>> he might have been. a sheepish little wave. he did look up. he did. a little smile. which is, you know, when every single person yells your name as you walk by, we're talking thousands of times a day. we are in ardmore at historic marion, pennsylvania. host of more majors than any other venue. we're just outside of philadelphia. it was raining on the car ride out here. it was raining yesterday. it was raining last week. it was raining on monday. it was raining last friday. anyway, looks like it's going to clear up for the weekend. they're going to get this in. we're watching the leaderboard. more importantly on top of what's moving markets. it's a little quiet today after another sort of an interesting session yesterday that ended out with the fwogood guys on top. futures this morning down two points or so on the dow. can i say good guys when it goes up? you're really not supposed to. >> you want to see the rise of american companies. >> why would people want the wealth effect to go up?

why would people want prosperity to increase. >> you can say good guys. there's some people who argue when we say it's a good day because you're looking at the upside. we'll take that. >> if we listen to everything people said, we wouldn't be able to say anything. excusemy ba my back. cabrera's there. he's won a u.s. open and masters. ernie's won two. i see tiger -- >> there he is. okay. about midway through. >> tiger is wearing gray today. i've got some gray pants on. total coincidence. but there he is. he's starting, what? >> yours are kind of charcoal. >> he's starting out, it looks like, with some very -- short little backswing on some sand wedges. see him? a beautiful backswing. >> along with this incredible lineup behind us, we also have two very special guests who are with us for the next three hours. jeremy segel, professor of finance at the wharton school at

the university of pennsylvania. and barry knapp, head of u.s. equity strategy at barclays. we've already been chatting these guys up because they walked through the mud with us. they are very good sports. >> i rode out with them. >> i caught up with them as we were tromping through. >> do you know what jerry gets at dunkin donuts in the morning. >> i do. you told me. >> hot chocolate. what does coffee do to you? get you more excited? >> i'm sensitive to caffeine. >> are you sensitive to caffeine? we all are. that's why we drink it. >> plenty to talk about with the volatile japanese markets. big recovery rally in the united states on thursday. a fed meeting ahead next week. lots to talk about that including the golf. but before we get to all that, let's head back to inglewood cliffs with some of the top stories. andrew, good morning. >> he's supposed to be here. >> he's not a chicken. he's doing us a favor. >> a chicken? i was -- >> andrew is holing down the fort. >> i was happy to come.

i was happy to come. >> i think this is a situation where he is -- we didn't know if we'd get a single shot. >> we thought you would have bad weather. it looks like it's actually better. >> it looks better from tv. >> it's actually worked out better. you had tiger woods walking through the live shot at 6:00 a.m. >> that would not have happened on most days. >> he did go like this. >> he didn't want anyone to know. >> headlines real quick and get back to you on the course. in the meantime, the swrap neez markets staging a partial recovery overnight following yesterday's better than 6% drop from the nikkei. rebound bed by nearly 2%. helped in part by up beat u.s. economic data. also perhaps the piece in the journal. nonetheless, japanese stocks did post their fourth consecutive weekly loss. steve is giving me a face. >> i'd be happy to talk about it. we don't have time, though. keep reading. >> also, markets in turkey this morning, they are rallying. tensions in that country are

easing after the prime minister there met with protesters who've been trying to prevent the redevelopment of an istanbul park. they've struck a deal on what to do. we'll explain that in a bit. bonds are trading higher. even as that situation in turkey is cooling, it's becoming more intense in syria this morning. the administration now saying it has confirmed that the government there has used chemical weapons against rebels. it now plans to provide more aid including military support for rebels who oppose president assad. we're going to have more on both of those stories in syria and turkey coming up. corporate headlines this morning. europe's newest passenger jet, the airbus a-350 successfully began its maiden flight. the rival to boeing's 787 dreamliner took off from the airbus facility in toulouse frans watch bid over 10,000 workers aspectators. boeing plans to unveil new plans

for the dreamliner. a larger version of the jet will be announced at the paris air show next week. current versions carry anywhere from 210 the 290 passengers. have you been on one, michelle? >> i think so. i'm not big on planes. the futures now, even though the futures are negative territory and fair value is in negative territory, i don't know. last i looked, they were higher. all right. now it's negative open. dow opened lower by roughly six poin points. show you what's going on with oil at this point. higher by 29 cents for tti. present trading at 105.34. higher across the energy complex. 10-year note is climbing. credit is rallying across the world right now based on two stories that look a lot like plants. we'll be tdiscussing this more later on in the show. 10-year yield down to 2.1 from

2.2. gold is higher by 60 cents. 1378. asian stocks rebounding overnight following the previous day's savage selloff. cnbc joins us from singapore with more. >> michelle, you know, it has been a crazy week out here. some of the investors on this side of the world wouldn't mind hitting the links and maybe grabbing a drink to calm their nerves. today the arrows behind me, they're all green. yesterday they were all red. regardless of how much the nikkei regained today, which by the way wasn't enough to bring it out of official bear territory, you really are to take a step back and marvel just at what's been going on in japan and the rest of asia. can you guys believe the nikkei 225 has fallen for a fourth straight week since hitting its 5 1/2 year peak on may 23rd? nearly 700 billion u.s. dollars in market capitalization has been wiped off the nikkei. kathy lean of bk asset management says the question now is when the bank of japan is

going to cry uncle and give into market demands. that is more stimulus. meantime the rest of asia has been getting hammered as well. we'll take a look at some of the emerging market indexes. they've been getting slammed despite the rebounds that we saw today. the emerging markets like thailand and the philippines and jakarta, they have really been some of the best performing markets in the world. leading a four-year rally in global stocks. but over the last few weeks, they've been hit particularly hard by this tapering talk. money went in when investors were searching for higher yields. now with all the talk of tapering they have really been slammed. i want to show you guys one more chart -- three more charts. rather two. hang seng and shanghai comp. this is where they stand year to date. they've been hit this week. it's really been a brutal one for them all year so far. joe, back over to you. >> okay. thank you. we actually could see -- we're obsessed. >> we're obsessed. >> yes, we are. let's get back. range is here. k.j. choi is right here.

he's going to win one of these one of these times. there's tiger. the way that his club head, barry, lags his hands. you can see i'm always out in front. it will never happen for me. jeremy segel, professor of finance at wharton. the university of pennsylvania. barry knapp is head of u.s. equity strategy at barclay. as we rode out in the car together, it was very interesting. because we talked about lehman brothers. jeremy segel is a great historian of the market who actually was with milton freedman at university of chicago. we got that out of the way. >> i didn't know that. >> yep. barry knapp. samuelson was there as well. he was a young upstart, wasn't he? >> well, samuelson was at m.i.t. at the time. bernanke and draghi. they were on "newsweek" magazine

every week. a big debate. i came down firmly in the -- >> i would have never guessed. >> luckily we now -- it's been proven the keynesians were right. things are going so swimmingly right now. how are things going right now, jeremy? what do you think? how is your long term bullish thesis holding up? >> i'm still at 16,000 to 17,000 by year end. >> on the s&p? >> not quite. >> on the dow. >> on the dow. i think all eyes are on the fed. next week's meeting is really going to be key. >> do we need to get that out of the -- greenspan. it does loom. is it going to be a messy exit? >> first there's tapering. then there's stopping. then way down the road is when they start raising rates. people are acting like it's going to happen tomorrow. >> that's the hillson aspect.

>> i was looking at the fed funds futures market. and it prices in a 50% probability that the fed funds will be 50 basis points in january of '15. i mean, you know, so wow. that's down the road. a few years ago we'd all talk about it's going to happen the next meeting or meeting after that. now we're talking about just -- the tapering is just stage 1aa. >> barry, you're a little more concerned about the near term, at least. >> actually, i'm more optimistic on the economy than i've been. i think that so far the drop in public policy certainly seems to be helping business investment, labor investment, capital investment. the consumer is proving far more resilient to the tax hikes than i expected. that does bring this whole exit strategy process forward somewhat. now, if you think about '04, by the time we fwot to the first rate hike, the adjustment was almost done. the stock market bottomed five

weeks after the first rate hike. this go round i think the adjustment begins when it's confirmed tapering is going to occur. you pull everything forward. once you get past that you start to process. yeah, it'll be a difficult, complex process for the market to go through. but that's at the point where you can start getting much more bullish from my perspective on equities out right. this was always a risk that was looming. >> i'm listening. i heard -- i did. i heard everything you said. >> i want to go back over that. we will. >> we will. we've got to hit all our breaks. we have sponsors or something. we went by the lincoln financial stadium. barry and jeremy will be with us for the rest of the hour. >> we are just getting warmed up this morning. we're here at the u.s. open. we are also back in inglewood cliffs. pepboys ceo michael o'dell, famed golf coach butch harmon, rodney martin, plus a rare interview with michael price.

dawn zier. toll brothers chief douglas yearley. it's a big lineup. "squawk box" is back right after this quick break.

take a look at the futures, everybody. you'll see right now things have barely budged after all the chaos we've seen in recent days. yeah. at this point, barely lower. you can basically say flat line for all of this. we'll see what happens. >> more on the storm that soaked the east coast. reynolds wolf joins us from the weather channel. which we need. we need more -- i'm glad we own them. i am. he's jacketless today. you start talking about philadelphia. if you lie, i'm going to know. because i'm outside. >> i know. >> you know, watch -- normally we give you a free pass. what's going on, reynolds? >> i hear you, man. >> are they going to get this round in? >> joe, it's going to be iffy today. saturday is the best day. sunday showers back in. i think they'll hold off till later in the day. joe, you're always good to me. i'll try to be good to you guys. a lot of rain we had yesterday

sweeping its way back into the atlantic. sunny skies in the ohio valley. fantastic for them. this weekend what we can expect is another round of severe weather. i know. we don't need it. we don't want it. it looks like we might have some pop up in parts of the central plains. perhaps even into portions of the central rockies. notice sunshine expected for much of the weekend in the northeast. maybe late sunday you might see the showers run through. hopefully it will get better for you, though. take a look. air travel, come on, computer. wake up. we're going to be seeing backups in the parts of the northeast. namely we could see them in places like boston. moderate chance of backups. also delays possible in philadelphia, minneapolis by the afternoon, you might have some slowdowns on the tarmac. guys, back to you. joe and the crew. >> reynolds, you're messing with us. now you're doing the eric fisher. that's exactly how -- i'm even a caddie groupie. that is the new zealand -- tiger's old caddie that got into -- >> steve. >> yeah, steve.

yeah. you're doing the -- did you do that on purpose? you're messing with us? rolling your sleeves up? you look just like eric now. usually you've got the, you know -- >> to be honest with you, we just found out -- my wife and i found out we're expecting our fourth baby, our fourth kid. so the mind's been a little bit crazy lately. actually left today and left the jacket at home. >> way to go. congratulations. >> number four. wow. getting it done. >> we're in trouble now. it's game over. >> you are a wolf. you are. all right. coming up, all right, guys. syria, turkey, and other international stories moving markets. we'll have much more from merion golf club. you should try getting in here today to where we were. also, butch harmon is going to be here. we're going to talk the business of golf on the green with usga president clint nager. "squawk box" will be right back after this. it's muddy, look. >> tiger still there. ♪

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time for the fwloglobal mar report. some people call -- they think they need to say u.s. open

because of this small tournament they play. >> ross would probably say that. >> let's get to ross westgate. i know he loves the game. we watched the open. poulter, ross, was going to be with us. but he started -- got three straight birdies right out of the gate at 10, 11 and 12. we're 40 minutes away from where his hotel was. he would have had to come here, go back, come here. his manager said are you out of your mind? it's the u.s. open. but this is going to be great. luke donald. i guess you saw that. it's been a while. >> 4 under? >> yeah. >> did you have the same preparation as phil, joe? did you kind of last minute fly in and then shoot 3 under, shoot 7? >> i didn't shoot 3 under. we did come down late last night. yeah. phil, i think he's finished second. had better finishing than anyone else who hasn't won. he wants this really bad. you know who really wants it bad to get back on the major track is tiger.

