and then marissa mayer is speaking out. it's thursday, august 12th, 2013 and "squawk box" begins now. >> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we're going to talk about the latest on syria and putin's op-ed this morning in just a few minutes. but first, let's set today's market agenda. first up, we have data points of note. weekly jobless claims and import price res going to be released at 8:30 eastern time. also this afternoon, the treasury will auction $13 billion in 30-year bonds. you have the record $49 billion debt offering by verizon. stocks, they have been on a nice rally. the dow posted a triple digit

gain for the third straight session yesterday. the s&p 500 closing up for the on seventh day in a row and also worth noting today, the new york fed president william dudley will be speaking in paris a little later this morning. the topic, on the reform of overthe counter derivatives. and the fkk will be meeting at the exchange eggs on the introduction of trading at the nasdaq all the way whack on august 22nd. so it's about time we see some of this. we're going preview that with harvey pitt and ron guffner. that's coming up in the next hour. joe. >> thanks, becky. something is different about -- something is different. >> the pitter patter of little feet. >> i hear the pitter patter of little feet. someone was out late at the diblasio victory party. >> and what a party it was. >> it was unbelievable? >> it was a late night. >> are you hung? hung over?

>> a little bit. >> i thought he was sleeping. >> not his -- >> it was a long evening. >> he was on top of the world. >> we celebrated. my voice is a little -- you know. >> from cheering. >> right. a lot of cheering. >> becky did your headline. >> and the i want to thank becky. >> these are your headlines, andrew's headlines right here. >> and i look so naturally beautiful. >> you don't need makeup. but you got your haircut. normally you'd take any gel. anyway, it's good that you're here. was there a wreck on the -- >> no. they decided to put cones up and literally stop an entire bridge. >> for repair work or something? >> for fun. >> good time to do it. >> they literally -- >> morning rush hour. >> it was like a parking lot. >> i have said in the past that having a bridge between where you live and where you work on the east coast where there's weather and stuff is not a great idea. >> i know. >> and you came back and said chinese food in the city is so

good, you can't -- >> and there are trees if you look hard enough with your kids. >> the largest park in the world known as central park. thanks, becky. shareholders will vote on michael dell's proposed buyout of the country in partnership with silver lake. dell is looking to acquire the company for $13.75 a share. that's in cash and activist carl ica icahn. in an interview on closing bell yesterday, wapner must have been -- ooh, it just infuriated him. he moved his attention to apple. >> quite a bit today in the 465, 466, 467 range. that's not to say it won't go over lower. you know, i mean, i don't really look at it from day-to-day. we don't try to fix what the market is going to do. but i think think the products are pretty good and they're

going to get a lot of business from china. >> shares of apple and we're going to talk about this a little bit this morning. do you -- if icahn says it's cheap, is there -- isn't he a pretty good person, probably, to listen to? or is anyone ever better than 60%? i mean, he had some things that -- >> but we decided his gut is right. >> i think you go with it. >> but is his gut right? >> in this situation, i think you do go with him. the stocks come down based ott idea the market was disappointed that they didn't get that china telecom deal, which you think they're going to get at some point. >> i think the neighbor started to say it. but he's waiting for all the analysts to say the same thing, that the stock is still cheap and blah, blah, blah, and they all did say the same thing. did anyone else actually -- >> cramer told us the same thing, he wouldn't bet against

it been even though he was note catch the closest firm. >> i'm anxious to wooch this. but what if they really -- in your view, and i'm not saying you don't like tim cook or meg whitman, but yesterday, i could read between the lines and you were wondering whether he's got -- >> well, the problem being, i think there's a disconnect at apple. there's a product issue and the consumer issue and how much the consumer loves them. oddly enough, then there's the stock issue. the stock issue i would argue is that it is so disconnected from what's going on on the cycle. the question is lower than it should be on -- the stock is sdountding the ablth of that company to keep innovating with really new -- what the guy the other day said, where it's a market that you didn't even know you needed a thousand songs in

your -- on the -- you didn't know you needed that until apple told you you needed it and everybody needed it. the ability to come up with another product like that and instead of an add-on. >> i had an interesting thing on npr where they talked about the evolution of the pocket watch. first you needed it in your pocket and then you needed it on your brift. it went back to that idea of whether you can take it to the other level. but maybe you get enough information and small enough that, yes, people would be llg to tear that. >> we've all -- why do we believe that apple is capable of doing what nobody else is capable of doing? >> because they've done it before. >> it used to be that steve jobs would give you some elegant thing that says, wow, look how that works. there's no mouse or -- i don't know. you touch things.

did you see crooks are going to be filing their -- mute lating their fingertips to get through? anyway, in news, "the wall street journal" reports that private equity firms kkr and sycamore partners are considering a joint bid for jones group. have you got any of that, electricky? >> no, not on today. they own nine west and joans new york and a number of other players are said to be considering offers for parts of the company. and new numbers show that fewer homes entered the foreclosure process last month. realty track reports the number of homes dropped 8% from july, back up that number is down 44%. from last august. >> we've got a few other stocks to watch this morning, include pandora which includes brian mcandrews as its new chairman and ceo. pandora said they're looking for someone with a background in

technology and advertising. that is the main source of revenue for pandora. qualcomm's board has approved a stock purchase program. shares of men's warehouse -- got any of that, joe? >> you know who to talk to about that. >> who? >> i don't own any of that. >> no, i don't, either. >> well, the guy down at the new york stock exchange. he's going to like the way he looks. >> apparently, a time of people don't have it in their closet at this time because that company was hit hard after the company cut its retail outlook. the company said it is concerned about the trends in the are a payroll industry. >> vera bradley posted better -- >> who? >> vera bradley. the girls love these bags. >> who is that? >> she's a designer with lots of

flowery stuff all over the bags. >> i thought that was lily. >> lily, but vera bradley -- we've heard of vera bradley in hour household. better-than-expected earnings after the close. that stock was down in the after hours, as well. >> back to the situation in syria, it's not enough just to clean our clocks. it's dangerous for a country to feel that it's exceptional. >> you're going to hate me for saying this. i read that op-ed. >> i said it's unusual for the times to print something from someone who is thought of such as a conservative. i admit it's a -- >> i happened to read that op-ed and thought it was remarkably reasonable. >> i'm sure. i'm sure. you read -- you know, you read lennon's teachings and think it's pretty reasonable, don't you? >> i have to say, he made some incredibly potent arguments.

>> vladimir putin, taking his case for syria directly to the american people. ooh, that makes me feel sort of played. >> he wrote an article saying here is how i got this. putin warns that a potential strike by the united states in syria could unleash a new wave of terrorism, increase violence and further destabilize the middle east and north after ka. he writes in part, in his words, that no one wants the united nations to suffer the fate of the league of nations, which collapsed because it lacked real leverage. the united nations doesn't already lack -- >> he made a cogent argument. and i hate saying this or admitting this. >> that he's backing the tyrants and syria and iran at this point. >> he points out that the rebels have -- wait, he gets into the

idea on of saying, look, these chemicals not him. i'm not giving that any validation. he's trying to appeal directly to the american public because he knows the person public is not to the strikes. >> so you believe taft and pravda? >> no, but i'll read you a sentence. he writes the potential strike by the u.s. against syria despite opposition in many countries and major leaders and including the pope may -- i thought that was an interesting sentence. >> but he knows exactly how to say these things. >> he's saying two things, innocent victims, which will happen by a default, and then he says an escalation, which is a threat. >> he makes the argument against

american exceptionalism and his last line about is about how we pray and people can relate to, but he moves that over because many people don't like it. >> i would think if i were there, i would not leave with trying to arrive here at -- i would try and arrive at maybe a quarter till in case there were cones on the bridge. that's what i would do. o i cod look at the show and see what was in -- whether i needed to prepaver anything, instead of arrivin for makeup, o to -- i may have recalculate. >> okay. just a thought. just a thought. y almost got just,

you know, i almost literally got out of the car. >> to walk? >> no. to go to the -- there was a cop. obviously, cops -- >> no, stay in your car. >> i'm andrew ross sorkin. i need a police escort to cnbc. i can see you doing that. you have no idea how important my job is. >> did you try to do that? >> no. >> officer! i mean, a pregnant woman you are not. >> i could have pretended to be. >> you're right. right. >> let's check on the markets this morning. the dow was up yesterday for triple digits for the third session in a row. the s&p has finished higher for seven sessions in a hoe. there are red arrows this morning, but you're not talking about major declines. s&p futures indicated down by just over two points. if you take a look at oil prices, again, oil has been clearly driven higher by syria. the ten-year note at this point is yielding 2.89%.

so you can take a look at what's happening with the dollar this morning and you're going to see at this point it's stronger against the euro, 1.3292. dollar is down against the yen, which is back below 100 at 99.33. and gold prices, which have come down quite a bit as the vacation in syria looks to be put on the back burner for a moment, down another $20 to $1,343 an ounce. >> do you think the main russian outlet would be allowed to publish a -- >> that was one thing i was curious about what your view though would be. if putin called up, when have you not published the op-ed? we are exceptional here. do you think you could publish that in china? >> do you see what putin shut

down? even pictures or anything else that's gone on. >> that's what i mean. i don't want to get an umbrella stuck up my [ expletive ] with ricin on it. >> the thing is, he had to rub it in. it's not enough to step into the middle of a situation and offer a solution and take the glory for that. to then come in and rub it in to say that beer the bad guys once again. >> what happened? they have no -- you know, if you're a president over there, didn't he serve his time, that poor puppet that he had. like it was mohoney with putin -- and then he comes back. i'm going to shut up. i'm in trouble. >> why are you in trouble? >> because i'm afraid of him. that's like when bob kraft was

here and you outed him. >> right now, it is time for the global markets report. ross westgate is standing by in london. ross, good morning. >> morning, becky. i think joe is safe for now. it's okay. we are 7-3, declineser outpacing advancers. and it's about the lows of the session for the ftse. the ftse yesterday was up around 4 points by the close. despise those gains, not much moment momentum. the cac 40 down sh 4%. the ftse mib down 0.7%, as well. talking about italy, borrowing costs jumping to the highs of 2012 for three-year paper that was auctioned this morning. yields jumping out from 2.33% a couple of months ago to 2.72% this morning. there's still a lot of political uncertainty this in italy. the senate here, and i've talked

all week about whether mr. berlusconi could reconseen. so italian yields are here. we good see gilt yields up over on highs of the year. we've had the bank of england governor, mark carney and other members of the committee giving testimony today to the british harlment. mr. carney said he expected the yield curve would steepen with his forward guidance. he said the most important rate is the bank of england bank base rate which a lot of mortgages are priced off rather than corporate rates today. but they say that if the unemployment rate did dip to 7%, they would assess why it was knocked out. but he also says that the market ves a more optimistic view of

what's happening with the jobless situation than he does. so he's just trying to be a little bit more dovish at the moment. back to you. >> thank you for that, ross westgate. i'm juris if they -- >> that's what happens, with umbrella, isn't it? >> what is the view. are they afraid? >> yeah. >> i suspect they're more in line with what he's saying thinking. >> you know who is not afraid? >> who is that? >> james bond. he takes on the kgb all the time. >> afraid of what, andrew? >> afraid of an umbrella tipped with ricin stuck into your leg because you -- go ahead. >> i think that was originally the bulgarians, wasn't it? >> why did it happen? >> it happened in london.

