world, and no matter what we are talking about today, we have better position industry, and low-cost base created because of the energy revolution in the energy, and we have the best legal system going in terms of protecting investors and companies doing business here and around the world. >> great. >> and if we can be freed from some of the regulatory burdens, this economy could take off, and so will the stock market. >> thank you, sir. join us tomorrow. "squawk on the street" begins right now. good morning and welcome the "squawk on the street." i'm david faber with jim cramer and scott right here. carl quintanilla is off this morning, and afterf a 100-point rally, the fed is under the microscope as it begins, you know it, a two-day meeting. the futures are holding onto the gains and consumer prices up one point in may, and housing starts

rose above street forecast, but we are looking for a higher open. >> yes. >> and a actually more defensive. looking at europe, a mixed picture, and you can see it on the continent there, but a lot of green on the map. start with our own road map starting with day one of the fed meeting as the market swings over almost any mention on the word of the word taper. president obama hints that ben bernanke could be on his way out. scott? >> and david, here is sony activist dan loeb asking for a second time to spin off the entertainment arm. the firm is third arm staking that company, david. >> well, the battle over wire, and the battle over sprint or maybe not. sprint is filing a lawsuit over dish, and we will try to sort it out for you. and the protesters are feeling the pressure of biggest cities of brazil, with rising prices being the root of the demonstration, and we have the

details and the amazing video of what is happening in brazil, guys. >> today is the day for the federal reserve policy makers to kick off the two-day meeting. the investors are bracing about the bond buying back program and if it is going to be scaled back, and if it will be scaled back, and what they had for lunch. and meanwhile, president obama had some interesting comments about chairman of the fed ben bernanke on the "charlie rose show." >> i think that ben bernanke has done an outstanding job. he is like bob mueller of the fbi in that he stayed a lot longer than he wanted or was supposed to. >> this morning the white house spokesman said that the president's comments reflected admiration for bernanke's service, and comment on personnel, and no comment on personnel decisions until the president has made one. and bernanke's chairmanship will expire in june and expectation is that he will be leaving, and the question is who will replace

him? >> well, again, president obama, i don't think that he was trying to signal anything, and didn't real realize. the same with tapering, and we know that there is a tapering eventually, and we know that the fed chairman is going to leave e eventually, because these are things that do not last forever, and it is like, well, they have been, and they are both long in the tooth. >> right. >> so those who are not expecting the tapering any time soon don't understand that there has to be one, and those who are thinking that bernanke will never leave, well, you know, he is human and he does have a life, and i do believe he will be followed by someone with a similar orientation which is not the guys who come on the air all of time and say, why are we trying to help the economy, because that is the stub text, and if they had listened to them, we would be like sweden, and they would have been nationalized a long time ago, because they would have failed. >> what about janet yellin?

>> well, she is a rigorous individual, and you want the people of 1937 the recession amongst the depression. and in 1937, everything is better, the senate, and the house and the federal reserve, and they all agreed to raise the taxes and balance the budget and then a deep recession. >> yes, a deep recession which was a depression within the depression like you said. >> and there is some historical work that said that the war is the only thing that got us out. obviously, that would not be what we would want to end a taper here. >> no, that would not be. and it is funny, because the president may have communicated something that he didn't mean to, and in a sense, we are dealing constantly with what may be miscommunication or the misreadings of the communications when it comes to the of all idea of tapering or taking your foot off of the gas and forget about putting on the brake, and there i'm talking about e moving qe. >> and too much transparency, such a good thing? something that people were closed out? >> looking at the market yesterday, scott, and we are

foc focused to be tweets from an f.t. reporter. and this guy harding. >> well, that is the same as chief justice roberts in terms of the level of certainty, a tweet from a reporter? >> well, what the heck is going on? >> that is the world we live in? >> this is not a great world. it is not a rigorous world, but a farcical one. it is when we get killed by tapering, we buy it. and that is like the faux discussion on taper iing. >> and you brought it up, harding with the ft, and the fed likely to signal tapering and the move is close, and the market was upset by that, and pulled off of the highs, and mr. harding was on the 5:00 show last evening right here on cnbc, and we have a sound bite from him responding to how the market reacted to what he said. let's listen to that and then talk about it. >> the market was reacting as if there is some secret bat signal coded here, and that is not the case here. there is useful information and

people ought to read it carefully and react to it. as i said, i have done extensive reporting on which it is based but to gyrate like this, it says to me that people are taking a signal from the existence of the article and not what it says. >> you find it happen s a lot. i find that as well. >> i have problems with how rational he was, because this is an opportunity to distinguish himself as someone who wants to move the markets, and instead, he was rational and measured. why? >> and that is the case in fact that you can report whatever it is and spend a lot of time doing it, but perception is reality of those who read and or watch or whatever it is and decide on their own what it means to them. >> this is furiously sounding like, buy nothing. go back to the board and not the cr board which is cheap if we do get a taper. >> well, jim, it leads to the question that becky asked you and the chat in the "squawk box" is tapering tightening and the

market cannot get off to the fact that to it, tapering if it goes from 85 to 65 or 70 or whatever the number is, if it is not 85, the market is going to lose its you know what? >> well, we had a dry run. i was kind of shocked at how shocked people were particularly in the bond funds, and listen, this qe3 lasts forever, and it is like the cruise to nowhere. i was really shocked at how people were reacting like, oh, my, you know, we are not going the have a permanent situation where we print the money around the clock. >> and when people get the june statements and watch the bond funds or the muni funds or whatever it is going to be, it is going to be painful. we have talked about that and showed you the charts, and of course, you will see the 10-year. >> right, 221 this morning. >> right. that has been the other side of this. we have talked about it, credit so important, and so painful. >> right. >> and but to the extent that we can say, all right, we are going to see what we hear and maybe we won't get anything that is particularly painful or have a

summer of stock picking ahead of us then? >> well, stock picking after the futures take a stab, and the futures are clearly in control, and yesterday was interesting with the dow opening up at 150 and then what? up because of japan. well, japan does not open again until we are closed so maybe we should sell off, but then we went down, and then we had a faux tapering story, but then it was real, and then go on "fast money" and it is faux tapering so -- this is insane. you let it come down, and then pick stocks that do well in the environment, because business is good and not affected by the fed. but it may mean not to buy the utilities and the investment real estate trust, and the mlps because they need to finance, and so you do have a dichotomy of the stocks that won't work, because they are entirely bond market equivalents and we don't need them for the bond markets. >> and we can do it with the perception that they do poorly. they are down for the year, and

once we see the tapering and we find out that the business does not end, you cycle back to the toll brothers. and last week, we had a statesman guy from there on, and stuart miller from lennar said it won't hurt our business, but you have to let the stocks come down and find out that the business is not hurting and then buy. you can't jump start the cycle. you to have a cycle of pain until you get to where the earnings can come out. >> the psychology of pain. >> yes, the psychology of pain is horrendous. >> talk about the third point the hedge fund run by dan loeb the head of sony has raised its stakes, and they are asking for an opportunity to address the board on the proposal to spin off the entertainment unit. david, this comes in a second letter from the third point to the ceo of sony, and now we will see what happens. >> i have the letter here. >> and the tone in how this

whole thing started, it still has a very, what, amicable? >> yes, it does. >> to it all. >> he has to keep it there. and first of all, this is not dan loeb circa 1999, but a guy running $11 billion and $12 billion hedge fund and one of the biggest activist investors and slash investors out there from the hedge fund world, and he has taken the more statesman-like tone, but that is the case in japan and not the u.s. it is different. and i continue to watch this with interest because of that. let's not forget they have yet to seat the new board and the 20th is the shareholder meeting, and thursday, you will get new board members as i have reported in the past. and advisers to morgan stanley and to a lesser extent citigroup, and we won't get in to talk to board until they have a board to talk to, so that process will take some time. there are those who would argue that the value of the entertainment assets are significantly, and significantly

undervalued and unlocked by a partial ipo, but there is big pushback that i have heard from the company itself who believes that the subsidiary ipo is simply not the way to go and it is not clear to me what levers mr. loeb has to really push if that in fact ends up to be the message he gets back. >> well, blows it out. >> maybe. >> nice to see you. herbalife, terrific, and i made a couple of bucks, right? it is not like loeb is saying, hey, i'm here and i'm going nowhere. i am here to stay. >> it is stocks working and blows it out and people say, i'm in it because of loeb and discover, holy cow, loeb left, and then start the next thing that loeb comes in. >> well, there are reputational benefits/hindrance from losing something like this, and again, it is not a battle at this point, but more of a conversation. >> how about he tried? what's the matter with that? >> well, it fits in the way that

loeb views japan in general, and he is very bull ish on what is taking place in japan from the stimulus efforts there to the arrows approach, and he told me as much with salt, and how bullish he is about what is taking place there. so it is interesting that he has this thing going on in sony at a time when his overall view of what is taking place in that country is incredibly bullish. >> and the wind is at his back. >> and the governance changes that he is hoping to push on as well. >> let me be clear, if he sells, it is honorable, because he has tried. i'm not say sheging he is a sca but if he wins this company is worth a substantial money and much more than it is selling for, and the game plan is a great game plan. >> and he has benefited in part with the investor's perception of the inherent unit regardless of the subsidiary ipo or not. >> if he did what he said, the

stock would go up substantially, and the japanese way. >> and no, listen, they did in part with the financing of it, and they did it for different reasons, and as a matter of fact, they want to pull in the financing of it. >> and we have heard the pushback of that ipo, and they will get a bunch of new directors, and they will decide, and what decision they come to with the ceo, and that is go g ing to play out for some time. >> and what about stringer, and they are not an thet cal to e engli english. >> yes, and the guy. sounds like a surfer dude. >> skull kating? oh, nevermind. >> well, we do have much more on the investor activism, don't we? >> how did you know? >> i'm a mind reader like karnak. >> and the investors are paying off, and here is proof, we have the newest member of the golf championship club, the u.s. open winner justin rose will visit us

post 9, and i am excited about that. >> we will begin the two-day meeting and the dow has implied open of 33 points after yesterday's triple-digit move, and yet another one for the dow. "squawk on the street" live from post 9 live when we return. i'm in my work van, having lunch, next minute i'm in the back of an ambulance

having a heart attack. i was in shape, fit. i did not see it coming. i take bayer aspirin. [ male announcer ] so be sure to talk to your doctor before you begin an aspirin regimen. see your doctor and get checked out. it's easy to follow the progress you're making toward all your financial goals. a quick glance, and you can see if you're on track. when the conversation turns to knowing where you stand, turn to us. wells fargo advisors.

