good morning, everyone. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we have a big week about to unfold for the markets. this comes after friday's jobs report. now investors are bracing for earnings season. guess what? alcoa officially kicks things off this afternoon. on friday we look at quarterly results from banking giants jpmorgan and wells fargo. right now if you take a look at the markets, as we get started on a monday morning, you're already looking at some sharp upside potential here. dow futures are indicated up by about 92 points right now. the s&p futures are up by 11.5. again, this is kind of continuing what we saw after that jobs report on friday. markets initially looking at it as a little bit of a concern because they thought maybe the fed would be tapering sooner rather than later. but right now it does look like things are indicated higher. if you check out the 10-year note right now couldn't believe the yield when i saw it last. right now yielding 2.704%. pulled back slightly from the high it hit back on friday when

the yield us up at i think 2.73%, 2.74%. in europe now the major averages are all higher as well. see right now that the cac is up in franch by 1.8%. j nermny the dax higher by 2.2%. ftse up by better than 1% as well. a lot of green arrows as we begin things on this monday. andrew, over to you. >> hey, beck. nice way to start the week off. as joe was mentioning that little bit of news this morning, thompson reuters now saying it's going to be suspending the early release of its reuters university of michigan consumer sentiment data at the request of the new york attorney general. the news of the information company has agreements to allow some of its clients to receive that data two seconds before other clients. you might remember this news was broken by eamon javers about two weeks ago. investment group perry capital filing a lawsuit against the treasury department over the bailout terms for mortgage firms fannie mae and freddie mac.

saying they violated a 2008 law that put the two mortgage companies into conservatorship at the height of the u.s. financial crisis. treasury changed the terms last year for most of the profit would go to the government. at least 40 people are dead and hundreds are wounded after supporters of ousted egyptian president morsi attacked the republican guard building in cairo. morsi supporters have been holding rallies and a sit-in outside the military building since last week. joe, over to you. >> okay, andrew. the investigation into what caused the weekend crash of the asiana flight 214 still ongoing. let's get to phil lebeau, who is in san francisco with the latest. hey, phil. >> reporter: hey, joe. this is a story that was already tragic enough. but there is word this morning out of south korea that the pilot who was at the controls, it appears that this was his very first time attempting to land a boeing 777 here at san francisco international airport. here's the latest on the investigation this morning based on the latest data from the ntsb

last night. there was no mechanical or engine problems reported. the pilot indicated no issues on the flight data recorder or on the cockpit voice recorder. and they aborted landing, it was tried -- an aborted landing was tried at the last second. the ntsb says asiana 214 was going slower than the recommended speed for landing. the ntsb also says the asiana tried to speed up right before the crash. >> the approach speed was 137 knots. and the question was whether or not we had the lowest speed that the crew achieved. i will tell you that the speed was significantly below 137 knots. and we're not talking about a few knots. >> 291 passengers, again, or on the asiana flight 214.

that includes two chinese teenagers sitting in the back of the plane. they were thrown out of the plane. they were killed at the scene. there's an investigation today as to whether one of these teenagers was possibly hit by one of the emergency vehicles responding to the scene. obviously it was a chaotic scene right when the accident first took place and the emergency crews were responding. the passengers escaped asiana 214 within minutes of the crash. fewer than 50 are still being treated at hospitals here in the san francisco area. we expect to get an update on their conditional little bit later on this morning and to hear more from the ntsb. quickly i want to show you a chart of boeing. at this point, joe, there is no indication that there is going to be any lingering impact for boeing which is the manufacturer of the 777. this is a plane that has a very strong safety record. in fact, this was the first fatal accident involving a 777. that is the latest from here at san francisco. joe, guys, back to you. >> when was the last fatal accident on a -- not one of

those express jets also, phil? it's been years. i never like to talk about it, but -- >> you've got the one that was in buffalo. that was back in 2000. >> the commuter. >> that was the commuter yet. you have to go back to 2001. that was the twa plane in new york city. that was the last major airline crash here in the united states. >> phil, just to clarify something, at the top of the report you said this was the first time this pilot had landed at sfo. how many hours -- how many hours -- just at sfo. it wasn't that they had never landed -- obviously they had landed a plane like this before. >> reporter: right. >> how long in their career was this pilot? >> reporter: andrew, 44 hours on the 777 is the report out of south korea. at the controls of a 777. he was in what's known as transition training in south korea. and at some point, i believe -- i have to double-check the number of hours. i believe it's at least 100 hours. then you are considered

certified within their system to then take control of a 777 and to be fully certified. but this was the first flight for a 777 that that pilot ever attempted a landing here at sfo. >> i think he had 10,000 hours or something on other types of planes. it was just 44 hours on this type? >> reporter: correct. right. relatively new with the training here. >> and the other issue being that the scope -- some form of scope had been turned off for this particular runway over the weekend? >> yeah. they've been doing maintenance. >> reporter: they've been doing maintenance, andrew. the airline was aware of that. the system was turned off at the beginning of june. it is going to be off until sometime in late august. but keep in mind, that system, while it is a tool to assist pilots, this was a clear day. there was no indication of any other possibilities to impact the flight. and as a result a lot of people are looking at this and saying, that is not the sole reason for this airplane having this crash.

but, again, it's too early for the ntsb to say they've come up with a definitive cause here. >> phil, thank you very much. again, that is phil lebeau. we will continue with updates, obviously. this is still a developing story. we have an update on another weekend tragedy. at least five are dead and dozens of people are still missing after a run away train carrying crude oil derailed and exploded in the center of a small canadian town in quebec. the scene is being described as a war zone. if you have seen any of the pictures, that's exactly what this looks like. that train was hauling 72 tanker cars from north dakota to eastern canada. it apparently rolled downhill from an overnight parking spot. there was not an engineer on board. montreal main in atlantic is one of many railroads that have stepped up shipments of crude oil as pipelines from north dakota and canada's oil producing areas fill to capacity. there's a story in the "wall street journal" today that says that in 2012 there are about 16.6 million barrels of canadian crude that were shipped to the

united states by rail. but that's estimated to grow to about 110 million barrels by 2014. it's another one of the big questions about what's happening with pipelines as that has gotten put off. right now why don't we check on the markets once again this morning. as we showed you the futures are indicated sharply higher. in fact, right now we see triple digit gains for the dow. if it were to open now it would be up by 103 points. s&p futures are indicated higher by more than 12 points. oil prices, which have been climbing pretty rapidly as we watch all of the tensions in egypt are actually down by about 18 cents this morning. 103.04 is the latest trade for wti crude. the 10-year, this is the market -- this is the market to watch. the yield right now is at 2.704%. it creeped awfully close to 2.75% on friday after that jobs report came out. also take a look at the dollar this morn ing. we'll see right now that the dollar is down across the board. of course, this is after a big run for the dollar based on some of those strong economic numbers and the idea that the fed is going to be tapering sooner rather than later.

right now the yen is at 10 #.04. euro is at 1.2857. gold prices this morning at this point up by about $12. $1,225.50 an ounce. >> 10-year is at 2.7. the way it's supposed to work. >> maybe equities can go up while bond prices go down. >> good piece in the journal. now it's for years we've been waiting for the fed to hand the baton off to the private sector. and we'll see, i don't know, whether we can handle it. >> .7% increase in the bottom line. that's not even talking about the top line. and whether there's any revenue growth. that would be two straight quarters of pretty, you know, pretty tepid -- >> there's no revenue growth. >> some day maybe there will be. but that's what i mean. so then do you -- do you say the private sector can handle it? i don't know. time for the global markets report. ross westgate is standing by in

london. i just think of so many things that seem to be happening now that haven't happened in years. temperatures and all that. and an englishman winning wimbledon. i mean, it's all related. >> scotsman. >> i'm sorry. scotsman winning wimbledon. i'm almost sure this is related to carbon dioxide levels somehow. i think i can get to that somehow. do you know? have you tied it to that? >> well, it could be anything, couldn't it, really? what was amazing, the other thing i picked up on was all the sevens. i know the chinese get into their numbers. it was 77 years since a british man had won the singles title. the last time a british woman won was 1977. he played in seven previous finals. it was the 7th of the 7th yesterday. >> it's complicated. i can't call him an englishman.

i've got to call him a british man. you're so parochial over there. we don't say an ohioan did something. >> i don't mind you calling him english. it's just that i know he won't like it. no one else in scotland would like it either. >> then there's wails wales. aren't you all one big happy family? you're not, i've noticed. you're bitter about something. >> we're quite relaxed in england. >> first justin rose. first justin rose. now this. now we're just going to -- maybe this is portending something for -- when does that start, the open? >> it's a couple of weeks. >> okay. so yeah. who knows. then we've got -- then, of course, andy is the current u.s. open, isn't he, champion? >> ross, i just noticed dick hoewy is here. please hurry your report. >> i'm sorry for holding you up. >> what time is it? the show is over at 9:00.

yeah. >> okay. we are 9-1 advancers outpacing decliners on the dow jones stock 600. ftse 100 up 2.5% last week. up another percent first thing this morning. up 73 points. xetra dax up 2.3%. at the best levels of the day. cac up nearly 1%. in portugal governments held together. they've come to an agreement with the coalition partners. one of the coalition partners giving a big promotion. up 1.9%. portugal yields. keep our eyes on that. settling down a little this morning. still on the 7% mark. we've also heard today we're likely to get agreement. it looks like we've got agreement for more aid disbursement to greece. though there will be a lot of discussions about the conditions attached to that. there has been nervousness about that. spanish yields contained at 4.65% as well. of course, the big move has been on the dollar. sterling has been weaker this

morning as a result of that. sterling/dollar. take a look here. 1.4910. it is getting increasingly cheaper for americans to come and visit the uk. the sort of thing we'd like. that's where we stand at the moment here in the uk. i've got a -- look. this flag here. here we go. he's scottish. throw that one away. there we go. back to you guys. >> all right, ross. congrats. >> the window on these guys, i didn't think anyone would ever beat djokovic again. i can't handicap this stuff. then that ladies final. woo! a couple of -- have you ever heard of either one of those women? >> no, i hadn't. you got to go. have you been to one? >> why do i have to go? >> you of all people. >> me of all people. why? because i like brass. why? >> longer discussion. let's find out what the markets

are going to be watching this week. joining us now, ny melon's chief economist. also phil orlando. senior vice president and portfolio manager. guys, i'm going to hoewy first on this. transitioning off some pretty good numbers friday. do we think good news is good news or good news is bad news when it comes to the fed and the issue on "the wall street journal" about whether the earnings will be there to support all this. >> good news is good news. i think we're going to make a transition from four years of 2% gdp growth to three years of 3% gdp growth. >> 2% to 3%. when are we getting to the three part? >> probably right in the second half of 2013. i would say i'm very convinced it will happen by the fourth quarter. could start in the third quarter. we're right at an inflection point. keep in mind that while the growth rate in the first half