>> just have someone start your car and eat your lunch today, ross. >> ross, i don't know if you read the op-ed, but it is interesting to think about how the americas are considered by other countries. is that the weight, that we're bullies. >> no. he was backing a call for action in syria which he lost. and that was clearly politically a badly played episode, which was then -- which then resulted in john kerry coming out and saying, you know, all great allies, the french, it was an interesting place to be. the last time the french in the u.s. had a joint operation was probably battle offer do you know. i don't know if you remember that, joe, but that was a while ago. >> i do remember it, ross. >> well, the siege of yorktown. i'm forgetting my history.

>> i think i would have got a little more support from sean connery on this. i'm disappointed. >> the other bond? >> yeah, the other bond. the cold war, i think watching this -- i don't like getting mad at russia gn. and the cold war, it warmed up and now i think this is going to help make it get cold again. he's stick right in -- >> the bottom line want syria had a lot of yushan weapons. >> i think more just the idea of him running it in means it is more likely you reach an agreement with syria on the diplomatic effect. >> the difficult is setting an agenda. if you look at this current admin administration, that's not

going to please you. >> ross westgate from london, we're going to go to the other side of this country to california to talk tech news. two of the industry's most prominent ceos spoke out last night. facebook's mark zuckerberg and yahoo!'s marissa mayer. julia, let's start with you. >> good morning, andrew. at the q&a, mark zuckerberg was post and confident. he was even upbeat about facebook a facebook's disastrous ipo when asked to give advice on the next big ipo, twitter. >> i'm kind of the person you would want to last ask how to make a smooth ipo. but, you know, sirusly i think i

was too afraid of going public and i think, you know, i've been very outspoken about saying private for as long as possible. i don't think it's that necessary to do that. you know, you just have to stay focused on doing the right stuff and, you know, sometimes it might take the market a little while to catch up. >> when it comes to the nsa scandal, facebook has sued for authorities to reveal information about the national security orders it received. zuckerberg does not mince words, saying he thinks what the government did was wrong. >> frankly, i think that the government blew it on dmukting wh communicating basically the balance of what they were going for. the morning after it started breaking, there was a kump of people asking him what they thought. and the government's response was, oh, don't worry, we're not really spying on any americans.

oh, great, that's helpful. coming up on the next hour, we'll have zuckerberg's thoughts on who should be the next ceo of microsoft. jon, over to you for the take on marissa mayer's comments. >> julia, you never know what to expect on they go votes. here photo, she remains in a city code. once the interview got going, she talked about her management style, including a tendency to micromanage. take a listen. >> i probably should be making fewer decisions and what time i try and identify what those big decisions are -- and i don't think i've missed any yet, you do think that it's hard to say, okay, what are the really big decisions that need to be made absolutely correctly. >> and aaron pressed her on

yahoo!'s battles with the federal government on secrecy. listen. >> in 2007, yahoo! filed a lawsuit in against the new -- the patriot act parts of person advisa. a lot of people wondered about that case and who it was. >> you lost? >> we lost. >> not you, you weren't there yet. >> right. but when you lose, the way you lose, we fought, we lost, if you don't comply, it's treason. >> she mentioned that treason can get you prison time. she also had more to say about microsoft's future comparing life to google and yahoo! and yahoo!'s monthly visit erts being up to 8 million. not a ton of kwevens about revenue to her, guys. >> you mentioned two words.

you didn't mention revenue and that is the big issue and the other piece is the relationship with microsoft. >> about tumblr, interesting on microsoft, she was making the case that its strengths are in the enterprise. i wonder if that was a fray towards getting microsoft to spin off some of its online properties to yahoo!. we saw in that business insider piece a couple weeks ago that mayer's predecessor wanted yahoo! to spin off online. she's making a play in the right direction for the future. >> facebook is still happening right now. but you're not hearing about some kind of new products or some any things that's coming next. it just seems to be happening because the revenue is coming along with it. >> the money is coming, yeah. >> but from an excitement standpoint, was there anything he brought to the table? >> there was no new announcements.

last year when he took the stage, it was the first time he ever talked about the potential for grab search, but there's a huge potential money marriage for facebook. i was disappointed that efs wasn't asked to give his opinions. but there was no new announcements yesterday. i think he was talking about delivering on the things i had promised a year ago. >> jon, julia, thank you for joining us at some un-godly hour in california. when we talk come back, we'll talk about why the cfo is speaking out against the administration. cisco's cfo will join us for an hour today starting at 8:00 eastern. nascar is ab.out excitement

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the neigh's largest labor

federation has gone on record with this view. it argues this will drive up the care of union sporesered health plans to the point workers are forced to abandon them. we knew the union was unhappy with some of these charges on what they call the cadillac health care plans. this is the first time something has been put forward in writing. >> i think it's amazing the white house was telling them, don't say it. >> they did water down. the first one was going to say we have to fight this. >> the first one was a call for repealing obama care. >> the first resolution. but, you know, people said, wow, whougs, it seems like you're calling the union a lot. .they say, no, no, we're in touch with -- well, i do believe that. the white house is in touch with the union is. that's what they say. we talk to them all the time. >> how many other union groups follow along? if they do, that's when this whole thing becomes trouble. >> andrew, you have to admit, you can't make this up. the minute looks like wait a

second, maybe we all don't have the cadillac plan. they didn't care about anyone else. >> the unions were some of the biggest supporters of obama care when it was coming through. there have been complaints about this. they said that they would like a special carved out deal. the republicans are pushing back saying no, you can't have a carve out deal. congress has weighed in on this saying they can't create special rules just for this at this point. >> speaking of carveout deals, how about your next story? what a segue. >> president obama's former auto czar acknowledges that he told general motors to selectively fund pensions. steve ratner says he instructed gm not to fund pensions for -- >> not union, right.

>> rattner said it was not commercially reasonable and defended the decision by saying his job was to make sure gm emerged from bankruptcy as a viable company. republican lawmakers as you know have criticized that decision as an example of overly deep metaling by the obama administration and private business. there are a lot of people unhappy with how gm went down. rattner. the whole thing is a communist issue if you're going to get the government involved. >> same thing with the bondholders, when they fell in this whole thing. >> the gm bailout and the auto bailout. there's already people that don't like it. they will already tell you, it was done to benefit the unions. so all this is going to do is just -- they're already tainted with that. this is just going to confirm that a lot of that was -- >> there were some deals cut, the people thought that this was raw. but if you look at gm and -- >> but say it.

we will fund the pensions of the union employees, the salaried employees, we're not going to fund. we're trying to save money somewhere because not everybody can get it. we choose the unions, the other gooits guys get -- >> you can sugar coat it any way you want. that's where@stench comes in. >> that's your rahm emanuel in chicago, but not so much from the teachers union. anyway, when we come back, michael dell could finally win approval from the company that he founded. a live report, right after this. and then, speaking of texts, don't miss the cfo of cisco. he'll join us live at 8:00 eastern this morning. "squawk box" will be right back.

dell will hold a special meeting for shareholders today to vote on a buyout for shareholders. is this really going to be over soon? >> that's the big question. three times and we were weary. this is the fourth time shareholders will be travel to go round rock, texas today. the deal is sweeter than it was when we started this process back in july. now we're looking at 13.75 a share. we're looking at a special dividedea divide dividend. recall that that is a sweeter deal than the original 13.65 a share offer. but it's interesting because the deal has changed a little bit or

the dynamics of it have changed a little bit this week. that is what carl icahn, the main opponent, of course, backing off earlier this week saying that it seems like this is an impossible situation to win. of course, he's been the main opponent of this the whole time, saying ta michael dell's deal will unlock value, but not for the shareholders. it will unlock it for those who will take the company private and that, in fact, his proon posal undervalued the company. carl icahn still stands by that. recall that carl icahn is the second largest dell shareholders. he owns roughly 89% of the company. he tried to fast track a lawsuit to try and block this process. that didn't work and now carl icahn is backing off saying, okay, if this is what the shareholders want, then we're going to go down this road. meantime, michael dell is expected to come to the meeting today. he did show up at the first one when he thought his proposal might go through. he skipped the second, skipped the third. and hair holders are expected to

show up today to see how this process goes forward with a special committee and to be able to cast their ballots even t last minute. voting will continue as we are in that meeting down to the last moment. it is expected to last about 25 to 30 minutes. but it could be a really big day for dell and the shareholders and michael dell, as well. if this vote does go through, it will take this company private. it could be done as soon as october and shareholders right now sort of on pins and needles, expecting it to happen, but it's never a done deal until it's signed, sealed and delivered. back to you. >> jackie deang h adeangelis, i angeles. thank you. coming up, what has changed and what might still be the same, when we return.

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this weekend marks five years since the collapse of lehman brothers. rob, five years later, we are still asking what lessons have the financial institutions learned? what lessons have regulators learned? can we prevent this from happening again? >> sure. from a big picture perspective, we all have some shared goals. one is that no institution should be too big to fail and taxpayer money should never be put on the hook again as a bailout. that's something that everyone shares, the ledge yas lafb community, the regulatory industry and sernlt the industry. i think it's more safe, more sound, more secure, more stable. capital and liquidity have doubled. the institutions have gone through living wills.

compensation has been changed, so i think we're in a much better place than we were fooi five years ago. and a couple of -- and there's some indicators of that, too. there's a lot of guests who have been on your air over the last several days who talked about the need for more capital. i think the industry probably was undercapitalized precrisis. but now, one factoid jumps out as compelling. the six largest u.s. global banks have raised over $290 billion in capital since the crisis. that's more than all of the t.a.r.p. money distributed to the entire banking industry during the policy response. that's a remarkable amount of capital. go ahead sxb please. >> i'm going to agree that, yes, we are absolutely in a much better situation, but there's been comments that have come from our guests this week that i've tried to put in context and think about. some will say, look, you don't have dodd frank, you still don't have a advocator rule, i will say you're right. the banks have recapitalized.

but then you have sandy wile who comes on this week and says the banks should be, in some cases, able to split. if they can't get clear legislation, maybe you should have those investment banks split off again. rog cohen telts us yesterday, those banks should not be subject to the same regulations because we'll be back t where we were. what puts us in a situation whereou're operating outside the rules. >> i do hear you on that. i think thosrge institutions were the ones would did better. i think i'm more on in the cohen camp versus the sandy wile camp there. in terms of investors saying that too big to fail is ending is treasury department just put out yesterday a large deck that analyses a lot of data post crisis. and one point, one slide jumped

out at me. i think it was on the 16th page. it suggested the large borrowing costs have gone up twice the amount of the smaller regional institutions suggesting the investors think too big to fail has gone away. >> it's a different question as it relates to the concentration. previe kiss, i don't think there was any intention that we would have the type of asset concentration that we do in america in terms of what the banks are controlling. and because we were in the midst of a crisis, we put everything together overnight and that made sense then. does it make sense now? >> well, i think the concentration on our system versus some of our peers, we have a less concentrated banking system, for example, than some of our peers. i think the u.s. capital market needs financial institutions of all sizes. i really don't think the concentration is a problem. >> wells fargo now originates 30% of all mortgages in this country. >> right. >> does that make sense to you? suggest that's a good thing for this country?

