from our nation's capital this morning. joe kernen and andrew ross sorkin are back at headquarters. among our d.c. newsmakers this morning, we'll be talking about the strength of the economy, with the national association of manufacturers. plus, senator bob corker will join us to talk about everything from immigration reform to self-professed nsa leaker edward snowden. also with us today, we have house budget ranking member chris van holland and our guest host, famed corporate leader jack welch. first, though, before we get to all of that, andrew has a roundup of the morning's top headlines. good morning. >> thank you, becky. great job in d.c. this morning. >> thank you. >> headlines this morning, the bank of japan taking no action as expected. but some investors were sfoied that the boj failed to address recent market volatility in the monetary policy statement. nikkei dropping on that news. we'll have more in a couple of minutes. in europe today, germany's constitutional court is beginning a two-day hearing into legality of ecb's bond buying program. the policy has been credited

playing a big part in common financial markets. meantime, in an interview with german tv, ecb president mario draghi said the central bank will not resort to higher inflation rates to resolve the eurozone debt crisis. >> the good part of the savings that my family had left us, we were three children, were destroyed by the inflation in italy in the late '60s, early '70s. if anything, i have an early memory about what inflation can do, while it damages many other people. and so we'll have to find other ways, other roots to resolve their debt and deficit problems. >> draghi also said the ecb will only intervene in the bond market in certain circumstances. also today in turkey, riot police moving into taksim square and clashing with demonstrators there for the 12th day in a row. officers in riot gear fired tear

gas and rubber bullets at demonstrators pushing them to a nearby park. demonstrators set up camp at the square, calling the president awe authoritarian and demanding he resign. mr. kernen, welcome back. >> thank you. do you feel how you sound -- >> i feel okay. i just sound like i don't -- >> you barely are getting by here. i don't know whether it is worth it for you. >> i'm a little hoarse in the voice. you know, cramer sometimes is hoarse in the voice and -- >> i know. but -- and i also -- >> hold on what did you say for viewers? said it is probably better this way. >> i can't make fun of you either. i was going to read this, go -- but i won't do that because it is making fun of -- and you have a lot of things going on and you're losing your voice. >> i'm losing it but i'll keep it for the next three hours. >> but you don't have it

already. >> it is right here. i'm projecting. >> don't. it hurts me when you -- >> i pulled a groin. i know that's more information than you need to know, golfing yesterday. it sounds like you pulled your entire vocal chords or something. both playing a little hurt. >> got to play injured. >> let's lean on each other today. in corporate news, softbank is raising its offer for sprint for 1.6 billion from 21.1 billion, somewhere around $500 million which i figured that out all by myself. the japanese mobile operator is finding off a counterbid by dish. softbank's new offer has the backing of paulson and company, which had earlier supported the dish bid. paulson is sprint's second biggest shareholders. and texas narrowing the range of second quarter guidance estimates. new semiconductor orders rose after a drop last year. sony's pricing its latest playstation 4 console at $399,

$100 lower than the price of the new microsoft xbox one. announcing the ps4 will run secondhand games which in the past it was always a pain, couldn't play the old game. and won't require an always on internet connection that sounds good. the new connection -- the new consoles will be on sale before christmas. >> you are big gamers, right? in the kernen household? >> yes. >> i'm not whispering, i'm just -- >> you've got no oomph. >> i'll give you some oomph. here i go. >> no, don't. please, don't. it will make it worse. it will -- >> it will be okay. it is time for the global markets report this morning and deirdre, ron morris is standing by and ross westgate in london. let's begin with deirdre on the market reaction to the boj decision this morning. >> after giving the markets what they wanted for so long, it feels like the bank of japan

cannot do enough. no one expected much from kuroda today. at the close of the meeting, when he did not see his market fears over bond volatility, investors were not pleased. as he spoke, the yen strengthened, jgb yields started to rise. when cash equities opened up, they went from flat to negative 1.5 where they ended. take a look at nikkei futures. they're pointing to more pain after the market closed. but keep in mind, while japan is still up about 28% year to date, it has become an increasingly ugly picture throughout asia. the msci tumbled to fresh 2013 lows wiping out all gains this year. the hang seng shanghai composite negative on the year. australia's index giving up gains. china's slowdown had investors worried for some time already. and keep in mind, good news in the u.s. over there is being seen as bad news over here.meri markets of southeast asia as talks of tapering heats up.

foreign investors are taking the profits. look at what happened today in thailand. the philippines, and indonesia. the jakarta conference, very ugly sessions for all of these markets. remember, the currencies in these countries as well as around the region, many around the region, are really feeling the pressure of dollar strength and that is trickling through to equities. over to ross now in london. ross? >> deirdre, thanks for that. we hit the session low here in europe, plenty of red behind me. in fact, earlier around just a little less than 40 stocks in the dow jones in positive territory. that green line up on the top. decliners outweighing advancers by more than 9 to 1. let's show you how that translates. ftse 100 down 11 points yesterday. now the session low, down 88 points. dakotas down 1.4%. ftse down 1.67%. as far as the sector breakdown is concerned.

you'll s you'll see that weight of selling. basic resources down again today, 3.67%. down yesterday on chinese dada. more money coming out of that sector. we see bond yields rising as well. and keep your eyes on this. i know you're looking at it. treasury yields under 2.25% at the moment. had been up near 2.26% during european trading. everything global assets price stuff what halves with treasury bills as well. that's having an impact as you can see on emerging markets too. yield is going higher in spain. 4.71%. debt yields trending higher at the moment, 2.81%. we had production numbers earlier from uk. we're okay. .1%, flat, there is a modest industrial recovery in the uk. but no impact on prices today. just following this stock sell-off and yields going higher as well. deirdre talked about what is going on apart from against the

yen, big volatility in dollar yen this morning. i'll pick up on that and show you. up to 98 this morning. a dollar yen at the moment. 97, so we're heading back down towards that 94.98 on friday. we were up 103 around ten sessions or so ago. that's where we stand in europe now. back to you over in d.c. >> all right, ross. you know, usually we joke around with you about being our very own 007, cnbc's own version of that. well, these days we have been paying a little more attention to try to figure out what is happening with the world of espionage and, in fact, today we are learning more about the man who said he leaked top secret information about the government's phone and e-mail surveillance programs. the u.s. government is said to be hunting for 29-year-old edward snowden, wanting to find him before one of our enemies does. the fbi visited his father's home in pennsylvania and mother's home in maryland. snowden told the guardian newspaper that he was hiding out in hong kong.

40,000 people have signed a white house petition urging the president to pardon him, and in the next hour, amondayaft javer join us. i have to admit, i've been thinking it over and i've changed some of my positions on this since yesterday simply because i started thinking about it. here was a guy making about $200,000 plus. living in hawaii with his girlfriend who turns out is some sort of an acrobat or gymnast or something, saw some picks of her yesterday and he runs to hong kong because he thinks they respect civil liberties and privacy. it is starting to all not add up so well to me. yesterday, i thought a little differently about it. today, i think i changed my mind. >> i'm with becky on this one. there is a great piece by the way in the new yorker this morning if you haven't seen it by jeff toobin that says snowden no hero. the whole point of the piece is to suggest this is a selfish

plot on his part. and that actually he has not exposed as much as we necessarily think. and a column today also on this, and just the research on that prison program around what the internet companies are taking in, clearly less than meets the eye in terms of what we all thought in terms of him back in right to -- right in directly to the servers of google and facebook. they denied it and now i haven't done the work on it, but it is clearly not happening. prison is a computer system interface for how nsa can seize information once they collected it. it is not what i think a lot of people thought. >> which is everything all the time and a direct link into these web providers. >> you catered a lot of your thinking to me, i think, becky. i'm still fixated on and trying to figure out why -- >> no, saw the pictures yesterday and started thinking about this -- >> acrobat, gymnast, and you -- it is like why are you telling

me that? how does that -- you were telling it because it is me. i appreciate that. you -- >> no, that changed my perspective on thins too. i started thinking about it. this guy is never going to get to see his family again. and the reports that was the one thing he really choked up on. he had family who worked for the government. he was worried about how that would play out on all of them. and the timing with the whole china thing, amon brought it up yesterday, the more i thought about it, is this guy being used or manipulated by somebody? it is a weird situation. and if you say you have nothing to hide and nothing to fear, why did you run? and i can understand wanting to know what is out there, we asked senator thune about some of the issues yesterday because on the one hand you have senators like feinstein saying this is an act of treason and needs to be treated as such and others saying i didn't realize we were doing some of these things. there are all these swirling questions and i'm trying to figure it out. it doesn't make sense. i don't understand why he's done

some of the things he's done. >> i was thinking about how to stay dry and what -- i was thinking about -- i pulled a groin muscle, do women are groin muscles. you do, don't you? >> yes, we do. it is painful. >> i was thinking about wc fields on his tombstone. >> what? >> yeah. it said all and all, i would rather be in philadelphia. i knew exactly what he meant by that, because it is close. >> you were playing just -- >> a close call. philadelphia, dead. philadelphia very close. >> a great town. >> a great town. great town. and then beautiful suburbs -- beautiful suburbs. and then thinking about coming back on my four-hour trip back and with the accident and the rain and everything that i drove -- i was thinking about you were going down in that horrific rain and i was thinking about you on the -- >> i was on the train.

it was nice. >> that's better. what a horrific -- >> water, anyone? let me read up on -- his name is snowden. he's got a very agile girlfriend apparently. okay. all right. let me -- >> plus other questions. the other thing that changed my mind is reading some of the coverage this morning in the washington post and other places how this guy shouldn't -- shouldn't have necessarily had access to any of the stuff he was saying he could do, like being able to order a tap for the presidents. he's got access to things like the nsa is still scratching its head or people who used to work for the nsa saying this doesn't add up, doesn't make sense. >> i keep pick up nsa and it doesn't come up on the screen. it is not a stock, is it? symbol not found. trying to figure out our whole connection here. but i guess there has been so much weird news. is this like the fifth scandal? how many is this? this is a rough -- i'm sorry, this is a tough -- that's why your voice is -- is that why your voice is sort of -- >> on the phone --

