't know whether to slam herr or -- >> you were up that late? >> no. >> you see the reason she won is because a guy let her go in front of on him in line. >> you see commercials like that. >> none of the stories said whether she was trying to find that guy to give him the kouft it. but oh, that poor guy,s knows he's the won that let her walk in front. >> the whole sum thing is -- >> what would you do? >> with that? >> would you take the lump sum or go over the years? >> she's 84. you have to take the lump sum. >> but what do you do? >> yeah, i take a lump sum, get a diversified portfolio and watch cnbc a lot. i would watch all the shows to try and decide what to do with

it. coming up, d ash long with closing bell, the kudlow report and power lunch. >> "squawk on the street." >> "worldwide exchange." >> start the morning off right. >> and then i watch american greed to make sure i don't get the wrong financial advice. >> and there's cnbc world in the night. anyway, coming up, the continuing countdown of today's job report. we'll talk expectations next. plus, hank paulson's message to president obama. and in china's president 11 ahead of -- oh, no, xi. not -- >> it's not president 11? i'm sorry. ahead of today's summit in californ california. caught up with paulson. we'll join us with his comments, next. even those held elsewhere, giving her the confidence

to pursue all her goals. when you want a financial advisor who sees the whole picture, turn to us. wells fargo advisors. ♪ ♪ ♪ ♪

okay. all is right with the world, andrew. >> you said you were going on to be out. >> "the wall street journal" -- you did the "new york times" op-ed. "wall street journal," thank you for data mining. the nsa's meta data surveillance is legal and necessary. legal and -- isn't that incredible that you could -- >> two newspapers. >> once again, two newspapers. and i was already down as -- if

rand paul can get there -- >> i know. but he says they do talk about the rib rals who spent years warning about the knock on the door if not republicans who are predicting the program -- .then they go and talk about kentucky center, rand paul. are we going to go to weather now? >> we are news that president obama will be meeting with china's new president today. the two leaders will be attend ago summit in california. eunice yoon joins us in china with a preview this morning. good morning, eunice. >> good morning. a lot of people here in china are saying that there's quite a bit ooh optimism about this sum because they think it soo could lead to a reboot or reset. as you guys now, the relationship hasn't been very great over the past couple of years. it's detier rated significantly. you guys were talking before about cyber security issues.

that was just the latest thing. but, of course, there's the way that the chinese sets the value of the yuan against the u.s. dollar. also a lot of trade issues that have come to the fore. and when the two sides have met in the past, it's always been very formal, really proper meeting, planned out official meetings. when i was speak to go hank paulson who is here, of course, the former u.s. treasury secretary and he's here in town, and he told me that he thought that the informal studying was very unique. and because of that, he thought it could actually help pave the way for the two sides to actually get things done in the future. >> our president, barack obama is participating in this really unique meeting with president xi. in an informal environment, extensive meeting shows that he and our government has their eye on the ball. and they recognize -- we

recognize and china recognizes that this bilateral relationship is extraordinarily important. and that there's a terrific opportunity for them to build a comfort level. >> but even if they do become more comfortable with each other, it's still a very tall order because the fact of the matter is, that there is a major trust deficit between the u.s. and china. you guys were talking about the cyber hacking issues. that's increasingly becoming a concern. a lot of companies in the united states have been complaining about the trade practices and saying here in china, it's an unfair playing field for a lot of u.s. companies in china. .that's not only, you know, something that, you know, the u.s. companies are concerned about, but a lot of government officials are worried about. and on the chinese side, though, there's a feeling that the u.s. can trying to contain or control the influence of the chinese. militarily, because the u.s. has

come out here, there's an asia pivot, you know, building up and bulking up its military presence. but not only on that level, but economically, as well. there's been a lot of discussion about the trans-pacific partnership, which is basically a free pass, a free trade pass that would, you know, really tighten the highs between the u.s. and pretty much all the other countries around china. so there's a lot of concern here about the containment in china and right now, a lot of people are hoping that that summit is going to be able to fill in the trust gap. >> eunice, thank you very much. that trust gap is a big issue. we're going to be talking more about that. we'll see what comes out of this summit, but there are some very high hopes on both sides of the pacific, i believe. we are just a couple of hours away from what most people are calling the most important jobs report in quite a long time. joining us right now is john

lonski. also, phillip suppi. thanks for coming in today. this jobs number we've been talking about all week. and it seems actually for the last couple of weeks, it seems like it has some added importance. because there are now questions about whether this really is an inflexion point. jobs number is probably the most important economic number we think the fed is watching. where do you think we stand right now? what do you see happening? >> so i think you could get between 1 00,000 and 200,000. it's a nonstarter. everybody is going to say, okay, the fed is going to look at these numbers. if you go above 200, 250, i think that's where we're going to use that word tapering. and the market is going to start reacting in terms of interest rates as well as where investors are going to go. which we think at that point in the short-term might be a pullback. in the longer term, that will show that there is -- >> what if it's under 100,000? >> if it's under 1 00, i think, again, that will be bad news. that's going to be more stock

sell-off, moves to the defensives. but what we are looking for is there is still a lot of noise in the system. if you look at the government cutting back spending, look at construction, our view is you're probably going to get a number on the lower side, but we're confidence we're in a slow growth, not a nongrowth environment. >> don, do you agree with that? >> yes. i think we're in a slow growth economy, but when we look at this jobs report, it's important also to look at the composition of new jobs. the month of april, we were pleased with the number of jobs created. however, upon closer review, what we find is that 73% of april's new jobs were from low paying occupations. health care, hospitality and temporary lar. >> so you're concerned even about the jobs that we were getting? >> we have to be concerned with a trolley of jobs being created. that helps to exploring why employment income growth has been sluggish.

>> although you will probably see the market reacting more just to the actual number itself that comes out. >> right. >> i like what serat is staying. it's bad news if it's an extreme on either end. probably the market sees it as a nonstarter if it comes in anywhere near -- >> exactly. if it's close to the view of 160,000 jobs, nothing. happens. >> and people will look at it again. you start in a few hours parsing down where the jobs are created. we're looking at down the road manufacturing jobs coming back. companies are starting to manufacture here. that's a long-term scale. >> that is very long-term. what's interesting is every scenario you just laid out, basically, there's no good news scenarios. anything you see really making the market run up on these things. >> but if you hit the number and you're plus or minus 20 grand -- >> but then it's a wash. >> then you go back to focused on what is the fed going to say?

but i think longer term, you're going to be better off being in the market. >> when we get the number or when we look at all of these things, are you talking about a recovery that you think is in the second half or do you think this gets pushed off the next year? >> i think we're going to do better in the second half and somehow faster 2014. but without question, i think this is going to remain the most sluggish economic recovery since the second world war. so some of the reasons are because we still are dealing with these overleveraged balanced sheets among households. that's one problem. the u.s. labor force is struggling to deal with competition from cheaper increasingly skilled workforces from abroad. in our top of all of this, the population is getting older. one of the most interesting aspects of what's going on on the jobs front, is that according to the household survey, all the jobs creation since the start of the current recovery has been among people 55 years and older. they have the lowest

unemployment rate in different age classifications. and it just highlights one of the problems that you have in this economy. it's really hard to have the same type of consumerivercall. ts more secure. [ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪

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♪ today, yes, you heard from andrew. national doughnut day. the per expect guest to talk about it, nigel travis, chairman and ceo of dunkin brands. it's a day you wait for, i think. 364 other days .then comes june 7th. how is dunkin celebrating this important and solemn day?