was slow, we have two drags. one is fiscal drag has been bad. it's going to get less worse. second is that the world economy has been dreadful. but europe is kind of bottoming and japan's doing better. so i think that while the first half was a very weak economy, we're right at that transition point. and that's consistent with the way the stock market has behaved and the bond market has behaved. bond markets in a bear market. we doubled 10-year treasury yields in the last year. i think we'll double again in the next four years. by 2017 we're probably up to a 5% 10-year. but we're probably near kind of a plateau for a while right now. so basically three years of 3% real gdp growth. good for stocks. not great for bonds. >> phil, i want you to agree with him personally. but i also know this is cable. so what do you think? >> i really would like to help

you out here. it seems like dick and i have similar models. we think second quarter is is going to be punk from a gdp standpoint. probably similar to first quarter. the transition, shift from the fiscal drag to wealth effect is starting to happen right now. we think the consumer is going to drive third and fourth quarter. we think fourth quarter gdp we could hit a 3% run rate. we've got a 3.2% gdp forecast for next year. >> what do equities look like this summer? >> they're going higher. you've got this bifurcation going up. treasury yields are going up. we've had this ludicrous forecast that treasury yields were going to be at 4% to 5% over the last couple years. people are now starting to believe us. as treasury yields fwo higher at this point in the cycle multi. s can expand. it's not until the treasuries get above 5% that we start to fwet contraction. you could have a situation where bond prices are going down, stock prices are going up. we think this market, s&p could be at 2,000 looking out over the

next 18 to 24 months. >> phil -- >> keep in mind, the cause of the rise in rates is not a surge of inflation which forces the fed to tighten. it is better real economic growth in a context when i don't think the fed will raise the fed funds rate till 2015. so you're going to have stronger growth and a zero fed funds rate with a steep yield curve. that's pretty good environment. >> phil, i've known a lot of seniors who have actually tweeted me recently saying they have gotten killed with some of their bond holdings. they're trying to figure out what to do now. is it too late to diversify and move money out of those? >> it's not too late. you're just at a point in the transition now where you're going to see money coming out of the treasuries as folks open up their mid-year statements and see they lost money in treasuries. the transition is going to be in the spread product if you have to stay in the fixed income side or into some u.s.-based companies that are paying dividends in order to generate your yield that way and get some capital appreciation on top of that. so we don't like treasuries, but

we do like stocks. we think cyclicals are the play here. but there's some places to get yield on the equity side. >> real quick. we got to go. tuz anybody care about what's going on in egypt? does anybody care about the cost of crude? does that matter? >> cost of crude matters, but there's plenty of supply. so it's unlikely it's going to spike dramatically higher. in terms of egypt, the odds that the army will permit a disruption at the suez canal is mighty low. the only issue for egypt in terms of its impact on the u.s. market would be a disruption of the suez canal. not going to happen with the army in control in egypt. >> thank you, guys. starting the week off with positive note. >> it's a bull market. >> thanks so much. much more ahead on "squawk box." we're going to talk to an aviation expert about the crash this weekend. plus a health care stock that barons says could rise by 40% in the next two years. eliot spitzer can't stay

away from politics. the former new york governor turned pundit. not so successful pundit. maybe about to run for public office. that story and more with politico's beltway ben. morning moneyman ben white. "squawk box" coming right back. every day we're working to be an even better company - and to keep our commitments. and we've made a big commitment to america. bp supports nearly 250,000 jobs here. through all of our energy operations, we invest more in the u.s. than any other place in the world. in fact, we've invested over $55 billion here in the last five years - making bp america's largest energy investor. our commitment has never been stronger.

welcome back. u.s. equity futures up about 86 points this morning after a great friday. we're back above 15,000. keep tabs on united healthcare

shares today. barons says it could rise by 40% over the next two years as it will focus on profit margins in the early stages of the obama care rollout. united healthcare is a dow component. forgot that. closed above $66 a share on friday. the investigation into the weekend crash of asiana flight 214 continues. joining us on the squawk news line is michael boyd. chairman of the boyd group. thank you for joining us this morning. i know there have been a lot of questions. it's still relatively early on. it seems right now they are focusing on potentially a pilot error or something else along those lines right now. what's your thought as you read through some of these early reports? >> it looks like the airplane got away from them. in a sense that they somehow or another let that airplane slow to stall speed at the very last second of landing. and it just stalled and hit the seawall and the rest is history. so it was one of those things, a

two seat one way or two seat the other could have been a much worse disaster or could have just been a very bad hard landing. it looks like the pilots just weren't monitoring the thing. >> when you look at the track record for the boeing 777, you say this is one with a pretty amazing history when it comes to safety. >> yeah. there's about 1,100 of them that have been delivered so far. all but ten are still flying. that's over about an 18-year period. they're incredibly reliable and safe airplanes. and this is the first real crash, if you will, we've had out of three airplanes that have had accidents that have written them off. it's an airplane that's -- i don't think they're going to find a design error in the airplane. >> i notice there was a statement over the weekend it was pratt and whitney engines that were on that jet. any questions about this? or you think at this point we kind of just have to wait and see what the ntsb says? >> we always have to wait and see what the ntsb says.

they do know now the airplane was flying too slow and the people in the cockpit somehow or other allowed that to happen. so whether it was an instrument issue or just a pilot issue. but we do know it was flying too slow. >> michael, i have an issue i'm going to raise with you. it's a tough one. a number of commentators raised it yesterday. not about the 777. but about the 787. the amazing thing about what took place over the weekend in part was that so many people thankfully were able to get out alive, without injury. that plane was made out of aluminum. there was some conversation yesterday among some analysts that had a plane made out of composite crashed, that you might have had a tougher time. meaning the plane right not have stayed together as well as this plane did. what do you make of that? >> i don't know if we really know that yet. i would suspect that's speculation. remember, that fire was what they call an attic fire. more electrical than anything

else. there was no fuel burning. the fire itself plus the strength of the airplane, composite airplane for all we know might be better. but we don't know what the -- what's going to happen when a composite airplane catches fire eventually. that's something we don't know. i wouldn't say this points to the 777 being the better airplane or 787 being less. that's really raw speculation. >> one other question related to the pilots and relating to there was a period for many years, actually, where korean pilots -- where flights out of korea, this particular airline before was renamed, was not allowed to actually land in the united states. there was -- they had a deal with delta that was cut off for a period until they thought that their pilots were up to snuff. how does this change that? >> that wasn't -- that was korean airlines that was leaving wreckage up and down the pacific rim. that wasn't asiana. we had a fight in the cockpit that caused a crash. we had all kinds of things.

a team was sent over there to fix it. he did that years ago. >> michael, i want to thank you very much for joining us this morning. >> thank you. have a good one. coming up, the bulls are running wild in pamplona. the annual san fernando bullfighting festival is under way. several injuries, but no one has been gored yet. that's the good news. next, we check out the market bull's squawk master, jim o'neill, former chairman of goldman sachs asset management going to give us his outlet for the global markets when "squawk box" returns. weekdays are for rising to the challenge. they're the days to take care of business. when possibilities become reality. with centurylink as your trusted partner, our visionary cloud infrastructure and global broadband network free you to focus on what matters. with custom communications solutions and responsive, dedicated support, we constantly evolve to meet your needs. every day of the week. centurylink® your link to what's next.

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good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along the becky quick and andrew ross sorkin. the release of alcoa's numbers, the dow component on two high profile reports come on friday when both jpmorgan and wells fargo report earnings. stocks in egypt, meanwhile, are falling following the news that dozens were killed in new violence in cairo in a clash between the military and supporters of ousted president mohamed morsi. officials saying that the jet that crashed at san francisco airport over the weekend was traveling significantly below its target speed as it approached the runway. two people were killed and more than 180 injured in the crash. we'll have much more on the story with cnbc's phil lebeau all morning long. >> we have a quick breaking news item. iss, which is the proxy advisory service, now telling shareholders they should vote in favor of michael dell's

transaction at $13.65 a share. that deal is for a 25.5% premium. the expectation, i should tell you, was that iss, which is very influential in how major institutional shareholders ultimately vote, was going to come out on the other side. was going to come out in favor of carl icahn's proposal at $14 a share. they do say after evaluating the risk of accepting the offer versus the risk of rejecting the offer which they think could have some meaningful loss of value if the business transformation falters, iss is recommending clients vote for this transaction. says it provides certainty of value, transfers the risk of the deteriorating pc business and the company's ongoing business transformation to the buyout. that is a setback this morning for carl icahn's effort. and a vote of confidence for michael dell's effort. the vote, by the way, is on july 18th, which is next thursday. >> you have to wonder how many shares have already been voted at this point. that's coming up quickly. >> a lot of these votes is sort of -- it's what i was told was it was going to start rolling

this week. people were waiting both for iss, glass lewis, the other big advisory firm is going to come out. we'll see what they have to say about this. but traditionally over the past year or two, there's been a lot of criticism of iss because they typically come out in favor of the activist shareholder and the criticism is that their biggest clients are the activist share hold rs. this is going against that grain. i'm sure michael dell and others will be making a lot of that today. >> let's look at the markets this morning. the futures are indicated sharply higher. right now if you take a look you'll see they are up about 88 points for the dow futures. s&p futures up by about 10.5 points. in europe we also see a lot of green arrows. right now the biggest outperformer of the boards we're looking at right now is the dax in germany up by about 2.25%. the cac in france up by about 1.9%. ftse up by just over 1%. in asia overnight the nikkei was down by about 1.4%. shanghai composite up by about

2.4%. hangseng weaker, too. oil prices are starting to slow down a little bit after a massive gain you've seen over the last several, maybe five days or so with all the concerns in egypt. down by about 18 cents to 103.04. 10-year note still yielding above 2.7%. right now just above 2.7% which is interesting. watching what's happening with the yield, continuing to climb and equities also performing well. so we'll see if that trend continues. the dollar has been a little bit weaker this morning after some strong gains in recent sessions. right now it's down against the euro which is at 1.2855. dollar up, though, right about the flat line with the yen. yen at 101.16. gold prices are slightly higher this morning. right now up by about $13 to $1,226 an ounce. >> so far it's going according to plan. >> the way it's supposed to be. >> going according to plan. we had that about 5% or 6% pullback. and on taper worries. now we're 2.70. we've hit some new highs in

yield. we're not far from a new high in equities. so let's get the latest on the global markets. and the economy from a master, squawk master joining us on the squawk newsline this morning. jim o'neill, former goldman sachs asset management chairman, jim, fed policy, if you had to plan, i think, the way the markets reacted, new highs in the 10-year and the market looks up today and was up on friday, so have they so far in the first couple of innings of a soft landing, is it going according to plan? >> i think it generally is, yeah. i mean, obviously there's been times when it gettings a bit wobbly. as part of the u.s. normalizing, you know, the more people believe it, the more people believe that eventually u.s. bond yields will return to 4%. so at least, maybe more. it's difficult for them to stockpile for that, to be honest. so long as equities are doing

okay, why is it that big of deal? in some ways you could regard it as a really healthy development. >> yeah. we talked about how many times green greenspan said you can't wait forever because the markets won't let you wait forever. you can't have a bernanke put on the markets for the next five years. they weren't listening to him. but at least they're starting to take some action to show that they're not going to wait forever. i think that would be -- that would, you know, the markets wanted to hear that, most likely. now we're going to have earnings. you think that earnings could either help here or could it derail what we've seen? >> well, i think it's obviously one of the key inputs. i mean, it's all got to be part of the u.s. economy continuing to at least creep better, if not accelerate sharply. and it be more dependent on the private sector. hopefully not too excessively dependent on the consumer. so far, so good.