>> we call him b. >> barry. okay. let's get -- becky, we'll be back to you. hopefully you're dry. i'm not yet. let's get to -- that's a whole different story. to the u.s. markets now. i got a couple of guys here. one, i'll talk to one, robert van battenburg, one gentleman. then a fixed income guy delving into the stop market. keep going so i can read it. and tim gramatovich at heritus asset management. you've managed high income portfolios your whole life, right? >> who shows up at 3:00 in the morning west coast time and talk about high yield bonds. >> you're what we got. >> this is it. >> i was struck by up with of the things you said, without earnings growth, there can't be multiple expansion. can't multiples expand on low

interest rates. >> they can and they have. i think the issue is, you know, history has shown equities don't do particularly well during low interest rate periods of times. we'll see. are we living on borrowed time or there is more to come. >> a lot of people felt we were living on borrowed time. people have that have looked at, who do manage money talk about how high equity premiums are, highest level compared to bonds. >> couple that also with -- >> isn't that good? >> couple that also with record margin debt, we saw that a week and a half ago, so, you know, how much further -- we're high yield bond guys, very micro on the analysis we do. it crosses over. 85% of everything we do trades equity now, different with -- i was at drexel. >> would you be not buying stocks and buying high yield bonds even though those have gone up? >> i think the issue is that who

really knows on the equity marketplace. in high yield sector, the misnomer is there isn't any yield. we're still seeing somewhere between 8% and 9%. we run the only active atf. but there is plenty of value out there. i think investors often forget that we sit on top of the capital structure. when people talk about risk assets, we're above the equity game. we think it is a decent place to be. certainly in the fixed income categories. it is the lowest duration asset that exists today. i think it will do fine. >> your -- you think caper is coming quicker, people thought it shouldn't be something that necessarily derails the stock market. is that it in a nut shell? >> there is a dichotomy in the market now. on the one happened, tnd, the b market, some say the fed left $300 billion of buying to do, which means the fed stocks buying by september, the stock

market is parting like it is 1999. they're throwing caution to the wind. we believe that the stock market is underestimating the necessity and the willingness at the fed to start tapering sooner than later. the stock market is looking at inflation, hugging the flat line, no inflation to be found. gdp growth is anemic. what they're overlooking is the fed is getting concerned about the froth in the credit markets. high yield is one of them. the fed has pushed duration out of the treasury market for the last four years. and investors are now going into fixed income like investments, which is credit, junk, which is reads, mortgages and whole slew of stuff saying, okay, this is where aim i'm going to get my income. i think the fed is concerned about the reverse world effect when suddenly if they wait too long and then they start raising rates and everybody goes out to the same door, and that stuff is

liquid. it is a joke. so it is if all these people stamp out of the market, then you could have a systemic risk in the market again. i don't think that's what the fed wants to do. there is another thing. we believe and many among us that bernanke will step down in january of 2014. would he want to taper sooner rather than later? there are three meetings left -- >> why not go out at $85 billion a month. it won't be his fault. >> and leave it on the shoulders of janet alan just like when alan greenspan came in and then two months later you had the stock markets crash. you leave it on the shoulders of the successor. i don't think he wants to go that route. >> what was the point you were making that they know they need to taper, but they don't want to

at this point or we had greenspan on, just mentioned last week, who said that the markets might not wait for the fed to stay as accommodative as it is forever. may be forced to start pulling back because markets just get tired of it. >> well, in the sense it is a self-fulfilling prophecy because higher the markets go, more and more and more of the assets gets concentrated in this ill liquid credit, unless we forget that before 2008, the credit market there was -- there were countparties like the banks willing to take on the paper in case of an inorderly sell-off. now they can't do it anymore because they have dodd frank. they can't buy all that stuff anymore. prop trading diminished substantially. so here you have the potential of retirees, people that hold this credit suddenly getting panicky and trying to sell this

in a liquid market. we have been through the story before. >> i think the issue still gets back to fundamental credit. i'm 29 years of the high yield space. you'll have speperiods of -- yoe trying to solve a problem you can't. i think the issue for us is, you know, liquidity in high yield in particular is really relevant to the fall credit risk. if the companies are doing well, there is a bid for credit. even if it is the company themselves. 2008 was as bad as we get hopefully. hopefully. and who ultimately was the bid was the company themselves. so i think feltundamentally yout to get back to that. >> when he sat down, did you not know he was going to have an accent with the tie and the suit. did you not know he was euro? >> you weren't sure? you are euro. >> i couldn't figure out where.

>> the netherlands. >> you're happening and we do not have your style, right? and now ralph is really mad at me. i was kidding about philadelphia. he's saying chris matthews is from there. that's not necessarily going to endear -- we -- >> we love chris. >> we do. we saw the liberty bell. loved that. ben franklin's grave. what a dude that guy was, with the electricity. betsy ross' house haunted, big time. we were at love park. liked the little love -- the little love thing going on there. >> stop by brian robertson's house. >> no. didn't stop by. wasn't invited. wasn't waiting for an invitation. did go, ralph, if you're listening, went to the reading terminal and had the most incredible philly cheesesteak, which i love. didn't someone say i once spent three weeks in philadelphia one afternoon. we joke about it. it was lgbt, a big parade, we were cheering on the sidelines of this big parade and my kids

were cheering. good costumes. i'm kidding, ralph, relax. it was raining. i'm cranky. i pulled my groin. thank you. >> more on joe's groin muscle after the break. >> no, no. that's it. i'm finished. >> the state of manufacturing, key rate on the future of the direction of the economy. and in the next half hour, michelle caruso-cabrera will join us live from mexico with an exclusive interview with billionaire carlos slim. stay tuned for that and a lot more. i want to make things 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. ♪

welcome back. we're watching the shares of dole food this morning. chairman and ceo david murdoch offered to acquire the outstanding shares for $12 a share of dole, i guess, for $12 a share. you think that was a -- >> just a typo. >> how do you get -- murdoch already owned 40% of the company. the price is an 18% premium over yesterday's close. how old is he? >> that's a good question. i was going to say late 80s. >> maybe. let's get to the -- we don't kill the messenger, do we? alex, what is this that you've been doing to us? you remember friday, don't you? remember friday? and then do you remember yesterday? did we do -- did we make you mad or something? >> don't kill the messenger.

i have no control. >> how many inches? if you added up friday and monday, is it like ten inches? >> not that much. not that much. a drenching, no doubt about it. we're still dealing with it this morning. mainly north of new york city, but as you get up to a good chunk of new england, a wet ride, boston up to portland, along 95 having to deal with that. we could see more storms develop and press towards the 95 corridor. have to watch out for that. the severe threat is going to exist in parts of the northern rockies. back through the plains and then slide down through the midwest. we'll watch for the threat for damaging winds. that's the main risk out there with a low chance of a tornado. now, south of all of that, it is heat. denver, colorado, we broke the record high yesterday, got up to 99 degrees. could be talking another record today. we're forecasting 97. the record is 95 degrees. not just denver, it is all across the plains, where we got this big ridge of high pressure

in place. look at the temperatures. haze there, 105 degrees for today. oklahoma city will be pretty hot. we keep that going into tomorrow as well. not just the plains, but the southeast. your turn to get hot as well. big high will be in place. heat and humidity, hotlanta, 90 degrees. back to you. >> yeah. hotlanta, must be fun down there. all right, alex, appreciate it. it is like 90 degrees in oklahoma and texas and you're right. really getting -- >> did you see the new york times today? did you see it? >> no. becky has a great seg ment coming up. >> i need to show you an important article. >> is it as important as when we went from 399 to 400? >> you'll fall off your chair and we'll televise it. when you see the article. >> if i fall off my chair, i'll rehurt my entire groin area. where is it here? >> i'll find it for you. >> women have groins.

>> yes, they do. joe, by the way, check your top line. you said some crazy things. usually i would tell you -- >> like a pun? let me see. no. no. no. about the measurement of the rain. >> yeah, yeah. >> yeah, right. i called it ten inches and it was only four. that's funny. real funny. >> as the economy starts to show some signs of life, how is of manufacturing sector performing? jim paulson joined us on "squawk" yesterday. >> i think the dollar is actually going to weaken in the second half of this year. and that will surprise, i think, when most of it happens, and if it does come down, then i think i it revitalizes the manufacturing secretary cher is the missing link in the united states. we have the consumer, we have housing, manufacturing down. that might revive in the second half. industrials and materials is my favorite sector play. >> joining us now is ted mutre,

chief economist. we go from jim's lips to god's ears, we hope. based on what you've been seeing and the latest survey you've done, it is the export area that is more difficult this year. >> one thing that surprised me this year is we have only seen manufactured good experts up around 1% this year. that's pretty dismal. i think when you look at manufacturers in the ism survey, our own survey and others, new orders and sales are the thing that is really dragging it down. a lot of that is exports. >> do you think it is because of the strength of the dollar or do you thinkit is becaui thinthink demand picture? >> i think you're seeing exports really drug down pretty significantly in europe. i think also in china and canada and elsewhere, a lot of our major trading partners you're seeing weakness. i think that's hurting the u.s. manufactures. >> and in terms of the slowdown,

in terms of what has been happening, we talked about the spring swoon, some people think things will start to pick up. is that the sense you get too? >> we're in a little bit of a stall when you look at our own survey. manufacturers were positive in their own outlook. when you look at expectations for sales, they're only forecasting 2.7% growth in sales. that's a lot lower than last year when it was roughly 4%. the numbers are good, but not great. certainly better than when they were at the end of the year. still in that swoon. the employment picture is still extremely weak as well. >> it is interesting you say that, though. what you talk about, where when you ask manufacturers, they have pretty high expectations for their own future, but not certain about the industry overall, that is very similar to what we hear when you ask the small businesses. it is the story line that has been out there for the last probably three years at this point. people are optimist big their own fortunes, but not necessarily the broader economy.

>> manufacturers will come up and whisper in my ear and say i'm having best year ever. i hate to say this too loud. folks are suffering now. the macro economy and political environment sucks, but i'm having a good time, good year now. you hear that pretty frequently. and i think that 72% is echoing those sentiments. >> immigration sa i big concern for the manufacturers. what do they think about what is happening now on capitol hill and the odds that something will get passed. >> tomorrow we're having an event that is joint by between the d.c. and also in minneapolis. we have greg page, the ceo of cargo, participating in an event in minneapolis. in d.c., we have doug pulse eiken and paul ryan who will be leading a conversation about how important comprehensive immigration reform is for manufacturing in terms of really being able to dress those holes. >> they think it is something that can get pushed through this

year. >> manufacturers clearly are looking for attracting and retaining quality workforce. immigration is a large part of of that and dmoeft domestic sid well. >> thank you. when we come back, michelle caruso-cabrera sits down with carlos slim as his country passes a law taking aim at the company he founded. tdd# 1-800-345-2550 [ trader ] when i'm trading, i'm so into it, tdd# 1-800-345-2550 hours can go by before i realize tdd# 1-800-345-2550 that i haven't even looked away from my screen. tdd# 1-800-345-2550 ♪ tdd# 1-800-345-2550 that kind of focus... tdd# 1-800-345-2550 that's what i have when i trade. tdd# 1-800-345-2550 ♪ tdd# 1-800-345-2550 and the streetsmart edge trading platform tdd# 1-800-345-2550 from charles schwab helps me keep an eye tdd# 1-800-345-2550 on what's really important to me. tdd# 1-800-345-2550 it's packed with tools that help me work my strategies, tdd# 1-800-345-2550 spot patterns and find opportunities more easily. tdd# 1-800-345-2550 then, when i'm ready... act decisively. tdd# 1-800-345-2550 i can even access it from the cloud tdd# 1-800-345-2550 and trade on any computer. tdd# 1-800-345-2550 with the exact same tools, the exact same way. tdd# 1-800-345-2550 and the reality is, with schwab mobile,

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welcome back to "squawk box." mexican telecom carlos slim sitting down with michelle caruso-cabrera. this morning, michelle joins us from mexico city. good morning, michelle.

