or ninth, maybe seventh birthday turning 29. "squawk box" begins right now. ♪ you say it's your birthday it's my birthday too yeah ♪ ♪ you say it's your birthday >> thank you, guys. thank you, joe. thank you, andrew. good morning, everybody. withing to "squawk box" here on cnbc. i'm just going to read right over you. >> can't wear your birthday suit for you today. >> oh, i did. i'm becky quick with joe kernen and andrew ross sorkin. today's top stories, fed chairman ben bernanke heads back to capitol hill for second day of a semiannual monetary policy testimony. he'll be appearing before the senate banking committee. speaking before the house yesterday, bernanke reiterated that the fed would likely begin tapering later this year, but he also stressed policy would remain accommodative. >> we're using asset purchases and the resulting expansion of the federal reserve balance sheet, primarily to increase the near term momentum of the

economy with a specific goal of achieving a substantial improvement in the outlook for the labor market in a context of price stability. >> stocks didn't react much to his comments. trading in a narrow range. but this is probably exactly what the chairman had been hoping for. he stressed volatility has come down in the markets as heny th the markets have gotten a better understanding of what it needs to do. the futures at this point are indicated up for the dow futures and s&p futures. dow futures up by 33 points. s&p futures up by 1.25 points. nasdaq futures indicated down by half a point. beyond bernanke, few other events of note. weekly jobless claims, the philly fed survey and leading economic indicators. and we have quarterly results from morgan stanley, united health, verizon and black rock among many others before the bell. it will be keeping us busy this morning. >> beyond bernanke. in earnings news --

>> beyond bernanke. >> we're beyond the birthday. >> yes, we are. >> i would have gone with 21, by the way. >> i want to get back to -- because i read bernanke, i want to get to how my mind works, not that you're interested, but in a second. y united health beating expectations. i read it how he -- he said, you know, we're not locked into an unemployment rate of -- and i thought he was saying, look, if things start going better and we can tell, you know that the economy is going better and at 7% it looks like we need to start pulling back, that's not what he meant. he meant we can get down below 6.5 and it doesn't mean we're going to stop. >> my understanding was i thought -- >> no, no, no. >> trying to raise rates. >> no, he's saying even if we get down to those targets, it still doesn't mean we're stopping. >> he said about 7. about 7 was the phrase.

about 7. >> that he starts stopping or wouldn't mean he would stop? i'll read it again. i'll read it again. >> little bit more news and we'll come back in a second. everyone still buzzing this morning about cnbc's delivering alpha conference. number of market moving headlines coming out of the event. i love seeing carl icahn yesterday. >> here it is. mr. bernanke suggesting the fed might keep interest rates near zero long after the jobless rate falls below 6.5%. >> that's not a quote. that's somebody describing what he said. i'm suggesting thwait you were quoting mr. bernanke himself, the bearded one. >> i figured that he's, you know, saying what bernanke said. >> they're right, though, he was worried about the participation rate. if it falls because of the participation rate is -- >> where does it say he'll stop

at 7? not in this piece? >> i'll get you the transcript and then have a debate about it. how about that? >> this is even worse. it is not what bernanke said. >> that's my interpretation. >> you've been like wrong on every single thing you've interpreted for the last -- all the way back when europe didn't matter that monty would do that and the whole country flourished. >> we'll interpret other news. >> please don't. >> among the headlines yesterday at the delivering alpha conference, nelson peltz raised the pressure on pepsi, arguing the company should buy mondelez for more than $62 billion. and spin off the soft drink business. he wants them to pay between 35 and $38 a share. >> pepsi right now doesn't love the deal, okay. and i'm asking all the shareholders of pepsi and mondelez get your cards and letters out and send them to the board of pepsi and mondelez to back this transaction because, andrew, if the transaction is structured the way we suggest,

pepsi, by 2015, our estimates say this stock is $175. it is 80 something today. >> pelgts joined a chorus of people who mocked the name mondelez. >> my fault with irene is two fold. the name mondelez i hate. i think that hurts us in two multiples of pe, okay. and then -- >> really? >> yeah, oh, it sounds like a disease. suffering from mondelez. but you're right, her margins are way, way lower than what they should be. and when i irene and i meet again in the very near future that's what we'll talk about. >> an interesting meeting. they're going to be meeting -- he said multiple meetings

with -- who does not want to proceed with the deal. mondelez said they were open to hearing from investors and, of course, they have a meeting set up. >> he already said what he's going to be telling irene rosenfeld, which probably tells you about how that relationship -- >> his not on his favorite list. though he likes her because she was the one who decided to split kraft the first time around and that was at his behest too. so interestingly, that transaction hasn't really worked. oddly the kraft business, the slow growing business, that's actually doing terrifically and mondelez, theingi business is not. in other news, dupont rose after i reported that peltz had taken a big stake in the company. here is what he had to say about that. >> i learned literally in the past two hours that you have just amassed and are continuing to amass a very big stake in dupont.

can you comment on that? >> you asked me in the green room about ten minutes ago if you say dupont, what comes to mind. do you remember what i told you? i said paint. >> and that's about all we got out of him on that one. the stock did go up about 5%. >> a yeoman's ev fffoeffort. >> sometimes in not answering you get an answer. >> big volumes. >> what does big mean? >> big, i am told ultimately the position could be a nine figure. that would be ten figure. >> big enough to where he has to say -- yes, i believe he will. i believe we're a couple of weeks away from that. i believe one reason he was not in a position or didn't feel comfortable saying anything beyond sort of playing with me there was that -- they want to disclose the position but they haven't built the full position yet. >> that must make people pleased with you.

>> i give him a lot of credit. he was forth right about the pepsi stuff and got into details on things you didn't necessarily have to. i thought it was fun. and how was your conversation? >> it was great. kate and i were talking this morning about our different panels. i led a panel on garrote rreat , if we'll see the move out of bonds and into stock, which started last month. that's a big we. is this the beginning of something or some disagreement on the panel. >> greg flemings was saying he thinks people have been caught by surprise by the backup in rates and the swiftness of it. in a month, you had a huge move. he thinks that potentially could continue and the outlook on stocks is being tapered. >> the idea that somehow -- >> did you get the secret hidden meaning that i got on that one? i thought it was ten based on the comments yesterday, then i saw subsequent stories

suggesting it was six. >> and then carl with john paulson. it was a great day. really. very good. what do you have to say about dell? >> dell shareholders will vote today. >> are you sure? there is some question. >> what i read here -- i can't believe -- michael dell's $24.4 billion -- it could be ajournd quickly without a formal vote to give the board more time to round up support. investor carl icahn put forward a rival plan and he was there yesterday too. at delivering alpha conference. >> things can be done. i mean, this is worse than, you know, where we had these dictatorships. i mean, you look at dell, it reminds you of a dictatorship. they absolutely go scare you. they say things wrong about the company, they got all the lawyers protecting them, and nobody would have got away with

it, risk of being modest, would have gotten away with it if i didn't have a spare $3.5 billion around. >> peltz, icahn. >> peltz for two or three years. but the lloyd beard is since january. when did -- >> that was unveiled at davos, right? icahn i haven't seen with that. i tweeted out, how new is this and priya dos said a few weeks. >> no, he had -- he was -- >> everybody is wrong today. you're wrong. you're wrong. andrew -- you should take it from here. >> he was on the cover of forbes or fortune. we had the writer on the program and he had the beard. when was that? six months ago, longer? i don't know. >> i can't remember. >> icahn shared his opinions on other investors including jim chanos, who didn't have a beard, and big ackman who can't grow a beard. >> i like chanos. i think he's a smart guy.

i think there is a lot of things he hasn't gotten. look at some of the stocks he shorted that went way up. i like anybody. i'm not going to -- i'm not going to criticize chanos. >> you just did. >> but he -- well, with all modesty, i think i have a much better record than he has. you know something, i want to tell you now, you're not going to get me to say bad things about ackman. i like ackman. i'll tell you why. i turned my thinking about him. anybody like with reed hastings and anybody that makes me a quarter of a billion, i like. >> peltz and icahn were two of the many newsmakers at yesterday's delivering alpha news conference. kate kelly joins me with some other highlights. >> it was almost hard to sort of cherry pick some key points to talk about here, but it was a good lineup and i felt as though there was a range of things from policy issues and legal stuff that was interesting to some investment picks.

some grand prognostications about the stocks and markets discussed too. a number of people, lee cooperman, i was thinking he was on your panel, but he was on david's, but you called him out of the audience. they have essentially tapered their ebullience on equity saying the market could go sideways before regaining steam. others also predicted a continued and continued backup in rates. greg fleming saying rates could go up to 4% on the ten year later this year and the market has been really sort of unprepared for the move we have seen already. there was also some talk about asset bubbles and places to short or just to avoid. one notion that hit home with me was richard perry's comparison of the japanese credit market it subprime in the u.s. pre2008, a lemming like bullishness. my words, not his. based mostly on ratings and little research. naturally he short the bonds and he thinks they're likely to crash down to earth. the most famous, john paulson, was there, unveiling a new housing long of all things. he thinks it still has plenty of

room to run. housing starts were up 50% from the trough. that's what is creating a lot of excitement. however, the peak was 1.8 million. we estimate you need about 1.2 million new single family homes a year to meet population growth and replacement demand in the u.s. while we're up 50% for the lows, we're still only half what we believe is the long-term trend. >> there was plenty of talk on good old-fashioned stocks. some names that came up yesterday included express scripts, qualcomm, thermofisher scientific, call corp., sandridge, which he thought had tremendous risk and reward. he could see it doubling within the next 12 months or so or going bankrupt. discussing his philosophy on what to buy, he said in many ways his approach is an

old-fashioned one. >> in the early '7 0s, the environment was dominated by jpmorgan u.s. trust, their fo philosophy was -- they didn't care what they paid in earnings. brazilian economy is going through difficult and u.s. difficult is going through difficulty. things normalize, you make a lot of money being patient. >> david faber asked him of all your ten picks, what is the greatest risk reward. he said it could double or go to zero if there say problem in commodities. greg fleming rates prognostication was a longer time frame than i remember. >> people look at the move when it went up to 2.75 and that was a bit of a shock. if you're talking about even more drastic shocks, we may not have seen the last of the shocks. >> that was his point. he wasn't necessarily saying

we're going to four but he thinks it could create further sort of surprise and -- that people aren't prepared for it. >> it is funny, so many things there you reminded me of a few things i forgot about too. >> there were hidden gems. i thought the richard perry stuff was interesting. a couple of people tried to get folks going, jacob lew who has been sued by perry over fannie and freddie tried to get the two sides to engage on that. what they said was limited. but perry said i love the commentary about the respect for due process and obeying the law and said -- >> i just wish he would read what he's doing. >> exactly. >> kate, thank you very much. >> kate. kate kelly. when we come back, bbt ceo will talk to us about his bank's quarterly results and the outlook. then the newsmakers will keep coming. 6:50, ceo mike jackson. in the next hour, house majority leader eric cantor. and at 8:00, randy kroszner.