>> national doughnut day means we go show all our wonderful doughnut. we're going to talk about the doughnut sandwich, but the big secret is, the best doughnut ever launched, according to my wife and i is the key lime doughnut. all the kids were sitting down, having them for dessert. >> does it have key lime frosting on it? >> key lime filling. becky, you'd love it. >> sort of like a boston cream pie, but with the filling. >> even better. >> even better. >> can we talk about this? bring it a little higher so the camera can see. beautiful glazed doughnut, fried pepper, egg and smoked bacon. apparently you like bacon, joe. >> i do like bacon. it's not from china, right? >> we don't talk about calorie

count. >> it's low calories, right? >> this is 360. andrew, i know you like lots of doughnuts. and i recognize the makeup crew is supposed to be limiting them. >> i warned them. i said please, keep me away. i'll have a couple, but -- >> but this is the best. this is great. what happened was we were testing it. even i didn't know about it. the media found out about it. it became a big media blitz so we decided to roll it out and amazingly, the media has gone crazy about it, again. >> and i think about the potential. you're going to have -- and the chicken sandwiches now, so if someone wanted lunch -- do you want to buy lunch at dunkin? >> we've focused on the two growth categories in our sector, which is breakfast and snacking. chicken salad, which i was eating earlier in the week, it's

the kind of product you can eat late in the afternoon and i think it's a terrific addition to our menu. nigel, wile you're here, tell us about the consumers. we have a jobs report coming up today. has it been your sense from the people who have been coming in over the last couple of months that there's been a downturn in the economy? >> no. we saw just the opposite, actually. we think if you take sequestration, the payroll tax credit holiday that didn't get renewed, even though we lobbied in favor of it and taxation increases, we actually think the economy is doing pretty well. i'm bullish for the second half of the year. we think it will be behind us. >> are you hiring right now? >> we are hiring.

we've increased our guidance. >> what percentage of your employees are part-time versus full time? >> i think the actual number is about 50/50 overall. and in our system it's 50/50. but we're bringing in more jobs. and one of the things that people forget about our industry is this is the best way for poem to get into management positions. >> it's not a bad way to start. 7 billion in sales. stocks almost at an all-time high. and i always like to say, "squawk box" runs on dunkin. it just seems to me like a great -- because i have it every week and i probably have it in the morning. probably overstated to say "squawk box" runs on dunkin. >> i think that's a great line, joe. >> it has a ring to it, doesn't

it? >> it's an idea that you talk to your management, your new management and -- >> but i wouldn't have to lie to say that. that's the thing. and you know how all these other spokes people, they're lying. they're lying. >> i didn't even realize they call it a box o'joe. >> thank you. thanks for the energy there. >> thank you. still to come on sidewalk this morning, a company changing the tv space. story of live-u is still ahead. then in the next hour, alan greenspan counts down to the jobs report. ♪ bonjour

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pros. we're talking golf and investing. if you practice and you can at all fall back on the confidence you get from the putting green, then you can do it under pressure. >> having confidence in your short putts make the long putts so much easier. i think you have to know that you have a swing, that you have a certain amount of confidence, you have the shot, you know how to do it and you need to execute. when you have the two and three bad swings and you lose your confidence, all of a sudden, the rest of your game can fall apart, you know? if you get too happy because i've been playing really well, all of a sudden, you stop concentrating. you stop paying taensz. you do that sometimes in a bull market, too. things get feeling good. >> one thing some guys never do is they never sell a bad stock. they want the it to come back. >> if you're an investor, you're going to have bad stocks, bad picks and bad days. you have to say i was wrong and sell it or you have to say my discipline says this stock is still cheap and i'm going to buy some more, i'm going to add some

more and you go ahead and you double down. >> are there times when the wind is at your back when you're investing? and do you know it if it is? >> well, you certainly know it afterwards. when i'm playing golf, what i've learned is i can't fight the conditions. i can't get because because of the rain or the wind or on whatever is happening. you have to say, this is where i am right now. these are the conditions today. this is what i have to deal with and i'm going to bring everything, the skill i have to this situation. >> it's reading the greens, the weather conditions, the firmness of the ground, all the various things that we experience when we get on the golf course. >> rates are very low. we haven't seen this level of quantitative easing before ever. we don't know what the consequences are going to be. dividendes and yields and bond investors. you have to take the hand that's been dealt and come down. come down. the toughest part about investing is realizing that you don't know what's going to happen over the next six, 12, 24

months at all. if the market could go up, you know, 20% or down 20% in the next nine months and you still have to invest a client's money so that it's protected, yet it can still benefit. and that's really, really hard. you've got 14 clubs in your bag. pick the one with the loft that is going to be appropriate for the shot that you're hitting. >> golf is like your short game. you don't have a 70 yard club or a 40 yard club. you have to know kind of -- you have a feel of how that ball is going to fly and when it's going to land on the green. so you study your fundamentals. you look at the conditions. but then you still have to execute your shot. and that happens with investing, too. i know what my discipline is. sometimes it just doesn't feel right at all or it feels great. and i've learned to go with those feelings. >> nice. >> thank you. >> joe, looking good. a week from today, don't miss squawk live from the u.s. open. coming up next, though, he's one of cnbc's disrupter 50. abi cohen is a co-founder of

liveu. and i should tell you we are using the company's hammer right now to bring you this shot over a telephone network. >> what? >> we're going to talk about how lieu is disrupting the television business by broadcasting anywhere coming up on squawk right after this. [ 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. wells fargo advisors. together we'll go far. my mantra?

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welcome back to our disruptor series. broadcast disruption is hitting the air. liveu is one of our disruptor 50 companies. we, along with the rest of the nbc universe, use it for live broadcasting rather than satellite transmission. chief operating officer and co-founder. when i heard about this technology i was pretty amazed. you have to send the signal into the satellite. it would be broadcast out. >> i didn't realize that i have used this in india. >> it's all over a cellular network. >> we have existed seven years. we developed this technology back in tel aviv. we are actually today in 70 countries. >> and you can broadcast high definition over the cell network? >> yes.

we took this big satellite truck and shrunk it into this device. >> how fast does the network have to be? if i try to do facetime, you have to be on lte or wi-fi. what do you have to be on for this? >> we have multiple networks. we have verizon, at&t, sprint. we have turned it into a broadband link is what we are doing here. >> you need to have one of these on either side of the conversation if you will. >> how many cell networks at one time when you're sending one of these signals? >> in the area. >> so it's not whatever is hooked up to this phone right now. >> exactly. it's multiple network. >> it's interesting. i didn't realize it was liveu. they called it the magic

backpack when we traveled with it. it's amazing. they tell you to stand city. are there ways to improve there, or entirely reliant on the cellular network where you are. >> there's still no guarantee on quality of service. this is why we did not kill the satellite. but we are improving the technology. and i have some interesting statistics from one of the big networks here in the u.s. in the previous election year, in 2008, about 1,000 satellite bookings for the election. in the last election, only 300 satellite trucks. they actually made much more news. so in relation to the number of liveu -- >> it's obviously disrupting -- >> yes. >> is anybody doing anything

like this? do you have the patent? >> it's the first player in the market. we are the biggest one. >> right. >> we are the only company to have a patent for this. >> we have to run. to flip this around, is there going to be a day in age where my television, instead of come canning over cable, dare i say this, is going to come over cell networks. >> yes. definitely. the cell network, you will have much more. >> avi, thank you for joining us this morning. >> pleasure being here. you can catch more online on cnbc.com. also coming up, the final countdown to the jobs report. former fed chairman alan greenspan 37. [ female announcer ] what if the next big thing, isn't a thing at all?