>> hey there. good morning, andrew. carlos slim said he's enconcerned about the telecom reform signed into law yesterday. doesn't think it will hit the profitability of the company he founded. we'll carry that slice of the interview for you two hours from now in the third hour of "squawk box." we also spoke about the controversy surrounding him because he's so wealthy, worth roughly $70 billion, in a country where there are high level of poverty. he rejects criticisms he hasn't done enough for society or mexico. he says business men have a responsibility to society, and when i asked him, i said do you feel like you have fulfilled that responsibility? he said yes. >> i try to do that, yes. i think that it is not by -- only by assistance or some kind of assistance on some kind of charity help to solve some problems temporary, but the only

way to solve the problems permanently and in a better way and high middle classes, middle classes and taking people out of poverty is giving education and employment. and to have all this employment, you need to have economic activity because with great economic activity is where you create jobs. >> recently the new york public library, there weas an event where people laughed at you every time you spoke and then walked out playing kazoos. they think your -- >> i don't worry about what they think. >> you don't worry about what they think? >> i don't worry. especially they organize and it is a way -- >> what they're saying is they think you don't -- >> i don't worry what they say. >> what about the argument that you do philanthropy because you want to burnish your image, make you look better?

>> no. the foundation has -- people don't know what we do. we are not advertising anywhere, tv or anywhere, what we are doing. not that people don't know. and we don't worry about that. i would recommend you to read. >> he was recommending that i read the giving by khalil g gibran, a lebanese poet, a philosopher. he had one of his employees pull a book off the shelf, the prophet. three sections were marked. he read this book frequently and he started to read to me a poem called the giving. and it is very much a philosophy about why one should give. and he's got a got a plaque in

his office. if you go on cnbc.com you can see an excerpt from the poem and we'll run the tape where you can hear him reading the whole poem outloud. back to you. >> have you read that? >> you read the prophet when you were younger, right? >> years and years and years ago. >> i think michelle was assuming -- i think she assumed -- she wasn't telling us like we never heard. you knew we read that, right? >> i had never heard of him. >> really? >> i never heard of him. but i have to say, when you read it -- it is very much about giving without any desire of getting back or anything. he's a big deal. i discovered that. >> yeah. 35 -- i had to -- very short. not very long. >> we'll be coming back to see michelle with more of the interview throughout the broadcast. coming up, big box office hits are synonymous with the summer. which movies and studios are likely to sizzle this year.

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welcome back. check out this video coming in from turkey. riot police moved into to taksim square, clashed with demonstrators for the 12th day in a row. officers in riot gear fired tear gas and rubber bullets at demonstrators pushing them to a nearby park. demonstrators set up camp at the square, calling the president authoritarian, and demanding he resign. to make a transition to the next story, we'll try, images like that -- >> you can do it. it is just that you don't have a voice. >> my voice is coming back.

it is strengthening. you know what it is, honey. hot water and honey. >> don't call me honey. don't call me shirley. >> okay. >> you know what's happening, honey? i was, like, this is nice. did you see behind the candelabra over the weekend? >> i did. we can talk about that as well. we're talking about movies now. the summer movie season is in full swing. they're holding the 54th annual movie and entertainment conference. brett harris is an analyst at the firm. so let's talk about the movie season. i'm supposed to go see tomorrow man of steel, a preview, imax previ preview. how do you play this summer? >> excellent. first off, the summer is very important over three months, may, june, july. the box office will do about a third of its total business. there is man of steel coming out this weekend, owned by time warner. important for time warner given three of the largest franchises, the hangover, the dark knight,

are coming to a close. >> what is betting line whether this movie will work? >> to tell you the truth, you know, first off, i think the estimates are for $100 million to $120 million over the weekend. i think the previews have been good so far. the reviews have been good so far. that being said, for the larger cable conglomerates, time warner is really a cable network company at this point as is viacom which has world war z coming owl the follout the foll weekend. that's a bet wearter way to ben from the strong box office we're seeing. >> so cinemark, things like imax. >> cinemark, imax, coinstar, a couple of names we like now. at the conference today, three themes we're looking at really,

first is the growth in the international box office. second is consolidation with the industry. the industry is very fragmented so you've seen a couple of deals recently that will be highly creative. and then premium products, 3-d, arch format and imax, which adds additional revenue to ticket sales. >> all of the theater chains out there potentially ripe for consolidation or some form of takeover. who do you put at the top of the list? amc taken over by the chinese earlier -- >> it is hard to see. there are four big guys. amc was one of them, taken over by wanda. tough to see regal, cinemark or carmike, the other three, being taken over. rather, the consolidation story of them consolidating smaller regional operators where they can buy companies at six times ebidta and turns out to be

highly accretive to public shareholders. >> the bet on imax, if you're betting on imax, you're betting on international growth, is that what the gamble is? >> the international box office is 2 1/2 times the size of the u.s. box office. it has grown over the last ten years. that's really where you're seeing secular growth. coming from russia, latin america and china. turns out rising middle class, the rising middle class likes going to the movies. two ways to play that. first is imax, which is -- think of imax as beachfront real estate. you have -- it is big. typically on an opening weekend, for example this weekend with man of steel, 13% of the business on 1% or 2% of the screens because there is a line out the door. and a ticket premium. so studios are really competing to get an imax distribution, which is great for the company imax. >> all right. brett, good luck with the conference today. we really appreciate your time. i want to talk movies more.

maybe we'll talk later this summer. >> great, thanks so much. coming up, may look like annoying pop-ups but this he can did serious damage to your computer. our next guest says he has a security solution. a member of the cnbc disrupter list. later, jack welch, the latest survey of small business sentiment and more of the interview with carlos slim. [ male announcer ] i've seen incredible things.

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>> welcome back, everybody, cybersecurity is a major concern against companies and individuals, it's in the headlines all the time. today's cnbc disrupter knows this all too well. thank you for joining us this morning, the ceo of bromium. when we think of securing our laptops and computers, most people think of macaphee and you protect yourself from the malware, the viruses, bromium works differently. why don't you tell us how it works compared to how we think in the past. >> so today, the way the security works is you effectively maintain lists. we have a list of good software.

you have a list of bad software. >> we know there is a program or a virus, it gets added to the list of bad guys? >> yes, so you can be sure when somebody is targeting a new piece of malware, it won't be on the list. >> somebody has to be attacked before we know the list of the bad viruses. >> yes. so anything interesting you see in the news in terms of somebody god hacked, they probably got hacked by a program not on the list. what chromium does is different. in trying to decide what list to use or not to use. every team they try to make a click on your computer screen before you can make that click, we create a what is effectively a disposable computer. a virtual computer behind the scenes without you realizing it. then whatever you are trying to do, you learn on that computer. >> if the virtual computer gets crashed before you let it on to your real computer. >> no, you always run your web

page, your e-mail attachment. everything runs in a different part of the computer. when you click to the next wek web page, when you close an application that, computer is destroyed, trashed, therefore, even if it got compromised, it's not a big deal because that insex in infection is limited to the computer and cannot get to your networks. >> how much safer does it make a computer using this protection vs. the old type of list software? >> it's infinite. you can do a computation and say the real thing that happens over here is saying that the cost that attacks your computer for the bad guys just goes up by 10 thuchlt, a million times more. >> a million times more? you are not making that number up, are you not saying like a ga zillion? >> no, it's a million times more. if you are spending $10,000 to troy to hack a computer, now you have to spend about $10 billion.

>> which makes you a much more less likely attack target, if you use the stuff that kould would cost a lot more money to get in and break it. >> absolutely. >> the one question as a user, it drives me crazy when the computer says are you sure you want to do this? does it take longer to access everything, does it become problematic for the employee so itting down trying to use that computer? >> that's a good question, the answer is you are spot on, the security technology yasd a batch to the end user to figure out what they are doing. >> reporter: along, you already lost. can you ask to use these kind of questions. with bromium, you do not see this technology in playment all of these virtual xrurts created, destroyed, managed automatically, you just clickment you can be sure that you are not going to get mize compromised. >> you have andrew hor owits and big clients, the nyse, adp, block rock. it sound like things are moving

along really quickly. so is the goal ultimately to be a publicly traded company or do you think you will eventually get bought by someone. >> we see what we are trying to do over here is two things. we are a stand alone company to protect customers and put our poukt into the hands of as many people as possible. that's what we are focused on right now. >> we want to thank you very much nor joining us today. we appreciate your time coming in. >> thank you very much. the pleasure was just mine. when we come back, we have a man who needs no introduction. jack welsh. we will talk to jack about the economy, the fed, all of these scandals in washington and much more. then speaking of the beltway, we will be catching up with senate republican bob corker this morning and house democrat chris van haulen. ""squawk box"" will be right back. .

