packed one. we do have weekly jobless claims coming up. they're set to hit the tape at 8:30 eastern time. we have pending home sales at 10:00. plus we have a whole lot of fed speak as well. fed speakers could shape today's session. we have new york fed chief dudley speaking at 10:00 a.m. they say that no one other than bernanke or janet young has more credibility about conveying what direction the fed might take. on top of that, you also have some other fed speakers including governor jerome powell and dennis lockhart. on squawk yesterday they were talking about policy and central bank's communication. >> as the economy improves, people should expect interest rates to go up because the fed should go with the economy as the economy improves. that's a good thing. i think a lot of the movement and this is where i think we have to do a better job of

communicating our intentions. a lot of the movement is in fact due to people thinking that we're going to be having a higher path of the fed funds rate for a given set of economic conditions. also worth watching is the treasury will be auctioning 29 billion in seven year notes. this follows that $35 billion five year auction from yesterday and the 35 billion two year auction on tuesday. both of those sales were characterized as weak. it's been a while since we've been watching some treasury sales. it looks like it's time to pay attention again. bill gross out with commentary talking about this is a situation where people think it's time to jump off the titanic. he's saying, not just yet. >> we have paid attention to those. thank you very much. good morning, it's great to see you back. also making headlines this morning, everybody, the u.s. executive who has been reportedly held hostage by his workers in china is now free. chip starnes is on a flight from

beijing to the u.s. they demanded generous severance packages even though they weren't being laid off. once he was released. he said he was threatened by a vendor and feared for his personal safety. he was in touch with the u.s. embassy who was aware of his departure plans. eunice yoon will have more from beijing. in other news, dish network is withdrawing its offer to buy clearwire. it had offered 440 per share. last week sprint raised its operation to buy the portion of clearwire it does not own to 5 bucks a share. oled tv, the price tag, 13,000 bucks. that's the same price as rival lg electronics. >> andrew, that's a tv i could see at your place. >> do we have an image. it is one of the coolest tvs. >> isn't it?

>> it is awesome. it is awesome. brian, thank you. we'll talk about that. we'll talk about the clearwire thing, too. jack grubb turned out to be right. >> i was sick of it. i thought we had a guest who said that he was going to -- he would never get sprint and our charade, here we are. in other corporate news this morning, a number of ipo headlines. initial offering by hd supply ipo pricing below the range last night amid market volatility. industrial and construction supply company raising $957.2 million. that ipo priced at $18 below its expected range of 22 to $25. i wonder what ken rangoon thinks of that. meanwhile, cdw cut the price of its ipo and that's already at the bottom end of a lower range.

it's $395 million. let's check on the markets this morning. this has been the big story for at least the last week or so. take a look at the futures this morning and you will see that they are indicated slightly higher, just about 22 points for the dow futures. s&p up by 3.2 points. yesterday was a big up day for the markets. massive gains throughout the day. we'll see what happens. yeah, it has been up and down and up and down all over the place. look at europe and see where things are starting out. you can see it's mixed results at this point. barely budged. ftse is up by .4%. the dax is up .1%. you did see the nikkei up by almost 3%. that's building on the gains that we saw here. that was a gain of 380 points. if you check out oil prices, yesterday's daily news. you can see the wti right now is up 27 cents to 9577. ten year note. this is the market to watch. the yield right now is at 2.5%.

mortgage rates jumped over the last week. i think yesterday that number was -- the average was a little over 4.5%, right around 4.5%. massive move. still historically incredibly low. you have to wonder if that will affect major purchases. the story questions whether people will be buying cars at the same rate, houses at the same rate and even whether businesses will impact things. >> yesterday on "street signs" 2:00 p.m. eastern time by the way, we saw a chart -- only payment i get for doing this doggone show in the morning. we know that mortgage rates, the trend for 20 years -- >> historically this is a great price. >> listen though, from '93 to '95 mortgage rates rose. >> correct. >> from 1998 to 2000 mortgage rates rose. home prices, they fluctuated a bit, but they have always only

ever moved higher. i'm not saying that 8% mortgages wouldn't crush housing. >> if you're somebody who's been sitting around waiting hoping to make a purchase. this probably pushes you out there because it does affect how much home you can buy. if you're looking at monthly payments it does make a difference and that's the type of thing where you could see the different locations. >> it also makes a difference whether or not you're a living buyer or you're a financial buyer. if you're an investor you have to cover the mortgage, the rent has to cover it. makes it harder. if you're moving to your family, you're spending. >> it means that you can buy a smaller house. >> the flip side is you could argue over the past two years one of the things that's held up the housing market at all was investors. so once you take them out of the game, if that's what we think this is going to do, or at least slow that down, what does that then do to the ability -- >> you have a point but most investors pay cash. >> right. >> putting down 30% of all buyers. all buyers pay 100% cash.

>> if they get pushed out of the market, does it mean that prices come down? >> the cash buyer wouldn't get pushed out. they don't care what interest rates are because they're not borrowing money. >> if it no longer makes sense as an investment. >> i'm not thinking of individual investor buying it. i'm thinking of blackstone and, by the way, being well enough to do it. >> 6% mortgages a number of years ago were the panacea of real estate. oh, yeah. 4% mortgages are the doom, i don't buy it. >> if you're talking about a fragile economy, it can make the difference. you see a print like yesterday, 1.8% the gdp number that came out. that was a little surprising. >> you're way too logical and rational for 6:07. >> i've been thinking a lot about it. i was thinking on the way back from maine. the dollar is down against the euro. up against the yen and the pound. euro is at 130.17.

brian, i did see you tweeting at this. gold prices barely budged. 122970. that did make me sit up and pay attention. still something to watch. 1229. time now for your global markets report. a among the headlines. the e.u. striking a deal on who exactly will pay for bank bailouts in the future if we need them. here's a hint, it will not involve taxpayers. charn tso standing by in london. karen. >> thanks very much. along this and behind me, you can see a number of the european banks under pressure. if you have 100,000 euros, you could be on the hook. that's rattling the banking sector today. overall, the stock shifted 600. tracking a little bit underwater. investors are still focused on the timing of the tapering off. the theme for the markets.

individual stories are having an impact here today. the ftse, .4%. first quarter gdp. the annual rate was a little bit lower, 0.6% down to 0.3%. the cac was in negative territory but up this morning. it is improving. the german markets are challeng challenged. the ftse is tracking lower. it's continuing that in the morning session. let's move on to some of these stocks. you'll notice the likes of lanxess. this is causing pressure in the german market. they've slapped a new antidumping duty on chemical companies. it relates to a compound that was produced with the likes of dies, medicines and pesticides.

it's the latest tradeoff between europe and china. bond markets, there's been some news across this market as well. i'm going to take you in particular to the italian note. we had an auction this morning that saw investors pay slightly more than what they did four weeks ago for italian bonds. on the five year they had about 2.5 billion yields. 3.47%. up just about 3% on the 30th of may suggesting that we were seeing pressure. even higher in the ten year at 4.55%. we had about 4.61% on the italian paper price of that auction. the yields have come down a little bit. u.s. treasuries, 2.5%. we have seen as u.s. treasury yields have gone up, this has taken some of the safe havens and the german bond yield as well. the foreign exchange markets, sterling dollar has a bit of a selloff since that gdp number came out.

prior to that, almost .3% lower. euro dollar reclaiming some traction. it's getting there on the trade up. mario draghi talked about the eurozone growth. he said policy here would remain accommodative. seeing a little bit of a claw back in that trade. i must say across the charts as well. the australia dollar. we have the old prime minister, kevin rudd back in the job as the new prime minister. coming up, this could be having a little bit of an impact. also, most of the mining has been there. the rest of the sector has been supportive for this. back to you, brian. >> karen, thank you for that report. we're now going to go over to asia and back to the big buzz story of the morning. the u.s. ceo held hostage has now negotiated his freedom. unit yoon has been following the story. she joins us from beijing.

eunice, good morning. >> good morning, guys. the american ceo, chip starnes is now on a plane to the united states. he's no longer in china. it feels like a very dramatic leave as he was able to seal the deal. money was transferred, everything was paid out. after that he told me that he was put into a car by local officials, eventually had to switch cars on his way to beijing where he was with his lawyers to finally get to the center. it was a bit unclear as to whether or not he was going to go to a hotel and then later he text messaged me and said that he was on a plane heading to the united states because he had been threatened by a vendor. he was really worried about his personal safety and he said he just needed to get out of here. >> eunice, it is a wild story. hopefully we'll have an opportunity to talk to him when he gets back to the states.

you know, one of the things that struck me is when we interviewed him yesterday, he was still being held hostage so it was unclear to me how honest he could ultimately be about his feelings in china. do you think we're going to hear a bit of a different mood about how he feels about this whole experience now that he's out? >> i think that's up to him only because he still does have a factory here but, yes, i completely agree, that in this environment it was very difficult for him to be completely honest about his feeling about china. i mean, he was being held -- i thought it was interesting about is this a publicity stunt. when you felt the level of anger and frustration on the part of the workers, you knew it wasn't a publicity stunt. he was joking around. even today he said i've lost nine pounds over the past week but i really do think that was a coping mechanism. yes, it's very difficult for him to say how he really feels about

his business here and whether or not he's going to stay. another point that i thought was really interesting was on the one hand you could see this as an isolated case. on the other hand, it was interesting talking to the workers because wages are rising here. we hear a lot about how the chinese are stealing american jobs, jobs are shifting to china. china is now in a situation where it's seeing its job shifting to lower cost countries, such as india. and the system here is different from the united states which has a higher level of education, not as many people in the work force and in china there's so many people who are still in the work force and very, very poor. so we're wondering now how, you know, the chinese are really going to be able to deal with the situation where suddenly these workers are realizing that these jobs aren't necessarily going to be available to them in the same numbers. >> eunice, you mentioned that this is an isolated case but there is certainly, you understand, the layout of why a

situation like this might pop up. does something like this that receives this much media attention automatically lead to other sort of situations where maybe there have been some discord and maybe this makes it rise to the occasion, too, rise to the surface? >> well, the way i've been reading this one, what's interesting, what he said, it is true that there are factory bosses in china that end up running off. workers try to capture them. they feel like they've been burned. you can see these type of situations a lot. what's interesting in this particular situation is that it is a foreigner who was being held and it was kind of allowed to play out a lot more than what you'd expect. you see these situations, but when it's a chinese boss it doesn't get as much media attention. in fact, a lot of times the police do come in and don't always side with the manager -- don't always side with the workers. a lot of times they will side