>> so far they've not raised flags suggesting that is a significant problem. but i do agree. i think i'd look at not just one institution, but let's look the totality of everything. let's look at regulation, internal controls, risk management, we need to look at everything in totality and i think that it's unquestionable that we're in a much better place today than we were five years ago. i would agree with that. rob, thank you very much for joining us today. always great to talk to us. are you dinging too big to fail? is that with you're dinging? >> every time the bell rings, an angel gets its wings. >> there is a royalty rate. >> did you hear him s to fail? >> i did. >> it's a set up. >> one last thing, too. i know i don't represent the smaller community banks, but when we're talking about five years later, there have been good improvements in terms of systemic supervision and some of the new capital. some of these things are very good. but some of the regulatory burden on the community banks i think is a little challenging

for them and i think we should think about how to fix that. >> and now you're doing bells for too big to fail because the weiner bell is gone. >> too big to fail. >> thank you. >> too big to fail. >> ding, ding, ding. >> still ahead on "squawk box" -- i'm going to check my mail for that check -- ben mosche bought the mega insurer back from the brink and he's going to join us on the set at 8:00 eastern. but first, it's our lucky day. gary is here. he's going to make his way to the set next. ♪ [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional how lincoln financial can help you take charge of your future. ♪

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almost every industry is quickly finding big data needs to be a big part of a successful operation. our next guest knows that very well. gary loveman is the chairman and ceo of caesars entertainment. you're talking about "hangover 2." >> that was not caesars palace. >> well, parts of it, not all of it. >> he never lived there. >> caesar? >> yeah, that's true. >> that's a line from the -- >> we've got to talk a little bit about big data. you guys have been -- probably the originators of this. what are you actually collecting on each -- on each customer? and how do you take that data? what have you learned over time

about the customer that way? >> what we collect is all the transactional data the customers share with us when they're with us. they're in the hotel, the restaurants, the casino, golf course, spa and the like. and we know about them demographically. and we're trying to predict the sorts of things that interest them based on their revealed behavior when they've been with us and encourage them to do something a value to them under terms they find -- >> was there ever a surprising connection that you found in the data? somebody that enjoys going to the spa also happens to enjoy going to a certain restaurant or doing a certain thing or playing a specific game? >> yeah, there are in many cases surprises. so you find people of tremendous affluence that have very modest culinary interests, for example, that might not be what you would predict or the reverse. people have a constellation of interest and you want to make sure it reflects what you learned about them the last time. >> sometimes people say big data can be helpful and also it can send people on bad paths. have you ever gone in the wrong direction because of the data?

>> certainly. we've explored all things that haven't led us in a fruitful direction. that's a big part of the process. you're running all sorts of experiments to see if you can find something that influences what people are prepared to do on the margin. >> and how many people do you have, engineers who are literally working on this big data project? >> well, we have 200 people in our function that sit in the flamingo hotel literally and work on the data that we construct all the time trying to learn something different about how we can run the business better. it might be how we price the hotel, how we put our table games, offerings out in front of customers, how we can get people to reactivate if they've not been with us recently. all sorts of different dynamics in the business. >> what would be a tactic? >> well, you want to find out why you believe that's the case. we had a lot of customers who saw us before hurricane sandy but have never come back. they might have seen us routinely and now they don't come back. is that a matter of information about the market? perhaps they have a

misperception of what's available to them. may be that they've begun visiting one of our competitors. we want to try to figure out what we can learn about the people that have exhibited that behavior so we can do something to try to change it. >> what did you learn? how do you win some of those people back? >> a lot of it has to do with perceptions of the market. a lot of people believe that hurricane sandy left it incapacitated and less interesting. we have to convince them at low risk they ought to make another visit. they'll find, in fact, it's terrific and reengage their pattern of having coming to see us. >> is there something that impacts the games themselves in terms of how long someone's going to sit at a slot machine and keep going. >> sure. it turns out certain customers like one and others like another. so you can learn a little bit about which type of game experience -- >> and how do you sort of shift them, literally in their walk on

the floor, i imagine, to the game that you want them to get to? >> well, you don't necessarily shift them in their walk, but you tell them, there are games that have the kind of experience they've shown us they prefer. and it might be over here. we might tell them it's over to your left three spots and might indicate some other way. we have digital interfaces on these games and say to you while you're playing, hey, we know you like this game turns out there's another game you like over here. we might have a person tap you on the shoulder and tell you to look at something else. >> you play any games? >> sure. not in my own casinos, but everywhere else. >> you're giving your money away to others. >> do you see how big the hotels are in las vegas? how do you think they build them that big? >> one for bad, two for good. this guy's amazing. not only is he our big data guest, but our guest host. we're going to talk to him about the consumer, the economy, hangover. here's a hint, he's not afraid of heights.

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titans of silicon valley are talking. >> we want to connect everyone in the world and give people tools to share whatever they want. >> we're about organizing the right content and the right advertising. for each of our users. >> does marisa meyer have the right stuff to have people coming back for more? >> carl icahn still loves apple. >> i think apple is a no-brainer. it's extremely cheap. >> the man is buying more, should you follow his lead? sf. >> betting on caesars.

the chairman and ceo of the gaming giant gives us his winning strategy. >> did caesar live here? >> no. >> i didn't think so. >> "squawk box" begins right now. good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick along with joe kernan and andrew ross sorkin. the futures at this point are relatively flat. dow futures looking up by about 4 1/2 points. this comes a of three days of triple digit gains for the dow. and after seven days in a row of gains for the s&p 500. in our headlines this morning, walmart making an aggressive pitch to grab its share of iphone upgrades. the retail giant is selling the iphone 5s for $189, $10 less than apple's list price. the new 5c will cost $79. and that compares with apple's stated price of $99. also, the music industry's

biggest record companies are suing satellite radio provider sirius xm. they claim they have not paid royalties for songs recorded prior to 1972. sony music, universal music and warner music are among the plaintiffs. a takeover in the banking industry. buying spokane washington based sterling financial for $2 billion of cash and stock. andrew? >> thank you, becky. we also have news. russian president vladimir putin warning that military action could unleash chaos in the middle east and on the world economic stage. in a bid to appeal directly to americans and policy makers, including a commentary in today's "new york times." he's pleased, he says, with washington's willingness to engage with the moscow initiative but rebuked the president for his previous --

no one wants the united nations to suffer the fate of the league of nations which collapsed because it lacked releverage. he goes on to say a strike would increase violence and unleash a new wave of terrorism. putin says many of the rebels have ties to al qaeda and that attack could undermine efforts to resolve the iranian nuclear prop and the israelian/paul tinnian conflict. >> look, this is a situation where you're hoping for peace, hoping some way to avoid a conflict. this doesn't make it any easier. he takes up the cause of american exceptionalism. all people are created equal and can't see ourselves as being any better. >> oddly enough, his arguments seemed cogent and semireasonable. >> he's taken all the arguments and played on them, captured all of them. >> right. from geopolitics to silicon valley. let's turn our attention to the

conference, powerful leaders in tech. including marisa mayer, touting the growth since she took the helm. meanwhile mark zuckerberg says the ipo along with the growth in mobile have made it strong. we have jon fortt with more on yahoo. but we're going to begin with julia boorstin. >> on the heels of facebook shares hitting a new high yesterday, mark zuckerberg saying how far the company's come in the past year. aside from the fact it was far from smooth, it was a valuable process and the company is actually run a lot better now. >> last year, second quarter, we had basally no moo revenue on mobile. and now -- in our last quarter a year later, more than 40% of our revenue is mobile. and, you know, people think that there's more competition on mobile, there's more great apps. people spend on desk top 1 in 7

inches on facebook on the web. and on mobile it's more. it's 1 in 5. >> zuckerberg says a key part of his job now is to keep facebook centered on its vision and the three pillars of its strategy, build, grow, and monetize. >> for us, we're really singularly focused on this mission. we want to connect everyone in the world and give people t to share whatever they want. and that's been this unifying theme for us for as long as we've been around. >> one surprise is the fact that zuckerberg's idol is bill gates. coming up on "squawk on the street," we'll have more from zuckerberg's q & a. jon? >> yeah, julia, marisa mayer also on stage, as we said. and a little bit more from her. it's interesting, the subject of

yahoo's logo came up early in the interview. taken a lot of flak on twitter for the look of the new logo. but mayer defended it. take a listen. >> we kept it in-house, we didn't have someone as an external firm or consulting firm. we didn't spend millions of dollars doing it. we did it in a way that came from an authentic place. and, you know, for us, what the brand is really about is about the products and having the best products and the best user experience and that what we want to shine through. we're happy with the logo. >> and mayer also had a lot of things to say about the difference between yahoo and google. she says she wasn't sure she could be happy as she was at google. but she praised yahoo's technology. take a listen to that. >> we have one of the most successful personalization a

algorithms i've seen to date. i think we're just getting started. i think yahoo is an advertising-driven company but we're a personalization company and we're about organizing the right content and the right advertising for each of our users. >> none of that driving revenue quite yet. joe? >> all right, jon, thanks. take a listen, jon, we're going to talk to an analyst now. let's talk more about marissa mayer's leadership. joining us is jeffrey sonatheld, dean for executive programs and a cnbc contributor and rocco pendola. the street.com social media director and writer radio rocco? >> yes, i was going to say, we were talking about yahoo and for people my age, yahoo is the internet. i'm 38, for people my age, joe kernan is cnbc. i feel like i grew up watching

you even though i probably didn't. >> i did radio interviews with you when i was -- >> yeah. >> when i was andrew's age, i think. >> yeah, back in '99, 2000 on the ticket in dallas. yep. >> and then, you know, i've decided, jeff, i'm not going to even try to figure out what i think of a ceo until i talk to you. because with marissa, i wasn't sure what to think. you love her and think she is the first leader in the history of the company that has all the key functions that a ceo should have? >> yeah, she's the real package. she's the real deal. despite the jokes that others like to toss her way, you know, with the "vogue" cover and jokes about the photographs taken of her and her appearance, is that, in fact, she is fantastic. she's an actual symbolic computer scientist.