. >> criminal or model citizen, the whistle blower who may have damaged the state of national security. today's guest host is jack of all trades. >> we ought to be talking about growth and jobs will come. >> jack welsh talks, business, leadership, politics and the state of the economy. plus, senator john corker joins us live from washington, d.c. as the second hour of "squawk box" begins right now. >> good morning, welcome to

"squawk box" on cnbc. take a look at futures this morning see how the market is setting itself up. the dow looks like it would open up 15 points t. nasdaq is off 27.5 points. the s&p 500 about 14 points. let's get you through some of the morning headlines the morning. japan increasing its offer for sprint nextel by 1.5 become dollars for 78% of sprint. that compares to the prior offer of $21.1 billion for 70%. dell bank is competing with dish network, which is offering $25.5 billion for all of sprint remember we had that conversation about what was really happening there. this shangs it up a bit. also, u.s. companies are scaling up. their hiring plans, a manpower survey finding employers are planning to hire the most workers since the fourth quarter of 2008. finally, sony pricing it's up coming play station for $399,

$100 best less than microsoft x-box 1, sony saying it won't restrict sales and the ps 4 won't require a constant online connection to the internet. microsoft says it's x-box updates will need to be connected to the internet at least once a day. we need to go to becky if washington, d.c. >> thank you. the journalists who exposed the u.s. under surveillance program says there will be more significance revelations in the coming weeks. meanwhile the self-described whistle blower, 29-year-old edward snowden. he was last seen in hong kong at a hotel near a cia base. our eamon javers joan us with more on this. this is a fascinating case. i changed my mind a bunch of times based obvious more and more things i have been reading on it. >> this is like a spy novel coming to life. we are learning more about the life and times of edward snowden, including the fact the

new york times reports he had a pen chant for a spy-like behavior even when he was moting with the reporters at the london "guardian." he agreed to meet with them in the lobby of the hotel. they would be expected to go through the hotel asking loudly for direction to the a certain point in hong kong. he would approach them walking by with a rubbic's guantonomo bay. >> i read that. >> it's a kinmatic movie kind of a detail. a lot of folks are trying to get their arms around who this guy s. i spent some time yesterday talking with former u.s. and soviet intelligence officers to get a sense of what they make of him. you can imagine they're all buzzing among themselves trying to figure out who is this guy, what drove him and a lot of them are focused on the psychological motivations for why he would have leaked this information. take a look at this chemical weapon from the a former cia officer i spoke to yesterday on edward snowden. it's a strange story on several levels, how he gained access

isn't clear. i suspect the details coming out quickly. i suspect it's rooted in a psychological motivation, family issues or work environment. i also spoke yesterday to a former soviet military intelligence officer who in his day did some spying on the occupation. the officer said young edward appears to be a misfit, a high school dropout a. community college he did not finish, the army career that has been cut short. it is quite possible we are deal with an ideal ieft iist here who believes he is doing a great service to humanity and correcting a wrong. even these steps are usually prompted with something, problems with personal relationships, troubles at work, betting debts, so forth. so both of these former long-term officers looking at the psych lomg cal motivation, who is he in his head, who does he think he is? what role is he playing here. that's what the intelligence community will do to figure out why this happened to them. clearly, these are devastating leaks. the intelligence community reeling after this disclosure.

the "yard began" saying there are more revelations to dom. >> dianne feinstein says he may call himself a whistle blower. she sees this as an act of treason. there are two sides of this dewitt. there will be a huge fallout. how far they should prosecute him. >> there is no question people in the intelligence community view this as a real threat t. former cio officer compared snowden to aldrich haines and robert hansen. those are the devastating spies working as actively controlled agents in the 1980s and 1990s. that's the way the intelligence community sees him. >> seem as controlled by someone or doing this potentially on his own? >> the diamondback notifies i got from both of these officials. this is two officials among a sea of former officials. take it for what it's worth. is they feel this is a lone wolf-type character. but, you know, they're just judge u judging based on reading

the headlines like the rest of us. >> of course, there is a huge other group of people who see edward as democracy and giving americans the ability to go and understand what their security services are dog on their behalf and to them. the irony to all of this is snowden, himself, told the "guardian" in the interview posted obvious sunday, he didn't want the focus on him. he didn't want to distract from the revelations he made which exploded onto the national stage last week of what the nsa is capable of. now, we are focused on this history man at the heart of this question, where he is. what he is doing right now. he was in hong kong last week. where he is now is probably anybody's guess. >> again, eamon javers, thank you. joe, we'll send it over to sfwlu what we really have, this is a guy, a liberal, far left, who loved the president and then found out that this was happening and thought it was like, it's just george bush on steroids and that's kind of what

happened, isn't it? becky. >> that was part of the stuff that was revealed yesterday, he thought these things would change. >> he thought obama was different and he wasn't. >> he also funded rand paul. >> yeah. he went off the deep end with his mr. myth goes to washington filibuster on the drone stuff. yeah, amy, go ahead. >> i was going to say, that's exactly right. we know somebody with snowden's name who lived in that same area in maryland made a donation to rand paul last year. we know also that ron paul came out yesterday and called snowden an american hero. so you got to keep the pauls straight now. yeah. >> there is a libertarian free internet anti-government straen here politically and you are going to see a lot of support for snowden. >> there is. >> i believe. >> yes, there is. becky, are you going to see brian roberts today?

>> i am. >> will you tell him i was kidding about philadelphia? >> no. no. >> we're going back down there. we're going back down there on thursday. it's a beautiful city. >> if they let us in. >> i'm from philly, man. don't dis philly. >> it's the eagles fans i was talking about really. you don't try to, you wouldn't defend them, would you, eamon? >> i woushlgsd i'm an eagle's fan. >> it's not his city, just his teams you hate. okay. >> okay. that's right. can i take back that entire -- it was raining. i pulled a groin muscle is what you know, it's nice. i love, love betsy ross' house. anyway, thanks, sar, brian. is burke there, too? >> i believe he does. >> i am screwed. >> our guest host this morning is jack welch, a founder of the jack welch management institute. so many things to talk about. so little time.

what i want to talk to you about honestly is the dynamic between the fed and unemployment and where we really have in the economy. do you want to talk about snowden initially? is that something? >> no, i'll go anywhere you want. on snowden, that he broke the law, should be prosecuted. they should send him back here and prosecute him to the full extent of the law. >> the i give you my conspiracy theory, you said the president gets an a on this nsa stuff. i think they know that. i think this got us off the irs thing. i know, now we are talking about this i think he is right, no, we're not talking about lois lerner anymore. that's a real scandal. looking at metadata to catch terrorists. are you really going to be mad at the president for doing that, no? >> thoughts by the board. that's off in the front. >> it will come back. >> it will be back. >> this took, she's like, god, i

love this snowden guy, isn't she? she's somewhere drinking a martini. >> here's the qui i have. obama you says gets an a for this, snowden should go to jail with this? >> yeah. >> are we all cool with all of it? i'm wondering how far it goes. >> i think we got to understand, but when you have two presidents, totally different ideologies, you have feinstein and you have rodgers saskatoon be further apart. >> when al gore called it an abomination, then you know it's the right thing to do, don't you? just from -- >> i don't want to go there. >> oh, you're chicken. >> no, i'm not. >> as a former ceo, what is the role, though, of the companies. you heard all the companies denied it or verizon not saying anything yet. when you were a ceo the ceo of ge, did you guys ever provide information for the government. did you ever have top-level conversations, tease type of

things? >> no. >> was there somebody in your company that provided information? >> no, not that i knew of. not that i knew of. >> because you guys had access. >> not that i knew of, no. never happened. >> so we got your take on each scandal, a a.p. scandal, float your boat. the media, that's the first time they paid attention. is that press scandal? >> no, it's not. have you noticed out of these five scandals the four or five the media in this country didn't break a single one of them. >> that's interesting, but benghazi is misleading at best. >> that's not a good -- that was a bad situation. the way that. >> that's just awful. >> we had lazear on the bush administration, admit it, the idea, never had talking points given to him on what he was supposed to say, put together by the white house that someone is supposed to read verbatim to spin something. >> the irs tragedy is a real

scandal. >> right. >> the a.p. let the media fight if him. i can care less about him. >> they got their panties in a bunch for the first time. maybe they'll look at another scandal. >> where do you find eric holder? >> i find him to be misleading at best s. that a reasonable answer? >> a reasonable answer. >> did you see greenspan, i don't know if you were watching. i'm not going to ask you, if you didn't watch, i'll be disappointed. >> i saw him. >> you did. we were all sitting around saying if the economy stays a little weak, we'll stay at $85 billion. so we'll be fine. if it gets better, then maybe we start upticking at some point. so there is no pain ever for any of us. >> the last number for them was perfect. not too good, not too bad. >> the unemployment rate whent up. which means they can't taper. so we added jobs. it was the best of both of them.

but will the market or the world eventually say, loose, you can't keep doing. you know these things in the irs, in my old jobs argument before, you get back to the problem of government union, government employees, being unionized. franklin roosevelt didn't want to do it. because you couldn't manage it. george meany didn't want to do it. when you have, the people in the jobs who are being benefitted by who they elect. you get going there. >> i can hear people out there right now saying that unionles or i can hear thinking unions have dropped to a level in this country where, let's say that that's the problem, one of the problems with our issues, it's just impossible. it's only 7% of the work force. >> stop saying that. it's 36% of the federal government. >> the federal government. right. >> don't yell at me. >> i'm going to yell at you.

loose, when you basically have a government -- >> this is what you should have said. >> no, look, i mean, you got certain -- doubt which leads you to when the government unions and government employees can, are in subjective jobs, no matter how decentt the people are, let's assume they're all perfect. their biases have to come through. if they are voting, if they are making subjective dignitariess, now, firemen don't make subjective decision. that's fine. a postal workers don't make subjective decisions, they deliver the mail. okay. those things are role controllers. irs and bls. >> okay. >> i'm back to the bls. i'm not leaving that, either. >> once you realize what happened to the irs, you can make it right. might have changed. >> yeah. may be true then. i didn't think about that.

>> let's think about it. both the irs and the bls make subjective judgments. let's go to september numbers before the anouptsed in october before the election. we hire 875,000 people. the largest number since ronald reagan in 1983. we add 600,000 government workers, the largest in 20ers. >> ye. >> we go to the lowest participation rate in 30 years. all for what? all getting ready, all these people for a fourth quarter that's the lowest number in the whole recovery.4% gdp. stop it. it's not -- and i was saying that within i'm looking at all the order books. this number pops up. we go from the 8s to 7.8. now we're at 7.6. >> meanwhile, conservative groups trying to raise money having trouble getting the tax

status. >> so when you get subject -- no matter how good the people are. the bls in their handbook has two page sts describing biases. they recognize the problem. people in theirself interest vote for bigger government, more jobs, more tax revenue. >> just to put a fine point on it, you are not arguing the numbers, themselves, are manipulated for the way some of the -- >> input. >> the input of the numbers in terms of phone calls the. >> i'm taik making a phone call, i'm asking you, did you work an hour, this employee. the bias has to go that way. it's no matter how good the people are. when their basic job is, bigger government, more jobs, better wages. that all plays into that. so you have the irs. they want bigger government, better wages, the bls wants more government and bigger wages. now you are asking them to make

subjective. you don't ask firemen to do that. you ask them to put out the fire t. postal workers, you don't have them put out the fire. you have them do the maim. you don't ask airline kroerls to get the planes from here to here safely. they're not making subjective political decisions. these people are making decisions and god bless them, they may be the most decent people in the world, but any of us in those jobs, you go this way or that way -- it's real. i'm telling you, it's real. >> you are going to get people. >> out of their minds. >> no, they're going to call you, what do they call hike the tin hat people. >> that's funny when he first said it back in the hall. >> i was nuts supposedly. >> he took a lot of flack for it. that was pre-irs. >> i got a standing ovation in some restaurants. there were two sides to that. but i think it's important --

>> no. >> jack. hold that thought. we will continue the conversation. >> this is real. >> we will continue conversation. coming up, we will get a read on the state of small business. then we got senator bob corker. [ kitt ] you know what's impressive? a talking car. but i'll tell you what impresses me. .

