we're joined by kayla tausche this morning. what do you have? >> mountain dew. >> you're promoting the brand. do you like mountain dew. that's almost as caffenaited as red bull. let's bring you up to speed on the global selloff. nikkei planninging to levels not seen before bank of japan launched its mass civilian stimulus program. it's now down 21% from last month's 5 1/2 year high. nikkei is back in the bear market territory for the second time in less than a week among the reasons being cite forward the selloff short term traders taking money off the table warning a move below 12,000 would for the market into dangerous territory. also the dollar/yen now dropping below the 95% handle as japanese investors horticulture their

position. green back sliding to its lowest levels. japan's governor being quoted today saying the financial markets will eventually calm down. he says the japanese economy is on a steady path to recovery. as for the rest of asia today, take a look. south korea's central bank held interest rates steady. the central bank's cut in may was the last one for the year because south korea is on track to a recovery but in china shares tumbling to their lowest levels in six months. mainland markets re-opened after a three day holiday. we have more from our colleagues in just a couple of minutes. you want to do europe >> we do. the selloff is hitting globally in extension from what we're seeing in japan. europe stocks selling off in early trading. banks being hit hard. the ftse down by 73 points. france cac is down 37 points. and germany dax is down 134 points.

nearly 1% drops across the board there. those financials and commodity sectors obviously very exposed to broader economic fortunes. west will have the latest from london in a few moments. u.s. equity features as joe just mentioned are down. dow on its first three day losing streak of the year. was down 126 points yesterday. right now if it opened it would be down 75 points. the s&p would be down nine. sectors closed lower after they opened higher. we saw a late day sell off in the markets yesterday. >> before we go to joe -- joe, all hail. >> that's okay. let's talk. >> just so we understand the all hail joe did call this. >> i think it was the beginning -- may 22nd, it was the beginning of the end of tapering, beginning of the beginning of the talk about tapering. >> it was the original -- >> the original fom meeting. you know who else we have to

give kudos to is alan greenspan. the market may be saying we don't like what's happening here. the s&p a week ago we looked at the intradition day high to intradition day low it was 5%. now we're more. now we're more and we're back below 15,000 on the dow and yesterday, as you mentioned and i don't -- what's her last name? her last name is gone. >> kayla tausche. >> kayla. >> kayla is here. were you not -- >> you're calling that. >> he was not here, i don't think last time you were on. >> madonna or bono. >> it's pronounced bono the one i liked who was married to cher. but, you know, so now here we are back below 15,000. we'll sheer.

we'll see whether -- you never know -- it's like a little thread you go what is this? you go oh, oh, and you start pulling it and then it's one of those sweaters and then the sleeve is gone. >> the market is so short term it's hard to predict whatever is going to happen. >> it's so short term if we get 10% or something that's something that we want to have talked about as it was happening. we don't want to hit ten and say wow it's down 10%. it's six already. i got to do the math again. we'll see the intradition day. doesn't it feel dicey. >> it does. the question goes back whether the market is impacting the real economy. if you see the stock market drop 10% how upsetting is that to the fed. >> it's like a chicken and egg thing. is the economy telling the market it shouldn't be as high as it is? that's the other thing. >> there's the indicator element. fed is more inned in the wealth effect element which is to say if the market drops by 10% what

it means for the larger economy having said that -- 10%, 80% of the stock market is owned by 10% of the -- >> don't forget housing either. when we back up 100 basis points, wealth effect and all the nice rebound that we've been seeing in housing. so it's just going to be, you know, it's volatile. there's a lot of people the entire 10,000 point move to 12,000. people didn't believe it. >> there were a lot of people that said this will never end it will keep going until the end of the year. >> micromanaging it too because we do need five, six, eight percent corrections. if we look back six months from now you may look both of these last month both of these moves you're seeing right there, how long ago was that, it was the end of -- it was just last week. but if that turns back up which in all likelihood could it if the economy improves and if the economy gets better.

>> i would think you want to be suggesting the fed needs to stay the course here. >> i think the fed has to get out. >> that's my point. >> what greenspan said we're waiting for them to get out. until they get out it's looming. it's looming and we're wondering how the market will react. we don't know if it's a messy exit or a yellen messy exit tor a bernanke messy exit. i saw she was the leading person now. >> she's been the leading person for months. >> larry summers. >> new, new front page of the "new york times" a few weeks ago. we written columns a year ago. i don't -- i'm not sure about -- >> you don't know if bernanke is going any way. >> i'm not sure the markets will love yellen. >> too dovish. not good with numbers? >> confidence thing. the market wants database

>> larry summers. who else said it recently. oh, yeah. j.p. >> yeah. you got commodities, my friend. >> i do? >> parentally. >> commodities, we'll look at all the markets to see how they react to this but market opened higher yesterday and then i want got ragged and ug lly. if there's economic fears you would think that's below 90 at some point. then gold doesn't indicate anything any more seems like. it's down is that exciting. >> jewelry sales. >> in india. >> rupee is -- >> we're trying to bring back jewelry sales. >> got to try. >> you forget. have you seen it? you haven't seen it yet. >> candlelabra.

>> you read cliff notes? >> read novels. >> you do. >> you get through a novel but not a movie. usually because i'm being held captive on a plane. >> all you youthful are adhd. you troy watch a movie and beep, beep, i got to look at twitter. your facebook. >> add i know. what is adhd. >> attention deficit hyperactivity. you haven't heard of that? >> i thought add was -- >> let's look for -- my attention is gone. there's treasury note. 3.2. that's another thing that, you know, if it's not japan if this thing gets out of hand if we go 2.3 even on an absolute basis doesn't look scary at all but as

quickly as we've gotten here this could be something that we need to watch. greenspan at one point said i don't like watching all your stuff put the ten year on. now we got -- it's important to see that a lot. there's the 30 year bond which a couple of days ago it was a 14 month low, 14 month high in yield. we'll watch that. i think it's red -- west gate here. ross westgate. >> we got ross westgate. >> ross westgate. >> okay. >> time to go overseas for this moaning's market selloff. did i get it wrong? is it ross westgate? no, you got it right. i'm wrong. >> ross westgate is in london. let's begin in tokyo this morning. >> thanks a lot. let's take a look at the equity markets here in japan. another big selloff started on that may 23rd date that we remember after the 22nd event by the u.s. federal reserve. we had these repeated lurches

lower. today we saw 6.5% drop in the nikkei 225. multiple layers today. everyone that spoke today whether it be the chief government spokesperson the bank of japan governor, the economics minister they didn't go beyond the standard line of oh, we're not going to continue day-to-day moves and that was a little bit of a trigger for this new move south in the nikkei 225. twice in a week now we're entering bear market territory. many of the strategists i speak to here in japan say this is part of that correction that started three weeks ago and say this may continue for another two or three weeks. having said that there's another dimension today which, of course, is the yen and we've seen very violent moves lower in the dollar/yen. this isn't problematic per se for the exporters in particular although many export stocks like toyota are moving lower because companies in japan are conservative in their estimates. even if dollar/yen was shooting up to 100 when they gave their

forecast they were factoring in an exchange rate of roughly between 90 and 95. these levels don't alter that scenario. i think that's where strategists are fairly comfortable saying this is a consolidation phase because when they report in a week's time their first quarter numbers they expect to hit those numbers. however what's also complicating this picture is the fact if we don't know the speed of the tapering off the yen becomes a safe-haven again because we're talking about 2% inflation but no one expects realistically for that to be happening any time soon. we're seeing an unwind and hitting a lot of emerging markets pretty hard today whether it's china or india, thailand, all of these markets are down today so that compounded today to move the yen higher and as a result we're seeing big losses on in the equity market yet again. >> maybe we shouldn't be surprised by any of this because

i mean we can get japan back to 35,000 if we print enough money over there. it works so well, the big qe that it basically the market doubled sooner or later wasn't someone going to say wait a minute it doesn't work this way? >> true. but i think the other point is the structural reform agenda and we talked about this time and time again. maybe there was hope there would be something very immediate in terms of relief on reform from the government but realistically speaking that's not going to happen. i have to alert you that a lot of people are starting to question even here in japan how quickly some of these reforms are going to come through and that's because we've had six prime ministers in the last six years, all of them have had their own growth strategy. mr. abe. >> -- mr. abe is no exception on that point. they have to rely on the bureaucrat circumstance on the bureaucrats. if you ask the finance ministry

to lower taxes when they have a problem with their tax revenue it's going a very difficult task. that's a long term question people are asking. >> you say strategists expect the pull back to continue for two to three more weeks. what signals are they looking for to stabilize the market? >> i think most people are expecting the earnings to come forward in the next three weeks or so, we'll be hearing first quarter numbers from many corporate in japan. they say when those numbers start to confirm that economic recovery in japan is really starting to pick up and we see some of the numbers come out in terms of spending here in japan after that, i think right now we only have the growth data which is pretty impressive. but we need to hear consumption which is picking up continue and the profitability continuing as well. >> there was a fast move up. 50% retracements are not to say it's going to be 50% from the move in the last year but there

is backing and filling that goes on. one of the unsettling things is that around the world we think that central banks can do this for a while, to build a bridge for when the economy starts to improve globally and the baton gets passed to policymakers and it's not easy to pass policymakers in japan. but it's very similar here. we're sitting here and with bernanke hoping that this works but our policymakers aren't doing any structural things over here either and that's what scares me. i hope this isn't a look at what could happen globally and happen here as well. anyway. >> absolutely. >> all right. >> all right. let's move across the continent there and head over to ross westgate in london. ross. >> hey, kayla. we were down right now take a look a lot of red behind me, dow jones stocks 600, 9-1.

it was worse than this early on about two hours ago around 26 stocks were in green. and it follows the ftse before today's session we were down 8% off the recent highs. down another 1% today the ftse was down 40 pints. cac down three quarters. xetra dax one and two-thirds. ftse off 1%. yields were higher on the 15 year. fairly contained but pretty decent demand. one benefit over high yields in italy and the peripheral in spain there's that demand because there's a differential between what spain and italy are paying out. spanish yields, 4.6%. there was a six week high two days ago.