she's first woman engineer in google and one of the top 20 employees and she actually built -- she was the head of google's engineering department, you name a google map to google earth and google mobile and things. she has proven herself many ways over before coming into this job. and then you look -- had eight ceos at yahoo and the brief 18, 19-year history. she's the first one to be that total package. some of themgood technologis technologists, some of them were fake. >> are ydo you agree? >> i don't disagree. i think the problem she's facing is maybe an impossible task at yahoo. a lot of what we're talking about and what she talks about i don't think has been a problem. i don't think there are, you know, cosmetic problems with the look and feel of yahoo's properties. who doesn't go to yahoo finance or yahoo sports for the news every day? i know i do. they're a huge partner of the

street. people go there. they've had traffic, sort of old reliable of the internets, you go there, but don't really realize it. there's no passion, not a lot of brand loyalty. no the a lot of reasons to get excited. >> i went to yahoo finance every day before this happened. but she pointed out yesterday that traffic had been up like 20% and then talked about the gains that they've seen in terms of the resumes that come in. something like 12,000 resumes. that's up four or five times since she started. maybe part of it is creating buzz that makes it a place people want to be and a place that people want to work. >> i think that's a lot of it. if you can take a look at the particulars where she looks at the people or the products or the traffic or the revenues as a right set of priorities. i think you've hit it on the head. she has married, intertwined important qualities. she's made this an exciting place to go. even though she's taking out 1,000 jobs and of course she had

criticism on her woody allen application of the 80% of life is showing up, getting people to come to the job instead of working at home. despite that employee morale is soaring. you can see that with the numbers you gave with the 1,200 resumes coming in a every week. or 12,000. it's incredible. >> here's the question i have, and it has to do with advertising. the business is a revenue model. you need to have advertising. and she is not focused at all, supposedly or enough on the advertising side of this business. that's what you keep hearing over and over again. she focuses on technology and if you're google and you create a new fantastic technology, maybe that's one thing because you can actually then attach revenue to it. she's playing an old game and doesn't sound like she's playing it with the advertising piece. >> yeah, that's the key right there, where's the focus. i don't disagree with what she's doing. and she's creating a spectacle which is fantastic, she's very good at that.

she's out front in the media. will it work. i think it's a risky bet. they would be better off in my estimation. and i was on her side a year ago. after watching the last year, not seeing many material results, i think they need a seasoned media person who can be behind the scenes and not be the story. make the content on yahoo the story. make the users that go there every day be passionate about the site, get the feet on the ground, do some creative advertising. just keep things rolling. but i think she might -- >> you're playing to the crowd, rocco, telling the guys around the table we need more media expertise. but in reality, this is what terry was brought in to do as a media star when he replaced tim kugal in running yahoo way back. and he was saying there was going to be subscriptions were going to be the growth behind here. despite the strategy, he was hugely successful because he brought in somebody who knew advertising.

the head of ad sales did spectacularly well with the wrong strategy. is that the revenue growth and the success was display ads, and that wasn't where terry thought the business should go but relaxed and recognized if you get that right person you're talking about, it was hugely successful. and that's the thing here, you talk about getting out in front. we saw ron johnson, we saw scott thompson. ron johnson at jc penney, or you look at the way he got out in front, of course, at rim, blackberry and these people have made mistakes because they couldn't back it up. it's almost like what you were talking about with president obama in some of the stage craft there. >> yep. >> can you deliver? and she delivers? >> thanks a lot, rocco. good to see you again. i never made it to one of your ceo things, but you have a groundhog day party that might be the one. >> joe, you should come to that. we won't give you -- >> you go once -- >> yeah, all right. that might be the one to come

to. thank you. i don't know anyone else. have you ever been to a groundhog day? >> party? >> yeah. our producers would actually be serving groundhog. in full disclosure, cnbc and yahoo have a business alliance. >> love yahoo, love marissa. >> you do now? >> no, i actually do. i wasn't being sarcastic. >> you with the "vogue" thing, you were kind of one of the people jeff was talking about. >> when she's -- >> i thought she looked great. she did look great. can i say that aloud? >> now you're getting ourself in trouble. coming up next, caesars' big bet. and gary is going to tell us when to hold 'em and when to fold 'em. plus, buying apple stock is a no-brainer, so should you be adding shares at these levels? we're going to find out, "squawk

box" with that and a lot more. c. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪

welcome back to "squawk." take a look at the futures. a couple of red arrows down, dow looks like it would open off about 1 1/2 points. >> i was going to do this next headline when we were talking to gary. did you see this? hilton, how many do they still have in vegas? >> they have zero left. >> they have zero left. the flamingo's gone.

>> we own the flamingo. >> you bought it. >> 2005. >> oh. let's do the news. an ipo from hilton. >> the news is that hilton has filed for an ipo up to $1.3 billion. backed by blackstone. that was a transaction they bought the company in 2007 at the height of things. >> are they going to do okay when it comes down? >> i think they're going to get out and make a little bit of money. i don't think a huge win. >> i think that's right. they had a tough time right after that lbo just before the crisis. and they've done a very nice job of getting themselves back on their feet well. and the hotel industry has responded really rather nicely. >> right. this should excite you they're able to do this, andrew. they're able to come out -- >> able to get to even. there was a time people thought that would be a dicey proposition. >> plus, it allows us to dredge out the paris hilton tape where she says -- >> that's hot. >> that's hot. >> what? >> that's hot. >> "squawk box" is hot.

we have her saying "squawk box" is hot. and as long as we're talking about hilton -- >> all the time. >> you're okay with that? >> i was waiting for it to do it again. >> gary is the chairman and ceo of caesars entertainment. and, gary, when you look at what's happening in the united states, obviously things fell off a cliff for a while. how is vegas doing? how is the rest of the economy doing? >> well, vegas is doing better i'm happy to report after a long period of time. it's coming back in an interesting way, becky. people are coming back in large numbers. attendance is not an issue at all. people are entertaining themselves to an increasing degree. in our second quarter, we announced hospitality related revenues, hotels, nightclubs up about 7%. the very high end of the business, very affluent people are back as you reported doing rather well. other folks are very budget

conscious. >> you mentioned something to us in a commercial break earlier where you talked about the numbers in vegas that you see, the revenue, is it revenue or income in terms of the breakdown for what you see from gaming and what you see from entertainment? >> well, revenues are now disproportionately in favor of nongaming activities. hotel, nightclubs, restaurants and alike. but profit margins are still higher in gaming than they are in most other things. we make more than half of our profits on gaming, but more than half come from everything else. >> what was the split? >> about 60/40 in favor of things other than gaming. >> we used to see casino companies report and it would be a couple of big losses or big wins. >> right. >> and we used to see what was a politically incorrect term, i think, asian high rollers. we would see that in press releases and corporate results, are they still a factor? is china's weakness a factor? is macau taking all your business. do they still come to caesars?

>> they do. if you were to take a look at the 500 top gamblers in the world, 480 of them are in chinese. they play in the multimillion dollar per day type levels. >> will you accommodate them at caesars? >> we do. and our competitors have properties for that type of action, as well. >> what do they play? >> almost all play bakrat. for other companies, it does, and analysts do ask about our fortunes at the gaming tables, it's referred to as hold. there are periods where you have odd outcomes in the distributions of these games. and so -- >> what are the odds? >> it has an advantage to the house that's in the neighborhood of 2%. but it's a distribution that has -- >> what's the industry standard? what's average? >> well, other games, for example, depending on how well

you play jack black, the hold might be substantially higher. if you play it intelligently, it's modestly in favor. >> i used to play blackjack and have under the table. i'd have the little guideline. you were supposed to look at it and have to hide it. >> you can put it right there. >> and if i follow it explicitly, what are my odds? what are your odds? >> we would have an advantage, 50, 70 basis point advantage if you play precisely according to the rules every time. which is very disciplined. >> one for bad, two for good. >> yeah. gary, the idea that entertainment makes up such a large part of the revenue that comes in. that's why when you're doubling down in vegas, the biggest builder in vegas right now with the link. why don't you describe what that is. there's no gaming involved at the link. >> what we decided to do, becky, take advantage of our 50-yard line position, we own the properties. and to try to find attractions that would bring customers from around the strip into our neighborhood recognizing they didn't need another casino experience and didn't need more

hotel rooms. so the link is a grove-like low-level retail dining entertainment complex with unique experiences like the brooklyn bowl which all of you know here in new york. and it leads back to this observation wheel of 550-foot tall observation wheel where our visitors will travel in a cabin that holds about 40 people and it'll have digital entertainment and you'll go on a 30-minute circuit. >> when is it going to be completed? >> we'll have the retail dining entertainment experiences beginning to open around christmas of this year and start taking guests some time in the beginning of the second quarter of next year. >> it's your feeling that vegas is due for a continued recovery. >> we have plenty of people in town, it would be nice if they each spent a little bit more than they've been spending. the place remains the principal resort destination really in the world. >> hangover 1, that was a hollywood set, wasn't it? >> that was a hollywood set.