i emphasize in particular so long as financial conditions, which would in my view include housing activity or some measure of house prices -- >> yep. >> -- and equity prices. as long as they all behave themselves, then i think the fed should be broadly speaking quite happy with all of it. >> jim, europe has given the fed cover, you know, repeatedly for the last three or four years. every time they look to overlay -- every time the fed looked overly easy, we could see that things were so bad in europe that the dollar didn't have to worry that much. it's happening again. porch fwtugal and elsewhere, th must be something that you're watching closely. >> well, you know, i'm currently in a retired state of life. i'm not watching anything quite as closely as i was. which is quite nice. how can you avoid it? yeah. there's little issues all over the place. today the big focus is on whether greece can reschedule or not and stick to its program.

the portuguese issue. of course, creeping in the foreground slowly but surely is the all important german elections. after the summer the european thing will get a big notch again. those have the ability to derail things. interestingly, the very latest marginal economic data in europe, particularly from the so-called periphery, has been a bit better. maybe the european mess is -- is stabilizing at a level of mess but not getting worse. >> one point i think you want to make, suddenly we think that emerging economies, you know, that they're never coming back. you think that's still a place to be long term. >> well, i think people have to distinguish between the consequences of u.s. bond yields going back to 4% and what's genuinely going on in another part of the world. the markets are going through this notion that everything in the planet is a pure derivative of u.s. bonds. which in terms of some of the

liquidity plays, obviously that is true. and emerging economies and the other economy that's got big current account testify sdeficit going to get financed so easily in a world -- the underlying long term outlook for these places depends on what they do themselves. as it happens i'm getting on a plane to china tomorrow for three days. i suspect the chinese will continue to be focused on doing what they think is right for their own long term growth. i think it's fascinating to see the markets behaving as they often do in terms of the fed policy. some kind of major herd in thinking that the whole world is just a function of fed policy which is clearly not the case. >> is andy murray, would you call him a countryman? would you immediately say he's scottish? do you feel -- i mean, is this a victory? are you sharing this victory? >> i've got some celtic blood in me. i can claim more than many pure english people. right now the news here in the

uk is andy murray should be not only the greatest sporting icon in britain for god knows how long, but probably the head of the imf, the head of everything else. he's given us permanency on cnbc again sf again. >> that olympic win really -- that seemed to give him something. it's good to see. now he's nicer and everything. >> power house. power house sf. >> okay. geez. we're calling him british. even though he's scottish. >> british. we're all -- unless scotland votes independently from the uk. right now because of that we're all very british. >> okay. all right. congrats. justin rose. blah, blah, blah. all right. see you later. thank you. up next, we have fortune's stephanie meda and politico's ben white warming up in the green room. we're going to be talking about eliot spitzer's future in politics, geithner's speech making payday, the fed's future

and we'll reveal the fortune 500's list. the futures sharply higher on this monday morning. dow futures up by about 90 points. "squawk box" will be right back.

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you know, we all have our own private hells. i hope his private hell is hotter than anybody else's. >> that was ken langon in 2008 comments on eliot spitzer. this morning there's news former new york city governor turned pundit eliot spitzer is returning to politics with a run for new york city comptroller. joining us to talk about that story and much more is stephanie meda. also ben white, politico's chief economic correspondent.

welcome. ben, you led the morning money this morning with spitzer. we have to say that caught our attention, too. can this guy actually make a comeback? >> i think he can. i think he can win for comptroller. that's a race on the ballot that's all about name recognition. he's got that. his main opponent will be scott stringer, the manhattan borough president who people like and could win. i think new york is all about redemption these days. anthony weiner is leading the polls for mayor. >> seems like that is such a different situation than eliot spitzer. >> it's a different situation. >> it was a felony. >> spitzer's was a felony in terms of engaging the service of a prostitute. >> that's illegal. >> that's illegal. >> then with the money and the hiding. >> i still think that -- >> he was in charge of -- >> he was. he had been -- >> do you guys honestly think he can't win for comptroller? >> i think he could. he was a leading law enforcement agent in the state of new york. >> engaged in the illegal activity. >> the lib raerals -- he's been huffington post for the past four years.

ariana has told me all the foibles of a man. what's that got to do with being a great public servant? that's the wrap on it. unless you're republican, of course. >> it's also not so different if you're not a public servant but as you pointed out a law enforcement officer. >> you know how gallagher, his jokes are like smashing melons are not even funny. i'm not fwoieven going to make joke about a guy like pispitzer pulling the pursestrings? god knows what he's going to spend it on. this would be eyes wide shut. he would have -- who knows what he would have going on. black stocks hanging from the ceiling. >> i have a different question. let's assume he wins. what does that actually mean to wall street? >> that's why the liberals still love him. that's why you love him so much. >> no, no, no. he was so aggressive both in his role as governor -- >> can you imagine if he found one of his enemies that had been hiring prostitutes what he would have done? when he was in here we asked him

why weren't you prosecuting? he goes, oh, of course i should have been. it was a moral lapse. three young daughters. think about the larger issue for business. >> if he actually wins -- >> he controls the pension funds. there are investigations into what these pension funds are doing. where they're investigating. >> as an activist shareholder. >> he can run campaigns. >> the jamie dimon thing was up there the first time. >> can you still buy shares in the it shall. >> i wouldn't know anything about that. it's actually right that, you know, wall street tuz not want to see this guy back in a position of power where he could be running campaigns against ceos and can be, you know, telling the pension funds where to put their money. i think there'll be a lot of opposition. ken langon is going to be against him in a big way. >> not just against hymn. does that mean that ken langon and everybody on wall street starts giving money to -- >> scott stringer. if i'm scott stringer's campaign manager today i'm calling every

one of these guys. this is your worst nightmare coming back to life. fund my campaign. run ads for me. >> andrew pointed out the problem with that. to who again? you pointed out the name. >> he's a nice guy. people like him. there's no big scandals in his background. >> we can make stringer famous, right? >> right. it's a short window of time. >> did you guys see "the wall street journal" story today with more speculation about larry summers potentially coming back as the head of the fed? stephanie, that's something that had been out there and had circulated before. but "the wall street journal" really makes it sound like there may have been some promises made from the administration before 2010. >> yeah. it's a little bit interesting. because summers is is somebody who has -- you know, he stayed within the public eye. to ben's point, the name recognition, somebody who has flair, somebody who has a certain persona in the public. there's a lot of value to that that goes beyond, you know, his intelligence and his savvy and his ability to work within -- you know, work within the administration.

now, you know, here's a guy who, you know, opportunity always play well with others. ben can speak to that a little bit. >> yeah. i think stories like this one in the journal are not always the best way for a candidate who wants a big job from the obama administration to get one. i'm not saying it comes directly from larry summers. i have no idea where the story comes from. it sounds like it's people close to summers saying, hey, this guy was promised the fed chairmanship after bernanke left. you don't popularize yourself in the white house by having stories out there suggesting you're the guy and you're the next person in line. the administration is not going to have its hand forced on who its next fed chairperson is. i think janet yellin is still the front-runner. summers would probably be second to janet yellin. he's in the mix. i don't know that these kinds of stories are really helpful to his cause. >> but do we have any reason to think -- yellin is always mentioned as the front-runner. i could see if reports are true, that he thinks the president promised him the job, why do we think -- >> i read the story differently. i read the story as larry summers told somebody back two years ago that he had had this

conversation and that this person then sort of -- i was looking who the bylines were and how this story was written. it occurred to me this was -- i thought about five people could be. >> i doubt it comes from larry summers, too. you're right. it doesn't help. >> call the people up saying please be quiet. >> then obama says, you know, bernanke's already served longer than i thought. as if maybe he was going to give it to him before the second term. then he gave it to bernanke and sort of surprised him. >> presumption in the story was he came into the white house to be national economic council chairman with the understanding that his next job would be fed chairman. i doubt they would have promised it to anybody. >> why is yellen always thought of as a front-runner? >> she was there throughout the -- people don't give her enough credit. she was there during the financial crisis. she was the right hand during this -- you know, during this whole period. >> before inflating the financial crisis. >> also first woman fed chair

would be historic. there's a thing for obama to do. >> ben and stephanie, stick around. we're going to take a quick break. when we come back, we will unveil fortune's global 500. that's the list of the largest corporations in the world. also coming up in the next hour, john harwood has an exclusive interview with president obama's chief john harwood has an interview with todd park. his challenge is making sure the government is high-tech. it's a big job. "squawk box" will come right back. .

. >> welcome back, everybody. joining us on set is stephanie meadows. ben white plit politicos chief economist. >> the company second year in a row is royal dutch shell. no surprises there, the big surprises are once again china is adding more companies to the global 500. they got 89 companies on the list up 16 from last year. apple has soared, they went from 55 to the number 19 position. they're punching way above their weight in terms of profitability t. global 500 is a ranking by revenues. they're the 19th biggest by revenue, number two in

profitability. >> i noticed there were three chinese companies in the top 10 as well. is a massive change in a shift an how long has that been happening with the chinese companies? >> since basically the last decade, the list is a snapshot that really reflects the changes in the chinese economy, not only the domestic economy, but increasingly as china goes out in the world, you see many more companies derive revenue from sources outside the domestic economy. >> is that four out of six of the top six? >> yes. >> man, we're in trouble. i thought we were less oil dependent these days. i guess that hasn't transferred. >> we are faking. >> are you still on that bacon technology? >> well, you like bacon? >> i do. i wasn't particularly worried about the smithfield ham takeover. >> you will be. when the bacon comes from the 15,000 dead pigs. >> i know there is no actual bacon on the desk today with i

is disappointing to me. >> i say andrew got in so much trouble. >> we don't bring it up any more. >> really. >> i sat next to a guy on a plane. he wasn't my rab boy, he was clearly somebodies, he's not happy. >> and a kewaukee watcher. >> and not happy that i had not done well. >> thank you very much for coming in today. we appreciate it. see you both soon. coming up, a man who is no stronger to "squawk box," he's a big show. morgan stanley is like a vice chairman. gary kaminsky is our big host. plus typical wall street jovenl he's really tan. he is bringing some friends to talk stocks, bonds, real estate, "squawk box" is coming right back. rise and shine. with centurylink as your trusted technology partner, .