gilt yield are a little lower. farce currency markets we look at the volatility in dollar/yen carrie was talking about. one of the significant factors has been for emerging markets a lot of people borrowed yen and euro to buy into emerging markets. although the dollar has been weakening against both the yen and euro it has been going up. you can't look at those cross rates to get an effect on what the overall dollar is doing. number of individual stocks to look at. to discussion in on one, rbs, the 83% state-owned bank in the uk down over 6%. an announcement made late last night stephen hester the ceo was brought into the restructure this bank, trimmed an awful lot off the balance sheet is stepping down at the end of the year. he didn't want to go, they want to bring a brand new in.

investors decided it's too much politically meddling and not happy about it. they think there's political interference. that's where we stand right now in europe. >> okay. ross, you feeling like a dog or a tail today? i'm not sure. it's a chicken and egg thing. you going down because of what happened here yesterday or are we going down because of what you're doing. >> the former. >> you're going down because of us. >> more tail than dog. >> always our fault. we got someone here who will make it all okay. joining us in studio, president and ceo of old mutual asset management. that sounds like a firm that's been doing this so long. >> centuries. >> they are very wise. >> before there was a stock market. >> were you at the buttonwood tree? >> it's 150 plus years of

financial services globally. >> where is it based? >> based in london. trade in london. go back to south africa in insurance. >> you don't work there any more? >> you're always from snaerkts joe. >> good place to be from. >> your unsettled by what's happening >> no. >> you're not. we should be okay but we go through these trials and tribulations. >> there are trials and try you about lagss in terms of market sentiment. 800 pound gorilla is the fed. it's not rocket science and shouldn't be a surprise to anybody. bernanke is trying to signal it. he's trying to figure out when. we'll wait for indicia. this is not a star chamber thing going. tinting thing to me, from my perspective is people talk about

this question of us quantitative easing, slow down, whatever. they talk as if it's happening in a vacuum. there's a whole other side of this which is what do the trillions of dollars of private-sector corporate and individual money cash that we've been talking about for the last three years that's been sitting on the sidelines. what do those dollars do as the fed tapers. there's a chance to walk this razor edge and if the fed begins to taper because the underlying core economic activity is sufficiently stable the fed concludes it can taper -- >> the baton gets passed zmipt. the issue is does the baton get passed or fall on track. the question that we spend a lot of time thinking about is not what fed will do what is the market meaning the core underlying economic private-sector do with the baton. >> what do you think? >> i think there's a really

good -- i'm reasonably bullish is the short answer. i think there's a chance, if core underlying economic growth remains stable and for me, maybe i have low standards but for me stable is 2% plus. right? if you have a 2% growth economy in the united states economy still the biggest in the world and still the most important hence the dog comment about the london market today, you will see large corporate cash deploy itself into the economy to grow. i think that's entirely possible. you want in my mind it's the relationship between the fed and the private-sector that is the real question for the next six to 12 months. >> a lot of these things are cross current. i'm trying to figure out why -- i also agree we've been sort of -- the fed three weeks ago it was the beginning of the beginning. it was very early on but they were signalling like we talked about the sixth differential

equation where the change, the change, the change. >> this may not be the beginning of the end but it way be the end of the beginning. >> or the beginning of the end. but in this case do you tie what's happening in japan and the emerging markets to the possibility of tapering here? >> caveating, of course, that this is more complicated than a single linkage my short answer is yes. >> the dollar you would have thought getting stronger tan dollar has been weaker. >> the pull back in the emerging markets from our perspective is more rooted in a concern about honestly china. now if you think about it, the news from china last week and they issued a ton of economic news was reasonable. people were worried about china not continuing to grow as rapidly as it did but the flip side is there were genuine concerns about a hard landing.

it's pretty clear there's no hard landing in china. ultimately emerging markets therefore will stabilize from here actually. >> that could help here. >> help notoriously. >> while it's happening as a news, business news, river time the market goes down 100 points it will be a huge deal but it may not be, in the long run maybe we're still on track five years from a big financial break and cut healing, recovery, housing -- >> if the market goes down 100 that's a fact but the issue is what does the fact mean. that's what we spend a lot of time talking about. >> when the market goes down it's on heavy volume when it goes up it's on light volume. >> volume actually hasn't been that nuts. >> we got to go the tease. you look like an investment manager. you have the hair. >> got it all. >> right out of central casting. >> whoever degreed you this morning did a great job.

>> this is me. >> got the banger's collar. >> if you're just waking up this morning there was another selloff in japan overnight. the nikkei dropping nearly 7%. rest of asia coming under pressure. we have a live report from beijing right after the break. check out u.s. equity futures because we do have red arrows across the board with the dow looking like it will open off about 63 points. we'll be right back in just a moment. clients are always learning more to make their money do more. (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me.

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welcome back to "squawk box" on this thursday morning. you can see by that chart japan selling off sharply overnight. the nikkei now at 12,445. investors return from a market holiday in china. >> reporter: hi there. our markets got pummelled. investors are worried about the tapering of the stimulus measures or concerns of a tapering of stimulus measures by the federal reserve. this is the first time that investors had a chance to react to the weaker than expected numbers we saw for china out over the weekend. a lot of people are worried about where the economy is headed. morgan stanley downgraded its economic forecast. third bank to do so after rbs and barclays. the world bank cut its economic forecast for the global economy and it really painted a bleaker

picture for the chinese economy and that's really making people bathe nervous here. in addition to that there's growing belief that the government authorities are at least not really comfortable but at least not alarmed by the current ratified growth. all of that together is leading to the drop that we saw in the markets today. >> there's some desperate opinions how week that data was. our last guest said it wasn't as bad as we expected. but china markets are hitting a six month low. what are your people saying about it? >> reporter: well people are worried about the overall trend of the economic data, especially the expert data. we saw only 1% growth there and you have to keep in mind a lot of people here have been watching the u.s. economy and saying okay the u.s. economy starting to see a bit of the recovery so these numbers should look better. they weren't better. that's what people are worried about. in addition to that there's a

lot of tea reading which goes on when you try to decipher what the government will do next. what people are looking at are state press reports as well as comments. since that data has been released. it all points, to again, the government is, perhaps, not alarmed by the numbers that they are seeing and there's a government think tank that released some comments basically over the weekend which said that they believe the current administration would be comfortable with or at least tolerate quarterly growth at 7% before they would actually do anything to try to support the economy. also the premier said he thought the economy was generally stable. that was according to one state tv broadcaster. finally even the president when he was speaking with the u.s. president said that the first quarter numbers which everybody was shocked by when they saw it at first, he was saying that

that provided a nice backdrop to the restructuring that's going on in china. so in china when we hear all of these comment, especially from leaders, a lot of times we don't take them at face value just because the whole economy and the way the economy works is the leadership always wants to beat the expectations and deliver higher on growth numbers. but this time we're starting to see that maybe, perhaps, they are actually comfortable with these slower levels of growth. >> thank you for joining us today. and keep us updated. it's all happening over there. is that the tail or the dog? i think it's the dog. coming up over in japan the dollar/yen dropping -- >> a joke i won't tell. >> the dollar/yen dropping. investors cutting their long japanese stocks and short yen position. we'll check with a currency trader and why the dollar is going down at the prospect of tapering. e owning it.

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our top story today the nikkei and its effects on global markets plunging the knick okay to levels not seen since before the bank of japan launched its massive stimulus program on april 3rd. as we've been talking about the markets this morning, we've been remembering what former federal chairman alan greenspan told us on squawk last friday. >> the sooner we come to grips with this successive level of assets and balance sheet of the federal reserve, which everyone agrees is excessive, the better. i think the issue is not only the question of when we taper down, but when do we turn? and i think that the markets may

not give us all the leeway we would like to do that. >> joining us now is boris schlossberg of bk and s management. boris, do you think this is all what we're seeing in currencies is it related to the fed in tapering, boris, or it is related to japan and people that were shorting the yen? is it all tied together? >> it is much more to things in japan. but greenspan's warning remember what's happening in japan is very interesting. basically the fed has been v-very successful at rate suppression. it's key program has been very good because it's been able to keep rates low. even though the boj tried to emulate the fed because it was so late they had tremendous problems with the yields on the jgbs. that's the big problem especially in japan where their debt to gdp ratio is so large

any small movement in yields going up creates massive problems which is why a lot of what they are trying to do kind of gets constrained. i think what you saw this week is boj came out and offered absolutely nothing new to the market. that's when the yen fell out of bed and dollar/yen began to collapse. so, i think it's kind of a very interesting idea that basically the market just doesn't believe at this point that the boj can really fulfill its promise on qe as well or execute its program as well as the fed has its side. >> just hope we keep making the point this isn't a playbook for what could happen here. boris, you.out that if rates just rise slightly in japan, that debt service gets scary we're talking one 1%. it's scary for them. there's number over here based on the fed's balance sheet where -- what kind of loss would the fed incur if we went back to