>> let's say i come out and i'm liable at any time to put $2 million $3 million at a hand in blackjack. >> what if there's a tiger -- or in my case, could be a bunch of sheep. what if there was something in the room -- >> well, that would be -- >> what if it was trashed? will you bill me for that? >> if you ask for it, we might. as long as it's legal in clark county, we want to make sure you have the kind of experience that's uniquely interesting to you. >> how often do people trash that suite on purpose? >> i don't think it's on purpose. but people are known to trash suites in las vegas somewhat often. >> all right. so we got it all out of the way. every lame, you know, reference to "hangover." "hangover 2" wasn't there. one of andrew's hot spots. >> where is my hot spot? >> you saw what happened. anyway, coming up, trading

interrupted. you went to thailand, remember? >> i wasn't in thailand. vietnam. >> oh, that's even better, though. the sec looking for -- and then you came back immediately -- it was an ear infection you said, right? remember? >> it was an ear infection. >> you needed penicillin for that ear infection. the nasdaq stopped trading because of that glitch, broken markets and more. and at the top of the hour, back from the brink of collapse, robert benmosche. this is kenny chesney. no cma nomination. time for today's aflac trivia question. what condition does "arrested development's" tobias have? yo, yo, yo. aflac. wow. [ under his breath ] that was horrible.

pays you cash when you're sick or hurt? [ japanese accent ] aflac. love it. [ under his breath ] hate it. helps you focus on getting back to normal? [ as a southern belle ] aflac. [ as a cowboy ] aflac. [ sassily ] aflac. uh huh. [ under his breath ] i am so fired. you're on in 5, duck. [ male announcer ] when you're sick or hurt, aflac pays you cash. find out more at aflac.com. with my united mileageplus explorer card. i've saved $75 in checked bag fees. [ delavane ] priority boarding is really important to us. you can just get on the plane and relax. [ julian ] having a card that doesn't charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u.s. when i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. ♪ in order to go visit my family, which means a lot to me. nascar is ab.out excitement but tracking all the action and hearing everything from our marketing partners, the media and millions

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now the answer to today's aflac trivia question. what condition does "arrested development's" tobias have? the answer, gymnophobia.

the fear of nudity. >> i think that's the fear of nudity in the gym. lululemon beating estimates by 5 cents, but lulu is cutting the full-year guidance, now sees $1.94 to $1.97 a share. and you can see in the premarket, the stock's down by close to 10%. first it was getting kids away from the television, now looks like parent haves a battle on their hands with smart devices. 51% of children are now using smart devices. that's up from about 40% last year for kids that are age 2 to 14. the study also shows that kids who play with smart devices are just as likely to play with traditional toys and most parents feel their children's device usage is not affecting time spent on other activities like recreational sports. if you have any comments or questions about anything we've been talking about here this morning -- what? >> i think that all those comments and questions we can

hang with gary for a couple of minutes before we go to break. i was just told in my little ear. >> i was told too. >> i was not. i hear music. >> well, we're going to hang for a moment if we could. >> do you have something you want to -- i want to know how many more times it can get overbuilt and then suddenly soak up all the demand. how many times have you seen that happen? >> well, a couple of times. unfortunately, the one leading into the crisis was an exercise on steroids where you had these extraordinary projects. >> it was almost like a city. did it finally -- >> yeah, yeah. there were two others that did not get completed. its construction ceased some time ago and nothing has happened there. the echelon project has been bought. >> wasn't there a trump project? >> there was a trump project. there was one that ended up turning into condominiums and

hotel space. >> there's too much land out there. you know what, there's too much land. there's no -- there's no ocean, that's why he thought it was a good place, right? is that the guy? >> bugsy seagal, that's the guy. >> here's a place that doesn't have ha lot o land and doesn't seem to ever fully work. maybe you think it does. atlantic city. will atlantic city ever be like vegas? >> atlantic city is not likely to be like vegas any time soon. >> is it going to get to that place? you hear about the visions and dreams about atlantic city and never seems to -- >> well, there are two offsetting things at the moment. the business has been contracting as a result of so much new competition. makes it hard for people to invest that market. we announced an investment to build a new meeting space because we think it needs that like vegas does. you can't imagine vegas without convention and meeting attendees -- >> it seems like you've got the

organized crime element to help things along in atlantic city. >> there's no organized crime in atlantic city, joe. i'm sorry to disappoint you. it's not nearly that interesting. >> when you talk about the revenue that comes in from gaming in atlantic city -- >> it's much higher. >> certainly in the neighborhood of 70% or more. what atlantic city needs is other activities. there are now great clubs active in atlantic city. much more entertainment. but in particular, needs the convention meeting business. >> you need more pr, i still think of it as casinos in trenton. you need to -- >> we do. >> is it chicken or egg issue? >> right. right. right. >> how do you get to that? >> gary, i remember, you walk outside, and in the casinos, you don't know whether it's night or day, and you walk out in vegas and it's fine. there's some dusty old -- but you walk outside in atlantic city and it's a shock you're not in vegas. i guess because maybe i started in vegas, but just not the same

feeling. >> some of that has changed. if you walk out on the boardwalk, it's a good experience. and i think the governor and others involved in this have gotten it better and better. we don't have much of an issue with people telling us they go to atlantic city and don't like the experience. the problem is we need to get more people there. >> a lot of competition now too? >> yeah. a lot of competition. >> we'll talk about headlines this morning. we're about an hour away from the latest weekly report on initial jobless claims. economists are looking for 330,000 new claims for last week, that would be up from the prior week. also, former auto task force chief steven rattner now telling congress he did tell gm to fund some pensions but also said not to fund others. at issue was this, pensions for some workers at the auto unit spun off in 1999, rattner said his primary position was to make it a viable company. he succeeded on that front but still lingering questions.

newly announced changes in the s&p 500 index. vertex pharmaceuticals and amatech is going to join the index next week. siac is going to be moving over to the s&p 500. we've had changes in the nasdaq and the s&p 500. >> i don't know if you have comments or questions about anything you've seen here on "squawk box" this morning, go ahead and e-mail us at squawk@cnbc.com. up next, we get it straight from the horse's mouth. russia's vladimir putin pinning an op-ed in the "new york times" saying the world will be upended if a military strike happens. er, 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.

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russia's president going directly to the american people with his warning that a military strike on syria could upend the world. eamon javers joins us with more. >> vladimir putin doing a little freelance writing here in the "new york times" with this op-ed this morning. putin making the case against military strikes in syria. let me give you a sample here of what putin has to say in this

op-ed piece. he says on the issue of chemical weapons, no one doubts poison gas was used in syria, but every reason to believe it was used not by the syrian army but by opposition forces to provoke intervention by their powerful foreign patrons who would be siding with the fundamentalists. that obviously is the opposite of what president obama has been saying. also, putin saying a strike will result in more innocent victims and escalation possibly spreading the conflict far beyond syria's borders. a strike would increase violence and unleash a new wave of terrorism. also the opposite of what president obama has been saying to the american people. leon panetta, the former head of the cia and secretary of defense was on the "today" show earlier this morning taking issue with what mr. putin had to say. take a listen. >> the last person to lecture the united states about our human values and our human rights and what we stand for. we know what we stand for, we know what we're fighting for in the world. and i think his effort to try to

do this in a column in the "new york times" is not going to work. >> and the most astonishing paragraph of all of this is the last one at the bottom. he takes on president barack obama's claim of american exceptionalism that he said it's extremely dangerous to encourage people to see themselves as exceptional whatever the motivation. tough words for the u.s. public and u.s. political leaders. and i love this. right at the bottom, this very helpful identifier here. they say vladimir v. putin is the president of russia in case anyone had any questions about who wrote this this morning. >> thank you for that. the sec is also meeting with the heads of exchanges and other self-regulatory organizations today following last week's interruption. joining us now to talk about it, harvey pitt, former ceo, and ron gefner. also a former sec enforcement attorney. guys -- i don't want to be a

defeatist in all of this, is there an argument to be made that technology is always going to occasionally have problems? and i don't want to be an apologist either, but in an electronic age, how are we going to avoid all this stuff? you can have all sorts of redundant systems, but occasionally stuff breaks. harvey? >> you can't avoid technology glitches, but you can anticipate them and be prepared to deal with them. what was shocking about the recent nasdaq outage was the fact that it was the second such incident in a very short period of time for nasdaq. and it seemed as if there was no crisis management plan in action and there had been no effective planning for that event. >> let me go to ron on that point. is the issue the technology that broke or the response to it? >> i would argue it's the response to it. i'll go along with what both of you are saying and i'll back that based on two points. if you look at the release the

sec has provided to the public regarding the apple $10 million fine in may of this year, you have very senior people within the sec organization including a commissioner stating that the actions they were taking against the nasdaq were tied not only to technological glitches, but their hasty reaction to allow trading in a secondary market. now the step that the government is trying to take to cure some of these issues, right now there's a voluntary compliance program. in march of this year, the sec submitted for public comment sci, which will create rules regarding technological compliance. >> right. okay. harvey, put -- pretend you're back at the sec and you've called bob on the carpet, he's standing in front of you, what do you tell him? >> i think the first thing you say is where is all of the constant testing? and i mean continuous testing? secondly -- >> and he's going to tell you

there's continuous testing. that's what he has to say even when there isn't. and i assume there probably is. >> well, there may be, but it's ineffectual and one of the problems we have is that when this broke, nasdaq didn't even tell the ceos of its listed companies until much later -- until after they read it in press reports what was going on. when it ultimately restored trading, it restored trading in some stocks before others. this creates all sorts of disorganization in the markets and is chaotic. the sec can't let that stand. >> ron? >> yeah, one of my concerns with regard to public comment is that the nasdaq did a very bad job of communicating. but one of the issues i've had is better to not communicate at times when you don't know what's going on than to communicate. >> that's what any good lawyer would tell the ceo. >> when you interviewed grun

feld, he made mention. we'll call it disaster recovery plans. sounds as if there's an opportunity to improve it from a technology standpoint. whether that's mandated by law or regulation, may or may not be necessary. >> harvey -- >> i'd argue from a business perspective, it's something they have to consider. >> harvey pitt, ron, thank you guys, thank you very much. coming up next -- >> really quickly, i know we've got to go. but did you see the prequel that amc's going to pick up from "breaking bad." >> yes, i did. >> better call saul. >> yeah, did they just announce that today? >> yesterday. >> awesome. awesome guy. but when jesse initially says, we need a critical lawyer. and he goes, we need a criminal lawyer. and i couldn't help but think about that when a guy said you need a good lawyer or a criminal

lawyer. >> i think we need to run a better call saul clip every time we have a lawyer on the program. >> he's the best. coming up next, icahn's big bet on apple. at the top of the hour, aig ceo robert benmosche.

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some interesting rotation mixed moves. gave the dow a boost while apple put pressure on the nasdaq. it was weird that nasdaq was down, the dow up a lot. carl icahn, though, upped the stake in the iphone maker yesterday calling it a no-brainer buy. >> i think apple is just a no-brainer. it's extremely cheap. and i'm looking at the numbers. i mean, you look at the numbers on apple and you really -- if you back out cash, you're really paying less than $300 billion for apple and its eebidt is about 50 million. >> joining us to talk tech, rob, it always goes down after, you know, there's always some type

of disappointment, it seems like. they opted for margins, not market share. but if they'd gone for market share and not margins, i can see the same result having happened. it just, you know, people never like what they see the day of. what's your take? >> well, i think you're right, the patterns always sell the news almost irrespective of what they launch. i do think this time, you know, the big focus was on the lower cost iphone. it was lower cost and this was the first new iphone that was actually built to be a slightly lower cost but it's slightly lower cost and not massively lower cost. that's the disappointment. at the same time, we pretty much got what we were looking for. and so maybe there's a little bit of sell the news because there wasn't some sort of surprise. >> isn't there always angst when people say, uh-oh, they're going for market now and they're going to lose their margins. it's weird, people don't want it

and when they don't do it they say, oh, they didn't do it. >> you're right. 'r where they need some lower cost products to go after to apple's probably this inbob, one more question on apple, does it -- ths stock is cheap on every possible metric and only has one way to go and that's up. and you've got icahn. that truly is consensus. it's totally over loved. is it definitely going up? >> i'm not sure about definitely. i'm not sure if it's truly -- i think it's less over loved than it's been the past couple of years. i would say there's more debate now, which is where i think there's an opportunity. i do think it's going up. but i think you have a -- >> anyone that says it's over. how about ibm? just quickly, only 30 seconds.