with the manager and clamp down on all the workers. in this situation you did not see the same case. >> what was the ultimate settlement, meaning, you know, did he offer a lot more money? was it hourly? what kind of wages? what did the deal look like? >> they didn't go into specific details about the numbers but he was saying that everybody was paid up and basically the issue was that the 30 or so employees who got the buyout and were actually leaving the business, they got their pay but that the rest of the people who saw these massive payouts, you know, wanted -- they wanted to be able to quit and then get the payout and he was trying to explain to them that if you resign, then you do not get a payout. that's not how it works. so then they were saying, but we're resigning so we want the payout. so i think when he was talking to me he said that he ended up getting some more people that option, to be able to resign but then get the payout. he said tomorrow a lot of those

people a lot of those people are going to be allowed to reapply to the jobs if they want the jobs and to be able to stay here and work in his factory. >> eunice yoon in beijing. it is a wild and important story. thank you for bringing it to us over the past couple of days. we'll hopefully try to find mr. starnes when he gets to new york. in the meantime we have more news at home. i don't know what kind of suit you're wearing, brian. you'll like the way you look. men's warehouse, their founder, george zimmer is firing back today sending a very angry open letter to the retailer saying the company has hurt men's warehouse's value. he writes in part that the board quickly and without the assistance of financial advisors simply rejected the idea, refused to even discuss the topic that would permit me to collect and present to the board any information about its possibilities and feasibility and instead took steps to marginalize and then silence me. it was encouraging the board now

to consider a full range of possibilities to maximize shareholder's value. on that note you should know that men's warehouse says that mr. zimmer has had difficulty accepting the fact that men's warehouse is a public company and that he has not been the chief executive officer for two years. kind of would sting if you're the founder hearing him say this. he advocated for significant changes that would allow him to regain control but ultimately he was unable to convince any of the board members. that's the story from men's warehouse. who knew that the founder could -- >> we've seen it happen before with steve jobs and other people who have gone through similar situations. the board does have a responsibility to act independently and to make sure they're looking out for the best interest of all shareholders. >> the question is zimmer comes back to create a deal seems hard to do or whether others will try to jump in and do something with them.

>> job market play. >> the job market play. >> things get better. >> get better, people need jobs. >> need suits. interview suits. i know people have gotten more casual. people still do hopefully dress up. as you see the younger workers traipsing through the halls of cnbc, you realize that some of these trends have been lost. >> j. crew and the gap. >> i've not seen so many jeggings. >> jean leggings, bad idea. when we come back, the looming earnings season. we'll talk markets and the economy. we will talk tech with an entrepreneur newer who has been there and done that. former lycos boss bob davis joins us. the ones getting involved and staying engaged. they're not afraid to question the path they're on. because the one question they never want to ask is "how did i end up here?"

i started schwab for those people. people who want to take ownership of their investments, like they do in every other aspect of their lives.

welcome back to "squawk box." let's look at the national weather forecast from jen carfagno. is it going to get any better in new york at all? >> that's not going to improve. what's going to improve is that it's not going to be as hot as some other parts of the country. i'll show you that. rainfall, we're breaking records, let me tell you this, breaking records all over the country. in the east, northeast in particular, we're breaking rainfall records. we've got plenty of moist, tropical air coming in. that's why it feels so humid and so muggy. storms will fire today. there is a chance of severe weather. heavy rainfall is going to be one of the biggest issues that we see out of the storms today,

tomorrow, saturday and sunday right here through the northeast. keep is it very wet. you look at the forecast next seven days easily getting 2 to 3, 3 to 5 inches of rain across the area. it is so saturated already. look at new york city. we are now in the running for one of the top three wettest junes. we're at the number three spot. easily going to get to number one. we're already at 9.86. the southeast is very humid as well, very muggy. feels like summer down here in the south. we'll be watching for storms today with the front coming in. damaging winds and hail will be the main threat. heavy rain going to be a big concern across the southeast. still a very active pattern across the northeast. rainfall easily 1 to 2 to 3 to even 5 inches of rain especially across parts of florida where tampa has had 10 inches of rain for the season. now we go to the record and brutal heat wave that we have going on. big old high pressure building

across the west. temperatures in dallas today hitting 100 for the first time of the year. not unprecedented. vegas, 117 for you this weekend. that would tie the all time record high. we could tie the world record high temperature in death valley, we're coming close to it, 134 is the world high temperature. we are getting close to 130. it has not happened many times in history. death valley, 1913, to track it. big weekend coming up weather wise. >> jenn, we're trying to get over the 134. >> crazy. >> i've been in death valley. cool place. not today. >> red hot. it's cool but not today. jen, thank you. now let's get to the markets. we have the chief economist at ihs. we have lou green from drw trading group. lou, you've been watching the back and forth.

do you have whiplash yet or do you think you know which direction this market is going. >> as is usually the case, i don't have a clue. just the resetting of the expectation that when the fed was going to start to back out of the qe i think was the key thing here. i think the interest rates are not necessarily setting a new expectation for the economy or anything else, but they have to reshift our interest rate exposure and so, therefore, i think we've seen some dislocation because like in that three-year range you've had interest rates rise dramatically, much more so than would be indicative of what the fed said about raising the fed funds. i think the market participants are doing what they need to right now, not necessarily what they want to do. in regards to the stock market, we've gone, you know, only about 4 to 5% off of the high trade so we've really not done a whole lot there. the volatility as you say has been the really disconcerting thing. we haven't really moved that far

off. i think we came very close to a key level earlier in the week down at 1555. the low is 1560. that's sort of within the crayon band of technical analysis. the market held there. on their way back up halfway back to the move from the recent low would be 1625. then the high of the day the day before the fed meeting, 1654. that would also be an important level to get back above. >> you mentioned the whole idea of the treasury market doing what it needs to do right now, which is to get maybe more in sync with how they think the fed will be acting. that makes it sound like a temporary quick dislocation and then we get away from some of the volatility. is that where you think we're heading? >> yes, that's my thinking. i'm not saying it can't go up to 3%, anything like that, i'm not making a prediction for the near term or what that range is. i don't think we're done with the low interest rate environment for the treasury

department. there's other factors aside from the fed for instance what's called a lack of safe collateral which is from a lot of people who may have earlier in the last decade been driving security who are now funneled into the treasury market, therefore, increasing the demands for treasuries and keeping the rates lower than they otherwise would have been if there was the full buffet full of security interest rate fixed income instruments. for instance, we've gone up 100 bases points on the ten year in the last month and a half from 160 up to 260. the last time we moved so quickly was when the fed initiated qe 2 on november 3rd. the rate for the ten year was about 250. by the middle of december, this is 2010 -- by middle of december we were up at 353. it's because the market was acting as though the fed qe would solve the economic problems and move on and the markets could reprice. >> right. it's a little trickier than just

saying the fed is in and therefore the rates should be low. the fed is in and therefore what's that mean for the economy. >> let's talk about the economy. yesterday we got the read on the economy. that shocked people. do you listen to what ben bernanke said? >> let's start with the fed. the market is very confused about what the fed is going to do clearly. they're getting very mixed signals. they're very clear about what it's going to take to raise the fed funds rate. they haven't been clear about what it's going to take to taper down the qe program. >> we know they are closer to tapering rather than further away. >> of course. >> we know that the qe if it had any impact on the market, it will get some impact as it rolls back out. >> sure. all i'm saying is there are no milestones out there as clearly for qe as there are about the fed fund. on the numbers yesterday, clearly those weaker numbers

will give the fed some pause, there's no question about it. on the other hand, they're old, old news in a sense. this is the third reading for the first quarter so i can't get too excited about it. we knew it was weak. it was weaker than we thought it was going to be. the second quarter will be weak as well. between 1.5 to 2%, no question about that. we do believe because of all the strong housing numbers, because of a lot of the other strong fundamentals that by the end of the year the u.s. will be closer to 3% than 2%. >> 5% next year. >> that's where i was going to go. there's a story out that they're saying it's going to be 5%. does that make any sense to you? >> doesn't make any sense. there are a lot of constraints on growth. you have the sequester which is going to go probably through next year. i don't think they're going to go through any kind of deal. you've still got weakness overseas. exports aren't going to help us. i don't see how you get to 5%. >> he's a guest on the show later today.

>> he is. we're going to talk to him about it. part of his argument is you'll see some changes out of washington. part of the gamble is that washington is going to act in some way and do something. >> in an election year? i don't think so. >> the best thing they can do for d.c. is put a bubble over it, encapsulate everybody inside of it, don't let everybody there leave and let the rest of the country go on and do what they want. >> i'm channelling my energy this morning. >> that's the greatest risk to the economy right now? >> i think that the greatest risk continues to be the labor market and all things that are connected to that. the unemployment rate is down significantly from its 10% high. the unemployment ratio is barely off the cycle low from 58.6 to 58.2. there's very little dynamism in the market. the weekly jobless claims have

been quite low but part of that is although the separations and firings have been quite low, the other side of the coin, the hiring, the hiring rate is very sluggish. it remains about 17 or 18% below the pre-recession levels, the monthly hiring. there's a labor market churn every month. millions of people get hired. millions of people get fired or leave their job for any other reason. the hiring is very sluggish. therefore, the wages continue to be low. another key risk i think is the pricing power. that level of inflation. we get important inflation data, the pce. that inflation data could be the spoiler in the works for the fed to get out of the qe. they would love to get out of the qe. they have lowered the bar i think on what it takes from the labor market in order to get out. should the pce core be at a record low at 1.1%, just a few thousands away from going to 1%, should that trend continue to go down, i just cannot see bernanke

leaving without trying to do some more accommodation. maybe it's not qe. maybe he leaves it to the next chairman, but i don't think that he can leave with say a .8 pce core and say the job is well done and we didn't turn into japan, you know, when it actually could be a few quarters away should that trend continue. there's reason to think that it may not. >> merriman, today 120 years ago the stock market crashed that set off the panic of 1893. we saw banks fail, railroads fail. >> that was 120 years ago today? >> it was. things look a little better today thankfully, however, the gold move has people spooked, the rise in rates has people spooked. everybody -- you know who they are. there are a subgroup of people waiting for the shoe to drop in a big way. do you see the risk of a big black swaun type event, sort of a big unexpected thing that could bring down the jenga game?