4% on ten year and how much money would that cost us. ice not that high but the same thing could theoretically happen here. we can't do this forever and wait for the economy to finally recover. there may be adverse consequences. >> there may be. there's a big tail risk. that's concerning the market. we don't have the absolute levels of debt that japan does but the move higher in rates could have very terminal effects. definitely a worrying concern. in a very near term the key thing with dollar/yen is that everybody was long. when i read articles i'm so confident in the yen going down i'm converting my mortgage yen you knew that maybe there was at least a near term top sentiment wizar

wise. only support you'll get on dollar/yen is from this side of the pacific. if our economy picks up. today's retail numbers will be an interesting print to see if u.s. consumer looks robust. if we look okay if we can pull everybody up forward then i think a lot of these worries can be allayed for the top being. if we start to crumble, if our own spending and own growth starts to crumble then you'll see these problems materialize a lot faster. >> not even a week ago we saw 175,000 jobs created in the last month and everyone in the market was saying this is the perfect number because it's not so good that the fed will stop its easing. have we forgotten that number and talked about tapering because this fomc meet is looming? >> already remember prior to the number the lot of the data was starting to would bel. for right now when you look at u.s. economic data there's a big

question mark how strong the u.s. economy is? i think that's the big open question as we go forward. if consumer demand stays robust i think we can pull through the sum summer. if this was the peak we're in a world of hurt here. >> all right, boris. thank you. >> thanks guys. >> currency we need everybody today to try to pull the pieces together. thanks. see you later, bud. >> wish we didn't have to stop. can you say that. have you tried his name. give to it me. no. you forgot who it was. >> boris schlossberg. >> ice not that hard berg. >> i had a hard time with ralph. >> we're going to washington. snowden affair don't controversy about the government collecting information. joining us general michael hayden. he advices companies on security

software and infrastructure. michael thank you for joining us this morning. >> good morning. >> overnight there's a report in the south china morning post that mr. snowden gave an interview to that newspaper, now apparently providing documents suggesting that the u.s. government is not just snooping on its own folks but now snooping on the chinese and folks in hong kong and hacking into their networks. does this change your view about what his motives really are because this seems to take this story in a very different direction this morning. >> yeah. i want does kind of move him off the center lane of civil libr y libertarian. the national security agency conducts foreign intelligence that's not too outrageous to me. >> let me ask you, is he a hero

or whistleblower or in the words of "the new yorker" a grandiosenacissist. >> you have to do certain things to be whistleblower. talk to the inspector general, general counsel, demand that you speak to congress. i mean all of those things make an individual a whistle blower. fleeing with stolen documents, going a third country and making them public through the press which reported them quite inaccurately, that's not a whistle blower. >> google, facebook and others have come forward asking the nsa to allow them to provide some more details about what typesoff queries they are responding to. should nsa provide them with permission.

>> they need some head room. believe me i feel their pain. i cannot tell you the number of times in government when the press grabs a story, walks it to the darkest corner of the room, inaccuracies, exaggeratations and all i want to do is go public and set the record straight so the american people could understand what we were doing, but coin. >> michael if we saw that information, what would be the headline? what would be the takeaway? would the public say oh, they are not actually targeting u.s. civilians in any way. would thereabout a number that we would still be surprised by saying? >> i don't think we would be shocked by number. the headline would be somewhere along the line that major american corporations complied with through or major american corporations helped defend america against foreign threats because the prism program was about foreign intelligence. >> finally there's a distinction between internet service

provirprovid providers and telephone networks. verizon hasn't made a statement. it's very clear the data is being kept. can you give us any sense of what type of data is really being collected, both from the internet side and from the telephone side so we really know? >> sure. that's the problem. a lot of the press accounting has conflated these two very separate programs. on the telephone meta data side what the government is getting access to, what the government is having delivered to it is fundamentally billing records, records created by the carriers for their own purpose that are shared under a court order with the national security agency. >> that's broad. you're getting maligned. >> yes, absolutely. it's very broad. what is narrow is what the government is allowed to do with that data once it's in its position and that's to ask a question, a question that has to have a predicate with terrorism

and has to be arguable that that is a reasonable question to be asking that database. now the other program, the prism program deals with emails and chat rooms. some of that data for foreign intelligence purposes, not limited to terrorism, but the nsa has to believe that the data it is asking for deals with foreign persons, not u.s. citizens. >> we got run. just to put a fine point on it. when snowden says he could literally if he had the president's e-mail or my e-mail to look at my e-mail by sending a query to g-mail or google in this case can he do that >> absurd technologically, absurd legally. it doesn't just violate the laws of the united states i want violates the laws of physics. >> michael hayden thank you for joining us and clearing some of

this up this morning. >> knees a lot of stuff. >> knees a lot. >> i would like to know stuff the heat can't tell us. >> michael, if you're still with us you got to come on back. >> bring some stuff that no one knows that you're not supposed to tell us. >> there's a word for that down here called a felony. >> really? >> all that stuff that's blacked out when it's released. >> redacted. >> a busy morning for the markets. the nikkei down 6% overnight. u.s. equity futures are negative but off their loss of the morning. we got everything you need to know before the opening bell rings on wall street. that is coming up straight ahead. [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients

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welcome back. some days we have time to do chairs where we talk about things that aren't quite as weighty as japan. >> oftentimes you guys hold newspapers and just show them to the camera. >> i'll show you a picture and you may not know this guy but he's a david lynch icon. he's "blue velvet" fame. "twin peaks," "desperate housewives," "sex in the city". >> i know him from "sex in the city". >> he was married to charlotte. >> so we first met 15 years ago. i've been friends a long time. i went to dinner last night. i want to show you this wine. most famous stage direction in

shakespeare. it's exit stage left pursued by bear. washington cabernet. an acidity in this wine that i think -- i don't know it was delightful like a bouquet. >> you had it last night you meant this morning right before the show that's why your teeth are pump signal. >> no. trit because it's great and i told him i would mention it on the show. >> did you bring me a both signal. >> have a bottle but it's empty. what's most important tonight the overnight selloff in japan. early situation in europe and u.s. so stay tuned. my mantra?

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made a retirement plan, they considered all her assets, even those held elsewhere, giving her the confidence to pursue all her goals. when you want a financial advisor who sees the whole picture, turn to us. wells fargo advisors. that shows a closely watched confidence number access bid a group of traders two seconds before it's released. you can see trading exploded

two seconds earlier. >> this two-seconds heads-up was not well known. >> this is another reason for them to have no faith in the market. >> if the sec chairman calls us, this doesn't seem right. that's the end. >> welcome back. oil prices slipping overnight on demand worries, right now, it's down just about 37 cents, 9155 a barrel for wti crude. the weak dollar is helping to support the commodity in response to a global sell-off. joining us now is our chief economist krisoff. i want to see what you attribute this sell-off to today? i think a lot of people are surprised it is move income that direction. >> good morning to you, first of all, thank you for having me on there. we did an annual report that could have queues to that.

last year for 2012, that's the first time this data comes in. we had the biggest increase in oil and gas proungs in the u.s. of all the countries in the world. this was the biggest increase in oil production in the entire history of the united states. of course, behind that, have you the shale revolution. explains why we see oil prices not rising anymore over the past two years. >> what does that do as the u.s. becomes the major leading source of growth in oil production? >> it does a lot. when you look at the spire energy landscape, you have this picture of a spooth surface, a lot of moving parts beneath. one is the change role of the u.s. energy. on the production side, what you have seen is a decline in import requirements from the u.s., imports of oil peaked in 2005 and have since fallen by almost 40%. over the same time, chinese imports have risen 85% and

european imports which sometime ago used to be on a par with the u.s. have not kept up with the decline in the u.s. oil t. u.s. is swimming free from these connections and requirements from crude oil. on the other hand, the u.s. used to be a very big importer of products for gas for cars and all that. it is now the world's biggest product exporter. then there is an intricate story. you see how this impacts the rest of the world. we know about shale gas in the u.s. it has continued with this big increase in production last 84. all that gas got so cheap that it crowded out massively cold and power in the u.s. >> chris, i want to ask you about natural gas. i know there has been a debate about the u.s. becoming an exporter of natural gas, what are some of the concerns as we develop that process and what it would do to global prices and

demand? >> as a simple economist, i have to be for free trade. it's not only for the u.s., for the rest of the world to remain integrate and to remain engaged in importing and exporting. one of the things that would happen if you have to subsidize everything for the rest of the world, that spins over if production processes which is less energy efficient than they would have been in market price, since whatever you produce, you have to compete, products, you have to compete with the rest of the world, it makes sense to have a similar cost space for the inputs. >> krisoff, thank you for being with us, we appreciate it. >> thank you for having me. the worst levels in the morning, the full market story when we return. two big hours coming up. .

a global market sell juv, european markets down sharply over central bank uncertainty and the futures here down as we get you ready for the open on wall street. gold, fixed income, currencys and equities. we got you covered in every aspect of the market. plus your second hour of "squawk box" begins right now. >> good morning, welcome back to "squawk box" here on cnbc. joe curran can't even look at me at this moment. >> my microphone fell off. >> you never lost anyone on the

air. josh is with us at the table. take a look at futures. it's come back. the dow looked like it was off 44 points t. s&p 500 off about 6 points and kayla is going to explain why that is happening. >> we saw a round of stocks from acia plunging to levels not seen since before the bank of japan launched its massive stimulus program on april 3rd. it hit a peak on may 22nd. it's been down 22% since then. 12, are 445, stocks fall income shanghai as well as hong kong and korea. market itself there down greater than 2%. let's go to singapore where cnbc's chloe cho has more. >> remember, this market has

strength on one big events after another. we have the changing of the leadership at the bank of japan. then coroda unveiled uber policies, they cheered and pumped money into the equity markets. now, a lot of the excitement is gone gone. there is a sense of the party overhang, the critical puzzle is they came out with the 30 arrow, growth measures, ultimately, a sense of reality check of how long it's going to take japan to get out of its years of deflation. so now it's a chicken and egg game if you will in light of the fact that the next big event isn't until late july. is an upper house elections. so whether this market continues

to get back up is a concern. the traders say the nikkei and yen as one sells off, the other will sell off as well. so we will enter into a vicious cycle. it gives cheerleaders a black eye saying some are calling it, it was the reaganomic. there is a complete difference, japan has a key demographic difference with the united states, moving ahead, that is going to create continuing. >> tim: racings and -- continuing. >> tim: racings. ee owe gyrations. one of the reason is they

buffered up the fiscal positions. the key thing to watch out for really is we are looking for two deficits. the upper one has a twin deficit. this is why the indian finance minister came up with reforms, talking about direct investment, but also the central bank has its hands tied because of high inflation levels. so as we look ahead the key points, indonesia, india, what happens to them and the impact on the emerging markets. >> all right, claire, we'll be watching that. thanks for that report. the markets yesterday started off okay. the dow posted its first three-day losing streak of 2013. joining us now, doug duncan, fannie mae chief economist and investor/ceo of the growth equities. we want to start with our economists. i hesitate yesterday if you saw greenpan, if you did, that means you weren't watching.