>> talk about not consensus, doesn't seem like anybody likes ibm. in fact, liking ibm, i probably get more pushback on that stock than any other. it's slow,te anyone's radar recently. >> bob, thanks, we've got to keep it short today, rob. see ya. when we come back. final thoughts with gary loveman, the ceo of caesars aig. plus some breaking economic news. we've got jobless claims at 8:30. "squawk box" will be back after a quick break.

is sports betting coming to atlantic city? all these guys, they want to bet against rutgers, they think it's a no brainer. >> i think sports betting is coming to new jersey.

i'd like to see it come to places other than new jersey, as well. >> we like sports betting. what's our prompt? money -- >> money -- >> money talks. but i think that's different. >> interestingly, joe, the momentum for this is going to come from places other than political sources. it's gigantic. the nfl through all sorts of informal mechanisms. it would behoove the league and commercially very appealing to get betting available to people in a legitimate fashion. online betting on sports would be tremendous. >> not just sports, but everything else. in particular with respect to poker, for americans to play poker online legally. and i'm cautiously optimistic we'll prevail on that. >> wow. all right. well, i just wonder in vegas

whether, is it gambling or now family? what are you? >> it's really neither of the two. it's gambling and it's adults. so people -- it's certainly -- there are places to bring your family that i don't think the city is principally focused in that direction. >> they tried that, didn't they? >> they tried it and it didn't work well. families are not an attractive target audience for this sort of resort development because families don't have a lot of time, don't have a lot of money. for our customers to be attracted, they need money and time. so the grandparents but those before the stage of the life where they have children are the two categories most likely to be good for us not the folks with the duties of children and all the demands. >> well, they're going to sea world anyway. >> other places. >> you saw what happened. >> that was a long time ago, joe. long time ago. >> what year was that that happened?

>> that was about 60 years ago. >> did someone shoot him in the eye? >> i don't know. >> there was another bugsy, did batey play him? >> yeah. >> good having you in here. >> good being here. i appreciate it. >> maybe we should do the show next time from the suite. you'll be sleeping on the roof on a mattress. we'll never see you. >> i'm afraid to have that happen. >> can you have a tiger onset? >> under the right conditions. >> what would you look like with one of those tattoos. >> if i wore the tattoo on the show. >> no -- missing a tooth. >> gary, thank you. when we return, bob benmosche will talk about the state of the company and the financials five years after the financial crisis. before we go to break, though, take a look at the futures. jobless claims out at 8:30 this

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it's nearly five years after the government's bailout of insurance giant aig. >> aig. we turned it around.

>> thank you, america. >> thank you, america. >> thank you, america. >> the company has paid back the government and the treasury gained a net return of more than $22 billion from the buyout. aig ceo bob benmosche. >> our guest host this hour, the cfo of cisco, talking tech, jobs and a lot more. welcome back to "squawk box" first in business worldwide, i'm joe kernan along with becky quick and andrew ross sorkin -- oh, no, he's here. >> they're going to think he's dead when you say the late -- >> no, he came in late today, when you're late, it means

you're pregnant too. you're not pregnant, but you were late to the show. >> by 58 seconds. >> for a guy like me, that's a lot of time. anyway, we're going to talk to bob benmosche. it's not really, i'm kidding. just a minute. but becky has your morning headlines. in our headlines this morning, vladimir putin is taking his case for syria directly to the american people. he wrote an op-ed titled a plea for caution from russia. putin warns that a potential strike from the united states and syria could unleash a new wave of terrorism. increased violence and further destabilize the middle east and africa. he also took issue with president obama's remarks about american exceptionalism on tuesday night. he writes it is extremely dangerous to encourage people to see themselves as exceptional whatever the motivation. we are all different. but when we ask for the lord's blessings, we must not forget that god created us equal. he's creating quite a controversy. people are looking at research if you remembers showing a majority of americans say you shouldn't trust the russians. that's from last year.

also on today's agenda, weekly jobless claims and import prices released at 8:30 eastern time. and this afternoon, the treasury will be auctioning $13 billion in 30-year bonds. this comes after the well-bid $21 billion auction yesterday and the record debt offering by verizon. stocks have been on a rally just over the last three days the dow has posted triple digit gains. three sessions in a row, the s&p 500 closed up for the seventh day in a row yesterday. if you look at the u.s. equity futures, you'll see the futures up by about 17 points, stronger than we've seen earlier, s&p futures up by less than a point. also worth watching, william dudley speaks in paris later this morning on the topic of reform of over the counter derivatives. and the sec going to be meeting with officials and exchanges and self-regulatory organizations on the interruption in trading at the nasdaq. also, apparel maker

lululemon coming out with their report, their earnings, coming in with 39 cents a share for the second quarter beating estimates by 5 cents. but lulu is cutting the full-year guidance. that compares with estimates of $1.99 and the stock is getting hit pretty hard in the premarket trading. you can see right now that stocks down by about 8%. lulu's sales are improving but hit by higher input costs. five years since the financial crisis and aig has made a huge comeback, repaying the government in full. joining us now, give us a little bit of perspective five years later, robert benmosche aig president and ceo. good morning to you. >> good morning. >> i don't want to relitigate five years ago. but i want to understand one thing. we've got hank paulson on the show tomorrow, and i want to talk about the things that took place during that period. you were not the ceo at the time. >> right. >> what would've happened?

and it's a hypothetical, we'll never know. what would've happened if we didn't bail out aig. >> i would still be enjoying wine at my villa. because there'd be nothing to come back to. i think the world would've fallen apart. i think the financial system was on the brink. and had we not acted, i believe the financial system as we know today would not be here today. it would be worse than the depression of the 1930s. >> what would that mean? i mean, we had him telling us at the time, he was telling his wife to take money out of atms because they might not work later. would it have been that bad? >> what was happening it was actually starting with the banks themselves. so all of a sudden every bank didn't know who to deal with, which was this liquidity crisis. so when you stop the flow, that's when you have the disaster begin. and so it began with the banks and financial institutions. you know, can you trade with goldman today? can you trade with morgan

stanley? can you trade with ubs? what does credit suisse do during that period of time. i think everything would've froze. and once you get panic and as you heard me before say about, you know, it's a wonderful life, everybody runs in and says we want our money. and that would've brought everybody down. there would be no way to stop the panic. >> was the bailout done the right way? you made your money back. great commercials that tell the american public you made the money back and gave them more. and that's good. there's an argument made at the time, not that it was luck, but if you would have asked some of the people in the room at the time whether they thought the u.s. government would get the money back, they thought if they could get to even, it would be a good thing. >> that's true. >> do you think the approach to how they pursued the bailout and obviously hank greenberg has a different view on this particular issue. if you could have done it again knowing what you know now, do you think you could have put the

company through bankruptcy or done something different? >> you know -- too long to do it on a 15-minute segment. i will tell you that when people are about to go into shock, you don't excite them. you calm them down. and so i think that the 80% and what was negotiated on behalf of aig, the question was, was the board willing to put themselves in a position to play chicken with the financial system and the u.s. government and the authorities attempting to keep calm in the marketplace and stabilize things again? and so i think that, you know, hank's argument is that that day aig had to give up 80% of the company and yet if you like at all the money that was given to other companies that were allowed to become bank holding companies a few days later, you didn't. and so when you have over $100 billion going to some wall street firms because they get to

use their assets to go to the window and yet you monetize 50 cents on the dollar, that's his argument. he's got to work that through the courts. but clearly, that's a different issue of should they have acted? and should they have made sure that aig -- remember, look, people would say this is insured by aig. they've got more money than who knows what. and the point is, all of a sudden aig had a problem. >> part of the problem was there was a little corner of aig up in connecticut that most people didn't know about. i think now five years later i wonder -- is there a corner of wall street or the market that we don't understand that you would worry about that's in the shadows, not that could be the next aig but that makes you anxious? >> well, a little bit. and i'll tell you why. the fact is it was only at a 44,000 trades on the books of fp -- >> financial products. >> financial products. only about 120 had this

liquidity feature put into it. and it was put in around 2004 or 2005 as i recall. and therefore, it was that small number of contracts that the accountants began to realize had a need to provide liquidity if the value security started to go down in addition to the credit default. so clearly, it doesn't take very much to create a big problem. that's what started the whole unraveling of aig. there's always a probability. we've got to make sure the whales don't sink the financial system. and i do believe we're at a point now where companies today, banks today, the way risk-weighted assets are calculated and so on. there's very little chance you'll sink the financial system but you can cause a pretty bad belly ache for some of the big financial companies but it won't sink the system. >> where do you worry that is? we just don't know and that's why it is a whale? >> we don't know where it is and what it is. and i do know that we've always

said, i remember, when i was buying my -- sold my home and bought a house in 1981 and i thought interest rates and home mortgages peaked, and they went to 18%. and that's the last of the great housing crisis except we had another one. we'll have another crisis. it may not be in ten years, may not be 20 years, we'll have another one. and what i do worry about is government officials who were there to protect us and make the right judgments as a government are not going to have the latitude to use their judgment to fix the problem that nobody thought about until it occurs. >> what i still don't understand. okay, so credit default swaps, people knew that if worse came to worse that there was no way there was enough there to pay off the other side of the trade. is there anything out there now that if the unthinkable happened the people writing the whatever it is, the protection, the insurance, writing the

contracts, is there anyone out there that -- what they have to pay. >> you actually have the capital adequacy or report from the fed. i can't remember all the letters. but clearly, what they do go through every year is to examine all of the assets held by all the financial institutions covered by the fed by security number. and they go through and actually have an understanding of those securities, what's in those securities and then stress them. and i believe had you done that stress test at aig and looked at the possibility of a housing crisis because they force you to think about housing prices down 20%. if that were to happen, your liquidity contracts, those 121 would produce $50 billion of liquidity. where are you going to get the money from? >> will the stress test

anticipate the next problem? what if there's another security that is the one -- >> yeah, i think the question is what if it's something that isn't in the system or something that's off balance sheet or some contract that says there's a contingent liability. those are the things that are hard to see. if you go through most of the assets and liabilities that sit in these financial institutions, i'm pretty sure we're getting our arms around it. i think it could be a situation where it won't bring down the financial system but could hurt a financial company. there's something i don't know. and i always worry about what i don't know which says leave a little flexibility for the people who are empowered by the public to run our governments, to make sure they have enough latitude to fix it. and dodd/frank is basically precluding that. and i worry about a policy that says the policy is good enough and smart enough that human beings don't have to use their

noodle. >> if we get to a point like that, would you prefer to see larry summers, for example, running the fed, janet yellin -- >> oh, that's very clever. what's important, and i worry about the individuals and i worry about larry, for example, is we have a strangled hold on the financial system because of coming to conclusion on regulation. and so what's important, whoever gets the job can come in and use common sense and judgment. and i worry about the pressure on larry being that because of what happened in '99. and look, the deregulation wasn't the issue. it was not having irregulatory framework. what happened? the bush administration, you have 9/11. and so, everybody became preoccupied or a whole lot of other things and the financial system was left unmanaged in my opinion for quite a few number of years. >> all right.