>> i don't think so. the one that we worry about the most is some form of geopolitical move in the middle east. that's the one we worry about and lose some sleep over. beyond that it's hard to see, you know, what else could kill this thing. certainly the u.s., the underlying dynamism is there. the question is when does it get unleashed as we were talking about earlier. we think at the end of the year. yeah, sure, i mean, there are other things out there we could talk about. the middle east and that perennial worry about the oil shock is the one that's still out there. >> merriman and lou, thank you both very much. >> thank you. coming up, commodities traders are calling the end of the, quote, supercycle. gold prices now down 36% from their peak in 2011. copper prices up 35%. iron ore down 40%. we'll get frank holmes' outlook on gold coming up. first, as we head to the break, let's take a look at yesterday's

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welcome back. gold prices during a three-year low and heading for a record quarterly loss and inflation fears subsiding a bit out there, but the big question is at some 1300 bucks an ounce, is that a buying opportunity or cut your losses and get out of gold for good? frank holmes ceo and cio of u.s. global investors joins us now.

frank, listen, i know you're going to find on the side of gold case and plenty can make it in a strong way, but we're down 600 bucks off our peak. worst quarter in the history of the gold market ever. make the case for gold. >> it's always been proven going back the last 40 years of having a 5 percent in bouillon and gold stocks and rebalancing your portfolio, it does what it's supposed to do. lower your volatility and enhance your returns. a lot of people got in trouble that were leveraged, but gold is still a very prudent investment theme. i think the place that people take a look at today is that there's a difference in the fundamentals. most of these gold producers are trading below the cost of production and we're now seeing huge cuts in exploration development. we're going to start seeing substantial layoffs. schools in toronto are laying off people. i think that's a key factor.

any time these commodities, we had natural gas prices fall, drilling stopped until the supply/demand factor balances itself. >> i pushed back on the cost of production. if 1200 bucks is where you broke even at gold, nobody would have mined gold. which we know they did. people wrote in, hey, that was the case. all the $500 gold has been found. it's more expensive. you have to go deeper, more into the jungle, desert, wherever you need to go. do you believe that 1200 bucks is really the break-even cost? if it is, you could see no new gold coming on the market for a while if prices stay where they are. >> it's more like 1300 six months ago in our numbers. i think it's so true, that you're going to see the supply start to shrink coming from gold miners. i think the key factor in taking a look at gold demand, two factors, one is the fear trade.

that has to deal with monetary policy. we still have negative real interest rates. even with the runup recently of mortgages and the cost of ten year government notes, etc., money market funds went to two bases points. substantially less than inflation. if you go back in the '70s when gold had collects of this magnitude, of up to 40%, you had negative interest rates. so i think that's key when we look at the fear policies, that negative interest rates will prevail for the next 18 months. two is the love trade, which is 50% of all gold demand. we are seeing places where we're up to 6%, 8% on any gold coming into the country. we're also seeing the gdp per capita of china and india which is 20% of the world's population flat lining. that impacts gold demand. i think that wire're finding a rebalancing. last time i said gold could fall

$100. that's a one to three ratio. it's fallen $50 from the last time i was on the program. >> greg, i know a lot of our viewers are listeners are in their cars on the way to work. it will be hard for them to visualize this. i'll put up a chart. the world gold council sent me a chart. if you're in your car, imagine the price of gold and a lot of lines, charts, etc. the bottom line is this. the world gold council admits this is a large pull back in history. there have been pull backs that have been not as severe but close. do you think this is still a bullish trend for gold? >> i do and i gave you the reasons i think that are important is that both the monetary fiscal government policies around the world and, two, is demand. so you have gdp per capita for

china and england, which is 40% of the world's population slowing down. you will cierre demand slowdown along with the government in india trying to do any sort of demand. what we are seeing is a very positive limitation is buying being bought all over the world. people are taking delivery of gold coins and bouillon. that's unleveraged. most of the futures market is leveraged. >> frank holmes, a real pleasure. thank you very much, frank. i know it's early. see you soon. coming up, is your e-mail in box out of control? never able to find an address or phone number when you need it? our next guest says he has the solution. i have to tell you, i use this product myself. it will change your life. talk about news you can use. we have a "squawk box" disrupter when we return. later we'll ask ed to explain why gdps will accelerate dramatically, 5 to 10%. we'll talk tech with former

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welcome back to "squawk box." have you ever wanted a personal assistant to automatically keep all of your contacts organized and up to date? our next guest has developed a tool that could make traditional paper based business cards obsolete. i use this product myself. we have the founder and ceo. we've never met in person but we've e-mailed each other. your product has changed my life in many ways. let's try to explain to viewers what this is. i can take it since i'm a user, when you get e-mails, you get e-mails all the time.

they have their name, e-mail, phone number. oftentimes you have to copy and paste that information into your contact list if you're trying to keep it. this does this automatically every single day and right back to 195,000 e-mails of mine and updated 2,000 contacts. is that an okay way to describe what you do? >> yeah. exactly. it's really nice to be here. this is exactly what we do. we keep your address book up to date so you don't have to worry about doing it yourself. our system analyzes each e-mail you get, extract contact information, check your address that needs to be updated. >> here's the question. somehow you've cracked the code on one thing which people have struggled for for years which is to be able to sim man particularically understand which piece of the e-mail is the important part and which isn't. i find oftentimes if there's a complicated signature at the

bottom it knows what's going on. are you going to be able to use that technology and apply it in other ways in the future? >> yes, totally. this is your personal assistant for your e-mail. currently we're working only on the address book. we're working on a personal assistant for your e-mail. when there's a meeting, it could take care of your agenda. if you have a bill to pay, did you check that bill? we think there is a lot of variable information inside your in box. we are using very powerful natural language technology to get past this information to make it efficient. first stop is the address book and then we move to all the personal assistant stuff. >> phillippe, it works on g.

mail, sales force, how much do you worry that a company like google who has done a lot of natural language stuff comes in and tries to do what you're doing or somebody else out there gets into what you're doing. you're the only person who does it, trust me, i've looked, but i also recognize that there's got to be competition coming. >> yeah. yeah. obviously google wants you to do it and that they could do it. first, it's a small service and we're really focused on it. as you said, we are developing any kind of platform, we're doing google and g mail obviously. we're doing that kind of advantage. we are moving forward. we are not focusing on the address book. a lot of our competitors are relying on social networks but social networks, there's a lot more to t. if i write to you, andrew, i will put my personal phone number and that will put

the phone number and put it in your address book and your address book only. >> right. the future of your company, is this something that is a stand alone business? is this something that ultimately microsoft says, you know what, why don't we have this built into microsoft outlook and we would like it available in outlook. >> we want other players to use it and put it in their system. social share and personal assistant. we see ourselves providing extracting value from e-mails. >> okay. philippe write that name is the name of the company. i appreciate you coming on this morning. >> my pleasure. thank you. still to come this morning

on "squawk box", why ed keon says that the u.s. economy is about to take off. he's looking at 5% for gdp next year. plus, he went through the dotcom boom and bust. where is bob davis putting his money right now. he'll join us live. stay tuned. "squawk box" will be back. ♪ becoming part of the global phenomenon we call the internet of everything. ♪ trees will talk to networks will talk to scientists about climate change. cars will talk to road sensors will talk to stoplights about traffic efficiency. the ambulance will talk to patient records will talk to doctors about saving lives. it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. the next big thing? we're going to wake the world up.

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we're in the chairs talking about some of the things that have caught our attention. we have talked a lot about interest rates, guys. there is a story on the new york times that points out this is starting to catch up for the states and municipalities issuing bonds, too. georgia, philadelphia the metropolitan transportation authority in new york city and others have delayed sales of new bond because of the big drop they've seen at least when it comes to some of those plunge in prices in recent days. the fed, obviously, wasn't involved in this. it's rippling through every secretary general one of the bonn markets. >> this goes back to the whole points that whether you think the interest rates that have existed and what the fed has done has allowed washington and everybody else to live in this sort of la-la land, right? >> the beggar problem is this was the time that the fed bought and states like illinois that didn't care to get their finances back in order. you may have run down the clock on this. for the state of illinois over the next 25 years, higher interest rates will mean another $130 million. >> that's why i bleempblt i love

the city. i got a lot of friends there. >> chicago? >> detroit will foille for bankruptcy. chicago probably isn't far behind. if you look at their finances, they rely on the states. the states already have the highest gdp. now this i love my wife, from chicago. >> right outside indiana. the problem is they didn't take it at the time they were granted by the feds. >> real quick, a lighter story. "wall street journal," shortcuts to getting elite flyer perks. you can actually buy your way now on to these elite programs, not just like the lowest level. i'm talking, you can get to the highest level. >> what, $100 bucks? >> for u.s. air, if you spend $200 bucks and fly 30,000 miles within 90 day, which is a lot, they will give you a chairman status, which means they will give you anything you want. there's ways to do it. if you have status on united, call american, they will try to match it. not so bad. anyway, coming up, u.s. equity

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. >> good morning. welcome to "squawk box" here on cnbc. joe off today. he will be back next week. take a look at futures this, mo. they are looking good again. not nearly as good as they were the past couple day, we had nice green lines. s&p 500 a little over 1.5.

here's what else is moving global markets this morning t. fed speaks today. bill dudley will be speaking on the check outlook after the markets open. investors are likely to pay attention to his words on the qe tapering strategy and yesterday we spoke to kocherlakota about how the feds are getting the message. >> i think it's to be clearer what our intentions are the main policy instrument once the recovery advances. >> we learned more on that interview. overnight, we should say asian markets snapped a three-day losing streak on signs of improvements and the easing on fears about u.s. stimulus withdraw. the nikkei scoring its biggest gain in 13 sessions in south korea rallying 3%. the shanghai composite index comparing gains the last hour to

finish flat. let's check gold this morning. falling 12% over the last eight session, hitting a three-year low. check it out right now. flip that board around. you have it there. 1,274.4. >> no rebound in sight. even though it's at that three-year low. also on the economic front, investors will get a look at consumer spending more may, which could provide insight. economists expect it to rise 0.3% with incomes up 0.2%. initial jobless claims is expect told show a decline. both those reports are due at 8:30 a.m. in the u.s.. >> a couple ipos we should talk about. they are falling short of expectation, hd is pricing its ipo at $18 per share. considerably lower with recent volatility in the equity

markets, a number of companies scrapped or cut back on investor caution. a similar story for technology, product seller cdw, which returns to the public markets after being taken private six years ago. it priced its ipo at $17 a share. it reduced it from the initial 20 to 3, it cut the number of shares it had planned to offer. also, investors will be finally getting long awaited information on how blackberry's new devices are selling. they no longer provide financial guidance and estimates on the devices have been all over the map. the information is set to be released tomorrow. it will focus on the z-10 touch screen devices. it won't have any information on the just released q 10 keyboard device. i have one on my desk. i have not set it up yet. nbc doesn't support it yet. so, i don't know, i haven't turned it on. >> so you bought a blackberry personally? >> no, they sent one to me to

try out as a test. i will send it back once it's done. >> i haven't asked for a blackberry,ly have a personal phone. >> i'm going to buy an iphone. i am with you, i noted to be a dual gun slinger on this i got the old one the keyboard, i had this two weeks t. keyboard is broken again. it's dleeth everything i'm typing as i'm typing it. >> you are saying i shouldn't go back? >> i still need this for longer typing things. >> i can't stand the battery life or lack of on the iphone. it looks like if old motorola. i'm getting six, seven hours out of my iphone 5 with the apps closed. everyone is tweeting me, close them the battery stinks. >> i want both. i need both. i'm going to buy the iphone. >> like the traveling sales guys, they got to two blackberrys. >> she has a back, she can do it. if you are a guy, you need to go