welcome back. we want to update the viewers on dell, of course, and we followed it so close here with the july 18th meeting, one month away at this point. and we have also been following closely what it is that carl icahn is or isn't going to do in furtherance of the so-called recapitalization plan that he has put forward with the asset management. and yesterday a letter that did not get a lot of attention that i picked up from icahn capital as part of litigation on behalf of joe rice, the noted strike suit attorney who does a lot of that kind of stuff. rice had asked for a response on where the recap stood. icahn wrote a long letter dated july 17th, and i can share some of it with you which does seem to indicate again his exasperation if you will to try to put together the recap plan. let me share couple of perhaps for you from the letter. and it says that the restricted

definition of a superior proposal under the merger agreement together with the express terms of the merger agreement with large termination fees, and matching rights in favor of michael dell, and act as almost impossible barriers for the potential bidder unseating the going private transaction. in particular, how does a potential buyer secure pfinancig for this size deal, in light of the matching right, and the fact that the banks would not be paid anything in the event that the bid is matched or topped? and so perhaps i thought that you would see him step aside, icahn, and that has not occurred, but i wanted to point out the letter, because it is indicative of the challenges that mr. icahn is facing -- >> which you have noted from to get-go, by the way. >> we have. we v. achl. -- we have. and again, scott, it is a interesting belief for companies that if you can line up a

company to lever it up for go transaction, and you can lever it up for us, and pay us a huge dividend and that is the icahn plan, but it is not likely to come to fruition, and in fact, the key is this july 18th shareholder deal where you can vote it down and then hope they come back with a proxy fight, icahn and then a new management team, and unseat the board and put in a new recap deal, and then put out another plan where the debt will be taken out by the private dell and mr. dell will control 75% of the new company. >> well, again, both of the scenarios presume that a hewlett packard, and a reig vnvigorated hewlett packard would not be -- let's say impacted. >> yes. >> and then i keep saying that this is financing issues. why are hewlett packards and dells? well, the dells come in to make the deals. if that balance sheet is levered

either way, hewlett packard can come in either -- and it is a bad deal. >> don't forget lenovo by the way. >> they come in underneath everybody. >> and they do announce todd brad sli going to step out, and he has been running and printing personal systems, and he is going to assume a new position at the company called executive vice president for strategic growth initiatives. working directly with meg whitman, and he will be focused on enhancing hp's business in china and extending the company's critical partnership relationships around the world, and identifying potential partnership opportunities with the early stage companies. and so bradley is stepping aside a significant unit and personal systems which is going okay. printing is okay. >> and i thought she was happy with printing, so this may be a good shape -- >> printing is going well. but of course, in systems as in pcs not as much.

>> read into this guy being leaving? he is a guy who should be familiar, and his face should be to cnbc viewers, because he has been on the network before and it is not just the ceo of that company who has appeared on the network. bradley has been on. >> oh, yes, this is a huge unit as we know it. >> huge. i am confused by this. >> ly try to get some clarity, and difficult while we are on set, but i will make a phone call or two. >> you can do that on air. >> i can try. i have the phone in front. >> and you are going to make calls? what about going on twitter and kind of muse. don't do that, use the twitter and say, it is big news, and then leave it at that. >> and then see what happens. it is kind of like that -- >> and we have a lot of stocks to talk about and we will do some of that on the "mad dash." >> why talk when you can tweet. >> he is going to tweet the "mad

dash." >> i am going the tweet that the "mad dash" is up next. the most important signal for investors, and what will the fed signal? steve liesman reports, the fed decision on "street sign cisioi tomorrow on cnbc. is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

okay. 5:30 before the opening bell and let's "mad dash" it. >> jack in the box? >> yes, i know jack and you may not know jack, but jack in the box is closing between 10% and 20% of caddo bas, and happen to love them with short lines at

the mall, but they say it is great that it is closing, but it is at the high, and they say it is great, because kadoba has underperformed, and they say it is fabulous for chip chip poelt chipotle. >> and why kordoba? >> well, it is not packed and it is not working everywhere. so jack is higher, and chipotle is a company in a dogfight. you talk to the chipotle guys and they will say they are much better versus taco bell, but it is good for everybody in the industry, and chipotle could go higher still. >> and we will be watching those stocks with a lot of thers after five straight days of triple-digit swings on the dow, and not just up, but certainly

down. should you -- well, should you get ready for number six? the opening bell is 4:00 away.

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you are watching cnbc's "squawk on the street" live from the financial capital of the world where the opening bell is set to ring in one minute and ten seconds. all right. how do you like that? what are we keeping an eye on today in addition to the jack in the box? >> hormel. they are as consistent as any company i have seen, and they are talking about the higher pork prices and sounds like they are not executing well, and remember that smithfield foods is in the same business and there is clearly some problems in the pork business. or else hormel would not miss like this. >> well, a surplus here, but shorta shortages in other parts of the world. >> well, yeah, some classic mismatch that the prices that they don't have the price increases to equal the costs. and i want to point out that hormel is the kind of company that people have been hiding in for months off of the possibility that we will have some weakness. interesting. not happening. >> well, you are watching the opening bell right here, of course, as you can hear them

ring it! >> i didn't hear it yet. >> you didn't hear the bell? >> no, the bell. ring the bell. all right. here's the big board, and -- there it is! >> yay! >> and he is a fabulous ceo and fabulous guy and i know him personally, and it is not about friends, but it is about making money, but he is a great guy. >> he was not late with the bell, but right on time. and the guys at nasdaq is releasing the under 30 list. you can get a list of that at the real time exchange at h.q. there and call it more green than red, and certainly, a mixed picture. not like as, not similar to yesterday where there were virtually no red on the board at least at the open. >> the beginning of the holding period waiting for the fed where we twiddle the thumbs and say, better not take a big position? >> yes, i'm looking at the banks

right off of the bat, because yesterday, jim, you said that is the biggest sector. >> and the fulcrum. >> and you the modest gains among the big banks, but nothing to really say is tremendous. bank of america is up a fraction and so is citigroup, but it is a critical sector to watch. >> and there have been a lot of run-ups to the day of the fed meet wig is hazardous and another cohort says that the meeting is done and i will start to buy the stocks particularly at the end of the quarter where they come in to buy the netfl netflixs, and the microns and they are about to report by the way, and show them how smart they were. this does happen. you go to the board of directors and the mutual funds and my guy had netflix, and he is a smart guy. >> by the way, netflix is up again and a quarter of a percent. >> it is amazing that it still goes on. >> it happens. >> you have to show it on the board. >> and it used to be apple, and

even had to own that. >> and yes. >> at what point do we start maybe today talk tact ing about 10-year? how close? >> we can't have it go to the 2.25. it has to go over time, and incremental alistened a step by step, and inch by inch and not unlike the incredible three stooges marathon this weekend. not enough shimp. >> there is not enough shimp. >> shimp is genius. >> and the fourth marks brother. >> harharpo, and zep poe. >> speaking of zep poe. >> undervalued. >> i'm taking my umbrella and holding the zepoe. >> and the 10-year is remarkable, and that move sup not step by step or inch by inch by any means, and that is where you say, i will take the risk

assets down, because they have been inflated and the fed is the reas reason, and they won't be able to handle the exit well, so there is that. >> remember what jamie dimon said the other day, normalized rates are very good for jpmorgan. >> i thought you were talking about the other thing that he said the other day. >> the scary thing? >> he didn't mean that. >> back to todd bradley. >> you know. >> todd bradley, hp, had been running the printing which is in turn around and doing much, much better, and personal systems not quite turned around yet, but he is making what is essentially a lateral move at this point, and he is going to be focused on a number of things. then you get a fresh eyes on the personal systems group is what i am hearing which is in the personal of this new guy, and what is his name? leon wiseler? dion wiseler, and from asia

pacific and japan and advertised to be a lateral move at this point. for bradley move him into the channel more and focus more, and so important for hp, and you can see way, way back, to have the ability to sell so much, and create new channels in china. >> if you are dell, do you not want to hear this? a hobbled dell. not unlike james caan in the movie "misery." >> no, you want hp. >> it has been a fantastic performer this year, and i am sure that you will speak to meg whitman and this guy is going to come in with guns blazing. >> this guy would be running printing and personal systems and lenovo's product -- >> really? >> digital home group, and then he ran lenovo's group in korea and tells you where he is coming from. >> well, meg whitman fixes the

balance sheet, and that is what she is doing, and now playing offense at the same time they are loading up the balance sheet with what couldn't be a worse time for dell. >> and what about technology stocks in general for dell, and talking about hp, and the move in cisco yesterday, microsoft, intel, and what is happening there? >> i hold this retro tech. did you see sandisk. >> and micron. >> and did you notice that they bought the d-rams and they have a oligopoly, and sandisk we saw that the price is not going down and the innerds of the pcs are not coming down which is going to hurt the margins, again, you don't want to be deshlgs all, a want the lever dell. >> but when you talk about the

margins being impact and the protecting the business at whatever cost as they go to the potential transition at a company. >> this is the bridge too far from the cow. i said that tribune would never work, and there they sacrificed the workers which is the labor department should have stopped this. this is a decision that the balance sheet can handle it. i think that if hewlett packard weren't so strong these days, probably could, but meg whitman is going on offense, and you heard her say bad things about dell on the call. >> and let me share with you mr. icahn's letter yesterday on the subject. >> sure, why not. >> he is a significant shareholder in dell. he said that the company has been releasing some of the present and the future of management as bleak, but we believe that a number of b business decisions have created this news.

bad pros rouperous shareholders used and there is that? >> well, i defer to judge who knows icahn much more than i do, and those are fighting words. >> well, no, those are the words that you use in any go private transaction, because of the inherent conflicts of the new management and the company, and you always wonder despite what has been great by the special committee, are they tanking it? are they tanking it? >> speaking of carl's words, those who were fortunate enough to have a ticket to what has become the cigsignature event deliveri ining alpha, carl icah going to be one of the keynote speakers with me, and that is fabulous given what is going on and the year that he has had and amazing career. >> anything off limits or ask about netflix or herbalife? >> well, i assume it is all on the record and everything. >> i look forward to it.

>> before we get to bob pisani on sprint which we did not mention, and you have the lawsuit to try to prevent charlie ergen from getting the condition of the 4.40 on the share of clearwire, and today is the deadline for mr. ergen to conceivably shore up the bid for sprint, itself. >> can you get him on the phone? you are the only guy who speaks to him. >> do you want me to try him on the air? >> well, i don't have the bat line, and what was the "financial times" guy calling it the backbone? he was using an illusion. >> you want to call right now, go ahead to give it a shot. >> you have him on speed dial? i have my kids on speed dial, and snap chat. you go on the snap chat. >> there is not a potentially, or appear to be another bid, but you never know what mr. ergen will do, and sue in some way or what, but at this point, it does

not appear that the higher bid for a better formed bid is comi coming. >> you know the story far better than i do, and as one shareholder told me about the deadline coming and going, is there anything that says that he still cannot make a bid, and if it is credible, they can push the vote back, can they not. >> yes, and if he were to come, and this is the deadline, but they need to weigh it before the meeting on the 25th, but time is of the essence here. but, yes, if he were to come with something publicly, i mean -- >> clearly, he has to do it soon. >> yes, scott, everything is questioned with him, because unfortunately despite being brilliant, you know, the reputation is one of being somewhat -- well, what is the word? >> flippant. >> hard to pin down. >> inenigmatic and inscrutable would be words on the s.a.t. >> and i would not use those to describe bob pisani with more on the move.

