kernan and andrew ross-sorkin. bill ackman is joining us at 7:00 a.m. eastern time to talk about the unusual quest for allergen. and tyson has reportedly beaten out pilgrim's pride for hillshire brands. the company is expected to pay $63 a share in cash for the jimmy dean sausage maker. tyson's earlier offer was for $50 a share. pilgrim's pride bid was for $55 a share, so it marched up considerably to $63. in other corporate news, carl icahn reported a more than 9% stake in the company. icahn plans to talk to the discount operator store about strategies that include things like the exploration of strategic alternatives, whatever that means. but when carl gets involved, he's not a quiet investor. much more to come on this story. and shares on apple begin to trade at split adjusted price

for the stock today. that stock officially split 7:1 after the close on friday. cutting the price to $92.22. if you were looking at any mutual funds to hold over the weekend, it warned up up top this was not built into the price yet. so we'll see the new price. apple shares are gaping ahead of the split up 10% over the last month. andrew, over to you. other news in the video game industry because there's a gathering this week for the annual electronic entertainment expo. the microsoft xbox news conference is coming at noon eastern time. the company recently cut the price of the xbox to $399. now to focus on how a new game can take advantage of the console's technology. and i don't know how you're going to feel about this today, joe. netflix holding the annual meeting about public pension funds to separate the rules of chairman and ceo. we have seen this movie before

in other instances. this was with jpmorgan and jamie diamond. but there's no crisis at netflix recently, but that issue is on the table with a lot of people looking at it. and radio shack, have you been to radio shack recently? >> i have been there in the past two months. >> i have not been there in a few years. >> why do you go? >> because the wires that connect the beats headphones to the -- you can buy insurance policy on it. we have gone in there and i have gotten ten new wires for $2. >> so they are not making money off of you? >> no, i think they still are. i don't know about the quality of the wires. no matter what you do, it is just going to fray or whatever it is. or the connections get shorted out. >> this story is for you, joe. because they are launching an in-store repay program today.

they want to lure customers into the stores by offering to fix phones and tablets with cracked screams and those watered down or to wires on beats headphones. they start at $39.99 and will carry a 90-day warranty on parts and labor. so you can bring your iphone there. >> do did you watch "60 minutes"? >> i did not. >> john stewart went to be on the show with the egyptian guy who has the show. i think the show is canceled now, an egyptian comedian that really has his life on the line from this, but 30 million people watch this guy. so he's like the jon stewart of egypt. jon stewart went out there and it was pretty funny. but last week on what does the zen moment mean when they do that? >> just when they give you something to think about. >> the zen moment is when

streaming is slow for netflix, is it just -- >> it buffers. >> it keeps buffering. that would be maddening, wouldn't it? so i stand by what i said, it would be -- if i were verizon or a pipe owner, it would be impossible to watch netflix if they didn't pay. that was my zen moment. >> this may bring the regulators in. >> no. but a zen moment, so they weren't -- it was without comment. they don't say one thing or another. it was just -- am i a zen -- was it profound? >> it's the opposite of the zen. you do realize that. >> no, that's what i'm asking you. they are saying that was not zen. >> right. they believe there's humor in the zen moment. >> so you are saying -- i assume they are net neutrality people. they probably love netflix like you. >> i have never seen them comment on this. >> i'm not sure they were commenting on the issue.

>> yeah. you think they were commenting on me doing it in slow motion? i did the whole thing in slow motion. they do things like that all the time, so you don't think they like that. >> for some reason i don't -- >> i don't think they did. so you're jealous because you have never made -- >> i have never made the zen moment. i try to avoid the zem n moment. >> if it is for looking stupid, you may have it wrong. they are trying to read your cold opens today. you could have gotten me six different times. >> i think he offers no comment. >> that's what i think. i was proud. and that is -- anyway, a new comment is showing growth in the second quarter, but forecasters by the national association of