welcome back. u.s. equity futures indicated higher today. that would be pretty good. only 18 points yesterday after all was said and done. shares of nokia trading lower this morning. they have come back a bit. the cell phone maker's revenue fell short of expect takings. an anchor is going to tell you about the weather. becky. >> yes, i will. let's get the national weather

forecast from the weather channel's reynolds wolf. reynolds, good morning. >> hey, good morning. really hot times for you in parts of the northeast. i would expect that trend to last the next couple of days. better conditions by the time we get to monday. that's then. this is now. scatter storms in the rainy and cooley in florida. warm for you in seattle. pretty nice there. go figure. and in terms of your flight delays, we'll have those for you too. atlanta could see more today, mainly to the afternoon. memphis might have backups. new york, for the time being, things look good, just incredibly warm. okay. let's go back to you in new york. >> okay. thank you for that. bbt reporting quarterly results earlier this morning. 77 cents per share. three cents above estimates with revenue above consensus. joining us now to go through those numbers, kelly king,

chairman and ceo of bb&t. good morning to you. >> good morning. how are you? >> i'm good, thank you for joining us. we have been talking about bernanke. the steeper yield curve, what is that doing to your business right now? >> well, in the very short run it is not having a material impact, just because of the, you know, the short end is still very low. it is impacting the mortgage business obviously because refinances are going down because of mortgage rates going up. but as the rate yield curve steeps on a permanent, we're asset sensitive which means we have more assets to price up than liabilities. so right now it is somewhat muted except with regard to mortgage and long-term it will be positive. >> when you think about underwriting now, some people

say it is a good thing, given that it means there will be more credit available, but put it in context for us, where are we if we put a 1 to 10 scale on things. >> so going into the great recession, underwriting had gotten to be considerably too liberal. and then obviously everything tightened up pretty dramatically. i would say we're probably about halfway back to where we were, which to be honest with you is pretty surprising to me. i've been doing this for 41 years now and, you know, usually we go in about a ten-year cycle of banker memories from the bad times to the -- forget all the bad loans and -- this is coming back fast, to be honest. and i'm a little concerned that underwriting is loosening up too fast. >> give us a sense of regional borrowing. for so long, the flip side was that nobody was borrowing because nobody, you know, the

business was so bad. is business a lot better? >> i would not say it has gotten a lot better. i think you have to look at a bifur cated market now. the larger businesses are doing well on the bottom line, mostly because they are controlling expenses pretty substantially, and/or they have substantial international operations, and so they have diverse fide revenue mix and doing well. if you get to medium and smaller businesses, they're still struggling. you talk to them, they're very concerned about the uncertainty coming out of washington, their business, while certainly better, let's be fair, certainly better than two or three years ago, but not robust at all. so not nearly as good in the small end as in the large end. >> help us with the fed stress test, bb&t failed the test back in march. where do things stand.

when do you talk to them again? >> well, so let's be clear for the audience, you know this, but on the actual stress test, we passed with flying colors. we actually had top quarter performance. so we did extremely well on the quantitative side. the fed objected to our capital request based on what they call qualitative issues. which we are not allowed to discuss. but so we're in the process, we made our resubmission, they have 75 days to respond, that means we'll probably hear system in the first half of august. >> and then the other thing i want to ask, basel iii, to most, it sounds look a plan, but in terms of what the capital ratios are going to ultimately do to your business and to the regionals at large. >> well, the most recent numbers that we got, which i think are

relatively final, are actually pretty positive for us. and i think generally for most regionals. so, for example, our basel three adjusted ratio is 9%, which is very, very strong. versus the kind of minimum of 7%. so we have 2% over, you know what even as is phased in, the expected level would be. so we're in a very strong capital position. i think most of the regionals will be -- most of the basel 3 impact son the largest wall street institutions who in many cases had lower capital existing standards, and i'll have them to raised to meet the new standards. >> kelly king, thank you for joining us, hope to see you in person on set. >> thanks, got to say happy birthday to becky. happy birthday, becky. >> thank you very much, kelly. >> every guest has to make sure they sign off. >> someone said it is your anniversary too. i think it was earlier.

>> a month or two ago, we'll take what we can get. now you're trying to deflect. >> what sign are you? >> cancer. i'm a crab. >> you're a feces, right? >> i'm a pisces. >> a pisces, not a feces. >> and i'm on the cusp. tech joints reporting results after the bell. as we head to break, some highlights from yesterday's delivering alpha conference. >> make no mistake, we will not let the pursuit of international consistency force us to lower our standards. the united states has demonstrated important global leadership in putting in place tough new reforms. the clarity and liability of our laws do not just provide a bull work against danger, they serve as an impetus to a race to the top rather than a race to the bottom. >> i don't think anyone is too

big to indict, too big to jail. there is a moral hazard in the industry if you give people a blank check and tell them they have a get out of jail card because of their size or interconnectedness to the economy, that's a dangerous thing. we should never do it and we don't do it. 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. people find out state farm does car loans as well as they do insurance, our bank is through. good point. grab an edge. look there's two guys on the state farm borrow better banking sign. nope for real there's two dudes on the state farm borrow better banking sign. [ reporter ] breaking news from the state farm borrow better banking sign...

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pwc's earn your future is a 5-year, $160 million commitment to help students learn the financial skills they need as they grow. pwc's earn your future: empowering students and future leaders through financial responsibility. ♪ we're having a party everybody's swinging ♪ ♪ listen to the music on the radio ♪ >> good morning. welcome back to "squawk box" on cnbc. i'm joe kernen with becky quick and andrew ross sorkin. you're wiser. you don't look any older. do you feel it?

>> no, i don't. >> do you feel different on a birthday in. >> yes. i feel angry. >> i said different. >> depressed. exactly. depressed. better than the alternative. >> look -- >> a state of mind. do i do feel as i've gotten older birthdays roll right off. >> state of mind and state of how good -- >> we never feel like we're older than 18 anyway. >> that's right. >> ibm shares getting a boost this morning. earnings beat the street. brian white is managing director at topeka capital market and just reading the take today, and some of the publications, they like to struggle to lift revenue is the headline for the wall street journal. because it has been the fifth straight quarterly decline in revenue. you follow this company for a while. i think i could go -- i can definitely go back before even

gerstner and that headline could have been ibm's headline every quarter for the past, what, 15 years. they haven't been able to -- it hasn't been a revenue story. i heard they're buying back stock, moving factories overseas for lower tax rates. that's been the story forever with ibm. >> so what the story, you know, revenue they get out of businesses that xhod tiecommodi so profits have grown 16% a year for five years. and in fact if you look at '08, they grew 23%. in '09, 13%. most were down 20%, 30%, ibm grew through that process. the last time they saw quarterly decline in eps year over year was third quarter of '04. amazing. >> the company, you saw that number, the main frame was supposed to be dead also ten years ago. so did they do $25 billion in revenue in a quarter. >> so --

>> hard to grow revenue when you're doing that much anyway. why not try to make it better revenue and not necessarily focused on growing it. >> so the pc business they got out of in 2005, sold to lenovo, and media reports that they're trying to get out of the lower end server business. but main frame still maybes decent money and grew double dinl digits. >> we had chanos on and he didn't say he was short ibm, but did raise the question about services, and whether ibm and all of these other companies that have made so much money on services, whether they'll be able to continue to do that with the cloud, that's really changing the equation right now. what do you think? >> i think you're right. it presents a head wind. they grew their services backlog 7% year over year, the fastest growth in four years. what they're trying to do is they see opportunities. how can we help our customers get to the cloud, how can we help our customers get to big data? service opportunities for that. >> does it bring down the

margins. is it cheaper because there is so much competition in the arena right now? >> it depends on what product sets your offering. ibm continues to expand their margins and believe it or not, i think we're only probably halfway through that. >> wow. >> not -- they had a 10% operating margin about a decade ago. today, 21%. and i think it will continue to go higher. >> wow. >> the two ceos prior to this were both, you know, at this point, they're both our guests from what legendary, paul fasano and then gerstner. gerstner had to come in and redo -- is romney the right person? >> i think she -- she's been with ibm a long time. and she was a big part of their growth market initiatives which is one of their four big initiatives going forward now. so i think she is the right one. they need to grow in these emerging markets and, you know,

big initiatives in china, but also big initiatives in africa, which you haven't heard a lot of other companies talk about. so it is cloud, it is big data, and growth markets are very, very important to ibm and she was an important part of that. >> at this point, it is still corporate, servicing, big end entities and also some hardware but keeping things running and designing systems and things like that. >> software, number two in the world in software and it is half of their profits. >> wow. >> so hardware, if you look at software in services together, it is 83% of revenue, and essentially all the profits. >> those glasses, you're almost wearing a main frame on your face with the google glasses. >> yes. they have watson. we talked about watson last time, very excited about watson. >> that evil howl that -- how does watson compare? >> watson is a lot more

sophisticated. >> he's a -- i don't like him. he was nasty to those contestants on jeopardy. he kicked -- >> i'm sorry, dave, i'm afraid i can't do that. >> when the sing later hits in 2045 and the machines are running things there is four scenarios, they could be neutral, benevolent, malevolent or apathetic. there are four things. if it is goes away of watson, i call that mal ware. >> come on. >> oh, yeah. oh, yeah. no need for proceed pl protopla people with flesh. i think they already lost control. >> oh, stop it. stop it. it is going to be big and this is something i think over the next five years will break out. >> maybe you don't realize it, they were the best we have as humans. >> he crushed them. >> he did.