>> another move to the upside, but i have to say that all of the anxiety is back in the fed meeting and in particular mr.prd president obama saying that he had stayed longer than he wanted to or should have, and there is announcement that maybe as early as tomorrow that mr. bernanke is going to stay on, and obviously, the white house will make an announcement in the fall, and some people say that him not go going to jackson hole was the clearest indication he is not coming back and i don't expect an announcement tomorrow, but there is some anxiety about that. and the 2013 reserve, it is dubbish and even if janet yellen comes in, and she is replaced, i think that the only hawks are richard fisher, and so if the politics is an issue, it is still dubbish. and speaking of the fed, the cpi numbers were very good numbers for the federal reserve.

that is well below the 2% numbers that the fed uses as a target number. that is going to give them lot more room to continue the qe3 if they need to. but on the other side of the equation, they don't have to end it because of the inflation number. and mario draghi was saying that he will do whatever he has to do to save the euro, and there is another comment from bernanke-like thing, we will use all of the tools at our disposal. and over in spain, he should listen to draghi, and that is the problems they are having in japan. >> and the housing start numbers, the multi-family was a problem with the volatile series, but single-families up 25% year over year, and we have had two weak months now, and home building sentiment six-year high highs that we are seeing, and the home builder are hoping for a lot of orders to come n and

disappointing in the last two month, and right now, i want to see if there is a trend here and third month in a row, concerned. bank of america had a fund manager survey, and they do it every month, michael hartnett, and interesting and bull ishgis the stocks, and 48% said they were overweight stocks specifically in the united states, and 50% said they were underweighting the bond market, and so there is confirmation of a fund manager doing what we have been seeing in the last couple of months. guys, back to you. >> i want to go through the notes. i want to do my own "mad dash." if i can? >> no. >> and we have so much more to talk about with m&a, and not so many new deals. >> well, maddash.com is mine. >> can i get permission? >> yeah. >> do a quick mad dash on the m&a and like i do with you, ask questions. and start with the health management associates, because this company is in play, and a

large shareholder in glenview capital management, and 46% holder and has the prospect out there of running a consensus to replace the whole board, but the company is for sale and activity around it. i have talked to a number of bankers and people representing to potential buyers and this is the feedback and it is in the interest to try to drive down stock prices as best i can, but it seems to be concern about the numbers there in the performance of the business overall. and the numbers are weakings and i have heard it a number of times and the numbers are weak and the stock price has run. we shall see if the likes of well, community health is number one in terms of the potential buyers and then hca and some people thought might be interested and tenant and we will see who is here in a legal way, but there are legal and regulatory issues out there, jim. i wanted to share that on hma and there is the possibility of

glenview trying to take out the entire board. not activist fund, but it is active. >> high end, high end group of guys. >> moving on to realty pharma, and elan has put itself up for sale, but realty pharma is out. they have dropped the lawsuit, and the interesting thing is that it did not have to happen. they put conditions in it, and the condition was that the shareholders would not approve a $200 million buyback and it would have gone differently and pharma would have held up if it weren't for that condition, and some confusion about the date of the actual shareholder vote, and interesting when you see that. elan is done. moving on to cable deutscheland, and that is important to compete with vodafone. i talked with john malone, liberty global's chairman a month ago when we sat down for a

long interview, because the prospect of buying it is out there. and the question is was it, can it get it through german regulatory authorities? >> there would be enormous sinnynergies in creating a germ language entity that would cover all of german-speaking central europe, austria and switzerland and both parts of germany. >> right. >> so i'm not sure when, as, when, they would, the regulators allow us to combine with kdg to get into the other businesses and give deutsche telecom across the footprint would be beneficial for the german consumer, and the german business base. >> that is the argument they are going to be making to the the german regulators, and in is a great battle right now. >> did you see that he filed for the offering? >> well, the agency --

>> and the buying power? >> well, they have to watch it. >> on speed dial, too? >> they just finished virgin media. >> and let me end with this belo. >> what? >> blc, remember it? $ $13.75 deal, and remember that the buyer there was up enormously, and gannett went up as much as belo. >> yes. >> and now it is trading -- >> it is more than 50% of tv now. that is what happened. >> but why is belo trading well above the $13.75. >> somebody else wants to come in. >> and gannett came in so well, shareholders are thinking to get more from them, and can we potentially vote this down, because the acquirer stock is going up so much that it must be a bad deal. >> and we go to the bond pit is my thinking, and go to the cme with rick. rick? >> 8:30 numbers weren't that bad this morning and you can clearly

see that with the intraday of the 10-year chart and crawling up. and the two-day, and you know the laurels of the economy or hardy and f.t. and it is classic laurel and hardy, and you can see where it is sell-off pushing the yields yesterday when the stories came out, and the markets really kind of a cat on a hot tin roof at this point, and many don't believe lit change until tomorrow's conference, and maybe it will be more volatile. if you look at where we had the first close at above 2%, it was almost a month, 22nd of may, and this is not going to auger for a huge runup, but it is not going to dissipate in terms of the selling or the lower yields no matter how historical perspective you think of a yield of 220, it is different yield than the 160 we had not that long ago. if you look at the boone. you can see that the pattern is the same, and the 223 are high yield since we popped through

2%, and the equivalent is 160, and they are getting close to that. and a two-day chart of the dollar/yen, and the volatility keeps on coming. 94 was the low yesterday and 95 handled today, and big movement and this time in favor of the dollar. back to you gis. >> thank you, mr. santelli. i'm relieved to see you kelly evans, and i can stop talking for a moment, and you can take over. >> well, i want to say something that bob was saying, and he was saying how the inflation is low this morning for fed, but i would like to raise the proposition that perhaps it is not so good for the fed. take a look at a couple of things that is going on and this is the movement scene for the last couplef months. the cpi data coming out, and grows 0.1%, and that is the core, and not much inflation on either of the indexes. the fed meeting today and we will get the decision tomorrow,

and the pce index also extremely so soft. remember last month the core reading of 0.1 was the lowest since 1960. people in the market inflation expectations are going down. i want to steal a line from brian reynolds this morning. they have gone to a level of quantitative easing that we have never seen. so it is interesting that the rate is pulled back when the treasuries are rising. >> and the earnings are good. >> so it is not a situation of risk on/risk off. but what is happening is that the fed is emphasizing the jobs puzzle and not out there with the inflation and in my humble opinion, i believe that there is a reason why, if the market believes that the fed is going to hold back and maybe they are constrained on the capacity side. i don't know, but maybe this is why we are seeing so much concern kind om coming from the

credit markets, because, jim, it is not as if the equities have fallen out of bed, but it is the emerging markets. >> i have not talked about it enough. >> i will leave it there and run with it. >> all right. kelly evans. we are about to put ben bernanke and justin beeber in the same sentence. how is that possible? >> both stayed too long. >> we are back after this. my mantra?

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ask your doctor about the only underarm low t treatment, axiron. all right. welcome back to "squawk on the street" from post 9. the fed beginning the two-day meeting and the dow jones industrial average begins this day higher by 66 points, and one half of one percent and the technology is performing well, and cisco on the back of hitting the two-year high is back up 3/4 of a percent to dday. and up next is "cramer's 6 in 60." we will be right back.

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all right. it is that time "6 in 60" and six stocks in 60 seconds. start out with fedex. >> they say i have a positive outlook and this is a report tomorrow and you are taking your life in your hands with that. >> life in your hands? >> well, let them come in and then the position.

>> and what about this one? >> piper says it is going to bottom soon. >> and pimbridge. >> this is horrendous. >> conocophillips downgrade d. >> doesn't matter, the oil is going higher. look at that, the market is ignoring the downgrade. >> and linkedin. >> pacific crest is saying time to buy. it is working, and scarcity value of the product. >> and greenberg? >> well, they do stuff with herbalife, and i defer when he does anything. >> in other words? >> they say they like the bush. i refer to herb with the superior ones, except for maybe the man i'm looking at. >> and what about tonight on "mad"? >> well, ever since air gas tried to buy, it has not come in. we have the old ceo coming on and this group airgas, and apd

is a big industrial sensitive group, and they have been on fire and we want to know how. >> and so thank god they did say no. >> it is amazing they said no. david, i have never seen it happen. >> i followed that thing to the point where the viewers were ready -- >> well, they were wrong. he used the nancy reagan defense and made you far more money on the predicts. i'm proud of him, and philadelphia's own. >> see you tonight at 6:00 and 11:00 on "mad money" and we have more your money, and justin rose, the winner of the u.s. open is going to iz have it is us right here on 9. . ♪

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and more time doing paperwork. ink from chase. so you can. . >> now, road map starts with what else but the fed? we are a couple of hours now from the start of the fed meeting and what does it all mean for the markets and who's in line to succeed ben bernanke? we are going to break it all down. plus, the weak housing starts are putting pressure on the home builders today, and find out if it is a sign that you need to worrying or if it is creating a buying opportunity. and u.s. open champion

justin rose is going to join us at post 9, the first englishman to win the u.s. open in more than four decades and he is going to tell us how it feels to bring home the trophy and what is it like to meet phil mickelson. but first, the latest and the nsa, and we are about to have a public hearing starting on the hill, and eamon jaifrs with the latest. >> yes, we will see what is the latest on the eric snowden's online q&a, and they are gearing up. this is a nightmare for the u.s. intelligence. what they don't want to be is engaged with a global tit-for-tat with a former booz allen contractor, but that is where they find themselves. this is how nsa protects americans and disclosure aids the allies.

clearly, members of the intelligence committee, itself, and those testifying including keith alexander, and ken coal, the deputy director, and the director of the office of intelligence, and the director of the fbi, and all of those figures will definitely want to send a message to the united states saying, that this program was worth it. it was legal, oversight, and all refuting the points that eric snowden made thin his comments yesterday. >> eamon javers with the latest from washington. thank you. never before have the market bns so focused on the fed meeting starting now. ben bernanke arriving for day one of the two-day meeting which will wrap up with the all-important news conference tomorrow at lunchtime. meantime, did the president of the united states speaking to charlie rose last night indicate that ben bernanke will leave the job in january? >> well, i think that ben

bernanke has done an outstanding job. ben bernanke is a little bit like bob mueller, the head of the fbi. >> yes. >> where he has stayed longer than he wanted or he was supposed to. >> delighted to welcome to the program the chief u.s. economy for jpmorgan and chief economist from bar cclays and heavy hitte, and any doubt in your mind, mike, that ben bernanke will not seek a third term and he will leave in january? >> it is clear that he did not want to stay on, and the president's message was clear that we will see a new fed chair come january. that is pretty clear now. >> so how does he convince the markets where to go on the monetary policy in the next year if he is out of the job in six months? >> well, he has tryied to emphasize that he speaks for the committee and not himself, and most people are thinking that the most likely next candidate

is the second in charge at the board and they share a similar mindset. >> well, dean do, you agree with what we have heard there from mike and it is going to be janet yellen, because there are other people in the frame here, and that could change the calculation. >> well, the signs are pointing to chairman bernanke not staying on for a third term and the highest probability candidate is janet yellen, but it is not for certain by any means. >> dean, i want to follow up with that, and how do you think that i guess that bernanke's uncertain future or who could eventually take over for him is ultimately going to impact the unwind which is going to happen soon? >> well, two possibilities. either it's a candidate like janet yellen or one of the other establishment candidate swwhichs likely to happen, and in that case, not a dramatic profile for the exit strategy than