>> they say the wave of anti-government demonstrations are a part to damage turkey's image and economy and nbc's richard engel is in istanbul with more. good day, richard. >> it's good to talk to you. the prime minister was very dismissive of these protests. he not only said they were damaging to the economy. he called the demonstrators traitors, vandals. he said that it has disrupted business across the country. here in taksim square, this is the main tourist center of the estimate hotels are now empty. the prime minister in his speech today said not only are these hotels empty. the businesses here are suffering, except he said the

businesses that sell beer. yet another swipe at the demonstrators, which the prime minister dismisses as a bunch of trouble-makers. now the demonstrators, however, say they are in this square not because of a planned park. that was the initial demonstration planned two weeks ago, but because they say the prime minister who was democratically elected is acting like a sultan, he's too authoritarian, he is too dismissive of criticism and is trying to ban sales of alcohol, making comments like the one he did today, dismissive of people who drink alcohol, limiting women's rights. they said they had to come out and say enough is enough. it is an ongoing situation. it is shot down large parts of stal istanbul. it looks like it will continue tonight. the demonstrators are calling for a big demonstration in a few hours. it's unclear how the riot police were firing tear gas and dealing with the smoke in the square, it's unclear how they will deal

with that. >> thank you for that report, stay safe out there. 23 will be hearing more from you. coming up in the meantime, more details on what eric snowden leaked to the u.s. media. plus senator bob corker will give us his view of those monitoring programs and much much more, "squawk box" is coming back right after this. .

>> up next on "squawk box," small business sentiment. later, we'll be joined in washington by senator bob worker. we'll talk about everything from financials to the economy to the nsa leak. and in the next hour, congressman chris van hol isn't our guest -- hollen is our

guest. "squawk box" will be right back. tdd# 1-800-345-2550 that kind of focus... tdd# 1-800-345-2550 that's what i have when i trade. .

>> welcome back to "squawk box" this morning. taking a look at the futures. the dow looks like it's off 131. the s&p 500 up about 15 points. let get you caught up with the headlines this hour. boeing is now predicting that airlines will be needing 35,280 jets worth $4.8 trillion over the next two decades. that's an 8% increase over the prior forecast. general motors is cutting the price of the chevy volt in an effort to boost sales. with the credit and price cuts, the cost could be as low as $28,500. former hewlett packard ceo is on a short list of ceo cannons put together anyway, in

the meantime, the national federation of independent business releasing small business sentiment. steve. >> a little pop finally in small business sentiment. who know what is it is related to. it was up 2.3 in may do 94.4, one of the better increases in levels we have seen in a while. still depressed levels. overall, optimism up 10 points to still a net-5% or optimistic. last number there is the net the positive mynous the negative. a god time to expand, 8%, up 4 points. capex spending though flat at a decent level. creating new jobs, we reported that for you i think that was thursday last week. they released that ahead of the jobs number. the chief economist at the national federation of independent business.

bill, this is not the one we have been waiting for because we have been reporting this depressed number for quite a while, but it is better. >> that's true, steve, it is better. so we should look at the god side of things. last month we had a 2.6 point gain in the index. so that's the good news t. bad news is that takes us back to the level of may last year. now, the god news, it's the second highest reed reading in the expansion which started back in the middle of 2009. so at least we didn't go down and most of the index components did improve. so we're making some progress here. >> you made the distinction in this survey between the hard numbers and the soft numbers. i think the soft numbers look forward into the coming months, the hard numbers talk about real sales right now. what can you tell us about the zengs or the difference between those two?

well the hard numbers have to do with hiring, capital xend spending, inventories and investments. those are kind of the gtp numbers. we hire, gdp goes up. the soft numbers are the expectations numbers. you talked about one of the big ones. is we still had 5 percentage points of the owners thinking the economy will be softer six months from now. but that's up from minus 50 in december. so hey, we made a lot of progress. we are gloomy about the future. if you are dploomy about the future. you don't spend moinks you don't hire. that's where we sit. >> there was one thing interesting the assessment of a political situation, when you ask people in a good or bad time to expand for political reasons, the bad is on the rise. what's going on there? >> well, you know, what's going on the washington?

you gentleman and ladies watch the news. the inkoch tennessee is showing forth. we don't seeming to making any progress on what we thought were the main issues the budget, tax reform, some of these big issues. no progress going on there. the economy, of course, is not doing well, we revised gdp down in the quarter. it's still not good. we are millions below the level of employment we had in two imp so there is nothing happening that will make these people optimistic. when we ask them, now a good time to expand your% substantially? you pointed out, 7% said, yes, it is, it's a low number. it's up from 4. 70% said, no, it's not. we asked them, well, why? well, most of them, of course, said, you know, sales are weak. theny is not good. almost 3% said political flooimt climate is not favorable for investing my money. >> jack welch here.

>> jack, how are you? >> fine, thank you, bill. the temporary employment numbers from may were the highest in 13 years. were your people the biggest contribute or of that and, if so, is it oo baum care or the uncertainty about the political climate. what is it that is creating these sell prayer jobs? >> well, i think that certainly in some sectors of the economy, we are seeing improvement. there is growth. so what you do to hedge your bet is rather than hiring a full-time worker, which is the biggest investment as you know, you hire a part-time worker, they are keeper, easier to let go in case things go the other way, which they have been doing for the past few years. we do kind of okay in the spring. then we crash, so hire temporary workers, see what happens. we asked about the use of temporary workers in our monthly

survey. we seen little change, 13 or 14% reported hiring temporary workers or a contracting for workers. so we haven't seen a major shift there. >> do you got a quick number here on the gdp growth? >> well, we're still looking for low 2s at the best. low 2s. >> that's not very good. >> no, everybody knows. i'll come back with a better number i hope next month. >> just do the number that's the right number. we promise to keep reporting it. we have been waiting this long, bill. we will not give up on you now. >> you are taking with me. >> thank you very much. >> okay. so, andrew, jack. >> the uts we should say down big, markets overseas weak as well. let's get some lots on the markets. >> 30-year bond is down a full point.

14-month low. yeah. 30-year. >> 30-year. >> so, jack, play mr. market for us. what's clayton saying? i'll tell you about business. business is in the 2% range. but i'm telling you, we are starting to get a sniff from the industrial businesses. it's the first one we have seen in that for six months now, we have been getting demands for product in several of our industrial businesses where they're tied to copper and steel and the approach was, the bids were, please give us a number with today's steel ploois price lower at the time of delivery. give us a quote six months out. for the last six, seven weeks, we have been getting, giving us the availability. would you guarantee availability in october shipment, these products? that's the little tiny 75 that

shings have changed from give us the lowest possible price on copper and steam, give us the dam product when we want it, how we want it. is a change. i don't know, not a big deal, but it's the first sniff and we got it in three businesses. and that, to me, is a change. so there is a little industrial smell going on there. >> nubt u what about the other businesses? >> things aren't bad. this i think so are not bad. this is a 2% economy. this is not a disaster by any means. but it's a 2% economy. we're not going to create enough jobs with this level of economy to get out of the 7s. >> we have seen progress some progress in discretionary spending at this point? right. >> is it because of franny and freddie or people took capital gains last year, base of the sequester, the tax increases? what's it bus of? i mean, aren't you gratified so some extent the s&p went up to stable for outlook?

some things are happening in spite of all this. >> the things are not bad in the u.s. export markets are terrible. wear you'll getting killed in fraurp. china has slowed. no question. i was in china five weeks ago. >> you were? fly coach? >> this has happened over and over again. >> keep going. that was a joke. >> every time i go there, i get the same impression, who are going, who is going to live in these apartments? >> yeah. did you see some of them, honestly? >> this was way out west. i was in beijing, xindao, out in that area. we would see literally a mile or two of steady empty progress. we thought to the guy, they'll come but they didn't say they'll come. >> maybe it's not all our fault, john, what's happening in this 2% world in the united states, it's europe, china, maybe it's

not all regulations and uncertainty and all that it's not all obama's fault. >> i'm sure it isn't all obama's fault. i'm sure. >> it's the markets in a -- >> you know i deal regulation. we're overregulated. >> i'm doing it again. andrew doesn't have a voice. >> i'm not chasing you on this one. it's a global slowdown issue and we could be doing a lot better. >> so that's real economy. how do you feel on the stockmarket right now? >> it seems to me loading -- let's take out our own situations? you go about here say i want to get out. it's too high. call the guy, talk to him. what can you get if six month bonds? 6 points. 6 basis points. how about 90 days? 3 basis points. >> equity -- >> you are driven. >> equity has driven

historically high levels. nobody believes in it. see, the only reason i'd ask jack about the stockmarket is to get how most people feel about it right now. you would never portray yourself as someone who knows if the marks are high or low. >> no, he knows about the economy. we can try and indicate it for the stockmarket. like anybody else, no one is excited about the stockmarket right now. >> the problem with that issue, where do you go? >> now you are making a good point. >> it's driving you there. 6 basis points. >> they said it would be nice to get the fed out of the way so that we're not constantly worried about tear exit strategy and let things happen, now we think there is a big bump in the road. >> we are all tired of talking here about racing, the economy, for everybody, okay. >> right. >> this current fed policy makes the fat cats fatter. >> it does. >> it hurts the people on pensions and. >> i want to get your thought on this this goes to the point i think you are making.

this is off ben white's morning money, he is quoting john west from the eour-asia group. he says most people think of the politics as a break on growth rather than an enabler. right. well, politics is ugly, there is a hidden growth consensus setting the u.s. up for a much more productive future. no big legislative overhaul is need, they're saying we should recognize a political shift is under way from democrats getting serious pressure from energy-related jobs. they go into trade and other things. they are suggesting basically the opposite, basically, the politics is enabling whatever growth is out there. do you think that makes any sense to you? >> right now? >> now i'm trying to play contrarian. >> you know, i really, if you take the stockmarket, there is only one place to be. that's in it. because you can't go anywhere else. if you take the economy, we

could be growing a lot faster with less regulation, that is clear. these projects are being delayed, delayed. >> did you treed blinder piece today? >> i saw that. give it 10%. >> the only way you bring back the money, or the only way, okay, it's in the journal, talking about bringing back some of the money that's overseas. >> right. >> you can only bring it back if it's used for hiring or you do it in a way where it's tax advance -- what if globally and competitively the demand is not there for the companys to use the money for hiring? that's the only way he wants to do it. it's so weird that people think that companies can do just like -- >> that question is always crazy, why aren't you hiring more people. because i don't have the demand. >> you president in a global marketplace competing with other companies prime coat to hold down costs as well, right? >> yes. but then -- >> how can you possibly -- >> hold on, i'm going to play

contrarian here. yes, the flipside is then it takes away the argument that we need to then clang to a territorial system so quickly. look, the argument is bring the money back, all of a sudden you get jobs. has always been the architect. >> i don't buy that. >> you think it's bring the money back. >> so it's not there. >> it will help the economy broadly. >> even if it. >> i don't think it has, no, i don't agree with you at this point. >> you don't agree with the point that a lot of people make if we can bring the money back that, would create jo bs. >> it probably would. if the money were here. >> not by bringing it back. the company is not going to hire. >> it's much more secure. >> i never read an article that i think he's not like insane. you know? >> well, i don't. >> i like him. we've had him on the show a million times. >> you know. >> but these guys they think you can do these things to create jobs with a government war is crazy. >> you don't seem too like princeton guys.