>> so people can do things that are more meaningful, watson can crunch -- read trade journals that maybe a doctor can't. >> got to unplug him right now before it gets any worse. all right, brian, thank you. >> okay. >> thank you. >> enabler. >> working for him. >> i am not. stop it. >> i want to see if you're really -- oh merck g, my god. you have metal legs. you're a cyborg. >> that's the original one. >> that's your future. >> okay, we have other news this morning, black rock posting quarterly results minutes ago. the company earning $4.14 a share. that's x items handily topping expect takings of $3.82 a share. revenues were roughly in line. larry fink having a good morning. >> the other company has 3.857 trillion dollars in assets under

management. >> it is unbelievable. the biggest by a square mile. >> that's right. let's talk about intel. intel posting second quarter results that were in line with expectations, but the chipmaker is cutting its full year revenue forecast, saying that it is scaling back capital spending as the pc indices sags. this was in line, but profit is down 29%. how do you turn things around as the pc industry collapses all around it. >> interestingly enough, pc was not that bad this quarter. units were up about 5% quarter over quarter, a little different than the dire expectations or estimates that gardener and idc posted earlier this month. >> why was profit down 29%? >> well, there are a bunch of different factors there. one is pc is down year over year in terms of the estimates of the

street, the number was okay. so pc is probably down about 7% year over year, perhaps 5%, somewhere in that area. >> we always look at the earnings in regard to what expectations are. i know that's what the stock trades are. when you see profit decline by a third, i mean that is a phenomenal trend, chris. that's something that i have to wonder how concerned analysts are about this. >> it is certainly a slight negative. i would say gross margins last year were fantastic for this company. it was a highly profitable company at the time. things are a little different, a little more normalized now. i would say that was really the exception and not the rule going forward. so pc does seem to weigh here. it will continue to weigh here, but it is still a very profitable company, trading at probably 11.5 times right now. >> do you like the stock? >> i do. it is a mild positive for us.

it is an outperform. we think there are a lot of good things going on, but the company is in a holding period now, probably for a quarter or two until mobile, smartphones and tablets start ticking in at the end of this year and early next year. >> so by next year, you think this is going to be a very different story, won't be talking so much about pc because mobile will be playing such a bigger role? >> i think we'll be talking about pc, pc is still 60% of the company. company's revenues and also at the same time, we'll be talking about new areas of growth for intel, one of them being mobile, smartphones, tablets, and other areas that they're moving into as well. >> you think 11 times, where do you think the stock should be trading? it still sounds like it has a lost b lot of big problems it has to address. >> 13, 14 times multiple. intel has problems, but very good things going for it beneath the surface as well. they're move into areas like

networking to challenge guys like cisco and juniper. they're also moving more heavily into memory with their joint agreement with micron. there are areas for growth here. we probably put it in line with some of our other companies, the group average, some around 14 time, ca all it 27 or $28 stock >> dell shareholders may vote on michael dell's buyer offer today or not. we'll see as activist investor carl icahn leads the opposition. the latest when "squawk box" returns.

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most of these boards, they're completely dysfunctional. but i've never seen one as bad as this. i really mean it. i've never seen anything where they actually go out and they scare their own shareholders. i mean, one guy wrote a headline, perfect, he said they scared the dell out of shareholders, you know. and there was one guy wrote it. i didn't write it. i wish i had thought of that. >> carl icahn attacking dell yesterday's delivering alpha conference. they're scheduled to vote today on whether to take the company private. joining us is morning star analyst carl landfair. good to see you this morning. >> hi, good morning. thank you for having me. >> help us here. should -- should we vote for michael dell? should we vote for carl icahn?

>> well, it seems to me that voting for michael dell is definitely the safe play. voting against michael dell's bid, you're assuming that carl icahn's proposal will go through. but it also opens the door that neermg mi neither michael dell's bid goes through and carl icahn can fail, which you're left in limbo, a material downside risk for shareholders. >> explain why some of the largest investors in this country, and some people originally thought carl icahn was in this for a couple of quick bucks, but now you have everybody from t rowe price to black rock, big names out there decided or said publicly they're voting in favor of carl icahn's proposal. >> well, you're basically counting on the fact he can get 50% of shareholder support for his proposal, which is very different than in pairing michael dell from getting 42%

support for his bid. effectively carl icahn's financing that he needs, the $5.2 billion to carry out his proposal, is contingent upon electing all 12 nominees to the board. and so in order to do that, you need to generate 50% support while combatting michael dell's 16% equity share that he can -- >> what is the endgame for you? the flip side is you're suggesting effectively the carl icahn bid is not a real bid or difficult bid or challenged bid, there is lots of risk involved in it, they're going to lever up the company, you don't know what you're going to get. right? and yet some of the biggest shareholders out there are saying, i'm backing this, i'm backing this guy. >> yeah. it is a farley high stakes game of chicken to see whether or not michael dell will either raise the bid, if that's that they're hoping for, or to see whether this proposal can get carried

through. if you're assuming that carl icahn can carry this off, then if you're interested in the long-term valuation of dell, you're assuming that it can also operate with 1.7 times leverage, and, you know, materially less adventurous financial position. >> do you think michael dell is ripping off the shareholders this morning? you're suggesting that the dell deal is the one to take, simply because it is the safe one. but is there an argument to be made that two or three or four years from now we'll see maichal dell take this company and the public shareholder is going to say to themselves, man, did i make a mistake, i handed the company over for way too cheap? >> right. and the other side of that is, you know, there is a material risk. and if there is, in fact, this kind of proxy battle and the leadership is pushed out, you're going to have to see a period of transition that is go to be

really difficult and ongoing shareholder scrutiny from wall street, quarter to quarter results, are going to definitely incentivize dell to get rid of its lower margin segments. that could be integral to the long-term viability of the company. it makes it much more difficult. >> okay. carr, thank you for joining us. we'll see if there is a vote. there is question if the vote will get pushed off it doesn't look like michael dell has the votes locked up. thanks for coming on. coming up, the nation's largest automotive retailer posted quarterly results. ceo mike jackson will join us next. i've been doing a few things for a while that i really love-- tdd#: 1-800-345-2550

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. >> the nation rolling out quarterly results inline, but believe the company mike jackson is chairman and ceo. it's not bad. $90 million. 73 cents a share. mike. is that about right? . >> joe. good morning. most importantly, happy birthday to becky. that's right up with our record earnings per share of 73 cents, joe, that's absolutely right. that's an increase of 11% driven by a revenue of 4.4 billion, a 13% increase and i have to say, you know, when this year started

and i forecasted the mid-15 million units for the industry, i was one of the most optimistics, but at the halfway point, i'll absolutely confirm the industry is on track to do that. if i look at the two issues out there that you might ask about, namely interest rates, well, auto retail very much is active in the shortened of the yield curve. we seen for the change in the interest rates for our customers or the cost of inventory. okay. some day interest rates will move. it looks like it's sometime down the road, for autos, 100 basis points means 15 a month. customers have very muched a judd on gas prices to around $3.50 t. freakout number is now up around $5 a gallon. they have embraced the new technologies around fuel economy, multi-speed

transmissions, for the life of me, i can't understand why gasoline is $3.50 a gallon. miles driven is below the peak of '07. and oil is gushing out all over america. so we have dramatically increased supply and people are driving more fuel efficient cars. so any common sense would say, gas prices are coming down. >> yeah, so, is that wishful -- you think $5 bucks. you don'tly the four does it anymore? . >> no, i really do not, joe. i think there has been a dramatic change in consumer behavior compared to five years or ten years ago. first the industry has a technical solution for fuel economy. hybrids and electrics. that's part of it. that's 3 to 4% of the business. we've had a dramatic break through in turbo chargeing, direct injection, multi-speed

transmissions, the computer systems on the car that can manage and integrate those complex systems, they work seamlessly to give you great performance and dramatically improve fuel efficiency without having smaller cars or to drive slower. bus as you know, joe, americans do not like going backwards in life. it's a tough sell to say, hey, you want better fuel economy. you got to get something slower. doesn't work in xerk america. the industry has a great technical solution. >> mike. i know you, there is no one i don't think can can look at the tesla and not think, well, it's a marvel, but when i was talking act it not on camera. there are, before you think they're going to take over the world, you have some concerns, right, the way that it's? it's got a lot of subsidies, yeah? . >> well, i think the vehicle, itself, tesla is to be

congratulated, it is a marvelous automobile and technical achievement. now, the declaration that they're profitable to seems to me a bit of a reach in that okay the first quarter they made $10 million. but the government paid all their sales incentives 45 million. the government created this electric car credit system that gives them another 60 million. so you would be taking away the government support. they're a long way from being in the black. as some of those subsidies go away over time, we'll see how long they stay in the black. and i disagree with his retail model. >> would that cut out a lot of deals, i guess, huh? . >> yeah, i'm not. you know, i think it's the wrong step for them. i think the retail franchise system in america is for raul parties. it's very efficient. i think he has the right to do it. >> you will be in at some point in the studio, hopefully, in the not too distant future. >> i'll see you in september. i'll be there.

>> okay. great, thanks.

>> good morning. welcome to "squawk box" here on cnbc. if you are just weaking up, the birthday girl of the day, becky quick, turning 21. you can send her gifts, flowers and other things. the futures, take a look are the how things are setting themselves up. we have a green arrow on the dow. s&p 500 opened up a point higher. the nasdaq, though, down about a point let's get you to some of the morning headlines.

the big one, ben bernanke is back on capitol hill. he will be appearing before the house financial services committee. bernanke emphasizeing there is no set time table for adjusting the asset purchase plan. it will depend on how the economy is doing. we will have more on bernanke in a moment. we will correct myself and joe and i will bow back to you. also, this morning, dell shareholders set to vote this morning on whether to accept the $13.65 per share buyout offer. the vote is seen as too close to call right now. potentially, they might not even have the vote. we have more on that story as well. dell component united health reporting a profit, 15 cents above revenue in line. it increased the profit range and larry fink has something to smile about this morning, black

rock reporting certain items well above the stills of $3.82 with revenues roughly inline. in studio this morning, sharing his thoughts on the fed, markets, technology and more, business insider executive editor, a great title, joe. thank you for being here. >> thank you. how are you doing? . >> i'm good. >> you are feeling better. >> yes, a little food poisoning, maybe. >> allergy. >> anyway, you are here, you are here for the next two hours. >> if you missed it, by the way, our delivering alpha conference definitely delivered. we start with news from carl icahn. scott is here with. good see you, it was cloosic icahn yesterday. the rift of deal makeing to netflix, of course, dell herbalife says he is dangerous. >> you will not get me to say

bad things about ackman. i turn thinking about them. anybody that would read hastings, anybody that makes me a quarter of a become, i like. >> carl has made a quarter of a billion dollars thus far in that herbal life bet she still obviously in. naturally, we turn to dell the shareholder vote, he railed against michael dell. then he went after the board. let's listen to. mostly, we have a completely dysfunctional. but i've never seen one as bad as this. >> i really mean it. i've never seen anything, where they actually go out and they skier their own shareholders. one guy wrote a headline that was perfect. he said they scared the dell out of shareholders and there was one guy that wrote it. i didn't write it. i wish i had thought of that. >> who know what is will happen. whether they have the vote. right? if dell does, if michael dell doesn't think he has the votes,

