sorkin and brian sullivan in for joe kernen today. why don't we start things off. 5:59 every morning. not early. >> i thought the show starts at 6:00. i looked over and saw the clock and see there, can you show -- >> we're just about to be 6:00 right now. >> there you go. >> now it is 6:00. let's start things off with the markets this morning. andrew mentioned japan. nikkei closing down 4% overnight after u.s. stocks logged their waft day in over a month. among the reasons that were cited, fed fears, you had fed president dennis lockhart and charles evans suggesting the central bank could begin tapering easy money program as early as september. there was some doubts after that lousy jobs report we got last friday. but there is more fed talk today. philadelphia's charles plosser will be speaking at 12:30 on his economic outlook and cleveland's sandro pianalto talking about an hour later on the regional economy. in the meantime, the bank of japan kicked off a two-day meeting today, widely expected

to maintain its pledge of increasing monetary base at an annual pace of 600 billion to $0 $700 billion. t we'll be watching very chosely. european trading, you can see the stocks there are off a little bit too. the worst performances the ftse 100, down over 1.2%. down about 80 points. the u.s. equity futures here are looking like they are also indicated lower. the dow futures are indicated down by almost 60 points. s&p futures off by just over 7 points, and, again, the decline we saw yesterday, the 93-point drop, the worst performance we have seen since the end of june, june 28th, the last time we saw a move like that, which tells you how calm and fence sitting the position these markets have been to this point. >> also today, the treasury will offer $20 billion in ten-year

notes at 1:00 p.m. eastern time. as for data points, the mortgage bankers association release at 7:00 eastern. economists expect to continue to see downward trend in the rise in rates. earnings front, ralph lauren, time warner, and wendy's. one of the hottest restaurant stocks in america over the past year. we also have aol ceo tim armstrong 7:00 eastern time and after the bell look for groupon, mondelez, and the hotly watched tesla. also one not listed there, but one of my favorite economic surveys, the jolt survey. job opening and labor turnover. doesn't get as much attention as the adp, but i like to look at the people who leave their jobs voluntarily. if you quit your job, that means you have optimism you can find another job, generally, not in

every case. i like to look at that. how many jobs are open and how many people feel confident enough in the economy and the job market that they can bail. >> there is an economist who looks at that and says that's one of the most important numbers they watch too. >> i've been banging the drum. i haven't gotten any traction. national effort to try to highlight -- >> i think you have a partner, i think that's one of the most important numbers too. it is a good number to watch. that's coming out at 10:00. >> corporate news this morning, the u.s. government filing two civil lawsuits against bank of america. the suits accused the bank of investor fraud and its sale of $850 million of residential most backed securities. latest in the fight between cbs and time warner cable. les moonves dismissing it as a public relations gesture and one little note for everybody, apparently cbs' ratings are only off 1%, 2% as a result of this

little battle and so when you think about -- >> how is that possible? >> that's what i thought. when you think about the who has got the leverage in this negotiation, if your ratings are not tumbling, things change. how is that possible? i'm in new york city. i thought everybody in new york city -- in new york city, for example, they only have -- time warner cable has 45% of the market. so fios, rcn, all these others and then you factor in the nielsen box situation. >> that's it. it gets us into -- not into the weeds of tv, but the world of the nielsen box, how ratings are still done and where they are. people who are busy, perhaps, don't have time to do so. gives you a little tip-off as to where some of the nielsen boxes are locate elocated, not l.a., york, not dallas. >> possibly. >> just a theory. get a check on the markets once again. the futures are under pressure this morning. right now, dow futures down by

56 points. s&p 500 by 6 1/2. oil prices at least at this point you can see wti up slightly. 7 cents. 105.37. that's below the trading range we have seen recently which has been closer to 107. if you look at the ten-year note, there is an auction coming up later this morning for treasuries. the yield now is 2.64%. the dollar is going to be an interesting one to watch, particularly with what we just saw. the dollar yen sitting at 97. the dollar is up against the euro at 132.96. the yen at $97. gold prices yesterday closed below $1300 an ounce. down once again this morning by another $5.50. >> we got a story in the wall street journal this morning, i want to talk about this, the story suggesting that the s.e.c. financial crisis cases are winding down and forcing officials apparently have decided not to recommend filing civil charges against hedge fund firm magnetstar capital.

it suffered billions of dollars in losses during the financial crisis. the paper suggests the decision is a sign that the s.e.c. investigations into whether companies or individuals broke the law with their conduct ahead of the crisis are now running out of gas. we're coming up to the five-year anniversary of the crisis. but what is so fascinating to me about this particular case is we have abacus, we have fab and now magnettar, a close cousin of abacus, in terms of building a cbo meant to fail, if you believe that sort of description which is how they described abacus, i wasn't sure that was exactly the description from moment one. >> putting the market together, you want to put people on both sides of the deal. >> juries have come out to a different place on this. i'm surprised -- i thought post fab to the extent they're worried in cases there would be a little bit of mojo that the s.e.c. would think they have going into september 15th and

you might actually see a spait of these things. the journal coming to a different conclusion this is over and done. >> all i remember is going to d.c. right after liaehman broths failed, there for five days, down on the train with a suit on my back, extended stay and i'll never forget walking on capitol hill and having high ranking government officials and some people elected in office asking me what a credit default swap was, what a cdo was. these are new instruments, incredibly complex and if the s.e.c., good men and women there, if they can't figure it out, i can't blame them. they were massively complicated. >> we were told not to use cdo on air because it was too complicated. >> i was not at the network at that point. what would you say instead? >> just make sources say it for us. >> i see. >> do me a favor, tell me what the problem is. cdos.

>> sort of surprising and the other thing i've been watching, there is a number of bankruptcies, so you can see how much people are spending. there are still a number of cases out there, maybe not from the s.e.c., but cases that have not been resolved. we'll see. >> also, disney reported quarterly earnings after the bell yesterday. the revenue came in light because of weakness amid the movie business. joining us to break down the numbers is anthony declemente at barclays. anthony, i know you have a neutral rating and you maintain that neutral rating after the numbers came out. the revenue was a little disappointing. did that come as a surprise to you? >> no, i think revenue in the quarter was generally in line. the parks division was strong. i think if you look and try to break it down on espn, the print and the quarter was quite strong. if you smth out some timing issues in terms of when nba

games were shown and when affiliate fees were recorded, top line net at the cable network for the second half including the forward quarter may be a touch slower than people think. but, look, that's probably reflected in the stock, which is modestly underperformed into the print and this remains a best in class entertainment company that trades at a reasonable valuation. >> you think it is a reasonable valuation. strong quarter all the way around? >> yeah, listen, in the past, i've raised some questions in our research about the increase in sports rights fees, but, you know, that's something that, you know, the operating margin profile at espn won't hold up the stock. parks are doing exceedingly well. iron man three and monsters university this summer at the studio. while we're neutral, probably more on valuation. we continue to think that media is a great place to be, that disney is in the next space. >> is disney a company you think -- i believe i read your

writings about this, you think it is prepared to start giving back more cash to shareholders. >> yes what is happening, as their investment cycle in the park starts to taper, their free cash flow will accelerate and we're in the process of seeing that happen. if you think about their return of capital to shareholders as a percentage of free cash flow to equity, if that stays relatively fixed, the dollar amount that comes back to shareholders in forms of a buyback will accelerate over a two-year period that we're in the process of. a lot of conglomerates are returning in the form of a buyback. disney is behind that -- in terms of that theme because of their acquisition and because of investments in the parks. but now they'll catch up in a big way. >> lone ranger is looking like a

ishtar or water world. losses from the box office flop, how much is that going to impact the quarter and should investors pay attention to it or ignore it and move on? >> sure. good question. i never took you for a filene's basement guy. >> this was five years ago. >> are they still in business? >> i think on the lone -- >> i used to go there. >> on the lone ranger, investors are willing to some degree give disney a bit of a pass here. they had a string of successes with pixar, marvel. though lone ranger was a tent pole stumble for disney, no denying that and company management can see they're disappointed in the performance, if you look at the hit or miss

business of film for disney and for its brands over the last few years, it has been a pretty hot batting average. i think investors will be willing to some degree give the stock a pass on the lone ranger. >> what is your favorite stock on the sector? >> i like the low multiple high return of capital names. i like cbs a lot. you were talking about the dispute with time warner cable. i like viacom a lot. that's an underdog incredibly attractively valued. i like disney, and in the midcap space, we like amc networks. >> can you explain why cbs' ratings have not fallen as precipitously as some would imagine given the blackout with time warner cable? >> i haven't looked at the blackout, i haven't looked at the nielsen numbers, but i would imagine it is because time warner cable's distribution is relatively small percentage of the entire pie of the footprint. so, i mean, i think it is harder

for that to come through in the nielsen ratings. i think the dispute is generally centered around not only price per subscriber for cbs' service, but also digital rights. the price of show time, video on demand and content on cable, can cbs go direct to consumer with some of that content? i think some of the dispute revolves around mobile viewership of cbs content. and so, you know, it is a water shed time and we'll see how that contract works itself out, but i think folks in the industry are looking at it closely. >> who do you think has the upper hand? >> i certainly think the content owner has the upper hand. only because you've got so many bidders for content out there. if you look historically, look at viacom directv deal last year, it is obvious content has the upper hand.

content is king in terms of negotiations. that's what we continue to see. i don't see that really changing. >> all right. anthony, thank you for joining us this morning. >> thanks a lot. coming up on "squawk box," say yahoo! and you probably think about a logo with an exclamation point. could that soon be a thing of the past? we'll have that story coming up. first, one stock to watch today, first solar. earnings sharply missing forecasts. company lowering full year earnings and revenue guidance. that stock looks to get walloped today. as we head to break, let's check on today's national weather forecast with the weather channel's alex wallace. good morning, alex. good morning to you. rough situation again across portions of the midwest. dealing with more heavy rain. actually going to step out of the way now so i can actually see what is going on. monitors are not working correctly. but actually just heavy rain coming into some of the same areas we have been dealing with over the last several days. springfield, the rainsville area, that's an area hit pretty hard with that heavy rain.

flash flood warnings, they're ongoing across these areas here at this point. what we definitely do not want to be dealing with. we unfortunately are. more rain. and you see, justify not moving at all over the same areas. rain training over the same spots. it is a rough situation across a good chunk of missouri. we need more -- no more rain. unfortunately the risk for today and as well as we work our way through the next few days we'll be dealing with a risk for some showers as well as some storms, leading to potentially 3 to 5 inches of rain in the spots. again this could lead to more problems. we already have flooded -- flooding issue and that is expected to continue out there for us as we work our way through the next 24 to 36 hours. quite a bit of a mess we're finding ourselves dealing with across the midwest. unfortunately again, more rain to deal with. jackie: there are plenty of things i prefer to do on my own.

but when it comes to investing, i just think it's better to work with someone. someone you feel you can really partner with. unfortunately, i've found that some brokerage firms don't always encourage that kind of relationship. that's why i stopped working at the old brokerage, and started working for charles schwab. avo: what kind of financial consultant are you looking for?

talk to us today.