>> glue. which is what i don't understand. when you were listening to him, did he make some points that you hadn't thought of or should we have all known? he described the exit process might be forced upon us and it might be messier than people thought since the balance sheet is so big now and you have to sell all that. >> he made the point three meetings ago with the fed, the first time they talked about what might happen when they change their posture. there were four days of instability and xhal capital markets just from the minutes. >> i think he twitched. >> he might have said taper and twichd, that was enough. the beginning of the beginning of the beginning almost. >> i don't think he's necessarily aligned with what chairman bernanke things they will go. if you think back to the greenspan era, june of 2003, exactly ten years ago, he prepared the market for 50 basis points of cut. they cut 25. in ten days, it whent up 50

basis points, so this is a reference back to ten years ago, that 50 basis points never came out of the markets. so i wouldn't expect this rise. >> we can handle this rise. another 100 basis points would get your attention. it can happen. >> i think the fed is likely not to try to take this out of the market, but to watch how markets react. >> what is your sense of when the taper begins? >> we have it in our forecast the beginning of next year. >> that's the earliest? >> they're saying september. we don't believe that will happen until probably the beginning of 2004. >> how do you think inadvisors can hedge against the volatility of rates? >> most people say we have rising rates by the end of this year. but if that happens more quickly, there are a lot of people who will be left without shares on the trading floor. >> yeah, i think that's the biggest problem the fed has is

they've taken all the volatility and duration out of the market. they were going to be working hard to prevent that from happening in the short term, whether they can do that or not, i think they will find out the global easing is going to have a bigger impact. the u.s. won't be able to drive the whole thing. that's a part of the story with japan right now. i think it will be a rough ride for investors. >> were you the guy that actually wrote the check to treasury from fannie? how much you paid like $40 billion, right? >> about 50. >> $50 billion, did you sign it if. >> no, actually -- >> what did you do? >> it will get there the end of this month. >> did it clear, do we know? was it one check? >> it will be there by the end of this month. >> the check is in the mail? >> exactly. >> it's a wire transfer. you don't write the check. >> suddenly franny and freddie. >> i knew they were great

institutions that we really needed, right? you have gone from hero to goet, to hero, to goet. >> it's been an exciting pla is to work. >> unbelievable.at. >> it's been an exciting pla is to work. >> unbelievable. do you say this is all just a lot of noise or is there something to this? you got to look at japan and think this could get nasty, theoretically. >> actually, i'm not going to say it is a lot of noise, but there is a lot of noise out there. i think people are overly focused on what's happening right now when the bigger story is what is happening in the u.s. economy, while here in the slowest quarter for the economy, this quarter, that's for the obvious reasons of the fiscal drg on the economy, we're going to begin to act sell rate to the balance of the year. so there are a lot of good

things happening here in the u.s., earnings revisions just turned positive in may for the first time in 11 months, the continuing initial unemployment claims are at the lowest level they have been since 2008. so the employment situation continues to improve. is, of course, critical. inflation is low. it has supported some expansion in the multiple. it will support further expansion. >> people say because we are at what 14.9 times earnings on the s&p that historically there is room to run there, when you look at earnings, they're not great t. majority of companies saw the revenue growing sletd of slowing. >> let's talk about earnings. in the first quarter, we had a 5% increase in earnings. that was a positive earnings surprise. what we seen in the stockmarket over many years is when the stockmarket has a big advance like it has had frequently, not always that, is a leaked

indicator of upside earnings surprises. you get the multiple expansion, the earnings have to come after that. >> how much more money have you put to work? >> we're not market timers. we really run fully invested. in the markets. we like stocks. we think the big picture here is that both individuals and institutions have to be moving in the direction of adding to stocks. they don't own enough stocks to fund the liabilities that they have to over the next ten years. in the meantime, the lost decade for bonds has begun. and so, watch out there. money needs to be continuing to move out of cash and into stocks and out of fixed income into stocks. financial, the households have only 35% of their financial assets in stocks. i know you have heard these

numbers before, 10,000 baby bombers retire over the next 17 years. if you look at private and public pension funds comboind, they have a 42% wait income stocks. it's too low, they having a chu aerial -- actuarials. >> if you go do japan and the nikkei, they could get your attention. >> if they do go up as much as they would. >> 1598 s&p inter-day high was an inter-day low. two weeks ago. so if we're down 5, the futures today, we're still above, we are down 7 now. we'd still by a bof. 1898 is where that 5% correction

was. >> okay. >> comments? questions? ask me anything you see on "squawk." you can follow us on twitter. taking a look at futures, we are off the low, still mixed s&p, dow, nasdaq would all open lower right now. take a look at the u.s. treasury the ten-year note yield is up just slightly.

>> let's look alt the economic data, coming up at 8:30 eastern time, retail sales, import and export prices. later this morning, business inventories, also this morning, realty track is saying the home repossessions are up 11% in may compared to april as more completed the foreclosure process. it should say those numbers are down 29% versus a year ago, that's the good news. apple reportedly seeing iphones,

the company also is said to be considering launching a cheaper version of the flagship phone perhaps with a price as low as $99. would be a different price point those moves, however, are only in the discussions stage. >> let's head to europe for a look at the markets overseas. tell us, still, any, nothing better over there, ross? >> it is a little better. 8-to-two. is better than 9-to-1 earlier. three hours ago, 26 stocks, the best sessions of the day, nevertheless, though, of course, we come a long way from the recent high, before this morning's session, 8% from the highs for the year. down another percent this morning, currently 54 points, this loss is down two-thirds,

it's up a little bit. not the yields, the solid demand, wholly because the yields were high. this is where we stand the yields 4.32%. we had been up 944.66, which was the six-week high we hit two days ago, just on that italian auction, by the way. unless you saw yields on the 15-year come down slightly. they were elevated for the three year. the yields are going high, people look at the spread and still say, you know what, it was a decent carry there. will keep demand fairly healthy. the biggest one in the u.k. has been surrounding the u.k. state group up 4%, it was down 6% early on. it was announced last night. stephen hess the ceo will be stepping down the end of the year. he didn't want to go.

he will take it back and stay a long time afterwards. investors decided it is a bit too much of government back head e pedaling. they disagree on strategy an that's why investors are a little upset. they also are rather pessimistic about whether they'll be able to take it back forward. that's the way we stand in europe. back to you. >> thank you, ross. we will get more of what to expect in this session. charles, thanks for being with us this morning. there are a lot of things to choose from this morning that are moving the markets, there is some profit take income asia. we have the jobless claims the world bank survey that shows that global growth might be a little bit more tempered than we expected. what are you choosing from, how are you trading on this morning? >> good morning, kayla, i think the world bank is an acknowledgment of what people understand and appreciate.

i think the market trend is driven by the prospects of central banks, process initiative, on uncertainty on economic prospects around the world. the includes the bank of japan the third prong stimulus was put off after the fall elections will be held later this 84. disappointed mashlth markets last week. disappointment about the policy initiatives they may have and uncertainties stemming from bernanke and the minutes from 8-22. >> we are looking at that time safe thampblgs dollar, it comes to a ten-week low versus the yen. i think people thought the dollar would have risen out of what we seen from asia. we seen volatility in gold, too. what is the safe haven trade now, there one? >> i would say this is not a safe haven move.

this is a little more nuance. there is a carry unwind going on. that's a little disturbing. deep liquid foreign exchange markets. the yen up against the euro about 1.9% today. it's also up against the u.s. dollar, investors were short the yen, because it was cheap to borrow now are covering the trade. so the action is really a byproduct of what's going on with the yen. consistent with the lack of the safe haven trading, we don't have gold skyrocketing. gold is only at 1385. >> what happens if there is a surprise in the jobless claims number for the last four weeks, we have been between 352 to 355,000 roughly, which is down from even a year ago sharply. could we see a surprise there? and what would that do to the markets? >> we could see a surprise. it's a high frequency indicator as you know. here's what i would expect, knee

jerk would be risk off and rally because of the implications regarding the tapering time table by the federal reserve. if the jobless claim is stronger than expected, you might have a little bit knee jerk up and then the reverse action trading off a little bit as investors again worry about the timing of tapering, which, frankly, i think taper is going to happen when it happens. it is based on the data now for good reasons. the economy is getting stronger on a virtuous cycle. >> we had all indices in the red yesterday, when you look at the futures board this morning, it was the dow's first three-day losing streak in recent memory. whats to the market psychology if we are in the red for four days, all of this week, how long will this pullback last. what are you expecting? >> here's what i would say about the market psychology. this is largely an emotional response.

market itself don't change the fundamentals don't change in a sex-and-a-half hour trading session. rather, what is happening, investors aren't settled for the reasons discussed. i think what happens is we break through new technical levels, the three consecutive down days. markets really, the economy continues, things haven't changed on a fundamental basis all that much. ironically, it may turn out to be a support an a reason for markets to then rally from lows. >> so a quick shot remembers charles, to wrap it up. if you believe the fumt fundamental ams are strong, do you buy on these dips? >> i think you pick the sectors you think have the good long-term fundamental prospects. when there is share price weak inside, you get involved. you don't go all in. >> thank you, charles campbell at mkm partners. coming up, the chief

investment officer frank holmes. when he comes on, i say, hey, holmes. he will react to the global sell-off. they're laughing a lot. both of them. then we head to the morningstar conference to talk fixed income with black rock james keenan. "squawk box" will be right back. .