business for economics say that growth for the full year will likely come in lower than they previously estimated. job growth has seen to be steady and the consumer is starting to spend, that means it is picking up a bit. while gas leap prices are holding steady. the survey finds the average price of gas -- >> i heard it on the radio on the way in. >> they send her the prices and she -- i don't think it is algebra. it is like adding and subtracting by the number and she comes up with an average to get a check. the average price for gasoline is $3.69. it's flat over the past few weeks. san francisco had the highest price at $4.14 a gallon. meantime, baton rouge, louisiana, had the lowest price at $3.33 a gallon. and in global economic news, japan's economy picked up speed. first quarter growth, the initial estimates revised toen a

annualized 7.6% among the catalyst. an up expected surge in capex. is that real? a match iing to china near 7%, that for real? >> they have done some massive changes. >> obviously. we'll see how long that can last. in china they are battling -- a lot of it is debt. they are just spending money on capital that doesn't need to be spent, but china's economic agency is piling on excessive debt as the gdp starts to lag. >> below 7.5%. that's interesting. >> 7.6%. first quarter growth beating it and revised to and annualized 7.6% in japan. they have zero up nation, is that for real? >> that's for real.

>> it's real! >> if they say it's real, it's real. >> well, not always, of course. that's what they say. >> do we believe them more than we believe -- >> unless they are talking about the nuclear reactors. >> well, yeah. then i am not so sure, but the economic numbers i believe. we'll check on the broader markets. the dow is in striking distance. within striking distance of 17,000. it closed friday at 16,924. the futures this morning are relatively flat. looks like dow futures are up by 5.5 points. the s&p futures down by just you should a point. if you look at oil prices, last week you saw oil closing at 102.66. this morning wti is up 54 cents with a gain of just a half percent. also the ten-year note, last week we closed the week below 2.6% for the ten-year yield but it is pushing up above 2.615%.

the dollar this morning looks at least at this point like the dollar is trading -- the dollar is not here yet, but it is stronger against the euro at 1.3621 right where we were before we heard anything from mario drugge last week. the market moved in and 'tis paying of that. the dollar is down against the pound and the yen. and gold prices this morning look like they are trading up barely by $3. and after last week, bond yields in europe reached record lows in many of the countries after the ecb's announcement last week. what about the bond market around the world? we have mark grant onset, the managing director of southwest security. thanks, mark. that's what i say at the end. they didn't pause and put it in there. the journal says treasury prices are climbing as investors

worldwide buy u.s. debt. but we hit 10042 and went back to 260. i figured after drugge said that last week, that will be the near term high. what is going on over there, is there any way the yield climbs here? >> no, not at all. >> is it -- it's always like everything, either half empty or half full. do lower yields, is it good because it stimulates everything or is it bad because it indicates things are slow globally? >> i think lower yields. in the first place, the european yields are manipulated by the european central bank. >> thank god we have no manipulation here. >> of course not, but the fed should follow the ecb down the path. i suspect as i told becky last time, we'll get to 2.5% on the ten-year on the basis of a relevant value versus european yield. it will press everything down. >> now is the time to raise interest rates.

>> now is the time to raise interest rates. rising assets and falling gold prices are good news nor the economy, but inconsistent -- do you think we should be raising them like him? >> no. i think it would be very bad for the country to raise them. >> you saw the spanish ten-year now below, what does that say? >> the ecb is lending money now at 1.5%. they are encouraging the banks to buy the sovereign debt and allow them to carry them risk-free in the tubes. they have pushed down all the yields all across europe. france's yield is 1/3 less than the treasury yield. and i think the fed is going to follow suit. the fed as a trillion dollars worth of ammunition and will start pushing down on the long end of the market. >> did you see christine la guard's comments over the weekend. you have railed on that issue for a long time and you turned out to be right. and she turned out to be wrong.