one device. i have gone only to the iphone. >> he's ahead of me. are you what i want to be, ed. >> a texting showdown. 9:01 in the parking lot. big news from by a jenning. chip starnes, is exec held hostage by his worker is freed and on his way back to the occupation him they demanded generous severance packages. starnes said he was threatened by a vendor and feared for his presence. we will have more from by a jenning in a few minutesments if you need a dose of economic optimism over the volatility over the last few days, we have one for you this morning. the portfolio manager ed keon congress us on set to talk about i. also joining sus is hans olsen from barclays in the

america, ed, we have been talking about this, this morning, you say 5%. makes people sit up and take notice. >> first, let's be clear t. call is 5% per quarter, maybe one sometime the second half of next year t. logic is pretty simple. if you look at gdp groerkts you say we were growing 1.5 to 2% last year. we will grow in the first quarter this year. nothing has changed. actually, there was a big thing in the middle. we had a huge tax increase. 1.3% of gdp. should knock growth down 2 to 3%, based on the research we have on the subject. at the same time, you had cuts on federal and state and local government spending in the first quarter also pulled about 1% out of what gdp growth would have been otherwise. so the united states economy in my view is like a secretary with a sumo wres himmer as a joke. >> what makes you think they are getting thrown off our backs? >> partially because of time. if you go through time, then

your anniversary the tax increase, the way gdp measures changes, a year from now, we will have had a year of the new tax rates. should diminish. >> just the way it gets measured in gdp it won't matter as much by the middle of next year. on the spending side, we're getting the worst of the cuts basically right now in the second quarter, it will resist into the therk the rest of this year. will keep gdp growth down the next few quarters. again, through the year, first of all on the state and local side, i think it will go from cuts to positive contribution gdp. the feds have to do --. >> just because it's look better from the offers? . >> in california, that was the circle. the state and tax collections were up 10% in the first quarter. money will get spent on good things like hiring teach efs, cops, hiring the worthless brother-in-law, but it will get

spent. you will see positive contributors to the gdp. the federal governments do nothing. by next year, that drag will substantially diminish. the underlying strength of the private economy will line is through in my opinion. >> this is a story becky was talking about. if you have state and local governments pulling back on some of these things, that doesn't help the cause, it hurts the cause. >> again, they are having a hard time now. with interest rates rising, in general, it will be a little more difficult to raise money than it was before. put it in context, we were up from all time low levels to still very low levels. so although it's a bit of a track, don't get me wrong. i was surprised as were most people by the suddenness of the rise if rates t. rise if rates is not a surprise, the new rates were going to go higher. a little more quickly than we thought. >> i love that line of thinking, ed, hans, when you look at $4 gas. people said it was going to destroy the economy.

that's our average, we have adapted t. sequester is supposed to destroy the economy. it hasn't yet. the payroll reset hasn't yet. the key is the consumer is shockingly able to adapt and adjust. it sounds like that's a big part of ed's theory, do you agree? >> governments can also adjust, by the by a to a slightly higher environment. >> that's right. i don't think you can plan on the government doing nothing. that's sort of what they do. >> it's the best thing they do. >> i think the other thing is i'm rooting for that outcome, right? it's hard to see if you are in a, transiting into a higher interest rate environment how that happens. we went back and looked at the '94 period, similar to this you started out in the negative short-term interest rate environment and the fed over the course of the year raised rates seven times and gdp was operating at about 4% when they began the project. it ended at about 1% during the last rate cut.

so it ends up being sort of a challenge for the overall economy. i think if if this is to work. you really need capital expenditures to kick in number one, number two, you need a better trade profile. i don't know hoy it comes to be, though. >> the fed is right, this would come as a significant surprise, what happens to the market? >> a huge surprise the interesting thing again if you go back to the '94, if that's your modem of comparison, over the course of the entire, you know, three months before through the end of the rate increases, markets were up 13%. markets were up very nicely after the end of the rate increases. so markets are able to reset and have the conversation be about earnings again. >> what happened to the savings rate? people have been dropping down negative. >> briefly. >> what will happen i think what has held this recovery back? we can talk about a lot of different things, one of the key things has been the availability of credit. it's just barely starting to get

better. in other words, if you look at the polls on credit availability, credit standards, it's just barely starting to ease up a bit. yet, credit demand is starting to recover. >> you think this virtuous savings hasn't been because consumers wanted to save, it's because they couldn't get credit? >> it's the way we do the savings rate. >> is this a good thing, a bad thing? >> remember, the trillion dollars in capital gains in the stockmarket over the last cycle, that doesn't count towards the income? so even a little bit of that gets spent. a little of the higher value of houses get spent. you can have a temporary nepgtive savings rate, i think that's likely to happen. you look at auto sales for a decade, auto sales are running at 17 million. during recession, they went down below 10, now they're 15. means you have a huge amount of pent up demand for autos. >> 11 years. >> that's right. either you are going to have more car sales up to 17 to 20

over the next couple years or you will have fewer cars on the road. that's unamerican. we can't have it. >> people have left. many say they're never coming back. >> right. right. it's time. it's just a function of time and you need a couple of years of very, very good return zpls we've had those. >> yeah, what you really need is and you need the double digit returns year after year, so think about it in '95, '96, '97. >> does that mean everybody jumps in when all the good sales are gone? >> it depends on the time line, i'm 41-years-old, if we're not higher on the dow when i'm 65, it means we're living in a cave in a cormac scenario like my father. >> it's a different ball of wax. if you look at the opportunity for decent gains in the equity markets here and abroad,

especially europe, i think they're good, valuations are decent. earnings are supportive. >> the key element that's missing is confidence. >> yeah. >> so we've gone through a lot of tough things in the last dozen years the economy and the country as a wholement, i think that zapped some traditional confidence. i think it will come back. i think the underlying things haven't changed. the risk taking, the quality of institution, those are all still there. i think those will come back over the next couple years. what seems like an incredible forecast wouldn't have seemed as all recoverable. >> 5% sounds so great and outstanding to us, that tells you where we are right now. ed thank you very much, hans, great talking to you guys. >> coming up, he started one of the original high-tech flyers. lycos bob davies is investing in the next tech winners. we will find out who he thinks they are and why. check out the ten-year note. there you have it.

the yield. "squawk box" is coming right back.

. >> welcome back to "squawk box." he is investing in companies he thinks could be the next big thing, joining us now as our

guest host, bob davies the general partner. he served as ceo of one of the most visited of his time, one of the original search engines, lycos. thanks for being here. >> i remember using lycos all the time. >> i remember it as well. it was a good day in history. >> can i have some money? >> it was a very good day in history. i have a question, before we go into venture an what's going on in your world? we had a lot of conversations about snowden, about leaks, about security and what the world looks like online. given your experience. when you were at lycos did the government ever try to get involved behind the curtain? can you give us detail how you now think about what's going on in that world that we think are finally being exposed to. we knew it was happening, we didn't appreciate the severity of it. >> to answer the question, i hadn't thought of that.

the answer your first part of the question is, yes, we did get an answer, targeting a particular individual, it wasn't the broad-based program. it was one individual they wanted access to. we had some orders that dictated what we needed to do. but as far as their government snooping, if we call that it overall, it's interesting. it's almost like it doesn't matter until it matters, then it's too late. we all look at it and say it's ensignificant today what the government does to me today doesn't matter, i'm not doing anything online. we see a broad based overtight program leak that. what i worry about is not just the fair bow government to say there is a single person at the top of the pen cal looking at something. what i get afraid of is 100,000 little tyrants in their little

pocket of the world saying i'm controlling something because i have this information about you. that's when it gets scary. >> not just our government, how do you think when we talk about china? in in terms of all the information put out, we talk about big data, all this data made available, how safe is it? >> i think it's very safe. the funny thing, if you go back a generation, when i grew up, the concept of calling somebody on the telephone and giving them your credit ard information, your date of birth, social security number on the telephone you do all day long, there was no encryption, this perfect stranger behind the scenes you give everything about you to get a bathrobe from a catalogue to be acceptt to you. now, all of that data is encrypted, tightly encrypted. it comes in big volume. the ditchs today when there is a hack, the hack is en masse. that's where it becomes a lot different. but i think the environment today that's safer for the individual than it was 20 years

ago. >> is it an investing opportunity when you look at great data? >> yeah, we have a number of companies that spend their time doing that. when you look at the department of defense today, it has 6 million attempted hacks a day. it's just crazy the numbers that you find out. the thing to remember, though, the bad guys are always better. so tears very little the bad guys can't physical out. they're really one step ahead. you need some system mat ec approach of controlling that. >> we spoke to hp about that. some of the big companies are working on it. what can the little companies do? >> the little companies need to be smart t. last thing is be complacent and sit on the side lines. there are point solutions. we have a number of cells that offer pieces of that equation, the small company has to be smart or they will wake up and find out they have a big problem. >> the buyout of lycos was about

a 3,000 time gain to the initial investment. 3,000 bagger. i don't know what else you'd call it. unbelievable, right? so you got some money. what's the single best place to put that money right now in technology? >> well, my business is private equity, if you look at where i'm investing, it's private equity across the board. i have a balanced portfolio, to me, it's taking the next generation of leader and building that person today. what i really get excited about is finding that individual that sees something where most of us see nothing. >> who is that? is there another steve jobs out there? >> i think there is a lot of steve jobs. we will talk with lee motion, just completely changing the face of computer interaction. >> are you defining venture capital in the same bucket? >> investor capital, we are getting the guys early, what we do, we are finding them early on. it's not 28 two guys and a dog and a garage, it might be two

guys in a second floor bedroom. we're getting the businesses quite young. >> are you a believer that the consumer space is done with, now it's all about enterprise? >> not at all. >> are you not? >> not at all. i this i the enterprise opportunity is enormous. >> that's where you see so much conversation and money going now as opposed to the view that facebook and google sort of own the business, there is little guys, obviously, trying to get in there. >> i think that the enterprise and consumer be both seeing pretty heavy activity. the enterprise has certainly seen a lot of public offerings, mna activity going on, on the consumer front, we are scratching the surface, i look at the great entrepreneurs. becomes powerful. we have companies locally, one in boston is creating online jewelry a. company in new york that gives you professional services in the home. you want to book a made or a plummer, these are potentially

transformtive businesses. noul all achief. >> i can think of businesses that do all of those things so this is disrupting the disruptors? >> it's interesting, exactly the case. >> we are watching the detectives. >> so if you take a look at this company, a new york business, they are disrupting people like krax list and angie's list that had disruption before. >> bob will be sticking around. i want to find out if you care about bernanke and the economy or the world. this is so almost different. you are trying to disrupt --. >> i want to know if technology actually destroys more jobs than it creates. >> that will be good conversation. >> we will talk all about that over the next two hours. bob, stick around. thanks for being here. also still to come, fed speak, the main focus. we have get speakers, william did you doley and jerome powell.