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countdown to the may jobs report is on. will investors get more clarity on the fed's qe plan or be left in a fog? former fed chair alan greenspan shares his prediction, how it can shape the fed's exit strategy. plus, cnbc contributor for the economist ray gipp is our special guest host. it's a special hour of "squawk box", and it starts right now. good morning, everybody. welcome to "squawk box" here on

cnbc. i'm becky quick, along with joe kernen and andrew ross sorkin. a lot of market disciplines are waiting to see what happens. just an hour and a half. we will have more in just a moment. president obama and caye niece president began two days of talks. later today in california. cybersecurity in north korea's nuclear program are expected to be among the primary topic of discussion. and walmart holds annual meeting today in arkansas. they see sales rebounding in the second half of this year because customers are growing more confident. check out shares of elan. u.s.-based pharma increased its bid. it is offer $13 a share.

previous bid was $12.50. let's get to the story of the morning. as steve liesman joins us now with a preview of what investors can expect. >> then what do you do? >> i don't know. >> do you come in in the morning with a list of other things to talk about if this doesn't work out? >> we did the nsa thing. >> what's after that? you've got nothing, do you? >> you can always return to cincinnati. >> cincinnati, irs. >> no. i was going to talk about michael jackson. >> what's interesting is what you said is right in line of the lead of my report. if the number does come in line with expectations, my take is it's going to take tapering off until september, off the table at cnbc. we'll have to figure out a whole other bunch of things to talk about. we did the 5% correction.

kernen says that is over. the one thing we can talk about is the 169 is the average, right? but i really think, becky, it's 145. >> i can't figure this out. usually the economists say i'm lowering to y. they're all squishy in the last self days. they said, well, it creates downside risk. they give four other numbers. >> they have had their disagreements. >> they worry that adp could be right. >> kissing cousins no longer talking to oefp other. what's next? this is lou crandall saying takes employment growth out of the range that the fomc. revisions. since january '11, revised up

jobs report 70% of the time by an average of 75,000. participation rate, a debate inside the fed, about the quality of the change, assuming they have decline in the unemployment rate. and slack. bernanke believes he has room for error. bernanke has said they could adjust a stim louse quote in the next few meetings. it has argued a reduction in stimulus stimulus. >> one question. you gave me a hard time yesterday because you said it was the wrong question to ask. when we saw the fomc minutes, when we talked about whatever substantial means, do you think they understand or knew whatever -- whatever number is coming out today, do you think they already have a sense of -- >> no.

>> no? >> no. what i think they know is we may get a piece of the jobs report earlier in the week. i think the manufacturing piece. because they need that for their industrial production report. >> but we got that number already. >> yeah. they have a piece of that. if you think they have other data that tells them what's happening with the economy two weeks earlier than the rest of the market, that's something you can develop. they don't have that forward looking two-week advance. >> we have all been speculating about whether they cut it off in the fall or next year. whenever. and my question is when they're having that conversation, do they actually have a real date in mind, or are they waiting for the data just like us? >> i think they're waiting for the data just like us. did they do all this to take some steam out of the market and give themselves some flexibility.

it's not quite a conspiracy theory but the intentional we did this to create some doubt. and that doubt. >> the day is coming. >> we're not parabolic on stocks. look, we have greg here. i don't see this as an orchestrated insertion of doubt into the market. it doesn't feel orchestrated to me. >> our u.s. economics editor and charles cantor. greg, what do you think about all of this stuff we're talking about? suddenly taper has become the most important question. >> and do you have another thing to talk about? >> no. i think you'll probably need another guess host. it will be a boring employment number. but i want to pick up on something you were saying, steve, whether they are trying to introduce uncertainty.

in the old days, when it was just move the short rate up or down they knew what they were thinking. the only way they find out what the market thinks about what the fed is going to do, is bernanke goes out and gives a hypothetical. they watch the market. it's as much a mystery to them. >> there's two ways they find out. fed survey. no, seriously. people are saying they're looking at this. and it really did showed the market had gotten extended all the way out into 2014 with qe and not until january for tapering. >> minutes showed they were worried about that. i think bernanke had a couple of things in mind when he gave that testimony. one was to say, hey, your price in qe through next year, we are going to move sooner than that

if data is supportive of our forecast. it is not going to be this automatic pro. we go 85-50-0. the numbers are not as good as the fed has been hoping. it doesn't cut off september. maybe just changes the numbers they go to, instead of going 85, they go 65. change the mix between how much they do with buying bonds and keeping the short rate at zero. if they're nervous about all the bond buying they're doing, maybe change the guidance and keep it at zero a little bit longer. >> you have to take all this and figure out where to put your money. we had some people say there's basically nothing that can happen with this jobs number that makes them really bullish on the market. if it's a good number, you worry that the fed pulls back. if it's bad, you worry that the

fed. >> if it's a bad number, the good-good or good-bad. i'm looking into an environment where good news is good news and bad news is bad news. i interpret the fed's message as we will stay as long as we need to stay to make sure that the recovery is self sustaining. therefore when they go and how much they go, they're going to go late, not early in our judgment. and because of that the investment implications for us are you've got to worry about inflation. therefore think carefully about how you protect and grow your capital. in real terms, not in nominal terms. it's about volatility. and i would like to say respect volatility. i think the chatter around this is no different to what happened 100 percent ago in the market where we debated. would qe itself create jobs, would it improve real estate

prices? so this volatility is natural. it will be a fight around what will the affect of less quantitative easing mean. >> it's a question of how much of this market run is based on quantitative easing and how much is based on the real economy coming along and stepping into that. if they're talking about taking quantitative easing away, is it strong enough to sustain the levels we're at now for the market? >> absolutely. >> we think if you look at earnings and cash flow, the extra dollars fully separates evaluations today. >> okay. >> supported over 100 percent of earnings. that is very large. and we remain very optimistic on future shareholder returns. because skepticism a bounds. people are incredible skeptical. and i would rather invest into

skepticism. >> and good news should be good news. the market should view it as good news. >> and my strong hope for the jobs report, it continues to trend and we will have 39 months of employment growth. >> why is good news bad news? >> it should be out. >> because you think there's a freed lunch inside what the fed is giving you? >> like a crack addict. >> is the economy in the market a crack addict that is a patient in intensive care. and now that it's getting better, it's in rehab. >> if it's heroin or methadone. >> are those the only choices? >> heroin is a bad withdrawal.

methadone you've been off. >> isn't that like the worst? that scene in "traffic" -- >> from uncertainty-certainty perspective from the fed, is there a way to get out of this and do it in a certain way? the second they said they were going all in, that created a sense of certainty in the market, right? at some point propelled the market and at some the real economy. there's a debate about that. on the way out, is there any way to do it with certainty. they want flexibility. the mixture creates a little bit of a problem. >> sure. in fact, this is an age-old problem. it's happening every other tightening cycle. on the one hand they are always afraid there's leverage in the market. they don't want to tear it apart like they did in '94. and being trapped by this sense they are on doing the same thing every month, every quarter. so that's one reason bernanke

has been emphasizing it could go up, it could go down. but the truth of the matter, there's no reason why they would go down from 85, 65, 75 because they're trying to shake us up a little bit. >> but there might be -- oh, go ahead. >> no one believes that the economy is getting better. the risk is that it actually surprises you to the up side, not to the down side. if it surprises you to the down side, i suppose you have to degree a put. but if it surprises you to the up side, no one is positioned that way. and i think what's happened, every security where income is a corner stone to the investment thesis, you've got a rude awakening over the last two weeks. whether it's municipals, treasuries. >> close to value or growth. >> and it probably doesn't even have a dividend. and people are hiding there because they're skeptical. and they have lost a sense of what the potential risk is.

and the messaging is fixed income can go down. equity income securities can go down. and be prepared. so that's i think incredibly healthy. to me the risk is that you get a surprise not to the up side. >> at the end of the day i want the economy to be better. >> i think good is good. good is good. >> right. >> good is great. >> no one is positioned for great. >> guys, thank you very much, charles and steve. still to come, an exclusive interview with alan greenspan. he's going to join us at 7:30 eastern time. up next, apple, google and facebook providing government with direct access to their servers. a startling server suggesting just that. comments, question