he's still hitting over there. >> he's still right here. >> he's still hitting over there. ross, i'm going -- >> by the way, you got the right footwear, right? it's not a day for classics. you've got to wear the try joys. practice ground looks really wet. >> it is. >> what are dry joys? >> becky selected some white jeans to wear. if she had slipped, it was very easy. >> we were walking down the hill. >> i wasn't hoping for it. >> yes, you were. >> it would have been interesting. >> i would have taken you down with me. >> yeah, you would have. >> white trousers. very bullish call i would say. joe, i'm going to watch with interest. i'm insanely jealous, as you can imagine that you're sitting there and i'm here. great show, guys. 8-2 advances outpace decline. following that rally on the u.s. yesterday. continued in asia overnight. we've stopped four days of losses for european equities.

ftse 100 was just up. was just up five points yesterday. slim gains today. only up seven points. we've come back from the earlier session highs. cac up .2%. dax up .4%. ftse mid down a quarter. sector breakdowns. see how we're weighted to the upside. some of the notables. resources for once having a better day. a serial underperformer because of the weak growth -- weaker than expected growth coming out of china. utilities health care. the more defensive end. bond yields are a little bit lower as well across the board today. 10-year bund yields down. spanish yields down as well. just adding to a certain amount of comfort factor here in europe. that's where we stand. let's move away from merion. take you back to the u.s. studios and michelle is there. >> hey. >> why are we in studios, michelle? >> we're in studio -- well, we were worried about the weather

at the u.s. open. >> we knew we were -- we knew there was going to be serious news this morning. >> there's serious news. >> in syria, no less. >> that's right. ross, good to see you. i know how much you love golf, too. the white house promising to step up assistance to syrian rebels after determining the assad government has used chemical weapons against the rebels. it's also studying the possibility of a no-fly zone. steven cook is a senior fellow if for middle eastern studies at the council on foreign relations. a major policy change by the obama administration in the last 24 hours saying they are going to assist the rebels in some form or fashion. reporting indicates it's going to be at least anti-tank weaponry but not anti-aircraft weaponry. consensus is that the rebels are on the verge of collapse. is this enough or is it too little, too late? >> well, it's unclear whether this is going to be too little, too late. clearly the rebels are on the defensive. the introduction of large numbers of fighters from hezbollah has made a significant difference for the syrian

forces. anti-tank weapons will certainly help them. but they've lost kucera. syrian army are approaching aleppo and homs. this is a dire situation. we've all known the syrian regime has used chemical weapons for quite some time. >> steven, you bring me to -- i'm going to ask the cynical kind of question about process rather than substance that i usually hate from journalists. you bring up this point. everybody seems to have known chemical weapons were in use. what's different now? does this have anything to do with the fact president clinton came out and was critical of the white house for not doing more? >> well, i'm not sure whether it's directly related to what president clinton said. but it's clear, united states's closest allies have said for months now that the syrians have been using chemical weapons. there's also the revelation that 93,000 syrians have been killed in this conflict.

that the prospect of iran prevailing in this conflict, the iranians, the syrians and hezbollah would tilt the balance in the region so much would affect u.s. position there for years to come. this is clearly forcing the united states to act. the question is, as you put it, is this too little, too late? my sense is, it probably is. >> okay. so if it probably is, and now we have this iranian dominance in the region and all those things you discussed, what does that mean for the united states, our security, our future foreign policy in the region? >> well, now it's time to back fill. we're going to have to convince our allies in the region, sau s saudis, israelis, turks and others we are, in fact, serious about the iranian challenge in the region. all of these months have gone by in which people rb saying if we do not engage more seriously on syria it's going to send the iranians a message they can fight in the region and advance their influence in the region.

now when it is infinitely more complicated the united states is going to have to get more deeply involved in a variety of areas in the region. >> should we -- i'm sorry. we're going to hit a commercial break. turkey. should we be more optimistic now? it looks like there's going to be some kind of court decision about what happened in taksim square? >> i'm not sure this is much of a deal. i think prime minister erdogan remains in a very strong position. but the protesters in gezi park aren't just about the park. they're about the authoritarian turn in turkish politics. >> got it. steven, thank you so much for joining us this morning. >> there's a second component to it. if the court rules in favor of the government, then it goes to referend referendum. then it fwo it goes on for a long time. coming up, more of today's headlines. plus the automotive economy. car sales have been strong. so are consumers going to see mini, mo and jack. ceo of pep boys, our special guest. as we head to break, a look

at yesterday's winners and losers. more "squawk box" live from the u.s. open, coming up next. ♪ [ laughter ] ♪ [ female announcer ] each one of us is our own boss. ♪ and no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. ♪

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good morning, everybody. welcome back to the special edition of "squawk box." you can see everybody's warming up, raring to go. i'm becky kwukquick with joe ke. we are just outside of philadelphia. things have been raining. kind of spitting. everybody's ready to go anyway. looks like it's going to take off. >> we are under here. if it was raining, winds coming this way you would know if it was raining. >> i already feel it. it's spitting on us. >> you know the frizz factor. >> exactly. bad hair. >> both of us. >> let's check the futures this morning after a strong thursday rally. you're fwoigoing to see things barely budged this morning. yeah. okay. trading off. hanging right around the flat line. we'll see what happens on a friday. even with yesterday's advance major averages still lower for the week. japan's nikkei 225 staged a partial rebound.

up nearly 2% overnight after slumping more than 6% yesterday. however, the nikkei still posted its fourth consecutive weekly loss. and the situation in syria is likely to get extra attention from investors today. the white house says it has determined that the assad government has used chemical weapons against rebels and that it will increase military assistance to those rebels. it will also be consulting with allies about possible next steps at the g-8 meeting that's scheduled for next week. back here in pennsylvania, this is a place that pep boys calls home. merion, it's a short drive away for our next guest, michael o'dell, ceo of auto parts giant. thank you for joining us this morning. >> my pleasure. great to be here. >> we've been watching the situation with the auto parts. you just came out with earnings. earnings were a little disappointing but revenue was better than the street had been expecting. the consumer obviously plays a huge role in how they're feeling. what do you see now when it comes to people going in, trying to fix up their cars. >> i think things are starting to stabilize, starting to no

normalize. pressure we had on earnings db -- we hit the top line. pressure was more on the margin. we feel cautiously optimistic for the year. >> we had people who talked about this all the way through. you and your competitors. everyone kind of benefited during the downturn of 2008, 2009 and after that because people were holding on to their cars longer, fixing them up rather than buying new cars. what happens when people start buying new cars again like they have been this year. >> honestly we look at it differently. our focus for our business is our service business. our sweet spot is the 5 to 13-year-old car. for us it's when those new cars -- when they're done going to the dealer and looking for someone else to maintain the vehicle is the sweet spot. some of the pressure we felt was the decline in new cars in '08 and '09. there's fewer 5-year-old car on the road now coming into our service cycle. >> okay. >> actually the increase bodes

well for our future. it's getting into our sweet spot. when you're done with the dealer, come to pep boys. >> what happened with some of the discounting? is that situation something that's going to be repeated? why were you offering discounts in terms of trying to boost up the margins? can you get rid of discounts? >> there was two things. we tried to stimulate demand with a whole house promotion we had tested earlier in the year. actually late last year. it was successful in driving traffic. we did it again in march. it at no time drive traffic. the other piece is customers going online and looking for coupons. they were pretty aggressive in doing that. we pulled back. our associates have been helping our customers find those coupons which puts pressure on the margin as well. >> i've read reports. people take a look at the business and say operations, looks like you're getting things in line. that's all good news. they're a little concerned about how high the stock is at this point. you trade at a pe ratio of about 53. which is, i think, double what some of your competitors are. auto zone. things like that. >> if you want to look at a pe,

sure. if you looked at how we trade on an ebitda or multiple of sales you would say the exact opposite. >> you're lower than your competitors on those other margins? >> correct. quite a bit. >> if you look at just what's happening with the country, we know that the higher taxes that a lot of people have been paying as some of the payroll taxes went on, or the deduction people were getting that went off, i know that hit a lot of different businesses across the board. did you see an impact from that? >> you know, it's always hard to parse it all out. i think there could have been some of that early in the year. particularly in february and march when it first hits people. kind of they get that first new paycheck with the new tax deductions. it kind of catches them by surprise. i think more or less we've moved through that. again, i would call us cautiously optimistic. >> dr. siegel and i were having a conversation on the ride over. we were talking about the low end versus high end consumer. one of the things we've been -- >> there's an absolute

dichotomy. >> we've been debating at barclays, the low end consumer got hit almost immediately by the reversal of the payroll tax cut. retailer earnings estimates were too high. they came down hard. you did see some effect on the low end. but the high end consumer, you know, has received a positive wealth effect from higher stock prices, you know, house prices stabilizing. what do you guys see with respect to that? where do you sit in that? >> i would say that has sort of neutralized more at the high end. something that's kind of interesting for us, typically people -- our average customer is about a 50 k median income. normal for the u.s. but we started a rewards program four years ago. we now have more specific data on our customers instead of generaliti generalities. what we now know is 50 k would be our median income customer. 25% of our sales come from 5% of our customer. they're median income is more around 100 k. >> really? >> yeah. that's why actually -- that's

where our service business -- >> how is that piece doing right now? that's the key. this is at the point where the high end tax hikes ought to be affecting behavior. yesterday's retail sales number said, no, they're actually holding up better. which is why we're talking about -- >> if you look at our numbers, the strength is in the service business. do it for me plays to a higher income than the do it yourself. the business that's been under pressure has been the do it yourself. >> very interesting. >> when you found that out, this is part of what companies are doing. trying to take all this data and crunch it and figure out what to do with it. have you changed how you do any of your business operations as a result? >> absolutely. number one is we've been for the last -- since i've been there for a little over five years, we've refocused on the service business. our legacy is diy. our future is service. it's a larger market, faster growing and plays to that income demographic. what we just did, we just grand opened a new store in tampa that basically takes advantage of this knowledge. it takes the service experiences and moves it closer to a dealer.

we're still going to be 30%, 40% less. but we're going to be the best alternative to the dealer when it comes to servicing your car. then it takes the retail experience instead of us playing to the diyer out of economic necessity, it plays to more -- it almost looks like a target in terms of how the retail experience plays out. >> is that buying higher end stuff? >> not necessarily higher end. a lot of it is how it gets positioned. our stores were built for car guys. >> right. >> basically this is taking the learning to terms of who the customers are that can generate the most opportunity for us. reposition the store. instead of having all of these products when you walk in it's a maze, you love it if you're a car guy, completely confused if you're -- everything you want for your car but you don't have to know anything about the car all positioned more like a target experience. >> guys like me. like cars, don't know anything about them. >> it's the same thing. we have by far the best

assortment of wash and wax with mcgwires and black magic, et cetera. and those customers that come in and buy those premium products, they don't come to us for service. they go to the dealer. they're willing -- they'll come. diy, you look at automotive retail, we are the top end in terms of the consumers that we attract. when it comes to service we've played more to that 50 k. we're going to hold our prices. we're still going to be, you know, appropriate for the same customer. but we're going to have a better experience. again, more akin to the dealer. because it's the same thing with the people that diy out of passion. there's a lot of people that diy because they have to. there's a lot of people that diy because they love it. >> for anybody who doesn't know, diy is do it yourself. >> do it yourself. these guys have a mustang. they'll be working on the weekend. they have a car they drive every day. they go to the dealer. we want them to come to us. >> michael, thank you very much for your time. my pleasure talking to you. >> thank you. >> rory.