the board can postpone it. >> they can try an turn some people around, but there are a lot of people that have come out and said they're not voting for dell, whether it's t rowe, vanguard, state street. the list is growing bigger. >> do you think the list holders, their end game they want a dell controlled by a carl icahn board that is levered up. they actually want that or they literally want an extra buck from michael dell? what is the real end game here? . >> i think they'd be happy with another buck if mike ral dell. it's all about a higher bid. don't you think? you are talking about a lot of shareholders sitting there for an awfully long time who have watched the stock run down to the level it is now. >> this morning, it's below 13. now, rye, it's 12 and change here. they want to get paid. the situation doesn't look good. however you look at it. i think they just want to get paid. >> if they don't vote, it's bike

the boehner plan b. is that why they would not do it pretty much? . >> it leaves you weakened. >> i would do another dollar, if he brings it public at 60 if two years. >> so the sources that i have on the private equity side will tell that you silver lake would be just as happy if this deal went away. because this business has deteriorated so much. but that's the argument. there is no argument. it has. >> this is something that what is the term, what is going to save dell? whether it's a private company? what can michael dell actually do as taking up private that he can't do, dell can't do publiclyment it's a mystery to everyone. >> you can invest in longer term stuff. >> i tell you. in this case, we talk about it every single day. if the company deteriorated and go to hell in a hand basket

serious changes in investment that investors don't leak or in the short term, it becomes a death spiral. it's possible if that happens just in terms of being out there publicly, we talk about it. >> does it affect the actual business, if they make the big investment? they make big skwirks so forth, but take a while to play out? . >> if you have a company that looks like it's deteriorating, it's hard to hide new talent. it's hard to invest. it's difficult. >> scott, did you know you were getting set up by icahn? . >> that's so nasty. >> i would never mess with icahn. >> so he says, anybody that makes me a quarter billion. >> at his expense. >> he always says that. >> ackman is e-mailing you, i didn't know what was happening there. >> i spoke with dell. he said, i'm going to a board meeting in canada. i have a railroad to run. to which carl said, if he's

running a railroad, i don't want to be on it. >> then i thought ackman came back with another line afterwards. >> no, i don't think so. >> we wish he did. because that would continue your -- >> do you have a crane waiting outside in. >> i read this afterwards. >> i thought that might have been ra joke. i'm not sure. >> of course, i wasn't in on the ec jo. so there. >> people have been, just on the set today saying no one has been more successful than icahn. but it really is his gut a lot of times, whereas ackman you figure he is there late at night with a slide rule, you wonder which technique works better. where did carl get out of yahoo, 16? . >> that didn't work. >> he's done so many things. >> the number of things he's doing now, joe, is unbelievable. >> do you remember on the faber and i were talking king pharmaceuticals. he was literally shaveing and looking in the mirror and heard it on the tv and immediately

said, what? and decided to block that and did eventually block it. he does things, i mean, almost without -- without opening the books. >> how ditz affect motorola? he had no idea. then he has imclone, a biotech expert. >> he's played a billion dollars on netflix. he's ra movie buff? he does watch a lot of movies, i know that. >> he is amazing. >> you meant a regular movies, though? . >> why did you go there? . >> i don't know, because the audio guy would normally. he watches a lot of movies. that's what we were looking for. the economic, thanks, scott, the economic growth. >> that's a good segue. >> not much clearer. with liesman after day one of the fed chief ben bernanke's testimony, sometimes it gets dry, if we could spice it up -- >> with a little porn music?

>> anything. >> they are willing to do what it takes. >> i know you do. >> he's here. the whole, this thing earlier with andrew where you messaged me. >> when i was driving. >> within i watch at home afterwards, there are times where i'm thinking about something. it's going to be funny, becky says something that's funnier. when i watch it at home, i go, why the -- it's easy to figure out what you are going to say. >> it's a fast conversation. >> you should have like the hour rule. if it hams in the last hour. >> the question was, i was hoping, i'm hoping bernanke we're not on permanent, you know, 85 b. that was my joke yesterday, internal combustion engine. we need 85 billion a month. so never really go below that. you go up. if it's weak, you go down a little bit. but you stay at 85. and this harvest guy we had on, what's his name?

he's ready for a permanent fit. so the point i was making this morning, i thought bernanke was saying i may get out at 7. the point was, he may go below 6.5, that may not be enough to get out. >> the term of art, your interesting conversation, that's what i'm about to do now. whatever you want to do at home go ahead. it's threshold vs. trigger. right. so threshold is a place where you might go around and kind of do something. a trigger is boom, i'm doing it now. 6 and 7, by the way, too. unemployment is not necessarily the be all and end all of fed policy. participation rate. i'm getting yelled at. should i do my report? >> oh, you got a hit. >> i got a hit. >> go ahead. >> so here's one thing. because it was a muted reaction yesterday on wall street, i think bernanke wants to repeat. that i think he was happy with the markets understanding. so he has not much to walk back t. message here is twofold in my opinion. on the one hand, the street

hurt, tapering to be mostly on track until september. the fed is not dell bent i was going to say, held bent on that course and will adjust it's timing based on the performance of the economy. >> i emphasize that because our asset purchases depend on economic and financial developments, they are by no means on a preset course. >> so this is sort of the commentary. our friend saying fed to bond market, please come down or else, no tapering. so that's an important part of it. icap saying, we still think the fed is likely to start tapering if september, but bernanke left the door wide opened to the possibility that the fed might wait until later. at pantheon, mr. bernanke did not retreat from the fomc's core message, but he was at pains to make the.that the tapering of asset purchases later this year is data-dependent. so the rice if rates, they interested about the economy t.

effects on a deficit reduction on can economy, a debt ceiling showdown, no economic rebound which has to do both domestically and globally. fed policy is built around the asset purchases. bernanke said that could begin on an unemployment rate and interest rates which bernanke said could be raised. these levels i was discussing were thresh holds, not triggers. is the fed will be considering policy change at levels, not automatically making policy. i think one aspect of this is we are getting a sense of what the fed thought it did wrong in the past few weeks. it did not address the market's fear of a policy mistake. bernanke's big message was this, then the fed is not on auto pilot. it's paying attention, there will be no clang in policy. >> you know the scariest thing i was talking about yesterday, just real quickly was that the consensus is that we are on this glide path that takes us consistently, minimum, we get 2%

gdp growth. unemployment gradually comes down, no problems. it's clear sailing the next two years. we had a five-year recovery. there are times in the past we are ready for another recession. you have global externalities that can happen at any time. what if we don't keep improving. bernanke is here forever. >> it may be a reason why bernanke may want to take a little of that tapering back. >> what does the fed feel the qe does? it seems to me they're starting to question whether qe actually has much of an effect. there is this talk about not so much tapering is tightening. they want to change the members. so reduce the tapering, reduce the bond purchases, really loan into the zero rates, perhaps go lower than 6.5%. what is the thinking? . >> a couple things they believe it accomplishes. they believe it lowers long-term rates. they believe it causes investors to take greater risk at a time when investors take on an

unusual lack of risk in their portfolio. >> this is risk they wouldn't take if just with the policy gains that they said, oh, we're going to keep rates low until 2017? >> it's the risk the fed feels they should be taking, radio it? in the more normal world, you'd have a bond equity mix of 70-30. in the aftershock of the financial riefs, it's the reverse. everybody piles in the fixed income despite a negative rate. so the fed feels like it needs to have this very strong policy to lean against a very strong anomaly and lasting anomaly in the market. >> this is what we do at 2% gdp growth. what we do at 0 or minus 2, what would we do? . >> i think the fed waits on zero for a while before it acted like zero was the norm here. >> things aren't that bad. >> they could go to 120. >> so that's the world now we

live in. >> they could do that. >> we went through so many decades without this, through boom and bust, through, you know, through good times and bad times. >> we're just interest rates. but japan went through -- >> i know. >> this for a long time. >> there is the notion southeastern or lighter this is a bun u one-shot deal with the financial crisis. >> i wonder the conversation at the time. >> bernanke won't even be there. >> the financial crisis is global. all this extra labor. >> hopefully the globe. >> we should create this extra demand. >> europe could implode again, china is crappy. we could slow from 2%. it's not a slam dunk we keep improving, right? >> that is true. is still possible. i understand that. when what is the right normal here? >> i don't know. clear the system. we can't, we're so cushy. >> you are in the camp. we should have let it crash? . >> no. no, every single thing.

we'd be on our back without the 85 million. >> bernanke feels. >> operation 43 cents is if line with expectations. we'll take a lock at more of the details when we come back. >> coming up next, he specializes in monitoring 13 d filings. we will talk about the alpha conference in new york. then he's running for player of new york. so how does john lew feel about el mother spitzer running for his job when we speak to the new york city comptroller john liu. more on the morgan stanley results. [ moritz ] today's high school students

will soon be responsible for paying bills, managing credit-card spending, and applying for loans... but most of them don't have the financial skills to handle it. pwc is doing something about that. i'm bob moritz, u.s. chairman of pwc. pwc's earn your future is a 5-year, $160 million commitment of funding, volunteer hours and curricula to help prepare students for the financial realities that await them. pwc's earn your future: empowering students and future leaders through financial responsibility.

>> welcome back, everybody. morgan stanley is out, i was wrong.

43 is the gap epst. core eps is 45. that's what you match up analyst consensus. isg revenues of $3.8. is better than had been expected. they say echame tu bendicion whichty dba is better than the actual. >> you have 7, is that the number? . >> 7.9 the firm sent out. 7.9 estimate vs. the 8.3 billion actual. 4.2 is the isg revenue. which boats the estimate. equity at $1.8 billion vs. 1.4 billion. >> give an drew the number. >> is that the compensation? . >> was goldman at 44? . >> 44. different in brokerage, you are right. they make more competition. because there is all those, yeah, the guys at fleming.

so you move up the lock. >> what is that rate? . >> 40% probably average is 40%. >> i don't know, that's what it was. >> unless you switch. and you get a deal. >> all right. again, we continue to keep an eye on the core eps. 45 cents vs. 43 estimate. also, a dell shareholder vote is due to take place in austin, texas today. it could change the plans to take it priechlt i private. carl icahn fueled the deal yesterday at cnbc's alpha conference. >> things can be done. this is worse than, you know, where you had these dictatorships. i mean, you lock at dell. they absolutely scare you. they say things wrong about the company. they got all these lawyers protecting them. nobody would have gotten away

with it. the risk would have been able to get away with it the they had a spare $3.5 billion around. >> we are joined by ken squire. that's a research firm that specializes in recording 13-d filings and shareholder activism. ken, how do you think this will go today? . >> thank you for having me. i think it looks difficult for dell to win this one today. you know, by all reports, it's about 30% of the shareholders already that have come out, reported to come out against it. there is another 10% of shares that probably won't show up to vote in a vote like this count against dell. he needs 42%, over 42% to get this done. so it doesn't look like it will happen for him. >> so do you think the company, the board will actually push this off, push the vote off? . >> they could either postpone it before the meeting starts or wait until the meeting starts and see how the votes are coming

in. adjourn it with a vote of the shareholders, which is a different threshold which is easier to get. >> isn't that despicable, though, isn't that a despicable thing to do if are you the board? . >> certainly carl thinks so. you set the vote. it's not coming your way. you need changes. now the board should be, they shouldn't be on dell's side. they should be doing what is best for the stockholders. >> the board believes this is best. >> what is best for the shareholders here? carl will make his arguments. he's got some strong arguments. if you lock at the number, others say, hey, if you don't get this number now, you could have a much worse situation down the road. >> if they feel they get more by pushing it off, that's how they justify by pushing it off. >> andrew talked about andrew peltz, he made a lot of news, why don't we start with pepsi? >> nelson is suggesting pepsi boys it $35 to $38 a share.