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>> ♪ . >> welcome back to "squawk box," everyone. in our headlines this morning the head of the irs has a date

with congress today. i rs chief danny werfel will testify before the house ways and means committee. he will, no doubt, face questions about the targeting of extra groups for scrutiny when they apply for tax exempt status. investors will be giving closer scrutiny to today's treasury sale. $between billion in treasury notes, sales of two-year and five-year notes did see higher sales. in roughly two years the results will be released at 1:00 p.m. eastern time. we will talk consumer spending, initial jobless climbs we will be watching scloesly. the fed will watch that, too. coming up at 10:00 eastern the latest on home pending sales. >> the markets will deal with more fed speak. new york and atlanta fed presidents and fed governor jerome powell all have speeches

during today's wall street session. joining us on set is executive vice president and former federal reserve bank, president of the markets group. dino, welcome. >> good morning. >> so is the whole edict now of all these speakers to try to clarify what ben bernanke may or may not have said last week? >> one sure gets that impression. you know the commentary from chairman bernanke was pretty direct in terms of saying we are getting closer to tapering, to shrinking our balance sheet. now all the commentary has been to walk that back and say, well, listen, we are not in that big of a rush t. market is exaggerating. they're overinterpreting these comments. >> so take us inside the fed, right, how would that message be conveyed? is there literally an e-mail like, hey, these are your talks? there is some pr person call you up at night? >> no, it doesn't quite work that way. look, i think chairman bernanke in a way when he was speaking at

the press conference, he was trying to be even-handed. he was frying to say, look, if this happens, we're going to do this if that happens, we're going to do this. we're going to go in a different direction t. market's interpretation, though, focus on one side of that message. because the market was sort of not ready for the, oh, over the next few months, we will actually go to start to reduce purchases most likely. he did leave himself an out. the market reacted. everybody knows what too to do at that point. they realize the market was overinterpreting and going way beyond what the fedex pected and wanted. >> do you think you should stop talking? meaning talking was a good tool to calm the markets if what you were going to say was, we're in the going to do anything the next two or three years, right? the second you start talking about how you taper, by default, it creates all kind of uncertainty to itself. >> more than that, the whole purpose of qe was buying the

safe asset, pushing the investors out the risk curve, to buy the corporate the equity the emerging markets, et cetera. so now, there is an equill lip bringium, it's a stage equilibrium where the asset prices where they are. those investors know once they start to remove those reports, those are at risk. of course, they're going to be moving to reduce their exposures as soon as they fear. >> i don't understand the fed's surprise at the market reaction. >> right. >> it should not be surprised. by definition, those riskiest assets are most at risk t. people will try to reduce those positions because they're overweight. >> the smart thing for bernanke to signal what he is doing this early in the game. do you wait? not that you want to surprise everybody at the last second. >> you will get a market move. >> maybe that is the better way. to an extent you think are you if a fragile environment already? >> becky is right. no matter what you do, there will be a reaction.

they think, let's ease the market into this. if you think of the '04 tightening, right, they signalled it six months before it started. so that by the time it happened, it was a nonevent. but that was a change in the interest rates from 1% to 1 and a quarter to 1.5. this is changing asset purchase, it's a completely different die nammic. we haven't been here. >> what about the double tracking? is it double speak? i don't know what he means any more. i said something last week the market reacted. now i will say something different this week? let's forget about it all? >> the fed is looking for a forecast. if the forecast is for a strong forecast, if they're forecasting 3, 3.4%, let's say you have a drop in asset values, it will mean the wealth channel works in reverse. people have less confidence, they spend less. gdp forecasts come down. they node to back track and send

the message, okay, you guys, are going too far. >> i look at this as ben bernanke being dr. spock whachl he forgets is markets are not always lodge cam or reasonable. they react epotentially sometimes. >> i think given the last three years the fed is sensitive to market reaction. be you there is no easy way out. this is the problem t. problem with qe is once are you in it, it's hard to get out because you have to ask, you know, because, again, that equilibrium is where it is, but how do you exit this without damaging that equilibrium. there is no easy what i to do. can we name one of three fed chairman who pre-dated paul voelker? >> yes. >> how about you? >> this is a bad game, i'm going to fail. >> i'm thinking of a guy before voelker. i do know his name if i think about it a second. >> g. william miller.

>> arthur burns. >> the point is, di no, at what point did the fed chairman become so powerful? i guarantee you 40 years ago my dad couldn't identify who the fed chairman was nochlt offense to him. they weren't a part of every day lifement now we're hanging on the fed chairman, fed speak words. what's happened that suddenly this industry, this institution, no offense, a lot of americans believe was created under the wrong conditions and is possibly corrupt. when did they become so powerful in. >> look, it happened with the voelker rejust a moment. because we had a real problem -- until voelker, the fed, you could argue, had very limited indianapolis. it w -- independence independence. >> bernanke is the most powerful man in the world. >> he's the most powerful economic official in the world. >> probably the most powerful person period. >> i'm sure he would disagree with that. we are where we are. is insurance the voelker era,

the fed has been very influential as marines have become more active as investors, they follow equity markets more. they see what the responses are to the feds. so they are much more conscious to what the feds are doing what the messages are from the fed. that's way we are. you are right. 40, 50 years ago, that was not the case. americans were not as active as investors. the market did not move in the same way in response to fed messages. people didn't understand what the fed did. certainly the media did not. >> we didn't exist at that time. >> there you go. cnbc wasn't around to follow every word that officials were --. >> a good answer to a tough question. i wanted to put it out there. coming up next, the rise of the machines the world's first robot with common sense to help increase productivity. we will see if there is common sense there. they're putting in places that have never been automated. the ceo of rethink robotics will joan us when "squawk box" returns. i want to make things more secure.

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. >> welcome back, everybody, if are you in the market for a cutting edge, high end television set. samsung may have redefined the high enpart. it is unveiling a television fa will sell for $13,000, that is more than five times the cost of the current lcd tvs of the same size. this new samsung offering using a curved screen and advanced display technology called oled. samsung says it provides pick perfect quality. it's not going to fit in any of the things that people denied them to their walls now, it's curved. >> probably better angles. we will do a little disrupting right now. the disruptor 350 looking to return manufacturing jobs back to america from overseas. we think robot ecs wants to bring them back and give those jobs to a robot named baxter. scott ecker, president and ceo of rethink robotics jones us

now. our guest host is bob davis. by the way, this happens all by coincidence this morning. we found you, bob just happened to be on today. so, anyway, scott, great to have you here. tell us about baxter and tell us about what baxter can do and how much common sense baxter really has. >> sure. thanks. good morning. you are right, we are focused on creating tool to help american manufacturers to be productive and compete with china. baxter is in robot with common sense, they have built-in intelligence, it knows about the job it's doing. it knows about the part it's working on, it knows whether you as a co-worker is in its work space or not. baxter can adjust in that changing environment. we have a robot ooez easy to using can be trained by an average factory worker.

it does simple manufacturing tasks. it's really, really cheap. >> when you say really, really cheap, i am told it is $22,000 to buy the robot, $4 an hour, how do you get will? >> if you take the full price of the robot and dwietd over six or 7,000 life span of the robot, you get to $4 bucks an hour. so we like to say, your mileage will vary depending on how you use it t. comparison is if you've got a person taking plastic parts, putting them in a box in chosen, you outsource to china to do that for $2 bucks an hour. when you add the transportation costs, long lead times, risk of ip loss, you are better off doing that in the u.s. we will give you a robot. >> scott, what's the big deal? i'm a little straight man. robots have been around forever. what's the big deal of baxter, why should we care about it? >> robots have been around 30 years in u.s. manufacturing and

70% of all robots in the world are in car manufacturing and others in heavy industrial equipment. there is a vast majority of u.s. manufacturers don't have robots at all, 300,000 small to medium businesses that don't have robots. baxter allows you to us to provide a robot. >> is it one for one, meaning one baxter reini places one individual or replaces five individuals? >> we don't think about baxter replacing anybody. it's a productivity tool that works side-by-side with the person. so think of it this way. a person can produce so many wedgets per hour. a person plus a baxter can do one-and-a-half to two times wedgets per hour. that's the way our customers think about it. >> it requires a human being, an employee standing next to baxter, we talk about, you know, $2 an hour in china vs. $4 an hour here. i was thinking it was a minimum one to one if not more.

>> baxter can work completely on time. lots of our customers have baxter sitting at the end of the machine, packing parts, packing boxes 24/7. but the beauty and ease of baxter is it can work side-by-side with a factory worker a. worker can train baxter to be his or her co-worker/buddy. the two of them as a team can do the job t. factory worker gets a promotion. >> baxter taxi the job of somebody working a lean. a new job is created building, repairing, selling baxter. it doesn't seem to work out perfectly. can you find the people, if a job is displaced over here, are you able to find enough skilled, qualified workers to build, design and sell baxter? >> without a doubt. but let me start with the premise that what baxter does, we focus on what we call the 3-ds the dirty, dull and

dangerous jobs in the manufacturing environment. people can do much more highly skilled activity. the activity of packing wedgets in a job doesn't leverage the capabilities people do. people can do much more highly value-added skills. you have to remember --. >> go ahead. >> sorry. you have to remember, if u.s. manufacturing today, there actually is a la borbor shortage. despite the high unemployment number in the u.s., there aren't enough people going into manufacturing. >> right. >> the average age of a manufacturing worker in the u.s. is 45 today. >> scott, real quick. >> we're bringing in a robot to help out with the simple jobs. >> look out, five, ten years from now t. baxter 3, 4.50, these issues talking about highly skilled labor vs. dirty jobs, how is that balance going to change? >> when we get to baxter 3, 4, 5, baxter will certainly be faster around more precise. it will have more capabilities.

baxter is continuously upgraded through software release wes do. so he's got more and more things he can do in the factory. they will still be the simple manufacturing tasks. an operator running a machine will always business something that a person can do that requires human skills. i don't think there is a tradeoff here, baxter vs. people. >> i was just wondering, what does the union say about baxter? >> actually, we have had a lot of union support. you have to remember, for 30 years, productivity tools have been put into american manufacturing and that has allowed productivity to manufacturing to grow by 3 or 4% a year for 30 years t. unions are well aware of the use of these sorts of automation tools because if the output of their workers goes up, their wage rate goes up, the unpleasant jobs are done by some other form of automation. by and large, the unions haven't been supportive of what we have been doing so far.

>> scott ecker, thank you for joining us this morning. >> thank you. >> for more on our cnbc disruptor list, check out disruptor50.cnbc.com. >> when we come back. kate kelly looks at last year's conference and who has been delivering alpha for investors since then. in the next hour, american ceo chip starnes released after a gooel deal with beijing workers. this is a situation where you understand robotics and rethinking robotics. it may have a sense. we will rethink this deal on u.s. relations with china. . .