rory mcilroy. ernie else ju els walked by, to >> i didn't hear any word of the michael o'dell interview. >> joe is in hog heaven over here. watching everybody who walks by. >> i don't know if i'm going -- i'm not panting exactly. >> a little. anyway, michael, thank you. back to headquarters with more of the headlines. michelle? >> this weather thing has worked out great for you guys. all this action 6:39 in the morning. the situation in turkey has calmed down at least for now. turkeys stock and bond markets rallying sharply this morning because there's a deal on the table between mime minister erdogan and the protesters. the decision on whether or not to develop a park in istanbul will be decided by the courts. if the court says yes people who live around the park can vote whether or not to allow the development. the park is issue which led to the rounds of protests two weeks ago. spread around the country as

general uprising against the prime minister. protester who is met with the prime minister deep into the night last night will bring that deal back into the park today to see if the larger group will accept it. andrew? >> we don't know if they really will. so many other issues have risen up over time. fom lowing up beat dmik reports that moved markets yet we have more data coming ahead this morning. we're going to be getting may producer price indexes at 8:30 eastern time. 9:15 eastern may industrial production and factory capacity utilization. then coming up at 9:55, set your alarm. we're going to get the university of michigan's preliminary june consumer sentiment index. but at 9:54:58 if your thompson reuters and pay i don't know how much money you can get that number as well. steve? >> if you think really hard about it, you can get it also any time you want. kind of divine it. >> did anybody get the joke i was making? >> it's not a joke. it's real. >> i thought it was a snide comment. >> i didn't know if our audience

was in on it. >> we've been talking about it for days. >> huge story. broken by eamon javers. let's turn to dan fwreenhouse who happens to be here from p btig. there was a story in the "wall street journal" talking about what bernanke is is going to say following the press conference next week. said he will emphasize the rates will not rise. >> when you meet with clients, there is a bit of confusion between what's going on on the tapering side of things. or the asset purchase side of things and what's going on on the interest rate side of thing. i think what he was getting at, something michelle and i were talking about before, what's going on in the fed fund futures market, swaps market, pricing and higher interest rates, the fact remains eve fn the fed were to slow purchases from 85 to 75 to 65 or whatever it may be, interest rates in terms of

increases in the federal funds rate are not happening any time soon. >> i'm a little less charitable than you are about the story, dan. i don't think that the article addressed the problem that exists. if you look at the fed funds futures market saying that there's a 50% chance of a hike in january 2015, the fed does not have a problem communicating the metrics for when interest rates are going to go up. bernanke doesn't have to really address that problem from what i can tell. the problem he has is when is -- when are -- what tapering will do to the market and interest rates. the idea that tapering still results in increasing the size of the balance sheet. that's the communication problem. but i don't think, like, the market has gone up because it fears a federal hike rates any time soon. >> you're giving the market too much credit. it's a sentiment issue. it's a psychological issue that people are conflating tapering with interest rate -- >> it's even more simple. they see it as a plant. that bernanke's saying everybody

overreacted. this 50 basis point rise in interest rates is too much. walk off the ledge. >> that could be. >> my meetings are all with big hedge funds. i got to be honest with you. there has been a growing sentiment among our clients, including a dinner i had just the other night, who cares. i think this -- >> don't fight the fed. right? that's a rule of law in fed markets. don't fight the fed. the fed is going to do less, it's bad for the markets, right? >> no. listen, if you are an individual stock investor as our clients are or running a portfolio, at the end of the day buying 85 or 75 or 65, interesting tis cushion. >> dan, we're talk to talk about this all morning. we got to send it back. >> you're sending it back. >> i was just told to send it back. >> i was told to send it back at the same time. >> joe, we're not going to fight about who can send it back. >> liesman, wrap it up. k.j. choi is here.

you're going to win one of these one of these days. i just saw you've got a nice right to left on your driver. how you hitting them? >> we're on now? >> we're going. we're good. you doing well? >> yeah. today wind direction change a little bit. right to left on range. yesterday left to right. every day a little change in the weather. >> you were hitting it, you were practicing a different shot because of the wind? >> yeah. this course is more the cut shot and the more better -- >> the greens are wet. it doesn't seem to be that much easier for people, though, right? it's still tough. >> yeah. the rough is more thicker. because of the wet and heavy. and the speeding is very slow. very key point is in the tee shot and the putting green. i miss putt yesterday inside the 15, 10 footer. miss putt in the birdie. today i'm going to make it. >> thank you for taking time.

anybody who's watching, you are tough as nails. we love watching you. good luck. we're going to be back -- i don't know who i might get out here. becky, back to you. i know we have glenn nager of the usda coming up eventually. >> joe, that was pretty cool. >> it was pretty cool. he's nice. a lot of people blew me off. he came right over. first time that's happened to me. >> well, i am impressed. let's get back to our guest hosts who are here with us at the u.s. open. jeremy seigel professor of finance at the wharton school at the university of pennsylvania. barry knapp, head of u.s. equity strategy at barclays. guys, okay. we've been watching all these guys come in. i know you've been listening to the conversation that andrew and steve and michelle were having about bernanke and the things that have been happening. you guys are both very optimistic over the long term for the markets. barry, as you laid out earlier for us you're a little more concerned with the near term because you think at this point for people who weren't listening at the very top of the show, you think at this point we are moving up all those expectations. it's not fwoing to be when the

first rate hike comes or when the expectation of the first hike comes. it's going to be when we're expecting that they will eventually starl lly start to t market has its reaction. >> absolutely. when you go back and look at the prior normalization cycles, '83, '94 and '04 they had their own characteristic. you got a very similar reaction in the equity market irrespective of how things started with the fed or the magnitude of the selloff in the treasury market. it's always a 7% to 9% equity market selloff. at least it has been over those observations. that's what we think it's worth. now, people talk about the fed talks about the stock and the flow. then we talk in the equity markets about the anticipation of the stock and the flow. >> right. >> the equity market's a discounting mechanism. leading indicator. sometimes a misleading one. when we hit that inflection point we think it will trigger a correction. now, that correction is a buying opportunity. >> okay. >> you have to make some real strategic changes in your portfolio when that occurs.

and if they're fwoing to -- >> get out of the stocks that trade like bonds, look like bonds. >> exactly. move more towards cyclicals, ones that benefit from achieving the elusive escape velocity. >> jeremy, your take on that? >> it's interesting. i think we need more quantitative criterion for when he's going to slow down quantitative easing. you know, he's given us benchmarks on unemployment, inflationary expectations for when they're going to raise rates. all he says about when we're going to taper off is sustained improvement in the labor market which is sort of vague. i'm sure what's going to happen next wednesday is, you know, all the reporters are going to try to pin him down and say, tell us what you're looking for before you start to taper. and i think that that -- that uncertainty is one of the things that's sort of rocking the markets now. what is that criteria that we're going to have when we're going to see the taper begin? i hope he's fwoing to clarify that on wednesday next week. >> all right.

we're all waiting to see what happens with that. looks like the market is, too. maybe that's why things have been kind of flat lining this morning. we're going to have more from barry and jeremy throughout the show. joe, back to. >> you are going to have the usga -- whoa! usga historian. he's going to bring some clubs along with him. maybe even one of the hogan clubs. who else had a big shot here? he had a 1 iron. it's going to be really cool. he manages one of the museums of the usga. you want to stay tuned. we'll be back right after this break. ♪ [ female announcer ] it's time for the annual shareholders meeting. ♪ there'll be the usual presentations on research. ♪ and development. a few distribution issues will be resolved.

some new members of the team will be introduced. as usual the i.t. department is always there to lend a hand. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you're responsible for liquid assets. and employee incentives. you just need the right professional to help you take charge. because you don't measure your success by the size of a pie chart, but rather by the quality of the pie. ♪ ♪

from ben hogan's iconic 1 iron shot on 18 to david graham's nearly perfect final round. merion has played host to some of golf's greatest moments.

more majors than anywhere else. you know we're second for major tournaments? i wouldn't ask you that if i didn't have a reason. here to help us relive some of those moments, the usga museum's senior curator and historian. that is -- i thought, so ben hogan comes here. he's got to get a par on that really long hole. how long is that hole? >> the hole at that time played at 458 yards. this week we're playing longer. back to 521. >> there's a plaque out there where he hit the 1 iron to tie the guy and win in the playoff. we don't remember the guy he was playing, do we? >> yeah. there were two players he faced in the playoff. george fazio and lloyd mangrum. the story is interesting. it goes way back. 16 months before he was in a

near fatal car accident. doctors say he may not walk again never mind play golf. he comes back. he walks within a month. within a year he's back playing professional golf. comes here. sets his sights on winning the u.s. open in merion. comes to the 18th hole. hits a beautiful drive right down the middle. from where that plaque is right now, 214 yards away, hits this 1 iron we have here onset today to the middle of the green about 35 feet away. makes two putts. forces the playoff. wins the next day. >> i think the club did get stolen, right? >> it did. the interesting thing about the club is that the club he hit in the final round he actually didn't have it for the playoff. it was stolen out of his bag during -- after the final round. along with his pair of shoes. he didn't have it. it disappeared for 33 years. it was finally returned to a golf collector. it came into his shop who took a look at it. saw the markings on it. said, good player must have hit this. it looks a lot like ben hogan's 1 iron. on the back it says ben hogan personal model.

so personal modem. so he sent it back to 'mr. hogan in fort worth said that's it, that's the one i hit at merion. >> that's so great a. 1-iron is tough to hit. i was hearing a joke the other day about a guy, maybe this is a guy in the middle of some rain storm got everything shut down. he walked to the clubhouse wearing a shot real high and said not even good can hit one. >> lee trevino did that. >> lee trevino tells this story. it looks like a butter knife. this is very difficult. what is so impressive is hogan was able to hit this when the pressure was the most. lee trevino said not even good can hold a 1 iron in a lightning storm. >> they blinked this course 7 yards, someone today from 213

might hit a 6 iron, a 5 iron the way they hit them now. who made that club? i played with hogans. that's not a hogans? >> that's not a hogan. >> he didn't have one. >> this is a macgregor. he played with a macgregor for a long time. in 1953, he developed his own club. >> you got to look at that other putter or the other club, which is amazing. bobby jones' putter. >> so, yeah, this club is bob jones' calamity janes 2-putter. jones was struggling with his putter before the 1923 u.s. open. the head pro in nassau country club in long island jimmy maiden gave him this putter calamity javenlt he said try this out. he went out and won the u.s. open and played here and the club wore out. the pete is spot wore out. he had been using it so much.

he mad six replicas made. this is calamity jane 2, he won 10 of his national championships with this, including the 1930 grand slam winning all four major championships of the day including the u.s. amateur here. >> that was the final part of the grand slam. >> it was. >> that was back when there was no uspga him he kwon the amateurs and the three other majors, right? >> yeah, the amateurs, excuse me the majors of the day were the british open, u.s. amateur and british open and u.s. amateur that was here. he finished off in the final on the 11th hole. there is still a plaque on the 11ing tito commemorate it. >> he hadn't found augusta yet at that point. >> he was still in his competitive career. >> why do they have baskets? that's the last thing. >> a good question that has been asked a lot this week. now, the reasoning is hugh wilson who founded the course went over to the united kingdom

when he was doing scouting work. he saw some of the courses over there that had the wicker basks. the reason they had them there, the wind was so strong, they couldn't have flag, they'd get torn apart in a couple weeks. he brought that idea back here to merion in 1915 or 19 scene, the bob jones 1st u.s. amateur he played in, in fine 16, we had the wicker baskets. >> i think they look like norman bates' mother a little bit. we appreciate it. thank you, that was really neat to see those in person. >> thanks for having me. >> thank you. we do have another big hour of this special edition of "squawk box" ahead. check out the squawk leaderboard the chairman and ceo of ing u.s., rod fiking, also the usga president glen yager an michael price of evercore partners, more