>> i'm not sure. there are some. academics in general. they say it's a lot of -- they don't. >> bliernd improvement. >> they don't, well -- we're going to have much nor from jack coming up. senator corker will join becky in washington, talking tax reform and the nsa case. checking the future itself at this hour, we've gotten a little dicey, europe is not strong, either the bond market weak. it's got an little volatility at least. "squawk box" will be right back. .

>> welcome back, everybody. senator bob corker took to twitter saying, getting ourselves in order, it must begin with senate tax reform him bob corker is the ranking member of the foreign relations committee, senator, thanks for joining us this morning. >> it's good to be with you. >> we have been watching the markets this morning. it has shown pressure. it looks like the dow is triple digits down. we did see yesterday s&p is

moving its outlook to posty. the market shrugs it off. >> the same issues are there. we haven't dealt with the big issues of entitlement reform. i think all of us are glad to see the entitlements where they are. we know this is a short-term issue. it's a great time for us to tackle the big issue. i still believe our market, our economy would really take off if we would go ahead and deal with this issue. there is almost a fiscal fatigue. it's almost i know i'm on your program. i have talked about this many times. i almost feel the audience on g yawning right now. yet we know this fall it's going to be topic again. >> the whole idea of the debt ceiling. it kind of went away in january. the market hasn't thought about it. yet, the situation in washington hasn't changed, has it? >> it really hasn't, except

candidly in congress i don't feel that intensity, you know the white house is making overtures, they're coming over today to meet with a group of senators. there is not really a process in place to deal with the issue. so i worry that it's going to be swept under the ruk for a few years and, you know, continue to be a drag as i still believe it's a thing that's keeping people from investing even more in the future, but it's where we are. it's affecting us around the world. i do a lot of world travel, we were talking about that earlier, you know, our status in the world, our enemies think we are weakening. it's not just affecting our economy but our standing around the world. >> some people will say the sequester, as messy as a process it was helped us out, it cut spending dramatically in terms of the actual budget, things going on around here, and you have seen tax returns come in pretty strong. >> look the sequester is even handed. it's better than doing nothing. i'm glad we have that in place.

what i thought would happen it would condition everybody to deal with this bigger issue. hasn't happened, again, we'll have a, you know, we're going to have another line in the sand coming soon. i don't think there is going to be that grand bargain. i just don't feel it. but maybe some kind of mini deal on the entitlement issues. >> when we were talking on set, you said the senate was marking bills on a presequester. >> it's interesting. so the senate, it's almost beyond belief is using as tear top line presequestration numbers. you have to wonder, what are they thinking? that's not going to happen. so i think that likely leads us to another continuing resolution, which again is a really ham handed way of running our country. there are things that should be changed at the lower numbers to make our countries function better. it looks like we will miss that opportunity, too. >> edward snowden is the top you

can everyone is is buzzing around here. yesterday, dianne feinstein said this was a tree treason us act. john boehner said we should be looking at him as a traitor, what do you think? >>. >> i don't think the second revelation about the prison program. there has got to be a better way if you have concerns about what's happening at nsa. there's got to be a better way than sharing with the world mechanisms we are using to keep you and i safe. so it's despicable what's happened i know he is a sympathetic figure for some. but that's not the way to dole with these kind of issues. there's got to be another way of raising concerns without sharing some of our most prized trades, if you will, as it relates to understanding what's happening around the world and there is no question, these programs have kept us safe. i will tell you, i did not know about the more raw-based programs. >> okay. >> i did go to a briefing, which

i appreciated occurring last thursday. >> you mean the verizon program the phone program? >> i was unaware of that, i was more aware of the targeted program the second leak that came out. you know, candidly as i sat and listened, you do have to have tremendous oversight and i do hope our senate intelligence committee is doing the kind of oversight that needs to take place, but again, it is keep e keeping us safe t. oversight component is the thing that hopefully keeps our civil liberties in place. there is no doubt going to be a lot of discussions. >> bob, very quickly, i want to let you go before talking about gse reform. people will say there is a windfall that came into the treasury from fan my mae. this $59 million last month. what is the solution with the end game? >> well, i think you got to move away from a situation where private sar holder gain, taxpayer losses. the bill transforms the way we

do housing finance, hopefully, we'll be able to pass something that puts us on a better course tan we are. >> senator, i want to thank you very much for your time today. we'll see you again soon. these issues aren't going away. andrew, back over to you. >> thank you, becky, a lot more from jack welch when we return. . . .

>> we are seeing movement in the bond market especially at the long end, movement down. we have a great friday. what was yesterday was up sort of flat. but we are trying to figure out where to go. ever since paper day, may 22nd. still to come, congressman chris van hollen and we caught up with sam slim. interview and more just ahead. d. ♪ load! we keep moving to deliver what you need. .

>> things are not bad. this is not a 2% economy by any means. >> one more hour with the master of management jack welch. the scandal leaks drawing attention from congress and the private sector. we'll talk to representative vis van hollen and james backford the author of the ultrasecretive nsa. >> more with the billionaire carlos slim, the third hour of "squawk box" starts right now.

>> welcome back to "squawk box." i'm joe kernan. along with -- >> my voice is not that bad. >> it's progressively stronger. jack has that voice. >> you feel okay. you sound bad. >> okay. so i don't have to worry about you? >> hopefully not. >> you have been doing stuff at home, taking care of the baby. >> now you see how hard it is. >> i do. >> hopefully, you won't be dismissive anymore. >> my wife is superwoman. >> becky quick, another superwoman. >> also with us from washington, and our guest host today needs no introduction, jack welch from strayer university. but also former ceo of general

electric. a board member all over the place, author of at least two books. husband of susie, who has win several books, best selling author that she is. she is understanding of you. not everything you say is wrong. have you gotten yelled at today for anything? you aring look at me. you are afraid to say anything. let me keep going. >> behind every successful man is an astonishing woman. >> believe me. i was saying that as someone who knows exactly what we go through together, don't we? >> let's all hold hands. >> come on. >> u.s. equities futures this morning, we need to. it's bad today, down 117 points, bond market is not great. europe is crappy. we're if an interesting little period here, not knowing twla the nikkei is going to do it. ran up so much. look at the nikkei chart. i hope that doesn't happen here. you hope what happened with their bond market doesn't happen

either, you wonder, because we don't have the normal market clues as to where interest rates really should be, sooner or later, it would be nice to get back to some degree of normalcy. there's the european markets. let's look at the 14-year low what i mean by that is that the yield is 14 month high and the price is 14-month low. >> we also have other stories we are watching this morning, including boeing which upgraded its 2013 forecast t. jet demand is predicting airlines need 35,280 jets worth 4.8 trillion over the next two decades. is a 3.8 increase over its prior forecast. what are you laughing at? >> the forecast. come on. >> nobody is going to get that right in one of your forecasts? >> i wouldn't bet on it one way or the other. >> you can bank on it. >> another piece of news, jack's

comments on this sony plans to price its upcoming play station 4, rather at $399. that's about $100 less than microsoft's x-box update. the x-box1 won't restrict you are game sales. and microsoft says it's x-box update needs to be connected to the internet once a day. >> i watched that show last night with my two teenage boys streaming the developer show and the hardware show. >> yes. >> i mean, what a show. those kids are into it look crazy, it's like the old auto shows, talking act each feature 30 yeegs, amazing. >> they were watching x-box or sony yesterday? >> they were watching both. both. they watched the developer's sew. right. i was streaming the apple show. it's incredible how people can do that. >> they're so captured by it.

they made comment on every single little kneeture. we all, at least my wife and i grab e-mail. we use the fine and we take pictures, do things like that. every little feature. >> highway has not tweeted today. >> she tweeted early. >> hours ago. >> yeah. >> she hasn't said anything about you or your performance vis-a-vis the show. you haven't tweeted either? >> no, last night. >> i almost answered someone who said that we were bullying you with our supply side and to put down jobs initiatives because it's really irresponsible. don't you love the government jobs i love the green jobs. >> we want growth to generate actual jobs. you cannot just say, you can't say, hire people whether you need them or not. henry blodget wants us to do

that. >> henry does? >> take the money on corporate plens sheets use it to hire people. >> by the way, henry blodget has a heck of a site. >> he does. >> you follow that. >> like gossipy, it's good. >> it had all the features of what you like about apple and why apple. here's what apple is bringing out. yesterday, it was fabulous. >> he needs to send us an edible arrangement or something after that, a big sloppy kiss. business insider, find it on your computer. i know, i look at it, too, it's a great site. >> let's get back to becky in washington. zwrak misses you, becky, you probably do, too. >> i do, i miss jack. i am enjoying you walk right up to the line. >> a couple of times. >> contest it. >> a couple of times, i know, it's a skill. it's a skill. >> you don't ever touch that

third rail. >> i get so close some days. >> immigration reform picking up momentum in the senate as a key procedural vote is expected to pass later today, supporters in the house are hoping to keep that momentum going, joining us now representative frank hollen. >> we finished talking to senator corker. he brought umm interesting points about how he sees it, things haven't changed all that much in washington. you have still facing the same issue we were talking about all last year, we get back to the fact are we going to raise the debt ceiling or not that's looming. it sound like things haven't been resolved at this point. he says the senate is looking at budget lines based on the presequester numbers. that's not going to match up with what the house is doing.

it is not going to match up, you are right. we have the looming issues the debt ceiling. we have to go into october with another round of threats of government shutdown, which is why we said we should go to a conference on the bucket. after all the senate passed a budget. the house passed the budget t. way to begin to get certainty is to resolve the budget process. unfortunately, speaker boehner has so far re2350used to appoint conferrees. in the senate, reseen our republican colleagues block the efforts of harry reid and others to go to conference. you seen senator mccain take a different position. he said it was insane for them not to go to budget after all the complaints over theers, right now, we are signed of in hymn bo question have not been focused as much on walk. during that period, the market has taken off. it's been a great year for the markets.