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in another regulation about american communications, the "washington post" says the national security agency and the fbi are tapping directly into the central servers of nine

leading u.s. internet companies. emon joins us with so much more. what's going on? >> good morning, joe. a stunning day of revelations yesterday. two major nsa intelligence disclosed classified programs in a space of 24 hours yesterday. that's not something that you see all the time. the first one that we talked about all day yesterday on air was a program in which they were sending court orders to cell phone companies, including verizon, asking for phone records of american phone calls and phone calls overseas looking at the data about those phone calls, who called who and for how long. then later in the day the guardian newspaper and the "washington post" reported on a new classified program. this one called prism which would, according to the newspapers, allow the nsa to tap into the servers of nine major

american internet companies, extracting targets both abroad and at home. although the programs were said to be targeted at foreign targets, they could scoop up a lot of american-generated data. now, after that, last night we saw a wave of statements come out from the nine internet companies that were specified in this. let me put on the screen here a sampling of some of the statements. st they denied some of the key elements of the story. apple says we have not heard of prism. google, no back door for the government to access private user data. yahoo! we do not provide the government with direct access to our servers, systems or network. now, amount of this, guys, appears to hang on had definition of what is direct act

session and what is not. on the web, the the "washington post" appears to suggest there's a techno logical knew answer for the discrepancy about who has direct access and who doesn't. perhaps there's indirect access. nbc news last night confirmed this as a data collection program. later last night, into the late night hours we had a statement from the director of national intelligence. take a look at this statement. he says the guardian and the "washington post" articles refer to the collection of communications pursuant to section 702 of the foreign intelligence surveillance act. they contain numerous inaccuracies. the unauthorized disclosure of information about this important and entirely legal program is reprehensible and risks important protections for the security of americans. that from the director of national intelligence. guys, you get a sense of how the obama administration might start

to respond to this. calling it reprehensible. but not specific what the inaccuracies were. all of this coming on a day when president obama will be in silicon valley meeting with the highest tech companies. a lot on the presidents play today, guys. >> one of the things we're trying to figure out, if they don't have direct access to google or face book, can they get this by being able to effectively tap the lines of internet service providers. not the companies themselves. but if they have access to phone lines like verizon, sprint, or at&t, are they getting access to cable, broadband people have at home or other things? is there some other back doorway for them to get at this information? >> well, that's one possibility. i don't want to get into the realm of speculation. i don't have any direct reporting myself. one of the possibilities here, there's some equipment in the

companies that nsa can access that equipment and indirectly access the computers at some of these companies. >> equipment at a google. >> yeah. >> or a telephone network? >> yeah, either one. >> how could they have equipment at a google if google is saying -- >> it's a conondrum. >> it sounds like a little bit of legal-ese. >> that's the knew answer. this question of direct access is what the story really hangs on. >> i think there's a method to the madness. and i think the leaker knew you can always fall back. nobody is talking about the irs. explain why you should target certain groups? if you can help me catch terrorists i'm not going to

really fault you. i think it's all subterfuge. coming up. >> always a conspiracy. >> alan greenspan on jobs, the economy and more coming up. time now for today's aflac trivia question. what was the only nhl team to win 40 games and lose 40 games in the same year? the answer when cnbc's "squawk box" continues. 't work, he can focus on his recovery. he doesn't have to worry so much about his mortgage, groceries, or even gas bills. kick! kick... feel it! feel it! feel it! nice work! ♪ you got it! you got it! yes! aflac's gonna help take care of his expenses. and us...we're gonna get him back in fighting shape. ♪ [ male announcer ] see what's happening behind the scenes at ducktherapy.com.

now the answer today's aflac trivia question. which was the only nhl team to win 40 games and lose 40 games in the same year? the answer vancouver canucks. toyota is rolling out a new version of its compact corolla model, hoping to appeal to younger buyers. the 2014 version, which goes on sale in the fall is longer and sits lower than the old car. it also has apparently a more sculpted athletic look that is

closer to a sports car. >> oh, yeah. >> than what many were refer to as an econobox of the first update to the corolla in five years. >> athletic? >> joe, you buying? >> no. >> who came up with the phrase it has an athletic look. that's like saying it has a fat look, or skinny look. >> big-boned look? >> you would be very happy in my mini van. >> kill me. >> if i must. any questions, go ahead and e-mail us at squawk @cnbc.com. alan greenspan coming up. there he is.

he's live. you have an hour left to play armchair economist. will today's number come above, below or in line with expectations? cast your vote. we will reveal the results before the real number hits.

welcome back to "squawk box", everyone. in our headlines this morning, we are an hour away from the anticipated may jobs report. economists are expected that the nonpharm came in 169,000. although that's up for debate a little bit. there have been squishing numbers, as liesman was telling us. unemployment rate remaining steady at 7.5%, though. high profile internet companies are disputing a "washington post" report that the fbi and the nsa have direct access to their server. apple, facebook, yahoo! and google,ed flat-out denials. microsoft said it did not knowingly participate.

shares of tivo jumping this morning. it settled a patent case that had been scheduled to go to trial next week. the terms of the settlement weren't reveal. stock up 2.5%. >> welcome alan greenspan, president of greenspan associates. mr. chairman, thank you very much for joining us this morning. it's great to see you. it's been too long. we're ready to come down at any time and sit with you in person if we can do that at some point. even though it's on me moat today. >> good to be with you. >> we're watching closely on a minute-by-minute basis when some type of tapering agains. i know there are times you don't really want to put yourself in position of chairman bernanke and second-guessing his moves. but i guess i can at least get you to acknowledge the exit from

this accommodation in your view might be more difficult than maybe the market thinks right now. >> i would generally say that is my view. first of all, very large elment of uncertainty with respect to basically what the markets are doing. and i think that there's a general presumption that we can wait indefinitely and make judgments as to whether wh we're going to move. i'm not sure that the market will allow us to do that. so my view is that the sooner we come to grips with the successive level of assets in the balance sheet of the federal reserve, which everyone agrees is excessive, is better. i think the issue is not only the question of when we tipper down, but when do we turn? and i think that the markets may not give us all the leeway we would like to do that. >> and we see that it's not in

absolute terms. 30 or 40 basis -- a move from 1.8 to 2.2 doesn't sound like a big deal on the 10-year. but just the slightest knew answer from the fed caused that. and you could see some people weren't set up to handle that. and you wonder if it were faster or even bigger, you wonder whether there's some problem somewhere that we don't know about until it happens s. that part of your analysis too? >> well, i would say. one of the things we ought to think about is when you have very low long-term 30-year yields, think of it in terms of price earnings ratios. that is substitute interest for earnings. then look at the price earnings ratio and take off the tab, stocks or bonds and stick on it -- in other words, take off the tab of bonds and stick on stocks. and we do have a problem here. and i think that we have to be

aware of the fact that this market can move on us faster than we expect. and i think the federal reserve is acutely aware of this as an issue. and i think they are prepared to move quite quickly. so i don't think that the argument should be between small issue of whether or not we are tapering at a certain rate or not. there's a far broader issue which the market is waiting to look at. remember, the decline and the exchange rate has not been helpful in this regard. >> do you at this point feel that the economy is strong enough to go to zero on qe right now? >> i don't even think that's the question. i think we've got to do it, even we don't think it is strong enough. i happen to think that the thing that is most important positive

for us at the moment is the fact that equity premiums are so high, which means the down side on stock prices is quite limited. and i think if we could get stock prices to rise, which they will if this thing stabilizes, then you get a lot of asset growth effect on the economy. and one of the things that i think we underestimate is how important asset prices are in determining the levels of the overall economic activity. so the more asset price expansion we get, the more type of negative bond market reaction we can get. >> alan, is it possible that you could see the fed taper, go from 85 to 75 or 65 but then at some point decide you know what, next month isn't as good as they expected or go back up again? or once they begin the taper it

can only go down? >> i would be moren kleined in that direction. >> one clarification, alan. i'm sorry to ask you this. i think i'm a little confused. are you suggesting qe3 is holding back stock prices at this point? >> that's where i was going to go. >> because so many people think qe3 is holding up those asset prices. if it's taken away, it will knock down asset prices. but you think it's the opposite? >> no. i think obviously when the fedden dueses long-term rates to fall, it creates a buffer for stocks to rise. for example, the earnings outlook is a little bit tricky here. because productivity is slowing down. and even though we get extraordinarily low wage rates,

that can last only for so long. so i think we are playing here with a bunch of very sensitive issues. and if earnings stop rising, then we really have a problem. i don't think that's going to happen, though. >> but that max it sound as if you think -- obviously there's artificial things happening in the markets because of the massive size of quantitative easing. it almost makes it sound like you think it's doing more harm than helping because it's changing and playing with all these numbers. >> no, not necessarily. they have a wonderful capability of gettinged of the artificiality. long-term rates have got to rise. and the problem, which is going to confront us that we haven't a

clue how rapidly that's going to happen. and we must be prepared for much more rapid rise than is now contemplated of all the people with whom i talk. >> alan, when you were chairman and the fed was always concerned that a lot of leverage had built up in the system in that long period of low rates. do you think that's a risk now? if that's the case, do you think it would be wiser to the fed to move gradually with plenty of notice or move quicker and shake things up now and try to purge that confidence from the system? >> i don't think shaking things up are relative at this point because if we do move too rapidly on the fed action it will really shock the market.