otherwise. if you had a real outsider who had a different view of the qe coming in, you would see a different profile, but i believe it is unlikely. >> and dean, this is not a question of probabilities, but in a very uncertain environment, more uncertain, and what if it is stanley fisher or larry summers or geithner, and won't that change things? >> well, it will change things, but the staff is the same, and the members will be the same, so any of the candidates would lead to a sea change in fed behavior here, and there is too much continuity in the institution for that to happen. >> mike, can you explain something that seems to be a riddle here. we have inflation falling, and with the cpi data falling, and inflation expectations extremely low, and yet a fed with the unemployment rate and the focus is on the exit, and should the fed feel constrained here about the capacity to do more? >> i don't any. so i think they are comforted

with the some of the survey measures have remained stable. we have to remember that job growth has been relatively solid over the last few months so they feel they are making progress. they have not seen enough yet, but they don't feel constrained in the asset purchases. >> so mike, what is the message tomorrow at lunchtime? >> well, we won't get a clear signal of the timing of tapering whether it is november or december, and the chairman is going to say that the tapering is not tightening and try to separate the policies. it is more of an issue to try to qualify what tapering means rather than give a better sense of the timing of it. >> dean maki, the problem is that the market does not necessarily hear what bernanke wants to tell them. there is a divide that keeps getting us each time. >> i think that's a very difficult message to send in that the fed wants to separate out the tapering from the rate hike provision, but it is very

difficult for the markets to do, because the fed can't guarantee anything about what happens a year and a half from now. and it is also a odd time for the fed to be banging the drum on tapering when economic growth is slowing and job growth is slowing in the second quarter, and the fed is relying heavily on the 3% for forecasting. >> exactly, dean. why are they not sounding more devilish, because it is obvious to people that growth is not where it should be. >> well, it is that many of the fomc members have become concerned about the potential costs and stability concerns and those types of things, and they vary a lot from fomc member, but the only way to taper the tempering costs is by looking at the costs. >> it was so great to have you

both on from jpmorgan and barclays. >> on the subject of the fed, let's go to squawk on the street. could teenaged girls obsession with justin bieber have anything in common with ben bernanke? and the answer is yes. financial commentators are ca y carrying on the guessing game with giddy concern that is usually reserved to teenaged girls, and that may be unfair to teenage girls. o.m.g. we will air your responses throughout the morning. >> does justin bieber film all of the videos attached to the camera going in circles. >> was it you singing or someone else? >> well, let's send it over to josh for a quick update. >> well, attention all doughnut lovers. tim horton's is higher this morning, and here is deal, the

restaurant chain is dealing with concerns from one activist investor highfields capital, and now another, scout capital, and i spoke with hendrick thai, and they want a doubling of the buyback and not just increase, and tim horton's mans of 70 m l million cap exfrom the biz, and they say enough of that, and accelerate it into an underperforming business does not make sense, and finally the activists want them toler up more than the management seems comfortable with, and that stock is up 3% right now. kelly, back to you. >> all right. josh, thank you. >> and activist/investor dan loeb putting more pressure on sony and asking the company to spin off the entertainment arm, but will sony say yes? and still to come the u.s. open champ ended a 43-year drought for england. justin rose will be here to tell us how he did it, and how it feels, and how it feels to beat

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world leaders meeting in northern ireland for the g-8 summit, and we will be spending the final hours of the meeting discussing the global economy to the violence in syria. we go there now, and what is the focus here, geopolitics or the economy? dwe >> well, i will go slightly different, tax as well. yesterday was one of david

cameron's teases to get the trade talks jump started between the eu and united states. and today, they are talking about syria and getting an accord, and various sources have seen fighting the scourge of tax evasion, and that is corporate tax evaders and money launders and tax evasion, and the language is going to be strong against the companies, and face it some of the biggest u.s. companies, amazon, and google have been arranging the businesses not the pay taxes there, but in the u cak, they wd tell multinationals what taxes to pay and where. complaints about the show companies previously in africa was el. so show companies are in the line of fire. they must identify effective owners, and used to exploit loopholes and agree to give each other automatic access to the residential tax affairs and a

tighting of the net of launders and evaders as well. that is some accord of the g-8, but on the other issues, they are very far from a conclusive agreement on syria. it appeared apparently to some delegates, it was g-7 versus russia in a lot of the talks, and russia was not backing down apparently. putin -- >> well, wow, speaking last night in new york, he said that syria and the extent to which russia has stood to the position has emboldened iran and russia to some extent. sorry about dropping the line, but the g-8 meeting has had no shortage of fireworks it seems. >> looking at sony, the shares are on the move this morning yet again, and the third point, the hedge fund is raised by dan loeb to raise the stake from 3% to 6.3%. and asking for the opportunity

to address the board on the proposal that the company spin off the entertainment unit. we will have more on that later on. keeping an eye on the home builders who are bouncing back today after a rough month, but now the question of whether it is a sign to buy, and u.s. open champion justin rose is here tonight, and he is going to stop by post 9 with the trophy. i think that simon is excited abtha about this one. >> oh, yes. >> we will be back in a couple of minutes. the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason

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go undercover and stave world. >> i'm your new partner. >> oh, yeah. >> they are missing and start looking for them at missing minions.com for a trip to four to orlando resort. rated p.g. the housing starts are e bounding 6% in may after a large drop in previous month. and diana olick is live in washington with all of the results. hi, diana. >> yes, and rebounding, but not as large as expected and mostly on the back of multi-family housing. you have to parse them out. multi-families rose, and up 69% from a year ago and sing lsing m single-family starts are flat, up zero% month to month, and up 16% from last year. this morning, it was revealed that we are below the 1991 recession trough and around the

1981 recession trough, and of course, the populations were much smaller back then. permits with healthier, and single-family rising to the highest level since 2008, and multi-family took a breather. the good news is that we need more housing so construction jobs should be plentiful in the near future, and the home builders are con fident as we sw in to a report yesterday, but it is not translating to a big family start, and this as existing supplies of homes are way off from where they should be. looking at the supply crunch, look at california for example in may, the height of the spring sales season, and there is a 2.6 months supply of homes down from last year, which is creating bidding wars which is pushing up the prices an incredible 32% from last year, and the biggest annual price jump recorded since the california realtors started to track this stuff in 1980. given that, we should see the

housing starts up higher, but out west, they were down 4.4%. kelly? >> thank you, diana. we have been mentioning all morning long how the u.s. open champion justin rose is going to be here to post 9. he is on the floor and the trophy in his hand and the first englishman to win the u.s. open in 43 years, and he is a popular person at the nyse, and 14th going to be speaking with us live here at post 9 in a few moments sglcht absolutely. the crowds, and you could hear people applauding. the home building stocks have gotten a boost in the last week, but looking at today, it is up 0.5%, and it is on a day when sensitive stocks are selling off. where does the trend go? especially with the fed meeting tomorrow. and joining us now to talk about it.

david, we have better data today and the data better than yesterday, and what is more important, because the message today is the rates trump the fundamentals. >> well, that is what we will see throughout the summer. seasonably slower period for the builders. when we get to back of the year, the stocks will do well, and as diana said, prices great for builders and margin built into the last half of the year. buy the dips here, and wait for opportunities to take advantage of the move up in margins and profits as we go forward. >> would you agree, and any differentiation you would make among the builders in the sector? >> well, vewe have a different take on the builde people overreacted, and that is not that much, so short term some opportunity here, but generally speaking from the start of the year, people have had expectations about what the housing recovery going to look

like. >> because it is not the 60 basis points, because that is start of something more, and depending what we will hear tomorrow, and the people say that the gains in these stocks are made. >> well, we asked all of the builders last week, what sort of movements would it take to really change the trajectory of the housing recovery, and they said at least 150 basis points and some said more. >> but it is the profit, i mean, as you infer from the way this you answered the question, people buy the houses the same way as cars, what can i afford per month, and as you raise the rate rapidly for the price of the mortgage, the price is going to come down and therefore the profit margin for the builders are going to be squeezed and quite dramatically soon i would think. >> yes, there is a squeeze on the pricing and then the volume. in the resale market, people are less open with the bids and at the commuter cities, people may not be going for the granite

countertop. >> diana olick asks a e-mail question that she wants to know why the builders are given an incredibly tight supply especially in a state like california are not starting many thousands more home, a what is the real issue, because something tells me it is more than season. >> california is an interesting examp example, because it is the number one market in terms of demand and is more difficult and takes time in california for people to migrate out to the areas like the inland empire where the vol yuumes will met. lit ta it will take some time. >> and do you believe this is just a ploy to keep the prices going higher? >> well, it is true that they are metering out the sales pace and the land, because land is so precious. this is not a recovery in the outskirts or the periphery where you would see more volume growth. so until we are out in the peripheral area in california,

you won't see the volume growth, but lit come through in prices. >> david, second half areas? >> we like lennar, and beazer. >> we like ryeland and tri-point homes. >> okay. a couple of things for people to chew over. thank you for your time this morning. here he is, here he is, the first english u.s. open champion in more than four decades. justin rose has joined us here at post 9, and he is with the trophy. that is next on cnbc. everybody has different investment objectives, ideas, goals, appetite for risk. you can't say 'one size fits all'. it doesn't. that's crazy. we're all totally different. ishares core.

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good morning. if you have just joined us, we are about an hour into the trades and the stories we are squawking about is 7:27 on the west coast and 10:27 here on wall street. boeing announcing that korean air has agreed to buy twin jets from the plane maker, and it is valued at $3.6 billion based on current list prices. the deal is five 747 and eight intercontinental planes. and speaking of the dow components, the at&t and american exchange and mcdonalds are the blue chips. and the shares of hormel down more than 4%, the food maker cutting the four-year outlook hurt by higher costs, and softer sales. and 32-year-old justin rose became the 113th u.s. open

sunday beating out phil mickelson and everybody else to win his first major championship and also the first englishman to win the u.s. open in 43 years. justin rose is here live at post 9 with the trophy. great to see you. >> thank you very much. >> and welcome to the new york stock exchange. >> thank you. >> and something tell ms. e that you have not let go of it since? >> well, i may as well had it handcuffed to my side, because it is a whirlwind, but fantastic. >> can you describe the emotion of being the first major and the u.s. open and the father's day, and most of us watching it saw your reaction after the 18th? >> absolutely. to win the u.s. open is a -- well, any major is a dream come true, but u.s. open, and this is a country i call home, and both of my kids born here, and i'm incredibly proud to be call eed champion and to honor my dad who passed away a long time ago but

few moments to make it so poignant, and he set me up for this great win. >> and we mentioned that you are the first englishman in 43 years to win the u.s. open, and most of us who have watched you play over the years and the big win and you won the jack nicklaus' tournament at the memorial, and you expected to win a major, and did you expect it yourself? >> well, throughout the course of history, that is the one thing that is missing, and that is in the back of the mind, that no matter how good you are, the majors can be elusive. so i have gotten myself into the major talk not to have won a major, and i am happy to have the monkey off of my back with that perspective. >> can you tell us about the final stretch, because most of the crowd was pulling forphil, a u.s. player who had never won a u.s. open, and been the bridesmaid five times going into, that and did it help that you weren't in his group to win? >> absolutely. i was in a great position.