it is time for the executive edge. this is a new segment we're launching this week focused on giving business leaders a leg up. our goal is to highlight interesting stories that go beyond the morning's top headlines and one of the top stories trending on twitter this morning, jay leno's interview with president obama. among the topics discussed, why

the president says he will go to the g-20 in russia despite multiple disputes with the country. >> we'll be going to that because the g-20 summit is the main forum where we talk about the economy, the world economy, with all the top economic powers in the world. the creating jobs, improving our economy, building up our manufacturing base, increasing wages, all those things now depend on how we compete in this global economy. and when you got problems in europe, or china is slowing down that has an impact here in the united states. >> he was not asked and did not happen to mention whether he would be having that private meeting with putin that so many people expected. i guess that's something still to wait and see. a lot of questions around that, particularly with snowden. >> i don't know. for me, at least, i think we're in a box. we were physically just in boxes on television, but i say we as a country, you know, he's in a real box on this. i am surprised that he's been

not more outspoken. i thought on an interview like that, he could have made some joke, could have been a little light on snowden to somehow get away with -- or get into the more tricky issues with russia. no? >> listen -- >> you go to the g-20, do you go and meet with pewteutin? >> yes, i would. he has a huge amount of knowledge of our program now on asylum in russia for a year, essentially. >> so you want to meet with putin? >> i would, absolutely. >> what would you say? >> what would i say to putin? don't look at that dude's computer. please. >> you have to get the feeling there is some mutual understanding about the situation. putin and the comments he made in the past suggested that he would not allow him to come in if he was going to be releasing any more secrets. he's former kgb and feels strongly about a lot of the

issues. we'll see there is a closer relationship between the two nations. >> i have a sneaking suspicion that a closer relationship could develop. in other political buzz, mitt romney has a washi ingwarn congressional republicans. the gop should not force the government shutdown in the quest to stop obama care. romney addressed more than 200 donors at a republican fund-raiser in first speech of its kind since the election t was close to the press, but his office released prepared marks. he said in part, i badly want obama care to go away and stripping it of its funds has appeal, but we need to exercise great care about any talk of shutting down government. he went on to say what would come next when soldiers aren't paid and when seniors fear for their medicare and social security and when the fbi is off duty? >> here is my question, what is the role of romney going to be

over the next two years in the campaign? you see him out there, looking almost presidential or on some kind of campaign again -- >> statesman-like. >> what are we going to see from him, do people care, do they not care? >> he touched on this. he touched on this point of why would anyone listen to me, touching on the point he lost the election, why would you listen? he said we all learn from our mistakes and he thinks he has wisdom to add to the conversation. >> i think it is a good idea. hopefully somebody will be the grown-up in the room. i don't know it will be romney, but somebody needs to say, don't shut the government down, get in the room and talk, you're elected to work things out, you're not elected to spat in the media, to fight, to do nothing. >> his point was that the republican party would lose with voters if they were the ones who forced the government into a shutdown like that. that's coming up at the beginning of october if they can't get things settled. they're about to go on recess. gentlemen, let me also mention in corporate news, internet branding icon is about to change. what is your opinion on it.

yahoo! is getting a new logo next month. it will be first change in nearly two decades. each day during the next four weeks yahoo! will showcase different logos, 30 in total. after labor day, one will replace the distinctive y with the exclamation point. the company decided on the new logo. what? but usa reports that yahoo! wants to show off different looks to look s to depict its renaissance under ceo of marissa mayer. what is the point in showing us the different ones? >> i have three words for you this morning on that. new orleans pelicans. >> oh, yeah. >> because when things aren't going your way, i'm not saying they're not going yahoo!'s way, you change the logo. change the colors. switch things up a little bit. give people a different feel when they step on to the court. >> two issue. are we officially getting ready of the exclamation point? >> i don't know. they must know. >> i would go with a question

mark or semicolon. >> but peurple is marissa's favorite color. >> why are they going to show us 30 other ones if they already decided on the new one. that's going to make everybody -- >> like a tumblr feed. they want to float the idea. >> let us vote. don't pick it now and show us 30 others. >> you're big at asking questions. if you pick a new font, what would it be? >> times new roman. >> come on. too newspaperish. >> aerial. >> like the disney character or like -- not the little mermaid. >> what is the microsoft word? ar -- >> ial. that's my favorite font and calibri. >> looks a little too googlish

or microsoftish. >> that's your executive edge. coming up, fed speak spooking the markets yesterday. more central bank talk on the agenda today. goody. look out. we'll have the expectations for that right after this. as we head to the break, look at yesterday's winners and losers. right now, 7 years of music is being streamed.

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good morning. welcome back to "squawk box" here on cnbc. john mellencamp in the background here. >> he's all about mellencamp. >> mellencamp dated meg ryan. cougar didn't. cougar had swag. >> good point. i like the cougar music. but, you know what, in respect to him, he wants to be known -- >> where is meg ryan these days? i don't know. i'm andrew ross sorkin with becky quick, brian sullivan, john cougar, john mellencamp, brian sitting in for mr. kernen. zillow will have a social media round table with president obama

today, focused on housing policy. in europe, stocks slipping in early trading after the bank of england detailed forward guidance plans. mark carney announcing the central bank will not raise interest rates until uk employment hits 7%. taking a page from mr. bernanke's book in july. it stood at 7.8%. the guidance is similar to that issued by the federal reserve. a check on your broader markets. the futures indicating what could be another down day. a bad day yesterday. same setup today. the dow opened 50 points, the nasdaq and s&p also implied lower. oil down a little bit. turned around a, little bit, a little firmer. the ten-year treasury note is what everybody is watching. 2.63% after a sharp spike over the last couple of weeks. yield tapered off the last few

one week or so. the dollar is a story. yen strength, i know it sounds boring, guess what, everybody you talk to say the yen is driving the market because japan, japan had a terrible night, off 4%. the yen strength, six-week high there. currencies, got to like gold as well. the two are inextricably linked. >> markets ended down for a second straight session yesterday as fed jitter s continue to take hold. john silva from wells fargo securities and todd strethy. good morning to both of you. i want to start with this. janes hatzius saying to ben white of morning money fame, we had him on the show this week, suggesting the biggest risk to the stock market is actually the debate over who becomes the fed chairman and that that is going to create a lot of noise in the

market and he believes may be creating some of the noise now, which i don't really understand. you're sitting right next to us. i'll start with you. does that make any sense to you? >> makes no sense. the noise is short-term. the markets are looking for a reason to pause. we have been talking about this for six months. there is uncertainty. do we know who it is going to be. more uncertainty going on as well, when interest rates rise, when do we see europe come back, what does china do. all this together, people look for excuse in the short-term. it is noise. not investing. it is trading. >> let talk about the short-term. we had a nice little run here. are we in for a pause. >> ready for a pause. i think you have to then look and say, okay, last four years have been very different. we think the next four are going to be very different. where are you going to see opportunitys? the opportunities of the last four years, let's be defensive, by companies with strong dividends, not get too crazy on the risk curve. how are you going to go when the mark set 16 times earnings to

really outperform the market. not just by the market, but buying specific companies that outgrow the market. those are going to be some of the cyclicals, growth companies, not going to be your i need my utilities defensive companies. >> john, do you agree with that? if that's the case, have we totally overbought every company out there that has a nice little dividend? >> i think from the bond market and the equity markets perspective both, i would disagree. i think that yellen represented continui continuity. you talk about summers or cohen coming in, it is a new player. there is a certain higher level of uncertainty about what they're doing. and i think that adds to the issue yesterday where evans, president evans of the chicago fed, who was viewed as pretty much a very much of a dove all of a sudden starts to talk about tapering showing up in september. i think that reinforced the whole message that, hey, you know, monetary policy may be changing quicker than people had

expected. and so i would say, no, i disagree. i think that the discussion about the new fed chairman is had a bit of uncertainty the marketplace. >> when you look to see what happens, what is your timetable for when we get some certainty on who this person is and to the extent we have certainty on who the person is, we're going to have a whole confirmation fight, which i would imagine create a whole new level of uncertainty. >> i agree. i think probably the nomination has to come through in september and october, certainly they want to have some hearings. the hearings, i think, quite frankly from my point of view, will be more of a discussion and debate if summer is the nomination than if yellen is. if yellen is in, i don't think there will be a lot of argument, but summers, i think, carries a lot of past history with him and he'll be a lot more debating and uncertainty about what is the direction of policy going forward. >> what is your outlook on gdp

for the second half of the year? >> for us, for us it is 2 to 2.25%. and inflation stays pretty modest at best. >> what changes that? on the upside or downside for you? is there any particular thing you're worried about? >> well, i would build upon your point earlier, exactly what is happening with europe, bank of england kwharks england, what is happening with japan. it is trade that could flip the number, plus or minus. we saw that earlier this week when the trade number came out and we talked about 2.5% gdp for the second quarter of this year. i think it is the trade numbers that will flip the economy up or down. >> that was largely a function of the exports and -- sorry, the imports of oil and oil prices, some things you've seen there. oil prices have climbed again. i wonder if that will be offset or do you think the production will be enough to blunt some of those price spikes we have seen? >> i think the production does blunt some of the price hikes.

we're talking about real gdp. you start adjusting for prices, your point is well taken. this is sort of a new element coming through that really is pushing us into a better trade position going forward. it doesn't change the world, but it is at the margin, i think, significant. >> okay. we'll leave the conversation there. thank you for coming in. >> thank you. >> john, thank you. >> am i wrong for not caring at all who the next fed chairman is? >> this battle that is taking place right now between summers and yellen and the camps on either side is something that could actually really hurt the u.s. economy. it has gotten past. >> do we think summers, kohn or yellen or mickey mouse will raise the rates? >> it demeans the position. this is supposed it be a technocrat position, it is politicize and that's a dangerous thing. >> you to thido you think mom a

indiana -- this is the east coast media bubble we live in. i'm sorry to say it. i'm going to wisconsin next week. i'll ask 20 people and all 20 will say, i'm not going to not buy a house or car because, oh, gosh, don kohn may be fed chairman. >> they'll say i'm looking closely what the is happening now. i just had a friend who cam out from wisconsin last -- or minneapolis last week and told me, she's looking closely at that they're going to be doing and whether or not they would want to buy a new house based on different things and the interest rates. maybe not directly to -- >> i agree with you. i don't think interest rates are going to move. >> you're in brian's camp, i think. >> it is going to happen. we have to live with what is going to happen. but data is going to run most of this. these guys are going to have their own views. what people miss -- one important thing, this is a great way for congress to take attention away from themselves. it is all monetary, monetary. what about fiscal? pay attention to what do we need to get our house in order as

well? these are people we elected. >> i think it will be a much tougher battle for -- after the nomination to get through the congress than it would have been for just about anybody else. i think people are much more aware of the fed. i think you're right. it is not -- you're right. it is not so bad to think -- >> summers, yellen or kohn. not like volcker and the evil dove. >> do you think people in middle america actually care? >> i think the markets care. the markets and the economy and the economy is america and america is mom and pop. >> the attention -- >> and then you have a housing issue and then it becomes the real economy. >> i guess i'm too simple of a folk to understand these complex discussions. >> i think -- you don't think it matters who is in there, it doesn't have a trickle down effect on the rest of the economy? >> no, i don't think kohn, summers or yellen or the lone ranger or anybody will raise

interest rates. we confuse, we, meaning america, maybe us, the media, i don't know, tapering versus tightening. taper is one thing, tightening is another. no interest rate hike for two years. >> when you take that much of the monetary out of the system, i think it is. i think that's where it could run into problems before they raise rates. don't do it the right way, market doesn't have confidence, can see interest rates and bond prices -- >> i agree. i expect bond yields to rise a little bit, maybe. >> if they don't do it carefully -- >> mortgages can't destroy the economy. >> we never see the fed's balance sheet like this before. if it is not done carefully, you could have some very bad -- >> we don't know how this is all going to work -- >> i don't know if it matters which one it is. there is tricky issues there and

market confidence matters noor reas for that reason. >> i almost got run over by a semi today. they didn't bring me on the show to sit back. i don't know why they brought me on the show. think about how much money, maybe time, airlines can save if planes taxied to the runway without using their jet engines. these wheels, right there, could be the answer. the head of that company, very cool, coming up when "squawk box" returns. ♪

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all right, welcome back. part of our disrupter series features a company called wheel tug. they disrupt the airline industry. it is cool. they collected a new electric taxi system that allows commercial jets to push back and taxi without turning their engines on. the company claims the wheel tug system can save airlines up to $1.1 million per plane, per year. that's a lot of money. bob crane has been following the company closely and tells us wheel tag, wheel tug is attractive and viable. and i'm considering investing. i recommend it to people active in the industry. joining us now is isaiah cox, ceo of wheel tug. so when i have my little fishing boat and engine on the back, and little electric engine in the front, you're basically doing that for airlines.