is it all going to come screeching to a halt and realize all these things still lenger out there? >> well, you know, washington should at least do no harm, right? by injecting more uncertainty into the economy, obviously, we can create some jitters. my certain e concern is if we don't sit down and begin to resolve these issues now, you will get to the fall. there will be again threats of defaulting on the debt. there will be threats of government shutdown. let get together and try and resolve these issues right now. we should also in my view replace the sequester because it is a continuing drag on the commitment it's not a huge drag. but why do anything when you got 2% growth, kind of sluggish. why do anything to put the brakes on economics? >> that's probably the six we are getting into. acting as if a sequester never happened. no agreement could be reached before, both sides could by a kusd of bullying, pushing their agenda on this. is there a way to try and come

up with some smart way of cutting in some places, not in others? >> yes, there is. >> but is from a way both sides agree to? >> not so far. in the house, we have tried to simply get a vote. i think we're up to six or seven times on a proposal that would replace if zwefter with a targeted set of cuts, also, the elittle napgs of some tax expenditures, which we think have no productive value. but because that includes some revenue in the out years, our republicans colleagues have said no. they should put a plan on the table themselves. we have seen no plan from our house republican colleagues in this congress to do that. but we would welcome that so we could then have a discussion and a debate. >> but it does sound like the impetus between trying to get through a new situation where you deal with reform overall, there are a lot of people, particularly business leaders, think that needs to be a part of it. it seems while the sequester

cuts in and cuts the deficit, things are looking better in terms of the tax cuts coming in, the impetus for finding a smarter way of doing things is off the table and won't happen until 2016, correct? >> i worry about. that i don't think we're quite there right yet, ready to give up yet. we ned to be focused on two things. number one, in the short term the economy could be doing better if washington removed some of the drag and certainlisome of the uncertai y uncertainty. in the outyears -- >> removing some of the drarks that's different things depending on which said of the aisle you are talking to. my guess is getting rid of the sequester a and the spending cuts. the other side would say let's get rid of the onerous tax increases that have gone in. it all sounds great saying we want to get rid of the drag t. two sides look at things very differently. >> first of all, i agree with those who say we should have tax reform. we need to clean up the tax code. there are differences of opinion obviously on how best to do it and whether in that process you

generate some revenue to help reduce the debt. but, you know the congressional bucket office is an independent nonpartisan entity. they say that the impact of the sequester is.6% less growth during this year. that's a self inflicted wound. >> us a territory comes in multiple force, in the forms of higher taxes and spending cuts. both those will impact growth. >> absolutely. that's whenever you deal with the deficit reduction, you need to do it in a targeted and balanced way over a period of time. right now when the economy remains slow, we shouldn't have anything that breaks the economy. the sequester does. i think we should invest more in our infrastructure. we got low interest rates, 13% construction in the industry. god knows we need to wrup upgrade our infrastructure. this is the moment to do it. it should be coupled to reduce the outyear deficit. as you look down the road, with the retirement and baby boomers, that's when you need to get a

handle on this. >> on entitlements. >> we should address the long-term issues, also act now to get rid of the drag on the economy. >> i agree with you on both counts. let's talk about immigration. we are expected to see a procedural vote today. where do you think we finally end up with all of this? will we have some sort of immigration report that makes it through both halls of congress. >> i think we will get a vote, a bipartisan vote in the senate. then the question, of course, is what happens in the house. and i think speaker boehner would like to get some kind of immigration reform through. the question is whether or not his caucus is willing to support that effort and how can he structure a conversation and a vote in the house to make sure we get it at the end of the day, because we saw in the house last friday a very troubling moment, an amendment was adopted. it essentially said, let's

deport all the so-called dreamers the kids who under the president's policy are now allowed to stay here, get their education, serve in our armed forces, but there was a vote in the house last week on the homeland security appropriations bill to essentially get rid of that policy. so that was a troubling sign. i think speaker boehner prebl wished that steve king of iowa hadn't offered that amendment. >> right. >> but what's interesting is what happened when he did. the people who didn't want him to operate on the republican side still went ahead and voted for it. it messed up what had been a bipartisan homeland security appropriations bill. >> yeah, that is a troubling sign. this is an issue i think that needs addressed quickly. congressman van hollen. thank you for joeng us this morning. >> we can shake hands. >> we were going to hold guys while you were holding hands, thank you congressman and joe, we'll send it over to you. >> thank you. i tweeted now. >> you have?

>> no. >> does retweeting count? >> no. >> oh, then i haven't. susie did. i re-tweeted susie. you have to follow me to find out what she says. >> i will. i follow you. >> you do? i don't tweet. you don't gaet lot, though. >> i follow you. >> we gaet lot from jack. much more from our guest host jack welch and mexican billionaire car loss slim, more of mcc's exclusive interview, plus more on that nsa leak scandal from james bamford, author of stefrl several books of america's secret organization. as we head to break, czech out the "squawk box" market indicator. here at fidelity, we give you the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price --

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welcome back to "squawk box" this morning. look at futures. the dow looks like it's off 25 points. the s&p 500 off 16 points. >> you gave me an appraisal? >> yeah. >> thank you for that appraisal. how's the performance? the voice is coming back.

so i can't compete. >> a b-plus? >> we're not giving grades. >> the harvard grade, you are an a-plus. thank you. our guest host strayer, you probably like to see mean, real school. our guest host this morning, jack welch founder the jack welch management institute, so many other things, former ge, ceo. how many board were you? >> none. >> you glefr did a board. >> you know what we talked about elan the cramer slrks ceo split up. >> andrew has been evolving. you were sure we should go the european route. >> no, i don't think so. there is no data there to prove it. >> people think how can you be, how can more governance ever be a bad thing? we made the point if someone is that good at making decisions,

they should be the ceo. >> let me say something no one talks about in a split role, you get shopping where the employees shop the idea, you want to buy this company? how about you, you want to buy it? no, it's a mess. shareholder democracy can sometimes work, sometimes you can have a great dictator, only when the dictator is great does it work. that's the complicated part. >> when you got a leader that can make decision that jamie diamond was crazy. then dave cally. >> he was so unabashedly anti-splitting it up. >> but they said he didn't have enough financial acan you men acumen. he's deeply capable if finance. these whackos don't know anything about it. they're sitting down in maine in

the corporate library talking about that stuff. i mean, that wroel crowd. >> so he learned to manage those quarterlys under the master. >> he managed the business, not the earnings. >> why would you ever miss an estimate? because you tell them what the estimate is. 30 days later you announce it. >> right. >> a endope can do that. >> it's more about managing expectations and the business. >> managing the business. not the earnings. >> is jamie diamond an other ceos safe for that, given that resounding vote or do you think iss and empg everybody comes back -- >> they can't go at jamie. that was the, that was crazy when they go after the best one in the game. then to go after dave on financial acumen. dave was there 20 years on thef, jamie is working in finance.

>> is there a time and place for it, though? one of the things i think about. >> only to ask for a ceo. >> if you go back and look when jamie diamond, treks, it was a tron situation, bill harrison was the chairman when jamie was getting that done. i can see a time, for example. >> in six months when a guy was leaving? >> if jamie dup was going to step down, they had a succession plan, maybe you make him the chairman the next year or two to help out. a year. >> maximum. six month, preferably. >> okay. >> you give the guy the job. or the woman the job. they get the job. they make the decision. you don't like them, throw them out. i'm not against firing them. but this idea of splitting for corporate governance and then they make this mistake with cody i felt was bowl saying he has no financial acumen, he has more, he's forgotten more than the

whole crowd will ever know. >> okay. we got to go. i'm just wondering, there's got to be a way of making sure that boards aren't just rubber-stamped of, you know, ceos. >> if the decisions are bad, the stock goes to held. >> if they're friends with, golf buddies with the chairman and ceo. >> do you think you want to fight on the board? you don't want fights on the board. you want smart people. >> if it all works well. >> cohesively. >> i sort of understanding. >> there are sometimes companies screwed up. that's when you want the activists, shareholders to have a vote. >> that's a reasonable thing. this company stinks, that's a different argument than splitting for governance? >> it's possible to argue, we got to run. you can argue new this case democracy works jamie diamond won the vote. coming up, we got more from mirnl caruso cab rer ra,

michelle caruso cab rer ra. right now, we head to a break. take a look at all those red arose on the u.s. equities futures. [ music playing ] m lorenzo. i work for 47 different companies. well, technically i work for one. that company, the united states postal service® works for thousands of home businesses. because at usps.com® you can pay, print and have your packages picked up for free. i can even drop off free boxes. i wear a lot of hats. well, technically i wear one. the u.s. postal service®, no business too small.

welcome back to "squawk box." che chevy are giving a tax credit for buying the volt. california residents get 1,500 with new pricing, noncalifornia residents could pay as little as $28,500 for a 2013 volt. coming up, we got much more from our guest host jack welch. plus the nsa security expert james bamford. he will joan us, he's the author of "the shadow factory" 9-11 to the eavesdropping of america. we are back in just a moment. .

>> welcome back to "squawk box," let's look at stocks on the move this morning. really do need i think a reality show would be well off camera as well. >> i think we should work on that. >> then you wouldn't say the things off camera. lulu lemon shares, do you own any lulu lemon? >> clothes. >> underwear? >> no, gym clothes. >> what will happen with you now

that christine day has taken off? >> i don't know, she sent me instructions. yes, there is no flap, anyway, shares are under pressure following the announcement the ceo christine day is resigning. we'll miss her. the part after her successor is overshadowed. the earnings report beat estimates as did the currently forecast. we are watching sprint nextel. japan's soft bank increased its bid for sprint. it is offering $2001.6 billion. a new offer is in cash than stock. dish network has been on the table. yes, dole foods, the shares are higher, chaerm ceo david murdock is offering to buy it for $12 a share. an 8% premium over yesterday's close. did you check? >> i he will. >> murdock is he 90? >> he's quite old. for me to say that, he's really

got to be old. >> he's 90. >> really, right on the button. i knew it. wouldn't you like to own one? not unu up with of the small islands, one of the five or six whatever it is, for more on the nsa leak scandal, let's get back to becky in washington. beck. >> joe, thank you. you know that nsa leak scandal, it is raising all kind of questions about how close knit the intelligence community is with the private sector. joining us right now with more on this is jamie bamford, he is the investigative journalist and author of "the shadow factory." eamon javers is back with us. jails, we have been talking about this all morning long, i am told you are the absolute expert when it comes to knowing what is going on inside the nsa. how does something leak this happen? >> well, it's been happening for

a long time. the nsa eavesdropped legally for 30 years up until 1975 and it was stopped with the foreign creation of the intelligence corps. it was started up again after 9/11. soth it all takes place in secret. so nobody knows what's going on. many people in congress. so that's how it can happen. >> well, this first situation, the verizon release of the court document, that suggests things are going along by the rules, even if we don't all know about what's happening. we have been trying to figure out if this made a difference, you have someone checked to a contractor who is giving up some of these secrets versus somebody on the inside, i was shocked to know there were 1.4 million people in total in the united states who have top secret clearance. >> and contractors make up a large percentage of that, very