>> and we are just weeks away from this year's delivering alpha conference. kate kelly is joining us with a look at last year's participants

and whether or not they did, as the title subject, kate, deliver some alpha. >> this is the burning question, brian. so we had some impressive calls last year but the head and shoulders deliverer of alpha was leon cooperman of omega advisers. he recommended ten stocks. other par tis mantz gave us one or two or a sector. of those ten, nine did well t. loser was down a tiny bit, less than 2%. media company gannett rose 67%. watson pharmaceutical up 60%. >> wow, look apt those numbers. >> it's amaze, huge double digits. metlife 47%. cooper man has been bullish stocks in general for at least two years now. he's been very right on it have been churned out great reports as well. he's been a foe of the policy an assault on bond yields and said at last year's conference, bike u.s. treasuries was akin to

walking in front of a steam roller and picking up dimes. robert kapito did successful on verizon and merck. he likes high yield bond funds. a trade that got crowded in the second half of last year. honorable mention goes to j.p. morgan's mary erdoes. ppr owner of gucci group up more than 50%. on the losing side, though, jim chanos had a couple calls that didn't play out during the year. he focused on hp, he felt overspent on acquisition and dell, both have risen since then. hp by a particularly big mar jen. dell looks to be taken over at a

buyout of $13.65 per chair. of course, i should add the caveat that we don't know if these players are holding on to these names or not. having said all that, with the exception of kapito, all the players will be back next mon wth cooperman and chanos. as always, cooperman stocks will be interesting to hear. i want to hear the reaction to the tapering noises. we haven't gotten his reaction to it. i would like to know if he thinks fixed income is any more attractive. >> can i be your plus one? i have not gotten in by conference. >> get out of here. >> do i have to be invited? >> i think it's a very hot ticket. if you work here, we can pull some strengs. >> you can do something for me, kate? >> he knows some people. >> i think you are a call of genius, by the way.

they do so much more of a higher percent annual outside of europe. europe is struggling. that was a great call. >> that was my panel. i do have a panel this year. we are talking about that right now. i always think the best ideas, one of the ones you did last 84 is the most interesting one. you have to get these people to convict and have conviction around it. the conference i covered this year was fun, too, everybody has to have one actionable idea. some used it to kind of talk about the state of affairs or the kwanttative easing or things they liked or disliked. to get a professional idea is cool. >> thank you. thank you, kate. a big hour still to come, including personal income and jobless claims data. we will speak to jim owe shaughnessy at the top of the hour. he has stock pecks for you, folks, one of whom got an upgrade today t.ceo of leap

motion. we will learn about the ceo. let's check out the futures. we are looking for a green open. not a huge day, folks. another up day, gold down again. markets set up on a very busy is it thursday? this morning? >> yes, it is. >> it's thursday! we are back right after this. [ male announcer ] with wells fargo advisors envision planning process, 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.

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. >> stocks getting a boost, they whether keep the fed in the game longer. we will talk markets with jim o'shaughnessy. >> paying for college is about to get more difficult for student borrowers. >> classes, nothing before 11:00. you are a freshman, it's out of the question. >> find out why interest rates on student loans could double in four days. >> plus computing has long been the dreams for sci-fi fan, dream no more. leap motion will make eight reality for consumers for $80 bucks. we speak with the 23-year-old ceo as the third hour of "squawk box" begins right now. snoitsz [ music playing ]

[ music playing ] . >> welcome book to "squawk box" here on cnbc. first, brian sullivan is in for joe kernen who is off. bob davis, former ceo of lycos, now with highland capital with le hear from bob ahead. first, becky has your morning headlines. >> thank you. the fed speak the new york fed president dudley will be speaking on the economic outlook. just after the market opposite this morning. a lot of traders view him as a key member of the central bank's core and say no one other than bernanke ann or janet yellen will be conveying which way the markets take. other speakers are jerome powell and atlanta president dennis lockhart. we have consumer spending for may. could provide insight on growth for the second quarter. economists expect it to rise with incomes rising 0.2%.

a separate update on initial jobless rates is expected to show a decline the week before. both those reports are due at 8:30 a.m. eastern time. right now, let's get a check on the marks. the u.s. equity futures have indicated higher. they have picked up steam since the last time we checked. right now dow futures is up 50 pointsch overseas and asia, you saw big gains for the nikkei. in japan the nikkei was up almost 3 performance. of course that, follows the strong gains we saw here and in europe, we saw mixed markets. this morning, you will see that there are green arrows. these are modest advances the biggest gain comes from london with a gain of .4 of a percent. >> we will speak to china the buzz story the u.s. ceo held hostage by his workers in china, negotiating for his freedom. eun nice has been covering this from the start. eunice. >> reporter: hey, guy, the chip

starnes story reads like a movie script. he jumped from one car into another before boarding a plane out of here. american ceo chip starnes has said good-bye to his defacto prison in china after being held captive by his factory workers for a week. starnes is on a plane back home to the u.s. the two sides finally struck a deal. more workers get payouts, starnes no longer needs to live under constant under surveillance. he was threatened by a vendor and fled. in a text message he said, i was, let's say, threatened this morning. i freaked out. starnes says he was being held because of rumors he was trying to close his whole plan. he says he only moved part to india. rumors, maybe, chinese workers have little recourse and are used to losing out. factory bosses in china

sometimes do flee without giving their workers pay. so these workers didn't want the same thing to happen to them. over the phone, starnes wrote, deal was done and all employees were paid. a chinese union official told me, international companies are welcome here. but with wages rising, chinese laborers are starting to compete with cheaper workers from other companies. just as american workers lost jobs to china. >> i feel numb, this worker says, we will continue to fight. as for chip starnes, his fight is finally over. younis yoon, cnbc, beijing. >> and, guy, i am sure that his family is going to be very excited to see him once his gets home after this whole ordeal, over to you. >> thank you, eunice, a couple interesting day, we appreciate it. brean. just two sessions remain in the quarter, ha readily to believe. joining us to talk about the second half of year is jim

o'shaughnessy, the irish guest level has enkreesd. we had o'leary yesterday, o'shaughnessy today. >> i appreciate it. >> o'shea. >> i want to give proper credit here, davis. >> all right, jim, i want to talk emerging markets first. okay. there is a saying use it for brazil. it's in the market. brazil the country of the future, always has been, always will be. >> right. >> you can use that with a lot of emerging marks. the point being, they're cheap for a reason. there's problems. tell me why russia, south korea, south africa, are good values and fairly safe investments? >> yeah. basically what we do is we look quantitatively at three things. we look at their value, their dividend yield, and we look at their momentum and the countries you mention reasonable doubt the top five holdings in our emerging market fund. what we find is -- >> i didn't mention them by accident. >> what we find is emerging

markets are trading at a 28% discount to the u.s. they account for 55% of world gdp compared to 30% in 1990 we can't ignore them. your average american in 2010 had over 70% of his or her portfolio in u.s. stocks. we think that that's crazy given the fact that we're 43% of the world total market capitalization. >> gold is collapsing. so south africa, which is relying on gold is struggling millions on the streets of brazil. you got thousands perhaps more dead in syria. protests in turkey, russia may or may not be harboring edward snowden. we don't know what the situation s. these are bad situations. why isn't that 28% discount observed? >> we love it t. wall of worry. all bull markets have to climb a wall of worry. boy, emerging markets are certainly giving us that wall to climb. emerging marks always fet unamerican to me. it was like buying a japanese car in 1985.

it doesn't seem quite right to be there. >> i think investors can do well. they have a low correlation with stocks and emerged with international stocks. they're considerably better at generating alpha. one of the things that's beautiful is they are really under cover. because they are under cover, they generate a lot of excess alpha. so do we need any more uncould have? >> i think so, when you compare your average market to say ibm, will you have a lot less coverage on that entire country as a whole much less the stocks within it. >> what other differential do you see? have you studied that over a sustainable period of time? >> we have. we have looked at the excess alpha that they can generate for us in the u.s., on things like momentum, whereas the u.s. is about 3% excess alpha, emerging markets are 6.6% excess alpha. you look at yield, the u.s. paltry 1.3% excess alpha,

emerging markets 10% excess alpha. >> jim, in good times that, is really an excellent place to be and a great thing you would see coming into it. you talk about what's been happening with qe. not just with the fed, but with central banks around the world, they've all been loosening up. as they have emerging marks have been one of the huge beneficiaries. if the fed is the first to start tightening back in and reigning things in. is that going to be like draining the pool? >> i don't think so. economy when you look for these really deep values. for example, russia as a whole trades at a p.e. ratio of 5. you got the average yield in south africa being something like 4%. the numbers ultimately win out as far as we're concerned. >> i hate to give you such a hard time on this i look at this. this is almost similar to the reaction you see in the u.s. stockmarket, which is, look, qe did mean something.

it did mean something here. taking it away will mean something. my question is how much of the begins you seen in emerging markets were because of quantitative easing and the fed and other central banks presenting money? >> my point back to you is with all the qe, look, they're still priced russia at 5. you got places like south korea priced at 10. then when you go down and look at the underlying stocks within them. >> i guess my question is how much would you say? >> i would say fairly diminimus when are you focusing on these cheap stocks with high dividend yoelds. >> brian said, if u.s. stocks get hit hard, asken the bottom fall out from emerging markets? . >> not necessarily. >> probably. >> it's a good chance, yes. we deal if probabilities as opposed to possibilities. it's possible that that hams. but from our perspective the emerging markets are a great diversifier in the portfolio. they can, in fact, zig, when our

markets zag. >> how do you do it, on funds? locally? adr? >> we do the locals, and manage it through a separately managed account. >> that's what you recommend everybody to do? >> well, no, unless you can afford the minimum $250,000 for the separately managed account, i would recommend that most people use the etf. >> all right. >> just do down. there's all sorts of tools on the web can you say, okay, which of these emerging markets are the keepest? which have the highest dividend yield, by the five the combination is the best. high yoeld, cheap. >> okay. jim, thank you very much. appreciate that. notice he didn't mention ireland. >> he didn't. we are considering that nonemerging more? >> it's the issue. it's merged. like japan. >> anyway. okay. >> when we come back, paying for college, it could get a lot more difficult t. interest rate on stafford student loans.

it's going to double next week unless the senate steps in. we will have more on that story right after this. still ahead on "squawk box" the future is now. it's time to ditch the mouse and the touch screen t.ceo of leap motion will tell us what's next. that's coming up at 8:40 a.m. eastern. .