. >> good morning, welcome back to cnbc on "squawk box." take a look at the future, we happily have some green arrows. the do you looks like it's opening higher. the s&p 11 points the nasdaq up about 17.5 points. let's get you through some of the morning head lines, an investigation into the asiana flight 214. that's continuing. officials are looking at the possibility of pilot error in the crash. phil le bault will be with us shortly with an update. greece will allow it to receive its next batch of bailout funds.

they say they have fallen behind, but the growing authorities have implemented steps to put the program back on track. we talked about this last weekend. finally, proxy firm iss now recommending dell shareholders approve the company's proposed dole to take itself private. michael dell of course leading that. it's a big setback for carl icon who has been seek support for an alternative report. some advisory firms were going to come out in favor of him. more violence in egypt today. at least 40 people are dead, hundreds are wounded after they say egyptian president morsi attacked people in cairo in a sit-in since last week. questions about whether they will be able to put together a coalition government. this is the most violent single occurrence since the entire outbursts started last woke. we have a live report in a few

minutes chts also the investigation of asiana flight 216. phil has more on this developing story. >> and becky, it's early in the investigation. as andrew mentioned at the top, increasingly, ntsb and investigators are questioning whether or not pilot i roar is the primary issue at fault behind the 214 crash. here are some of the developments overnight. this is why a lot of people are saying what exactly happened with the airplane and the pilot in charge. this was his first landing of a 777 at afo airport. he was in transition training on the boeing 777. with just 43 flying hours where he was at the controls. by the way, in order to be certified as a captain you need 60 hours of flight training in the 777 and ten takeoffs and landings to qualify as a cap taken. he had just under 10,000 hours on the aircraft. as we mentioned, asiana 214 the

cockpit voice recorders showed no mechanical issues. the pilots were, however, coming in too slow, too low, to abort a landing. here's what one passenger saw as they were coming in for the landing. >> it was too low, likely any other times, but there was no announcement or anything. but the very last minute i hear the engine sound, which the pilot probably tried to send more power to lift the plane back up, which didn't work. i was holding things so tight and bang, the impact was so powerful. >> and, in fact the burned out fuselage of the asiana 214 is still here on the runway at sfot. glide slope technology commonly used at this airport and other airports around the world, it was not functioning.

it was not turned on during the landing on saturday, but asiana 214 the pilots were aware of that. the ntsb still needs to interview the bielt in charge along with three other pilots on board to get a better rundown from them. they expect to be talking with those pilots in the next 24 hours. by the way, guy, this investigation very early on, they're going to be here at least through the rest of this week. they haven't moved the fuselage at all and months is usually how long it takes before they determine a cause for an accident. guys, back to you. >> 50,000. right, phil? takeoffs, landings, today just here in the united states, 50,000. >> reporter: on the boeing 777. >> no, in general. 50,000. >> you miss by a foot. 50,000 takeoffs and landings a day. you know, you figure some of those are probably below the optimal speed as well, you just would never know. this one happened to have a sea

wall and everything else. >> also, joe, a lot of people pointed out to me, listen, you can't say it's pilot error. at some point, a pilot has to learn to land a boeing. those are valid points. at the same time, i think this is not comforting for people to hear this is not the first time landing here at sfo. one more factor that is going to be coming out today and will be the focus of a lot of questions, no doubt. >> one last quick question, on landings, traditionally, what percentage of them are landed solely by the pilot and what have some form of assistance or other things helping to control the plane? do we know? >> i don't have an answer. in fact, that's one of the things we are trying to determine is how much assistance did they receive as they were coming in? in fact, the ntsb said, listen, we don't know if this was completely the pilot, if there was auto functionality playing a

factor in here? all of that still needs to be determined. we know from the cockpit voice recorder, there was no indication of any mechanical problems. it was 7 seconds before they were about to land that they said, okay, let's speed up. let's try to abort this landing and do a go around. obviously, we did not have enough time. >> one more question for you. i know you said that gains wouldn't be necessary. >> right. >> it was the great day. would that system have at least told them or indicated or issued an earlier warning that they were come income at too steep of a slope? >> i'm not sure if it would have given them a warning they were coming in too steep a slope and told them sooner. it clearly would have been another tool to assist the pilot and the crew. what is unclear and we still need to determine, becky, is we talk about the pilot and this being his first attempt at landing a 777 at afo. there was another pilot in the cockpit. how much experience did he have?

did he not react sooner? those are a number of the details that need to come out. >> we will check back with you then. our next guest says the jump in ten-year treasury yields may be behind us. joining sus joe amato. president of newberger ver none group and chief assessment officer and gary kaminsky is back in the house. gary is vice chairman at morgan stanley wealth management. in the interest of full disclosure, joe and gary are former colleagues. joe says that he taught you everything you know but only 10% of what he knows, gary. was he basically the brains behind the kaminsky group, too? >> well, joe joined our firm after the acquisition. it was ironic. it was ten years ago today that you and i were on air when the first news came out about lehman buying newberger berman, one of the good things, not many great

things that happened was that joe came over to run the firm. >> you needed to know about the interest rate backdrop. that wasn't your thing, really, you were sun corps, individual store, things like that? >> newberger, berman, from the standpoint of acquisition and what it is today and the culture that remains in terms of stock pickers, individual, asset management. it's back to the core business. unlike a lot of people, joe has a great background in terms of running research and so, yes, i brought a lot of great guests here today. they understand what is really happening out there. so talk to joe. >> so, what we said in the intro, so the sharp rise in ten years height be behind us. you are now in the middle of what you estimate is fair value for the ten year. now my question about fair value is, how are you calculating that

and is it assuming the fed action or just if there were no fed at all? >> given the economic backdrop, 230 to 2080 is where you think the ten 84 would be? >> that's the view hoff our fixed income team. fair value at 280. certainly, they are considering the fed actions is on the overall economic growth and outlook for immigration. they feel rates have moved towards 280. the long-term trend in rates will be up. >> that's not too horkts not too cold. would imply to me the economy is not really gang buster 2030 to 2 yrkts it sounds like a tepid economy. >> i think that's what we're saying, our long view is we are seeing and will see grinding modest growth t. fed has always seemed to overestimate the level of growth. we think the fed might be slightly later to ending the tapering. we see some value in the

intermediate term. >> you say what bernanke flipped that 254. >> he did. >> it almost looked like it. they all came -- >> cnbc got all these calls. >> we're sorry. >> we all want to come back on average. the way it looks to me for the rest of this year right now is that we hadn't heard about bond vigilantes for many, many years. in fact, they had no impact, right? what was that face for? >> the way it was pronounced. >> vigilantes. >> truly cosmo and worldly. >> you know i'm not. >> this is mean. >> vigilantes. >> the vigilantes perhaps will be coming back, because, if, in fact, it was an orchestrated attempt, to talk about down interest rates after 254, what's going to happen in the next couple of weeks is going to be quite interesting because it is going to actually be an outcome

here, either the fed is going to take control of something they had control of the last three.5 years or will lose control in the next three weeks. itself the way it looks to me that the bond market is shaping up right now. >> you, considering what you think about the economy, can you tell us whether earnings are going to be sort of middling? is that how you put it in. >> i think that's a consensus right now. i think expectations are low in the second quarter. they may accelerate based on a modesting a sell rakes in the economy which has gotten everybody excited over the last number of weeks. at newberg, one of the hallmarks is we are too focused. we try not to get caught up in the short-term back and forth of the marks. our long-term record would kit that that serves clients well over the years. >> so why is the market doing so

well, middling earnings, the fed, is it too high is, is it up a little on air? >> i think as it relates to the u.s. markets valuation, you are seeing a modest outlook for earnings growth, rates are staying at 280 or 260 depending on where it ends up over the course of the next number of weeks. they're at relatively low levels. >> in my take on you over the years is that you never were really just overly bullish on the market per se because your whole deal was picking stocks. >> right. >> you would never say the market, it was always you need me to pick which stocks. are you bullish now? >> as joe knows, closet indexing, go with closet indexing. that's not what we did. in fact, the performance on the long term paid off. i believe and i've said this really since last august when the statement came out and said

we were going to do anything, that's what forced people into the markets. . before we let joe go, joe, with see so many people come on air here and talk about this rotation, talk about what people are doing, or not doing. you have a front view seat. you actually look at billions of dollars. what are individuals doing in terms of the move, to add a fixed income. what do you see in terms of daily flows? >> on a year to day basis, we've seen good flows across the board. we seen roughly 3% growth in our equities fixed alternatives. >> so that's money coming off the sideline, that was sitting in cash? >> that we assume was sitting in cash. >> right. >> over the course of the last number of weeks, we seen a little outflow in fixed income. more focus in high yield. it received lots of flows industry wide. whether you want to call it the great rotation or people

realizing you can lose money in bonds, shifting to assets given the environment and the outlook that we see. i think that's, you know, that's a good trends. >> thank you. >> gary will be with us. >> yes, sir. >> what does a fat cat like vice chairman, are you making more or less than you made as -- >> my mother will probably be watching the show, joe. she will be e-mailing me now, why is kernen being mean to you again? >> you don't have to give me a number. are you all confirmed, because you made so much money at newberger? do you need money? . >> you got comments, questions, about anything you see here on squawk and we mean anything. shoot us an e-mail squawk at cnbc.com is the address. gary will be getting that e-mail

as well. you can follow us on twitter. coming up next, the challenge of making the government high-tech. john harwood has a big exclusive interview with the president of obama's chief officer todd parker coming up after the break e years? what if you didn't know that you might need extra coverage for more expensive items? and what if you didn't know that teen drivers are four times more likely to get into an accident? 'sup the more you know, the better you can plan for what's ahead. talk to farmers and get smarter about your insurance. ♪ we are farmers bum - pa - dum, bum - bum - bum -bum ♪ (announcer) scottrade knows our and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help.