"squawk box" live from the u.s. open at merion golf club

. yearley

good morning. welcome to this special edition of "squawk box." i'm joe kernen along with becky quick. we are live at the u.s. open and in scotland in march or october. >> a chill chilly. >> the merion golf club all actually in ardmore,

pennsylvania. we are just outside philadelphia the weather, though, looks like it will clear up for the weekend. we are watching the leader board, more importantly, we're on top ofhat' moving the markets. >> okay. more importantly, some people, anyway. as you can see, you don't want to take your eye away from those futures for a moment today, they were down one, they were up one, now they're up 92 cents. but we are at the u.s. open and the range is now empty. it's weird. it comes in waves. there were people waiting at one point. it was entirely packed. now, i might go over there. maybe not. >> well, we got a couple special guests that becky is going to tell you ab as she gets off this antiquated archaic device. >> i'm tweeting. >> you are. what is that thing called? it's from the old days. >> you have been into apple, your iphone for what? >> it was called the blackberry. >> you know, that guy from the

museum brought one of those. >> oh, are you so funny. anyway, we have two special guest hosts, jeremy siegel a professor of finance at the warton school of pennsylvania and jerny knapp, lots to -- jeremy knapp. lots to talk aboutment also to come the president of the u.s. golf association, legendary investor michael price, nutrisystem dawn zier and doug yearley. let's go over with our associates standing by with today's stop stories. andrew. >> before we go, joe, what exactly is the attire underneath the sweat itself, i want to know, we were talking about clothes the other day. what is that? >> look, look, cheb it out. he wants to know what is under there. we got cnbc shirt in case we take anything off.

>> it's too cold, we're not taking it off. >> we had a discussion yesterday about what everybody was going to be wearing. >> actually, we like what you are wearing. i like it. >> when the cat's away the mice will play, won't they? >> it looks good off the top. >> it's not a cruise veteran. >> i have this blue turtleneck at&t pebble beach. >> there you go, that way everybody can be happy at at&t as well. let's get to the morning headlines, now we have the sweater of the month from sorkin's lovely t. white house is saying it has determined the assad government has used chemical weapons. it will now provide additional military aid. we will be consulting with allies about possible further steps, escalating tension in turkey cass kaumd down, the turkey prime minister struck a deal with protesters that may stop the development of anise tan bull park.

more than two weeks the demonstrations have often turned violent, if protesters accept that deal, they will decide if it can be redeveloped. if that happens and the courts say yes, then there will be a referendum. this is not over yet, finally, wireless service providers, t-mobile and verizon reportedly don't contribute to the u.s. under surveillance program according to "wall street journal" which stems from overseas ownership ties. t-mobile is owned by telecom, verizon wireless, of course, a joint venture and that was an issue that people especially brought we were talking about before. >> it may be the flight of the airbus 8350 taking off from tulus, france. >> the jet which will compete with boeing 787. it's debut comes after eight years of development that cost an estimated $15 billion. boeing has news about the three

next week. it is expected to announce a new larger jet at the paris air show. they will hold up to 290 passengers. i want to know if airbus develops more planes more quickly in a less complicated way than boeing does. the dreamliner has been full of problems and delays, everything like that. does airbus have a more efficient way? >> i want to talk about the aristocrats, remember that movie,s through toulous, tolous, zsa zsa gabor. >> i like seeing the 838, the double-decker one. >> i like how big they r. getting on and off takes forever. >> not enough people saw the aristocrats. >> quote aristocatk". >> the futures have been opened.

now, we are back in positive territory for the industrial average t. s&p opposite flat t. nasdaq slightly positive t. price of oil at this hour, brent and wti are higher across the board. 9703 for brent. we seen a ramallying credit in the new york times and the wall street journal. the yield on the 10-year is down fro 2.1 to 2.2. we will see what mr. bernanke says the next time around. maybe bernanke is saying the ball overrea acted. >> i don't think it was a plan. i think that what happened was that john and you know the new york times story that people thought it was a plane, there were two stories that went on. >> they use the same exact phrase, second guessing the fed. >> but i think that pilsner thinks this is nonsense. i'm sure he is talking to people at the fed. you need to make it clear.

>> i don't think le told them you need to write this. >> the trouble is the language in the piece that says bernanke likely to say at the press conference. >> right. >> that suggests a conversation. it suggests essential. >> i'm not sure it was a conversation he had yesterday versus the day before. i think, anyway. >> my point all along. >> a little speculation. >> my point has been they're correcting something that doesn't need corrected. it's a straw man. i don't think the mark fears an imminent or early rising. >> we were at 1.5, now we're another 2.2. >> i think it's economic growth. >> i will be honest. in the article her says it's probably not better exec growth. a lot probably has to do with mispricing about what the fed is likely to do on the interest rate fund. i don't think expectations for economic outlook have increased that dramatically. >> i don't agree with that.

i'll tell you why later. >> we will argue here, becky. back to you. >> michelle, went to jump in on that conversation. barry saying he wants to arc you with it, too. we will get back to his conversation in a few minutes. first, we want to talk about the crisis in america. it has been a huge colonel. it has continued to grow. our next guest says he plans to remake his company into america's retirement company. joining us is rodney martin, chairman of ius. >> thank you, delighted to be here. >> ing, this is a new thing for you. you guys have only been public a little over a month a. month-and-a-half at this point? >> may 2nd. >> a remade company. i used to have an ing account. really, you are a retirement-focused company right now. you have what about $481 billion if assets unmappingment? >> that's exactly right. the majority of our earnings over 76% come from retirement

and investment management and as you pointed out in the lead, it's one of the post-daunting issues facing americans today and americans are both woefully underpreparing for retirement. >> i was talking to larry from black rock telling us americans have on average about $25,000 saved up for retirement at this point. >> that number would not surprise me. >> right. from again, when you think about the changes that are occurring. i mean, pension in companies are declining. there is over 10,000 americans a day turning age 65 and will for the next 19 years. retirement accounts are five are going to grow by $5 trillion over the next six years. the majority of our business is focused around that, our 13 million customers. that's why again our aspirations as we are recognized as america's retirement company. >> this is a tricky time to physical this out.

we are in uncharted territory when it comes to what's happening with the federal reserve and when it comes to expectations with the bond market which a lot of people assume we are at the end of a bull market for bonds and perhaps at the beginning of a real bear market for bonds and that turns everything on its head when you are trying to figure out how to go into retirement. what do you tell people? >> it does. it underscores the need more than ever that and the research that we are doing and what we hear from our both larger institutional customers and the retail customers are they need help in what we call retirement readiness. really, regardless of what kind of where you are economically, whether you are a middle market customer or a more affluent customer, people are looking for guidance in preparing for retirement. when we're facing it more challenging times in economic cycles, it even underscores that even more. >> are you in the camp of thinking, yeah, you should not have nearly as much many bond funds as we would have told people just ten years ago.

as you head towards retirement, does it change, we are not talking 60/40 or a split like that? >> we talk about helping people planning to and through retirement. >> but are bonds much trickier? >> sure, they are. and that balance needs to continually be relooked at as one goes through. which is all the more reason that people need help and support. >> i was wondering, what division does your customers have between bonds and stocks now? do you have numbers on that? is there any movement you see recently? >> i think there has been some move him. it's generally, again, depending on the age, if you are ten years from retirement, vs. 20 years from retirement, so on, it would not be uncommon to be 60/40 or 80/20. >> that doesn't sound too much different than we have been telling people for decades. >> it hasn't been. >> that's my question. i don't know what you think about this. would you tell people at some point, hang on, you could lose money in bonds, a lot of money,

depending on when you buy in? >> you could lose money in bonds. again, you got to make the right asset allocation choices as you go through this. so we're trying to provide them both the tools and guidance to make those decisions. it isn't getting to nh, whether it's age 65 or age 70. people are living thankfully much longer. they are generally healthier, they need to look at this not only getting to that point but beyond. >> maybe working a little longer, too. >> exactly. actually requires more diligence in this process, which is why we think our thesis and theme is better than ever. >> in your asset management, you must have some information about where does the money flow in is it flowing into your fixed physical products or an amount flowing into your equity products going to change or improve? >> that's a great question. we've certainly in the last six to twelve monthss, we've had some very healthy growth in our

equity products. we happen to be very fortunate to have some terrific three and five-year track records in our equity products. and there has been more growth there than there has been in previous times. >> rodney, thank you very much for your time. >> thank you. there is supposed to be sun, intermittent clouds. >> the sun right now. >> we could. it's not going to get above 60 during the show, though. futures at this hour, we'll see if we need to do that. look at that. the ing guy getting it done, man. up 16 points. we were flat before. nice job. >> still to come an update on international stories, including the latest out of turkey and syria. more from the u.s. open, including usga president nager. his forecast to speed up all levels of golf.

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♪ you

publicselves announcements.

[ music playing ] >> let's go, while we're young. announcements. [ music playing ] >> let's go, while we're younes announcements. [ music playing ] >> let's go, while we're young. >> i want to look at these, because i can't, i don't know, i seen caddy shack 50 times, it still doesn't get old. why is that? >> well, it's an iconic film. it's popular with golfers and non-golfers. it's the reason we chose while we are young as our campaign theme for trying to get the public to express its concern about the pace of play on golf courses. >> i guess i'm not a doorknob wouldn't have worked. that was another of rodney's most famous quotes. i still don't know what it

means. anyway, i do, actually. it's cable. we're okay. can we look at some of these? >> absolutely. >> which one is your favorite? >> i actually like the tiger woods once. i like the kids, i'm trying to get juniors involved in the game. it serves multiple purposes. >> how do we do this? do i have to say, take a listen? >> i don't know. are we going to run them? let's run them. >> the tiger one the psa on tiger? while we're waiting for these things to come in. what's the problem? i'm not a golfer, i'm admit, are people slow when they go through, it creates a backlog, they're taking time looking at shots? >> that's only a portion of the problem t. real problem is in the last decade we lost about 3 or 4 million golfers. we see junior par sispation down 20% him when we study the problem, we see the length of play. people don't have as much time to play golf. >> we got an 11-year-old and a

13-year-old, it's hard for that long. we will bring them along. >> let's try and do whatever we have. ooim i'll take whatever we have. run it. seal what we got. ♪ >> hey, while we are young? he thinks it's a major. >> we're helping to peck up the pace. see what you can do at usga.org. >> no respect. >> that is great. >> that makes me nervous, though, if i were to golf, i'd be so slow, i'd be worried about people coming up behind me yelling at me. >> you saw, it's so cute. >> here's the thing you can do. go to usga.org. we have tip, a resource center there to give you tips as to how to play faster. we have tips for golf facilities

to make their golf facilities play faster. most importantly for your viewers, there is a pledge there, a place to pledge. if you seen it, we will start sending you over the internet video materials that you can watch to improve your pace of play and if we can get enough people to sign it, we'll have a rallying cry for the golfing industry to set up their golf courses in a way that allow you to play faster. most of the problem is in golf course architect cure that maybe takes too long to play. most of the problem is in greens too fast. rough height too high. you can't find your ball, poll location, rather than putting it in the middle of the green, it's over on the side. in a number of people that the golf course owners try to put out. >> this bunker right here might present a little problem for me t. one 30-yard, you got to hit over another bunker. >> can i interject? i walked 18 holes in two hours on wednesday night. >> he didn't play. it takes a while.