>> making the plane into a hybrid. instead of using the engines to drive around, we use the engine in the tail and apu and we drive -- >> what is apu? >> little hole, that's where the apu exhaust is. that's what air conditions the airplane and starts the engines, for example, when they're doctor deustc -- during the pushback today to do this. there is enough power to drive the airplane. the motor is less than five inches wide, but can drive an almost 200,000 pound airplane. >> using kinetic energy? >> electrical power. you have a picture of the motors, 737 picture, the 737 wheel, normal one and wheel tug wheel next to it. >> we understand -- >> right over here? >> it is very, very cool. let's show that. when you -- >> the wheel on the right is the 737 wheel today. the wheat on the levft is the oe in the video we demonstrated

last year, driving the aircraft around backward and forward. >> what is it about the wheel itself? >> inside the wheel is a electric motor. it is an old idea. >> why didn't they figure it out sooner? >> it is difficult to execute. making it happen is much more difficult than the idea. i'm convinced the wright brothers when they first pushed their airplane around, they thought, this thing is designed to fly, why is it so difficult to move it ten feet. it is designed to put the airplane -- the pilot has the control here with the unit to drive back -- >> how much more fuel. you understand the idea of pulling the plane? the car, you use gas, you hit the gas, you hit speed on the turnpike, the gas mileage goes up. same concept with an airline. when it taxis out, is that where most fuel is burnt? >> they burn hundreds or thousands of pounds of fuel in taxi. there is a lot of drag. and just to break away to get the airplane moving, they'll move the engine up to 40 or more

percent of the full throttle. that's an enormous amount. this is an aircraft designed to cruise at 30,000 feet. >> the wheel is not -- doesn't get taken off before you fly. >> right. flies with the airplane. >> who is doing it? >> we have 11 airlines signed up, 537 aircraft already reserved including klm, iceland air, air berlin and other and teamed with other companies making the components for us. parker hannefin makes our wheel. >> you mentioned, the idea is an old one, easy to do that, it is implementing that is difficult. which i don't get. you have gordon bethune who came through and said take olives off the solid so we can save margins, you would think this would be a no brainer. what is tough about implementing it, making and creating it or getting the airlines to do it. >> it is both. a bad decision can destroy a

airline. you make your decision carefully and slowly. institutionally there is a lot of resistance to rapid change. the actual cost, we're talking about saving 700 pounds every single -- sorry, $700 every single flight with the wheel tug system. extra weight costs maybe $15. >> how much does it cost to put the system in? >> we're giving it away for free. giving away the system for free, spare parts, replacement parts, the works, in return for half of the savings. no cash out, no expenditure. they put the system on. as they save money -- >> do you think they'll be honest, we didn't save anything. >> there is an sd card that records the data and we're able to accurately bill. >> you'll be small data. you'll know. >> if they change their mind, they can give it back. this is not a permanent change to the aircraft. >> you're stationed in

gibraltar. that's why you said pounds, not dollars. if this takes off, parker hannefin would benefit. >> all of our partners would benefit. >> patented? >> many. >> this is not a new idea. >> the conception of an idea is old. we have an competitor, but their solution doesn't do what ours does. the biggest advantage is turn around time. you spend less time -- the thing passengers hate is waiting to get off the aircraft. that's the end. with wheel tug, you can drive the airplane without the jet blast danger. you can use both the -- >> little cool looking cart with the giant wheels that pulls the -- >> no, not really. the main competitor is a company called safron and honeywell. they're competing. >> does this work on any sized plane? can you do this on the big double decker? >> we did a demonstration in 2005 on a 767 and we have customers that are interested very much in 787 variations and others. >> does your competitor also charge the same way where

basically this is an ongoing thing? >> theirs is a permanent change, it is a one-way change. a one-way change is harder. if you say to somebody, try this, like the ipads in the cockpit, you can change your mind, put an ipad in, take out. you can't do that to a permanent change in the aircraft. >> approved by the faa. >> not yet. end of next year. >> once you get -- the ceo of a company called hico. he told me the process to get approved by the faa takes forever but once you're in you're in like flynn. if you get in, that's a golden ticket. >> it's a big deal. half -- if we can save $1 million per year per aircraft and capture half of that as our end, we're going to do extremely well, indeed. >> buy the rock of gibraltar with your money, isiah. >> that's what i need. >> okay. >> still to come on "squak box" this morning, we got some big news. aol ceo tim armstrong earnings outlook and the rapidly changing world of media. plus we've got jeremy siegel's

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including the es and rx. ♪ this is the pursuit of perfection. what do you think his intentions are? >> i think we're going to see things we haven't seen before in the news industry. >> what is it that policymakers should do, if anything, here? >> i don't see any reason for tapering whatsoever. we're dependent on monetary stimulus to keep this economy coming along at a 2% growth rate. welcome back to "squawk" as we went to a break we asked you to brainstorm the top twitter

feuds. here are just a few of them. sarah palin and arnold schwarzenegger. keith olbermann and piers morgan. donald trump and rosie o'donnell. don lemon and jonah hill. and ann coulter and john franklin stevens. a couple notes on that, mr. schwarzenegger said to twitter he was on a plane, this what is he said to palin, looking everywhere but can't see russia from here. palin came back with a retort that wasn't that great, she said arnold should have landed i could have explained our multibillion surplus in energy efforts. what's he up to. i thought the keith olbermann and piers morgan was fun. >> i did see that. >> and ann coulter and john franklin stevens, didn't know what that was, she made comments, he stepped up. you can look at twitter forever and watch these go through. >> pulling back from it. i feel like i'm getting too addicted to it. and then it's like, you know, sometimes you do stuff or have an interview that doesn't --

people don't take to or whatever, and -- >> twitter is a dangerous place. >> have you noticed sometimes, you know, you look at people's profiles, right, just to see like -- people write the nastiest stuff and when you look at their profiles they always have like open-minded, world needs more love, more peace, but those are the people that send you like hope you you know -- >> yep. >> sorry you actually avoided the wreck this morning. that's what they say. >> i should note, tonight is the premier of cnbc's documentary "twitter revolution" the social media platform was created seven years ago and this is a plug for our man carl quintanilla who will join us in the next hour with more. this is his documentary. catch the entire story tonight and you must do that, at 9:00 eastern right here on cnbc. and i will be staying up late to watch it. >> when we come back, aol ceo tim armstrong joins us to talk about his company's earnings and the changing face of media. "squak box" will be right back.

today, a cnbc exclusive. stock above its ipo. facebook's on its feet and getting into the game. mobile games, dan rose and their next play.

good morning, everybody. welcome back to "squak box" here on cnbc. i'm becky quick with andrew ross sorkin and andrew sullivan in for joe. the futures are weaker. see the dow futures are down by 41 points. that's off the worst levels of the morning when we saw things down by about 60 points. s&p futures down by about five points and in our morning headlines, disney earningings beating wall street's expectations but a poor performance for the movie business weighed on revenue a little bit. disney says it does expect to take a loss of between 160 and

$190 million for the "lone ranger" in the fourth quarter. the stock down about 2% in the premarket trading. more reaction to the numbers and the future of disney at 7:30 from rbc's david bank. the fed talk continues today as philadelphia fed president charles sloser speaks with cleveland's president. yesterday chicago fed president charlie evans seemed to confirm tapering is a few months away. and the u.s. government filing two civil lawsuits against bank of america. those suits accuse the bank of investor fraud and its sale of $850 million of residential mortgage backed securities. the government says bank of america made misleading statements and failed to disclose important facts about the mortgages. >> aisle just out with q2 earnings moments ago. revenues beating the street. joining us now from new york to talk about it, tim arm strong aol chairman and ceo. i want to talk about the earnings but seeing across the tape as we speak you're also making an acquisition this morning, buying adapt tv.

what is that? >> andrew, nice to talk to you. very important day in aol's history. i think three or four years ago, most people probably thought aol wouldn't be around at this point. today we are announcing a deal with adapt tv which will make us the number two video player in the marketplace and it will essentially double aol's revenue in the video space and get us up to almost 150 million unique visitors and videos. video is probably the most important space in the internet along with program advertising. this acquisition does video and program attic and the combined companies will be the number two player in the marketplace in those two markets. it's an important day for aol. on top of the fact that we had great earnings today and continued growth in our sector. very good day for aol. >> let's go through the economics of this acquisition. the number looks like $450 million, is that right? >> it's roughly about $400

million overall, andrew, and about $100 million is in stock roughly and the other $300 million is in cash. it's important for us that investors see this. there's a lot of other video activity in the marketplace. adapt tv, we believe, is the most important technology platform in this space. it's also, we believe, the fastest growing company and if you look at the public market comps of the other companies that are public in this space, adapt tv is probably the best asset seth and also growing the fastest. we have a commitment they're taking aol stock which is important and a deep alignment on the vision and insight into video and the largest shareholder at aol individually i think this is a fair price for a great company and more importantly, the founder and his team, an incredible group of people and silicon valley joiningle. >> l -- joining aol.

>> can you give us a basic explanation of what the company does? >> the highest level, roughly a 240 billion industry in the tv advertising business, which is going to go from tv to ip delivered video over the next decade. adapt tv is the only technology part platform in that space which is a marketplace that has buyers and sellers and the important piece of it, which is why we wanted to acquire it, is advertising for the last 100 years has been bought in bulk. we believe the future of advertising is going to be bought more like e-commerce where you understand the video asset you're buying and you're able to plan, target, measure, and do deep data analytics around advertising. if you follow the industry trades in advertising and what people are doing, you'll notice the word programattic is probably the number one theme in advertising and adapt tv is the largest player in video programattic.

video is expected to be the number one space going forward in terms of ad spending and programattic is the biggest trend. the way people think about google with search, think about adapt tv for video. and for brand advertising, the next big segment on the internet, adapt tv is an incredible asset. >> it's brian sullivan. i'm not going to pretend to understand everything adapt tv does. i'm hanging on by an intellectual thread here. seems you're making a bet on television. you're making a bet on the future of how video content is delivered, correct? >> yeah. we are -- >> so what is that bet? help me understand how our job is going to look in ten years and why you're going to try to be a leader in it? >> again, you know, content and site sound and motion in the history of media has trumped all other forms of media for engagement for consumers and spending. if you believe that consumers will still want sight, sound and motion at scale what you're seeing with the internet, you're going to see a shift from traditional analog tv into ip

delivered tv. look at the traditional media space, the announcements you've seen over the last three or four months show all of the players in that space trying to get themselves ready for ip delivered tv and video. this asset sits at the other side of this which was built essentially to make that transition for advertisers and marketers and for agencies and the largest holding companies across the world have adapted adapt tv to see seshlly help them move their tv budgets to ip delivered tv. we are, you know, big believers in content, big believers in premium brand advertising, big believers in video and big believers that software is actually going to improve advertising over time dramatical dramatically. program attic advertising is not a bad word in advertising. it's a great word in advertising and it's finally the case that software is going to improve advertising at dramatic scale and the adapt tv team is the best team in the world at doing it. >> tim, can i ask you, just -- this is obviously disruptive. this is something that you're

going to see some big changes. who do you think the losers are as these changes come about? >> i think, you know, in all cases and, you know, i think it's important that if you want to win in this space, you have to actually get organized around it and get in front of it. aol three years ago chose to acquire fivemen media and go viral. the two founders of those organizations, ron runs our video team and has done a great job, jimmy is the ceo of "huffington post" working with arianna huffington. it comes down to having people that understand what the disruptive change is and i think we probably have assembled the best team of people in the industry around understanding that disruptive change. i think the winners -- the losers will be people who don't pay attention to it and don't get in front of it. the winners will be i think the same strategy we used. choose your space, choose your team, and choose the assets you're going to have and go like that. >> are content companies

ultimately the losers? program attic buying which sounds like is coming to video in a meaningful way, ultimately also means lower margins, right? but programattic buying has compressed margins across the board. we've seen that already in the web world. does that translate in the video world? >> well, first, let me straighten out a couple things. it's important for the entire media sector. progr programattic advertising is not depressing margins or advertising. it's depressing businesses that have not gotten in front of it. if you are watching programattic closely notice that it actually has high prices and high target ability for advertising and there's a piece of programattic which are private exchanges where you at cnbc could set up a private exchange with advertisers just to buy cnbc inventory. that's a big and fast growing part of adapt tv's business. in that case, and we've seen this at aol, premium

programattic inventory gets premium pricing and the race right now is to set your company up for yield management of premium content and premium programattic together and that's why today is i think an important day for us as a business and probably at a larger scale for the industry. >> tim, first a question i've been asking pretty much every day this week. we've been hearing speculation in the next five years a company like a google could ultimately buy the sports rights to something like the nfl and really shift and change the way we watch tv in the broadband world. do you think that's actually something that could be a reality in the knicnext five ye? >> i don't know specifically about that, but i would say if you look at the two really significant trends happening right now is that on the device and network side, ip delivered video is getting faster and better and the devices are getting better. it's highly likely you as an end consumer will not only want but demand ip delivered video.