>> xents? questions? anything you see here, shoot us

an e-mail or follow us at twitter. we have red arrows across the board still, getting better. the dow opposite 6 points and take a look at the nikkei overnight. we will have more on this global market sell-off and your top business stories when we return. also at the top of the hour, cftc commissioner bart chilton, he will be our special guest. "squawk box" is coming right back. .

welcome back to "squawk box." checking futures this morning him take a look. you see all the indices in the red. the dow opened 43.on the downside off of the lows earlier this morning. we do have about two hours before the open. in the headlines american airlines is adding more seats to the jets. they will be added to the boeing 737. the airlines hasn't decided exactly how many seats to add. coty begins trading today at 17.50 per share. depending on how many shares are

bought, this could be the largest ever ipo by a u.s. products company. let's take a look at the safeway shares jumping on news it sold its canadian operation for 5.7 billion. the buyer is the largest canadian chain in alberto. >> turning back to the markets, macneil curry rates at bank of america, merrill lynch. what do you see tech physically and i mean we got a lot of reasons to back it up fundamentally. where are the support and resistance levels for a lot of these markets, macneil? >> the first and foremost is the price we've seen out of the u.s. treasury market over the course of the past several weeks. that's been a driver of what we have seen. i think as long as u.s.

treasuries yields are set higher, i think you are going to see a continuation of this larger risk off event which has been predominantly an emerging market fixed income and foreign exchange carry unwind story. so with respect to the key levels, the u.s. ten-year yields 230, 240, those were levels effectively set in the highs of 2011, 2012, u.s. ten-year yields. that's a significant barrier. it looks like the republicans were to make a run there. we could see the thing accelerate liar. i think as long as treasury yields remain in an upward trajectory, this carry story continues to unwind t. second story would be the japanese yen as a correlary to the yen.

>> if you look at the yen versus the dollar. >> yes. regardless of what you put the yen against, whether it's a dollar, sterling, euro, take your pick. it has been under the yen has been appreciated as that leg of the carry trade unwinds. >> do you like, we should do the ten 84, not the 30 year. you are showing charts, motely focus on the 10 year. what would surprise you, what would not surprise you on a yield and what would really surprise you? 2 and a quarter, 2.30, you physical we are going to see that, aren't we? >> certainly, ewould expect we will see a test of that, it might not be today, it might not be tomorrow. i suspect we will. >> what would surprise you, 3, 3-and-a-half? >> if i woke up tomorrow morning and saw 3-and-a-half, that would surprise me, yeah. >> six months from now? >> three-and-a-half would be a surprise, i think closer to 295.

>> the risk would be pick up steam if we went to 295, wouldn't it? >> it depends. when you get into treasuries, risk on, risk off, that doesn't matter. it's the rate of a credibility. if we were to move higher, that would be typified of a rotation story out of treasury into say equities or thereabouts. if you see a rapid move to the top side yield, that would be a bit more of a negative event. >> all right. macneil, thank you. it will be interesting to see. we'll have you back. thanks. >> we will go to holmes in one second. unet is acquiring blo. that's $13.75 per share in cash. is a 28% premium this monk on

that deal. it will put gwinnett's broadcasting group. gannett group, they will be at the no. 1 cbs affiliate group the no. 1 nbc group and the no. 4 abc affiliate group following that transaction a. quick note gannett saying it will continue its buyback program. it has replaced it with a $3 million operation. >> the president of the broadcasting was at blo gfr going to gannett. >> are you a blo man? >> i have been following the stocks. belo. >> we are like a middle aged.

>> middle aged media? >> but 50 is the new 30. so i don't know, i need to know how media plays out. >> the question is table may be the new media. cable may be the new media. >> i don't know if it's people watching when they won or computers. are you the one that is supposed to know. are you the disruptor. >> this is true. anyway, we watched gannett stock today. >> the full market on the cover of "usa today" on the day we peaked. that's all i know. >> let's talk markets. now get into commodities, like gold dealing, we are talking the fed are tapering the moves. we don't like to swha goes on during the break. joe was getting on you for gold. >> he threw gold under the bus. >> i never said -- >> you used to love gold.

>> i wrote a book on gold. i've always advocated on the program or any other program a 5% exposure to bowl yoven an a 5% to gold stocks. rebalance it. there have been points it's been extremely overvalued. now we're in the correction mode. what is important when you look at gold, it has its own dna volatility. the vol telt is plus or minus 15%. any time it's up 30%, take profits down 30%. right now this correction is not equivalent to 2008 percentagewise, it's not correctly the same percent annual. so it's a fawn event for gold, another $100. >> you made a comment during the break this is somehow seasonal. what does that mean? >> the jewelry, i call that the love trade. it starts the season off at the bottom of the to be, july and

august. it runs until chinese new year. you have the sequence of one holiday after another truly impacted. >> i am july 13th. i take offense to. you get good pricing. >> even better. >> expectation price? >> i think gold can easily bounce here. the ratio i would sigh 10% on the downside, 30% on the upside over the next 18 months. >> i'd like to point out a week ago the speculative short position in gold was at ap all time high. it was off the carts, just like it was a week ago for the short position and the yen pound if europe. we've seen what happened to that, whether it be on the other side of that trade. whenever so many people are on one side, i will take the other side. i think gold probably rallies here until the end of the year. >> the liquidation of a short

position, physical demapped is at record highs. people are buying gold coins, one-ounce gold coins, waivers, all over the world. >> do you think this is going to be a massive failure? when you think of the fed tapering problem being a success, gold doesn't rally on that, does it? >> well, you know, the fed hasn't announced when they're going to begin the tapering. there were a lot of signals last week from a number of different fed heads skuth suggesting the time frame will be september. i'm not sewer that's the case. you know, i think bernanke has to do a better job of communicating what it is the fed intends to do. in the meantime the market has priced in i think a september time frame for the beginning of tapering. i think we are perhaps a couple years away from actually raising interest rates. >> that thought process is important when you go into gold and the commodities is the

intrael rates that, is, what is the cpi number, what is the treasury bill rate. still, with this rally here the treasury bills are way, way below the cpi number. historically 2%, we have to have inflation running at one and a quarter%. we have to dampen what took place in the ''80s in the commodities cycle. in the '90s, you had positive real rates over the cpi. it's still negative. >> also, point this out, going into this year, the best two asset classes were gold and emerging market stocks. they're both pairing tear game, redressing a bit. that's normal. should be expected. that can continue because those gains for those previous ten years were so great. so it doesn't mean that gold will go down forever. i think it starts to build up. >> to add to that, since qe1, the best performing country was indonesia and turkey up 300%.

they're going for a correction phrase right now. that's 300%. >> in energy, you totally understand oil being at 95, even though the globe is low. >> oh, yeah. the big factor is the costs. the costs to explore and develop. >> it got more expensive. >> it's now pushing $104. so you are seeing -- >> that's liquid frack, that's not gas. >> it helps our manufacturing capacity. we see more manufacturing coming to the state. i think that's what gives us the pricing power around the world is bus of our inputs. what you got to pay for a dplon of gas here, everybody companies about. if you go to columbia, it's $2 more a gallon. you go to europe it's twice the price per gallon. >> per liter. >> per liter. >> even more expensive there. we are seeing the numbers in oil this morning, that it was the largest production increase in u.s. history ever.

what does the supply look like long term. >> i think it's 1% per year. what's important is urbanization, it's estimated in the super cycle over the next ten years for the percentage of the world's population to go from 3.5 billion in city centers to almost 5 billion people. that's intensely demanding on these commodities. under luck one of the worst performing sectors in energy stocks and the dividend yields are 4%. >> thank you, appreciate it. >> good to be here. >> thanks, holmes. >> you said it earlier, it never gets old for me. i don't have any new material. it's always old. is it urban when i call you holmes? >> perfect. >> i think people would look at you two gentleman and say that's

an urban interaction. >> it's coming from the heart. >> i think you are right. coming up, we got the search for qe guidance, we will preview the next fed meeting and leverage finance unit. "squawk box" is coming right back. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to.

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uses 89% less energy. and costs 77% less. it's called hp moonshot. and it's giving the internet the room it needs to grow. this ...is going to be big. it's time to build a better enterprise. together. >> welcome back to "squawk box." back in february, carnival cruise lines went through a nightmare after a fire left thousands of passengers adrift in the gulf of mexico. now they are trying to set sail again after $15 million in repairs and upgrade, joining us

from carnival cruise lean's ceo. janet. >> we are broadcasting on triumph this morning. i have mr. pahill, jerry, with us today. it looks a lot different than when it rolled into mobile, alabama. i was there. it's a different ship. >> i was there. i walked through the whole ship, i met the guests, you are right. we spent money an time to refurbish the ship. >> you had major safety improvements in a short period of time. what were those improvements, how were you able get it done? >> the ship ended up being out of service for four months. basically the safety improvements, one, fire safety, suppression systems, the second water the biggest problem we had on the triumph was we lost power in both engine rooms. you are not supposed to lose power. you should lose it in one engine room, not the other. we have rekrabled the entire

engine room. this third piece was we put on a generator. >> overall, you earmarked $3 million for ships in your division. how many have you been able complete at this time? what would you say to passengers fearful of getting on those you van yet finished? >> so far, this is the second ship that has everything done. a lot of the other ships, the changes are minor. we're not talking about a safety issue, all the ships have and continue to meet all safety standard, we are going above and beyond t. real dollars being invested are doling with the comfort issue. not with the fact on the triumph, a lot of guests were subjected to discomfort. >> yes, they were there so we're trying to dole with that. it's not a safety issue. >> so three weeks ago, you had to heavily discount cruises to fill this ship. when can shareholders expect

that to end? and to how much have you had to discount? >> well, every ship in the fleet, pricing on every cruise is managable. >> how about a number? >> there is no specific number, every one is different. we feel pretty good about this, we carry 4.5 million guests in here. we have a lot of guests. this cruise is sold out. that's 433 people. across our fleet, we will carry 4.5 million people a year. our guests, our past guests are coming back. >> jerry, thank you for being with us and on your hospitality on your ship. >> thank you. >> joe, back to you. >> nice to see her on the network. coming up, the triumphant return, the cftc commissioner bart chilton is going to join us for the remainder of the show. he will be here for the whole

hour. >> a triumphant hour. he looks like he knows about everything, he looks like a james bond villain t. futures are much better than yesterday, we'll be right back. at honda, we know some people are never happy with the way things are. and are always dreaming of how they could be. smarter, simpler, how-on-earth-does-it-do-that... er.