i think gradual is adequate, but i think we have to get moving. >> what i'm hearing, though. equity premiums are so high right now that we have a lot going for us. but looming is how we get out of this. and i think maybe that's what you're saying. if that were removed, things could actually go on their own. it's almost like we have this thing ahead of us that we're worried about and it's holding us back. is that fair to say? >> i certainly think it is fair to say. >> and i see what you're saying. we're all worried about that day when they go from 85 billion to 84 billion. in fact, we have high equity premiums where things could be going swimmingly. and we have this -- >> yeah. >> and it goes into a lot of research that you have done recently, alan, with government activism in terms of long-term fixed investment. it adds on to that notion that

we're hurting ourselves to some extent here. >> i think what we have to be aware of is our ability to forecast is far less than we understand. and i'm most concerned about the fact that we have lots of time to decide when we're going to move. and i'm not sure the markets will allow. >> we would see that with a move in bonds down. >> yeah. >> that would be the market telling us you can no longer control it. you've lost control. >> that's the thing that worries me eventually. >> the producers told me i lost control of the time cues, when rerun commercials and everything and that's going to be bad for us. there's leverage built up into our system here. >> more from alan greenspan after a quick break as we get ready for the jobs report. futures right now, we have a red arrow on the dow.

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let's get back to our interview with alan greenspan. we wanted to get back to this conversation. an article this week in the financial times pointed out how bond funds across the board had gotten hurt. on average they were down by 5%. i know you were laying out your concerns that bonds, yields at some point have gotten to rise. is there a concern it could happen too quickly. do you worry about what that will mean for people who invested money in the bonds? >> that's precisely my concern. i think we underestimate how markets behave. remember, a necessary condition for a major economic and financial move is that nobody expects it to happen. i'm finishing up on a book at

the moment. one of the issues i raise is basically the in ability of us to catch these sharp moves because a necessary condition that they happen is that the vast majority of people, for example, are bullish and committed and have no more purchasing power to buy stocks, for example. that's a sure sign that where everyone thinks the future is terrific, it won't be. this is what's worrying me about the bond market. there's a general concern here that i don't think people are aware of is that we are stillwell below the level where we normally ought to be at this stage. and the consequence of that is that when the bond market begins to move, we may not be able to control it as well as we'd like to. and that has a lot of ramifications with respect to all sorts of markets with which it is associated.

i don't know. let me just say one thing. i don't say that's a high probability or even something we ought to worry about excessively but we are underestimates the probability that that could happen and not be aware of the fact that there's got to be some plan b of what it is going to do. i'm certain my former colleagues have been talking about this at great length. >> the concern is that the fed is kind of out of arrows at this point. >> the fed is never out of arrows. the point being is how do you manage a situation such as this? and i think the way to do it is to move. put it this way. tapering obviously is the first thing. but tapering, remember, is still increasing the size of the

balance sheet. that means it's going to be a little bit more difficult to reverse it. and i'm a little concerned that the reversal procedure is a little bit different than we think. the markets are not going to give us the leeway we would like. >> i would think that if just simplistically if the fed is buying 80% of the paper and they can do 85 billion a month, they are going to be the people you're saying there won't be anyone there to buy them. that's what the fed is doing right now. they're there. so they can keep buying. so there will always be a buyer. how would that manifest itself when they're no longer able to do that? the dollar would collapse? >> most of the margin is coming from abroad. so you have to think in terms globally. remember, that there just isn't an interest rate market in the united states. we're arbiters against the rest

of the world. >> okay. >> so there's a whole series of interrelationships here you have to keep in mind. >> may have to ramp up the 85 buy bonds globally. we could do that if we had to, right? that's where it gets scary. >> yeah, i'm not sure. >> i understand. >> so even though we stay fully invested at the margin, it starts spinning out of control and we can't control it. >> look, i think we ought to learn something from what's happening in the last week or so. >> right. how quickly it moved. like with a knew answer it moved that quickly. >> that's the whole point that i'm making, is the fact that if you get this much of a response for this small inaction, then the markets are going to determine that when the fed starts to not only end tapering, but going in reverse, what type of reactions we're bound to get. it's that process which i think

you have to be acutely aware of. as a probability perhaps less than 50/50. but it's something you have to consider and hedge against. >> mr. chairman, given your views on qe, how do you analyze what ava is doing in japan? >> japan has got a far more difficult structural problem with which they have to deal. remember that it's a very significantly aging population. that out of necessity, you're building and long-term assets begin to fade because you need buildings when people -- when the population is expanding. and so my view there is the fact that they have been able to keep their rate structure down --

remember, jgbs were yielding well under 1% when the rest of the world was reeling 3 and 4. and the reason they were able to do that is a very large amount of savings in society. and they were running consistently current account surpluses. they could control their interest rates internally because the marginal pricing was internal in japan. and they kept it that way. the current account balance is gradually deteriorating. and at some point they are going to have to start to borrow abroad. and when they do that, then they're dealing with a marginal rate, which is very significantly above where it is in japan. so i think they have a structural problem there in which the issue isn't qe or not qe. i think that it's a difficult

the issue. >> dr. greenspan, i want to go back to the united states for one moment here. you talked about how you would like to see them move back sooner rather than later on the quantitative easing. they have promised to keep the short-term interest rate near zero, probably until 2015. how do you feel about that? do you think that's too long? would you like to see them move back that form of monetary combination as well, or is it okay to key the short rate so long for so long provide they begin to stabilize the balance sheet? >> well, remember that the rate that is going to become operative -- in fact, is it is not already, is not the federal fund rates but the interest they're paying -- >> sure. on excess reserves. >> and the issue there is if they wish to keep a certain level of assets in the system and the market is beginning to move essentially, supposedlily

finally starting to relend those monies that are on their balance sheet, which eventually is going to happen, when they start doing that, of course reserves will start to go down. excess reserves will go down. and if you're trying to keep it up, the only way to do that is to raise the short-term rate. so it's going to be a tradeoff between the type of monetary policy as reflected by the size of the balance sheet with the issue of the rates you wish to pay. you cannot have simultaneously low rates and a stable balance sheet. >> dr. greenspan, thank you very much for joining us. we always appreciate your time. and you certainly have given us a lot to think about today. thank you. >> you're welcome. good to be with you. >> when we come back, a great jobs friday panel to get you ready for the mechanics that are coming ahead. [ female announcer ] what if the next big thing, isn't a thing at all?

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the third hour of "squawk box" starts right now.

welcome back to "squawk box" here on cnbc. we're counting down to the may unemployment report at 8:30 eastern. big question, will the numbers we see today provide any clarity on the fed's time frame for changing its policy. we have assembled our panel of economic experts. and i use that in the loosest sense of the term. we'll get to them in a minute. first of all, though, becky has your -- >> yeah. >> isn't it an oxymoron. >> sit a very difficult thing to do. but we do have some of the very best with us today. in the meantime, president obama and chinese president shi gone two days of talks later today in california. cyber security and north korea's

nuclear program expected to be among the top topics of conversation. walmart begin its annual shareholder meeting. customers are growing more confident. mary thompson will bring us a report in 10 minutes. the markets standing steady ahead of this jobs report waiting to see what the numbers will show us. dow futures down by 11.5 points. s&p up slightly. less than half a point. overseas in asia, some action. you can see the nikkei actually ending down 26 points. but people talking about that level. 12877. the nikkei at one point moved into bare territory, correction of 20% down from the highs that it setback in may. it rebounded slightly. came off the worst level.

only down 19% by close. a very dramatic drop for may after a big buildup. you can see foot city, dax and cac standing still. >> on hand to give us a preview is and reaction to the jobs report, here they are. austin, there you are looking good. and representing what has been sorely lacking, the american enterprise institute's director of studies. our guest coast is u.s. economics editor at the economist. we're going with it? >> yeah. >> i think pi is so much cooler if you're going to use two

letters. austin has been the guy -- he doesn't have access to all of this proprietary stuff. you should be nailing it all the time. you're kind of cheating with all the stuff you have. >> my view, i've been doing this for six, seven months. we have got wit adp. >> do you feel like you know more now than you did when he used to come on or you know too much? >> let me say one thing about that. we're good at guiding the market. we're guiding the market in the right direction. the market has a view. adp comes out. we move in the direction of adp. >> all right. 150.