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. >> in this morning the dow

futures are up 80 points. they have been up triple digits early this morning. s&p futures up by just over 10 points. let's get to john harwood right now. he is on the white house lawn with a special guest. john. >> thanks, becky. i'm here with todd parks, the chief technology officer for president obama's administration. the president at a cabinet meeting is going to highlight some of the work that todd park and innovation fellows have done and also challenge his cabinet to adopt more of the innovations that they put forward. let me ask you, todd, ghoft has a rep takes for being clunky, slow, inefficient. what do you think you have been able to accomplish so far? >> this one champions the idea of harnessing the power and building a brighter future for iraq. exactly of what's happening in the government today. there are phenomenon people harnessing the power to help

government work better and grow the economy. just a couple examples, for example, in the recent hurricane sandy, fema has harnessed ways for better results. if you get housing to folks that rely on the ground inspectors, now they use satellite and analytics to figure out what areas need help and get help faster. in addition, a majority of folks post, were able do so via mobile phone or internet even when folks didn't have access, fema enspecters came back with ipads, another example, i was recently traveling with the president to austin, where he launched a new executive order that opens up tons of government data, everything from health and science to safety and more as machine readable free fuel for entrepreneurs to create new companies and jobs. this is america's day, we want to get back to you, all kind are picking up that data, to help

grow the economy and create low class jobs. >> the previous thing the government has going right now is trying to implement the health care law the administration announced a delay in the employer mandate. they couldn't get it done in time. what does that tell you about the limits in technology in making it work more rapidly and efficiently? >> basically, they focused very well, business expressed concern that there are issues to be worked through, so it was a sensible thing to do, to implement properly, so october 1st, actually, we will be bringing it live, thing are on track to make that happen. >> a lot of people are concerned those are not going to be up an running in time. what is your role in trying to push technological cloougs solutions to make that work better. >> there is a whole team working

incredibly hard night and day, they're on track, we had actually done a huge am of user testing, user experience on it to make sure the website is as user friendly as possible, taking a look, the prototypes are imprifs, the teams are using all kind of advanced technology. >> no doubt they'll be up and running? >> october 1. >> finally, let me ask you about the culture of washington. it has a reputation of being option of the silicon culture in terms of agility, flexible, innovation. what have you found being here as a creature of silicon valley. >> it's interesting. i have found a lot more similarities than you might expect. what we have been doing is whenever the president gives us a mission to harness things and get things done for the american people, we go find the folks across government who have been

dreaming about that for a really long time. they're out there, they're incredible innovators. they call a virtual startup to move silicon valleys to get stuff done. we found, like president obama who is deeply passionate about harnessing the tech. with that air coverage, it is possible for these focused teams to get a lot done in a short period of time. >> amazing. >> it's not easy. wasn't easy either. it's hard to actually build anything new. it turns out you fly a lot of techniques to internal parts of the government. they definitely work. >> thanks so much, todd, for being with us. joe, you just heard it. is one guy, one office, very big government. he's trying to make parts of it work at silicon valley. >> very good. we don't like that, john, thank you. harwood hangs out, walks around, you know what i mean,

checks out the edging. >> does a beautiful line. >> it's a nice line. >> they see him, who is that guy? oh, harwood. oh, glad to be here. coming up, does michelle use organic fertilizer on that? >> that, i don't know, on the herb thing. >> it should be. we're going to have an update on the violence in egypt following the ouster of president mohamed morsi. "squawk box" is coming right back. .

. >> more violence in egypt. we are joined from cairo by

yousef. a good day? ro nochlt, no, it's been a violent night. to two people have been killed in clashes. we understand most of the fatalities took place in an area close to the republican guard headquarters. the clashes broke out between the army and pro morsi demonstrators. the muslim brotherhood said their people were wrapping up pre-dawn prayers and were fired on unprovoked. the army said in a statement that they endured an attack. it was a terrorist attack is a way to describe it. one soldier died in the firefight. this, joe, a whole new level of violence. we just saw a press conference by some representatives of the muslim brotherhood. some of the people were in the pro morsi rally. they showed some bloody pictures of some of the victims, some of the ammunition used in the gunfight and the army for its part with the minister of defense is expected to hold a press conference to tell its

side of the story sore what it shared this morning. it shocked the nation. it shocked the world, joe, obviously, that's political ramification. are you under a transitional period where you are troying to foorm candidate. has been hit by delays because the islamists noor party involved in the transitional process is pulling out, staying we will not stand by as this happens. markets trading to the downside. reactions to that. so. >> chef, we saw some disturbing video over the weekend, too. the war on drugs said graphic. crazy stuff happening. we appreciate your report. stay safe. we'll check back with you probably tomorrow. >> okay. >> if you have comments, questions, about anything you see here, shoot us an e-mail. you can follow us on twitter at squawk cnbc is the handle. coming up next, we have a train derailment, with 72 tanker cars,

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. >> welcome book to "squawk box." in the headline, today marks the start of the earnings season, alcoa releasing its quarterly numbers. j.p. morgan chas have other high profile orders out this week. microsoft, they're shutting down their ms ntv service. service was once known as web tv and was the acquired by microsoft for more than $5 million in 1997, some of that technology from that service lives on, though, in the x-box gaming console, facebook begins the rollout of the graph stem cell research, featured today, it was announced in january. remember we talked about it. it has been available in beta, since then, it is designed to enhance facebook. >> good for us, because we saw so many stock dharts. >> they have the graphs. >> any chart you want to put up,

you can search for that graph, whatever, minute by minute, daily highs, monthly highs, yearly highs and lows, different shades of color on the graphs, is that what it is? you are looking at me, do you remember what this was? >> it's a social graph. >> social graph. >> all of the people you know, all of the experiences you have, then when you type in the local restaurant. >> right, now i remember. >> got nothing to do with charts. >> never mind then. >> it won't help us at all, basically. >> are you on facebook right now? >> no, i am not on facebook, i don't plan to be on facebook, how about you? >> why don't you shut down your account? >> i go down occasionally. >> are you on, what's the name of that? >> i am not. >> how would you know if someone said they would. >> that was an april 1st joke. >> it's a real thing by yahoo.

you know all about it. >> i heard of it. >> you heard of it. you had a friend who was on it. yeah. okay. >> let's take a look quickly, things are indicated higher. you see the do you futures are up and have been up through the the morning. s&p futures are higher right now. right now it looks like the dow would open 75 points. s&p 3500 would open up close to 10 points, also, let's get an update a. runaway train carrying crude oil derailed in the center of a small canadian town in quebec. five people are dead, dozens are missing. katie. >> reporter: good morning, becky, this morning, investigators and firefighters will get close to the blast zone, the two tanker cars on fire have been put out t. pressure was too high for investigators or fire officials to get even anywhere near it. as you said the death toll still

stands at 5 people. 40 people have been reported missing by friends and loved ones. this happened 1:00 a.m. saturday monk when about 70 cars from a tanker train detached themselves from a locomotive, derailed and five only them exploded right down behind me. then it flattened 30 buildings in this town and forced the evacuation of 2,000 people. a spokesperson says they're not quite sure how this happened, but the railcar the train was unmanned at the time it was parked for an overnight shift change. they're not quite sure how it became detached from the locomotive. one of the reasons they think a death toll could be so deceptively low, there is a popular nightclub down there. investigators aren't quite sure what, if anything, they will find when they get down there, becky. >> katie, thank you very much. this is a developing story, one we will be watching closely. the dollar index reaching a

three-year high, oil touched its highest price since may of 2012. joining us to talk oil prices is kevin book. on currentlies, we have boris schlasberg. doris, the dollar this morning is down a little bit. this is after some pretty massive gains if you look at the levels it's been at the last several weeks. what down happens from here? >> the dollar is king dollar all the way. we had positives and today we had a minor correction. you basically have a combination for dollar bulls. you have strong u.s. data the consensus the fed is going to taper, more importantly, have you u.s. yields rising especially to a 7-year high. all of that is creating a flow on the dollar side. on the european side, you have lots of problems, still very slow growth. lots of problems in terms of the periphery, in terms of portugal,

greece seems to be tapered over, as we go forward, it's in question whether it will will make the budget deficit. all of those problems will come back up. i think it will be a problem for the euro, so in my opinion, the dollar will make fresh yearly looi highs as we go forward. >> boris, is the most important thing what we hear from the fed? the fed minister released on wednesday. will give us insight as to what was said around the table. >> i this i the bharkt will be focused, not so much on what bernanke says what the hawks are saying. the they are feeling. if they give the market an inkling september is a tapering period that, will give the dollar moore of a boost. out of the u.k. telegraph, they said like the holy empire, omt was neither outright, nor monetary more transactional. bcb is floating the euro on its

rhetoric, nothing more. i think that will hurt the euro as we go forward. >> that's a great point kevin, let's talk oil price, they have been concerned with egypt, concerns about an egypt story, how much is the stronger economic numbers? >> well the stronger economic numbers are a part of the false bull story. maybe bulls in rose colored glasses is what we're look at, becky, what you have is is a classic geopolitical risk premium. benchmarks are up. the suez independent crudes that go through europe from the middle east down from other substitute grades. this is a market that says, boy, there isn't a problem t. problem is, there isn't a problem. no matter who runs the country, egypt is not a regular player. a net petroleum. one where first you have the same weak demand we have been

having all year. second that strong dollar is generally not good for crude. it's usually in the dollar crude swap the opposite of good. >> right now, it's close to $103, where should it be if you take out that geopolitical risk factor? >> that takes us back towards fundamental also in the low 90s for wti, in the high 90s for brent. you have the displacement of the west african grades which has done a lot to narrow the world market, which has brought brent closer, that convergence is real. everything else may be transient. >> gentleman, thank you both. >> hey, coming up, more on the crash of the asiana flight 214. up next, 23 will talk to a boeing analyst about what it means for that dow component. then a recovery in the manufacturing sector. we will talk to the marriage and ceo of a producer of heavy machinery. .

. >> the investigation into the flight asiana 214, joining us is the analyst at jeffrey, howard, what are your thoughts so far as

preliminary as they might be? >> well, the ntsb came out with a preliminary report t. implications are it's not mechanical and it's not maintenance. >> maybe the effects on boeing hard to connect the dots where it could be material to the 777 or to boeing. >> i think that's right. boeing is coming in on close to selling more 777s than 737sment so it tells you you have a great track record with that airplane. >> yeah. in terms of boeing's overall business and, you know, in recent months as xard to airbus, has boeing been gaining grounds, losing grounds? where are they? >> i think boeing has gained some ground. they putting the 787s back in the air. we recently raised our earnings estimates for the quarter. the quarter marks the highest annual, highest quarterly

deliveries since 1998. >> howard, is there anyway that because so many people apparently survived this tragedy that it may be a positive benefit for boeing in how this was manufactured that the emergency procedures work so well? >> well, you know, if you go to boeing's website, you look at the commercial airplanes, safety is the first thing on the top of everything they do. so over time, safety has had advanced the state of the art. it causes more people to travel as a result of. is there anything you want to ask? >> i'll ask the question, seldom analysts were talking about this yesterday, this plane was an aluminum plane unlike the new 787. the good news is so many were able evacuate, it was remarkable, actually, how many were able to get away from this unscathed. some concern that composite unlike alluminum benz composite cracks and what would have

happened, for example, if this was a composite plane. do have you any worries about that and the new 787? >> no the rigor of the certification process is remarkable t. number of hours that go into testing components, making sure the doors work properly, making sure people can escape. this is not something that's taken lightly. >> i can only imagine if it's been a 787. it wasn't. speaking of 787s. is that behind boeing at this point? >> it sure looks that way, i mean, they had 16 deliveries in the quarter and they're on a pretty steady rate of building fave month going to seven. a lot of companies taking deliveries. howard, thank you, we appreciate it. we will keep it short, the impact on boeing looks like has

to do with the airline, itself, anyway, i appreciate it. >> thank you. >> coming up, we will get an inside read, the chairman and ceo making his way to the squawk set right now, his company makes construction equipment, cranes, a lot more. we got a lot to talk about when we return. .