>> the imf hasn't come out with a correct economic prediction in i don't remember when. the austerity programs all across europe, you can apply them to some success to the periphery nation, but you can't apply them in the same way to the major industrial nations unless you recommend that england was just wrong. >> did you see the quote? do i have to go on my knees? that was her quote about apologizing. >> that was hank paulson, sort of. >> i think she was interviewed twice over the weekend in europe about this. and she basically said, we called it badly wrong. >> did you change your -- i'm nervous, he's not wearing socks. >> i never wear socks. >> he's from florida. he lives in florida. he thought he may get a massage. >> the last time they didn't wear socks -- that wasn't a zen

moment? >> i have never worn socks ever on your show. >> i know, but he didn't wear them and that meant he was going to bring them out. and that meant they were on the set and there was another man rubbing his feet on live tv. >> let me assure you, you won't see that. >> rubbing -- there were corns on corns, too. it was awful. as i recall, we used to argue about whether europe was healing or not. and you were less positive than a lot of people. with what they have done now, has that changed your attitude as they have taken the right steps to -- do you feel better about europe at this point? >> i feel marginally better but basically it's because of what the ecb has done. the economy in spain and france, you can go through the litany, they are no better than they were six months ago, or marginally better, but the ecb is plotting an exceedingly good

strategy. they lowered interest rates so much that the company has lower interest rates. consequently, you are seeing a pickup in the economies in europe because of the lower interest rates. and the fed should do exactly the same thing, be a big help to the united states. >> i can see a way that the entire world fits together. we borrow money from china because we like to consume. and then we go over to italy and spend all of the money we borrowed from china on tourist stuff. they don't need any businesses in italy. they just need to keep the ferries operating, right? do they ever do anything internal anymore in my of the countries for productivity? other than host tourists? >> there's companies like ferrari and fiat, yes. >> so it is important that they -- >> yeah. >> they aught to be able to make money hand over fist because it is so beautiful and the lifestyle is so nice, right? >> well, tourism only takes you so far, but they certainly need

industry. you go to a country like greece -- >> you can't start a business there, can you? >> they have big shoe businesses. >> ever entrepreneur has left france. >> what do you think of europe right now, are they in a better position than they have been? >> yes, becky, i think they are marginally better positioned because of what the ecb has done. which is why i recommend to the fed they follow the same course. the more you push down on interest rates, the better it is for real estate, the better it is for business borrowing, personal borrowing, mortgages, there are all kinds -- the best thing the central bank can do for the nation that it represents is to lower interest rates. >> is there a point where you have to let things rise where you can't artificially tamper things down forever? >> the whole focus on the taper has been wrong. it's like you have 4 3/4 bullets and have ten billion less one month the next. the focus really is on the point of disengagement when the fed

begins to de-leverage, shrink their balance sheet, then you see interest rates go up, but not until that point. >> they may not shrink. bernanke made comments at the dinners he's been attending that there's no reason for them to shrink. if you look at the fed balance sheet versus gdp in the united states, it's nowhere near what you see in the other countries like japan or other places. >> right. so that tells you we are in for a prolonged period of interest rates. if we can get them down to 2% or so, that's very helpful to the u.s. economy, employment. >> you think u.s. stocks can do well then as a result for an extended period of time. >> yeah, i do. i think stocks can do very well. you'll see back and forth as interest rates go down, they are going to get down far enough where you see the rotation back into the equity market. but i think the next move, if you want to know the next move, it's going to be down in interest rates. so since january i have been telling the big institutions to

buy long bonds, buy them as long as you can and ride the wave down. and i think there's still a way to go. >> that's crazy. so when will we get to 3.5% on the ten-year? >> 3%? you are talking going up years from now? >> you think eventually? >> years. >> everyone said we'll be at 3.5% by the end of the year. i know that, i don't listen to them either, but you looked at me like i had three heads because i said 3% on the ten-year. this was supposed to be 3% two years ago. >> we are not going to see 3% for years. >> wow. >> that's totally contrary. like 16? >> you know all 13 investment banks say we are going to higher interest rates. why? >> we are looking at each other with two heads. i believe you, but versus the

consensus, that's totally -- >> because these people don't keep in mind the central bank. the ecb drove rates down in europe. why don't you think that the fed is going to drive rates down in the united states? they are. and you can't discuss the interest rate environment without including the central bank at this point. >> although even though the central bankers in the united states will say things like potentially we'll start raising rates around the middle of next year, do you think they are not telling us the truth when they say things like that? >> i wouldn't say they are not telling you the truth, but they are -- engaging in their own position as being the central -- >> we have to go. how is the job market in the united states? >> not nearly as good as the government says. i see the numbers -- >> he spent something out called the bad jobs lie. i sent something out called the bad liesman lie because i was