nelson is a brilliant investor. he has a great track record, particularly in consumer services. more so in branded foods and beverages. you would hope that pepsi take him seriously considering what they have to say. their comment doesn't seem like they are taking them. they didn't give a comment that you often hear of, we value the input of our shareholders. we will take this unconsideration. they flat out said we are good where we are. the problem with being a construction. >> that's an all time high, by the way? . >> yes, i know. doesn't mean there is a lot more value there. >> do you think, one area i think pepsi could give on, potentially, is to say, okay, you foe what, we don't want to do this whole deal, we'll go towards your plan b. we won't spin off all the beverages, we will spin off north american beforeages, there is arguments to do that. does that make sense to you? . >> it makes a lot of sense, nelson said i think to you yesterday, that would make him

happy. it wouldn't make him ecstatic. it doesn't seem like they're considering that. their comment yesterday was pretty quick and pretty dismissive. >> why don't we listen to the sound from peltz, himself, this was andrea interviewing nelson peltz yesterday at the cnbc alpha conference. >> pepsi right now doesn't love the deal. okay. i'm asking all the shareholders of pepsi and my belief, get your cards and letters out, send them to the board of pepsi, because andrew, if the transaction is structured the way we suggest, pepsi by 2015, our estimates say the stock is $175, it's 80-something today. >> so he does suggest that he thinks there is a lot more value there. how likely do you this i this proposal is? to get picked up by pepsi? . >> no, it doesn't. i was saying the problem with

being a constructist which nelson peltz calls himself, i think actively so. the threat of a proxy fight is much less credible than it is for a confrontational -- like ackman. >> inside pepsi the argument is there are so many dissynergies by separating these businesses actually when you look at the middle east or europe, the salty snacks and the drinks do go on the same trucks. the second you decide you are taking these things apart, it actually makes it complicated. they say, why do we want to buy mongolese, it has horrible margins and cadbury wasn't so great to begin with either. so how challenging is it going to be sort of the risk of tikeing on this big merger, then splitting off this other piece, you have talent issues, some people checked to both the salty snacks and the drinks. it's not just like a slice everything, it all works out. that's, if i was challenging

injen newty, that would be what you would say. >> nelson, you look and see bad margins. nelson cease an opportunity to improve margins. >> it's a great brander. he knows anything. he knows that brand. >> yeah, the name, obviously, is a brilliant brand. the name is significant. >> ken, thank you very much for coming in today. when we come back, we have more highlights, delivering alpha conference, plus we have house majority leader eric cantor, "squawk box" will be right back. .

>> in our headlines, we are about an hour away on initial jobless claims. economists aring willing for 340,000 new claims for last week. that compares to the 360,000 the week before. also, congress could approve a deal to restore lower interest rates for subsidized student loans. a source still nbc news senators left the meeting with a deal if place. that deal could come up for votes sometime today. also, this year's emmy nominations are set to be announced later this morning. it's possible the house of cards and arested development, two series could receive top series and nominations. if so, they would be the first online only programs to do that. >> i would love to see house of cards. i thought it was one of the great series. you don't see tv like that. you just don't. >> no. >> i guess we can quickly mention verizon. i'm seeing a 78 cent number to

start with. eb eebita, 6 cents above estimates. wireless at this point .93% and wireless retail customers up 6.3% the revenue number close enough for government work 29.82 the estimate. 29.79 is where it came in. the adjusted earnings per share number is 73 cents. >> that will answer that. >> probably a penny ahead of expectations. then they're increasing cheer capital spending guidance, as they prepare for the future 16.4 billion t. 16.6. that's from a prior estimate of 16.2. verizon is a component, too. on this news, leader, the house

has passed two bills to delay the obamacare pan dpats for businesses, with more on the vote, house majority leader eric c cantor. how long is the dray for the employer mandate that was in this bill that you got that you just passed? >> first of all, i want to wish becky a happy birthday. i hear it's a very special day. >> she loves this. i don't think enough guests can say it enough. >> it is all, you embrace them. i tell you, i had one last month. you embrace them. >> there is nothing you can do about it. >> the alternatives are much, much worse. >> was jit for a year or was it like you republicans like the term e permanent delay. >> we do want to permanently delay this thing. i think what has happened here is you've seen the administration two weeks ago take a huge step and that was to

admit that this law is flawed and, in fact, what happened this week was even further evidence that there is growing bipartisan sense that this law needs to be stopped. >> why only 35 dens voting for the employer delay? i don't get that. 174 voted against the employer mandate delay. was it not just for a year? what did the bill say, delay it for? . >> well, joe, i think the important piece is you've got also now democratic union leaders who have written a letter to nancy pelosi and harry r reid outlining the threat that obamacare poses, not only to jobs in america, they said they perceive nightmare scenarios to the health and well being or working families. so again, in a very peculiar development here, you've got growing sense of commonality between the white house, union leaders and house republicans

that this thing is not ready. we don't think it will ever be ready. >> those are a strange bed fellow. normally, you would be doing things, but what was it? because i saw james hoffa's comments, too. he said, you know, those words are etched in my mind, too. because every time i heard them, i didn't believe them. that was if you like your plan, you can keep it. so many times, now, they're saying that was promised to them. they're worried they're not going to be out of queue. what changed then, what did the union finally see what is going to happen to them, a lot of employers will end their coverage? . >> first of all, i think they saw the beginning of the crack in the 40-hour workweek. is something that has been a union goal forever. >> and part-time stuff. >> that's right. you are now being and seeing growth if part-time employment in this country while you are seeing a reduction in full-time employment, which is obviously not something working families

want. then i think what they're seeing as well as everyone else is that employers are beginning to rethink now whether they're going to be providing a benefit, which goes to your point, that number one promise the president has made is if you like your health care, you can keep it. i think the unions like so many others are seeing that that promise is going to be broken. >> you see i love the piece in the new york times front page on the right about the 50% less for hick heck premiums. did you see how many people had that, that they were basing that? 17,000 people in the state of new york had that, the premium which was double what it was going to be under obamacare. that was the headlines for the fork times. 50% cut. >> you got to question always, but what i can say is new york is a state that's had extremely high benefit mandates unlike most of the rest of the country and as you know, that state has

not had the best fiscal experience nor outlook and this is what's happening at the federal level. you are driving up the fiscal stress and the deficit here and most importantly, you are threatening the health and well being of our working families which is exactly the point made by these union leaders. >> we had elizabeth warren on. this glass krielig has no chance going anywhere. you are talking about it. we're wasting time when i asked her, the house voted 36 times to repeal obamacare. that wasn't going to happen. why does everyone keep doing things that will never become law just to make statements? is that where you are now? >> see, i lad a very ro bust exchange on the floor of the house yesterday with democratic whip about the very point. this is not just a message stance, this is real. i mean, you've got again bipartisan agreement, this thing is not ready.

the white house then took the position they could selectively enforce the obamacare law and choose to, and lift the mandate on employers. what about the rest of the employers. we took both steps, removing the mandate from employers as well as individuals to say what is fair is fair. >> eric, we got to go, did you agree with the deal the senate made with, you know, to get cordray in and to end. >> it seems like whatever the democrats want to do if now on, they can do. >> all they have to do is threaten the nuclear option. i'm very disheartened, especially on the mlrb issues. very, very serious policy issues at stake here. i'm disheartened. >> a cheap deck of cards, who was it? i don't know. it's very, i don't know what's going on in walk right now. >> so, listen. we are trying to go -- >> the backbone. >> we are going to try to find this common ground on things

that make sense. >> good luck. >> for growth in this commitment i know you are all about delivering alpha conference that you sponsored. it's about increasing the return on taxpayer investment here. that's where we got to focus is growing this economy. that's where this discussion obamacare is about as well as health care. >> you are preaching to the choir. the delivering alpha conference brought to you by cnbc i think you meant a to say, later? let's end with a couple of bars of ♪ . >> happy birthday. >> thank you. >> thanks. we'll see you. >> okay. bye-bye. >> coming up next, new york city pension funds raking in 12% returns for 2013 fiscal year. fork city comptroller john liu on the performance and the buzz surraunding the possible return of eliot spitzer when we return. clients trade and invest exactly how they want. with scottrade's online banking, .

. >> welcome back to "squawk box." the 2013 fiscal year a grand total of doctor 137 billion in the fund, the highest ever for a fiscal year end. joining us to talk about it, new york city comptroller or controller. we will talk about that, tu,

john liu. so you know, john, during the break we were talking comptroller or controller. david walker said controller. >> no, it's comptroller. >> i just read a piece, he says it's controller. it was a mistake made 500 years ago. it's supposed to be controller. what is it? . >> it says comptroller. >> what will be the next one, eliot spitzer, what does he say it will be? . >> you have to ask him about that. i'm proud of the fiscal year ending june 30th. thanks for giving us the shoutout on that. >> i want to talk to the results and get to elliot spitz fer i could and the mayoral race. on the results, what is the breakdown between the upon you have with hedge funds, with private equity, in reits and real estate and the fees you are paying for that. >> well the breakdown is, we

have between 60 to 70% of equities. another 20% in fixed income. the remainder is split between real estate, private equity and hedge funds. the latter three categories are a relatively small portion of our portfolio. >> what do you need to average yearly to make the numbers work. >> the expected return on our fund is 7% a year. >> do you think that ultimately is too high or do you look at a year like this and say it is actually doable in. >> well, if you look at the average over my three.5 years radz controller, we're averaging 9.5%. the ten year average is about 7.5%. if you look at a longer time horizon like a 20 to 30-year horizon, which these pension funds have long durations. you see a much higher average returns, closer to 1%. >> how many changes have you made since you got that job? in terms of the allocation?

sample we have reset the allocation to include, for example the first time that we have hedge funds. we have directed more towards real estate and private equity to earn the returns that are able. >> i do want to get to eliot spitzer, we had him on the program last week. >> you do? . >> i would like to get your views on whether you think now having sat in these shoes, whether you think that he can take over these shoes and do a good job? . >> listen. that's up to the voters of fork city to decide. we're just under eight weeks away from a democratic primary that may in all likelihood determine who the next mayor and controller and city office holders are here in new york. >> trust matters, though, in this job? . >> yes, it does. >> do you trust eliot spitzer? . >> i think that, let me say this i'm happy there is going to be a primary election. i think it's good for the voters to have a choice. up until elliot getting into the race, there was actually not even going to be a primary.