. >> well sit-com back to "squawk box." the futures dow futures up 76 points. the s&p futures up by close to 10. >> the overall jobs picture in the u.s. appears to be improving. hiring manufacturing continuing to lag, joining us is the chairman and veo, manufacturing and capital goods company. you have been president 20 years? >> just about. >> the safrg three or four years? >> i'm not keeping track. >> you have outlasted them. about 66 or 65% of your revenue comes from outside of the united states. when we talk about manufacturing

coming back to the u.s., that seems to be a constant theme. is it -- do you see it? when you think about when you think about where you invest, building your capital in your business, is it here or elsewhere at this point? >> i think you want to make your product on the markets that need your product. that itself the primary thing, that's controlling. i think manufacturing back in the sungs interesting. it's a good thing. we will put capital where we get the best returns t. u.s. is a good place to manufacture, but there are other good places to manufacture, there is other growth going on in the world. >> 21, two, three, top marks for you, locking out? >> opportunity markets, still the occupation, we have a tepid recovery, it should be a strong recovery. knob two is the middle east. you got some great opportunities in africa and, you know, probably the third is still latin america. >> talk about qe. when you look at what qe was

supposed to do. frankly for a business like yourks it doesn't seem to be doing it. is that a fair or unfair way to put it? >> well, i'd say this. you know people want to buy capital equipment they have a need for it. they will produce results. low interest rates are interesting. they move the needle on the mar jirngs but they don't change fundamental demand. dumdal demand drives the need for capital equipment. if it isn't there, then probably that equipment isn't going to be sold. >> why do you think demand is weak? >> well, i think demand is weak because of a lot of uncertainty. i think the u.s. market is better than many markets, you know, in rust we trust, we say, as things get older, that i need to be replaced. but ultimately, there sooedz needs to be greater employment, greater growth, greater certainty around tax policy in this country. we should be leading an economic recovery globally. we're not.

infrastructure investment in this country is paling by comparison to what the requirements are. i think long term it's a good growth prospect. in the short term, growth is struggling. >> are you in the camp all this qe should not work and should be tapered because it's an inefficient way to taper money? >> i'd like to see it creating an uncertainty. you know it will end, $4 trillion on, you know the government's balance sheet wasn't an expected activity. so i'd like to see interest rates return to a more normal level. >> ron, i know you always to be a guy who says it like it is, deals way with your customers and shareholders, when thinking about the business today, if i came to you as a customer and i wanted to go ahead and put a big crane up or do a big project and think about the return that i get as a result of it, walk me through why i should invest in a project right now if i'm a

customer that hasn't committed to put the capital behind. >> well, i think you got to examine what kind of work you will be doing. if it's really new infrastructure work, is the tappanzee bridge going to be bill, if it's going to be built, under what time schedule? how will it be financed? will there be a highway bill in the united states more than two years long? okay. if we have a six-84, fully fund well capitalized highway bill, there will be certainty out there. if you will be in the market for a 10, 20 million dollar crane, will you need some certainty as to what the work flow will look like. otherwise, if are you a rental company, you will be replacing your fleet. you probably won't be going out on the margin adding to that fleet. >> if bernanke called this set right now and said to you, i thought what i was doing was going to help your business, your answer to bernanke is it

hasn't had impact at all? >> i think it will be helpful. we need a little better public policy, in my view, to replace the band aid that i think my policy provided. >> you have been outspoken on tax, you wanted to repatriate money from overseas. if you could, how would it change your business right now? >> well, i think we've got hundreds of millions of dollars overseas that we would repatriate. i think we'd, you know, reduce debt in the short term because that is probably the highest and most certain return. i think if there could be a plan for business around the country to the repatriate an also participate, that would be good for the country because our country does need to just do more than just fix and replace what's in existence, needs to kind of redesign. >> remember when he wrote about

that? >> it sounds like it's totally private sekd sector. >> i this i the private sector has to take the leap. not bonds, not talking about borrowing more money from china to build high speed trains from tampa and orlando. >> that's not what they're talking about. >> i'm not suggesting. >> larry's idea was that, he was -- now he's a problem. do you think there is a role for the government or no? >> i'd like to see the private sector continue to lead in its creativity and investment plan. i think the government can kind of set the table, but i don't think the government should be the primary driver of infrastructure. >> joe mentioned china. again, i know you, so i have some insight here. you always had great visibility into what was really happening with china. so tell us, are the numbers real? what is happening with that economy? you sell a lot of equipment there. a lot of these construction projects, guys like jim shamus

talk about it all the time, what's happening in china? >> the chinese economy is going under a significant change. we got over 20-year-old joint venture there. i got scars and good things that we have done. i have worried about the economy being a bubble. many of the construction equipment manufacturers over there have overproduced. people added capacity where there wasn't need and i think there has been an ad judgment process to take place. one of the biggest competitors over there has 53% of their balance sheet and receivables. you kind of wonder what's going on. >> you haven't bought outright companies in china? i'm getting to, where we ever see pork chop again once this deal goes lou? >> wee probably will. probably will. >> edible or do you have a lot of plastic? >> i'm in construction equipment, pork is probably not my -- >> i probably have. >> ron, thank you for coming in.

this is really interesting, thanks. when we come back, the impact to friday's employment report on the fed's exit strategy, we will be talking jobs. plus, a black rock board members big bet on black rock. we will ask james grossfield about his $95 million investment. this is one of the biggest insider purchases in a decade, "squawk box" will be right back. .

. >> friday's stronger than expected report. will september mark the beginning of the ends for the fed's asset purchase program? >> plus, stephen king tackles western affluence in the burdens of entitlements. sorry. that's stephen d king. chief global economist, he'll join us on set and cnbc kicks off its annual top states for business lists, can anyone dethrone the lone star state? >> i wouldn't do it. >> i wouldn't do it. >> i wouldn't do it. >> don't mess with texas. >> the third hour of "squawk box" starts right now.

>> well come back to "squawk box." our guest host this morning is gary kaminsky. that's one reason to leave cnpc you can come back and be a goest. >> where i started here. >> talking about the lockets and the shares. >> it started. right. >> vigilantes. >> vigilantes. >> morgan stanley, ripper than you used to be. which it's hard. your mother should be proud, very successful. andrew, if i can get his attention, he's going to give you the morning head loins. the investigation into what caused the weekend crash of asiana flight 216, still ongoing. phil lebault.

>> good morning. increasingly the questions today will be focused on the performance of the pilots on that flight. we are learning overnight in south yessia over the last 24 hours, the pilot who was at the controls of the boeing 777 was in transition training. this was his first landing of a 777 here at sfo. in fact, he only had 43 hours in total flight time in a 777. he aborted or tried to abort the landing. asiana 214s with going slower than the recommended speed. a landing that did not get completed. asiana tried to speed up right before the crash. >> the approach speed was 137 knots and the question was, whether or not we had the lowest speed that the crew achieved. i will tell you that the speed was significantly below 137

knots and we're not talking about a few knots. >> as more questions are coming out about the pilot of asiana 214, shares are down 6% in trading. by the way the ceo apologized for this accident. the investigation is likely to take months. this is so early in the investigation that it's early to determine that cause here. the ntsb is going over the chart, fuselage, in fact, it may not be moved. 48 passengers are still in the hospital. guys, one last thing, we will be talking with chair woman debra hersman within the next hour. keep in mind, they have yet to interrue the pilots of this plane crash. is something they are hoping to do in the next 24 hours. more answers, they hope to, exactly what went wrong. goes, back to you. >> gary kaminsky has a good question for you. >> good morning i was in and out

of san francisco last weekend. the weekend prior. runway was closed. it was a huge x on that runway. do you know what day last week they started to use that runway again? >> i don't know which day last week, gary, they opened it up. it has been under construction. that's the reason the glide scope indicator has not been working. asian na was aware of that. that's one of the questions that investigators are focused on. the id the fact that the glide scope indicator was not functioning. how much of a role did that play in this accident? at this point it's too early to say for sure it was a clear day, pilots have said, listen, that should not have been a determining factor. we are so early on in the investigation the only thing the ntsb is saying for sure is there is no indication of engine failure. >> phil lebault.

thank you for that story. among the other stories we are following, more violence in egypt today. at least 40 people are dead, hundreds are wounded after supporters of egyptian president morsi attacked in cairo. they have been holding rallies in a sit-in outside the military building since last week. trade talks begin today between the united states and the european union. the goal is aiming to boost economic growth. it would be the world's biggest free trade dole ever. both sides say they want to finalize before the current terms ends in 2014. becky. >> markets are trading higher. you take a look. u.s. equity futures are up 85 points for the dow. up 10.5 for the s&p 500. overseas in asia, you saw a rocky trading session. the nikkei was down 1.4% t. shanghai down 2.4%.

in europe, though, you do see a lot of green arrows there as well the biggest gains coming from germany. the dax is up almost 2.4%. the footsy 100 is up by about 1%. we're kind of bouncing off of what happened on friday when we got that better-than-expected jobs report, that did send stocks higher on friday. ilt it fueled the tapering. doin joining us is dean baker. also, tony fratto, managing director of hamilton play strategies. tony, i was a little surprised when i read through some of your notes. it sound like you are worried the fed could pull the rug out from unthese markets too quickly. >> i have felt this for a while. i have been surprised about the rush to get into talking about the tapering. i have been saying this. i feel like if there is any risk of us, a lot of people talk about america is turning into

japan because of what the fed is doing. i don't think it's a real parallel. one parallel i worry about is the choking off of, you know, organic growth, getting to organic growth, choking it off too soovenl i feel 23 are there a bit with tapering. we are showing up in some of the numbers. i felt we could go doper into this. i realize we are starting the 50 year of the recovery. so it's a long time. this was kind of a deep home that we dug. it will take a while to get out of. >> man, oh, man, how much you change. you got stock trading clients at hamilton strategies? >> i want to be consistent on this, joe. >> i can't believe what i'm larrying. all right. you are not going to argue with doan, i don't think? >> no, i'm 100% with tony. what exactly is the fed fearful of? inflations a bit over 1%, if anything, it's been trading

lower rather than higher. we are still so far from unemployment, even with this jobs number. it's important to remember more than half the jobs were in three sectors, restaurants, retail trade and temporary health. maybe it will continue. maybe not. let's just say it does. we still are looking to gainful employment until 20 when the. the idea the fed has to put its foot on the brake, it's hard to see what the motivation is. >> look at someone wrote this up on friday. they look at the white house statements on job creation and they noticed that they were literally cutting and pasting from previous statements. literally, whole sections, this sort of metro nommic acceptance of 200,000 jobs. growth at around 1.5-2%. we see the number 195, a surprise, it sounds like a great jobs number. it isn't getting us to where we

need to get. >> guys, even the fed officials, themselves, have raised questions about how effective qe 3 or qe infinity is at this point. you are getting less and less bang for your buck. you are running up the rally sheet while are you doing this. tapering is not about starting to tighten. it's not about taking all of that away. the idea you can do this endlessly, that has serous concerns, too, you have to get out at some point. >> it's hard for me to see the downside. it has less effect. we were talking earlier, as you go along, to my mind, probably the biggest effect has been the low mortgage rates. allows refinancing. after a while, everyone can refinance at a 3.5% mortgage has done so. we are no doubt approached the end of that. i think the negatives were a little less than a year ago. still it seems to me you want to do everything you can to have your foot on the accelerator. again, it might not be the most effective strategy. they have to have congress have

some big infrastructure program. not about to happen. so given the ammunition we have. why would you pull it away? >> dean, i don't know if you saw the interview earlier, this is a guy in the equipment business and said, qe is not really helped him as much as he thought if at all. >> well, again, i don't think there is much of a direct impact on business. you know the reality is most studies have found businesses are not that responsive. investment is not that responsive to interest rates. that's why i was emphasizing insofar as the impact on the economy, primarily through the mortgage the housing sector, again, we are coming to an end of refinancing, how much people could refinance. so it's not a horrible thing to see this jump in mortgage interest rates and frankly, since i was worried about housing prices getting out of line, i'm not that upset either. it seems it's going in a wrong direction, it's a small piece of direction. why throw it away? >> you seem like a nice, reasonable guy.

are you not flame throwing. i read your stuff. i like you. are you doing that for our audience? are you like -- >> no, i throw plenty of flames. i think it's outrageous we are sittings here with an 8.5 millions jobs deficit. that's a lot to low into the garbage. >> you were nice to sorkin. he's a wall street guy. >> oh, come on. >> we can talk about financial transaction, a breaking up that stuff, joe. if you want to get into financial transactions. >> i want dean to come back and do the whole huffington post. >> have me on tomorrow, whatever day is good for you. >> okay. good wmt ewill. we like it. we do. we like to kick things out. i like one of the things you said we got to keep our u.s. banks from all their tax scams from avoiding europe pine taxation. i like that, that's one of your themes, isn't it, doon? >> no, it's a straight forward one. europe wants to have a financial transaction tax.