yanking his chain. >> i'm sure she loved you for that. >> he did cc a lot of people, too. >> the journal had a piece outlining how bad the jobs are. we've lost 1.3 million jobs and added guys at mcdonald's. >> a lot of the jobs we added were in health care. >> we lost all the high paying jobs. i'm asking him, though, about the low-quality jobs. >> the sector low-quality jobs, every month we see the low-quality jobs, where did all the people go that leave the workforce? italy? greece? come on. they are just manipulating the number to get what they want. >> some people say you see more baby boomers retiring, that you have an aging population with baby boomers retiring all the time. >> becky, the economy is not

that good. we are barely off negative numbers. >> so you think there is slack -- other people say there's not as much slack and that we could quickly see inflation because the market is tighter than people think, playing into your extended low interest rates you probably think there's a lot of slack. >> there's a lot of slack and we'll see the inflation. all the way back in '07 and '08 and '09 when we started talking about this, everybody came on your show to say there's going to be all this inflation. and i said baloney. >> 92 million people aren't working or something. 92 million. >> only 330 million people in the economy. >> right. >> that includes kids. >> one out of four are on food substance programs of some sort. >> that's true. that goes to the other issue, though. >> like technology is causing it. >> all the things, globalization, technology makes it harder to get a good job, all the things that we say that you say are not happening.

>> i'm not saying regulation is distaidain from the private sec. >> that has something to do with it. >> we need 4% growth but we are not going to get it as long as we are not fixing corporate taxation. >> we should thank mr. out of the box. >> the best thing we have is the up no ovation. we are creating jobs. they call harvard now the stanford of the east because stanford is growing. >> thank you, mark. good to see you. coming up, if you have a case of the mondays after partying all weekend, you don't want to wind up like these guys. you can now fix the hangover at the airport. we have that story in the executive edge in a moment. and then don't miss this at 7:00 a.m. eastern time, we've got a "squawk" exclusive, bill

ackman is going to defend the business model of taking over allergen. "squawk box" returns in a moment.

welcome back, everybody. it's time for the executive edge. it is intern season and for those spending the summer in silicon valley, it could be a profitable time. a survey by one online career website finds that silicone valley tech firms pay their

interns more than any sector in the country. probably not a huge surprise, but if you listen to some of the details, that may get you. cyber security firm technology tops the list with an average base of more than $7,000, twitter, linkedn and google pay more than $5,000 a month. and it is not just the money but there are perk that is come with it including bikes, buses, massages, swimming pools, dance classes, parties and in some cases housing comes along with it. >> the jobs are way too good. i think that we need to put a cap on this. that's way too much money for these guys to be making. and it is just -- god forbid there's a market out there to get the best people because eventual eventually they may say with the company. there are talented people in the world. so they are able to do that. i mean, this is bad. this is part of the inflation. we don't want people going up. we want people meeting down here, don't we? >> how do you feel about free

internships? >> if people will work for free -- >> i hate them because i think it's only the -- >> people want to get their foot in the door. >> somebody who is actually paying your tuition and doing those things, you have to go. i do think to your point, the technology companies say they are the beneficiaries because they are paying $15,000 to $20,000, sometimes less, and that he get the first crack at some of the most talented people in the country. >> it's great. that's where the jobs are and that's where people are making money. kids are go, they are talented and do well in school. they earn their success. they get all a's. >> you are speaking to the choir. you are claiming this is like -- >> i am. you think technology is putting people out of work instead of giving people -- you think it will be disruptive with all machines at some point. >> i'm happy the interns are making money. why wouldn't you want that? >> because it's a race to the top. the next thing they are ceos and

not good for anything. we are going to beat this to death today. >> don't look at me. >> i'm not looking at you. it's a zero sum game. there's only so much money. it would be better to give it up -- it just would be better to divvy it up equally regardless of how well you do or anything. it doesn't help to distinguish yourself anymore, andrew, i don't think. we should all be at the zero sum game. >> i'm looking at you guys up close in high-def. go ahead. i'm taking a look at everybody. see, we're okay. the set looks amazing. go ahead. i want to ask you about this. >> colorado is creating the nation's first state-run marijuana financial cooperative similar to credit unions. there was a law signed by the state's government that could