. >> welcome back to "squawk box," the futures are indicated high. the dow futures are up 50 points. in our headlines today, president obama says he has not spoken either tore china's president ch hi about edward snowden. in a fuse conference, the president said he expects other countries considering asylum requests to follow international law. he said he would not send u.s. jets to intercept snowden. he made an offhand comment, something like i'm not scrambling jets to catch a 29-year-old hacker. the next class of college students may find it harder to finance their education.

it seems hard to believe. costs have gotten expensive. cnbc's hampton jones us with more. >> the clock is ticking. interest rates on stafford student loans are scheduled to double from 3.4 to 6.8% unless the senate acts. more than 7,000 students take them out each year. the education department expects them to borrow nearly $30 million. a bipartisan compromise will be troou introduced. the highlights look like this all new loans 10-year borrowing rate plus 1.8% for subsidized, undergraduate stafford loans, a fixed rate over the life of the loan and a cap on rates for consolidated loans remaining as 9.25%. joe man chin is teaming up with angus king to introduce that

plan. >> we've worked on this i think we have a good compromise. we are hoping the leadership on both sides will look at it as something that really helps american students, people trying to get a better quality of life throughed indication. >> the reform of the student loan program could save the government $9 skinlt 60 million. republicans say it should be used for production. says majority leader harry reid is a nonstarter. >> we don't think there should be reduction on the backs of these young men and women trying to go to college. >> an estimated 11 million college students will take out loans this summer. whatever lawmakers eventually decide to do would most likely be made retroactive, becky. >> hampton, thank you. this was a huge issue for students who are looking at what they will be dealing with over the next year or two. what are the odds there is some

sort of compromise in the senate. >> reporter: well, again, it seems like, remember, too, the house passed an earlier version. >> right. >> it has to be reconciled. it seems like this is something in the political interest in both houses of both parties. as you said, you get to the fabric of society in terms of college cost,et set remarks et cetera. here's another part of the whole dilemma or parts of. i wanted to get these notes correct for you. okay. so you got right now, something like 38 million federal student loan borrowers. the default rate for student loans is among the highest. a lot higher say than other commercial loans. there is also a trillion dollars out there in outstanding student debt. that's a huge concern for the financial industry. so, again, that, too, has to be factored into the fix. you know, what do you do about the default problem? that's a private financial sector problem as well as for a lot of these loans that are government subsidized and

portions of the stafford loans are government guaranteed. >> did that get a lot worse, hampton, did that get a lot worse when people were coming out of jobs trying to fine jobs that western there? >> the short answer, yes t. default rate kicked up about 13%, in 2009 you saw the numbers spike. those who started to repay in 2011. their default rates have spiked up as well. >> hampton, thank you. it's a huge issue. we will be watching closely next week. we appreciate it. >> a couple things, number one the journal did a good piece on colleges where default rates are higher than the graduation rate. >> this has been good for the for-profit schools. >> many of whom i've never heard, but have graduation rates in the low, you know, 12%. there are too many colleges. i hate, i know it's unpopular to say. you have a c-minus average from one of those lower schools, it will be hard to find a job.

that itself bottom line. i know a lot of people don't agree with that. >> what do you put with the overflow of students out there? >> well the point is, i think there is too many going to college. >> you look at the peter teal camp. trade, become skilled, a software programmer, a pilot. >> what does it mean you are destined? my best friend made a ton of money. >> the average unemployment rate. you compare that to if you have a college degree and if you have a master's degree. >> you can't look at it this way t. point is the, you got to look, you got to build trades out. all right. i'm -- it can be a software program. >> it needs a college education. that's like learning spanish, rurks chinese. >> some of the best programmers didn't go to college. >> that's true. >> there are 17-year-olds, yahoo, they hired that? >> to the exception. >> i'm just saying.

if you go to a college, a school that's going to not germany tee you a job, spend $150,000 a year to go there. graduate, 150,000 over four years ago basically a mortgage, no prospect for a job. you are already in the hole? >> no, the model doesn't work the goal has to physical out how to make education much, much cheaper. >> where did education begin to get expensive? when the government opened up the credit pipes, giving loans to everybody. princeton university could charge $100,000 a year, they would have the same number of applicant. >> i don't want to misspeak for him, i think his argument is actually not around, nobody should go to college but that there are exceptions and very special people and those people should get off of the college track. >> first of all, i didn't say nobody should go to college i when to the law school. that was stupid, by the way. four years at $180,000 bucks down the train. >> we need to make education

cheaper. >> peter is probably watching. you know, call in, send us an e-mail. his point is there is too many people going to college. if you got, listen, i graduated with a political science degree from virginia tech. i didn't graduate with any marketable skill. >> i don't think there is enough going to college. >> that's for us to pay less to do it. >> they'll do all sorts of things. first of all, they'll do anything they can't do. there is nothing that says i can't do a great skill in college f. you look at the educated workers we're always in short supply of people. those all require deeply educated individuals. we can't find enough. >> but that's you. are you at the top of the food chain that. >> i don't know. you have a lot of young start-ups that aspire to be at the top of the food cheney but get there with the educated work force. >> so you can't find the qualified workers in.

>> you guys are taking everything i'm saying way out of context. i'm not saying we should have an uneducated work force? good grief. i'm saying, let's get a 22-year-old on the phone that has a c average from one of those schools and ask him how their job hunt is going. when their res may is baby-sitter. okay. i'm sorry. we interview. we have a kid. we see the res mays come through. i'm like, do you have a college degree? there is no jobs. >> i don't disagree with the largest sentiment. the issue is, we have to find a way to make that a b student and also make it's a trade thing. maybe what they need to do is to understand the trade better. trade, if it's software, it's not necessarily a simple thing to do. >> bob, is this one of the biggest problem, when you are looking at start-ups? >> we have a company in our portfolio, they provide a college degree, 100% online. some of the best universities in the country.

we are making it more acceptable. you can get a unc degree. you can take a semester at notre dame. all these schools are real examples, complete degree programs online. so that college education is becoming a lot easier. i don't need to come to south bend, i'll take a semester in new york. >> again, bob davis is our guest host. we will have a lot more when we return. brean. >> all right. coming up, breaking economic data. we will get the weekly jobless numbers 8:30 a.m. eastern. then sci-fi becomes reality. this is cool stuff, folks. we will speak to the 23-year-old of leap motion. his company is preparing to release its touchless computing technology. you got to see this to believe it. i'm thinking apple tv right here, andrew. >> a ph.d. . >> all right. >> they turned me down. we are back right after this. i'e that intrigues me.

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. >> welcome back to "squawk box," everybody. conagra shares are higher. the food producer earned 60 cents a share for the fourth quarter. revenue essentially is inline. conagra- says it is seeing increasing benefits from its acquisition and is facing head winds in its commercial food federal government e segment. when we come back, we get

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. >> welcome back to "squawk box," everyone, rick santelli is standing by in chicago we have economist drew matis with us in new york. rick, take it away. let us know what the numbers are first. >> the survey says initial jobless claims move down 9,000 from a 1,000 upwardly revised 350 thousand. may personal income up 1% up .5 of 1% spending up .3 of 1% and last month had a subtle revision, original release minus .2 on spending. it is now minus .3 on spending. we can look through all the different numbers. the deflator year over year 1%. that's somewhat inline.

it's about 30% highner our last look up .7 of 1%. personal consumption expenditure. look at it month over month. it is up .1, that is .1 more than our last look. if we look at that same component on a yoy, year over year basis, it exactly matches up with our last look at 1.1, income up half of 1% is pretty good, you know, of course, income is what it's all about on pretty much every level. i don't see a huge amount of activity. although, you are continuing to firm up what already looks leak a firm futures market, which, of course, doesn't only indicate where the stockmarket is. it is where the stockmarket is. we are under 2.5% on a ten year. you know, all this anxiety, i would point to a couple simple things. tomorrow is the last day of the quarter and the half year.

it's been one week since we last had a close under 2.5% and the army doves in the bellfriday will be out there in full force. back to you. >> rirks rick, let's bring in drew matis, the senior economist. you look at the numbers for the jobless claims, rick brings up the question the treasury market's reaction to all of this, what down happens when you get numbers leak this especially after the gdp from yesterday. what does that do to the fed's calculus of all of this? >> i think it makes the fed more confident they are doing the right thing. i think win look at it, you have to consider one of the main things the fed is looking for, they could care les what happens in the first quarter as long as it doesn't affect the second quarter. they suggest the second quarter will be better than the ferc. the first quarter, i think you have to take with a grain of

salt, revisions are a little unusual. we know how many people were working and we know kind of what kind of money they were earning. so the real question, you know, why on earth do you get a drop in the gdp numbers? unless you can answer that, you have to discount it a little bit. >> rick, you point to where the treasury is now, right around 2.5%. what down at the end of all of in, was this a quick knee-jerk reaction from the market? is this some sort of return to volatility? was this a reaction? did things calm down a bit? >> maybe i'm the wrong person to ask, i would say forget pretending the sit-coms are real people. let's look at the marketplace. i think it is trying to replies risk vs. reward, not in a voluntary fashion. i think that technical aspect gets overlooked as everybody gets so enamered with the demand met aspects of this kind of

weekly serial of fed activity. as for our guests, how can you discount at more realistic measurement of first quarter gdp is beyond me. those are the things we have to pay much more attention to. >> rick, you are skeptical always on the government. you have tax data. you can choose not to -- either tore discountt the payrolls and the earnings number, which we have tax data to back up. or you can choose to discount the compilation of gdp, which if you and i were in a year together, we would not be able to physical out the equation. >> has it been any different throughout your experience being in the marketplace? >> i tend to trust the data that's the least refined. i think of all the data we have defined. >> what data would that be? >> the tax data, the payroll data. the gdp data.