on the other side of it, when you think about the things that are important from a content business, and we've been early investors in this, is that currated content, high-scale, live, we launched our aol live in partnership, sports fits both. i want it, i demand it and it fits live and real and i think that's -- that is a trend that's going to come together if you look at what espn's been doing and other people, they've done a very good job of changing to an ip delivered thing. i don't think it's out of the realm of possibility. >> you just mentioned pulisis, the implications of the omnicom transaction and your company in particular? >> tom friedman has his book plus some of the articles writing talks about the fact that average is dead, and that's something i've been using internally at aol. you either in our business have to have tremendous scale or tremendous must buy assets and teams. i think the combination of

pugolsis and omnicom will create a significantly scaled global media powerhouse that's going to rely on platforms and we'll hopefully be one of the companies. you saw that with our announcement. we want to be one of the companies that brings enterprised software advertising into that. i look at that as a huge benefit for us and really big move in the industry. >> tim, the other big headline, of course, this week, jeff bezos, someone you know very well, his acquisition of "the washington post," what do you think he's going to try to do with that? >> you know, i don't know. i think that jeff has been clearly -- he's got to be one of the best people in the world at just strategy, vision and sticking with things for the long term, so, you know, my guess is jeff has a very big vision for that asset. i was very happy to see him buy that asset and most importantly, i think for the graham family who i'm very close with, i think it's a great way that the grahams from a leadership position, looked at jeff and

they partnered together for what i think will be the next evolution of the "washington post." but if you think about content being king and how important brands are, if you look at the "boston globe," "the washington post" and our acquisition of "the huffington post" you see the value of those type of assets in the world for people and once we get through this disruptive period those brands are really going to stand out. "the huffington post" acquisition for us has turned into a global powerhouse where we have 40% of the traffic internationally, getting up to being almost in ten countries right now, and you took a u.s. news asset essentially that people thought we were buying a blogger site and we've been able to turn it into a global media brand. i'm sure jeff for "the washington post" that has that type of brand that's a potential capability for them. >> tim armstrong thank you for coming on "squawk" with the news about the acquisition and your earnings this morning and hope to see you very soon. >> thanks. >> thank you. do you have comments or

questions about anything you see on "squawk." e-mail us at squawk @cnbc.com. follow us on twitter. cnbc our handle. up next, stocks logging their worst day since june on fed jitters. when could fed tapering begin and what will it mean for stocks if anything. find out after the break. a look on the futures. some good music. little black keys. very nice. in my younger days. s&p, dow and nasdaq indicating a lower open. we'll leave you with the boys here. ster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.

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welcome back. shares of time warner today, earnings being the e street by 7 cents. the company raising its full year forecast. >> the markets showing some signs of concern after comments on the economy -- yeah. made a mistake. i thought you were going to -- >> i saw you going for the coffee. not going to make it. got the next read. we got her. >> thought you were talking longer. my bad. markets showing signs of concerns after comments on the economy from fed president charlie evans. all these things pointing towards potentially a tapering coming. jeremy siegel professor of finance at the wharton school of pennsylvania, also our guest host and ed key han, who is a

portfolio management, thank you for being here. you guys have both been pretty positive when it comes to the stock market. ed, you've been incredibly positive when you think about what's coming out with gdp and the market seems to trip every time they hear more about the idea of tapering coming in september or some time this year. do your thoughts change about the stock market just based on what happens with the fed and with the tapering or forget it? don't pay attention to the noise? >> the fed has a profound effect on the economy. we've had a 60% gain roughly in the last two years. it's a perfectly normal and natural part of market behavior to have a little corrections from time to time. so there's a little pullback we've seen in the last couple days. i don't think for most investors it really makes sense to try to be too cute. we think we're in a bull market. we think the bull market has another year or more to run. and i think the sensible thing to do, depending on your risk toleran tolerance, to overweight stocks in your portfolio and enjoy the ride a little longer. >> you're not making bold

claims. you said stocks could move sideways through a lot of this. >> it's the summer. this wouldn't be surprising, again, after a 60% run, to say things. for the average investor that really doesn't matter. eventually stocks will go up and down but the trend i think is clearly up. i think that trend will continue quite a while longer especially in i'm right that the economy is about to accelerate and earnings will accelerate into next year. >> jeremy, how about you? >> i'm on the same record there. i still think this bull market has space to run. a year and a half ago i said that we're going to cross 15,000 this year and close between 16 and 17,000 on the dow. >> what's amazing, you said this a year and a half ago, february of 2012. >> that's right. >> when it first came out. >> humility, you learn humility about any forecast. don't try do that too much. in the short run, of course, anything could happen. i think valuations are still persuasive and even though interest rates have gone up and certainly they have, they're so

extremely low on a historical bas basis. stocks versus bonds -- it isn't that stocks are so absolutely cheap. they aren't. they're about average historical valuation. but still, relative to bonds they are very cheap. and, you know, interest rates will go up a little bit more but i don't think they're going through the roof. i think finally we're going to get to 5% treasuries and historically is lower than they've been on average in the last 50 years and valuations have been higher than 15. >> 5% over the next year and a half -- >> oh, two, three years. i think eventually you're going to get tips at maybe 2% and 2.5% inflation. but that's going to be a long time going. it's not going there next month, not going there in six months. we're going to have that ratcheting up of interest rates. even 4 to 5% treasuries on historical basis is still very low. stocks, usually 17, 18, 19 when that valuation turns out. >> ed, the theme the last couple

years in the market run has been companies cutting their way to success. you hate to see that, right? earnings going up because they're doing more with the same number or fewer workers. when you're looking at your optimistic forecast you see companies growing what matters to me, top line, ie sales, and thus finally having to hire more workers and that is the upward spiral we need? >> that's right. i think the economy is finally starting to really gain some traction and the next phase of this market will be led by higher earnings but especially higher earnings through higher revenue. think of all the ceos you have on this show, the theme over the last couple years has been caution. they're trying to protect their margins. they don't want to be too aggressive. i think that's going to shift a little bit over the next couple years from we don't want to invest because we don't want to take too many chap chances to we need to invest to maintain and grow our market share. i think you're going to see a shift in psychology and that psychology is going to say, now we are back in a growth mode. i think the economy is driven by the private economy, the government has been a drag for the last couple years.

that drag is going to lessen i think and we're going to have a renewed growth. >> could that be offset by problems in washington again? if you get in and the fiscal cliff, we're back up against it october 1st if they don't fund the government does that change the whole scenario? >> there's a risk of that. however the deficit in the united states has been cut in half. gone from $1.3 trillion to about half that and still falling at a rapid rate. so the whole rational for dramatically cutting spending again or raising taxes again, that's basically gone away. so we already had a big tax increase. 1.3% of gdp to start this year. we've already had substantial spending cuts at the federal and state and local level. the rationale for why that's necessary is rapidly disappearing. some people who think government is too big, this is not an ideological discussion but from an economic growth point of view, government spending directly goes into gdp and as that -- if that cuts they start to lessen. plus the impact of the tax

increase starts to go away as the anniversary of it next year. you will see the emphasis go back on the private economy and the ism data we got this week, car sales, a lot of evidence we are starting to accelerate in the private economy. >> i think what was really astounding, the trade number we got. i mean that's -- jumps what we got last quarter's gdp which was so horrible and i couldn't believe how could we get labor market gains with a half percent the on gdp but now they're saying 2.5% on the second quarter which begins to look decent for a sequestered half that we had. so that was very encouraging, i thought. >> jeremy will be with us the rest of the program. ed thank you for joining us. >> thank you. >> coming up, apparently yahoo! is going to roll out a new logo. sort of highlighting some ideas on their tum bler blog. check that out. the house of mouse, hurt by the movie business, as "the lone ranger" expectations ride in not a little bit short, a lot of

short. perhaps the movie should have been titled "the lone audience number." what's next for that stock. wells fargo and american express announcing a new partnership that gives the mortgage giant access to the credit card marketplace. wells fargo head of consumer credit solutions will join us to talk about what the deal means for them. "squak box" is back right after the break. >> time now for today's aflac trivia question. what is a cuban medianoche? he c. he doesn't have to worry so much about his mortgage, groceries, or even gas bills. kick! kick... feel it! feel it! feel it! nice work! ♪ you got it! you got it! yes! aflac's gonna help take care of his expenses. and us...we're gonna get him back in fighting shape. ♪ [ male announcer ] see what's happening behind the scenes at aflac.com.