>> we go to your evil twin. we're going to come back and look at both. >> austin is pretty good. >> price is right rules. >> i was doing very well. last month i was pessimistic. >> you got cocky. >> i have been lower than the con sepb tuesday. a saw a comment from mark yesterday that i had forgotten about, which is this month is a five-week month not a four week. so i should have made mine higher. >> so where are you going? >> 140. >> like bob barker. how about kevin? >> last month austin had a rough one. we started to see stronger numbers than expected. >> right. >> it happened only because he told us he was the world's greatest forecaster right before

the numbers came out. >> i kept saying that every month. >> but zandi, what's the one thing we're talking about? the numbers don't seem to tell us anymore. i wonder if there's a connection between mark and that. i think we're looking at 170. >> we were talking about this off camera. my question is do you believe the adp numbers? i wonder if they pick up a turn stpheufrt. >> there's information on both. we're really splitting hairs. >> what do you think the real estimate is? >> what is the underlying trend of all the ups and downs. i think 150. and we were at 175. the economy is taking a step

back in terms of growth. it may not be evident from today's growth. >> that's what steve said. >> you were trying to figure this out. this is an aside. and quickly. do you think the left introduced this whole thing? is this a big deal or a diversion so we think about the irs? that's the real scandal, is it not? >> it is a big day because it comes with all the other stuff. if we look at a collection of all the ways the government has been intruding into our privacy and making political actions. >> if you're not visiting pressure cooker bomb sites or calling yemen four times a week, you have nothing to worry about, right? unless you give money to a republican candidate. and then you're screwed.

>> during tax season i think austin will call me up. >> we're back on this crazy thing. >> you know how this white house works. what's going on? >> look, i don't know. i saw that the irs had 220 conferences they spent however many millions dollars. the one guy got the presidential suite for a week. kevin has probably been there too. it was a decidely low brow things. where is this $40 million? why didn't we get paid? >> that conference is an interesting thing that hasn't been covered in the news. it allowed through research to launch joint ventures. outsiders will be able to study it. so i would guess over the next

year or two you will learn more about it. >> why are you as a american enterprise think that regulation and high taxes are holding everything back. why are you above the water carrier, zandi and ghoulsby all the time. >> i look at the data and i think the market i talked about last month you see a low strict positive wealth cycle. it's like cars were holding things up. home supplies and appliances holding things up. it tends to spread over a year, year and a half. i think that there's goes to be an underlying 2%, 1.5%, 2% from consumption growth that will keep gdp strong and job creation about where it is. >> nobody is talking about it like the sequester.

this was supposed to be the time it hit and everything else fell apart. does it affect negative impact? are you looking for it to ramp up later? >> yes. i think it is just part of those head winds. >> obama care? >>. >> are you still talking about it? >> two months ago i saw it some leading indicators in the data. >> it's not as strong as i would have expected. >> the fiscal head winds are blowing really hard. >> check on that call. >> health care reform and the sequester and other statistics we should watch for is hours worked. so hours worked per week.

>> austin, will you acknowledge that? or do you think he is wrong about obama care holding things back? >> i don't think it pwaeubgts up yet. i've been saying for months as we get closer to when it will impact we should look at hours worked dropping while total number of employment going up. that would be evidence if you saw it, the health care. >> did you just call it the thing? you've been away for a while. it's the affordable care act, austin. the thing? >> the sectors where you would expect the impact. in hours worked.

>> they have really small adjustmen adjustments. i think a real big affect. the average workweek and the places that are most effective is at the sweet spot. so i'm not sure you will see a big hours effect. >> stay there. more from our panel in just a moment. >> more news on the west coast. president obama about to meet with the chinese president in california. that's where we find chief washington correspondent john harwood in rancho mirage this morning. interesting given the the conversation about hacking in china but also, john, the conversation about the nsa here. >> absolutely, andrew. creates an incredibly awkward back drop for president obama to be engaged in diplomacy with the president of china with the nsa story mushroom anything washington. it's not going to stop him.

cyber issue costs hundreds of billions of dollars a year. one recent study estimated that china is responsible for 70% of the theft around the world. one of the co author office that study is jon huntsman, former ambassador. he cautions to everyone that the ultimate answer to this is going to be market forces and the ability of government diplomacy to make an effect ant that great. >> limited. you can create red lines sort of boundaries upon which you do not go. beyond that i think the longer term play is going to be gauging this entrepreneurial society that's coming up in china. they're moving very quickly. and they want to have name brand respected entities. they want to go global. they want to come to the united states. they know if you carry that reputation of being a rip-off

artist, that's going to hobble you in the marketplace. they're going to put pressure on their own government because their stuff will be ripped off too. >> of course the marquis example of them going global in the last few days is the purchase by a chinese meet conglomerate of smithfield hams. that is something that will be part of this trying to force them to clean up their act. the president trying to accelerate this process. >> going back to the nsa issue. i don't know out there if people are talking about it. how do you think that will factor into the conversation? >> they're not talking about it at 5:00 in the morning out here, i'll tell you that right now. >> given that, do you have a sense? do you think it will factor into the conversation today? >> sure. i think -- i don't think it's an element of government to government diplomacy between china and the president. but it creates a context for a

conversation in which i think it probably strengthens his hand in the conversation to say look at what your government is doing. what is fundamentally different about what chinese entities, what the chinese military is doing, trying to gather information protect our interest. so i think it changes the dynamics of the conversation if not the actual substance of the conversation. >> what we going to hear? what public statements do you think we're going to get? >> bad timing for us, an true. the two leaders meet at 5:00 p.m. pacific time. that's 8:00 p.m. our time for a bilateral. and we expect them to talk for an hour or so. there will be statements after that. they have another meeting tomorrow morning before he they close the conference midday tomorrow. the trademark of this particular event is called the unscripted summit. it's supposed to be as casual as possible without all the trappings to try to facilitate

the relationship between these leaders. president s had i is young and sophisticated. he has hidden harbor. he is outward looking to the rest of the world. we will see how much he can reform chinese society and business practices. >> i'm conflicted. al gore says it's an abom nation. new york sometimes like it, makes me hate it. feinstein says we need it. do you think it's a big deal? are we trying to stop terrorists in where are you? >> i don't think it's as big a deal as people are making it out to be. very few things democrats and republicans agree on. we're in a permanent state of warfare. but what i'm saying is this is something a republican president initiated under certain legal rules. this democratic president

continued all those things. what that tells you is where we are all this scale, the national security teams of both of these presidents, of different parties, think this is valuable to do. and it's a matter of how much you have in the protections, and if you're inclined not to have faith in that, you can think this is horrible. >> i'm proud of you, john. surprised but proud. >> coming up, final predictions from our panel ahead of the 8:30 a.m. report. plus, we'll unveil the results of our armchair economists. first, the retail king holding walmart shareholders gathering in arkansas. we'll bring you a live report from there right after this.