>> i mean, hoy, it's joe, so what more can the controller's office do? there is this idea if spitzer gets in the race, that it could take on a more activist approach if dealing with the investors or the institutions that the fund has money with do you believe that's a plausible role for the office to take, a much more activist role with these institutions? . >> i think so. in fact, that's what we have done over the last three.5 years. first, let's explain the controlers are essentially the independently elected chief financial officer of the city. thus, the responsibilities include auditing all city agency, carefully reviewing city contracts to eliminate wasteful spending, underwriting our bonds, selling them in the capital markets and, of course, investing our pension assets. >> you have subpoena power, right? >> yes, i do. >> do you use it? .

>> we send letters far more effective, becauser with not a law enforcement agency. >> people point out that governor spitzer has subpoena power again. some go, ah, he has subpoena power again. >> what we can do is, we often refer issues and matters to law enforcement agencies, the controller's office is more an auditing agency as opposed to a law enforcement. >> have you said who you are supporting? . >> i'm sorry, could you say that again? . >> have you given support to one of the other candidates? . >> i have not decide who'd i will vote for next. but the idea that the sheriff of wall street could come back as the controller, look, i think it's something we have done aggressively over the past three.5 years. we have had many victory, including financial callbacks at some of the major wall street dirms firms, diversity, exposure. the supply chain sustainability. >> thank you very much. talk to you soon. when we come back, trion,

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. >> that was nelson peltz talking with me at the delivering alpha conference. with me, that's a cnbc investor conference making his case for pepsi, pepsico to split up. joining us on the squawk news line, senior research asset management, good morning, evan. does this deal make sense to you? . >> yeah, on paper it looks

great. i would like to see nor stuff on the company you they will integrate it. how do you roll up this global snack giant? there has to be a reason how pepsi is observing it. >> it's big, it's ricky. there are dissynergies in some cases. you go and look in the middle east, for example, if parts of europe, the soda is on the same truck with the snacks. not so easy to split that up. you are taking on arguments internally within pepsi. those make sense to you? >> the synergy argument makes sense to me. i think that can beover come. you know, there are a lot of, these snack businesses are, there's a lot, they're separate business, right? you have a business, a confectionery business that can be combined with the salty stack

business. >> can can -- mongolese be fixled? . >> i think when you lock at mongolese, it needs to improve. where the markets are decent is they are developing a merging market business. >> you are a beverage analyst, one of the arguments is you don't get pepsi, are you not able properly value it. what do you think of that complaint? . >> i think maybe there is some truth to that on the south side analysts, because it does typically fall under the beverage only on the boy side. guys like myself are recovering consumer staples. >> we will pivot there. we thank you for your perspective this mompg. >> thanks, guys. >> erin sorkin according to dow jones. >> aaron was asking the questions, that's true. they did.

in my name. >> i was working on a fuseroom script yesterday, so. no, it was me. >> the second season is getting a lot better. so congratulates. >> i appreciate that, very, very much. >> that's where my joke would come in. coming up, bernanke on the hill for day two of his testimony, lawmakers, a former fed governor an professor joins us to discuss the fed chairman's comments and the economy, that's next. the futures right now are up. that's good! . 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.

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we have we have analysts standing by t. third hour of "squawk box" starts right now. ♪

welcome back to "squawk box" here on cnbc. first business worldwide, i'm joe kernen and becky quick. our guest host bill rosenthal. am i the first person to say that correct? >> you got it right. thank you. >> let's go to becky for the morning headlines. v-day. >> the first of which is earnings newsment we have a lot of earnings that have been out today, morgan stanley reporting 45 cents, that was 2 wentz better than the street was expecting. ref few, that beat the street's expectationings, morgan stanley announced a $500 million stock buy back. look at dow component you fighted health. beat estimates by 15 cents. revenue was roughly inline and yet another dow component to tell you about verizon reporting

earnings of 73 cents a share, items a penny higher than the street was expecting. revenue was if line with estimates. also, let's take a look at the markets this morning. the u.s. equity futures have been indicated higher. right now, those dow futures up by 38 points. s&p futures up by 1.7. nasdaq down by 2.3. overseas in asia, you saw the markets there, for the nikkei, it was up 1.3%. declines down by about 1%. in europe, in the early trading there, you see right now, things have barely budged. the biggest gains are in london. >> a lot of news coming from the cnbc institutional delivering alpha conference yesterday, among the headlines, nelson peltz argueing the company should buy mongolese for more than $62 billion. take a listen to him.

>> pepsi doesn't like the deal. i'm asking the people from pepsi an mondelez to back this transaction. if the transaction is structured the way we suggest, pepsi by 2015, our estimates say the stock is 175. it's 80-something today. >> we're continuing to watch shares of dupont today. i reported yesterday peltz is taking a big stake in that company. up 5%. peltz would not confirm or deny the report. also, carl icahn making fuse, he criticized michael dell's be id to take it private. shareholders expected to vote today on that proposal or perhaps not, we'll see. although a vote could very well be postponed. we will have more on that story in just a couple minutes. >> today is the second day the bernanke has been on capitol hill. it might be the last time, the

senate banking committee gets a shot. joining us is former fed governor randy crossner at the school of business and the founding and managing partner of dls capital management. we have been back and forth so many times on this i wonder if people, i know a lot of people in the normal network morning shows probably aren't debateing what bernanke said, i wonder if we overdue it so much on the past two months. he has always been data dependent. we know. that anything changed either yesterday or even on may 22nd? >> those eyebrows look a little different. >> that's what i mean. >> what about the color of his tie? >> people at ber naepg, we need eyebrow work. we do. >> you end up looking ridiculous if you don't get them. so. let me get right to you. i have said in the past that you have a way of making fed policy

seem friendly and rational. you have always been able do that. i don't think they're not on the payroll anymore. it's a collegial thing. but what worries me is that when 85 billion was announced -- >> we were in shock. a lot of people are in shock. now the idea that you cut out people in shock when they mention it. so we've become, grown accustomed to this. 2% isn't great, obviously, but i just wonder, if we're not on a track to improve and things actually would slow again or you have a swoon, are we just, we're almost on a permanent accommodation on a permanent fed, almost addicted to this? is that not the way i should look at it? >> i think it's true the fed says if things start to turn south, they will provide more accommodation, so that sort of safety net is there. i think the chairman and everybody at fomc wants the economy to be able to do it on its own.

whenitative taken the punch bowl away the last couple of times, we had those swoons. so it suggested that maybe the markets and the economy -- >> i don't know if anyone knows. >> oh, for sure. >> there are people that question whether qe has been effective. >> for sure. i was as you know supportive of the first couple rounds of qe. the jury is still out of how effective it is. >> owhy are we afraid to end it? >> i can see why they would be concerned. i call these open mouth operations. >> you have a heart attack with ten basis points? they have no monitor, no backbone, they got to 7 and they're panicked. they come back, walk back everything? pathetic. >> a little talking let the interest rates go up 75 basis points. >> the 27. you were around for 18%. >> in may, interest rates were what, 1.7? >> they got to normalize sometime. >> i was shocked when i looked back and saw how fast it moved. >> is it effective qe not so

much what the bond purchases do for the mark, what it indicates about where the fed is? not so much whether it's 85 billion or whatever but the idea they would taper it is an indication that they're getting, becoming more tightening, even if the actual nominal amount doesn't matter that much? >> this is what the chairman is struggleing with, additional tightening. so that's a little dance around particular words. you know, we got a big balance sheet, 3.5, 4 trillion. that's accommodative. the question is how much more? >> yesterday, someone that has an incredible track record and a big investor said i was on the right track indicating to some extent we don't know how this finally ends up. roach motel. where we've checked in, roaches never check out of the roach motel. they check out and they're dead. i mean, are there things, are there bubbles growing places we don't even know about right now from this?

is it going to be trough u tough to extricate ourselves? >> i don't see bubbles. >> do we need to get out of it? is there any harm? >> eeventually compounding, i don't see it now, you got interest, remember, if interest goes up 1%, it's 170 billion more to the deficit or budget against the budget. >> everybody who has been scared and warned us before, greenspan said there lbl. how would you know if you were wrong if rates were to spike? >> the black swann, you lose control. no matter what they try to do. all of a sudden, the interest rates begin to rise, investors say, hey, we want out. the problem, i asked this rhetorically. if you decide to get out of the bond market. i think there is no value there, where does all the money go? you tell me where the money goes right now. if it leave, whether it's the euro. >> where did you go last month? >> you go to negative yields on the shortened of the curve. >> it's been there before in the depression. >> it's possible, you give them

$100. they give you back 97 you got still mask risk alongside the fact that the largest buyer of the bond market isn't even an invomplt it's the united states government. until you stop running budget deficits, you get these congressmen to do anything. the fed has limited amounts and tools available. it's going on in japan and europe anyear here. they all got the same playbook. >> can you guarantee we not have a recession in the next years? >> i will not guarantee you that. >> twlabt the new unemployment rate the housing boom is not coming back. what if the level is 7% so the fed never gets to the threshold where tray can end? do we ever end? >> i think the reason they said 6.5, they think the baseline level is around 6 or so if things go right. so they would alter their guests. >> how does it affect strategy right now? is that something that affects

their -- >> i don't know who. they will kill me. >> larry somers. >> well, i think the president is in a very good position. he has a lot of good choices. >> he's very collegiate. >> it's tough to say. it is quite unusual. think of the number of people who have other experiences, plus chairman of the fed or as treasury secretary to be able choose from. >> this is something you can assess, though, in a better way? >> who are we thinking will have the better chance to get into that role because congress can hold them up? >> that is a very good question. i think that person would take into account. >> do you want to assess that? >> so i would say someone like yellen who has recently been confirmed as vice chairman obviously has a lot of support or recently had a lot of support. i think it would be more difficult to say roger ferguson who is informed as vice

chairman. >> tim geithner would have a harder time? >> i think there are issues that they'd want to litigate, the members of congress would want to lith litigate with them. so that might slow the train down significantly. >> i will tell you, whoever will be most accommodative. these are politicians. they want money printed. they want to keep the ball flowing. >> of both parties? >> ultimately, they figure out how to spend money. they spend it in different bays, but they both spend money. >> when greenspan didn't play, he thought it was his loss. david said about losing control of the yield curve. that was an important reason why the chairman started talking about the reduction in asset purchases. he never uses the word taper, by the way, i don't think he will. >> people noted that yesterday. >> he has never used that word. my guess is he never will. he wants to do a step down, see what happens, maybe wind down. not a sort of a traditional

taper. i think the reason he started talking about it now. why did he bother now, gets back to something you asked about, which was, you know the chairman is thinking of his own exit strategy. i think he wants to make sure. >> the successor isn't left with that. >> exactly the first meeting is up or out. >> right. >> also, he is very much aware of what happened in 1994 when they didn't say anything before han, they pulled back, rates exploded. here they had the ability to recalibrate the message, which is exactly what they've done to try to make sure the yield curve didn't get out of control when it seemed like they might have. >> they are trying to talk themselves out of it. it costs a lot less money. it's not a really simple thing, process to do. it's practically never been done that i can think of. >> it's the open mouth operation. >> and none of us do anything do we other than talk? >> blah blah blah. >> we do. >> the fed can put their money where their mouth is.