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. nows the answer to today's aflac trivia question. what is a cuban medianoche? the answer -- a sandwich. of roast pork, mustard and dill pickers on bread. it is popular as a late night snack, hence the name midnight. >> aflac. >> internet icon yahoo! changing its distinctive logo for the first time in nearly two decades. the question, though, is to what? each day over the next four weeks, yahoo! is going to be showcasing different logos on

its home page and then on september 4th, one of them will replace yahoo!'s distinctive purply exclamation point logo. the logo change would be the first major modification in yaho yahoo!'s 18-year history and promoted in a 30 days of change marketing campaign. the company has decided on the new logo but wants to showcase different looks to depict its renaissance under ceo marisa meier. the thing so crazy, they picked it already. >> you would think that you would let us foe vote on it. >> she loves purple. still going to be purple. >> i think they should rename the company teralicos, excited home. >> take a look at futures as we go to a break. what? we have red air ross across the board. dow off by 40 points. also programming note, tonight, carl, he's got the premier of cnbc's newest documentary, "#twitterrevolution" and host carl quintanilla will join us in

a bit with a preview. "squak box" coming right back. >> coming up -- disney is known as the greatest place on earth. but is it the greatest stock for your portfolio? we talk theme parks, movies and profits, when "squak box" returns. profit from it. at team. it's been that way since the day you met. but your erectile dysfunction - it 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. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help for an erection lasting more than 4 hours. if you have any sudden decrease or loss in hearing or vision,

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welcome back to "squak box" on cnbc. this morning i'm andrew ross sorkin. to some of the headlines. the big ones, the treasury is going to be auctioning $24 billion in ten-year notes at 1:00 p.m. eastern today. this follows yesterday's strong $32 billion three-year note auction. first solar shares getting a hit this morning after earnings fell well short of analyst expectations. sales also missed the mark and the company cut guidance. the numbers of americans applying for a mortgage or refinancing rising by.02% this despite a rise in rates. >> let's get more on disney's third-quarter results after the bell. joining us with his reaction is david, from rbc capital markets.

the earnings important. we know the parks did well. we've been sort of talking ate "the lone ranger." they made a lot of great movies but it could be a $200 million writedown. 106 to $200 million. that may define this quarter. look forward for us, because that's what we care about as investors, do you think this is going to meaningfully impact disney or just a bad headline with no material impact on the results or the stock? >> you know, the irony is, if you look across the pipelines and your confidence in the studios of all these major comglom rates, while this is like the most high-profile debacle the writedown for "the lone ranger" disney is probably in the best position for the next three to five years. the marvel portfolio, the pixar portfol portfolio, now the lucas portfolio, you feel really good about the peopipeline. >> if you look at john carter that did not do well at all,

launched i think in march of 2012, the stock is way up since then, right? so the market has the ability to say, you know, a lot of this financial risk is hedged probably elsewhere. it can get past this. seems like you're saying and agreeing disney will have no problem surviving and thriving even with "the lone ranger"? >> absolutely. as i said the ironry in is, in a very difficult business to predict coming after this kind of mishap, you feel most confident about the disney portfolio versus a lot of the other major media conglomerates and the studio. if you look at what really drives this business ultimately, honestly it's espn and the cable nets. you know, core growth on the affiliate side of about 8%. advertising growth, with, you know, ratings down double digits they still managed to grow advertising because of pricing power and the ability to adjust units. they're operating the business really well, we think. >> that's what's amazing too, but david, when we look at the battle between time warner and

cbs, okay, this is one of the most heated battles we have seen, espn so far has been able to pretty much tell cable companies what it's going to charge them and there's no pushback. is that over, though? >> right. >> will espn still command these increases every couple years they have been known for, driving in large part disney's results or is it finally going to have some sort of a top some. >> it's a great question. i think the good news for disney and its investors is, that these affiliated agreements tend to be three to five years in duration, and espn and disney has just gotten through a period where they've locked up on a multiyear basis a bunch of these affiliate increases. so i think the honest question is, we probably won't have to worry about it for another couple years. does it come to a point where, you know, espn starts to feel more push back -- >> sure. >> i guess ultimately it has to

happen at some point, but what i would say to investors is not in my investable time. >> not being self-serving here, but our parent company, comcast, has unveiled nbc sports, you got fox, which is converting its speed channel to fox sports 1, all of a sudden espn had basically no competition and now they've got a number of well capitalized, viable competitors with quality content as well. >> i don't know if i would call them -- i don't know if i would call them viable competitors. >> except for nbc sports -- >> maybe espn. >> which is fantastic. >> yes. but, you know, nobody has -- none of the competitors has the nfl, which is really the -- that's the game changer. the day one of those guys comes in and takes monday night football away, that's the day i'm really worried about the espn franchise. >> why don't you believe one day they will? you know, hopefully in 2021 we'll be able to have this

conversation again and that's really when we'll know. i think, you know, the -- there's the potential for a thursday night package from the nfl which is currently on the nfl channel. >> the nfl network. you think they would give that up, david? seems to be pretty much all the nfl network has. >> what i would do is i would take the 13 or so game package and bid out eight or nine of those games, right. that's what i would do. i would keep some of the games for the nfl channel, and i would bid them out. and, you know, i think that is certainly a possibility. >> david, when you think of the model for other sport channels, whether fox sports one or nbc sports, do you think there's an expectation in the industry that all of this does go to some kind of special tier in terms of how they've even thought about that model as well? >> you know, again, i think -- i think that there's a difference between the next couple of years and if we look a decade out. and i think over time, i think if the industry is smart,

they're going to allow some steam to escape from the, you know, the pipe, put a little valve in so they can broaden out the basic packages that don't include the sports content, but i think for the most part when you look across the first or second most distributed packages for any mso, i think you're going to see these sports packages and the sports channels on those most distributed packages on basic for some time to come. you know, where they're probably on 90% of everybody's packages today, maybe they ultimately go to 85% or something like that over the next couple years. maybe. i think they're going to stay on basic. i think that's the way the contracts are written. >> your price target on disney, do you have one? >> yeah. our price target now is $71. >> okay. so $67 now. about 4 bucks more. great discussion there. thanks very much for kind of going in. we sort of satisfied our personal curiosity during our

interview and put a trick on the viewers. thanks. >> you bet. >> coming up the revolutionary story behind a social media giant. now 200 million strong and a staple around the world, we're going to be talking twitter and get a preview of tonight's big premier next with a guy you know very well, from "squawk" and wells fargo getting ready to roll out a new credit card that helps you actually pay down your debt. yep. a credit card that pays down your debt. sounds a little crazy but we're going to talk about it. the head of consumer credit solutions joining us shortly to explain. "squak box" coming right back. ♪

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today, a cnbc exclusive. stock above its ipo. facebook's on its feet and getting into the game. mobile games, dan rose on their next play. "squawk on the street" 9:00 a.m. eastern on cnbc. according to twitter founder jack dorsey the platform came of age in 2009 when u.s. airways flight 1549 landed in the hudson. it was that moment that the social media platform really transformed the way news was covered and consumed. that's just one of the many stories you'll here in tonight's premier of "#twitterrevolution." carl quintanilla joins us with a preview. carl, very fitting for you to be doing this. you are the man that convince med to go on to twitter to begin with. >> that's funny. i was just thinking i think you

and i started on twitter at about the same time. of course you have -- >> you talked me into it. >> you have more followers. >> you convinced me and i was pushing back. >> none of us can compete to say andrew's follower count. i know we're all in the same camp trying to get ahead of andrew. it is an amazing platform. it's been a few years, big milestones like you mentioned. the miracle on the hudson. it's changed celebrity, changed journalism, it's changed law enforcement, it's changed peace activism in the middle east. just an incredible destructive, powerful force, and we try to go through it and give you a sense of who the people are behind twitter are out in san francisco but also look at it through the eyes of the users. one amazing user, guys, is the mba. 7 million followers on their feed. very few handles have that many followers. we went to miami during the nba finals and how they use it, use it to trash talk, how do they deal with the haters.

chris bosh of the miami heat had some great answers. take a listen. >> i like to put little tight bits out there about what i do and things like that. i think people appreciate that. >> we spoke to chris bosh in the midst of the nba finals. miami heat versus the san antonio spurs. a series so intense, he stopped tweeting, temporarily. >> i don't want it to take away from my focus because it can be -- it can be addictive. i think everybody knows that. >> the seven-game series generated more than 26 million tweets. all of them unvarnished and some unkind. how much attention to you bay to critics, haters, and how much do you engage them back? >> 0%. you know, out of sight, out of mind. this is ruining my day. why am i looking at this? you know, so i just -- i just leave it alone. >> it is going to be one huge challenge for the company to

keep users engaged because we now how nasty it can be. high-profile users like joe at the "new york times" and alec baldwin say i have enough of you guys being mean to me i'm closing my account. for the nba it may all be about television ratings. the number of people who follow either a team, the league, a player, a retired player or a coach, 130 million people which is -- i mean that's scale. that's reach. and we'll talk about how they leverage that tonight on the doc. >> it's amazing, carl. it changes the way people watch television too. i've found when there's an event i'm really excited about, sometimes i end up tweeting along with, i can't watch it on dvr like i would normally, i can't pause it because if you're not watching it in real time you miss the entire moment. which is bizarre how that's one of the few things that loops you back in. >> i always think back to the super bowl and the blackout, remember. >> yeah. >> the lights went out and

people immediately said, what's going on and after that, they went right to their phone and it was all laying out on twitter. a company like oreo, saw that happen and within minutes they created a hashtag that played off the lights and it got huge marketing buzz basically for free because they were smart about using this new technology. so it is a game changer. how they monetize it is an issue as for facebook. there are big business questions as well as cultural questions we try to address. >> i think you're right, carl. i love what bosh had to say. i think the biggest threat to twitter is twitter itself and some of the extremists on there. i mean, i hear what bosh is saying but i'm going to be perfectly candid about this, it does get to me. it gets to you. >> how can it not? >> like calling up 25,000 people a day just randomly at their job and saying you stink and hanging up the phone. right. eventually you get sick of hearing it and like -- i think that kind of stuff is probably the biggest threat to twitter because you're like i don't need it. >> a block key.

>> carl, psychological, philosophical question, you've studied twitter and understand it just about better than anybody else out there. when you think of the negativity and hate as people say on twitter, is it a function that somehow we as a country or as a globe are that much angrier than we used to be or the fact that everybody now has a megaphone? >> i think when bad behavior takes place and sully is right, happens all the time, i think there's a wave of people who rush in and say you know what, that's not appropriate. or we're not about that. i think when it gets really bad and not to say we're all not victims to it every day, but when it's really bad, people will self-correct and the companies definitely counting on that. for me one of the big recent milestones when the pope joined @pontiff. and when he started doing blessings on twitter there may be no going back no matter how nasty this gets. >> the other thing, it has

changed the way i find news too. it's the way i found out about the boston marathon bombings was on twitter. same thing. i find i find more and more of the news if i don't happen to be in front of a television or something, it's on twitter where i find stuff out. >> if tepper is on@squawkcnbc and you have the volume down on a trading desk you're turning it up. that's how it's melding. a frenemy of tv. >> your friend jeremy has a question. >> do you have a twitter account? >> no, i don't. >> slacker. >> i'm thinking of it. a lot of people say get on there, you will have 2 million people following you. that's what scares me. >> 1 million every day who wants you to interact with them. you feel obligated to do it because you want to be a nice guy and you're like i can't. >> carl, what i wanted to ask you was, being a macro economist, what about false rumors that go -- can go through twitter and, you know, all of a sudden i mean on a macro scale,

you know, like obama was shot in the white house or something like that, no one is overseeing that to say hey, guys, let me tell you the truth because millions of people are getting it simultaneously from just any source. could that be a problem? >> it's a huge problem. you're referring to the ap account getting hacked, said there were bombs at the white house. the market actually lost billions in market cap within a few minutes, got it right back. that was a very bad day for the engineers over at twitter. they in sense tried to add dual verification measures to increase security but that's a long-term challenge and huge challenge for those guys, you're right. >> carl, we are looking forward to it tonight. making sure we're up. i'm guessing you're going to be live tweeting through it? >> we're going to try if i can stay up that late. >> carl -- >> stay up that late for you too. >> john carney at cnbc tweeted about this, he saw the premier, is dick the founder of twitter, really ripped? you were in the gym and hitting the heavy bag?

>> a brief segment we work out together. he's in incredible physical shape. i'll leave it at that. you be the judge, sully, about whether he's ripped. i think he's tough. >> i'm not the judge of who's ripped at all. i'm rupped. what's the opposite? carl, thank you. >> we will watch tonight. that is coming up tonight at 9:00 eastern and pacific. again "#twitterrevolution." up next, wells fargo teaming up with american express for more access to the credit card business. we will talk with them about their plans and what it means for the nation's fourth largest bank. zawaha "squak box" will be right back. . . my doctor and i went with axiron, the only underarm low t treatment. axiron can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur.