>> i don't want to pay for their entitlements. >> you don't have to pay. european banks, if they operate in europe. if you and i go to you're. we have a meal at a restaurant there. we got to pay the tax. you don't want to pay the tax, don't go. >> do you want spitzer to get the job? >> i think it would be fascinating. >> tony. >> there you go. just for the fascination of it, joe. >> no, he'll do a great job. >> whose the comptroller now? >> you will know with eliot spitzer. >> i think our friend chuck todd, he tweeted earlier why public redemption is in the public interest. i wonder about that, too. >> it's better to not need the public redemption, right, tony? >> i don't know. >> i just think it's, i would have thought about it. i maybe would have thought that through a little bit better. hitting the music in the room, the recells, bolero, the socks, i don't know, dean, right? >> we all know way too much

about this. thank you guys very much. >> tmi. >> coming up, we have a member of the black rock board, a former chairman, jimmy grossfeld is making his way to the "squawk box." we will ask him about his take on block rock. we do have nice green arrows across the board t. dow looking like it will open 86 points higher. ♪ orts, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

. >> welcome back to "squawk box." our next guest says it will hamper the new and used buying market. jimmy grossfeld is a former chairman and a director, you may be one of the largest shareholders beyond larry in black rock, correct? >> yes. >> you are not a bigger, are you a bigger holder than him? >> no. >> you are the second? you might be the second? >> no, i think rob caputo is. >> let's talk briefly about the impact of qe on housing. what you see happening here. >> on housing, i think that housing is making a moderate

recovery. it's not going to be what it was in 2005 or early 2006 because you don't have these what i call irresponsible mortgages out there that make it very, very easy for people to buy homes. the underwriting standards have improved dramatically, both on the private market and gse market. >> do have you any worry about the tapering? does it do anything? have real impact? >> i think it does. why? because mortgage rates are up very significantly. so let's say you have 100 basis points or 75 basis points increase in mortgage rates. you will also have an increase in, you've had an increase in house prices. you've had an increase in mortgage rates. you've had an increase in guaranteed fees. you have an increase in downpayment requirements. all this is going to have a

moderating effect on home building and the sale of new homes, i think. >> you are doing a lot of construction in new homes? >> we have about 50% of the low priced housing market in houston and we confine ours to first home buyers. the reason we do that is because they don't have a home to sell. so that when rates go up and people have difficulties getting rid of their existing home, that's a problem if you want to sell them a used or a new home. >> it's a question i asked during the break, there is a lot of equity firms out there, colony capital. we had them a week ago, they are buying up homes to rent them. is that a good business to be investing in right thousand? >> i'm not sure. i think they have bought these homes, attractively priced homes at good prices. i think the issue will be managing these homes. they don't have onners in these homes. they have renters.

the long-term issue has been with respect to rental homes, the people who are occupying these homes keep them up or will you have a lot of problems with costs? >> hey, jim. >> my guess they're going to win. >> they're going to win? >> yeah, i think the big fimpls have discovered and are dealing with that issue. based on the base that they came in at and they're leveraging their purchases moderately, i think they have a good chance of winning. yeah. >> jim, we had larry hope nanny on last week. he says he thinks there is a lot of runway left for the home builders at this point. what do you think is this. >> i think that's true. at the low point, we had 320,000 annual rates of new sales contracts. now we're up to 450,000. at the high we're a million, a million and a quarter. so there's a lot of room.

on the other hand, owning a home is owning an ill liquid leveraged investment and mortgages are very important to that process. >> joe, i know we will talk about some investments you made. i am fortunate to know you are one of the greatest investors i had in my life. you ran a public company, tifs which was a successful company in the housing markets. without talking specific stocks, the home builders, the publicly traded home builders trade at valuations based on certain things, when you lock at the cycle right now, what are your thoughts? >> well, i don't think they're conservatively valued. i think recently they were trading at close to twice historically. they trade around book. on the other hand, the national home builders will have less competition from small home builders on a going forward basis. they have good cash flow on a

going forward basis. because they're protected by their deferred tax accounts for many years. so i think it's a mixed bag. i think they'll do better. but i don't look at us jumping very quickly to a million and a million quarters, single family detached or attached homes. >> let's talk about your investment with black rock group. >> great. >> your family has several hundred thousand shares of black rock total. >> yeah. >> you made a huge purchase last year in the open market. i understand why you did as opposed to a private deal. what what's the thesis behind this? >> first of all, you can't do private deals as a director with a private company. if you could, we would never do it with black rock, it would have to be an open market. >> what was the thesis? >> $95 million. >> yes? >> let nel you what it wasn't. it wasn't for a trade. as a director, if i were ever to sell women six months, i don't

own money to the company. sec of all, if i sold out after a year, you pay long-term capital gains rates. i think the only way to accumulate is to buy something at a decent price with great management. hold on for many years. i'm a big believer in black rock. it all starts with a great management team. they are very deep. they are very bright. warren buffet once said he skips to work. the people who run black rock the senior management all skip to work. i've seen these guys. i started doing business with larry in 1980. i have been a director since 1999. it's been my priflogy to be associated with these people. second of all, they only have one business. their business is managing other people's money. they claim to be doing this on a fiduciary basis. it's a trickier proposition when you are in the money imageers business and the subsidiary of a

very large other kind of company. so they only have one business. shall i continue? >> we may have to go and make the some money ourselves, but, real quick, what did black rock look like five years from now, ten years from now? is it in different businesses? i know you said it's in one business. to make this work? >> my understanding is black rock is the largest fixed income manager of the world. equity manager, etf manager and emerging market manager. so they have a broad platform to go in many different directions. about 66% of black rock's revenues come from etfs and retail. but only 33% of their assets under management. there is tremendous opportunity for growth there. if you ask me, what do i think is going to happen in three or five years, with i is my minimum holding period on something like this is i think you will have

great growth in those areas at higher profit margins. >> okay. we will leave it there. thank you for coming in. we appreciate it. >> coming up, chief global economist stephen king earlier this year, he got into a much publicized tiff. he will join us at 8:30 a.m. eastern. [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade. all on thinkorswim. your chance to rise and shine. with centurylink as your trusted technology partner, you can do just that. with our visionary cloud infrastructure,

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. >> welcome back, everybody. pope frances is urging priests and 91 nuns to avoid flashy cars. he says a car is necessary, but please choose a more humble one. the pope is reportedly a exact ford focus. since taking office the pope has chosen to live in a vatican guest house rather than in the more opulent papal a parms. on twitter, he says he hopes we find room in our heart force all immigrants and good will judge us based on how we treat those who have the least. a new horror story called "when the money runs out." as we head to a break, take a look at u.s. equities futures. right now the dow is up 91 points. "squawk box" will be right back.

.

. >> welcome back to "squawk box," some news out of dell. dell shares rising after proxy firm iss recommended the

shareholders approve the $13.65 a share buyout offer from founder michael dell and silver lake partners. the spec salt lake city iss will move that stock perhaps in a big way today. shares of priceline.com on the move. the stock was upgraded to overweight to equal weight. john is back at the helm at eli lilly, he was the drug maker's chairman, president and chief officer and had been on medical leave since mid-may, he underwent successful heart surgery. >> you only want to take a go at that once. >> you looked at me. >> it's fine. >> no, i didn't. i was watching you come up with it the next time. >> because you looked at me. >> be quiet. come on. >> rick, he's italian, santelli, is that it? joins us from -- >> i don't know, i don't want to say. >> that's close enough, joe,

that's close enough. you don't need to run a verification today. today's health care, no verification monday. so we're good. >> rick, should i feel good about the market's ability to think 27 is okay? >> you know, if there was 1-5 the attention paid to what yields are doing versus you were talking to mr. fratto today. i was with you. i have been so disappointed. i think people have gotten used to eating bologna sandwich and it tastes like a free lunch. it doesn't taste like the bologna it is. >> there is nitrates, is it bove bologna? we don't know where it's from. you are right. >> i look at everything, joe. nothing against eamon javers, here's my hero. they say they may be investigating a practice that's

been in place since 1946. it's as insulting as the libor when people like tim geithner knew five, six years ago, but they still go after people all in the soup together. it makes no sense. none of it makes any sense. there is no consistency and i guess, you know, 2.70 is a real rate. i think that the more the fed objects, the more real it's going to get. >> right. >> we had someone thatmatics it in business to try to figure out the fair value. he said 3-2, to 2-8. you have a feeling it's higher than 3? or is the economy weak enough to where 2-7 is reasonable? >> i wish i could jump into this, be a talking head and verify or quantity tie how he came up with it. in the end, it's like the exit. maybe they would be lower because things are much weaker

than we think they, are which makes the whole ordeal so silly in the p in the big picture. >> did you happen to hear the ceo of tarex, earlier in the program today? >> no, i didn't. give me a quick around the block. >> he said joanie aerial platforms, cranes around the world. he said there has been virtually no impact on his business infrastructure around the world as a result of automatic money printed. what say you on that? >>litionen, you know, alls i know is i think infrastructure is a super, super important area. how we get it built is the issue i'd pay attention to. honestly, i think all the dunces in charge of this money, we

can't trust the dunces in rolling out a program that they don't even follow their own laws they pass. you see where i'm going, gary? i think there is a place where we're supposed to let things do what they normally have done. we are supposed to let aggregate bebehavior on marks, in a world where politicians are there to seven, i don't know, instead of line their pockets, maybe they're hungry for power. in that old school, i agree with you. i think you get a lot of mileage out of the hoover dam. the problem is, when the money goes for hoover dam, nobody gets an education on how to quit smoking. the slush fund gets bigger and bigger. whether it's regulation or dodd-frank, it's the same. it creates this massive fast lane of cash for people to control who the private sector wouldn't allow them to be