maybe in a more pressure-free position starting the guys two shots back. two shots in the u.s. open is nothing, and that is the first thing i told myself. and on that golf course, if you post a num bber the way that th last two holes were, i thought it would be a good advantage. phil had a lot to contend with the birthday and the father's day and the five times, and so a tough day for him, too. and everything seemed to lineup perfectly for me. >> and the way that you told yourself how this was going to go, and you are obviously going to have a conversation with yourself, and you have yourself to a winning standard, and how much of that has to do with the mental coach that you have had dr. geo valenti, because it is very underreported in business and sport these mental coaches are absolute ly winning guru, ad what did he teach you? >> well, there is still a stigma, and it is not like you have a guy like this, but the

deal with everything, and deal with life. have everything in balance and doing well in life and sport, and life balance in and out of the office i would imagine, but it is definitely sort of a similarities there. >> and what do you do, meditate? is. >> breathing technique, and pre-round breathing, and that is a huge key for me. i think it is a huge key for me. and ultimately i felt like sunday i was in control, but i had a vision or analogy of being in a tunnel all week, and the only things that existed with me in the tunnel is three or four specific thoughts ash and if i got out, i knew i was not helping, and so what, get back into the tunnel, and to keep it simple is the thing to do. >>ly ti will try to do that. is it like a lottery win where friends and family come out of the woodwork or is this in this case companies. >> well, you have people with

numbers popping up on the cell phone, and you don't know who it is, is, but it is a great way to enjoy it right now, and reconnect with the people who have dropped off of the grid. >> who is the type of people that are contacting you? >> guys who have i known in australia, and they dropped off of the grid and reconnecting. >> and are you solely in america or traveling? >> well, i'm heading back for the open championship this summer, and this is going to be absolutely flying with me. >> do you get to fly where you like on british airways and here is a ticket around the world and just go. >> i am very well looked after being one of the premier card holders and i get fantastic treatment. >> and about the endorsement, i see one of the agents here, and presumably besides the $1.4 million check that you get for winning, this you will have other opportunity, and given what you already have, how do you weed out what you want to work, and who you don't want to

work with and the opportunities good for you at this age and stage of your career? >> well, that is a good question and i read an article from tony jacquelyne when he won the u.s. open championship in quick succession, and he felt like he was dragged all over the world doing things that he thought he should be doing as a major cham champion and he said that actually the major run ended quickly, because of how he handled that period, because that is what he thought he needed to be capitalizing on, and that is the lesson to stay true to the game and make the decisions about what is best for my game, but you have to relish the opportunity that it will bring, but at the same time weigh them out carefully. >> and you are not taking any time off? >> no. >> you are playing soon? >> yes, i hope to stay in a rich vein of form, but the mental fatigue is the one thing to be careful of, so trying to make the most of the days off and get ready for the next tournament as well. >> what do you think of the new york stock exchange? >> well, it is the heart beat of

everything going on. and it is an energized place as well. the comedown will happen when i get back to reality. >> first overpar round wherever it may be. >> i am sure lit happen. >> justin rose, thank you for coming in. we know that everybody who watched it it was riveting golf and the way it ended up. >> thank you. >> thank you, and appreciate your coming down. >> thank you. justin rose, ladies and gentlemen. >> and to find out how quantitative easing is, and what ben bernanke and justin bieber have in common, and here's a hint, it is not the hair. my name is mike and i quit smoking.

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and for more clues of what happens now, and just as importa importantly, how the market is positioned for it, senior economics reporter steve liesman is here with cnbc's fed survey. steve? >> thank you, simon. we have reported the top line information from this survey of 60 economists and wall street strategists and they find that the tapering is expected sooner than people expected. december compared to february in the april survey. now looking at the market outlook and the outlook for interest rates. the s&p and remember, they have been chasing the market higher the entire year, and so they only see 10 points of remember, 1647 right now, and you can see it on the screen, but by the end of the year, they see 1654,ed and how about by the end of june or a year from now, 1722, and 4.5%, so these guys are mostly economists, but wall street and equity strategists, they are down beat on the stocks from now forward. now, look at the interest rate

outlook, this is not interesting. 2.4, and back to where it was in march, and this is interesting, the outlook from a year from now, and up to 2.80 where they don't see the fed hikes coming. so this is something to watch for the market of the 10-year yield. now the market seems to be less and less optimistic of the effect of quantitative easing on the market, on interest rates and on the economy. what we did here, and this is a net percent saying, yes, and the yes minus the no. i want to start down here, can it raise stock prices? it used to be as high as over 70%, and now it is below 50% and those who believe on net that qe can raise the stock prices. also gone from a slight positive to slight negative on whether the qe can lower the mortgage rates and down beat on the bond yields and less negative, but still negative on the effect of qe on unemployment. so a pessimistic group out there, and when it comes to the

effects of quantitative easing, and now what is the next thing to move on to. there we go. and also some concern that quantitative easing is starting to effect the functioning of the market, and that is all of the bonds that the assets that the fed is purchasing. we no thae tknow that the fed i at this, and the same in the survey, and 65% in april said that all of the fed purchases that the market has stayed the same, and the functionality of the market, and now down to 47%. this is the number to watch, 50% to 29% saying that the functioning of the market has worsened somewhat as a result of the fed's purchases in there. and something that the fed is very concerned about. the last thing, they are less concerned and more optimistic about the effects of abnomics or the japanese policy, and only 8% saying it will worsen the economy, and 68% think it will help end deflation. and down beat on the u.s. qe,

and update on the japanese qe. this is the sixth straight day of five straight sessions coming in, and this is the longest stretch since 2011 we have seen the triple-digit swing, and regardless of the levels we are continuing the streak of volatility and the vix is lower, but as implied by the swings, actual vol seems to be higher than what we have seen in some of the options trades. >> and incidentally on the subject of japan, reuters has a survey out that the average consensus is that there is a 51% gain in japanese stocks next year. >> i saw that. >> and 51%, and less moves on the currency potentially. >> but don't you believe that qe can raise stocks? he hello! they have risen quite a bit, haven't they? i mean, at this point? >> well, this is why the fed succession is so interest, because i would argue that the job now is more difficult than any point to here.

>> they have painted themselves into a corner with this. >> sure, but the alternative wouldn't have been much more attractive and now back into the old debate, but the point being that you are right they led themselves to this point, but the question of where we go from here is the, the main question, and the 10-year is where today? 22? rou roughly 22, and that tells you what people are thinking in terms of tomorrow. >> and key tell there the 10-year. and going to sony and the shares up 3.5 sharply, if you want to call that sharp. it is the large activist-related hedge fund and not always active, but run by dan loeb, and they took the stake in sony up to 7% and it had been 6.3%, and writing a new letter as well and addressed to sony's president and ceo and saying that it is a sign of to increased confidence and direction of our leadership that we increased the investment, and of course, continuing though to exert or try to exert pressure on the company to do an ipo on the

subsidiary business and why that is beneficial to the overall stock price. >> earlier on "squawk box" they had robert kindler who is the chief of morgan stanley, but he would not deny that they were going to look at the proposal and defend against mr. loeb, but i can say that is the case. here is what mr. kindler had to say about mr. loeb. >> he is an activist who takes aggressive moves, and he has not done that in the last four or so moves. he has made a bet on japan, and we will see if he is right, but he has not been right so far. and he has pointed out something on sony showing how great the entertainment franchise is, but he has actually proposed which is to ipo the subsidiary, the entertainment subsidiary to raise the capital and so that

people understand the underlying value, sony said they will take a look at it. >> of course, with the help of morgan stanley as well. now the board that help to take a look at it, and i have heard they continue to be opposed to the subsidiary ipo is only going to be seated next week and the meeting is thursday. so a long ways to go on this, but it is interesting to know that it is continued pressure from mr. loeb. >> if you are charged with leading sony over the next five to ten years, why would you spit out the arm of the entertainment for a low percentage when you are left with the technology play to be restructured like dell and you don't want to do that, and don't you think that he would look at tim cook at apple? what happened with blackberry, and i don't need the pressure of the pure technology market in the market, because that is asking too much trouble, especially in japan. >> and loeb is saying not to

sell all of the division, but when it trades publicly, more transparent and better board, and although he and mr. harui can be on both boards. >> but it is not in the investment of both of the ceos who will take it to a better place in five years without outside pressure on the tech side. >> right. several weeks, and three or four weeks since the first letter was written or so. >> yes. >> and again, it has the, and we talked about it earlier the decent tone to what is happening there. >> this is going to play on for some time. >> you can stay on as chairman in both companies, and we believe in you, and love you and what you are doing. by the way, the play station was awesome. meantime, the former kpgm pa partner who is accused of insider trading is speaking ow.

find out what he says about the case against him and how much he profited from the scheme. and meanwhile, we are going to talk about how $100 oil will affect joe petrowski's business. r what you need. and that means growth, lots of cargo going all around the globe. cars and parts, fuel and steel, peas and rice, hey that's nice! ♪ norfolk southern what's your function? ♪ ♪ helping this big country move ahead as one ♪ ♪ norfolk southern how's that function? ♪

now we have dell just off of the high and we go to cme group with rick santelli and the santelli exchange. >> thank you, kelly. of course, on the first day of noticed keeps cropping up and i heard it this morning when steve was with a group of well-respected economists and analysts talking about his survey which many come to like, look at, find knowledge in. and the issue was exactly what rate is best for housing, the fed is trying to figure that out. i believe that free markets are supposed to figure these things out. i remember during the election process in november, and obviously prior, in trade was a popular top irk on this channel and many channels and many magazines and newspapers because of the notion that an aggregate group all interacting together,

that outcome has been proven statistically to be a pretty good outcome. it doesn't mean there aren't a few fat tails, black swans. for example, many believe that tinkering always leads to unintended outcomes. many in government believe that tinkering will alter outcomes in ways that seem more beneficial than true market forces. i believe there will be many books written about how that specifically maybe contributed to the crisis in '08, whether it was tinkering with the outcome of housing, trying to change the outcome of who can afford housing and who can't, what ground rules should be put into the system for housing affordability with a specific goal to increase beyond true market forces how many people owned homes. and i think that there's always unintended consequences. you know, if you ever look at data, i always urge viewers when we get data released from the bureau of labor statistics, go back and try to look at all the variables.