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welcome back. wells fargo and american express announcing a partnership to give one of the largest banks access to new credit card customers. joining us is beverly anderson executive vice president for consumer credit solutions at wells fargo and thank you very much for joining us this morning. >> good morning. >> this is an interesting credit card because it's more than just your average credit card. it's one offering to cut debt for consumers because everything that they do, you get a 1% rebate that automatically goes down paying the principal and a wells fargo home loan? >> well, good morning. you are talking about our home rebate card. i'm here to talk about a new partnership between wells fargo and american express to issue wells fargo credit cards on the american express network. >> so this is really interesting because when i looked through the stats of who are the top credit card issuers, i couldn't believe that wells fargo is as far down the list as it is.

is the goal to try to bump up that list? sh >> you're right. one of the goals is to grow our credit card business and we think this partnership with american express and wells fargo will do just that. we're excited about the products that we will be putting in market later this year and into next year. and they're really going to serve customers' needs. they'll have rich rewards, great customer experiences, and wonderful value. >> why do you think wells fargo hasn't had a bigger role in this before? again, i was pretty surprised by that? >> it is surprising. it just has not been the focus of ours, but as we look at what our customers want and desire, we know that they like -- they like and need credit to achieve their goals and objectives. we've got 70 million customers at wells fargo. only 1 in 3 have a card with us. we know they're using credit. we would like for them to deepen their relationships with us and use our credit cards. >> we think of amex, i pay mine

off every month. it's a charge card. i assume this will be a credit card. >> this is absolutely a credit card. american express has charge cards and credit cards. on their merchant net bourque they have a number of issuers who issue credit cards. we will be one of them. what we're excited about is this relationship that goes well beyond just issuing cards. but the relationship is about a strategic partnership that provides consulting services. they've helped us with product design as well as with some marketing strategies. their loyalty edge business is helping us redesign our rewards program. there are a number of strategic aspects to this relationship where capabilities across both companies are coming to bear to bring really rich value to the marketplace. >> is it a much better time to be offering a credit card to consumers. in 2008 a lot were pulling back and taking credit away from consumers. are they in a better position to take advantage of this and pay it back? >> absolutely. consumers learned a lot through

the crisis as did we as financial services institutions were at the lull from a credit perspective. consumers are spending again and this isn't so much about getting people in debt, as it is to helping them have a way to pay for things and to achieve some of their goals and objectives and do some wonderful things around experiences like travel and entertainment and retail. i think it's a very, very exciting time for our customers. >> i used to work at am ex. maybe that explains it. when thinking about doing this card we could do it with amex, mastercard and visa, in terms of who you thought about who to partner with, there were strategic benefits but there is an economic element, some merchants won't take it, what was the thinking? >> you know, one of the thinking -- part of the thinking was -- >> makes it a higher margin card? >> part of the thinking we have customers who really like choice. we have a relationship with visa

today that relationship is very important to us. and it will continue. as we talked to customers and heard what they really wanted, they were looking for different value and experiences. and certainly a great partner for that is american express. so they're one element of our growth strategy and we've got many others. >> what's the difference between the visa card and amex card you offer? >> they all provide really rich rewards and benefits for our customers. we have products today that span our customer segments. everything from entry level products so we have a secured card or a college card. all the way through our high net worth. what we've done is just look for additional opportunity to serve the needs of customers who don't have a card with us and american express was a great way to deliver this new value. >> all right. beverly thank you very much for joining us. >> thank you very much. >> great having you here. >> thank you. >> coming up, our -- we are counting down to another day of trading. a lot of fed speak this afternoon. we'll talk taper and the markets and why i could care less who

the next fed chairman is and probably why i'm wrong about it. jeremy siegel, famous professor, not yet on twitter, is our guest host. plus, the cbs time warner cable battle continues. a lot to talk about. @squawkcnbc. >> when do i get to tease @streetsigns 2:00 p.m. eastern time. >> tomorrow on "squak box," a preview of the season's final major. pga of america ceo will join us. plus, his take on the time warner/cbs dispute. tee it high and let it fly, with "squak box" right here on cnbc. [ male announcer ] come to the golden opportunity sales event

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"#twitterrevolution." >> the last thing you typed was what about a watch you wear around your waist. number sign new ideas for belts, number sign time to hold them pants up. >> hashtag exactly. >> from wall street to silicon valley one of twitter's biggest backers and an ipo guru who helped companies like google, apple and amazon go public. >> taper talk from fed heads driving a second straight day of stock market losses. if your portfolio isn't taper

proof what are you waiting for? >> the fight between cbs and time warner cable continuing. if you're in a blackout area we're going to tell you who to be mad at as the third hour of "squak box" begins right now. ♪ welcome back to "squak box" here on cnbc. we are first in business worldwide. i'm andrew ross sorkin with becky quick, brian sullivan is here. our guest host jeremy siegel finance professor at the wharton school of business. a lot more from the professor still ahead. brian has your morning headlines. >> we're going to start with the markets here because they're coming off a terrible day yesterday and could be setting up for the same thing today driven by that. this hurts me because if you are a viewer of "street signs" you know my number one prediction this year was japan would be the number one performing domestic market in the world, still are,

less so, dropped 4% overnight outpacing ireland, number one but i'm getting nervous after u.s. stocks lagged on their worst day in more than a month. among the reasons, of course, what else, fed fears. fed presidents dennis and charles suggesting the central bank could begin tapering their easy money program as early as september. there's more fed talk today. philadelphia's charles speaking at 12:30 eastern time, cleveland's sandra talking about an hour later on the regional economy. in the meantime the bank of japan kicked off a two-day meeting today. it is widely expected to maintain its pledge of increasing the monetary base in an annual pace of $600 billion to 700 billion yen which is like 10 bucks. the european markets, yep the ftse, actually the france cac outperformancing once again. same thing on monday when i was here. who knows why. u.s. equity futures indicating a lower open.

implied open on the dow down about 30 points right now. housing news, the number of americans applying for a mortgage or refi rose by 0.2%, despite a small jump in rates. i've argued and i'll say it again, the bank of japan is more important to the global markets than the u.s. federal reserve. >> because? >> because the u.s. federal reserve has done their thing, we know what they're going to do, phasing out. bank of japan is trying what could be the greatest economic experiment in the history of the world. >> i agree with you. >> thank you. >> that gives me confidence. >> but -- >> i can retire. >> i wonder if the markets follow what the central bank here is doing now because once the change is off, like okay, the bank of japan is still going to be really easy, our central bank is going to start tightening at some point and that may be a bigger driver of what the rest of the globe follows. >> just listen and professor would know better than i do, my view is this, they've said they're going to taper or likely going to taper in september. we just heard that.

the bond market already knows it. the vigilantes have come out. 100 basis points in yields in the last couple months. why is it a big deal? >> that isn't a big deal but what becky is talking about is, how do you wind down this huge balance sheet which is -- we're going to be on the leading edge of that. japan's a little bit behind. they're starting their big push. >> that's what i'm saying. >> we're ending our big push. there is the question of how we're going to get out of all those excess reserves. but i agree with you, brian, i think it's the most fascinating macro economic experiment of the last ten years. >> japan. >> japan. even more so -- >> talk about on national television -- >> than what banking has done because the size is so much bigger -- >> relative to our economy. >> and they're really trying to launch out of a much deeper stagnation than we ever had. >> 30 years of just nothing. >> fascinating. it is absolutely fascinating for macro economists to see what's going to happen the next year or two in japan. >> you win. >> i can't even -- >> you think that people in

middle america are thinking about -- >> they don't care who the fed chairman is. >> but do you think they care about what japan is doing? >> no. but i'm just saying, my prediction for this year was the nikkei would be the number one performing developed market in the world. i'm still on track. up 37%. ireland, though, my peeps, they're closing in, up 23% this year and if the nikkei keeps going down if i'm going to lose my prediction to my irish breathren it's okay. >> i think you're going to win that bet. >> you think so? >> it went up way too fast. >> come down to philly and take you to dinner if i'm right. >> that would be nice. >> we got corporate news to tell you about this morning. may move the markets. u.s. government filing two civil lawsuits against bank of america. those suits accuse the bank of investor fraud in its sale of $850 million of residential mortgage backed securities and the latest in the fight between cbs and time warner cable, well, cbs boss les moon ves rejected the latest proposal by time

warner to end the blackout, dismissing it as a, quote, public relations gesture. much more on this story in the back half of the hour. also aol's second quarter earnings and revenue beating expectations. the company, though, here's the big news announcing it will be buying web company adapt tv, it's aol's largest acquisition since tim armstrong took over as ceo in 2009. adapt tv uses software to match video and -- of -- video ads. buyers and sellers together. and just one comment on this, this is a transaction that to the extent you didn't appreciate that aol had transformed itself from an internet company to advertising and marketing and services company this i think is it. we're going to watch what happens to shares of aol today. also time warner reporting earnings of 83 cents. that was 7 cents above the expectations. revenue also beat consensus. >> all right. stocks logging their worst single day performance since june yesterday after all the taper talk rattled investors'

confidence. joining us is doug, chief market strategist at ing investment. and jeremy siegel professor at the wharton school of business. doug you're new to the table. we've been talking about tapering all morning long. you think this is a good thing even if it rat les markets -- rattles markets in the short term. >> i think the fed risked being behind the curve if they don't start tapering in september. the data is really starting to show. the fundamentals are marching forward. you have advance in corporate earnings, third conservative quarter for the second quarter, marching forward. you have broadening manufacturing. that manufacturing number was a blowout, 55 really surprised the market, really positive. the consumer on housing, retail sales, auto, looks good. the real big surprise, the positive that i don't think is getting enough attention is the trade deficit. yesterday's trade deficit was much, much better than expected.

that has a direct, positive impact to gdp and the forecast are going to be have to be revised up around 2.5%, that's three times the consensus forecast even two weeks ago. >> jeremy, you're of the same opinion? >> right. that gdp moving up to 2.5% i think puts september on the table as the most likely month where a taper will be announced. don't forget there's also the rate at which they will taper. still a lot of variables. people are saying it's like on and off. they can change the rate, how fast they're going to go. so there's a lot of parameters here, but i still think september is going to be the date and the news conference, september 19th, i forget the exact date of the meeting, he'll announce that they'll begin to taper that qe. >> you think the tapering announcement will be like 60 or $65 billion that they may be purchasing instead of the $85 billion. >> about $0 billion. lower it about $20 billion every

other meeting and that gets them to stop the qe by the middle of next year which was sort of what bernanke said as the target. that's the median i think that's in the mind of investors right now. if they go faster than that, they have to adjust. they'll only go faster if the economy is stronger. it's going to be bad for bonds but not necessarily bad for stocks. >> doug, what will happen, do you think, in the immediate term? you acknowledge it could be a rocky path for the markets as they start to acknowledge what the fed is doing? >> well, i call it the getting back to normal trade. getting back to normal is never smooth. but it's very good for the market because normal rates in the ten year is around 3.5%. we're ultimately going to get there. to me, the safest trade to protect against market volatility is to roll into equities, get fully allocated to equity as well as bonds. i think right now investors are too defensive and they're still

protecting against armageddon. getting back to normal means we're in a normal economy, they have to get back to their normal equity allocation. >> does that necessarily mean we will see a 5 or 10% drop in the market before this goes up or does all this talk about this as you two lay it out, maybe inv t investors calm down a little bit and hang in there? >> i think the offset the positive offset is corporate earnings. corporate earnings are coming in larger than expected. i recently upped my earnings forecast, really surprising me that it's looking around $110. that's an all-time high in corporate profits and that will be a positive for any volatility. that's why you need to get into equities now. i don't think that's fully priced in. >> all this with the fed actually potentially stopping or tapering some of the qe is going to be happening at the same time. we're likely to start hearing about who the next fed chairman is going to be. >> right. >> how big of a problem is that? just in terms of the change in

leadership handing over the mantle to the next person? >> it's going to be interesting. i believe janet yellen is the most suitable, suitable, they're both very well qualified, i'm thinking larry and, you know, is also the next person that's there, but i think that in terms of the consensus building that bernanke has done with the fomc, janet yellen is definitely i think the choice of bernanke and the fomc will tell obama and obama will go in that direction. i mean there will be opposition from congress and the senate, mostly is she a super dove, you know, which is the way she would look, but she will go through the senate. and one thing that's important to remember, if there's a delay, the tradition is, and bernanke stays on as chairman, so if it isn't done by january 31st, no problem, happened before, he will stay on until it finally is done. >> that's an interesting point. >> it's not an absolute deadline

like a debt ceiling might be. they -- bernanke would stay on and so there isn't that critical end date that many people talk about. >> all right. that's really interesting. jeremy, again is staying with us the rest of the program. doug, thanks for joining us today. >> you're welcome. >> okay. coming up, the twitter revolution, the company's ipo widely anticipated. we're going to talk to the ipo expert behind google's public offering. plus one of twitter's biggest backers as we head to a break. the early investors in twitter, man, they are going to do well on this one. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected.