give pot surrenders access through the fed. the traditional banks have been unwilling to provide to drug businesses because the drug is illegal under federal law. they don't want to get caught in the middle of this. which means it is all cash. >> what happens to your girl who said she had some pot and almost died? >> i only read the story like everybody else. >> didn't you see her walking around? >> she's in d.c. >> so she has never had pot before and just had no idea how to -- >> it was baked into something. >> she had it baked. >> she ate too much. >> maybe that's part of the problem. you know, if it's -- >> she ate like ten times what she was supposed to. >> aaron sorkin never did drugs? >> i don't want know. just because we have the same last name -- >> i think people have told me

that if you smoke marijuana that you get paranoid. >> people told you this? i have heard that from people. >> with brownies, she probably ate a little bit and got the munchies and ate some more. >> it was the effect that didn't come on, that was the problem. >> how do you know she didn't get the munchies and eat more. how do you prevent that from happening? >> that's a good point. that's dangerous. speaking of binges and hangovers and issues that you have -- this is good. the weekend in vegas could leave you with a hangover, but the airport has your cure. the airport now has and off-site medical clinic. the urgent care's co-manager says among the services is a hangover treatment. oxygen and an i.v. to include vitamin b and anti-nausea medication. >> i can also tell you i have not had this service but been told about it. you can have this taken directly

to your hotel room in the next morning as well. so it's not just on the airplane. no, there are guys, and maybe women, i don't know, who go out to vegas and have a little bit of a bender for the weekend. and in the morning they have these people come and i.v. them all up and do it all again the next day. >> did you ever see pinocchio when he goes to pleasure island at the end? >> they are drinking, smoking cigars and playing pool. he went with the friend of his. and he gets turned into a donkey. >> they all turn into donkeys. >> i think this is a valuable service. >> he gets an ear, a nose and a tail, too. >> what services have you taken advantage of in vegas? >> blackjack, i have played plaque blackjack. >> what happens in vegas stays

in vegas. >> thank you, becky. >> did you know if you are hung over, you should drink sprite? we'll talk about the fallout after the jobs report. and the non-payrolls from friday, will it change the feds game plan? and take a look at last week's winners and losers as we head to break. ♪ ♪

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good morning. welcome back to "squawk box" here on cnbc. i'm joe kernan along with becky quick and andrew ross-sorkin. making headlines, time inc will begin trading today. the company is spinning off from its parent time warner and will operate as a stand-alone private company. i read something today, this made me sad, i can't remember -- >> it was on the front page of "the new york times," probably. >> that it was a lonely -- i felt bad when i read time inc was spinning off. >> i love joe running the company, but they have a huge amount of debt on the company.

unlike news corp which has given $2 billion of a cash cushion. these guys did the opposite with a big dividend. >> i should say i work for the company. i write for "fortune" so i'm a contractor who writes for them, but it is upsetting to see the debt on the company. >> they do great brands. maybe they can make a go of it. >> i feel bad for them being lonely. ♪ all by myself >> is this like you with no co-anchors? >> yeah. >> you are usually the one who is tearing up. >> it seems anxious or something, but this didn't get you today? >> i can't get too upset about any of it.

i'm not in denial. i am rooting for joe roo. >> who may be on "squawk on the street" later today? he'll be on later today to talk more about it. kraft foods raising retail prices for maxwell house and ground coffee by an average of 10% due to rising bean prices. folgers and dunkin donuts raised their prices last week first. we are kicking off our monday strategy service with the managing director at ubs. and barbara rhineheart, she's the achieve investment office of private banking americas. thank you for being here, both of you. let's start off talking a little bit about the jobs number on friday, drew. there's been debate this morning as to what exactly the jobs number meant if the jobs created have been good jobs or bad jobs where, do we stand? what do you think?