inturns for. >> he wants to do infrastructure bonds in the private sector. >> i like that. the problem is, you will add import/export banks. you will let all these entities get involved. that's the issue. i like the private sector. whether it's muneys, no matter what, the government tries to eat the place in there that creates an artificial environment can't control. >> because they're here to help. thanks, rick. we'll see you soon. our next guest, argues in his new book the current stagnation may lead to a serious crisis in the near future. stephen king as achs chief, great to see you, thanks. i got a lot of personal, to clear things up, so i understand you correctly. so the era of continuously rising living standards in the west you say is an anomaly historically. we're at a point where we can't

necessarily expect it to continue. we think it has a lot to do with technology and the evolution not of humans but of machines and things like that. you deserve a lot of this. should continue. but what i think you are saying is that the promises that we've made at this point are so huge that anything we have, any spare capital we have is already committed. that's why it will be hard. >> first of all, the technology part of the story is important. i'm not suggesting technology will end. i'm very optimistic about that. there are also other factors that have been a big boost to growth, that will not be quite for the future. like women coming to the work force, a big change over the last years, a huge trade opened in the 50s. it will be repeated. massive increase in educational entertainment. a huge expansion of financial marks, in particularly, consumer

credit. >> a lot can happen in china. >> absolutely. which is why the focus is on the end of western affluence. there is opportunities of growth. over the last ten years, china saw an increase in living standards of 130%. amazing increase. >> yeah, the numbers in the west 4 or 5%, tiny increases compared with china and compared with their own previous history. >> in dabbling and looking at what the logrythmic rise and information that machines are giving us now. this is a similarity argument. eventually, machines are going to know a billion times as much as all human knowledge put together. there will be amazing things that will be able to happen. why won't that counteract? interest we had incredible increases in technology already. you recall in the 1990s, this expectation over the next ten years, actually the surprising things, the growth over the last ten years have been really very,

very poor compared with the entire post war poord. back in the late 1990s the time of the dot-com bubble, there are expectation the actual growth rate before the financial crisis was running only 2.5% a year. post-financial crisis, the numbers are even softer than that. the other big problem is this, having seen these fast growth rates in the past, politicians promised to ours, huge entitlements, whether health care or medical care or ceo pays, huge increases in the future, all which predicated the big increases in living standards. >> but you know back in the late 19th century, if someone wanted to close down the patent office, everything had been invented. there is the arguments that rear their ugly head again and again, every generation, we're going to hear we are going to run out of things that allow us to prosper. >> that's not the issue at all.

my issue is the growth rates we are seeing are lower than previously. but the plans we have depend on the continuation of the past growth rates. >> do you think this has to do with what we have seen in affluent western culture, especially in europe you brodie sort of this elitist class that forgots what private sector capitalism worked in the first place. there is a reason kwe when haven't grown the past five years. >> there is a huge entitlement. >> here we're doing suddenly it's cradled a great hero. >> but there is an expectation of having pensions, health care and so on, all which is providing free or little cost. of course, it all depends on the idea of continuous further decrease in living standards. >> so what's the real crux of what's holding us back? it's the technological innovation is not going to be what it was or that -- >> no the fact that the promise is made.

>> it could be like debt service on things we have promised. >> it creates a lot of uncertainty and trust with capital markets, more generally in society. you have a break down of trust, markets and sales con can't work. >> you see that in spain and egypt. you can't feed your family, you get mad. >> that's one way or putting it. >> all right. you want to make a joke? >> no. no, it's not funny. this is much more horrifying than "the shining." or "kujo" or something like that. >> it's for real as well. it's not a fictional story. >> look at the cover. it's. >> i know, i saw this on your coo's desk about three weeks ago. >> you thought "when the money runs out." . >> i wanted to say to her, are you wreaked stephen's new book? >> she points out it was fact rather than fiction. >> it's not under the dome.

what's the his middle initial? >> edwin, irwin. >> stephen e. king. >> i don't think he uses it. >> i have to use it for me for the distinguish himself from the other stephen king. that's how it works. >> i think of kujo. >> i think, i mean, talk about prolific. it's not you, anyways. thank you. >> i think i understand now. so it's really not, if moore's law will end, the singularity might still come. we promise so much. all right, thank you, stephen. all right, let's take a look at the 10 year. the yield had come down slightly from earlier this morning. actually at 2.694%. the yield is slightly below where it had been, there are headlines it had picked up some speed. i think it reached the high of 2.73%. we will continue to keep an eye on this. this is the market traders are

watching most closely. when we come back, it's one of cnbc's top business list. scott cohen is here to crack the top ten. he's been teasing us with where it is. we will try to physical it out when we come back. [ agent smith ] i've found software that intrigues me. .

. >> welcome back to "squawk box." the dow opposite up at 87 points

higher t. s&p up 10 points t. nasdaq we'll call it 18 points. >> we are kicking off cnbc's annual business series. scott coenjoins us with more. we are already trying to figure out where you are. i saw the video you posted this morning. it did not help me out. >> you know, you can look throwsly for a while, maybe it will help you out. mother nature has given you a hint. as you see a little rain falling. i'm wearing a raincoat. can all be a giant ruse, i could be sweating like pig under this thing. you never know. we built this up. this is the 7th 84 we hold the states to their own standards, we go through the selling points, the marketing materials, if a lot of states are touting their low cost of doing business, that carries more weight in our survey, if they tout their work force and so on, that carries the weight.

the states that put it altogether to become america's top states for business, let's look at what is on the line. for 2013. every state claims to be tops with business. >> i can generate horse power. >> we but those claims to the test. the more the states make a claim the more weight it carries in our study. the new new york works for business. finds out how it can work for yours. >> at stake, 2500 points in ten categories. we looked at the cost of doing business and the strength of the state economy t. kwhault of the state's infrastructure. its work force and the quality of life. we measure technology and innovation, business friendliness, education, the cost of living and access to capital. >> so here's the plan. all day tomorrow, beginning right here on "squawk box," we will count down the top five

states for business. then in the closing bell, we reveal where i am, top states for business 2013. you will see where your state stacks up, top states website, there is a lot of material on there right now. can you take a look at this war between the states for jobs and business heating up. we want to know what you think, follow me on twitter. use that hashtag top states w. we will get your comments out there. later on today, we'll have our first diabolical hint as to where i am in america's top states for business, guys. >> so the vying video you shot earlier this morning showing sunrise over the state you are standing in right now. was that posted within minutes of you shooting it? >> well, if i told you that, then you'd be able to figure out the time zone and all of. so are you not going to tell me? >> we try and be immediate.

but. >> scott, are you changing the rules so somebody else can win? wouldn't the same states win every year? >> texas and virginia differ. >> you are right, virginia-texas, virginia-texas for the last six years, no, we don't change the rules based on. >> virginia-texas this year in. >> you just got to watch. but what we do. >> i like to watch. >> we calibrate every year based on how the states are selling their state and one thing that you probably saw there, if you have been following this year to year, cost of doing business is the heaviest wathd category. this 84 it carries 450 points out of 420 points. that's more than it's carried since the first year the low cost states will have an advantage. but there is a whole lot hells. >> when they showed you the story board for that promo, as our senior correspondent, did you have any questions or any hesitation at all or did you

just embrace it? >> i have no shame anymore. that's part of being the senior correspondent. >> i guess. >> that's what i thought none of us do. i admit that, thank you. >> you definitely don't. >> i know. nobody at this table does. thank you, scott it does work. we all want to know where it is, right? >> i do. >> i want to know if it's not texas or virginia. >> what do you think? ♪ ♪ ♪ ♪ [ 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, going on now at your authorized mercedes-benz dealer. but hurry, offers end july 31st.

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thompson righters will suspend the early release of the consumer sentiment data. eamon, you told us about this a couple weeks ago. >> right, becky, june 12, we revealed we obtained a copy of the contract between thompson righters and the ute of michigan which thompson paid university of michigan $1 million for early access to the university of michigan consumer sentiment data. thompson righters sold that data two seconds before broader release to an elite group of paying clients. last night, they put out a statement saying they are cooperating with the new york attorney general investigation, they're going to suspend that practice of releasing data two

seconds early. thompson righters defending the practice on the basis of it being journalism. in a statement, thompson righters believes news and information companies and legally distribute nongovernmental data and exclusive news through services provided to fee-paying subscribers. they say they have voluntarily complied with the request from the new york attorney general to suspend this practice. so that begins effective july 12th. we'll see whether they continue the suspension indefinitely and where the investigation goes. for now, that early two-second release has been suspended. >> do you see this changing the way other news is released more broadly? >> well, the whole debate here is about the process of what's called tiered release. thompson rieuters put this out two seconds ahead of a broader release for their clients and that gave the early group a head start on market-mobbing information.

the question here will be, can you do tiered release for any market moving information and how does the law and the authority determine what is market moving information that shouldn't be disseminated early and what is journalism and news. it's a facenating debate and interesting gray area where news organizations become market participants and where they're just reporting the news. >> thank you very much. our guest host has been gary kaminski. we'll give him the last word. st, ideas, goals, appetite for risk. you can't say 'one size fits all'. it doesn't. that's crazy. we're all totally different. ishares core. etf building blocks for your personalized portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus, which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal.

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stock of the day, dell. proxy adviser firm, iss recommending shareholders approve buyout bid from michael dell. and silver lake partners investor carl icahn pushing alternative proposal that many thought might get the recommendation of firms like iss. let's get back to our guest host, gary kaminski, for the last word. >> i love getting the last word. >> you always tried to get the last word in. what have you learned away from cnbc out in the real world? >> i like the way you put that.

first, great fun being back with you guy. the most surprising thing to me, despite what you may hear on cnbc or general media, is that having been around the country now for four months engaging with clients and f.a.'s, clients are back engaging. a lot has to do with the fact interest rates where they are forced people to seek advise. but after five years of very little interest in talking to f.a.s or little interest in doing anything with portfolios, i think joe said the same thing earlier, people -- >> is that what you call brokers now? >> brokers now, wealth managers. >> f.a.s there you were an f.a., my man. you were an f.a. >> did you hear what i said? >> great time to be in the wealth managemented by as ceo said when he called in here a couple weeks back from australia. we have a lot of good momentum in wealth management and demographics right to be in the business. >> no longer a broker f.a.?

>> financial adviser. wealth manager is a wealth manager. joe -- joe was a stock broker. >> i was -- yeah. >> you are? >> love you, baby. >> travels around the world on a plane. >> he does. >> make and move money from anywhere. >> thank you for coming in today. >> great to see you. >> making and lose money. >> join us tomorrow. "squawk on the street" begins right now. ♪ >> good monday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber, kellan evans. cramer is off. we kick off earnings season today. alcoa after the bell getting bounce in futures as well after two straight weeks of gains for the major averages. first time that's happened since the middle of may. are investors slowly getting comfortable with a ten-year around