look at the sheets and sheets and sheets ofs a ter s a teast footnotes and what you arrive at is market forces are pretty good things because there are so many fundamentals at work, it's almost impossible to think tweaking is going to have a good outcome, but at the corner of this conversation, i don't want to pontificate, is a very important theme and that theme is why do we even have this place? why do we have an interaction of traders trying to decide what the true value of a ten-year note should be? why have any of it? it doesn't make sense because we really don't have a free market and we don't have full central planning. we have this combination that seems to be very incongruent with the ideals of the free market economy that has differentiated this country from any other countries, specifically many countries that have never had anything to brag about with regard to the economy. i'm going to have jim grant on from interest rate observer later on, an i want to get his take on it. nobody understands how you you a rife at a true interest rate

that all businesses can operate at at a risk/reward utility function that works best better than a marketplace. >> scott london pleading guilty to insider trading and speaking out for the first time. jane wells caught up with him outside the courthouse. >> scott, well, he will plead guilty. he hasn't officially done it yet but that's what he was in court, his attorneys telling the judge. he spoke for the first time on camera with us. we will plead guilty for giving inside tips to his former friend brian shaw. he's now thrown away a 30-year career and could go to prison, and for what? >> received about $50,000 in cash, a watch that i was led to believe was worth about $10,000, the rolex, and about three or four other items that were destined for my wife that i gave to my wife that were appraised recently for just under $10,000. if you add it all up, about 70

grand. >> reporter: is that all going to be given back? >> most of it has been given back. the money through the payment of the bond, the watch has been given back, and the jewelry is actually in my car and we just couldn't give it back today because the agents weren't present but that's the plan. >> reporter: you were at kpmg for 30 years. this is -- this has never happened before? >> no. i have been there just been 30 years and nothing like this has ever happened before. i had a clean record, no violations of anything, and, you know, unfortunately, you know, this, you know, ended up getting -- starting as something small and ended up getting pulled into something a little bit bigger, which i obviously regret, i'll regret every day of my life. >> reporter: how did you find out he had made over $1 million and what was your reaction? >> i was driving down the courthouse the last time i was in court. i was looking at my iphone and saw one of the "wall street journal" online blushes and saw mr. shaw had made over $1

million, and i nearly threw up in the car. your heart just sinks thinking that's impossible. >> london says he thought shaw had made only about $200,000 on the illegal tips. why did he do? he says to help a friend. has he done it before? again, he insists no and he's offered a polygraph though the feds have not taken him up on that offer. the full interview is on cnbc.com. >> you have to have some compassion for the man, particularly when he says, look, i need to work again. it can't be within the realms of the s.e.c. so i'll wait tables if i have to. you know? >> i guess. you know, as much as you have compassion or anyone who has broken the law. >> i guess. okay, jane, thank you very much. jane wells with a view there on kpmg. one "washington post" columnist comparing the obsession with fed tapering to bieber fever. we'll talk to neil irwin about his piece coming up in the next hour of the show. but in the meantime, we want to

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all right. we've got another hour to go until "the half 250i78 reportim" >> we'll get ways to make money in housing right now. some great ideas. and alexander on what's been happening in the muni market, what it all means, fed. >> there's been a sell-off. you actually have two -- >> especially last week. we're going to talk about that, what it all means. >> perfect. we'll look forward to it. >> thanks. >> let's get to it. here is what you might have missed if you're just tuning in. >> welcome to "squawk on the street." here is what's happened so far. >> i think there's a chance bernanke will be gone by the end of the summer and a chance he'll want to start to do this trajectory change before he leaves. >> he spent eight years in the trenches with people beating the crap out of him, and, you know, he deserves a break. he's done i think -- he hasn't

done everything the way i would have done it. i don't think every decision he's been made has been perfect but given what the circumstances he was handed, it's quite extraordinary what he was able to do. >> i do believe that he will be followed by someone with a similar orientation, which is not the guys who come on our air all the type and say why are we trying to help the economy? that's my subtext. >> they do announce todd bradley is going to step out. he's the guy who has been running printing and personal systems. he's going to assume a new position at the company called executive vice president for strategic growth initiatives. >> want to call right now? give it a shot. >> do you actually have him on speed dial? do you have him on snap jack? >> the fed wants to separate out the tapering from the rate hike decision, but i think that's very difficult for markets to do because the fed can't really guarantee anything about what happens a year and a half from now. >> i think in the last couple years i have got myself into the

major talk. been one of the better players to have not won a major. i feel thankful to have that monkey off my back. good morning. we're live at 11:00 a.m. eastern at post 9 on the new york stock exchange. that was justin rose joining us on the last hour there. if you missed it. take a look at what's happening in the markets because the dow is up triple digits, but this will then be, i believe, the sixth consecutive day we're seeing triple digit swings. that five-day stretch was the longest since october 2011. we are seeing some volatility even though the vix has been muted. the s&p 500 and nasdaq getting half a point and two-thirds of one point. hormel trying to the downside. they cut their full year earnings. the company will provide more details on its outlook later

this month. and we're also keeping an eye on sony. hedge fund third point run by daniel lobe is upping its stake in sony and calling for the company to spin off part of its entertainment business, that includes movies and music. sony trading well to the upside up 3%, a little more than that. we'll have more on this story in just a few minutes. let's start with breaking news out of washington. eamon javers has it from the nsa hearings. >> good morning. officials are testifying before the house intelligence committee right now as we speak. officials from the nsa and the fbi saying they're going to turn over details of about 50 terrorist attacks that were thwarted as a result of some of the nsa's spying capabilities that have been revealed by edward snowden. but importantly, among those apparent nascent attacks was one on the new york stock exchange. here is the fbi's shawn joyce explaining that. >> nsa utilizing authority was

monitoring a known extremist in yemen. this individual was in contact with an individual in the united states named khalid. he and other individuals that we identified through a fisa that the fbi applied for were able to defect a nascent plotting to bomb the new york stock exchange. >> so the clearly the question there is going to be what does nascent mean and there are going to be a lot more questions about this apparent attempt by folks in yemen to plot an attack to bomb the new york stock exchange and exactly what officials did to stop that plot. but clearly the intelligence officials here testifying before the house intelligence committee right now are making the case that these snooping abilities have prevented terrorist attacks. they're legal, they're overseen, and they're appropriate responding directly to some of the criticisms that edward snowden made in his online chat just yesterday with "the

guardian" newspaper. now american intelligence officials engaged in tit for tat of leaking information to make their case against this contractor who was last seen publicly in hong con. it's not clear exactly where he is today. >> that's what's so interesting about this is they're so sup set about the disclosure but they're combatting it with more disclosure. so all of these disclosures today are by choice, correct? >> yeah, that's right. the irony here is what that's officials are saying is that the leaks that snowden made were selective and designed to create a certain impression, for example leaking only one of the fisa court orders applying to veriz verizon. they said there was another court order that applied to verizon that snowden didn't leak that is still classified that gives a lot of limits to what intelligence officials can do regarding phone calls and that was not put out there. but now those same officials are engaged in their own selective leaks revealing certain

information they think is going to buttress their case. we now have a battle of leaks going on about these programs in order to shape public opinion and really the goal here is to affect the political debate about whether or not these programs should be allowed to continue. >> so how dangerous do they believe this political debate now is if they need to buttress their case with further revelations, eamon? surely capitol hill is behind them, capitol hill voted for this. why continue to go further and further in this way? >> reporter: well, most officials on capitol hill are behind them. the committee that they're testifying before now, this room we're watching live on your screen, this is the house intelligence committee. these folks are clearly on the side of these intelligence officials. they feel they've been fully briefed. they're aware of it, but there is a debate in the country right now about whether this spying authority is appropriate and should have taken place, and they're now revealing these details like this apparent

nascent attempt to plot a bombing attack on the new york stock exchange in order to explain to americans why they think that this is necessary. clearly they think it's a needed step to come out with this additional information today in order to shape that debate. >> it's interesting that you believe that the hot part of the debates is with the american public. it seems to me that everybody you talk to kind of knows that -- or would expect the security services were monit monitoring their internet and their voice messages. that's kind of what people assume because they see it on the television all the time. what i find more interesting is the temperature of the debate between the government and the tech companies and the commercial implications of being seen throughout the world as possibly an extension of the united states security services. you know, is facebook the biggest spying machine that they have with 1.1 billion users? that seems to me a more active debate at the moment. >> clearly what you have seen is the technology companies themselves just as the

intelligence officials are scrumbling to explain their role in this and why it was necessary, technology companies are scrambling to explain what they've done here and not that it was necessary, but why they were legally obliged to do it making the case that they were forced by u.s. law to comply with these programs and then just yesterday putting out new details of what their involvement has been before. all of the tech companies seem to be taking a very similar line here arguing that, hey, you know what? we were forced to put this information out and we've gone back to the government and asked them to be allowed to tell you more detail about what we're doing with your information. clearly, those tech companies see a threat here to their brand and their reputation around the world and here in the united states. the intelligence officials are defending what they've done, and snowden is defending himself now from attacks from critics in the united states, defending himself yesterday in that online chat. we see a lot of damage from this leak explosion here. everybody is sort of scrambling for cover. >> eamon, we're also going to

get a lot of focus on the vocabulary, this nay sescent plotting. how far along with the plans? where was the intent? there have been repeated examples of this over the last couple years where the question comes down to how legitimate and how real were these threats? >> clearly security officials have known for a while that the new york stock exchange because of its visibility and its iconic stature in terms of american capitalism and the american position in the global economy, would be a target for terrorists who were trying to strike these kind of iconic structures around the world. so that -- it would be a target that they would have an aspiration to hit is sort of not news. but what is a nascent attack is the question. was there a plot in place? were there people in the united states prepared to carry out that plot? at what point was that plot stopped and how and by whom.

all 2456 information of that in information we don't have yet and we'll see if they provide further details. >> ben willis is on the floor of the new york stock exchange. ben, your thoughts? >> when you come to work here, i have for 30 years, you know we have been a target for all kinds of crazies over the history of the world. we had one of the worst bombings in the history of the united states back in the early 1900s right outside. there's still pockmarks on the wall. we know that. my children didn't like coming here when you had the atlas and ems crews outside with the heavy armament. i'm also on the safety committee here. so we know that we are a target. it's obvious to the rest of the world and thank goodness for the technology we have that can protect us. >> is there additional technology, additional measures of protection, the physical presence you mentioned, and cyber security because the nyse is such a target? >> we have brian gimlet, a

brilliant guy who came from the secret service is head of our world security. we have all the devices and the highest technology the world knows about protecting this building and all our facilities. >> bob pisani joins us now. we have some reaction to the new york stock exchange. >> they have no comment on this. it's not surprising. i'm sure they are probably finding out about this at the same time as the rest of us. >> but they know to some extent surely they are targets. >> they never discuss the security or to what extent they've been briefed. obviously they have a very stringent and widespread security apparatus that is around here. we both know, albert benedict and i will tell you this is one of the most heavily surveilled buildings in the world. we used to joke it's easier to get into the white house than it is to get into this building. people who stand in lines for security to get in here know that. >> it will still be news because if it is a nascent attempt, presumably it didn't get to a clear and present threat at which point they would have

informed the exchange. >> that's why it's possible the exchange didn't know. they don't generally discuss these kind of security issues. you are under surveillance several blocks away. >> what kind of discussions do you have on the safety committee? i mean, what are we talking? what kind of concerns do you have? is it mostly physical? again, does it go back to cyber security? how aware are you generally? >> we have some of the most stringent and involved cyber protection in the world. it's not just those that wish us physical harm. there are crazies out there that continue to try to hack into the systems all the time. we have to be protected. we have the -- the world is at risk in coming into this building electronically to trade. we don't need somebody to disturb it. you can assume we've been here for 200 years, with he know what we're doing, we're protecting ourselves, not just from cyber but also the physical presence. >> do you feel unsafe here?