before we go, you have a villa. >> i do. >> it's like a beautiful greek island or something, i guess, right? >> no, it's a beautiful -- >> i know it's not an island, but it's in the adriatic. >> it's in the adriatic -- >> can you buy them for less there? >> no, i think it's very expensive. >> why did you pick it? >> it's the most beautiful place i've been. >> you've been? i would refer to you on all- >> i have not been. >> why don't we do your show from the city? because matt lauer did a thing -- where in the world is matt lauer and he did it there. >> he did? >> he did. >> we'll do that. we can do that. >> we can do it from the villa. and i'll let you stay there. you'll stay there. >> we'll stay at the villa, do it from the lawn overlooking the water. >> you do know the game of thrones is filmed there. >> the game of thrones -- >> the whole castle when you see -- >> yeah, yeah, yeah.

>> all of that is the walls of debruvnik. that's all from that movie. >> you are a renaissance man. you are. i mean -- >> there's pictures. >> does that mean i'm old? >> no, i had to figure out where it was. i needed to get the map big enough so i could figure out where it was. >> it's about 90 miles -- >> it's on the other side of the boot, dude. >> 90 miles east of rome, basically. >> you've got a deal. we'll be doing the show there this spring. thank you for coming in this morning and i do want to say thank you for bringing my company back. >> thank you very much. >> appreciate it. when we come back, we'll talk a lot more with the cfo of cisco. making his way to the "squawk" set. he'll be with us for the rest of the show. right now, though, as we head to the break, take a look at the u.s. equity futures. again, slightly higher, up about 12 points this morning. we do have big economic numbers. we'll get the august

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let's get right to our guest host for the hour, joining us executive vice president and chief financial officer at cisco systems. he's a member of cnbc global cfo council. and i was just saying, out of all the tech companies when, you know, when cisco does something every three months, i mean, you can peruse over what's in those results and figure out what's going on around the world in technology. the stock traded down last time, right? what happened? >> well, i think to answer your question, the reason why we have such a good view is because of our outreach on a global basis.

we contact with customers and partners around the world. and so we usually get a good sense as far as where trends are. what we're seeing as far as the trends going forward. we closed out our fiscal year and we just closed out our fourth quarter at the end of july. and the fourth quarter we had top line growth of 6% and we had non-gaap eps growth. very much in line with what we had expected for the year. 6% growth, we're close to a $50 billion company, 6% top line growth, good growth top and bottom line. we've been on this for the last two years. with our investors. we've talked about over three to five-year rise, 7 to 9% bottom line growth. so the year came in very much in line with that and even at the higher end you look at the profitability. the key thing for us we've been working with our investors is trying to drive profits faster than the revenue. this is the seventh straight quarter, q-4 where we've had profits growing faster than

revenue. over the past two years, we've been through a tremendous amount of business transformation, making sure that we look at our investments and the tradeoffs we're making with our investments so that we're making the right investments for the long-term continue to drive that growth. >> all right. so if there was anything that people look -- what was it? the overall environment? >> well, i think, yeah. back on your first point as far as the viewpoint we have globally. >> right. >> the key thing we said on the call that we're seeing is we're seeing inconsistencies when you start looking a the the global market. >> lumpy? >> no, we've said lumpy in the past. >> this is different. lumpy's dead. >> well, i think inconsistencies, kind of the same thing. but when you start looking at what we've seen the last four quarters, in the u.s. we've seen continued improvement on our business in the u.s., especially when you look at the enterprise and the commercial market. last quarter alone, our u.s. enterprise business grew at 9%.

and we even saw growth in our public sector business the last quarter in the u.s. about 4%. in europe, it's been pretty much a mixed environment. we've been -- look at the last four quarters, we were negative as far as some of the challenges, economic challenges with see in europe and went to flat. in the last quarter, 4% order growth, which was a pretty good track. and that's mostly in the north. the inconsistencies in europe is we have growth in the north and we're still having some of the challenges on the southern parts of europe. in asia, asia for us, our order rate last quarter went down. so if you look at some of our emerging countries, the growth rate, the previous quarter from an order rate standpoint was 13%. this last quarter was 8%. we saw a bit -- >> did that taper? did you feel the taper effect? >> again, it's mixed. if you look at some countries like india and mexico, we had good growth. >> yeah. >> some of the other emerging

markets were flat. from a china standpoint, the economics numbers have been revised down, still growth. and then challenges for us as it relates to some of the commentary regarding security and whether or not cisco is involved or not involved in that. >> in this country, do you see any indication -- and you can combine this with, you know, your viewpoint on the jobs picture and everything else, but do you see any indication that ceos are going to ramp up spending of any kind on i.t., plants or whatever? >> so i've been looking -- let's say the last six months at a lot of surveys. and part of the cfo council here at cnbc. the ongoing surveys done as far as spending. and i think there was a little bit more optimism a couple of months ago as far as spending. i think it's been a little bit more conservative. so we've seen some of those spending estimates revised down. >> weird because it wasn't great a few months ago. >> no, but it was a view out. >> yeah. >> it was sort of like --

>> we got ahead of ourselves? >> if you go back a couple of months ago, we're going to see improvement. i think that level of conservatism is there, but we haven't seen that breakout yet. from my perspective, i think we clearly have a recovery but it's a slow and steady recovery rather than a recovery that's starting to show some signs of steam globally based on some of those inconsistencies. >> i think you've done the financial reports yourself. did you hear how many percentages he gave? could chambers -- he doesn't know this stuff. >> are you kidding me? >> he could do it the same way? >> why do they need a cfo then? >> he and i work well together. we partner. >> just -- don't say that he knows everything you knew. >> yeah, he knows because you told him. that makes sense. we'll get much more from cisco cfo throughout the show.

>> i'd love to. breaking economic data on jobless claims and import/export prices in at 8:30 a.m. eastern. back in a moment. lecoca-cola is partneringg. with nashville parent and charlotte parent magazines, along with the mayors of those cities, in the fit family challenge. a community wide program that offers free classes

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welcome back to "squawk box," everybody. we are seconds away from weekly jobless claims. let's get right to rick santelli with those numbers. >> all right. initial jobless claims dropped below 300,000. 292,000 from a revised 323. wow, that really is unbelievable. that's a drop of 31,000. that really is something. now, if only i would see the correlation spark up that jobs report. import prices, unchanged. if i look at them on a month to month basis. if we look at them over a year to year basis, they are down hadn't .4%. some subtle revisions to our last set, but nothing hugely significant. here we are, ten years at 289, which by the way for a long

period of time was the high-yield close until very recently. and this comes after weak data in the jobs report almost a week ago from tomorrow, a week back. and i think that's significant. that number used to set the stage. as strong report used to give us a complexion of higher interest rates. but it certainly doesn't seem as though 289, although it's ten basis points higher is reflecting some of the weakness we did see in that report. foreign exchange, a lot of false starts there, guys. we can't hold 1.33 in the euro. and there seems to be some reversal of fortune from some international statistics regarding a lot of different issues. i think spain's unemployment rate still remains in greece somewhat shocking. back to you. >> hey, rick, joe's been yelling at the tv talking to himself this whole time trying to figure out -- >> we're tapering anyway. we're tapering either way. we might as well hope things get

better, right? >> yeah, you know, the tapering thing is just really such a circular argument. >> i know, i know. we want good news. >> there's only one thing that matters, right? one thing that matters, that a year from now, two years from now, three years from now, the parenting being done by the fed in the form of these programs is going to be much less. exactly how it triggers along the way, you could look at it in an analog fashion and a digital fashion. and if good news and bad news switch around and continue to be in this kind of world, i really don't think it's good, i don't think it's good and it's an excuse -- it makes investors invest for the wrong reason. and considering that is normal is gross. >> hang on a second. look at it. labor official is saying that the drop in claims are due largely to faulty reporting by the states. i'm going to look this up and try to find out more information about this. we're looking a 292,000 as being great news, maybe it's not

reflective of what's actually happening. >> i don't know what they mean by that. >> i'm looking to find the release right now. >> reminds me of john cliest. faulty news from the faulty towers. >> maybe previous numbers? >> i mean, if you know it's faulty, i don't know -- >> why would you release -- maybe previous numbers were faulty. >> you know what, when they take over health care and the government has a big issue in there. we forgot to tell you these procedures were -- hey, joe, what did you think about reading mr. putin in the op-ed of the "new york times." i've been dying to hear your take on it. >> my take was that i would never underestimate the ability of people to write something for him that they think is exactly something we want to hear. and saying he was reasonable just makes me feel like i've been sold a bill of goods. and i'm going to write an op-ed with you totally honest about

what i think of russia and their whole system. and let's see if we can get it printed. you think we can? >> i don't think so. >> how about in the state newspaper in china? i want to do the anniversary of tienemen square, think they'll let us? >> why do we print his propaganda when they wouldn't print ours? >> because we're exceptional. >> we are exceptional. thanks. >> and becky, that's actually a very great comment. that is a very good comment. i like what you said there. >> let me tell you quickly, this is for this time around. initial claims for state unemployment benefits slipped by 31,000 to a seasonally adjusted 292,000, that was the lowest level of claims since 2006. but the department said the majority of the decline appeared to be because two states were upgrading their computer systems, did not process -- >> so it is the current number, but these numbers are wrong. >> one of the states was large

and the other was small. let's bring in the chief u.s. economist at ubs. maury, this looked like really great news until we hear there were two states that didn't process their claims. >> yeah, they're saying that most of the decline was because of these measurement problems. if they didn't decline and you didn't have the measurement problems and you stayed where you were the previous week, you were still at a pretty healthy level. now, i would caution that, look, you're trying to measure something over the labor day weekend. and it's always hard to measure the claims then. if you connect the dots here, what you also saw today was the lower import prices. that is something that has been a positive for the american consumer. and if import prices haven't gone down as much as they have over the past year, the claims wouldn't be as low as they had been recently. because this is giving people purchasing power. >> do you essentially throw this week's numbers out, maury?