>> we should bear in mind we have a large number of people unemployed for a long time. they won't go out and get a job at a nuclear plant. you need to get back into the workforce. if you get back to the workforce, you can move up the ladder again. you have to reset and restart. any job is a good job at this point. i don't see what to complain about, 200,000-plus jobs, the workweek study and the unemployment rate. to complain about this one, it makes you wonder what people are thinking about. >> i'm not complaining about this one, in particular, but just taking measure of the job market overall. the journal pointed out over the weekend that there were a few million jobs lost in manufacturing and another couple million lost in construction. many of the jobs that have been added have been added back in. health care was the top one, and that's been good jobs. then a lot were added in in restaurants. and that's the concern. >> a lot of the health care jobs aren't very fun. and to be honest with you,

manufacturing jobs aren't always the greatest thing either. >> but they come with benefits. >> sometimes. i think a greater concern for me are the part-time employed. which janet yellin looks at as a signal -- what worries me is they may never go down. we don't know what the impact of the affordable care act will be. so we have a giant chunk of people part-time for economic reasons because they can't find full-time work because no one wants to hire anyone for full-time work. so are we the leading edge of a new labor economy, which is going to be a lot worse than the last one if only because people are going to have to hold down multiple jobs to get the same impact. and that's more a government policy issue. >> becky, the key take away for investors is that the 12-month moving market of the jobs economy hasn't moved in the past two years meaning the fed is going to stay bullish for longer than people expect. >> in terms of keeping rates low, they will continue with qe, but you think low rates may push

past 2015? >> we will see the first increase in the fed funds rate until the fourth quarter of 2015 well beyond the consensus at this point. >> that's what mark grant was talking about, a low environment and as a as a result a strong stock market. >> in contrast, everyone says janet yellin is bullish but she keeps tapering. so i disagree. >> that plea is no longer effective so why keep doing it? >> because the balance sheet is sitting there. that means they have to go faster than people anticipate once they start. >> ben bernanke said they may not shrink the balance sheet. >> the balance sheet has rates. you push both to extremes. if you are going to reverse something and not move one of them, the other has to go further. >> after we saw this kind of weakness through the first quarter and even at the beginning of the second quarter this year, we are saturdaying to

see the early signs of a global trough in industrial production. and that's relatively good news. so you're in a sweet spot where you are starting to see the turn in the data. it is not strong enough the central banks need to do anything to combat it at this point. and you also have a labor market that's growing albeit slowly with slow growth, improving at the margin and very low inflation. that's a very good environment for actually equity and bond investors. >> even though the dow is now looking right at 17,000, you would be telling more people to put money in? >> we are. we think there's a potential upside because the stimulus put into the ecb means setbacks will be limited in nature. there could be but they will be more limited. >> barbara, drew, thank you both for coming in today. >> thank you. coming up, it's never a bad time for a beer. brooklyn brewery is ready for the summer rush and going nationally. we'll talk to the fonder in a few minutes.

and tom cruise gets beat at the box office by a dark horse. the ceo told us it would be a surprise hit. i don't know -- >> it's supposed to be amazing based on a book and terrific. >> my daughter read the book but i don't know. i guess i'll have to see it. e financial noise financial noise financial noise financial noise

e financial noise

financial noise financial noise financial noise

welcome back. an unlikely movie beating tom cruise at the box office with a $48.2 million debut.

>> and a young adult book "fault" is crossing over. >> she's the new breakout star. >> people say this is a true movie. >> how many people do you know that said that? >> i know people who say that, hollywood people. >> she's the new hot teen actress from the other hot series. >> you don't have to see teen movies, she should have her own movies. >> this is considered an adult movie. >> tom cruise, this is like

"groundhog day" meets "terminator" or something. because he lives the same thing over and over. >> i feel like i have seen that movie before with tom cruise. >> probably. this is an adult story. coming up, we'll talk about the revolution of the brooklyn brewery with a name leading the charge. they have big international plans. we'll talk business over beer with the founder next on "squawk box." show 'em the curve. ♪ it's beautiful. it's more than that... ...it's perfect. introducing curved ultra high definition television from samsung.