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welcome back to "squak box." we are just hours away, less than 12 hours away, from carl's big documentary tonight. we were talking about twitter, the prospect of a twitter ipo is watched by wall street to silicon valley and the structure

will reveal plenty about the lesson's gleaned from facebook's botched offering. joining us is kevin, firsthand capital management and cio portfolio manager. more than a million privately traded shares of twitter in his technology value fund. twitter the funds the largest position. also with us this morning bill, the founder and chairman of wr hambrick helped convince google to use an internet based auction for their ipo in 2004 and helped take apple, amazon.com and other companies public and has a strong view, i think, bill, want to go to you first, on how to handle this ipo come this fall when they pursue it given what happened with facebook, given all of the consumer interests that you have to imagine would be around a twitter ipo, how do you do it and do it right in this day and age? bill? >> it's very, very difficult, really, to separate what is real demand for an issue at a specific price and what the

traders want to do. you know, there's so many hedge funds in the marketplace, so much short-term pressure on them, that it's really difficult to figure out who is your long-term buyer. i think that twitter and some of these other internet companies with a strong consumer base have a real opportunity to reach out to the user base. i think that's normally, to me, over the years, that has been the most loyal, long-term shareholders that you can have. >> and so you would focus on the retail audience? kevin, does that make sense to you? and what are the pros and cons of that? >> well, you know what, there's a lot of things that you could do. what companies end up doing, though, is deciding to focus where they're going to focus and, you know, i thought facebook was probably one of the best candidates. i half expected them to buy a little brokerage firm do it on facebook itself and give every

one of their members a share to purchase. and it didn't happen. i guess stepping back from it, companies view an ipo kind of like a wedding. it's a really important event but you hope you're only going to do it once. you end up not ending up being the expert even though you learn a lot along the way. you're probably never going to do it again. i think -- i like mr. hambrick's ideas on how to improve the ipo process and hartley agree with about everything he said. for the companies in the moment, they don't want to become the world's best wedding planner. they want to get on with it. >> here's the question for you, kevin. you own a number of these shares. i don't know how long a term inverser you expect to be in this company. should twitter be trying to maximize the total amount of money on ipo day, something facebook did quite successfully but at the expense of investors, just a year after their ipo and the price is creeping finally

back to where they started, or should they be trying to give you the opportunity to get a 5, 10% pop? is that -- should that be the goal or not? >> companies don't owe people a first day ipo pop. but it's in their interests to have their ipo go successfully. so you want to price it right. if you price it way too low, and there have been a few examples of that, i'm sure, for example, the people at linkedin felt they left a lot on the table, if you price it just right, people make a little bit of money but it's sort of a reasonable price in there and it's neither one extreme nor the other. that's what you want. >> jeremy, where are you on this? >> well, i mean, that's a good question. but don't forget, usually the ipo is a small fraction of what the owners have, so they want to generate good feelings about the stock for the 90% that they keep. but i would like it to ask bill a question. i mean, if i remember google, i mean, i don't know if that was a successful ipo, in the sense

that in the type of auction i remember went way lower than originally and a couple of the venture funds actually pulled some of their issue and it was at 86 it went off on and went up after that, so in a way i thought that that maybe wasn't the best thing for them. how do you look at it in retrospect. >> well, i do think it was successful from the point of view that google wanted to make shares available to any one of their users. they wanted it open so that a user could come in, place a bid, and what happened was that any user who placed a bid in the auction at $85 or more, did get stock. so from that point of view, it worked. did it work to its full efficiency, no, because it was a bit of a compromise. the auction was run by the traditional bulge underwriters

and so it didn't work as well as some of the others did later. but i think on balance, they accomplished what they wanted to do. they kept the -- their faith with their customers. >> do we want retail investors in this ipo? this may sound like a crazy idea, but given what happened with facebook, given the frenzy that is invariably going to take place around this ipo and given the fact that i would argue by default it will never be a fair fight, it will never be a fair fight, how would you try to allocate these shares? would you be spending a lot of energy trying to get it into the hands of retail or do you say you know what, let's stick with institutions and hopefully institutions that stay with you long-term, kevin? >> sure. just hand it off to the pros and nothing can go wrong, right? that doesn't necessarily fix everything either. you know, i think you're going to have a big handoff from one group of shareholders who are

mostly venture capitalists and private investors who really need to sell it and move on to the long-term shareholders and it's tempting to say i want to find a home for it at fidelity and t. rowe price and a couple big institutions and they'll be patient and buy it and hold it. you will ultimately end up having a broad shareholder base. you want to get to that broad base as quickly as you can. anybody who's going to be a long-term shareholder start to own a little of it. by the way, don't presume that frenzy is going to happen. you know, what i've been telling people is twitter has had a chance to learn from facebook's ipo, but the investors have had a chance to learn too. maybe people will be a little more calm this time and learn the lesson from the last time. >> okay. kevin landisand bill hambrick thank you for joining us. a quick programming note, the premier of cnbc's documentary "#twitterrevolution" coming at 9:00 eastern time on cnbc. brian, you had a quick comment on all of this. >> do you remember who andrew klein is? does that name ring a bell?

>> my ignorance is -- >> andrew klein started a brewery, right, a wall street lawyer, started a brewery, i don't know if you remember, then started wit capital. the brewery was the first on-line ipo. he ultimately failed, but he tried to change the game in how shares are distributed through wit capital. if andrew klein is watching, you know, ping me, ping us, i would love to hear from the guy. he was so far ahead of his time but too far ahead. freewall street.com which he wrote in '98 or '99 trying to change the way ipos were distributed. it didn't work out but we're sort of now in a way talking about his model. one of the these guys probably a decade too early. so if you're out there, andrew, congratulations, somebody hasn't forgotten about you. >> there you go. >> the beer was pretty good too. >> coming up, taco bell found a lot of success with doritos locos taco but see what they're coming up with. a breakfast item coming out. >> i've seen it.

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feeding obsessions. >> how much attention do you pay to critics? >> recorded history. >> i could see the shooters and i could see gunfire. >> was your intent to tweet it? >> and sometimes walking a dangerous line. >> how much of it shocked you? >> all of it shocked me. >> carl canquintanilla, "#twitterrevolution," premieres tonight at 9:00, all new cnbc. ♪ welcome back to "squak box," everybody. if you haven't had breakfast yet listen to this, taco bell is expanding a test of its waffle

tacos. what did you call them, wacos. >> a taffle? >> look at this picture -- >> i call that fantastic. >> waffle, scrambled eggs, sausage and a side of syrup. the calorie count? hey it's not as bad as you might think. 460 calories with 30 grams of fat. okay. the fat is off the charts. it was a top seller during breakfast hours at five southern california locations this year. the company planning to take its breakfast menu national last year. the will be available starting thursday in fresno, california, omaha, nebraska, chattanooga, tennessee. get it early. >> you know, warren could go to omaha. >> interesting. >> you know what he likes? >> give him a call. hey, warren. >> he watches. >> i want to try it. >> reg gu late. >> try that -- >> which warren are we talking about? >> w.b. >> sorry. >> you were thinking elizabeth? >> no. >> when we come back, a check on the markets ahead of "opening

bell" and what to watch in the trading day ahead and the fight between cbs and the time warner cable continues. who is to blame for the 3 million customers affected by the blackout. stick around to find out. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine.

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welcome back to "squak box" this morning. a few stocks on the watch. i called it -- squawk box. what happened? we're laughing about something said during the commercial break which should not be repeated. >> okay. >> aol shares getting a boost after the tech company's earnings beat analyst expectations. i don't believe you for a second. aol announcing plans to acquire adapt tv for $405 million. keep an eye out also on time warn warner. a winner this morning. the media company's earnings and revenue beating the street. a different story for vivus. reported a bigger than expected loss. revenues fell short of consensus as sales of a diet drug missed estimates for the fourth quarter in a row. apple news, apple planning to launch a global trading program for third-party usb power adapters. this follows last month's --

what is this, electrocution of a chinese woman? did you know about this? what are you looking at there? >> oh, no. there was a -- no. >> execution of a woman who reportedly answered an iphone that was connected to an uncertified power adapters. >> it wasn't -- yes. it happened last week, wasn't an official apple iphone charger. one of the third-party ones you can purchase that are cheaper and apparently something wrong with it so when she picked up the phone she was killed. electrocuted. >> so this usb power adapter take back program begins in the u.s. on august 16th. users can go to any apple store or authorized provider and drop off a third-party adapter and buy the apple adapter at a discount of $10. >> we need to be clear, apparently this was not an apple thing. this is one -- you can get the cheap chargers, sometimes you forget a charger pick it up at an airport gift shop. >> because the apple chargers are too expensive.

>> negative on the iphone 5 because the lightning adapter, right, now you have 16 chargers for your iphone 4 and buy another 16 plus the car because bat it terry life is, you have to have one everywhere. i got sucked into it. >> the margins have to be on accessories like that. >> the 30 pin adapter the one to buy to adapt two to make it into a lightning adapter itself on the apple store is 29, i just bought one. work gave me the 5. nobody cares. aol is up 4%. >> right. >> we had tim -- this is high-tech tv stuff, trying to get andrew's attention, aol 4%. you said that adapt tv deal was going to be a big deal and looks like you're right. >> i think it's changing the perception of what aol is. >> yes. not just an internet company. digital marketing and advertising company. >> and if you think about tim armstrong's history at google as an advertising guy you can see sort of developmentally where this whole thing goes. >> still haven't gotten the "squak box" signs down how to

get your attention. the whole thing on street signs down pat. >> i couldn't read, i didn't mow what that said. >> i can't read my own writing. get a check on the markets. rick santelli joining us from the cme in chicago and our guest host wharton school professor jeremy siegel. a lot of fed chatter out there. what's top of your mind this morning? what are you looking at? >> certainly not the fed chatter. >> me too, buddy. >> looking at the fact that post the employment report on friday the ten-year notes yield close has basically been in a one basis point range. where is that one basis point? pretty much where it's trading right now, 262, 263. i find it very interesting that we've come to rest at a level that for all practical purposes represents an escalated interest rate range. i fully suspect that you're going to see several more of these jumps into higher ranges. it doesn't mean necessarily the

intensity of the trade change. it just, you know, over time, i think these interest rate subsidies come out of the market and i'm not necessarily thinking it's acting as it's 100% dependent on the full transparency, i may or may not, to taper or not taper, i don't think it's part of that discu discussion. i think the bond market is looking past that and sees some good things. i have ed on the floor later today as a guest and want to ask him, he says gdp is not a great indicator for the future, the market is. i want to know if the market is a great indicator for the future, totally juiced up or not. that's my question. it's kind of like an a-rod market. what is this batting average going to be when he drys out. that's what i want to know. i think it's tough to get market indicators. i think the treasury market is getting to be a better one every session. >> rick santelli, thank you. nice reference, considering a-rod was in your town last night, went one for two. >> i live --

>> i live 35 miles away! i live 35 miles away! and i heard the chicago fans booing him. >> and cheering him when he got beamed unfortunately. the only time he gets cheered when he gets hit with a baseball. >> we don't want to advocate cheering for things like that. he will be able to spend a lot of times at universal studios and disney. >> rick santelli, hidden baseball fan, thank you. jeremy siegel with us the rest of the show. professor, has the bond market priced in this whole taper thing. >> becky and i were talking how important september is going to be, probably obama's choice for heading the federal reserve and the taper decision. wow. >> you have congress coming back. >> and congress coming back. >> starting this fight over whether or not -- >> starting the fight on that. we really could be for six, eight weeks in a holding pattern which by the way, seasonally wouldn't be so bad because the end of august and september are seasonally the worst times of

the year. if we can get through level on that, we could have a very good year-end rally, usually late october, november and december are good months coming in. i think the market will be in a waiting mode for a long time. i mean rick mentioned one basis point all has been the deviation. you know, we may have a lot of, you know, not volatile days waiting for these announcements. >> that's interesting. i mean, you could see some sort of a pull back or maybe just -- >> yeah. and don't forget, we know that the market generally doesn't like unsert it i. so if when these two uncertainties are resolved and we actually know it, that could start the rally. later in september. maybe flat until september and the announcements come out and, you know, a good final two months of the year. >> all right. when we come back, we will have more on the talks between cbs and time warner. the fight has been going on for days, but it's not easy to figure out who customers should be mad at.