>> what i say is just because the lines are getting smaller for unemployment benefits doesn't necessarily mean a boatload of more people will be getting jobs. >> it means people are less afraid of being laid off, which is usually good for consumption. >> i guess, that to me seems a lot more interpretational than the gdp data as bad as it is, after all, look at who compiles it. >> let's bring in bob davis, he's our guest host today. bob. as an investor of somebody looking at both venture capital and private exe equity, how large does this conversation loom? just about what the fed is doing, what the market is doing? does that not enter your head? >> it's a big overhang. we had a sick patient for a few years. the fed did a good job putting the morphine drip in our arm. it felt good for the past five, six years. they're trying to pull that away.

we're saying, i still feel a little sick. don't take it away. at some point the patient has to get better and struck him on its own. hoy do you let the economy run on its own? the marketplace says feds stay in, the fed steps in we get nervous t. fed steps out we get nervous. there has to be a balance where it works on its own. it just has to happen. maybe not now, into early '14 it has to happen. >> we have spoken with a lot of guys in private equity who recently talked about how good the market has been. scott sperling from thl was with us about a week or two ago. he says he's a little worried at this point about where the markets head from here. do you have those same fears? >> i this i the markets are looking for the first time in a while look at really solid public offerings. they are thinking in my world,

smaller companies, markets are fairly good in their acceptance of good growth stories. that's how we build the next generation of companies the next google, hp, entell get on the map when they get that public access to capital. they have been very eseptemberive over the last few months. >> rec, i know are you of the same believes it is time for the markets to stands on their own two feet. do you feel good about where we're headed in that direction at this point? >> well, actually up to the last 36 hours ago, i felt real good about it all. i really think it's a mistake, a huge mistake for the fed boys to circle the wagons, so to speak and basically show us what most of us have thought all along, they just can't pull back. it's going to be very difficult for them to pull back. so we have ideal conditions. you know, i remember when i decided to get married and have kids, we thought, you know, we

don't want to have kids until everyone is yshlgs if we didn't do that, obviously, nobody would ever have kids. >> the fed leaves us with uncertainty, uncertainty scares the heck out of us. the fed gives you mixed messages in the span of one week. all of a sudden you don't know what you have. they say two different things. you don't know what's going on. >> you would just assume bernanke had spoken. that was the last word? >> i sure would have. you know what's funny, we are so driven by interest rates, guess what, if we didn't owe so much money, we wouldn't be so driven by interest rates. all this debt, a trillion in college debt, mortgage debt, right, rick? >> you are right, right on, sully. >> we are always looking for the solution, never the cause of i y injuriry. drew, are you there? yesterday we did a segment on

street times on mortgage rates and housing. you sent me, thank you for watching. you sent me a note, you said something you said to your clients how higher rates have not hurt housing yet. so is there a yet? what number is that yet at? >> i don't know. i usually tend to think of it in break points. when do people think they'd miss the boat? the fed has this nice little window. if it goes up beyond a certain point, people say they miss the boat and will pull back from housing all together. i think that's a mortgage rate in the 5, 5.5 range. i don't think we are there yet. i think this run up in rates is probably prompting people to think, maybe they should get in while the getting is good? >> a good point rick, we'll sigh later this morning. bob davis, our guest host, he will be with us during the show. >> touchless computing has long been the stuff of science fiction.

weak moment, set to make a reality for consumers. the company's 23-year-old ceo, yes, only 23. will join us with pretty sci-fi stuff coming up. everyone's retirement dream is different;

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. >> welcome back to "squawk box." 8:42 in the east. welcome, thanks for joining us. here's your screen right now. there is a lot of green on the screen. in fact, the futures have been

accelerating throughout the morning. nobody is saying we are up a couple hundred points, s&p, dow, nasdaq, gold, looking to fall yet again. check out those shares of winnebago. the rv maker nearly matched estimates but its profits nearly doubled. the company says it has been able to sell more rvs with fewer sales incentives. rving, by the way, is fun. kb home reported a loss smaller than expected. the deliveries rose 39%, average selling prices jumped 25%. i want to say, guys, a lot of comments on twitter about this education zuls u discussion. we are asking our 2:00 p.m. show team to continue it. they can continue at 2:00 p.m.. >> we are like the third or fourth. >> eventually, i will promote the show so much. they will get sick of me, i'll get to sleep in.

>> it's an interesting tragedy. >> it's complicated strategy. >> we've got another disruptor to talk about this morning. it could potentially be the next big thing in the tech world, computing without touching anything. i money no mouse, no keyboard, no touchpad, nothing. joining us is leap motion co-founder and ceo michael buckwald. you are only 23-years-old, how old are you when you started this idea? >> it was about two years ago. >> two years ago. and just to expla into the audience, because it's almost like what you see in ironman the old "minority report" stuff where you literally with your finger can put it up and control what's on the screen with significant precision. >> yeah. we like to think it's actually probably better than ironman in "minority report." basically the goal is to let someone reach in front of their

computer and interact with like you interact with the real world every day. so in the same way we reach out and pick up objects hundreds of times a day. that itself the experience we want to bring to a computer and let you reach in and interact like a character in "minority report" or ironman. in this way it's powerful. there was arguing last night looking at minds shift to be. there is my plug to get it. tell us of the real world applications people are using this for. you see it on the screen, some of the great stuff that's happening. >> yeah, one of the most exciting things is the diversity of applications. so out of the box, you can control a windows or mac computer. then we have developers like otter desk who have built a way for engineers to manipulate 3m

models or the new york times who have built a 3d news reader and video reader. issuable networks, facebook, other situations where you have complex data, all of their friends and photos, you want to navigate through 3d space. of course, lots of applications on the gaming side. so definitely it is something for everyone. >> how does this compare, for example, what microsoft has done with their connect business, which, obviously, can you control some but also by motion. >> yeah, the connect was a great first start for the market. it is good as tracking very broad, big movements in a living room. but it's not able to track your fingers individually. there is a noticeable delay from when you moved to when something moves on screen. we have hundreds of times the accuracy and because of that, we are able to track all ten of your fingers in real time.

lets you do things like reach out and actually grab something like you would in real life rather than waving with these big sort of unrealistic hiring motions. >> is it for most of these things i have seep in the past, there is a bit of a learning curve, you have to learn what the computer expects you to do, you need to learn how to speak the language or move the right way before you can pick up with this computer? >> if we do our job right, the answer is nochlt a lot of other companies like microsoft with the connect because they don't have the accuracy we do, they think about this as sign language, which you have to learn in order to control the computer. >> right. >> we want to use our accuracy so controlling our computer is like interacting with physical objects, where they react to real time w. that there isn't as much of a learning curve, you already know how to interact with the world. >> i used it in michael's office, i had a gaming

application, we shooting a character on the screen. it felt like i was hitting you in your fingers. will the mouse disappear and will computer manufacturers lay this into it? >> it's definitely going to be embedded into computers. we already announced a deal with hp to embed this in some devices. we have other partnerships like that, both on the laptop side and the near term and in the future like tablets and smart phones and tved. >> when you said tved, before steve jobs passed away, he talked about revolutionizing the tv. this seems to be an opportunity. ultimately, from a licensing perspective, do you imagine hooking up with one company and a licensing this exclusively so apple, for example, was able to bring this technology to life on a tv or do you see yourself almost like a nuance in terms of voice recognition where it's

basically will bed to everybody and anybody? >> well, our business model is actually a hybrid. so we built physical devices and sell them to consumers. today, we're building a peripheral that connects to a laptop and desktop unless you control it. we received hundreds of thousands from all over the world for that device, which was shipping july 22nd. but we are also pursuing licensing of that same technology into devices, so, we want to work with a broad cross section of partners across these verticals. ultimately, the more eyeballs we're in front of, the better it is. >> real quick, is it ever possible we want to hold our hands, somehow your technology will read my brain, see my eye, know where i'm tracking or looking? >> that will be great. i think that's a few years out. but as a company, we're about making you more checked to your computer and anyway we can do

that is something rare. >> very cool. appreciate it. >> maybe the end of carp am tunnel zrem. >> actually. >> i had that, i did, so i love this. >> i hear you. i feel your pain. when we come say to commuting. >> i hear you and feel your pain. >> we have a list of the stocs s to look at ahead of the opening bell. two mad minutes with jim cramer. it is the last day of the quart ee quarter, and we will look ahead to the second half of the year, and from the fed's exit and the corporate earnings and we will tell you what to expect from the markets. "squawk box" starts tomorrow at 6:00 a.m. eastern. ♪ [ male announcer ] if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event,

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let's get down to the new york stock exchange, and jim cramer is joining us right now. jim, i have been waiting all morning long to get your take on what is happening between the fed and people talking things in and talking it back, and what are you making of all of it? we talked to rick earlier, too. >> it is nirvana, and everybody is saying 2% to 2.5% growth and that means not a lot of stocks to sell, and they could go up in the second half, and you could buy some cyclicals and this is as good as it gets. i don't want to look through it,

but maybe the fed is saying, hey, maybe we didn't mean it, and the companies saying that it is good, so maybe this is a recipe. >> so maybe we need to relax a little bit and not be so much on the edge as we have been to this point? >> yes. it is okay. we had a traumatic week, and the headlines and the big reason that i think that i'm constructive here is that the fed cares about what it did. we have been through whole federal reserve chairmen who did not care about the consequences, but bernanke clearly cares. you pick up the washington post today, and they are worried and the big jump in mortgages and journal is wor reing about the big jump in corporate ip come, and all of it puts a side, the fed cares. >> all right. so by all of the backtracking leaving everybody confuse and you say that the bottom line is that it is not going toiank the rug as quickly, because it is going to watch the market reaction? >> well, general mills typifies it. it is not so great to go to 50, but not so bad it goes to 40-something. and last night i had mcnerney on and he has never been so

bullish. he says all systems go, and he has a 20-year forecast. some people 20-minute, but this guy, 20-year, and even at par, that is a buy. >> and when i look around at other places, other things to do like get away from the dividend stocks and people are saying to get away from that. do you care? >> yeah, it is like general mills and not doing a lot for me, but looking at conagra, and talking about the 25 cent addition because of the raw acquisition of royal corp and how the food service business is not that great, so maybe it going up a $1 and the stocks we were selling are not going down a anymore and other stocks are reporting good numbers and we like them. >> but we can listen to the companies now, and not look at the tick on the 10-year so much. >> yes, we can listen to the fed and invest in good companies. >> thank you, jim. we will watch you in a few moments. coming up is our ceo of

lycos bob davis, and we will give him the final word when we return. you see, i did not do this, and they did it for me. look at that, a flashing screen thank you. look, i take it all back. thank you. >> we are right back after this. i want to make things more secure. [ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t

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welcome back to "squawk box." we go to our guest host bob davis who has been with us for the last hour, and what are you going to leave us with? >> the last word that i will leave you with is that i'm in the fun business. i invest in people, and what i am about all day is that it is as much art as science and i'm looking for the next generation of person who is trying to see something where there is nothing, and the idea is that without what we do in venture, there is no tech sector, and without the tech sector, there was no productivity gain in the market, and without productivity gains all of the discussion all morning long is nonexistence, because we have collapsed. >> do you think that the psychology has changed? >> how so? >> among the believers and the dreamers? are we talking about the american dream and whether it is over? >> well sh, i think that it has changed because people are practical and back to bubble 1.0 where the folks thought that

they could blow through the money quickly, that is not the case today, because folks do a lot more for far less, and far more entrepreneur than we had 20 years ago and that is far better to all of us. >> is that the result of what we went through the last five years? >> the last 15 years and the tightening of the capital in a good way saying produce something for me, and that is importa important. >> bob, great. pleasure to talk to you. >> me, too. >> and we will see you later. right now it is time for the "squawk on the street." ♪ when we go back ♪ this is the moment ♪ we will fight until it is over ♪ ♪ so we put our hands up ♪ like the ceiling can't hold us ♪ >> good morning. i'm carl quintanilla, and here with jim cramer and scott wapner. if the dow closes higher today, it is the third win streak since april. the 10-year is back to 2.5, and the gold has recovered from a touch of the bruising losses and key fed speakers taking the mike