>> well, now that they've made this announcement about the measurement, you essentially throw them out. what do you look at if you can't look at the claim? look at the consumer sentiment surveys in the sentiment surveys, the american public is saying something that doesn't show up in the labor market statistic. the american public is saying that, in fact, job markets getting better. >> so is that what the fed's thinking as they meet next week to decide whether to begin this tapering progress? >> i think they're going to begin to taper. and the point everybody misses is that qe-3, what we're in now was installed because the fed was afraid of downside tail risk in the economy. they have told you for three months now that they no longer are as afraid of downside risk. and bernanke has said if we cut back some, we still have a very easy policy. so i think they're headed -- >> you think they're -- you

know, what they see, you think there's a high degree of accuracy there? >> no. this isn't about a crystal ball. this is about looking backwards. >> yeah, but you say if they don't see tail risk, does it matter? >> yes, it matters what they see because they make monetary policy. if you don't trust them -- >> doesn't mean anything about accuracy. >> you don't have to trust the fed if you don't believe their forecast. they're doing as good as forecasters can do. >> exactly the point i make every day. >> frank, let's bring you into this conversation, as well. the cfo of cisco. and, frank, when you hear numbers like this, you say it's a slow and steady improvement you're seeing in the economy and you think is really reflected. the fed is saying that things are good enough they can back out of it. you don't think the economy's necessarily improved substantially? >> substantially, because even if you look at gdp numbers for the u.s. when they've been revised, they've been modified down.

and we're looking in the u.s. a little over 2% gdp. so higher growth is really going to require a higher number from that perspective. the job numbers that we've seen, i think, they've been last week they were lower than expected. i know the unemployment rate went from 7.4% to 7.3%. >> that's because the participation rate. >> exactly. and the fed back a couple of months ago is talking about 6% rate they were going to start to feel the economy was on stable ground and start the tapering. >> the rise on interest rates. the tapering they can do before we get to that point. but still, the point is when people are looking at it, it's not necessarily a booming economy. >> and if we see slight improvement, that's good. we need to see more than that. >> rick, i'll add to that comment on american exceptionalism. if putin is trying to lay this out that all people were created equal i would believe that. >> an exceptional system of government that allows people to

perform and achieve all kinds of great -- >> and to write op-eds like that, right? >> right. >> it's been banging in my head. >> first time in history -- >> he's trying to confound and confuse the two points and i think that's where he's twisting things. >> is it any different than -- well, you guys were young, but remember what khrushchev, the propaganda. one after another, we're going to bury you and all that crap. >> what kind of shoe is that? >> i think it's a nine west. >> why is everyone -- oh, never mind. i don't think the quality of life is that great. i don't think that, you know, alcoholism rates would be like 80% if things wither that great. >> you forget he's completely oppressing his own people and going after minorities and everything else. >> yeah. give me a break. >> rick, thank you for joining us. maury, great talk to you too. appreciate both of you. >> i hate we're in a position to get lectured by him. and i feel like he's played us. >> he made some excellent points

but he took points that the american public -- >> i'm going to have to go take a shower. >> he read the polls. >> exactly. coming up, yahoo and marissa mayer's giving investors an inside look. but first, we head to a break, here's what she had to say about personalization. >> yahoo is an advertising driven company, but we're a personalization company. we're about organizing the right content and right advertising for each of our users.

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welcome back to "squawk box" this morning. yahoo's ceo marissa mayer talking strategy yesterday at the tech conference. jon fortt in california joining us with more. good morning. >> good morning. first, take this with a grain so far salt because of salt. she's a big fan of the apple 5s because she doesn't put a pass code on her phone. and it'll give her much-needed protection. >> i was like, i can't do this pass code thing 15 times a day. and then i saw the fingerprint thing and i was like, now i don't have to. building in some of these smart sensors into the phone is really exciting. >> a ceo with no pass code on her phone, take note.

can you imagine? when the subject turned to microsoft, here's her pitch on the next ceo focusing on the enterprise. and i think the implication is leaving the consumer to, i don't know, companies like yahoo. >> i think that i really admire what steve has done at microsoft. and i think this is an interesting time for microsoft. when i look at their product line, i see a lot of strength in the enterprise area. windows office and what the next -- the extension of those products look like. one of the things i've come to appreciate. i do think that consumer executives and enterprise executives have just different trades and different instincts. >> maybe she'd be willing to take bing off your hands, microsoft. and she was very blunt about the reason you don't go blabbing about nsa requests. >> let's just say, look, right now you were just to tell us the truth about what's going on, the

stuff that's classified. what do you think would happen to you? >> i mean releasing classified information is treason. >> then what happens? >> generally lands you incarcerated. >> i'm not sure she'd do so well in prison. andrew? >> we've been watching orange is the new black. >> i haven't. >> she'd do very well in prison. not that she should be in prison. >> the first x rated movie i've ever seen was called "99 women." >> you just went there. >> it's not a sexual thing. it's not anything like that. >> how are you -- >> what are you talking about? >> no, the movie, if you watch the show, those women seem to be -- >> why would she do well in prison? what were you saying? >> the iphone 5s. >> orange is the new black.

i'm just saying. >> save us, jon. >> jon, thank you very much. >> let me just change the subject. >> there's a disclosure in the prompter. cnbc and yahoo have an alliance. given my comments about prison that the audience may be falling apart. i hope not. >> what if someone said i think you'd do really well in prison. how would you take that? >> my brain -- i've been watching the show, reed hastings very happy we're watching the show. our guest host for the morning is chief financial officer at cisco, a member of cnbc's global cfo council. she made a very interesting comment about -- >> do you ever have to sign sarbanes oxley? >> i'm not quite sure how we

transition here. >> here's the transition. she made a comment about certain types of executives, she was referring, i think, to steve and bill and microsoft doing very well in the enterprise but not necessarily doing very well in the consumer space. cisco has focused mostly on the enterprise and done very well there and hasn't always done very well on the consumer side. >> for sure. >> you may suggest i'm wrong on that. but i think that's the prevailing view. do you agree with her? >> well, i can answer it from a cisco perspective. so as you probably know, yes, we've done extremely well. as far as what we've done in the enterprise and commercial market. we have tried to be successful in the consumer market on a couple of occasions. and within the last year, we made some decisions to pull back from the consumer market. we had the acquisition we did many years ago that we ended up spinning out a quarter or two ago and then we had the flip, if you remember the flip camera we had a couple of years ago and exited that. the consumer market, there's a big difference between the enterprise and the consumer when you start looking at that.

so not many companies do well extensively. now, what we've done is taken it to the next level. we've worked with our service providers, other customers to work through successfully and we have been doing that the consumer market. >> really quick, weigh in on this, the type of person, if not a name you would think should run microsoft? >> i don't want to -- i think the board right now is conducting their search. and i think they'll do a great job. >> would you like to be on the list? >> say someone like -- >> i enjoy doing what i'm doing at cisco, cfo, i'll stay doing that. >> thank you for that. we're going to have more from frank still ahead. >> liesman is watching. >> what did he say about the jobless claims? >> he says it's hard enough to figure out good news, what is the proper market response when good news looks like good news but isn't really good news? that's double secret probation. >> you don't know if it's bad news either.

>> it's harder. we don't know if good news is good news. what if it's good news but not really good news. does it mean taper? >> where is the market right now? >> before the good news. i think it was initially going to be good. >> it's doing this as a doover. >> it's not that much of a move anyway. >> the jobless claims numbers that came out 20 minutes ago showed a drop in initial claims to 292,000. that's the good news, the bad news, two states did not process their claims because they were upgrading their computers. you can basically take this set of numbers and throw them out the window. when we come back on "squawk box," we're going to find out what jim cramer is fired up about. we'll check in right after this.

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. welcome back to "squawk box." we have the best viewers in the history. best prison movies. "cag "caged" was a big hit. "99 women." "chained heat" is number five. >> the actress who plays the main role in -- >> wait a minute, wait a minute. >> -- is a virgin actress and looks somewhat like -- >> who can forget wanda the wind warden. if you missed it, jim, you got to go to the videotape. but i don't know. you look concerned. >> no, i've watched the show,

too. i've watched seven episodes. i find it deeply disturbing. >> oh, you've seen what we're talking about? >> yeah. >> i'm only two or three in it. it seems okay. >> what is it again? >> it's netflix. i have to subscribe to netflix to get this. >> it's like "house of cards." >> i just met the woman. >> it's like the opposite of "shawshank" got to get busy living instead of busy dying and they play it down there with the sodomites. >> okay. this is cable. we could do this for a living. this is not a big deal. you just relax, little fella, everything's going to be fine. so it's not good news but it looks good. i was ready for the market to trade up on that. the tapering anyway. let's get some good news on the books. they won't even tell us which

state. big state, small state. >> texas and rhode island? >>. >> i miss jack. >> we can see how accurate they are. >> why give me a number that's wrong. i mean, that's great. thanks a lot. >> i don't know how to interpret good news, much less when it's not good news. what else did we see today? you heard some of the cisco comments, too, right, jim? >> yeah. i think if you're firing 4,000 people, you don't want to say how great business is. i think cisco's business is great. lululemon, we're waiting for some kind of orange lululemon. it has to do again with netflix. orange is the new black. >> we got to go.

we got to go. >> keep talking about netflix. >> we will. well, coming in at number ten on netflix, "caged heat." >> you got a cold soul, my friend. -- you got to call sol, my friend. >> we're going to give frank the last word when "squawk box" returns. back in a moment.

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let's gets back to our guest host for the last word. frank, we just had jim cramer on. he said cisco is not going to be able to say things are great because they're laying off 40,000 peop4,000 people. but a year from now, what do you i? >> we're investing heavily in innovation. our objective is to be the number one i.t. company. that's where we focused. we think over the long term that's going to play out for the success of us and our customers.

>> impressive team here. i'd love to come back. >> thank you. >> call us chained heat. >> marissa, my apologies. make sure you join us tomorrow. "squawk on the street" begins right now. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla, dave faber at the new york stock exchange. futures are cooling their heels after seven up days in the row for the s&p. that's the fourth time we've had that long of a streak this year, the dow up for three street days. the jobless claims came in at 292,000, that's the lowest since