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walmart holding its shareholder meeting in fayetteville, arkansas. mary thompson is there covering the mega event. mary? >> hey there, andrew. walmart annual meeting kicking off just moments ago. getting the investors all excited. people laughing, clapping, dancing, et cetera.

a lot of excitement in the arena right over my shoulder. a big event. it occurred here in fayetteville. performance by elton john, luke bryant. they come here to arkansas for this week long celebration. selected by their peers and telling us it's a big honor. >> you get to be part of this is a big deal. it's nice. >> 100 protesters at the meeting. >> this week the attention centers on the stars on the stage. walmart has been talking with business, investors as well as the press. yesterday a executives talking with the media about some of the

company's initiatives. e-commerce is its growth engine. again, this is an area that they are investing in heavily and expect to see very strong returns. on the international front, they talked about lengthening deals with suppliers. they don't want them subcontracting. that could lead to problems as far as safety conditions as evidenced by some of the fatal fires. in the u.s. stores they talked about the consumer being resilient and frugal. they tend to spend a lot around big events like mother's day, valentine's day, and budget carefully the rest of the year. as for the official business of today's meeting, proxy advisers, four directors, including ceo mike duke for their stewardship before and after the mexican

bribery scandal broke last year. the meeting goes on for another hour or so. coming up on "squawk on the street". >> thank you for that, mary. and the jobs report. >> that's what's coming up. just minutes away. and after the dust settles, t.j. rodgers. ♪ 'cause you make me feel so right ♪

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we're just a couple minutes away from the may employment report. we have been asking you to play armchair economist. predict the number by voting on facebook. we'll give you the results right now. most of you, 51%, expect that the payroll number will actually fall short of 169,000. 24% of you expect to beat. 26% say you think the number is going to come in line with estimates. right now rick and steve for their pre-dicks as well. rick, what's your number that you're looking for? >> 110,000. seasonality that sometimes is associated with the may number. >> 140,000. also on the weak side. growth is weaker than last

quarter. and i expect average growth. >> waiting for the five-week thing, though. >> may is also a weak month. beyond the technicalities, i expect that after the initial minute of hysteria in the market, take a step back, we look at the average and take a broader look. >> it might go to 7-4, 7-5. >> we need to pay attention to the u6. we need to see the affects of part-time versus full time and see if this is giving clues that congress ought to take under consideration. >> our panel will stick around for reaction. it is just about three minutes away. it's the moment you have all been waiting for. as we head to break, take a look at the u.s. equity futures which at this point have actually moved up a little bit ahead of that number. up 18 points. s&p up by just

. it's lots of things. all waking up. ♪ becoming part of the global phenomenon we call the internet of everything. ♪ trees will talk to networks will talk to scientists about climate change. cars will talk to road sensors will talk to stoplights about traffic efficiency. the ambulance will talk to patient records will talk to doctors about saving lives. it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. the next big thing? we're going to wake the world up. ♪ and watch, with eyes wide, as it gets to work. ♪ cisco. tomorrow starts here.

welcome back, everybody. it is almost here. seconds away from the may employment report. hampton pierson outside the labor department and he has

those numbers. >> up 175,000. may nonpharm payrolls increased by 175,000 jobs. the unemployment rate 7.6%. no change in average hourly earnings. increased by 178,000 jobs in the month of may. we had some revisions. basically march reported as 138. revised upward to 142,000. net 4,000 increase. april originally 165 revised to 149,000. the net for the two months, a decrease of 12,000 jobs from what had been previously reported. job growth in may. professional and business services up 57,000. food and drinking, includes 38,000. retail trade increased by 28,000. job losses, the federal government shedding 14,000 jobs. and it's down 45,000 at the federal government level over

the last three months. manufacturing also decreased by 8,000 jobs. 63.4%. up one tick from the previous month. 4.4 million persons unemployed six months or longer. 37.3%. but that total number is down 1 million persons the last 12 months. pack to you, guys. >> hampton, thank you very much. steve, you're looking through these numbers. anything jump out at you? it was stronger where most of us thought it would be weaker. >> revisions to the down side overall. >> it's cable television management's worst year. i could flail my hands around. rick, let's both do this. people will think we're having an argument about something.

aei people know what's going on. >> whisper number 150. >> this is silly. >> you could dough that. go ahead and do it. act on cable television like 25,000 difference. becky, you know, becky is terrific at what she does. >> okay. let me do the different question. is the good news bad news? >> i don't think this changes. the fed is going to say this is what i was hoping for. the fed may say what was government? minus three i think? >> i thought total government was down. >> 178 private sector. so 175 total. anyway, i think the fed will look at this and say either we are escaping the worst ravages

of the sequester in terms of employment, or they're going to say it's to come. and i think that uncertainty might stay through june. >> before we go through the rest of your thoughts on how to read this, why not give us the quick market reaction. futures at least picked up a little bit but not by a whole heck of a lot. >> it's actually quite fas nighting. interest rates had their knee-jerk reaction in a logical way. interest rates popped up from 208 to 211. back down to 209. we went from up 17, 18, to 51 in dow futures. back down to 30. this is right in the range that is comfortable for both sides of the fed equation, even though it's quite sad that's where the conversation always goes. >> let me just give you quick numbers here. i have to use my glasses for this one. workforce up by 420.

420,000 people entering the workforce. the number of employed in the household survey up 319. unemployment also up 101. people entering the workforce not finding -- look, this is the thing we have been thinking about and per tphapbgy has been thinking about as well, which is when and if we get to a healthy job market, people coming back into the workforce such that when we do good payroll numbers you have an experience of a raising unemployment rate. this is his margin of error for his policy. slacking the economy, waiting on the sidelines. comes back in and says, wait a minute, i don't have a wage inflation problem if these people come back and willing to work not at a higher wage rate. >> it's not just payrolls. it's a number of indicators, including participation. we want to see stable or going down for good reasons.

jobs being created. 319,000 created according to the household survey of employment. so that makes the payroll number look anything on the soft side. i'm saying full speed ahead. this is a very good number. >> full speed ahead for the the economy? >> tapering. we are on track to start to pull back on tapering. >> when? >> i would still go with september. we have a couple more months data to lock this in. when you think about the fed -- this is supposed to be the weakest time in the year given the sequester. >> so you're staying on track. let's do another 175 in june. when we get the july number. >> why? people coming pack? >> people coming back. i'm not saying we have reached that turning point. is that still your call here? >> yeah. that's consistent with their forecast.

they have 7.4% as the unemployment rate. there's nothing to suggest they're not on track to meet the forecast. that has been the language of bernanke, and the&san francisco fed. if the economy is as forecast, we should be able to start winding down quantitative easing. the economy is doing as they forecast. >> here's what i don't understand. 175k per month. that's what we have been doing two years. we're rock solid 175. that's where we were when we started qe3. inflation rate is now 1%. in that context, what's changed to end tapering? why end tapering? >> reduce. >> why would you? we're the same place we were when they started it. >> the unemployment rate is bit by bit moving down towards where they want it to be. you have heard a lot of people talk about the growing concerns about in stability in the financial markets, risk taking. and the other key thing, let's not forget, we're only talking

about pulling back on quantitative easing. no talk they are going to move the short rate from zero. >> everything you said makes me think the fed can use the same numbers and it changed its mind. same numbers, different interpretation. maybe it's not as effective. >> the quality of the work is changing. if we're -- >> i'm with greg. we're not talking about taking anything out. just not adding a full 85. >> yeah. >> i do this forever. >> let me bring in austin. hey, austin. >> the only thing i was going to say, remember, they had a big missouri compromise on the 6.5% unemployment number. if unemployment is going up you can say for whatever the reasons are. they are going to have a hard time -- >> what's a missouri compromise.