>> on my back, two hours. >> did king do one of these, too? >> he was in two of them. one with him and clint eastwood. >> with clent? >> at pebble beach. you have to sight he did another one, a cause of slow play on the golf course is refreshment carts. >> it's the drinkers. >> it's great. >> that makes sense. >> i guess it's a lot of clivenlt. >> i noticed that was no. 7. >> no, that's not 7. [ music playing ] >> please. >> wow! . >> each of these iconic champions, they donated their time and voice to this effort. they see this as a major problem in the game of the recreational context.

they're committed to working with us. >> 4-and-a-half hours max, even if you are playing for money. >> and you know it can be shorter than that, too. >> it could be. >> there are 9-hole alternatives. >> thank you, we appreciate it. best to rich. i don't know if you talk to him. >> yes. >> thanks. when we come back, a legendary investor looking at the latest tren in neck technology and telecom. we have a rare interview with michael price with evercore partners. that's coming up in the next hour of "squawk box." oh, he's a fighter alright. since aflac is helping with his expenses while he can't work, he can focus on his recovery. he doesn't have to worry so much about his mortgage, groceries, or even gas bills. kick! kick... feel it! feel it! feel it! nice work! ♪

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. >> now the answer to today's aflac trivia question, tiger woods is one of two golftories win the u.s. junior amateur and go on to win the u.s. open. who is the other? the answer...johnny miller.

>> aflac. >> everybody knows that. all right, turkey striking a tenttive deal to enthe protest and the u.s. considering a no-fly zone in parts of syria after the confirming use of chemical weapons. richard engel joins us live from istanbul. richard. >> good to talk to you, michelle. let's start with syria. syrian rebels we have spoken to say they are appreciative now that the white house has said that chemical weapons have been use bid a bashar al-assad regime is providing vaguely more military assistance. they say it's too vague. they need weapons, big weapons, heavy weapons, they need anti-tank, anti-aircraft. if they don't get them, they will lose this fight. hezbollah, irany revolutionary guard. they are fighting very hard.

hezbollah has already taken a town and hezbollah fighters are congregating in and around the city of ahelp alleppo. they say we need assistance and need it now. i can tell new turkey no, action has been taken so far. there are no american weapons arriving here. weapons aren't headed toward border or on their way in. it seems to be a policy statement taken, nothing concrete. oak here in taksim, the situation remains quite stable. there are negotiations between the government and the protesters, but no violence. michelle. >> thank you very much for the update. richard. all right. we have much more on the u.s. open in a couple machine, including michael price. coming up next, media mogul rupert filing for a divorce t. last time it cost him a pretty penny. plus another billionaire is calling it quits with his wife. robert franks, all the juice on "squawk box."

yeah.

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we will have more from merion golf club in a moment. take a look at how the markets aret issing up this morning. it's gotten better. the dow oprah opened up, rather, about 17 points now. the nasdaq we will call it slightly up. the same for s&p 500. ed in headlines this morning, we are about an hour away from wholesale inflation, the may producer price index. it fell .7 in april. irs attorney carter hoanes will be asked about scrutiny of conservative groups who had been accused by a lower level worker in cincinnati of micromanaging applications for tax exempt status. britain is warning airlines around the world that edward snowden is not welcome in the u.k. snowden is, of course, if man who leaked information on the

secret u.s. under surveillance programs. a document seen by the a.p. telling them to deny snowden boorkd -- boarding privileges. now to another story, a little fun, i admit it. rupert murdock filing for divorce. if history is any indication, it will cost him a pel pretty penny, robert frank joins us with the latest. you always have the dish to tell us. >> two weeks before he is scheduled to split up his company, rupert murdock filing for divorce yesterday from his third wife, wendi dang, it was irretrievably broken. they are not xheventing. he is 82, she is 44. people tell me the couple had been leading increasingly separate lives. she had a detailed prenup. maybe real estate. important to note. there will be no major impact on

news corp if this remains an amicable divorce. they have two daughters who have an economic interest in the company. no voting power on that family trust. it is held by murdock and his older. murdock is worth $10 to $12 billion. he paid $1 poin.7 billion to settle his divorce from his second wife an fast. that was a record. now another executive could break that record. news from reuters harold hamm may have to turn over $3 billion. he did not have a prefup. >> donald trump always says get a prenup. i think it's a sort of a 50 to a $100 million proposition sort of a 5 to 10 only a mon alimoney.

>> your numbers are pretty much spot on. they have real estate in l.a. in beijing. they have, of course the new york apartment which is worth i am told more than $100 million. she may or may not keep that. >> $100 million cash over time? >> it's a lot less than. i would have thought a $5100 cash one time. >> i think it's a little less than that. >> a 5 to 10 to keep it rolling. >> the kids and perhaps wendi have income coming from the economic interest in the company. so the one-time payment might be a little less because the kids were written into the economic interests of the company, not giving voting power. that was a big fight with the three older kids. >> a bit more payment. >> exactly. that's why he doesn't have to live her cash. her kids have this lifetime large income from this company. they'll be fine. >> i'm thinking of the cost of living.

i thought it was a 5 to 10. >> private schools. >> they travel. >> private schools. >> seen the prenup. >> we should get back to the golf course. >> let's get back to becky and joe at the merion golf club the site of the u.s. open. my guess is they have thoughts on this rupert murdock thing, joe. what do you think is reasonable, joe? >> i love wendi for smacking that guy. the tiger wife. >> that's worth $100 million right there. >> that's why i was sad to see it. i thought if someone is going to, i figured that was true love. >> i wish there was, you know, you can never count on true love, i guess, except in my own situation. >> or barry's. >> yes. >> i was talking about me being in love with myself. are you kidding? >> you are not kidding. >> all right. guys. let's get back to our guest hosts, jeremy siegel the

professor of finance at the wharton school of pennsylvania. guy, in the earlier clips, they were talking about this whole deal with the fed, how this all changes, what's the latest short time play, what is going to happen with the fed next week? jump off of this, will you? >> look. i think part of what happened with the blog and all yesterday, this idea that the fed thinks that first and foremost importance in their policy tools is setting interest rates expectations. within they will raise the overnight reserves and that asset purchases are a secondary too much but they're an important tool to the market. >> it's something that's never existed before, like trying to gain the whole fed, figuring out what is new? >> it existed before in the '40s and '50, they capped interest rates at 2.5% from world war iit. same dynamics took place. right. that was the financial repression period in the aftermath of world war ii. so there is a lot of similaritys

for that period. >> but the size of the balance sheet at this point, jeremy, are you talking about it, it is unbelievable. >> $2 trillion of excess reserves they got to absorb at some point eitherer with reserve requirements, i talked about that raising interest, selling some from the portfolio. one wonders in the environment of rising interest rates, you know, can you think of the fed in the reverse mode of selling. those are the concerns that are facing it. and, you know, when greenspan was talking about it is that the fed has only leaked hints about what it will do to reverse it. what is its plan. >> the balance shet when it's all said and done? it will be bigger tan it was. >> because they got reserves. there used to be almost no reserves, required reserves. we got down to virtually zero. we can get those back. my feeling is that we can probably go to a $2 trillion

balance sheet. then they have another trillion they have to worry about. >> the reserves will stay higher in the banking system because of basal 3, that's absolutely true. it's going to have to shrink. if you think about it in in context as well, i don't know if this is what chairman greenspan was trying to say. business cycles are so long. we're past the length going back to the '20s. if the fed doesn't get started and we were to have a recession, they're not going to have any policy tools. >> but the cycles are longer now. in the last 20 years, they are longer. >> fair enough. if we think this is a two-year exit strategy and they don't get started, then we could find ourselves. >> i think we got a few more to go. >> we will have much more from both jeremy anbarry throughout the show. when we come back, tow, we have an interview with michael price. he will talk to us about the trends in technology he is seeing right now and where the deals are. [ male announcer ] this store knows how to handle a saturday crowd.

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of evercore partners. michael, one of the things you have been watching is how the cloud and the movement of the cloud has turned the entire industry on its head. what's happening? >> every 10, 20 years, there is creative destruction in the technology interest. this time it's the cloud. what is the cloud? amazon web services. today, roughly 10% of all computing occurs in the cloud. and that's going to move to 40 and 50% over the next few years. and what that means is creative destruction across a number of vectors. first, the amazon data centers don't use any traditional enterprise products. so what happens and really nice weather you brought here. >> yeah. >> we try. >> blow away. >> so what happened is the traditional ip vendors aren't supplying the new age vennedor, the amazon, facebooks, gook

welcomponententry. they're bike c-gate hard drives and chips and building their own centers. you see a reduction in the price. amazon .1 to .40. >> the traditional ibms, they are getting into the clouds, too, can they make up for this by battling back on the same front? >> so the end state or intermediate end state is a hybrid public private cloud environment. so ibm buys soft layer. they have a public cloud now. now they'll probably work on a strategy to integrate this you will probably see something similar from amazon as well. >> if that's the case, okay. you got amazon who is disrupting everything. margins are getting cut. if you can offer the same thing, can they make up for all this? are you counting these guys out, the old vendors? >> stories, requirements, continues to grow.

there is plenty of uni-volume growth t. problem is when you measure the uni-volume by the actual revenue received and what happens to the net path line. i think in general, the t.a.m. the total available market is shrinking as a result of all this. >> the good news is you do see capital expenditure coming back in. companies have money to spend again? >> yeah the biggest capex cycle is carrying in the carrier sector in the lge or 4g which we all have on our ipads and the like. the u.s. leads the market here with more than half of the 90 million local subscribers. there's going to be 600 million global subscribers in the next five years and that's leading the capex resurgence which is helping the optical vendors the wireless vendors, the routing vendors and that's all good for a catch excycle. >> sorkin is not here.

he loves deals, they're coming on -- in your notes, how many chip companies are left, software companies? there's hundreds and hundreds. >> i think there is still a,000 public software companies over $100 million or something leak that. there is still probably 150 or 200 economic companies. >> when it gets going, it's getting going again? >> yes. >> you are seeing some signs of life? >> yes, the mna cycle is down. we don't see that in our business. our business is up. and -- >> it's only going to get better, right? >> yes. >> are you trying to do it now, trying to get some stuff going? can you tell us who did you talk to? who did you talk to recently? were they interested? >> you know what. >> can we see your phone while are you here? >> yeah, but jail is not a good place for any of us. >> warmer than here. >> it's warmer than here.

but, you know, the whole wireless industry in the u.s. the consolidation is playing out very nicely there. you are seeing activists come in and make a lot of investments in companies with either excess cash or poor execution. without these two is deals. and the lbo sector has been very active. you saw the pnc transaction. there is a lot of other news going on the legacy technology vendors, because where do they end up going but to private equity? >> another reason we are seeing deals is almost all the tech companies are 10 to 15 ep ratio. we don't remember seeing them all at that time. so, wow. >> amazon is at 100. >> amazon is, i know, in a world by itself. >> but the industry does have a much bigger focus on return on invested capital? the stocks that are performing well the oracle ciscos of the world, they have refocused on

returning cash to shareholders. ibm is a great example. stay there not had top line growth. back to the capex question. >> we're not going back in. we are wrapping. >> are they in your ear? >> they're not in my ear. >> they're only telling us. sorry. is there when he's down there going, it's a miss. that's what that means. >> no, he's playing makeup over there. >> he does a bunp of weird stuff, that's true, but in this case. he won't give me a piggy back ride. >> michael, thank you for joining us. >> it from to see you folks. coming up, the science of golf, all the technology the engineering and the math in the sport is going to the classroom. we will take a swing at that next "squawk box" live at the u.s. open at merion golf club. ♪ ♪ fly me to the moon ♪ let me play among the stars