>> what we say isn't necessarily. >> there is no presenter here. >> we will go to commercials. thanks, guys. coming up, carl icahn, shareholders are gathering today to vote on michael dell's proposal to take that company private. we will get a live report from the shareholder meeting. also an update on the deal's most vocal proponent. here's what carl icahn said about dell just yesterday. >> things can be done and this is worse than, you know, where you had these dictatorships. you look at dell, it reminds you of a dictatorship. they absolutely will scare you. they say things wrong about the company. they got all these lawyers protecting them. they would have gotten away with it. they would have gotten away with this if we happen to have a spare $3.5 billion around. call 1-888-284-9410 or visit schwab.com/trading to tdd#: 1-800-345-2550

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. >> welcome back, everything. jackie deangelis joins us from round rock texas with a preview of what we can expect. jackie, there are a lot of people waiting to hear if this vote goes through. >> absolutely. good morning, becky a. showdown,

indeed. carl icahn has been very coke vocal. he wants shareholders to reject michael dell and the share saying that price undervalues his company. the meet willing start at 8:00 a.m. local time. 9:00 a.m. eastern. about 300 shareholders expected to fill this parking lot and usher inside for this meeting. michael dell not expected to attend per se, it's not required. he may make a surprise appearance and southeastern most definitely will be here. there is a couple ways, three scenarios of how this could go down today. adjournment is the first possibility. a special committee will have to give a date. defensive dell an opportunity to raise its bid. yesterday there were reports out saying michael dell dug his heels in. the second scenario is that the go private deal could by a proved, be you that means support for more than 40% of the shareholders, excludeing michael dell,les, analysts are saying

it's a little too close to call t. final scenario that dell and silver lake that, deal could be rejected. icahn's proposal could be put forth at the annual meeting, which hasn't been scheduled yet, of course, icahn's proeflt, he says, values the company between 1550 and $18 a share icahn yesterday very vocal about the board and why they should be removed. >> most of the boards are completely dysfunctional. i never seen one as bad as this. i mean it. i never seen anything where they go out and scare their own shareholders. one guy wrote a headline that was perfect. they scared the dell out of shareholders and there was one guy that wrote it. i didn't writ. i wish i had thought of it. >> that sets the stage for what could be an intense meeting inside today. we will be going in shortly. investors will be allowed in.

we will be bringing you updates all morning. >> a big day not only because of the shareholders meeting. also balls it's your birthday. >> like you, i'm turning 28 again. . >> it's a great age. i plan on staying here a very long time. >> you want to be 29. >> jackie, happy birthday, we'll see more off later today. >> also, another nelson mandela. >> he's doing better. >> 95 years young, feeling a lot better. for more on the open six to the dell deal, we are joined by scott wapner. he spoke at the delivering alpha conference just yesterday, less than 24 hours ago. >> yes. i think it's fair to say even carl doesn't know what will happen today. whether this too close to call vote will actually take place or get pushed off. during our conversation at delivering alpha yesterday, he said he really wants the company, that it's not as bad a

business as the board and michael dell have portrayed. >> things can be done. i mean, this is worse where you had these dictatorships. i mean, you look at dell, it reminds you of a dictation. they absolutely don't scare you. they say things wrong about the company. they got all these lawyers protecting them, nobody here would have got away with it. they would have got away with it if i happened to have a spare 3.5 billion around. >> so what if carl loses? he says he's prepared to walk away a vend go onto the next thing, at the end of the day, it's just business, not personal. >> if you look back over all these guys, you know, it really isn't a personal thing and when i lose, i'd call him up and quality him and say, no matter what, if dell wins a proxy fight. if they go to proxy fight, i will be putting it off. if you go to the proxy fight, he

wince, i'll call him up and say, congratulation, i know i'm a big minority holder. i'm going to think how to get the held out of this dam thing. i will still say, okay. >> so who really know what is is going to happen? will there be a vote? does it get pushed off? right now the stock isn't acting like he will. it's been below 13. now it's barely above 13. it was un13 for the first time in a couple weeks. andrew, guys, joe, beck? i mean, who knows how this will come down at the end of the day, whether they will vote or not. >> what i don't get about this, the stock has gone down, not up. because people feel the deal will get voted down, which ultimately thinks there is this by czar reverse psychology thing going on. >> i wonder what will happen. they're already in the 11ing hour t. 11th hour and 59th minute. whether michael dell and silver

lake raise their offer. i'm sure from what you understand and others believe and dem has maybe said, they're not going to do it. >> isn't it like a quarter, if you raise eight quarter oafter billion dollars? >> it is, something leak. a lot of shares outstanding. i don't know, kind of tough. >> you had some of the biggest shareholders come out and say they're against it, which is probably the reason the whole thing could get pushed, whether it's the vanguard, t. rowe state street, black rock. the list is growing longer by the minute. >> does carl traditionally do better on the quick flip or once he's in the company on the board? >> i don't know, maybe i would say once he's in there on the board. >> he's actually done better long term? >> that's a gentleman i can't say for sure. >> thank you, sir. we'll see what happens. >> right now he's done well on some, a blockbuster. >> coming up, breaking employment data, weekly jobless

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. >> welcome back to "squawk box," everybody, june was a successful month for facebook's push to grow its possibly business. the social fourth quarter reported a jump of about 20% if users who accessed facebook on

their mobile phones. mobile ads accounted for about 30% of facebook's ad in the first quarter. the company will be reporting second quarter rules next wednesday. when we come back, with rea few minutes away from the government's closely watched jobless claims i think we look for 340 vs. 360 the week before. as we head to the break. take a look at the u.s. equity futures. s&p futures up by just under 2 points. nasdaq down by about 2 points. "squawk box" will be right back. she knows you like no one else. and you wouldn't have it any other way. but your erectile dysfunction - you know, that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure.

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. >> i wouldn't be surprised personally if the market got into a corrective mode sideways for a while. >> if you invest a dollar in the s&p 500 at the peak of the market in march, 2000, roughly today it is worth with inflation with dividends adjusted a dollar. >> the individual investor if they don't own a home is to buy a home. if they own a home and it has extra cash or available. it's not a bad idea as well.

>> welcome back to "squawk box." a second away from weekly jobless claims. rick santelli is standing by in chicago. steve looisman is back with us in the studio. what did we go through last week? >> 340. we were at 3. >> oh. all right. >> never mind. >> i had it in my head. >> the numbers. >> all right. 360 downgraded to 358 last week. then that number is going to drop 24 hour,000. it is you know a humongous drop. obviously, if correlations were right, it would be terrific news, obviously, if skill sets could go, if you hammer males, now can you operate on patience or programmed computers, it would probably mean more, i'm sure the stockmarket will probably rally on this, it should. it's good nick news, who knows anymore. we are under 250 in a ten year,

but, you know, if you want to lock at that big 100 basis point run up that started in may. if you look at the last two days in june. the first two days of july. we had a pause, the first correction on that big yield move and where did that correction bring us? four sessions roughly subtle between 246 and 248. right about the levels we have been intraday testing yesterday and today, a level you want to pay attention to. we still have philly fed survey yet to be released, yet under some pressure today, so, obviously, you know, volkswagon unhappy about it. toyota a little more happy about it. back to you. >> all right. remember we went up 2.5, i ask someone, we go to 2.6 or 2.7. we get a couple lousy numbers, we are back to 2.2. >> it might. this number is taken with a huge

grain of samt salt. you may want to trade, it's an all clear. you have seasonal distortion. have you the july 4th holiday, an expectation in the data for fact i shutdowns not happening t. spikeup last week was irrelevant. the spike down this week probably irrelevant. right now, there is an expectation the auto maker shut down. they didn't do that. at least some of them didn't do that, because of what fill le but a has been reporting. they have been running flat out to meet demand, construction schedules have been very strong. it sounds ridiculous. >> what's the unadjusted? i always get a kick out of this. it's not like we go from the 3rd to the 5th of july, seasonalities and numbers for decades, you'd think they'd work that out. >> i was going to say that rick. it sound a littlery dick will us to say these are seasonally adjusted numbers, but i guess,

rick, if the expectation is, the auto makers will shut down. instead they do better than expected. you have an outsize impact on the data, you go to the sit back and say, where is the trend. >> just imagine how all the other data is expected this is easy stuff, counting heads. think about things like inflation or deflation or cpi, whether it's 80's style or '90s style or the current style. you see how probably if the numbers are a tight rope, i think we ought to prepare to own a parachute. >> you get to the point to say is it better to have it or not to have it? some say don't publish it. some say this ought to be quarterly or yearly. some think with earnings, by the way. i think if you get the data, you say, you know what -- >> no, it is worthwhile to point out. >> a government audit to charge some money to do a better job.

that won't work. >> it's an interesting concept. rick. there is an issue of funding. i think there is an issue of priorities. i think the government can switch its priorities. >> they're too busy buying tenures. >> if are you in the market and are you trading, you care about weekly data, it's not too much to ask how it's calculated. >> i do think that it is important that the autos are working more feverishly than they were in the past. yesterday, i thought the beige book was interesting if that the anecdotal evidence collected by the fed sounded stronger. it was modest to moderate. it wasn't that weak data we got. it didn't read like a beige book. it was talking about a 0.7% gdp. the idea, i think what's important here. we will listen to bernanke, this is already the take awhat i is

july is pivotal for september. if the weakness in the second quarter spills over into the third, i think that's when you are going to say, you know what, this tapering is not going to happen in september and right now, i feel like the market has written off the second quarter. i think the fed has written off the second quarter. their forecast calls for a rebound. if it doesn't happen, it will mean a change of policy. >> all right. there you have it. >> all right. we're going to have to seasonally adjust next july for, no, for sharknado, the sequel. >> did you listen to any of the testimony in q & a yesterday? >> i did. i did. it's a sci-fi, you know, we own that, rick. i don't want you to blow this off too quickly. it will take place in the financial district. >> i have a fame for it. >> what? >> shark-onomy.