few people realize that. if you go up to nsa, nsa is on the right side of baltimore parkway. on the left is an enormous little city filled with all made up of the contractors. they all have their big building, booz alan, much of the eavesdropping, much of what nsa does, its intelligence collection is done by civilian, done by the contracting community, the business community as opposed to government employees. >> it's eamon javers here, i'm curious on your take on snowden the man that leaked this. his career has not followed any normal career path. he washed out of community college, washed out of the army, in a low level security job, he had access to documents, what are your sources telling you about his career and how he got from where he started into the petition of access that he ended

up in? >> and making $250,000 a year. i think i'll write a book just about how you do that, which is amazing to me. yeah, going from high school dropout to making $250,000 a year and having a nice cushy job in hawaii. it's bizarre to me. i've never seen a career track quite like that. and most of the people they hire at nsa are ph.d. mathemeticians and people like that are people that speak or do postune lynngala, people with high degrees in computer technology. i've never seen quite a kwooer career path like this what you have mentioned also is quite important. how somebody in that position can get not just documents, anybody can get documents, but the fact is, these are the highest quality and very

divergent document, one from the most secret court in the country. the other from the nsa's most secret electronic spying organization and then a third one that had to do with cybercommand, which is another part of nsa, but usually a person doesn't have access to all three of those areas. >> so a mystery there. another mystery here is the response from the tech companies, themself, after the prism program was leaked last week. the tech companies came out with kind of vociferous denials they gave direction e direct access quote onquote to the servers. what do you make of it they were able to do. what are the tech companies actually denying here? >> it's very hard to figure out. because you have so many different versions of the story basically. but the way i think it has to pretty much work is the nsa has to get access to the cable as

they mentioned in the, as they mentioned in the slide presentation that was put into the papers. because that's the only way they could figure out what's going by at the speed of light, which items they want, which items they don't want. one way of doing that is the same way they did i did it in san francisco with the at&t guilding there. they have a huge 10-story building which is basically the at&t switch for the northeast where everything comes in and everything gets distributed. and the nsa built a secret room in that facility. i mean, with the company's knowledge, but nobody in the company basically was allowed into it. what happened was a mirror image of everything coming into the at&t facility, a copy, mirror image copy of it went into the secret room.

in the secret room were all these pieces of hardware and software a lot made by a kane called naros. the software does a deep pack inspection. in other words, as an e-mail is going by at the speed of light, this software has the ability to actually look into the content of the e-mail and see if any of the targets that nsa has programmed into the software are located in there. in other words, they're looking for james bamford, there is an e-mail that goes by, it mentioned james bamford my e-mail address or telephone number. then that would be seg regatd out instantly at the speed of light and shot over to nsa for analysis. that's how they do it with at&t. that's probably how they're doing it here. >> james, we want to thank you for your time today. again, james bamford and eamon javers, great seeing you in person.

joe, we'll send it back over to you. >> okay. thank you, becky quick. michelle caruso-cabrera will come up next with an interview with billionaire car loss slim. we will get his take on regulation in the telecom industry right now. oh, what? say good-bye. >> say good-bye. >> bye, becky. >> bye. >> you will catch a flight to vegas, she'll joan us tomorrow from hp's discovery conference with special guests, including meg whitman, the hp, ceo, guru marc an dressen and gregory page ceo, cargil, that's tomorrow at 6:00 a.m. .

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box." the futures are down, europe is bad, the 30-year bond is at a 14-month low and priced 14-year high end yield, so there's some cross currents and they aren't all positive today. that was the case. we are going to go to mexico now. is telecom empire under assault, car loss slim is now speaking out about the future of his company. an exclusive interview with cnbc

correspondent michelle caruso-cabrera, she joins us this morning. >> hey there, jack. this ceo of this company signed a brandny telecom reform. the new law gives it power to break up the mexican operations by forcing him to sell assets. it's not clear that's what they will do. however, there is speculation because he has long been criticized for keeping prices too high, he could be forced to go through price caps on the price hess charges to consumers. he fells me if that happens, it would be a happy outcome. >> no, for price cuts, we are very happy, because it's an industry that we have to get down prices of course in 20 years and i think it's an industry where constantly because of the movement of technology and the volumes of -- prices go down and down and down. >> what if nthey force asset

sales? >> it's not clear what will be the intention. the intention is in industry this is what we suppose is very important to have investment itself and we need to sell some assets to be also a mature reasonable price at a good price and we can worry about. but the profitability of america mobile, i mean, there was an sec filing saying that the new law could have a material effect on the company. right? >> no, i don't think so, profitability is coming from productivity, efficiency, management and the way to manage a business. i don't think that profitability is any problem. by the contractor, i think, you need to have profitability, especially in this industry to make the business the big investment that this industry needs to develop and grow. >> so you don't take it personally, this law? >> oh, no.

no. the contrary. it's very important for us that there are conditions. >> do you consider yourself a mon open list -- monopolist. >> the monopolist is one. mono is one. i think any industry, in any industry, in any competition there is one that is faster than others, that is better than others and has a better position than the other one. you don't have any activity, economic or humaning a fist within they are exactly the same. you don't have a country or it will have 20% each one. they will let you have a difference between the companies because the ones who decide the situation in the market are the

consumers. the consumers are the ones that having a turn at this. they have alternative for moving, they have an alternative for telephony, they have alternative for internet t. only way they don't have alternative is in tv, pay tv. that's what we think will be opened for everyone. 12k3w4rd so that last.is the crucial. he has wanted to offer television in mexico the last ten years. he has been prohibited by the government. this new law could offer triple play in mexico, wireless, land line and also tv. he offers that in most of latin america, not allowed here in mexico. he says he is very unconcerned about the american money. take a look at the shares of the avrs at the new york stock exchange. amx is down about 25% sense the new president took over and made it clear telecom reform was

going to be one of his forms. in that way carlos slim roughly controls 31% of the company, when you yamd, his family trust, other businesses, et cetera. he gets $3 billion a year in dividends alone from the company. guy, back to you. >> two questions. first, i don't know how to put this lightlyment he has a lot of influence let's just suggest in mexico. so what is the handicap that they get forced to break up or at least sell some of these assets? >> look the bottom lienl, he says, he claems he has great faith that the intention of this law is to bring more telecom kremt to members quo. he says the way his mind works, you want more investment, you have to make it so that companies can be profitable. he constantly says over and over again, profitability means you will have more jobs and more investment. that's a good thing. he didn't see anything bad. so here's the other thing, very important.

most of his customers are prepaid customers. so you force him to sell, customers in halisco prepaid, guess what, they can change their mind tomorrow. they're not under contract. >> what about companies like at&t or verizon and others make a big push? >> well, that's another very important question. there is a change in this telecom law that allows a lot more foreign investment. that's crucial. remember when they first did privatization, the government kind of tied their own hand by saying you can't have that much foreign ownership. sew you will only have the super wealthy in mexico to build a bid on the telephone assets in the first place. >> michelle caruso-cabrera in mexico city, thank you for that interview. >> we will check in with jim cramer at the new york stock exchange. that's next. [ male announcer ] with free package pickup

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welcome back to "squawk box" and the futures this morning with red arrowing still this morning unfortunately and the dow looks like it will open off 119 points, and the s&p 500 about 15 points, and we are going down the new york stock exchange where cramer is going to join us. joe has a question, because i was told not the worry my pretty little head about what we are going to talk about. >> because i am dying to know something from him. >> go for it. >> jim, the 30-year and the way that things are starting out, greenspan last week saying that,

you don't have forever, fed. you don't just, you can't sit there for the next year and a half and do 85 billion a month, and the markets will stop you. i just wonder, how does it play out? are we beginning to see the long end goes, eventually the hand might be forced, no? >> where is dave tapper when we need him? i mean, we are running the resistance for the tapper rally here. >> they need to taper, don't they? >> i think it is gotten ahead of them. i think that the one of the things, and we got the so-called goldilocks number friday and the 10-year up in rates and yesterday and today and everybody is talking about the emerging markets collapsing and hearing 1997 invoked, but joe, maybe we have been around long enough to make sure it is not the end of the world, but many people are making the end of the world case this morning. >> but 3.5% on a 10-year, and give me that, because it port d portends good things about the economy and would not choke off

the business, but it depends how qui quickly it happens and perception and there is a knee-jerk reaction to anything that the fed does and the rates rising and we are seeing it today, right? >> yes, the percentage gains, and the percentage in rates are breath-take, because they came off of such a small base and it is important to recognize that the world is fretting about this, but it is not 1997 or if it is 1997, maybe going in to buy it if it is hammered, but 1991 to 2000 was a great time for the stock market and things didn't go right in the bond market every single day, but i recognize that there are people who are waiting in wrong, and have been very negative and 78% of the funds are under the market, and this is really important, stan, they have to crack it and bring it back down to the thursday pivot. joe, we have seen it all, let the end of the worlders play it o out. meantime, listen to jack, once again, so breath-takingly fun. >> and that order of what you saw and how it has changed. >> well, jim, this nugget of

demand changing from we want to guaranteed price on the six-month delivery to make sure we get delivery is a significant change. now, it is a small nugget, but it gives me hope going for the second half of the year. a little bit more than just hope. >> i'm with you. you are a realist and that is why -- but multiple reasons why i have always loved you, jack, but that is a hope. i want to echo what you said about dave cody, my next door neighbor in summit and i looked to him to be the finest mind in both economics and in the way that yield curve works and interest rates and banking, and that's the guy they slag? i mean, it is insulting. he is my idol. >> did you hire him? >> no, but i found him. >> you -- >> he was a finance guy in the g.e. finance system and rose up the ranks and worked for me as

an analyst, and i love the guy. >> delightful guy. >> jack, you are the best. i love to listen to you. >> thank you. >> you guys, you sure you throw those wild parties in summit, though. you still have toga parties the two of you, huh? >> when my 19-year-old blasted the music i told dave, hey sh, listen, there is a big party this weekend and he has never said anything other than knock yourself out. >> what is the livestock for at the parties, jim? i have asked him that before and i'm just kidding. you are barbequing. he -- barbeque iing. >> omaha steaks is a fascination for me these days. >> they are fresh. our guest host this morning is jack welch, and i want to ask you about that, do you want to sell all of the pork to china. we want to ask him that. >> please don't. >> huh?

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>> still writing them. >> and immigration is not some simple debate between the border and a path to citizenship. it has more stuff hanging, more ornaments hanging off of that one and it is going to look just like obama care, and it is more government, government, government. and we have to be careful with that. that's not a simple argument. >> jack welch, thank you for being here. >> great fun to be here. >> we had a great time. join us tomorrow. "squawk on the street" begins right now. we live at the new york stock exchange, and we have a sell-off across the globe and the bond markets, with more worries of the central banks and the stimulus, and the drawing futures down at 2.26, and as for europe, red arrows as well, and disappointment in the bank of japan left policy unchanged overnight. the road map begins with the markets. as we said the tide of the global sell-off crashing on to the