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>> okay. we're back here. this is when the guys are hitting from the range up there. these are some of the wicker baskets they were hitting into. you can see the bull marks. no one has fixed any of them. i'm here with steve green, usg

an chevron have produced the science of golf. it's a new educational video series for k through 12 students. it focuses and examines the role that science, technology and engineering play in golf. steve green is the vice president of policy and government affairs. if you don't think technology and skients play into this. you don't realize that ben hogan hit a 1 iron 213 yards. there are guys hitting a 7 and 6 iron 100 yard now. >> technology changed golf t. reason usga learned is that engineers are important for the future of our company. we also believe they are important to the future of the country. so this is a fun way to interest kids in science and technology, engineering and math. >> i hope there is a fun way. we hear about this all the time. the kids got to. there is all these liberal arts majors, english majors. we're in a country where there

is jobs in science and engineering. there is a mismatch there. but to tell someone, you know, you will go to college and take engineering four years. unless they're interested, it's going to be a tough climb. it's difficult, it's calculus, it's physics. >> we are using golf and other sport to try to debunk some of the myths behind science and engineering. we have a facility here called the skim zone. there is a variety of interactive exhibits that kids or adults can come participate in. we use golf to demonstrate scientific principles. so when we talk about velocity, we use a football, a bowling ball, a golf ball ap show how acceleration velocity works. so something kids can put their hands on, play with a little bit and learn a little bit about science and engineering principles. >> can you come in? i understand how science needs jobs, too, science in terms of hydrocarbons in this country

right now have gotten us to a point where the future is incredibly bright. as a public policy guy, are you working on that, there is still a group of, there is a whole group in society that doesn't want hydrocarbons anywhere in the future for our future energy needs. they need to be educated. the country needs to be educated. >> you are right, joe. we do spend time trying to ed ka it the public. legislators, legislative on what exactly is true and what is false about hydrocarbon exploration and production. this country has a unique opportunity, certainly in my career to move towards energy self sufficiency. >> we are exporters. >> i mean, you want jobs, it's nice to have math and science taught in schools. if you want jobs, we need to develop our resources here. we can manufacture and export to the world this time. >> that's right. in the u.s., the energy industry, you know, employs over 9 million people. it's a very large industry.

it's large capital budgets. but science technology engineering are what has unlocked hydrocarbons from shale formations. it's what's allowed us to produce from 7, 8, 10,000 tahiti in the gulf of mexico. so clearly keeping kids interested if science important to us. because the next generation of engineers and explorers need to be based in science and technology just like the previous generation was. >> so what do you produce? you produce videos? things that will be shown in the classroom? you got the greatest media company in the world. i don't know if you mentioned nbc? >> i mentioned nbc. >> along with chevron. so that helped. >> and the usga. >> and the usga. we've enjoyed working with technical people on the exhibits i mentioned. we have a series of videos available to the public either their chevron's website, usga or nbc news' website. then if teachers are interested

in some of these videos, there is lesson plans that go with those we have made available. >> how many are there? >> there is tooik like ten separate one zpls what are the different? how do they link golf to -- >> so if you go look at one of them, it will show using a golf ball in flight or spin or things like that and it links back to the scientific principles or the engineering presenceple behind that or how when a club face strikes a ball, it puts spin. >> plutonium physics? >> it is, they invented calculus to be able to explain the way -- >> that's right. so you got. when the golf ball -- >> we wouldn't when any of our walls if we didn't know how the shells were going to fall. >> trajectory is a great thing in golf. >> you will see the greatest players deciding to hit it high, low.

>> we watched k.j. wow, beautiful ball flight. he says that's the wind. yesterday, it was a different whipped, i was hitting left to right. it sounds like a great initiative. thank you for joining us and letting us know about this and for chevron's involvement as well. thanks. >> becky, back to you. >> guys, thank you very, very much. barry, jeremy, real quickly. we only have 30 seconds each or. so but everything you have seen, what's happened with the markets, with the volatility with japan, what itself the biggest thing that concerns you? >> well, i think the whole fed process is going to be complex, ultimately, to me, it's a good thing to be able to get past this starting point. so i have been waiting for this for some time. i hope it is the real deal. because i do think with the feds out of the market, we will be in a much better spot after that. >> jeremy, 30 seconds for you. >> my biggest worry is the long rate will go up too much. that's the largest asset class in the world is fixed income.

the markets quite a bump. my feeling is that if bernanke can calm it down, 2.5, 2.6 i think the market can hold 3, 3.5. >> you are talking this year? >> yeah. >> and the near future? >> i would agree with that by an order of magnitude, 2.5, 2.6 makes much more sense. >> we have breaking economic news at 8:30 eastern time. plus the ceos of nutri-system and toll brother. right now, tow, as we head to break, things have turned around, you will see, there are some green arrows after starting out basically mixed. dow futures right now at 20 points. "squawk box" will be right back. woman: everyone in the nicu -- all the nurses wanted to watch him when he was there 118 days.

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>> it is. >> it's 8:00. good morning. welcome to this special edition of "squawk box." i'm joe curran and becky. we are at the u.s. open, it's

live, it's cold, it's windy at the merion golf club in pennsylvania just outside philadelphia after a rain-soaked thursday t. weather looked leak it will clear up both today and for the weekend. we are watching the leaderboard as well as what's moving in markets. we had all the golfers out there, we realized they were all there lined up behind each other because they were all going to go out and restart yesterday's round. >> back to the holes where they finished when we got shut off with the rain. >> like a shotgun. the futures are off 12 points. not a lot of movement. down a point, up a pointch up 15 now up 12 or so. we had what looked like it was going to be a scary week after wednesday and then thursday's start and then we didn't even get. >> it was crazy. >> down 800 points that one day. we didn't even get to test the lows from two weeks ago when we got down both --

>> you put that -- >> the interday 15 on the s&p. so the 5% inter-day high the inter-low the s&p we didn't match at this time. >> you have gone officially into bear territory. it declined the other day. >> it's up so much. >> i don't know where it is since november, giving back ken 20. we have two special guests, jeremy siegel, professor of finance at the wharton school at the university of pennsylvania and barry knapp u.s. head of strategies at barclays. we have been talking about the markets, what the fed means next week and japan means for us. also, we have nutrisystem dawn zier and douglas yearley. we will head back to those standing by with some of today's top stories.

guys. >> let's get to the top stories. i thought the great shots of tiger woods at 6:00 in the morning. in the headlines, turkish prime minister erdwan is putting istanbul park on hold until a court ruling is down. it's rising on the hopes that both sides will ease the tensions that resulted and sometimes violent protests. police cracked down on the demonstrations, had sparked reid wider protests against erdowan's government. the white house is saying the assad government in syria has, in fact, used chemical weapons against rebels. the administration is saying it is considering further steps as well. japan's cab in the approved new economic reforms designed to boost groth. their stock has been declining, culminating in a 6% drop for the

nikkei average. it rebounded today, but posted its consecutive weekly loss. >> they fall because of not enough medicine, too much medicine? that's really the combination going around the marketplace. we'll get some stocks that could to move in today's trading. pandora pursued by bmi. the infifit radio company rejected a request for use of songs across multiple devices, pmi want itself pandora to pay the same rates smith and wesson expects fiscal 4th quarter results to top estimates on the top and the bottom lines. the gun maker also plans to boy back up to $100 million in shares. restoration hardware reported a first quarter profit of 6 cents a share, excludeing certain items, .06. >> the company is killing us. >> was that number right, .06?

okay. 2 cents above estimates. the revenues beating consensus, as did the furniture retailer raised the current forecast, michel. >> let's check the markets. the futures have come back. they suggest a positive open. right now the dow would open higher by, maybe awas speaking too soon. let show you flat. oishlgs higher across the board, not by much. wti at 97 cents per barrel. brent is at 10 195. >> why is that, growth? economic growth? >> i mean, maybe. we have been looking at this range forever now. >> it's at .3%. >> i mean, hello. >> it was up from 92. it was down in the 92 area when there were concerns about growth. now it's up. >> okay. i thought we didn't pay attention to wti because of the issue of the supplies down south and brent -- okay. this is the story...credit has been rallying, yields have been

falling, the 10-yield yesterday was at 2.2, there is a huge deeight about two stories about whether or not the fed was signaling everybody overreacted. understand credit across europe rallied. we will see when bernanke speaks on wednesday. we have been watching what happens to the yen for every dollar. euro will cost you a buck 33, the spound 166. the dollar, gold is higher by a buck 60. 13.17. let's head back to merion golf club the site of this year's u.s. open. >> thanks, michelle. we are talking golf and, of course, the markets this morning, jeremy siegel a director of wharton at the university of pennsylvania, which is near here? >> yes. >> we got to pick you up, right near the school? >> yes. >> like a she-she. it reminded me of lewis

winthorpe's place, didn't it? >> that's what i was thinking driving by. >> i was looking for eddie murphy. i'm barry knapp, also ahead of u.s. strategy of barclays. >> capri corn. -- capricorn. >> we were just talking about what we've seen in the last three weeks, actually, sense pay 22nd when we thought bernanke may have been signaling something. we haven't made any headway. >> it was amazing, at the beginning of that testimony the market was up, he said, we may start tapering in a couple of meetings. lchs, the market, what? did i hear the end of time is easeing? >> i hear the great kwon pier is race theory, they feel there is a slow down. when they taper, they can go back up. >> the bum set left. does the fed have any bullets

left after doing all these, if the market really or the economy really slows down. >> my personal view is that the markets got ahead of themselves in the sense that when they had the april fomc directed. they added that sentence about whether they were going to increase or decrease the purchases, they were talking about how they were going to taper, not when they were going to taper. but because we had weak data, march data through april the marks said, no, they've taken an incrementally easier step. when you read the meetings, they were dismissive of that data. i think the markets were in the wrong place. when heuyou know, really said what their core view was, then the mark said, oh, wait a minute, they're not going to add more stimulus. maybe we need to rethink this. >> many participants thought. not just a few or a number. it was, it became many par tis

papt thought there might be time to taper quantitative easing. word sort of -- >> we heard people like rosencrand being dubbish. >> you have bullard who has been hawkish sounding a love more dovish lately. it's really weird. >> he's the only one. he has his own monitor views. i think on balance, it seems to me if the data allows it, they would very much like -- >> the market has been confounding everyone. >> it always does. >> by going higher. no one said, wait for it to pull back. so we got up to this point. and it feels like we've engendered skepticism, even tow we haven't gone down. it has been like a rolling correction. >> exactly. >> we built it up to where we could get another leg now. they said, i will not wait. in this past month, we have been

churning around to where we aren't bullish again. >> people say i will wait for a correction to go in. as soon as it starts, people say i'm not going in. >> people were starting to believe eight month ago. it was coinciding with the bernanke thing the bull market has legs, it is stage. when we mentioned it, we get a month of questioning whether it can go higher or a taper. now, maybe, i'm waiting for the data. >> maybe not as good then it can go up again. >> it will be a correction of 10%. it might start 20% higher than where we are today. that's the problem. it runs up 15%. >> then the guys we have on don't expect us to call them on it. >> you said a 7 to 9% correction would be the time to buy in. is that the time, too? >> well, it depends. this looks very much like these prior normalization cycles, where the first month, it's all about buying yields going up.