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the fed meeting is days

away, many investors are looking for qe guidance. right now we want to look at the bond market. jim keenan, black rock north american's head of credit, leverage finance specialist. jim, i want to ask you first and foremost about the fixed income fallouts we seen from rising interest rates in the last month. i was just looking at the bond fund down 8% in the last month. that's pretty much wiping out anything you would have been making in yield. how can you put it together in fixed income? >> yeah, i think you have to look at what the sell-off about right now. this has largely been caused by two policies. the bank of japan is exited to inflation. you seen bond markets not seep in too dramatically, the fed introduced the tapering. but the reasons for the sell-off are a bit different tan what you

saw if 2010-2011. in 2010-2011, we were fearful of the recession. remember, if fed is introducing tapering because they feel the economy is improving. you see that in some assets. last time we talked about fixed income investors have to understand duration risks in their portfolio. we were saying you should be tied to bank loans as a means. >> so we understand there is a sell-off going on. where can you buy right now when prices across the board are coming down? >> right, if you are a longer-term investor. there is a good opportunity to by here t. rate market is stevele steiffeling. we thought bank loans were attractive because they had a lot less duration than fixed assets and less vom tilt than

the equity markets. most high yields are down 3% from their high the equity market is probably down 5%. >> so from a relative perspective, it's a good investment? >> it is a good investment longer term. it is, we still favor the equity market longer term. therefore, because we think the economy continues to grow and cash flows will grow therefore the rick metrics within high yield are still good. i mean, we seen these sell-offs before. they tevend to happen when there is a crisis. this is an onu unwind of the carry trade. >> the sell-off? >> i think, you know, you will see this going on for the next couple days. i think you will lock for stable going into the fed meeting. >> jim keenan, last point, jim, all yours. >> no, the last point, i would say i think the market will get better and will grow.

i think the larger end the current will drive. not in the last month. >> i know investors are watching those fixed incomes closely. >> andrew hasn't seen being there. never mine. he watches it immediately. he knows there is growth in the spring. >> i do watch. >> i can't do that -- bama. >> the morning sell-off plus we will be welcoming ctfc bart chilton to the set for the remavender of the program. .

>> global stocks taking a beating after the 6% sell-off. we will tell you what it means for stocks and commodities. we will bring you the best investment ideas from the morningstar conference. >> and breaking economic data, the closely watched weekly jobless claims and import/export prices hit the tape at 8:30 eastern t. third hour of "squawk box" starts right now.

♪ >> welcome back to "squawk box" on cnbc. i'm joe curran, becky quick is off today, doesn't get it. how many kaylas do you know on tv or cnbc, none? >> there was a kay lar brady from "days of our lives" which is my namesake. >> one of them you were named after? >> in freakon-onlyics they did the resumes, they did the low socioeconomic. >> trailer trash? >> yeah. >> you go, girl, i'm from the that neck of the woods.

cftc bart chilton, are you blue blood? where are you? >> i'm a consumer guy. >> except for sorkin, we're on the same page. barlette chilt isn't here. blue blood, your pedigree is impeccable. we will start off with a global sell-off which we started kind of. we're not nearly as bad. we are down maybe gotten you better, andrew. it's only 37 points. >> we were down triple digits yesterday. >> and the day before. >> and the day before. so we are the dog, not the tail. >> yeah, that's what i think. usa, we are watching the s&p closely t. closing on s&p was, i forgot, 16, around 16.20 i think. it got down to 15.98. today now it looks like it may

be now know more than in the, let's see, i looked at it earlier, i got it off my page. we were down maybe 2 pointsch we may be a 16 honey 10. overseas if asia, the nikkei levels we are watching. after the bank of japan launched that stimulus program, now it's if bear market territory. now down 21% from last month's five-and-a-half 84 high, don't forget, it's hard to believe that that was 30 40r,000 at one point. almost was like our nasdaq, really. nothing else compared to it t. short-term traders, warning that a move below 12,000 would force the market into even more dangerous and volatile territory. the dollar is down sharply against the yen as people cover short positions in the yen.

european equities, they're all down as well, also probably up from yesterday. for more on the slight, dennis garman, the founder, editor ohrt letter and den fis, normally, you know, i've worried about nine out of the last two stockmarket real pullbacks. we are always worried. is it just me that sometimes it is that rts in far away places, we don't see the implications here. then we should have been able connect the dots earlier on? are we seeing anything like that in foreign markets yet? >> i liked your comments, it was like pulling a thread on the side of your coat. you don't know, you aren't aware where the problems are from. you have hedge funds which are long on japanese stocks, short on the japanese yen, which is basically the same trade. they've doubled up. now they find themselves in an

uncomfortable circumstance. this is something that's happening around the globe. trend lines, no matter how simple you want to make them as being broken across the board. these are difficult circumstances, there is more than just a simple two or three-day correction. this has the lock of something far more material to it. it's quite honestly, this is rather scary. >> what is ground zero? the dollar, is it the tenure? is it japan, china? where do you think is the thing that everything is going to key off of? >> i think what people have forgotten and aren't paying enough atevengs to is that the bond market made its high, the yields made their lows almost 15 mon efforts ago. i don't think enough people have paid attention to that fact. the long end of the curve, rates are going higher. perhaps the fed is comfortable with that. the fact is rates are going up and the markets find that

disconcerting. now, i think perhaps that's a little overwrought. maybe you shouldn't find it all that disconcerting. we have so many people with so many stocks because of low yields, they look around, they've extended out into high yield equitys. they find themselves in an uncomfortable position. now they have no choice but that margin corpss are having their day in the market, too. >> you saw that the smartest bond managers in the world all got, how can they be caught blindsided a month ago by this move in rates. you wonder if it went up more quickly or further. you wonder how many people are exposed. the margin querks you were talking about. the fed is throwing everything at -- we're doing 0% interest

rates. are they losing control of keeping interest rates low? >> one gets that opinion. i think that is what one should be concerned about. the fed has used everything, the kitchen sink has been thrown in. what more can be done? that's the collective question being asked. the answer is -- >> maybe they do want rates to start going up. they got to go up sooner or later. maybe three weeks ago, he wanted to telegreve that. is this what greenspan says this is what it didn't have the time it said it was? >> vigilantes have been going forever. there is no inflation and no prospect for. >> they're simply back because so many people extended out in the curb as as far as they could. the market as an explore trader, we had a saying that market will go to the most damage to the most number of locals as quickly

as possible. actually the markets do the most amount of damage too late t. late investors were extending to find yield, extending to find stocks. found themselves overextended. >> you know, dennis, we have bart chilton here. he wants to regulate everything. can we put a cap at ten year yields, have you suggested that? >> dennis, will that work, what do you think? >> i find many chilton one of the scarier people in the government. >> i knew i'd get this started. >> boo boo boo, dennis. i was about to give you a compliment on your prognostication. good, maybe we ought to keep this going. dennis, thank you, we appreciate it. we'll have the aforementioned bart chilt isn't here the next hour. >> we've had other free market times say that. you are just trying to do your job. >> you know what, it's all a

question of balance. that's what we're trying to do. >> let's talk about that balance. let's say are you a squawk news-maker. i don't know if you like being described that way. >> i have been described worse. >> you just were described worse. >> breaking news for us. >> absolutely. today i'm giving a speech to international bankers about one of the key issues left in financial reform. is how rules apply in a patch across the world. cross-border rules. because you know rick knows no bounds now. we learn from 2008 with aig, the losses were in london. it went to other way, when wehman went down, we lost in europe. we want a nice patchwork of rules which are fairly harmonized. today we need to say we need to give guidance on explaining what we are trying to cover. take for instance 93 banks have

$223 trillion in derivatives. 93%. they have 3,300 sub sit areas all around the world. so if there is trading going on over the world that, risk can come back to our shores. today i'm proposing we provide this gains and stagger phase-in our implementation of the various rules. these are key rules under financial reform, like whether or not things are cleared, either backed up, whether or not there is enough margin and capital requirements for traders, so they're backed up. whether or not we have adequate customer protection t. last thing is have key transparentally provision, like seeing post-trade, transparency, so we can akroid the live or benchmark scandal and other things. >> it sounds like are you on the side of gary gefslor. are you with larry or no? >> i think he agrees with most

of these things. >> i am seeing foreign derivative, three of the five commissioners publicly question the time line for passing those glievenlts are you with ge or against gary? >> i support the chairman. i think he has done a great job on this. people try to make this a sides. i think it's a question of balance here. it's not this or that or one vote. this is a really delicate nunsd approach. what i'm -- nuanced approach. i think it can get us there. people want to make this, andrew, sort of some clash of the titans between europe and the u.s. we don't have a cracken. it's about koortd nating these things, being cognizant of each other globally. >> how do you enforce that when are you trying to get them to comply with what you are doing here in the u.s., you can't really? >> you can't. one of the way, kayla, we have the provision in dodd-frank

allows us to do stutd compliance. so we can allow the eu to govern the subsidiaries of u.s. swap steele stealers overseas. the rules have to be comparable. they don't have to have word-for-word the same sort of rules that we do. of course not, they have to be xravenlt i sort of compare if the eu and u.s. does this, global rec latory stuff on swaps. if we do it. they do i, it's sort of like field of dreams. if you build, he will come. if we in the eu build it, i think the rest of the world will come and we'll have comprehensive harmonized rules that will make us safer into the future. >> bart, i node to you help me explain something about what's going on in washington right now. depending on who you read and what they're saying, there is a suggestion that he was eased out. >> we talked to him yesterday.