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welcome back to "squawk box." the continuing standoff between cbs and time warner cable still leaving thou sans in the dark over prime time programming and prime programming. if you're a time warner customer in a blackout area who should you be mad at? we've been debating this really since the blackout began. joining us dan gross, daily beast columnist and business

editor, from new york jayson blair, media analyst and managing director. i'm going to start with you, dan. who are you angry at? >> i think, you know, in this battle, the cable company is always going to lose. they are not a consumer brand. they're like the utility. you only think about them when it's not working. everybody has a nightmare customer service problem. you're paying them the bill feeling like you're not getting something. these networks, networks have a personality. they can have stores like the espn zone or newsstands like cnbc has at airports. so people have a -- tend to have a positive feeling towards networks to begin with and tend to have a negative feeling towards cable providers. i think it's an unfair battle. >> jason, we were trying to understand the leverage points in all of this and one of the things that's been very interesting over the past couple days now is that ratings have not fallen off at cbs which may give them more leverage in their conversations and les moonves pushing back on time warner's latest proposal. why have the ratings not had a

steeper decline, given the importance that we seem to place on time warner cable? >> well, we're only talking about 3 million households in the entire cable -- the entire pay tv or tv ecosystem which is less than 3% of total households watching cbs programs. i think despite the noise and emotion being created by the cbs and time warner cable pr machines, these disputes have become more commonplace. since the beginning of 2012 there have been over 35 publicized disputes, 150 channels affected and the reality is that almost all of them have been resolved in -- within a week or two. >> how long do you think this one is going to play out? >> i think as we head into the september premiers for cbs' prime time lineup and the playoffs for -- pardon me the preseason games for the nfl, i think the two parties will have to come to the table. >> do you think there should be rules about this kind of stuff

especially -- i understand -- >> hold on. jason's point is exactly right. you know who plays on cbs in new york on sunday afternoons? the jets. that's -- that's when it's going to get ugly. >> i'm sorry, the jets this year is not going to be an appeal -- >> this could drag on. >> this could drag on through the rest of the month easily. >> easily. i think what this is about is a kind of quiet desperation at the cable companies. time warner cable, since march of 201, they've lost -- 2012, they've lost 750,000 cable subscribers and voice subscri subscribers. all the millennials living in their parents basements they're not signing up for cable. >> you think this is a cord cutting or cord never. >> a generation of core never. and so when you look at their revenue mix, you look at their earnings, time warner cable is boosting up their business services revenue but the -- those pipes that they have into

your house, the great advantage they had, this monopoly where they could sell you video and voice and data, people aren't buying that anymore. so they have to sort of look to clamp down on the programming costs. >> how will they get -- agree on the network side but having the distribution system is more than content. unless we side the wide advo voecation of macs won't the pipes still matter a ton. >> they matter a ton but not as much as they used to. >> you are unlikely to see another or a duplicative broadband network built out nationwide. at some point the cable operators will reach a point and the pricing power we believe will shift into data. today there is an imbalance between the owners and distributors of content. that goes back to the cable act of 1982. sometimes legislation, after 20 years, it becomes frankenstein's monster. it was created in 19 8 when

cable operators had monopolies and the big four broadcasters were perceived to have this existential crisis. it empowered them to either have must carry or negotiate for retrans. today that's gotten out of balance. the big threat is we're driving up the price of pay tv packages so they're unaffordable to an increasing number of households. that's bad for all players within the ecosystem. >> does this battle do anything to what may happen ultimately to time warner cable? people consider this a takeover target. john malone, et cetera. anything we should think about in that regard? >> i think you resolve it either with legislation where you change the cable act and my sense is we don't see a lot of willingness for d.c. to do that, one potential resolution and john malone, i don't believe he's going away. i mean this is a guy who played his hand incredibly well at 12 or 13 years ago sold tci when cable eval ways were 20 times, he's re-entered the space when

cable evaluations are seven times the space. and one potential resolution is to drive consolidation of the industry. i think you're likely to see some sort of combination of time warner cable charter cox cable vision and if that happens i think it places pressure to have a combination of dish and direct tv and they would be able to distribute to one out of every three households in the united states and may give them more power to negotiate on my behalf as a homeowner. >> could comcast buy it or do you think the regulators would step in? >> good question on the most recent earnings conference call, brian roberts basically said there is really no limitation to how big we could get. so -- and essentially, there are so many new providers of video whether it's ovd like netflix, the tell cos entering video, that certainly regulators would look at that differently than a decade ago. >> dan, if you were an investor would you prefer to own content or the pipes? >> i'm a content person. >> i know. i know. but given what's happening here.

>> yes. i would prefer to own content. >> still want to own content? >> if you have something people want to watch in large numbers, you still have pricing power. and you see, you know, the way the networks are bidding up, the world cup rights, sporting events, good sitcoms and the ability of the netflix of the world to sort of break these days i would rather be in the business of owning the content. >> i would rather own the pipes. >> i would rather own the new jersey turnpike than general motors. >> interesting. >> the kids these days, they're watching tv in a different way. >> i just worry about -- >> i don't care how they watch it. they need high-speed internet. >> the broadband. >> but you know what it is, i look at music, i look at your former -- the "washington post," i mean i worry about content at large and what that means in all different medias. >> you gave him a binary question and i jumped in. >> wouldn't it be great if you

could own both. >> "washington post" great example, right. so some of the smartest guys in the room have begun to buy an asset class that's basically been beaten down. and that's one of the reasons why we think this news corp spinoff is a classically attractive spinoff. look at print publishing the margin structure of those businesses have been remarkably stable as they transition from physical and into a digital business model. so there still is scale and content but both asset classes are relatively cheap because we had this decade long bear market that started in '99 and ended in 2009. >> jayson blair, daniel gross, thank you guys. >> thank you. coming up, the rise in diesel exports. jackie is going to join us with a special report on american companies that are looking to cash in on increased demand for products, america as a petroleum exporter. boon pickens if you're listening, doesn't that sound so

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. welcome back, everybody. 8:51 in the east.

the government's latest report on oil and gas news later today. jackie deangeles joins us now with more on the rise and exports. >> that's right. this is interesting, especially as a trend to watch ahead of the government's report today. just two years ago the u.s. became net exporter of petroleum products. now the largest exporter in the world. a major part of that is diesel fuel. it's because there is strong demand for diesel. diesel is a product of choice for export because the margins are much higher than gas and the refiners actually have an advantage here over their foreign counter parts. there is plenty of natural gas and u.s. oil production expands and there's more oil, much cheaper oil. consider the math here. part of the mid year assessment that we did. margins, they were running above just $16 a barrel while the margins on finished gasoline, they were under $8 a barrel. that's according to valaro in a

recent investor presentation. to capitalize on this many refiners have done some simple things to change their product mix. you've got companies like shell, marathon poet trory petroleum. but they have 2-1 output ratio of gas to diesel. valero is investing higher to get their ratio to 1-1 in two years. government data shows the u.s. exported one million barrels of day of diesel fuel for the weekending july 26th, up from 4800,000 barrels. bank of merrill, merrill lynch raise 2.6 million barrels a day by the end of last year, up from 1.3 million in 2007. a doubling there in nearly five years. valero says it's responsible for 20 a 25% of the exports that we are seeing. >> that's really interesting. when we saw exxonmobil and some of the other big energy companies that reported the numbers, at least for

exxonmobil, were below expectations in large part because of that. >> that's right. this is one opportunity that they can try to capitalize and make up for it a little bit. >> okay. jackie, thank you. when we come back, our guest host this morning shall be "squawk box" market master jeremy siegel. we will give him the last word. [ male announcer ] these days, a small business can save by sharing.

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the stock of the day. there it is. aol. earnings and revenue beating the street. perhaps more importantly,the company announced it is buying adapt tv for $405 million. tim armstrong is joining us first on "squawk" this morning to talk about it. you have both the earnings popping the stock, up 3.5% this morning. let's get the last word from jeremy siegel. i don't know if it's a history lesson. why are you not worried about the fed at all? >> i'm to the worried about pap tapering. for a simple reason. banks now have over $2 trillion worth of excess reserves. above and beyond the quirmts. i don't think they need anymore. you know, i think they have

enough enough liquidity. i think that's the most of the feeling of the fmoc. so in that sense, i think the economy has enough liquidity to move forward in the second half of the year and there's always the option, as i say, if things slow down, the fmoc will move in the opposite direction. >> you think they can switch? >> absolutely. >> don't change gears in the mid until. >>. >> bernanke is so telegraphed that. they'll start at 20, you know, $20 billion a month. go down to 65. if we see a slowdown, you know, in the third quarter, second quarter, they will stop the tapering. it will stay. it may even go back up to 85. >> you think it can go back up? >> yes. >> stop temporarily? i think it's a one-way street though. >> it would have to be a lot of weak tons go up. i mean, we would really have to see much more than expected buy the fed. i don't anticipate that happening. but it's an option. that's the best part. as long as the market knows that option is in there to get back

to 85, that's a cushion, you can call it the bernanke put, if you want, but i think that that's going to be a powerful stimulant to the market. and you know, i don't think they need it. as i say, i think we're going to get through the tapering well without -- without a slowdown in the economy and that's good for the stock market. >> obviously -- >> you don't care. you're with him? >> obviously, i agree. i just -- maybe i'm wrong. maybe we're wrong professor. although i'm glad you're on my side. i think the american economy has grown bigger. i think we get locked in this halo bubble of east coast, west coast. if you listen to the piece mists all the time, it's cool to be negative, right? it's cooler to be negative than positive. listen to the pessimists all the time. you're going to drive yourself into the ground. >> it's worth pointing out that professor siegel made this call about the market back in february of 2012. he's been right to this point. so this is not somebody who is watching how the chips falls and then changing the forecast.

well-done. >> thank you very much. >> yeah. >> professor, thank you for being here. >> i'm happy to be here again. >> this has been a fun time. >> sounds like opium. >> two years ago. >> the dow is 12,000 back then. >> green shoots is gone. >> professor, thank you. guys, we will be back here tomorrow. make sure you join us. right now it's time for "squawk on the street." ♪ everybody get up good morning. welcome to "squawk on the street." i'm kelly evans on this wednesday morning with simon hobbs live from the new york stock exchange. carl will join us later. jim and david are both off this week. good morning, sir. >> good to see you. >> futures are under pressured and concerns the fed might scale back the bond buying back programs next month. the dow is down 29 points. we're off the lows of a couple hours ago. overnight in asia, yen was strengthening. los