the parts of the stockmarket most into bonds going down, then it runs out the cyclicals. for me, it's not the debate in or out. it's the debate, what are you in? what should you be in? we had this big call, buy stocksobaum characteristics. >> you had it. >> it worked great. we have not. but if this is the real deal, if the fed is going to change, then are you supposed to get into cyclicals. that's really the case. >> there you go, look at you. you saw him. you saw him. all right. >> move over here. you know. >> all right, guy, we'll continue this conversation. when we come back, britney spears did it. oops, she did it again, and we've seen the result, but can nutrisystem work for us? we're going to ask the company's ceo when we come back. as we head to a break, check out the "squawk box" market indicator. announcer: where can an investor

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>> all right, that's britney spears. nutrisystem is one of the weight loss companies battling the bulge. dawn zier is the ceo of nutrisystem. she comes out this morning. >> great to be here. >> i was reading from a lot of notes. what is interesting, you point out one of the things helping you out is people are looking for glucose sensitive diets, that's people with diabetes in the united states? >> exactly. >> you set up a line dedicated to that. >> we have a program dedicated to diabetics. obesity is a national epidemic. every 7 seconds somebody is diagnosed with diabetes. we have a consumer program that helps the diabetic market. >> i know nutrisystem from the

television commercials. you deliver meals directly to them. it's all three of your meals and a snack, that what it is for the entire week? >> three meals, a snack, more food for the men, depending on what calorie diet you should be on. it comes direct to the house. it's simple. it's easy to follow. it works. >> the new stuff is what you have done with walmart. i didn't realize you were out in retail at this point. that's huge, when you get into walmart, you are talking massive amounts of volume that you can do. what happens to the margin at that point, though? >> margin is a win-when for walmart and us. the great thing is it's great for our brand, 60% of america shoms at walmart. it's an exam of what we are trying to do which is take one product, historically, we have marked one proikt, this 28-day program at close to a $300 price.. now we're showing how we can change that product up, do different things. walg mart is one example of that. >> would i go in and buy meal

like a frozen dinner? >> it comes in a box. think of it as your weekly lunch box. it works. people jump start to lose weight, who wouldn't want that? >> i was saying, you think about, you know, health care. you think, you know, the obamacare goes in next year a. lot of companies probably aren't going to want to undertake a lot of health care i guess liables. i would think if my company came to me and said you need to lose weight, i don't like when bloomberg tells me i can't have a big soda. if my company said you want us to koufr, you have to lose 50 pound, in the private sector, they can do that. the government can't do that. why can't nutrisystem develop a program that a lot of different corporations could use to sort of bring down their health care costs by getting everyone thinner.

>> i think you are inside my head. is exactly some of the things i was thinking about. >> it would be a huge deal for you. i don't think companies will want to have health care. i think they will say, fine, go to obamacare, we don't want to deal with it anymore. >> a lot of ways, nutrisystem is ahead of our program. our sweet spot actually is helping typically the 40-plus female market. men as well. we have a large men's segment. we are helping people lose 40-plus pounds of weight. when you talk about obamacare and you are tauk target people with bmi's greater than 30. we have programs targeting that. we have people getting recalled for the high school reunion the college reunion the wedding, losing the baby weight. >> do you have corporations where they mandate people to go on nutrisystems yet? >> we have relationships where we offer. >> a stick. you do enlike mandates. >> we might offer something, you can get a break. >> a break on something if you

lose weight. >> i would partner up with big companies. >> we have insurance companies with aetna, united health care, more things that we're looking to do on that front. we believe there is an opportunity for many different types of programs, some structured food programs works better for some, certainly, there is a place, when people have a lot of weight to lose, it's easy to be on a structured program. it gets you excited. you begin to lose that weight. ten you can begin to change that lifestyle. >> walmart is a great place to start if you shop there. >> will you be looking at grocery stores as well? >> you brought up the margin earlier. wam mart, it is really about the system the nutrisystem, which is really about weight loss, not one-day products or things like. that certainly, with the success that we're having at walmart, we are entering into different types of conversations, the phones are ringing. people want to know what else we

can do. still a lot of things for to us do with the walmart. >> i think you have better things at walmart than the grocery stores. why is that the case is i ka is? >> we are selling a $45 product. in grocery stores, it tends to be a lot lower. it's a win-win for us, it's a win-win for walmart, if you think about the average grocery cart for walmart putting one $45 product in there. it helps our volumes as well. >> it's a five-day product, a lunchbox, if it's not frozen, is this fresh fruit, what's in there? >> it's breakfast, lunch, dinners, snacks. a lot is ready to go. we have a whole frozen line as well. we have a lot of different products, nutrisystem has 150 more product. the interesting thing about that is we can put thoeth those products and different configurations. so if somebody wants an easy to go kit or a snack pack, for example, for back to school or people going to the office,

these are the different types of things. >> is that like a granola bar stuck in it? what is it? >> it can be a lot of different things. we have pa lot of snacks available. what we have historically done is had this 1 one 28-day product. a lot of things work for different people a. 28-day program may work for me. it may not work for somebody else. somebody else may need denners on tear own, dinners with their children, something like that. it depends. what we can do is slice and dice it into many different ways, each different segments, talk to people in different ways, and have different food options. >> dawn, thank you for coming in. >> thank you for having me. >> you can keep the frozen fodz there. coming up, breaking economic news, we need to put it anywhere, would we? it's only -- >> yes. thank you. >> key inflation data. it's just minutes away.

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>> a live shot at time's square there. we are awaiting the consumer price index coming out in a few minutes. let's go do dan greenhouse local strategist. i can't speak today, we were talking earlier. i want to get the low down on the wrap. i don't know if we're going to call. >> the story in the "wall street journal." >> i don't know. there was a piece in the "wall street journal" yesterday. it looks like the market rallied a little bit looking back on the ominous idea there is a separation between the tapering of the 85 billion. >> the headline was more pro rocktive than the story i think. within i was sitting on the desk and it hit, it said, fed likely to be supportive. we rallied.

at the end of the day the bond market went up as well. in terms of the story, if you are following us even marginally closely, you know what is in there. >> my question is one of the references in this piece and the time's piece, is the idea that maybe this was a trial bloom. >> what was said at the fomc meeting three weeks ago now that started this whole raucus, by the way, joe and you and others called it right at the time. but that was actually a trial balloon, now bernanke decided the trial balloon drifted in the wrong direction, now it needs to drift back. >> i disagree. >> that's my question, do you believe the original statement was a trial balloon and that he is unhappy with how the market has -- >> i think you and i disagree, i am in the camp that they were looking at the rally being everybody expected treasury buying to go at full pace all year. they wanted to introduce a bit

of volatility. i don't think there is necessarily anything wrong with that. >> we we throw up the chart of the ten year going back to this yield, i want to make a very important point. if you go back a year as the chart does, where we are is where we would have been if you didn't have the spring swoon induced. >> all the way to august, you can draw that line. >> that's correct. all we have done. >> is get back on track. >> get back on track. >> i would like to point the rise of interest rates comes with an interest in growth prospects, a declining inflationary forecasts that are out there. also, a belief that the u.s. economy is weathering the sequester better than was expected. so it looks like we will do what, 2% growth in the second quarter and accelerate for the 3rd and 4th quarter. i don't know that the rise in the ten year yield has gone up exactly in line with the expectations of growth. certainly, there is a portion of

that that has to do with higher inflation. >> still to come on "squawk box," the ceo of toll brothers, hear his take how the industry finally made it through the rough. the macon seumer price index ahead at bravenlth the u.s. futures ahead of that key data. here at fidelity, we give you the most free research reports, customizable charts, .

>> welcome back to squawk. we are minutes before the release of the cmi in chicago. rick, the numbers there. >> we are up .5, up .5. this is big. very unusual. this is coming off of a- .7. if you strip off the all important energy, you are up .1. this day is actually much different than many were expecting and it underscores that there is going to be a lot of focus on things like ppi and next week's cpi because inflation and fed policy have been a big talking point. many traders down here are more granular. they try to differentiate between commodity price

movements, which aren't necessarily the same thing. no matter how you slice it, this number seems to be having a an effect on the marketplace. we are at 213 briefly. you go got a basis point out of the ten year. we will continue to monitor. many people will be more focused on university of michigan sentiment survey with all the issues of the day. i learned overnight that, you know, subscription-type news, of course, has been around for a while. you might be surprised at who some of the sponsors have been over the years. i had a source tell me at michigan, for example the fed is a sponsoring subscription. they're a big regulat -- regula. eamon javers will keep us in the loop. >> will somebody have to get up 15 minutes early? >> or a nanosecond. >> i want to clear you up on the

reaction to this. from what you understand the fed is a client at the 955 number or 954 with 2 seconds to go? >> yoeng i don't know anything post-thompson reuters. thompson reuters is really the story. i think eamon did a great job. but the story from 1946 up until thompson reuters' involvement. that's when the fed and manientties were sponsors -- many entities were sponsors. country clubs don't let me on the i don't have a sponsor. the issue is pry frequency trade, i think. >> don't move. i want to talk to steve and get the number. >> a good number. >> a couple different ways to read it. >> it's up because of residential gasoline up 4%, food stuff, consumer foods up 06. food and energy rose, take out food and energy up 0.1%. when we look at this survey what

we do, an drou the report is we go back in the production process. we look at goods with less amount of production or work put into them. intermediate goods and crude goods is all the way up the pipeline so wheat would be a crude good, flour would be a finished good. if you look at less food and energ energy-2.3%. be careful from going to consumer inflation. a lot stands in between, this is a potential mark of company margins. when their input prices rise and fall, they have higher costs. >> you are sitting in ben bernanke's seat, how do you read this and how does it change your thinking if at all? >> i wouldn't be surprised if he was in the cafeteria getting coffee. >> far less important than the cpi. even with that said, the general trend is one of disinflation,

five-year forwards are down. expect as are down. inflation, as measured by the government. inflation is measured by the government. >> that's not enough, dan. really the question on the table is what we are producing here this conas i recall price number may be a hint of that. has there been a temporary issue or is there a more pronounced things going on where inflation is falling on a more permanent basis here? that can influence fed policy. >> i think the latter, if you look back the past 20, 30 years, they have fallen as a potential growth rate in the economy. is definitely structural. the decline in inflationary pressures. the pressure is whether it can ameliorate the policy. >> can i ask a question the headline number looks big, that would suggest to you the fed would be more likely to taper, right, then when you go look at the core number, you would think, wow, they might be worried about inflation or deinflation and be less likely

to taper? >> holding everything else accurate the truth is, this number produces almost nothing. >> if your consumer price is on tuesday the fed would watch. >> and if it goes up, it will be, if it rains next to that fire hydrant or it was hit by lightning three weeks ago thursday. >> this just has nothing to do. >> we feel young. we keep feeling and keep feeling. >> you know, there is one issue that's really the issue of the taper. it isn't the fed changing its mind or having to go post. that's on wheels with or have an engine on it. thessue is that they're disrupting the mortgage market with their purchases. is going to cause a taper of some sort. whether they stop buying x amount of mortgages and buy that amount in treasury, i can't tell you, but there are real logistic issues they need to contented with. they can float the number out. they will do what they want to do. >> rick, that's an important

story. we have been reporting that. the guys in the mother-in-law market are worried they're going to get whacked firstment what will happen is the fed will -- because there is this antipathy of the feds holding the emergency, to begin with. when they think of getting book to normal. they don't want to be owning mortgages at all. so the concern is when the fed starts to normalize, it normalizes on the back of the mortgage market first. >> can i ask our rick to comment. real quick. what's the view on the there are of that journal story we would be talking about all morning? in there which story. >> the piece about whether bernanke was pulling things out. >> they are interested to know exactly what the release story is for these stories. three, four weeks ago, the story came out, not in a timely way. yet the market moved. so many of these guys are kind of looking at that as the same way as the university of michigan and all these other stories. specifically, here's what they say specifically. they think mr. littlesengrant is

a great writer an ben bernanke is a really good guy. they don't understand what it does to the marketplace. >> rick santelli, thank you for that. coming up next the housing turn around, is it on a firm fitting? we will ask the ceo and "squawk box" is coming back at the golf course right after the break . 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. the lexus es350 and epa-estimated 40 mpg es hybrid. this is the pursuit of perfection. just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's.