>> do i? absolutely not. i feel safer here than a block away. >> let me ask you why in particular of the 50 terrorist attacks that apparently the fbi prevented as a result of this technology and working with the likes of facebook and verizon and so on, why have they picked out the new york stock exchange explicitly to talk about because it's the most eicon i can and least controversial of terrorist targets? >> that's one possibility. we'll have to see what they say in the remainder of the hearing. the hearing is still going on right now, so we might get more information on this. my assumption here and i'm going a little out an a speculative limb is of the 50 they've selected certain plots they can reveal the existence of that they feel will not compromise security by making them public right now because those plots have been foiled. the players in them have been wrapped up, and the techniques that were used are now safe to

expose to the world. there might be elements of these other plots that are still ongoing or sources and methods they don't want to reveal. that's why those pieces are going straight to the committee here on a classified basis, but they say they are going to turn over the details to the members of congress. interestingly, guys, you're talking about the new york stock exchange and it's iconic role and it strikes me how similar a position you are in new york to those of us here in washington at the capitol building or over at the white house. the secret service protection at the white house in a post-9/11 world is extreme. going up there to the floor of the stock exchange, last time i was up there, i ran into a bunch of former secret service guys who were now guarding the stock exchange itself and we were laughing and trading names of some of the guys we know together and just strikes me how similar it is and, in fact, you have some of the same very people who are protecting the building you're in and protecting builds here in washington, d.c. >> one of the biggest disappointments for people who come down here, there are people

taking pictures of the new york stock exchange, tourists, because they can't get into the building anymore. since 9/11, the visitors gallery has been closed off and you need essentially the approval of somebody who works here and specifically on the floor to actually get in. it's been a source of frustration for a lot of people. >> the trading and the bulk of what you would call wall street is now in fact park avenue. >> because of 9/11. >> it's shifted. >> remember, it was those attacked that helped spur that shift. >> but the iconic name still resonates. >> we have breaking news from capitol hill as a result of testimony given by the secret services. we're learning 50 terrorist attacks have been prevented in the united states, bun against the new york stock exchange. more when we come back. [ male announcer ] the mercedes-benz summer event is here. the new york stock exchange. more when we come back. forever. [ tires screech ] here you go, honey. thank you. [ male announcer ] see your authorized dealer for an incredible offer on the exhilarating c250 sport sedan. ♪

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nsa was monitoring a known extremist in yemen. this individual was in contact with an individual in the united states known as khalid. he and other individuals that we identified through a fisa that the fbi applied for were able to detect a nascent plotting to bomb the new york stock exchange. >> breaking news this hour. as a result of the testimony being given on capitol hill for the nsa surveillance hearing, we've just learned from the deputy director of the fbi that 50 terrorist attacks have been prevented in the united states

as a result, a direct result, of cooperation between the fbi and other agencies between american technology and telecon surveillance. >> we are able to disrupt the plot, able to lure some individuals to the united states and we were able to affect their arrest and they were convicted for this terrorist activity. >> okay. just so -- on that plot, it was under the 702 which is targeted against foreigners that some communication from this person in yemen back to the united states was picked up and then they turned it over to you at the fbi to serve legal process on this person in the united states. >> that is absolutely correct, and if you recall under 702, it has to be a non-u.s. person outside the united states and then also one of the criteria is link to terrorism.

>> would you say that this -- their intention to blow up the new york stock exchange was a serious plot or is this something they dreamed about talking among their buddies? >> i think the jury considered it serious since they were all convicted. >> okay. what about the other plot, october 2007, that started i think with a 215. >> i refer to that plot. it was an investigation after 9/11 that the fbi conducted. we conducted that investigation and did not find any connection to terrorist activity. several years later under the 215 business record provision, the nsa provided us a telephone number only in san diego that had indirect contact with an extremist outside the united states. we served legal process to identify who was the subscriber

to this telephone number. we identified that individual. we were able to under further investigation and electronic surveillance we applied specifically for this u.s. person, we were able to identify co-conspirators and able to disrupt this terrorist activity. >> i'm sorry. repeat for me again what they were plotting to do? >> it was actually -- he was providing financial support to an overseas terrorist group that was a designated terrorist group by the united states. >> but there was some connection to suicide bombings that they were talking about, correct? >> not in the example that i'm citing right here. >> i'm sorry. the group in somalia to which he was financing, that's what they do do in somalia, correct? >> that is correct. as you know, as part of our

classified hearings regarding the american presence in that area of the world. >> okay. thank you. chairman, i yield back. >> if i could, congressman, just hit a couple key points. it's over 50 cases, and the reason i'm not giving a specific number is we want the rest of the community to actually beat those up and make sure -- i'd give you the number 50x, but if somebody says, well, not this one, what we're finding out are there are more. they said you missed these three or four. those are being added to the packet. on the top of that packet we'll have a summary of all of these, a listing of those. i believe those numbers are things that we can make public, that you can use, that we can use. and we'll try to give you the numbers that apply to europe as well as well as those that had a nexus in the united states. the issue on terms of releasing more on the specific overseas cases is that it's our concern that in some of those now going into further details of exactly what we did and how we did it may prevent us from disrupting a

future plot. so that's something that's work in progress. our intent is to get that to the committee tomorrow for both intel committees for the senate and house. >> great. thank you. >> mr. thompson? >> thank you, mr. chairman. thank you all very much for being here and for your testimony and for your service to our country. mr. litt, before going to hearing, does or has the fisa court ever rejected a case that's been brought before it? >> revelations of a bomb plot aimed at the nyse -- revelations of a potential attack. we don't know much more about the details. the dow is up 99 points as we speak. we'll have much, much more on the markets rallying for the third day in four, plus more breaking news on that nsa hearing. more "squawk on the street" after the break. [ male announcer ] i've seen incredible things.

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blaeki breaking news this hour. they're going to publish a dossier which will detail in excess of 50 terrorist attacks that have been prevented as a result of the security services working with both american technology and american telecom firms. more than 50 cases, and, indeed, cases that go beyond the shores of the united states. eamon javers is in washington monitoring what is being said here. and, eamon, those cases are to be made public. they're going to deliver the details overnight and then the public will have access to them. i believe that's what keith alexander just said. >> we're going to have to wait and see exactly what they make public. they have said some of it will be delivered to the committee on a classified basis, but the headline here so far is the fbi official here, sean joyce, telling the committee that thesen sa surveillance

techniques were instrumental in stopping what he called nascent planning to bomb the new york stock exchange. we've got that sound bite again. let's play that so you can hear exactly what they're saying. >> nsu was monitoring a known extremist in yemen. this individual was in contact with an individual in the united states named khalid. he and other individuals that we identified through a fisa, rn able were able to detect a nascent plotting to bomb the new york stock exchange. >> he gave a little more detailing in a second round of questioning saying the individual they were monitoring in yemen was in contact with another person in kansas city, missouri. that person was khalid he said, and that's the person that the fbi then focused its surveillance efforts on. later he said they were in the very initial stages, very initial stages of plotting to

bomb the new york stock exchange. he said the fbi was able to disrupt the plot and he said that individuals were actually convicted in this instance. we're going to have to go back and check some of the public court documents to find out exactly what exists in the public record, whether we knew this already and what the connection was to the nsa, the fbi effort, and how far along court records would suggest that this plot to bomb the new york stock exchange actually may have been, guys. >> okay. eamon, stay with us. let's bring in james callstron, the former head of the fbi in new york. what is your reaction to the revelation that a nascent attempt to bomb the new york stock exchange was prevented? >> well, my reaction is that's the way it should work, and thank god it worked in that case. it's critically important for the intelligence community to be monitoring, you know, certain

communications outside the united states and the question that's talked about now is how do you handle inside the united states part of it. in this case, you know, it gave them a number they could act on and good job fbi. >> we understand you were the director of public safety for five years after 9/11, asked by the governor to come out of private life. are you surprised by these revelations? >> no. i mean, this case is an older case. you know, this whole issue that's before the country today is the wisdom and the legality of listening to all telephone numbers in the united states and keeping metadata on those phones. part of the issue that hasn't been talked about and i can't really get into the details of these programs because they're highly classified, but the phone k companies in the digital age

don't stored information for a long time. back when i was a younger agent, you could subpoena records in a telephone company and they would have records dating back for years and years and years. so it was easy to put an investigation together. now these companies, because of the cost, even though storage is relatively cheap, the efficiency of storing all that information, the companies after they get paid really have no need for it. so that's one of the reasons, i believe, that the government, the nsa, has to have a record so that an investigation can be put back together again after you get one piece of it. >> so, mr. kallstrom, as you infer, the central question is whether the ends justify the means, and what is now going to happen over the next 12 hours is that in excess of 50 terrorist attacks that have been prevented are going to be detailed at least to the committee concerned and some of those will be

obviously disseminated to the public more broadly. can you give us an idea of the scale of what you saw? >> the ends do not always justify the means, without question. you know, things have to be done legally, they have to be done honestly. you know, part of the problem here is the trust of the government has declined significantly for a number of reasons, you know, which i don't have to go through that list for you because you're well aware of it. so when the public trust is diminished to such an extent, these problems then stand out and people ask questions. are they listening to me illegally? are they doing this, doing that? and, therefore, you have all this consternation. there's absolutely no question that programs like this are going to assist in these types of cases. the question is, you know, is it overkill? how many of these things need to

be done and do you trust the people who have access to the databases. that's the question. >> i want to go back as well. you were responsible for counterterrorism planning and operations for the state of new york starting in october 2001. we were just speaking down here a little bit about these revelations saying perhaps the new york stock exchange being such a target you should expect that this kind of thing is taking place, but you're saying that your surprised by the revelations? >> no, i'm not surprised at all. the new york stock exchange is a huge target. we all knew that. it always will be because it's the symbol. our economy and our democracy. so i'm not the least bit surprised. i'm pleased that in this case, which is an older case, that it was solved efficiently. >> mr. kallstrom, you say that you believe that trust has been promised for the american people. what should the response be? how do you regain that trust? how do we set the system

straight? >> by having people that pontificate on television tell the truth. if they can't tell the truth for reasons of classification, then they say so. but, you know, i'm not saying that the ends justify the means in any case, even if the trust of the government was 90%, which it never will be, but it clearly doesn't help to have all these things going on about benghazi and the irs and all these other things. you know, it costs a crooked eye to the whole government. it's going to be difficult to maintain these types of systems -- >> so what -- forgive me. i don't mean to interrupt. you have a problem probably with the line here. what is the truth that you believe is not being said in public that needs to be said?

>> you know, i think anybody on the street could tell you that, you know, it isn't helpful to the trust of the government by having, you know, people just not come forward and deal with things truthfully. you know, the irs investigation is the classic example. and benghazi is the classic example. i don't say that from a political standpoint. i'm not political. but that does not aid in public trust is what i'm saying and the lower the public trust goes, the more difficult it will be to maintain programs like this that are very important in this day and age of emerging and new technologies. >> can you tell us generally speaking during your time how common threats like these were for something like the new york stock exchange and how close they really came to fruition? >> we had numerous threats through the '90s.

tons of threats. some came close and some were intercepted. very few happened because of the good police work. we have a terror staff force that includes the nypd and other agencies and police departments in the state that work closely together, and that's one way of really having some efficiencies and solving these cases. when people don't care who gets the credit, marvelous things can happen. >> can i also ask, is the new york stock exchange a more common target than other parts of new york? >> no, i wouldn't say. i think new york is the number one bull's-eye. my son ray kelly has always said that. it's true. when you hear targets talking about targets in the united states, nine times out of ten they're talking about new york. >> would you say the stock

exchange is more common target? >> i wouldn't call it more priority but it's in the top priorities including landmarks, major financial industries. you know, the places where lots of people congregate. the inspection inspection hubs, things like that. >> thank you. as we saw from the boston bombers, of course, james kallstrom former head of the fbi in new york on that breaking news that a plot against the new york stock exchange was thwarted as a result of the ns a and other agencies working with american technology firms. >> we are seeing another day of triple digit gains for the dow. we're up 125 points. nasdaq adding about half of 1%. about 0.75% to the s&p as well. we'll have more on this breaking story when we come back. tdd#: 1-800-345-2550 companies breaking through.