>> the two sides that have been battling it out on the fomc, like the old compromises of the senate, they just kind of agreed draw a line right here. if we get above it, it's one. below it, it's another. >> let's not forget what came after the missouri compromise. >> civil war? right. kevin, you did come in closest. any thoughts that did surprise you on this? >> you are fire hosing information at poefplt the thing that struck me looking at the whole collection is the walmart story. it is giving positive guide answer the second half of the year, which is consistent with the weight effect consumption bin i was talking b. and there's this return to normalcy. at walmart they were having a party, dancing, clapping. i was expect to go see ghooulsby

in the mosh pit. i think things are getting back to normal. that's why the bones of the data are so strong. >> when i saw the s&p went up 10 points, it looked like a bouncing ball. up 209. went back down to 205. it's about 208 right now. >> went up to 211. >> okay. and now it's about 208. >> yeah. unchanged. >> can the market think of good news as good news? this idea as the market takes away the possibility of qe. let's say greg is right. we replaced that with 175,000 jobs. you should just talk to the market, joe. be okay with it. >> it will be. >> the sooner you're able to get this. the sooner you get this out of the way, this looming pullback

by the fed. >> greenspan, in 1983, talking about the terminal rate. the market prices in the terminal point -- that's the fed's problem. if they go to 65, because they think 65 is the appropriate number now. the market creates conditions at zero. that's what bernanke wants. >> i think there's a bigger problem. i think they're worried. >> you think there's a bigger problem? >> the market not only goes to zero but the federal fund rate is starting to rise a year ahead. that is a bigger problem. that is the big communications lift. >> but it has not changed. nothing has changed. they haven't changed a single thing. so we're on track. >> that's why bernanke wants us to be confused. that's the only way to get the flexibili

flexibility. >> no really. >> it goes back to the idea he was creating something in the real economy. >> as austin pointed out, we have this disgusting thing coming in 2014. obama care. this looming -- he called it and it almost sounded like the movie, the curt russell, the thing. we love your honesty, we do. >> you guys are losing your minds. i don't know why i'm on here. >> austin, thank you. i appreciate your coming on. >> two bearish again, austin. he kicked your butt again. >> i got the unemployment rate right. >> you did. >> gentlemen, thank you. coming up, jobs and tech. founder and ceo of of cypress semiconductor. [ male announcer ] with free package pickup

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[ static warbles ] welcome back to "squawk box" this morning. our next guest taking issue with the current administration's spending saying it actually kills jobs. the obama administration propagated an economy offen very. a man who doesn't minutes words at all. founder, president, ceo of and

director of cypress semi conductor. thank you for being here on jobs friday. i can try to connect the jobs situation to all of this do you think the economy, where we are today given the jobs numbers, i don't know if you think great or horrible. how much do we put on the the tkpheu administration. >> they said bush screwed up the economy, we're going to fix it. five years later, they haven't fixed it. you can say whatever you want to say, those are bad numbers. it has to do with the government spending too much money. government takes a million bucks. private enterprise, 30,000 jobs. when you take money away from private enterprise and give it to the government, you lose

jobs. very simple. >> you loved him for the one thing he wrote, then you hated him. >> how much of that is a function of taxes, spending as a -- compared to the real economy and the issues we faced five years ago. >> we had so much capital to put into the market to create jobs. in europe, even the european socialist democracies take green jobs. italy they did a study and concluded they lost 4.9 jobs in the economy because it cost more money to create the job in the private sector. spain, 2.2 lost. they stopped creating green jobs. so it's clear to other people that whenever you take a million bucks to create a job and they say .0 5 to $4 million in the stimulus. we have spent $800 billion. when you take those out of the

economy from private sector between $20,000 and $160,000 per job is the range you lose jobs. you have a constant amount of money and it goes to a less product i have place. >> when people talk about austerity they traditionally think of cutting spending. other people will say austerity can be an increase in taxes. do you make a distinction? >> absolutely. i knew milton quite well. one time he got huffy with me is when i was talking to him and mentioned deficit six times. he said deficit doesn't matter. spending matters. they spend and borrow, they borrow money from the private sector. it's spending that matters, not deficit. you have attacked warren buffett and others who talked about needing an increase in taxes on the wealthiest. do you think that's what's changing or making the economy slower than it otherwise should

be? >> of course. one is prosperity. take reagan's second term through clinton's term. we've got democrats and republicans. at that time the tax paid by the top 1% was about 80% of what it is today. the top 1% made 20% of all income and paid 30% of all taxes. so they paid their fair share. you want to tax me? take my money. what's going to happen is that extra money i have, i'm not going to invest in some process that's going to invest. goes who is going to invest it better? me. i'm a job creator. washington is not. when you tax the weighty, you're taking money out by experts and giving it to the political process. >> my definition. any way you say it. it's complicated. >> this is -- this is a big issue. here's my view. if you look at total tax revenue

collected as a share of gdp, the economy, size of the economy, it's 17.5%, 18%. i guess the average since world war ii? 18.5% to 19%. tax revenue is actually quite low. relative to the size of the economy. we can discuss and debate the point about -- >> it's because of the -- >> and also the tax cuts. we had huge tax cuts 10 years ago. >> but if we were growing better -- in 2007 we had 19% with the bush tax cuts. how do you explain that? >> we're not overtaxed in a historical context. they are not high. this is what you were arguing. that very high income houses shouldering a higher share burden in it. that's in the data. that's true. but that reflects the distribution of income and of t income and wealth. >> in a word, though.

doesn't the private sector treat capital better than the public sector? >> absolutely. >> if you need to know anything other than that. >> absolutely. that's why we keep doing studies to try and figure that out. you know how government entities operate, don't you? >> it doesn't mean taxes are zero for everything. >> can i just -- you're absolutely right about that. you are absolutely right that it's better in the private sector than the government and there are times when the private sector is falling apart. four years ago, people don't remember how bad it was and we need the government to step in. people can agree or disagree. the stimulus is all expired and we havy is quester in place and it's heading into the lowest level of the economy since the eisenhowerer era. it seems to me that the off

thorrians have won. >> i love the sequester. the money went away from the government. nothing happened and nothing was getting done to begin with. >> that's somewhat debatabldeba. thanks for coming in, we appreciate it. we'll see you soon. >> when we come back we'll get jim cramer's take on the job's report. "squawk box" will be right back. monday on "squawk box," a rare, exclusive interview with the ceo of manufacturing giant 3m. he'll join us for an extended interview starting at 7:0030 a.m. and it's an interview you can only see on "squawk box." ♪ ♪ ♪ et toujours ♪ me amour ♪ how about me? [ male announcer ] here's to a life less routine. ♪ and it's un, deux, trois, quatre ♪ ♪ give me some more of that [ male announcer ] the more connected, athletic, seductive lexus rx.

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let's get down to the new york stock exchange and jim cramer joins us now. did you watch greenspan on, jim? >> i think he gave you more of his one hand, on the other. he's certainly not t.j. when it comes to making a view. >> you've had t.j. on a lot. >> i love t.j. >> i do, too. it's time to cut. if we want to balance the budget we have to cut. let's go back. >> doesn't he have vineyards,

too? >> yes, he does. they're really good. he sent me a bottle. i'm going to be kudlow like, i think he's a great american. >> that's good, and greenspan, jim, i wonder if you saw the whole thing, he basically said that stocks are cheap because they have the highest equity premium and that we think that, you know, there's a big contingency that thinks all of this momentum is fed generated and that stocks don't deserve to be here. we have this looming exit that's holding back the stock market because we know rates are going to raise and we don't know how we're going to handle it. he thinks the sooner we get it out of the way, the faster the economy and the stock market can be. >> his stock takeaway was much better than the economy. i think he's right that -- think about our programming. i it's going to be terrific, 3m, if he talks about how things have accelerated since the last quarter unless we hear a waffle

no, wait a second. that's not going to happen. interest rateses are going go higher because of the fed and we have to focus what the fed impact on 3m will be. i almost was going to say, it's easy and now you're watching. you're not stuck with unemployment possibly rising again and saying we need to cut back. bernanke, if you take the dual mandate seriously, it's like they're justified to do this, and that's why the dual mandate. he's not a dual mandate fan and it's price stability. >> we passed a big bad event is behind us. we can focus on what they have to say. he's a great guy. i've got to tell you, people should set their alarm. this guy is maybe the great world ceo. >> write a reminder on a 3m post-it. >> he's a hockey fan. he doesn't know the vikings from the ikea. she's still the one for you -

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he's moving on to "power lunch." we'll miss him, but he gets to sleep in. right now it's time for "squawk on the street." 175,000 jobs. that is the better than expected non-farm payroll figure in the may employment report. good morning, everybody, and welcome to "squawk on the street." i'm david faber, along with jim cramer and kelly evans live from the new york stock exchange. carl quintanilla has the day off. let's take a look at futures, shall we and look at the reaction to the 275,000 number and there it is to the s&p.