>> i could be like a tsunami. rick, i tell you, i'm on this kick about the consensus has everything work sock well the gdp slowly rises back to 3.5 as unemployment, you know, systematically ticks down to 6% as it will. then we can get out of all this. what worries me if it doesn't happen that way. we never really, maybe screw-ups in washington or europe or whatever, does it put us on, are we in the roach hotel we never, ever check out on? >> no, i fine it interesting. whenever the questions were pretty lierkts you know, a good thing those were leaders that were asking the questions. it seems like every time they ask them to defend, why are you doing this? he defended it. the economy is improving. look everywhere else, we're so much better. somebody else would say, why don't you stop? they go, i can't stop, it's too

weak. enough said. this is a guy who goes unchallenged, no constitutional rules about how fast he goes. when he controls a portfolio that can reach up to 3.5 to 5 trillion in the future. he gave me a few palpitations, i must say. >> we seem awfully used to 85 b. we haven't seen any negative effects. if it's a gasoline -- >> they call it unintended consequences. >> i think the engine has a gasoline. i don't know how we had an economy that doesn't have gasoline. we must have been coasting downhill. >> i urge everybody to go to a netflix and rent march brothers go west. it really is exactly the strategy ben bernanke is following. the train is going. they keep burning every car for the wood to keep it going. they get to their destination. they have an engine, nothing else. they're burning oil.

more wood, he yells, they're burning all the future wood. that's what they're doing. >> all right. this is unlike, that other mark. this is the mark. >> my other. >> you are thinking of carl. >> right. >> this is the marx brothers. >> it certainly was entertaining, whatever he was saying there. it wasn't dry, like i was accused of. >> i think you ought to rent sharknado. i think they are repeating it tonight. >> i was surprised the first time. >> i want to watch. >> oh, sorry. >> it's a sci-fi thing. >> watch it. >> when we come back, two dow components reporting earlier this morning. up next, we'll talk to analysts who koefr united health and verizon. second quarter earnings per share up 45 cents. that beats expectations 2 cents t. company is announceing a

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. >> welcome back to "squawk box." joining us right now from los angeles, sarah james, health

care equity research analyst. sarah. there was a lot of interesting things in this kwarttary did show some strong numbers in terms of what they have been looking at, better than expected within it came to enrolling more people in private government paid health insurance plans. if you look at the outlook, though, they did raise the lower end. the big question is what happens as obamacare comes into play. how does that affect this company? >> that's a great question. i think one of united's strength is one of the safer plays, they're not quite as exposed as compared to a well point other than aetna when it comes to some of the exchange actions that are coming. but what united does have is some additional growth levers those other companies don't have, specifically with their optumm business, this is starting to show evidence of driving a lower cost trend. they have the lowest in the

group this year 5.5%. they're making investments now. when i look at the risk profile of companies going into next year, you fighted is one that stands out from a risk reward perspective. >> the stocks have 6% on the news, what's your rating on the stock, what are you locking at in terms of price target? >> we have an outperform rating on the stocks. this is one of our top picks for 2014 and beyond. really, that's driven by the growth opportunity in the optum health care. they have one of the top performances in growing the medicaid business. >> in terms of who it matches up with, what are some of the other top picks you like? >> humana, medicare advantage. we think this is an undervalued play here in the insurance industry, we do surveys every six months and have found that

two-thirds of that population look like they're about to get together and penetrate growth for companies like humana. one of our top picks here is molina. this is a company that could double their top line growth over the next year or two. beyond that, they're working on a settlement with the state of california, where if akeefd, with eestimate it could be somewhere between 25 to 40 cents and give them margin assuramce over the next ten years with a large portion of their top line growth. so margin security as well as top line growth. >> sarah, i want to thank you very much for joining us today. appreciate it. >> thank you. >> okay. we have some news breaking on dell reporters, reuters reporting, rather, that michael dell at this moment and silver laic does not have the votes at this moment for that vote to go ahead. the question, of course, will the company postpone the vote?

or will carl icahn win today? that's what we will see later. >> we were talking about this earlier, from what you are hearing, silver lake would not be at all displeased? >> my understanding is there has been a divide almost from the beginning. there are people who wanted it to go forward. of course, they voted to do it. but there was a number of people who had misgifgs from moment one as the company's earnings have deteriorated and this whole sort of soap opera has progressed, there have been people who suggested, wouldn't it be nice if this all could go away? i do believe there are people inside that would like to see it happen. they have a lot invested emotionally if not financially, be you we will see. we will see what happens here. a couple other things crossing the tape, vanguard, state street, black rock, invesco, mellon, they all voted in favor

of the buyout that reuters is quoting this morning anonymously. but they are also suggesting that the deal did not have enough votes to pass. and so we will be bringing you more updates on this as it progresses and maybe get down to jackie deangelis who is at the annual meeting. united health is out with earnings, we showed you that stock is trading higher about 2.6%. stock not trading higher is verizon. it's another dow component. joining us on the squawk fuse line is a senior telecom analyst at hudson square research todd rethemeier. it's 72 cents very 73 cents the street was looking for. why has it been lower today? >> the one thing that is the wireless ebita margins, it's hard to say what was causing

thats, but we would look to maybe the upfwrad costs. people going in, getting new smartphones, those things are expensive. eats into margins. it's something we have been watching in this industry over the last 84 or two. we will continue to watch. >> i thought it was up 80 basis points from the second quarter of 2012? >> it was. we were expecting it to be a little higher than that. the second quarter is usually very strong seasonally. you usually see a big improvement from ferc to second quarter on ebita margins. this year we saw a slight decline from first quarter to second quarter. >> verizon said it's increasing its capex guidance for 2013. now they're looking at 16.4 to 16.6 billion. what does that tell you? >> it's a pretty small number in the big picture. it's a little spending they node to do to keep up with the demand for wireless data growth. >> i also know we always tend to

look closely at the fios numbers. for the fios internet they had 160,000 new net customers for the tr fios internet servers. how does that match up with what you have been expecting? >> both were better than i expected. excuse me. the tv customers, you know, we were locking for more like 125. they hadded 140. it's a good growth number. the broad band numbers were also good, even i was looking a little further beyond the fios. the old dsl lines. those were better tan we expected. >> so what do you think of the stock? >> i have a whole grading on it t. valuation is not that compeling to me. you know, it's trading at i7 7.1 times. 4.1% dividend yield. if you want to on it for the dividend, you certainly could. we think that's safe. it could be a good income stock. but in terms of capital

appreciation, we wouldn't expect much there. >> do you cover at&t as well? >> yes, i do. again, i have a whole rating. if i had to pick one of the two, i would choose at&t purely on valuation. it's a 5% dividend yield and also because they own 1 hours% of their wireless business. verizon still only owns 55% with vota-phone owning the other part of it. situation still needs to be resolved. >> todd, thank you for joining us. >> no problem. >> coming up, well, a lot. stocks on the move ahead of the opening bell. with le ask jim cramer about some of these reports about michael dell and silver lake not having enough votes to take the company private. we'll be right back.

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let's go down to the new york stock exchange and jim cramer is joining us. jim, this morning we have heard from united, verizon, morgan

st stanley and any thoughts? where would you like to start? >> well, we heard from eric cantor and happy birthday with him. >> thank you, jim. >> this has been an exciting day, but i believe it is delivering alpha day. we have a lot of earnings, but the idea that a major stock like dupont could be worth a great deal, a great deal more according to nelson peltz idea that pepsico should combine with mondaese. and who thought that morgan stanley would be great. they are buying back stock and almost double d the share count in the last five years and this is terrific to bring in some of that and some of what i regard as under the radar good news couple with what i thought was just what we talked about and whether any of the things that yesterday come the pass. >> and the dell news that andrew was talking about the reuters report that suggests that they may not have the votes just yet, and this is interesting? >> yes, this is a david faber on

this story the whole way. i think that judge wapner did -- judge wapner, and boy, was that an unbelievable interview and great to see that he gets along with icahn and how can you dislike the guy? well, i think that we will do if showdown in round rock today, and it is amazing that michael dell whom i recall as the original pioneer of the model doesn't have it. he just doesn't have the votes. incredible. >> wow. wow. >> would you take the -- i mean, you have been against the carl icahn deal from the beginning i think? >> well, i'm listening to the intel call and sorry to be realist realistic, but here is stacy smith saying that the world is small form factor and we got it wrong. with we are hearing from ibm and the other companies saying that we have the model not right, and dell has the worst of all, and i'm supposed to buy that? these guys are crazy both of

them. >> and jim, peltz's reaction of coke should by monalese. >> well, i like the pepsico model and i have trouble with somebody getting heat, and i know he said he was friends, but what do you need to do to please people? i think that nelson peltz is a great investors and tlik idea that the stock could go up on its own and i like the idea that he could buy mondalese, but the model is proving itself this quarter versus coca-cola, and look, i won't go against peltz, because he has a fabulous record, but there should have been more praise of what nooyi has accomplish and the backhanded criticism of irene did make some sense. >> hmm. crappy name. >> mon dellez. >> she would win points for changing the name. >> we remember, jim --

>> and alley jis -- allejis, and remember vornado and nobody knew what it was. and primerica, whatever, i dont n't kn know. >> and what about peltz and the women ceos and coleman from due bont and goes on the first-name basis and irene from kraft, and he is not happy with the way that women are running the companies? i am. >> ayay, for you, jim. >> yay, for you. >> xerox doubled and how about afc, and popeyes, gentlemen. of course, i am kidding. >> we are going to send him to the fortune women's conference there. >> there is a theme there. >> and keynote. >> thank you, jim. coming up the guest host is ben wisenthal, and we will give him the last word when "squawk box" continues.

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♪ today is your birthday >> happy birthday, becky quick. >> thank you, guys. >> you and nelson mandela and jackie deangelis all on the same day feels nice. and breaking news, got off of

the phone with sources related to the dell deal, and they believe it is closer than reuters is suggesting, and they are working dill yeigently on t dell side to get out the vote, because a no-vote and somebody who does not vote is effectively a no-vote, but if they don't get it the whole thing could be pushed off. and thank you for being here. >> i don't believe i wished you a happy birthday. >> and your last word. word up. >> all right. make sure you join us tomorrow, squawk is next on the street. yeah, showdown in round rock. it is decision day for dell. shareholders are gathering at the company's headquarters and scheduled to vote on michael dell's plan to take the company private. david faber at the new york stock exchange, and i'm carl quintanilla. and david says it is too close the call as they say in po politics, but a slew of inventor ris from verizon, and morgan