>> but amanda rittaria is being nominated to take that role. >> i don't know that to be the case. >> what do you know about that? >> i don't know anything. i'm like schultz, i know nothing. foy kwus on -- >> you read the same reports i read? >> yeah, there is conflict reports on a bunch of these things. >> you have to have some sense. >> i'm not the president, i'm not the white house t. president makes these sorts of decision on nomination. once i learned, if you second guess that, are you absolutely blind. >> has there been discourse the way these things suggested? >> i don't know whatsoever. i think he's been a great leader and forceful with pa lot of issues. by and large, these commissions have been fairly nonpartisan, dodd-frank made it a little more partisan, let's get back to where we fry to get the things done. financial reform shouldn't be a

part of the issue. >> sergeant schultz. >> which of you two knew? >> my confidence is way too old. no idea. >> i water thinking howard schulte. >> i was thinking george schultz. you had no idea. >> i want to get you. hogan. >> i will show you this story in today's "wall street journal," traders pay for an earl peek at data. eamon javers from cnbc yesterday broke this story, thompson reuters reletss two seconds earlier a surgeon piece of their survey the monthly report to investor was pay additional money to get that report early. and there are some questions about it. i want to get your take on whether you think it's fair or unfair. i'll tell you my position in a second. fair/unfair to get access to certain pieces of legislation like this early.

>> information is the commodity. i mean, forget about an hour-long massage. thompson reuters is paying a million dollars a 84 to get a two second advantage from the university of michigan. >> right. >> what that means is that two seconds. >> this is the consumer confidence survey? >> right. these are millisecond martz, two seconds is huge for them. >> so my position on this is actually i'm not that bothered by this. i look at the news industry. i say if you want to get bloomberg news, for example, have you to have terminal. >> we were having this debate on the other side of this during the commercial break. >> if you have a dow jones terminal, you can get access to "wall street journal"s stories in advance. all of those things cost money. there are premiums nor this information. so i'm unkwloer why we decided this information is somehow more

valuable or a public good than other that other news organizations -- put news organizations aside, dana is constantly taking research. if you don't pay for it, you don't get it. >> bloomberg news owns bloomberg fuse story. this is thompson reuters taking third-party information. >> this is the seam way if i hire five reporters to do the survey. >> the quo to whether you are saying, loose, it's a debate. we do a concept release on these technology issues in a month or so. i will be talking about it in a week. but it's all about money. right. if you have the money to afford these extra services, if you can have five reporters, if you can have a supercomputer and do high speed traitd trading? you have to have the money the

best the fastest computers. >> the question then becomes is research of any sort. i understand the bls report, it's a government service. it should be offered to everybody at the same time. how could i have a research operation that moves the market? kay schiller, that is an index. it's their own thing. they shouldn't be able profit from that. >> i'm sake it's something we need to lock at. there are lots of service, you are absolutely right. what they do, a lot of them try to come up with that same number. exact same number an release it. they're releasing it sort of metadata. all the data comes through to a super computer. it gets traded upon. i'm not saying that's necessarily bad. we shouldn't blindly accept it. maybe there won't be any mohr floor traders. maybe that is okay. we shouldn't not question, not look around the skoern and say

this is where we want markets going, there is no fundamental thought in two swhaekdz is happening in market? i think you are taking ap an a larger issue with this news coming out. we will have more from bart in the hour. coming up, portfolios, cheat thats. >> there's like cougars, you thought 579 0r8 cheetahs. >> i was thinking of the tripp tips, owl over your hand. watch playboy channel. we want to talk global stocks with mark yokyey from the international fund. but to us, less isn't more. more is more. abundant space, available leading-edge technology, impeccable design, and more than you've come to expect from a luxury vehicle.

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♪

>> welcome back to "squawk box." our next guest looks for international markets. joining us mark yockio knock yo. partying like it is 1999, mark, what are you looking at this morning? we are seeing futures come off the lows. are we going to see a relief

once we open in the markets or do you think the reds will stay around? >> well, kayla, i'm not good on the day-to-day stuff. with remore long-term focused. i'm guessing things aren't quite as good as people thought a month o'go. they are not as bad as people think they are today. >> from a long-term perspective, given the pullbacks we have seen in almost every single international market today, where do you think we will go from here? do you think the pullbacks will continue or do you see broadly equities across the globe going up? >> i think we will be choppy for a while. i think the issues will be resolved, in china, on a global basis is slowing down, our focus is to focus on the companies growing one way or the other whether the global economy slows down or grows at the pace it is growing right now. >> so what sectors are you

looking at? what specific names are you look at within those sectors? >> we take out the manic approach to international investing. we look for global trends in where we might find opportunities in those global trends, one of the big ones we have identified. it is evident in a while, the companies with exposure to the emerging markets consumer. their incomes are rising. people have more money to spend. more people are brought into the middle class every day. we focus on finding companies in europe and around the globe that have significant exposure to emerging markets. companies like unilever and budweiser and companies that make nivea skin cream. all these companies will do well for the foreseeable future. >> at least those regions will

hold up in the long term? >> sure, a lot of these countries, incomes are growing at 10 or 15% a year. their economies are growing a lot faster than the u.s. or europe. means people have more money to spend him people in emerging marks want to buy a lot of same products we do. until know now, they haven't had the incomes allowing them to boy them. >> what do you say for people who say europe is still uninvestible? >> oh, i think that's nonsense. europe has lots of good companies that don't just sell to the europeans. they sell all over the world, just like coca-cola gets 80% of their products outside the u.s., there are a lot of companies outside of europe, luxury skwood gaens companies that make the predominant part of their profits outside. >> thank you for being with us

this morning. >> thank you. coming up, we have breaking nick i economic data. we will have import/export prices for pay and i don't think you can get that two seconds in advanced. zplmplts

you can see trading exploded two seconds earlier. >> within that 9:55 call was reasonably well known. this 2 second heads up was not wen well known. >> this is another reason for them not to have no faith in the equity market. they believe the system is rigged against them. >> this should end. that's the end. >> you are looking at futures right now trading off the lows in the morning. you can see the dow off 41 points the s&p 500 off 6 points.

coming up, we got breaking nick data. we are seconds away from may. the weekly jobless claims

numbers. zplmplt >> welcome back to "squawk box" this morning. we got weekly jobless claims. ahead of that, the dow looks like it is off about 6 points t. nasdaq off about 13 points, rick santelli in chicago, steve is here, rick, the numbers. >> the litany of data, retail sales surprisingly strong, headline up .6. if we start the take away, autos up .3, good number. autos and gas up .3, everything outside the headline is spot on, pretty good. we had a stronger headline before you did the take aways. initial jobness claims moved down 12,000 from an unrevised 346,000 to a grand total of 334,000 and import prices dropped .6 of 1% on a month over month, shy of 2%, down 1.9 year

over year, both numbers are larger negatives than anticipated along with larger negative revision, last month down half a percent down 2.6 on year over year. really quite an amazing round of data points t. news is if they go up, not down. dropping importing prices is key, especially if you are one of the many watching huge amounts of volatility. let's not go inflation/deflation. once again oil an gasoline, especially us in illinois are paying some big prices, back to you. >> we will get more info on the data, you see the futures there moving marge family. >> you are in the bad news, good

news is bad. >> you went both. >> no, i am focused on this. i am laser focused. thank you very much. >> good news is good news. if people are spending, good news, prices are lower, that's good news. >> paper. >> i'm not going there. i don't think less fed in place of good economic news is bad. >> here's what scares me the bond markets starts responding to positive news, japan gets settled here. we start hitting these numbers. people start worrying. >> can you give me one of your oh my goods! 220. oh my gods! why are bond yields up there is no inflation. well, if barn yields are up, in

general, we say it's because of get better economic growth. >> i know. i can't help that. the retail sales numbers look pretty good. what i think happened, they revised up what we call the core or the control group, it feeds into gdp for april. may is good. i'm thinking these will come along with upwardly revised gdp numbers. i think we're going to be up around 2%. it's kind of going to maybe start to take the one handle off or lower import price numbers go along with what we have seen, the lower inflation numbers. that gives the fed a chance to make a mistake on the upside it would believe. >> 21 now. >> hey, steve, the control group was revised .3 lower which is surprising -- >> go ahead, rick, sorry.