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. >> the housing industry finally shows signing of a turn around. is great news for home builders. the ceo of home builders, it is not raining on your parade, it's not five years ago. there is nothing i can say to you that will put you in a bad mood right now? in there maybe the weather. we're back. i'm in shorts, i'm ready to go. >> what doesn't kill you, makes you stronger. things are pretty much stronger in the toll business. >> thigh are. the horrible six years the worst housing recession in this country's history. in the last year or so, it's coming back, coming back strong. we have 60% of our communities are seeing price increase. both coasts are great. we are very large in new york city, hoboken doing a high rise, that's been terrific. california is back. the problem now is finding land

because all the builders are well capitalized. the big builders. we're all out there hunting the grill. overall, we're thrilled. >> i did see a little bit of trepidation in some of the housing stocks a month ago when we started talking about a taperment people get out in front of what they think might happen. it doesn't mean anything about fundamentals for the industry, i wouldn't think, necessarily. your view is rates will go up. as long as it's managable. it's not going to be like three or four years ago and in the past, to him has thrived at 5 and 6% ten years, right? >> it's 5 and 6% is historically a low rate. now, the last -- >> it's a part of the pricing equation, too, though? >> if rates go up slowly, which everybody thinks they will. it's the equivalent of a price increase. i creates urgency. we are seeing more sales now because rates are creeping up very slowly. if that conand we stay in a

managable range, we'll be fine. we're not worried at all. >> doug, there was an article last week in the "wall street journal," earlier, about how so much of the housing resurgence is coming from people getting involved in flipping this house. you are dealing with actual home buyers buying into your property. so your view of it really is the best vow of what is happening to the new home buyers, themselves? >> the investors are not backing our business. our average is around $600,000. remember, this country produced 1.5 million houses per 84 for decades. right now, we're at about 800,000 homes per 84 based on april's numbers, this is an early stage of this recovery. there is a long way to go. we do not see the investors coming back. you have six years of pent up demand, nobody bought. interest rates are low. affordability is at an all-time high. we feel great. >> what about people getting ahold of loans, though, that has been a problem for several years at this point. can people get in, if they have

a less then perfect score and don't have at least 25 to 30% to put down? >> i think can. it's not like '05. it is certainly harder as it should be. mortgage money was way to hoord harder in '05 and '06. those who get a mortgage put 30% down. fico score rating off the chart. we're selling people before. we have for the problem. our clients do have a home to sell, so we have to lock at the daisy chain. it's a little harder to lower the price point. >> this is an issue, doug, i have talked about it in the past, that credit to the first time home boytary creates that uplift. you know the average fico score of a franny and freddie loan is 70/60. the loan to value ratio is 68. we need to loosen those credit standard a bit. some is policy stuff. fannie and freddie's pricing of mortgages, the capital requirements and all, could it be that rates going up a little bit will increase the bank's

willing ins to cut standard because the absolute rate is higher, you know, for sort of the average baseline bank out there that doesn't hedge a risk? could you see that happening or? >> barry, i think that's already beginning to happen. we are hearing that mother-in-law money is a little bit easier as we think it should be. we are going nowhere near the times of '05 when it was way too razzie. >> i'm getting down to 20% down, it would be an improvement. >> you don't have a house to sell beforehand. >> first-time buyers means a lot. >> i think it is easy. i think it will continue to ease t. underwriting is tricky. they're looking into all sorts of issues they never looked into before. if you financed a flat screen tv, it seems they will reopen your file. >> that's dodd-frank and the cfpc, too. >> i am wondering, you are doing a lot of great things in philadelphia. although, i always thought of you as someone in the disturbs. have you seen a difference in the mix of where you are

building in this recovery paird compared to the prices? >> we are, preprices 70% of the homes with a larger suburban move-up home we built our company on, now it's about 50% of that business. the balance is more in-fill. we're on our 18th building in the city hoboken. it's been a terrific business for us, we see that growing. >> we tried to get to you come up with something that was negative on the horizon. you really don't have anything. one thing i will tell you is that there was a pretty well known home builder on i guess seven or eight years ago. he told me straight faced they finally learned how to manage inventory, business cycles, you know who it was. is it -- it's not possible. i mean, you still have a cyclical industry. >> very sick lick am industry. i hope we learn some tough lessons through this downturn. we have never been a spec

builder. so we never got out that far in front of the market. we own a lot of land, so we're setting up the future. >> you don't want to go into that either in a downturn. >> more people are dieing than being born now, put that in your pipe. that was yesterday on drudge for the first time in u.s. history. >> immigration reform. >> and family formation. so many people have put their lives on hold, didn't form a family. now they're feeling better in the beginning of the year. >> the eco-boomer is bigger than the baby boomers. it's like 25 and underer. >> boomer's kids. >> right. >> eco-boomers. >> you are not even -- thank you for sharing. my son is with me. my friend are with me. we are ready to watch some golf today. >> tiger waved to us, swear to good, a small wave. i think it was to me.

becky thinks it was to her. >> you must be friends after that happened. >> we got lucky. thanks, doug. when we come back. it has been a busy morning on "squawk box." it is time to reflect on the day's highlights an talk about what is likely to drive today's trading session on wall street. we'll try to do just that straight ahead. change makes people nervous. but i see a world bursting with opportunity, with ideas, with ambition. i'm thinking about china, brazil, india. the world's a big place. i want to be a part of it. ishares international etfs. emerging markets and single countries. find out why nine out of ten large professional investors

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welcome back the "squawk box box" everyone. the futures are indicated ever so slightly higher and the dow futures up by 12 points and the s&p futures up by one-third of a point, and the consumer price index rose in may up 0.5%, better than expected thanks to gasoline prices. and boeing is set to announce

its dreamliner version in paris next week. and lit hold up to 190 passengers. guys we have talked an awful lot about what you should and should not be concerned about, and jere jeremy, there is a feeling that people are in stocks that are acting like bonds and dividend stocks, and you say don't worry. >> don't worry. first of all the dividend yield is still way above what you can get on the interest rates today, and secondly, most important, we have 10 to 15% cash increase in dividends, and we have one of the greatest increases in dividends over the last 12 months than we have had in the last 20 years. so i mean, dividend-paying stocks are going to keep up with inflation and give you growth and something that treasuries can ever do. >> and you are not bearish on the market yet? >> right. i'm not bearish on the market, so that the people fleeing the

treasuries should be going into the dividend paying stocks and not afraid of them. >> so i'm sitting with a market historian and i love history as well, and the history of the dividen dividend-paying stocks in the last financial repression period in the '40s and '50s is that they did have the maximum outperformance right before the treasury accord when they started the exit strategy, but stayed strong through the two-year process when the fed was capping the interest rates and involved in the market. >> that is why you have also told people not the sell out of the stock yet. >> right. it is not going to unwind like a "v" where they are doing great and then collapse, but perhaps not as well on a relative basis and the silly ccyclicals will d better. >> if people are concerned about the bond market and concerned about what is happening with the money, is that the safest place for them? >> well, the safest place is cash which is nothing. >> and unless inflation takes off and you have to change your perspective of what is safe and what is not. >> right. if inflation takes off, i want

to be in stocks than bonds, because stocks are assets and long-term better. >> but it is the best house in the bad neighborhood, but inflation is not about to take off in the near term. >> well, there are not a lot of good neighborhoods around that i say are screaming buys. would you want the buy gold? buy precious metals right now? i mean, they, i think that they are discounting still a financial disaster that is not going to happen. >> jeremy and bear, you are great sports to hang out with us this morning, and thank you. >> we got to see some cool stuff. >> thank you for having me. >> and you have the hot shot. i wish we had more. >> and we will have the last word from the u.s. open when "squawk box" comes right back. [ male announcer ] with free package pickup

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♪ even if it's so wrong ♪ i wanna scream out loud ♪ boy, but i just bite my tongue ♪ ♪ this one's for the girls messin' with boys ♪ ♪ like he's the melody and she's background noise ♪ [ volume decreases ] thanks, mom! have fun! you too. ♪ ♪ ♪ of a lovely lady >> don't you love that music. >> of course, we don't have to

look up. i want to be martha. >> and then -- ♪ it's the story of a man named brady ♪ >> is this what is it like to be on the top of kilimanjaro. >> are we on? >> yeah, we are on. >> "squawk box" and this is not like the real merion basket, because if you google norman bates' mother, that is what the baskets look like. look at this green and watch it go. this is what these guys are dealing with. >> whoa! very fast green. >> very fast. and look at the break. you can't see it and you can never see on tv how much these things are pitched. becky, you can tell how much they are pitched here, and look at that thing, it went right and then left and going over here, and that is what these guys even though they are soft, and that is going to go back left. hard right and then, wow! look at that. i have never done that with a

club. that is going to be a pretty good shot from here. anyway, it has been great being down here. >> it has been a lot of fun. >> i thought it would be rainy and it was very cold. andrew, i guess that you made the right decision. we have been freezing. we have been freezing. >> i have the sweater. i would have been fine. >> well, you know -- >> and the weather didn't -- >> it is cold. >> you never actually took the clothes off, because it was too cold for that? >> the clothes? >> it is always too cold for that. >> cue the porn music. yeah. look at how quickly they did that for you. >> the highlight might have been tiger was walking along like this, and he is cool, and we yelled "tyiiger!" and he is walking along. >> to we have a shot of that? >> and he kind of gave -- >> and everybody started hooting and hollering. >> well, we were on sound bites all day long with the ceos and why not a sound bite of, and how about the sound bite of tiger,

and your brother should send that thing out, abz he does, jamie dimon, jamie dimon, what about tiger woods? >> do we have tiger tape? >> we do. i don't know if it is racked up. >> it is coming right there. and this is when you guys start yelling. you start yelling. >> oh, come on. >> woo-hoo! >> they went to the shot of him putting. >> we didn't get to see it. >> well, guys, if there is no photo proof, i am not sure it happened. >> well, we have a cast of 50 in the shot. >> joe, are you sure it is a wave and not something else? >> there you go. a single wave. >> oh, no sh, he was -- it was e this. and you can imagine how many people yell "tiger!" when he walks by, so to not just flip us off was probably pretty good. >> and guys, we will say good-bye and before we do that, we have to thank dan greenhouse for sticking around for all

three hours. >> thanks for shaving, dan. >> he did. >> thank you, joe. i love you. >> and steve and michelle, also. >> it was fun. >> playing the "brady bunch" here and you guys have a lot of fun on the golf course. okay. very nice. guys, we will see you on monday and have a great weekend, everybody. >> "squawk on the street" is next. >> "squawk on the street" begins right now. ♪ and we began to rock steady ♪ steady rocking all night long ♪ good friday morning and welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange and what a reversal overnight. and the nikkei is going to fry to catch up off of the intraday high and we will see how much damage they were able to repair. on europe, we will keep an eye on the green scenario for the continent, but the close over there is a few hours away. ovgh