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breaking news this hour. the new york stock exchange is refusing to comment on the revelation made on capitol hill that it's a direct result of having worked with telecom and technology companies that the security forces were able to prevent an attack on the new york stock exchange and more than 50 other terrorist plots. details of those plots are to be released on capitol hill, and some of those will then be filtered out to the public during the course of the next 12 hours as the nsa and the deputy director of the fbi fight back

against accusations that some of this power has been misused. >> initial response from the new york stock exchange was a no comment. let's bring in bob pisani. any update? >> no, still no comment but we have a senior floor official at the new york stock exchange. gordon, what was your reaction when you heard the nsa program had foiled a nascent blom plot? >> allegedly. this is their job, this is what they do. i'm not privy to the particulars. but certainly if you hear something like that, it's somewhat reassuring the folks are out there doing their job protecting us. >> it's been no surprise to people down here and traders i was talking to didn't express any surprise. certainlies had a high profile target. >> lower manhattan, of course. it's been that way even more so since the tragedy of 9/11. but, look, it's a dangerous world. primitive people do these kind

of things. they talk about terrorists. i like to call them primitives. these are people that aren't in the flow and, you know, then they resort to these kind of things and it's sad. >> a lot of people don't quite understand the kind of surveillance we have down here and the kind of security that exists down here since 9/11. we sometimes joke it's easier to get into the white house than it is to get into the new york stock exchange, but tourists have not been allowed in here since 9/11. you need special permission. you have to go through an lab tr elaborate screening. >> we used to have a wonderful visitor's gallery and we used to get a tremendous amount of people that could come in here and look at this iconic police but they've had to shut that down and that's part and parcel with the new world order. >> gordon, you're a cheery guy. always have a joke every

morning. that's the way you like to roll. however, do you ever -- are you ever fearful to come into work in there must be moments when you catch yourself perhaps when you stand near the huge bomb proof shutters. i don't know how thick they are, a foot and a half, two foot, that now guard many of the entrances that can come down in a second and a half and you think maybe i shouldn't stand under those. do you ever catch yourself? are you ever fearful? do you notice people that you invite here, the people that ring the bell sometimes are mindful that they are such an iconic site and the history we've had over the last 15 years? >> i think it's something people are more mindful of than they have been in the past but life goes on. same thing in britain. it's just the way things have changed. this is an iconic facility but anyplace you go, it's a potential for something to happen. and we have a great security

staff here and i'm confident -- >> you know what's really interesting and to the point that you're making, i have watched the traders aren't here today as we're showing that, they're actually not listening. it's almost like they expect this to be the background to which they live their lives and there would be these revelations on capitol hill. they can see what we're writing on the screens and they're getting on with what they do because that's what new yorkers do. >> that's what new yorkers do, what americans do, that's what the british do, that's what civilized culture has come to behave in that manner and it's regrettable but, listen, you just hope that over time things will change, you start to see news articles about the taliban is looking to negotiate in afghanistan. so hopefully all this kind of stuff will eventually become part of the fabric of the past and, you know, we just won't have to keep looking over our shoulders and worry about this stuff anymore. in the meantime security down here is very impressive and we have a lot of respect for the people that run the program

here. >> certainly a topic of conversation as we were making the announcement, the nsa news came out, all the people down here were talking about it. but people have learned to live with it a long time ago. this was, of course, security a major issue after 9/11. one of the things that i was most impressed with having been down here for 9/11 was the fact that while people were worried in the immediate aftermath of it, everybody came to work every single day. there was nobody who called and said we can't handle this emotionally although people would have understood if that happened. >> a lot of pride. i remember at this time i offered any of our employees to not come in if they felt uncomfortable, and every single one showed up from the highest paid to the lowest paid and they were all here at about 6:a.m. in the morning. >> gordon, let me ask you a more controversial question then because the guys that are really wealthy are not here on the floor. the guys that are really wealthy are up park avenue and a lot of their buildings are not marked necessarily as you might expect

them to be. do you think that to a certain extent they are fearful of the implications? >> well, you know, i can't really speak to that but i can say this. i remember shortly after 9/11 when people were saying how do you feel about coming down to the stock exchange, i said, well, frankly, just to your point, this is probably one of the more safer locations just because we have the additional security staff and it's such a high quality staff. this plot wasn't -- as i understand it, the aled plot wasn't uncovered by new york stock exchange security half but was by then sa. more to the point, it debunks the myth that this kind of practice is un-american. like it's new world. they're using the tools they need to to combat terrorism and/or primitivism, whatever you want to call it, to protect americans. if this is everything they allege is true, you can only you

a plaapplaud them for doing the jobs effectively. >> i think the key point about what's been going on is over the years there has been no lapse in security. there has been no lessening of security since 9/11. you will continually see every day a high level. long, long before this came out every day you will see rotating -- different people out front, different situations. >> and maybe that's why i can be in such good cheer because i know we have such a good security staff around here. >> always in good cheer, gordon. renowned for it. >> we'll have more on this breaking story next. we'll speak to a former director of the fbi. more "squawk on the street." we're back in two. the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all

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a forceful defense of the way america's spies is under way on capitol hill. the head of the nsa has said as a result of their work, a lot of it outside the united states, more than 50 terrorist attacks have been prevented, and one of those terrorist attacks was a nascent plan and we'll discuss how you define that later, against the new york stock exchange. joining us now on the cnbc newsline, former fbi special agent jeff lanza. i imagine this is no surprise to you. >> it's not surprising at all and really, simon, it shouldn't

be a surprise to anyone when you consider the significance as a symbol alone that the new york stock exchange represents. the world trade center was attacked because of its symbolism of our country and our independence and our financial system and now that the new york stock exchange holds that same significance i would believe. >> the president was very anxious last night to try and reassure everybody that the process is transparent, so there's two questions. is the process transparent? is the process worthwhile? from your experience, i don't know whether you have dealt with the fisa court, the foreign intelligence surveillance court, that has to okay phone tapping or internet tapping, be that outside the united states or here, do you believe that it is transparent? do you believe that it is worthwhile? >> well, i did deal with that court, and to answer the first question, i don't believe there's transparency nor is there designed to be transparency and as far as whether it's worthwhile?

absolutely in most cases it is. what we don't know is how worthwhile is grabbing up every single phone call that was ever made during a three-year time. how whort wiorthwhile is that? how do you define help? could they have gotten that information in other ways. we may find out in a classified briefing, at least the congress will find that out. >> it's fascinating that you're so skeptical. >> well, i have learned to be skeptical. i worked for the government for 20 years and the fbi does -- [ inaudible ]. we're not going to find out more in an unclassified briefly but congress will and i think they know that. >> mr. lanza, thank you for your time. jeff lanza, former fbi special agent joining us on that breaking news. more on those revelations when we return. [ male announcer ] we've been conditioned

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for more on what we just learned about a possible attack on the new york stock exchange, let's get back out to eamon javers who has more on this breaking story. >> we've been doing a little digging into this situation. remember, the name that we were given by the fbi officials in this intelligence committee hearing just a few minutes ago was khalid husani. they said he was in kansas city, missouri. he was in contact with an

individual in yemen and they were in the nascent stages of plotting to bomb the new york stock exchange. cnbc has talked to the office of the u.s. attorney for the western district in missouri, and we've also been able to pull from court records a may 2010 guilty plea by khalid, a person with that same name. the office of the u.s. attorney for the western district of missouri confirms to us this is the same individual. now, this guilty plea from may of 2010 does not include any mention that we can find so far of a plot to bomb the new york stock exchange. instead, what khalid appears to be pleading guilty to is conspiracy to provide material support to a terrorist organization. a lot of details in this plea about alleged transfers of money, communications, loyalty oath to al qaeda. knock in he nothing in here so far that would suggest there was public disclosure of any plot involving the new york stock exchange. so that's a key point. it may be that this dates back

to may of 2010, but the officials testifying up on capitol hill said that this plot, perhaps the same plot in missouri, did involve intercepts from the nsa. here is an exchange that happened a little bit later between sean joyce, the fbi official testifying, and some of the members of congress who were pressing him for more details on what he knew about any attempt to bomb the new york stock exchange. let's play that exchange now and you can hear exactly what he said. >> nsa on the op wi-fi, which is khalid out of kansas city, that is the example i referred to earlier. nsa identified an extremist located in yemen. this extremist located in yemen was talking with an individual located inside the united states in kansas city, missouri. that individual was identified as khalid. the fbi immediately served legal

process to fully identify him. we went up on electronic surveillance and identified his co-conspirators, and this was the plot that was in the very initial stages of plotting to bomb the new york stock exchange. we were able to disrupt the plot. we were able to lure some individuals to the united states and we were able to affect their arrest and they were convicted for this terrorist activity. >> now, interesting there that sean joyce is talking about luring some individuals to the united states and then disrupting the plot. we're going to have to get more details there, guys on exactly how they lured those folks other to the united states, how they arrested them, and what they did. in this may 2010 plea document we've been able to surface so far, the u.s. attorney for the western district of missouri says it is the same individual. khalid is talked about as transferring a lot of money back and forth between the united states and other locations and also pleading now to a violation

of 18u usc 233b. >> we're not sure if this is the same guy, the 32-year-old used car dealer from missouri? >> well, again, the u.s. attorney for the western district of missouri confirms to cnbc, that office confirms, this khalid in this plea agreement is the same individual. what we don't know and we're still reporting on this is whether there are additional public documents that might give more detail on the plot to bomb the new york stock exchange. this document that we have surfaced so far does not mention the new york stock exchange. instead, talks about movements of money and other things. but nothing here that we can see so far about the new york stock exchange. we're still working on this in realtime. >> you know, eamon, in the meantime as keith alexander, the head of the nsa said himself, there is a trade-off here with making these revelations as to how or what has gone on behind the scenes, who was able to be tapped where, what telephone

calls in yemen were understood and linked back. this is potentially, as the man himself said, this could potentially make it more difficult for them to prevent other terrorist incidents moving forward, particularly outside the united states or in europe i think he said himself. >> that's right. and u.s. intelligence officials have already said that in response to the disclosures by edward snowden, the nsa leaker, folks they've been targeting have already changed their behavior. so what they've said is these disclosures, these leaks, made it tougher for them to track terrorists around the world. snowden said yesterday he views this as an overblown threat. he said more people are killed by bathtub falls in the united states than by terrorism. his argument here is he leaked this information because americans need to know what's being done in their name and what's being done to protect them of a violation of civil lib erts. >> eamon, really appreciate it.

>> very forceful push back from the president last night on public television. that does it for this show. thank you very much for watching "squawk on the street" as we hit noon on the east coast. let's hand it over to "the halftime report" and scott wapner. thanks so much. it is noon in the east. welcome to "the halftime show." four hours to go until the close. let's look at where we stand on this busy and big day on the street today. triple digit gain as the fed sits down for its meeting. the dow is up nearly 108 points. the s&p 500 good for two-thirds of 1%. technology having another strong day as the nasdaq is good for three-quarters of 1%. here is what we're following. colonies capitalist. tom is the here with the best ways to make money in hou