>> it was .5 last month. it is now $2 on the revision and .3 on this number. the control group was downgraded. >> i saw-1. what was it this month, rick? >> on this month, .3. the same as all the take-aways. ex-autos, gas and control groups were up .3. >> i had a2 and-1. it may be a wash. i'm not sure. if it's revised upward, then it would be a 2. but i just had the wrong piece of data here. >> you could argue that if the economy starts, we get numbers like this, then if we see a bond market 220, 221, you could say there is a reason for it. not the negative people say it's the fed losingiol. if positive people say there is good reason for it. it's good news. >> i think if the fed sees interest rates rise, the thing

they would be concerned about is two-fold, one is an inflation uptick. another thing would be concern about financing the debt. which we had a little scare of that. >> in japan. >> with the s&p downgrade. will people buy our debt? those are two reasons. i don't know what their tolerance is here. i think if they had any concern at all, they'd lienl to see mortgage rates as low as possible. one of the things we neated was not just an increase in the mortgage rates, relatively, it's gotten more expensive. that's an area of concern. i don't think they knows what to the tolerant is in this housing market, whether it needs a subsidized mortgage deal. >> steven,ly go back if you can to the jobless, isn't that a

huge number? we were down 11,000 last week, down 12,000 this week, it seems like aren't we 6 thoichl jobless claims above the five 84? that would be before back when we had the economic meltdown. isn't this sa huge number? it's a small number. great news. >> we try not to make a whole lot of the weekly data. it was in the 350 range, right around there over a couple weeks. now, maybe it's stepping down into the .340. will tell you a bit about job growth at maybe 200,000 or a little north of that. i didn't see, rick, i'm having trouble on the xumplt it's all my fault. >> 334,000 continuing. 2.97 million. >> we stepped down, bart, we are below that 3 million range. is a number economists used to forecast unemployment rate. what i have been hearing is if

it stays below 2.49, this is something that looks like this, the continuing claims go like this. the unbloim line goes along it. a tick here, a tick there. these are all improvement, bart, but they're not rapid improve him. they're not like if we saw 300, 2 nevenlt they'd get very excitedp. if we saw 200,000 for a while, people price out the fed. i think a beth bigger question that a lot of economists are asking is what exactly is happening to the sequester and the results of that. whether or not that's been offset by the stockmarket. tlen then there are those authorities that say there was no big effect from the payroll tax cut. it was temporary. very much the austrian school of concepts here, they would say,

you know what, there is no effect of raising it then. there is a big debate as to whether or not we seen the worst of the sequester or there is still the sequester to come. >> wait until you see the guys in the white house about how much they cut the deficit soon. they won't bhengs mention the sequester. they will go to a victory lap. suddenly, it will become, initially the administration sort of thought of it. then they pushed it all on the republicans. they're going do come book where they don't bring it up a whole lot. >> brip how well the efforts are going to cut the deficit. >> you are right there. are you probably in an all those conspiracy theories going on there. can you hear all this? >> i hear all the conspiracys.

>> yaend has a $115,000. >> everybody gets hit by the sequester. the sequester is essentially to me, it says government has broken down. it hits pocks on everybody's house. >> so you haven't come into the latest. we have done reports. >> i will get the memo. >> it's probably there. >> there is no out the u.s. is one of the strongest of any countries over the past several years. whether we wanted it or not. >> it wap just tax increase either. >> there's cutting. >> a little bit. >> the last two years, joe, federal outlays were negative. >> you rampd up. >> we were in the recession, steve. >> am i understanding you? >> no, i'm watching you closely, how you leave things out, add things in.

i do it. what did you say how you stands depends on where you sit. >> where you sit depends on where you stand. the reverse is possible. >> do you want to yell at rick? i don't have it in me today. you got anything for him? >> what, who, say it again, i didn't hear you, joe. >> i don't feel like yelling at steve, has he said anything patently false or misleading? >> no, no, i think steve is sounding remarkably free market lately. hey,ly give you one statistic. okay. >> love it. that's a big change for steve. >> up until 2007, $5,000 a year bought you about ten minutes early release on university of michigan and in the '70s, it was a whopping $600 a year. prior to that, from 1946 on, they send it to you early via mail if you were an alum.

>> the inflation indicatorment i like that, rick. it's all determined to the returns to it. >> we got to go. >> i will put data on that. >> we will continue our all star investor series with value techs. he is well known. a simple q le . ueue howyou've known?ldest pen we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪ to enjoy all of these years. in parks across the country, families are coming together to play, stay active, and enjoy the outdoors. and for the last four summers, coca-cola has asked america to

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the dow opposite 46 points on the downside of the s&p by 6 points. still in the red, much better tan we were at the top of the show. down as much as 65 points. that's, of course, on the back of the weekly jobless claims. check out shares in the dow component and dupont. they took a stifel nicolaus operating earnings will be at the low ends of the issued guidance, much of that to the unthenably wet weather. take a look at that stock down just about 1% in free market trade. our next guest has made his living investing for the long term. joining us, bill niagara, he manages a four star oak mark fund. you say, don't even ask me about stuff that we talked about all the time. we have to. your focus is on companies and what they will be worth in five years, that you can buy at

significantly less today than what they will be worth in five years and as far as stocks go, you figure in general, they're attractive compared to everything else. we should get to what you think is worth more in five years. one of the things is the financials? >> right. the financial, even though they were depressed, they were at historical lows. most of these companies sell at a significant discount to the their book value, low pd on earnings we expect after legacy costs from the housing busts are for the longer going through the physical statement. we expect most companies to return all their earnings to shareholders. even if they don't have much loan growth, they can get good eps growth. >> i guess if you thought that the whole fed exit strategy was going to be a disaster, you wouldn't even be positive on these stocks then, so

youmouthen, implicit in this, you don't think the end of the world is going to happen again in the near term. >> well, the end of the world didn't happen five years ago when people thought it would. >> wasn't it sort of in this book i read? >> every time i say it, we get a little royalty, no, if that were going to repeat what we saw five years ago, all this printing, if that comes back to haunt us, you do not think we are setting ourselves up for something that could be worse than the last time around? >> no, i don't think so, joe the way we think at oak mark, we are projecting business fundamental also out five years. we're really trying to identify how business trends change over a long period of time and the most of the economic news, that we focus on day-to-day just becomes noise when you look at that.

>> do you have five, you got 50, do you have five financials that you like? >> well, financials are some of our top holdings. we have large positions in jp morgan, capital one and aig. >> if we step out from there, do you do any technology, do you do any sick lick also? >> sure, we do both of those. i think our view on the market today is that the bond market is overvalued, stocks are modestly under valued. the more a stock looks like a bond the more likely it is to be underpriced. when you see that cyclical risk or ob less sent -- ob scalescent, they left that behind. >> do you have five? >> in the technology space, we

own a lot of the technology companies buying back stock and paying out dividends. texas instruments, oracle. in the industrial space companies like parker hannefin. cummins engine, delphi, if the market priced them as average companies, they'd have to go up in price. we think they are better than average today. >> i see you did an interview, omnicom, who do you like with them? bbdo, which asset? >> what we like-a at omnicom, w like the advertising generates capital, they are paying that

back through share repurchase. eps are growing faster than earnings are. >> you must have a couple that you think are really good really float your boat? >> you never know your home runs in advance. the names we have the most confidence in, by definition, are the names we sized largest. >> bank of america. >> i would expect our financial names to be a strong health over the upcoming years. >> all right, bill nygren. thank you. >> coming up. we will see jim cramer. we will talk about the sell-off in japan t. dollar on the on bell when we return. obs lessen. zair.

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welcome back to "squawk box." we have futures that are red arrow, but better than when we started the broadcast. s&p 500 is off 3.5 points, and over to the new york stock exchange, and david faber, david faber is here. and tell us the ways of the world. >> well, i don't know if i have the ability to do that, andrew, but yeah, mr. cramer is otherwise engaged this morning. and so you have got me. what do you want to talk about? anything? >> well shgs s, it is my issue morning and maybe yours, but eamon javers broke the story yesterday on the front page"wal and how do you feel about the issue of getting and allowing certain investors with a pay of fee to get more information than the others first? >> how do i feel about it? hasn't this practice been go g

ing on -- i have heard as much as 20 years this is the case, andrew. you heard otherwise? >> well w i don't understand what the big whoop is as they say. >> well, why now? my understanding is in speaking to the traders who have availed themselves of the information or chosen not to, this is a standard practice for a long time. >> and david, can't comcast subscribers who have cnbc pay for that, don't they have access to your reports during the day? >> i don't -- i think that -- i don't know. i don't know. >> e well, when you break news, they see it on the cnbc, and the people who don't have cnbc, don't see it, do they? >> that is correct. >> and yours if that ever happened. >> oh, thank you. >> david, you are mr. deal meister, and what do you think of the ginnette deal this morning? >> well, andrew, it is not a large deal in and of itself. >> really? >> no, i wouldn't have thought it either, but maybe a trend of consolidation in the land grab that many are waiting for the

another round of consolidating the smaller operators and owners of tv stations. you have the retransmission fees coming to them that are fairly significant and with the threat of aero out there, they own a lot of spectrum in some, and there is a lot of debate saying that the spectrum could be worth a lot of money to verizon or at&t. >> right. >> and so, i would not be surprised to see more of the same. >> don't you think that belo sold out too cheap, because look at ginnette shares up almost 55% in the market. >> as much as they are up. >> that is true. that is a great point, although, i have not looked closely enough at the multiple they are paying, andrew, but maybe that is why they are behind more of the deals in that there are an enormous amount of synergies to be taken away and cost saves here as e well. you know this environment is one in which we have seen a lot of the acquirer stock prices going up sharply, because so many deals are creative and yet we

have anything to see what people are anticipating. >> what happened to belo? it was a $25 stock, wasn't it? it almost went to zero. >> well, they were fairly levered. >> yes. >> they had a rough go of it there as i remember in terms of the balance sheet. >> i mean, it was almost zero back in '09. it got as low as 47 cents from $25. >> i forget, what was cbs? because it was a $5 stock at one point, too. and look at that in '09. >> and david faber, we will see you in a couple of minutes, and you will have more on that story. >> and more on a lot of things, guys. >> if i look up there, i will probably see cramer over there, and we have all of the monitors over there. >> he is probably doing some big network thing. and we are not broadcasting, we are cable. >> we are cable. >> it sounds better than broadcasting. >> right. sounds like brian williams. and this morning is bart chilton and we will give him the last word when "squawk box" returns.

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"ponzimonium" where we get a lot of the "american greed" stuff. >> this is an area that cannot be solved with regulation, and people need to be vigilant and aware. >> yes. >> and there are laws when people violate it, but people need to be aware even if they are your friends, and et cetera, and you should not invest unless you check it out. >> thank you, bart, for being here, and join us tomorrow. "squawk on the street" begins right now. thank you, bart. and than you, mikayla. ♪ i know you want to have some fun ♪ >> that is the way to start the sh show. i'm carl quintanilla, and david faber and cramer is off this morning. after the dow's first three-day losing streak of the year, we are seeing a wave of selling off in the world. the japan nikkei in officially bear territory, and slicing right through the dollar at 95, and the damage