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. welcome back to "squawk box" this morning. brooklyn brewing is up its craft brew game. it is close to an agreement to expand into asia. joining us is the founder of the brooklyn brewery and author and journalist. brooklyn brewery, i thought it was a local thing. used to ship it to europe. you ship it everywhere else. now you're going to make it in these other place? >> it is a local thing. from the beginning of brooklyn brewery we have had opportunities abroad. over the years, the importers have gotten better and better and better. now we have a pretty significant export business. it's about 30% of our business last year and growing. >> so but the crafty part,

people think of it as a craft beer, locally brewed shipped to them. now you can make it in stockholm and asia. >> actually, no. in stockholm we are making specialty beers at that brewery. it's not a big production facility. it seems important in europe that the beer be brewed in brooklyn. so we export. we have a lot of containers going over to europe now. >> but what's going on in asia then? >> asia, we may be brewing there. >> and the distinction -- they don't care about the distinction? >> they don't seem to. also, it's a big trip to get beer to asia from brooklyn. panama canal, and many hours in warm ocean. and it's hard to get the beer there in good shape. so brewing there makes a lot more sense. >> why was stockholm your second biggest market? >> good question. i have no idea.

brooklyn just caught on in sweden. we do very well. >> i immediately thought, andrew, like you and a bunch of inebriated swedish girls. no? >> i have had that thought. >> everybody is drunk on -- what is that -- is there a cap on what the alcohol content of a beer can be? >> in some states there is. but for the most part, no. >> what's your biggest? >> we have beers like 11% alcohol. but that would be one of your special beers like brooklyn black. >> do you warn people? >> oh, yeah. >> i drank one once, and no one warned me. when you drink a corona, sometimes you're thirsty. you know you can easily drink a 3% or 4% beer.

i think it might have been a 20% beer. when i finished i was like -- >> no, no. there is one 20% beer. believe me, if you took a sip of that you would know you're drinking something strong. >> i drank it quickly and i said that was the best beer i've ever had. i shouldn't have drank the wine afterwards. >> you can go back to this screen up here. this is the lineup by volume. you are number nine. i'm curious, as the guy who started this and runs this, when you look at those brands, who are you trying to beat? i assume you try to beat all of them. but do you i'm not going after nevada or sam adams. how do you think of that? >> i think from the beginning of the craft beer revolution it's been a battle against the big guys. you know, that's been -- >> so not infighting among this

group? >> not really. when i started in business in '88, imports were 3% of the u.s. market. and i told people we're going of that 3%. well, today imports are 13%. craft beers are about 10%. and we have really pushed the big guys back to 74%. >> why do you think that is? >> you know, it's happening in a lot of food categories, isn't it? it's happening in chocolate. it's happening in coffee. it's happening in ice cream, in cheese. it's part of that. people are drinking less but they are drinking better. they are going for flavor in all kinds of food products. >> have any craft guys sold out to the big guys? >> yes. goose island in chicago, started 1988, the same year we started in brooklyn. three years ago they sold to anheuser-busch. the founder, john hall, 70 years

old. his son wasn't interested in the company. what are you going to do? >> would you ever sell? >> no. i have partners, young partners who will be the next generation of the brooklyn brewery. we are very comfortable with where we are and the future. >> and does it lose its cred, if you will, to sell? >> i think so. i think so. i think part of what's special about craft beer is the local nature of the company and the connections to the community and the role it plays there and in other markets where the beer is sold. you know, we don't sell through division ads or radio ads the way the big guys do. >> speaking of which, the reason i mentioned that in the first place. you need to go back to the days you could do this. it was 1991. and old milwaukee, their advertisements featured the swedish bikini team.

large breasts and blonde. the premise is they would come in and save a group of bored or thirsty men by the swedish bikini team. it was a parody. many women's groups got mad and found them to be masoginistic. >> the craft beerrevolution. >> do you remember those? >> i don't remember those. >> next up, activist investors has a bone to pick with an true surrounding surrounding vleant.

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a squawk exclusive activist investors bill ackman to defend valeant business model as he tries to take over allergan. the buzz from wall street to washington. senator rob portman as tax reforms start to heat up for the the summer. splitting the apple. it begins trading at its new split adjusted price. the second hour of skwa"squawk begins right now. good morning and welcome back to "squawk box". i'm joe kernen along with becky quick and andrew ross sorkin. if we can be here made up,

right, i think that you can roll over -- even if you want to doze off. 6:00 a.m. is the start time. be here. >> eastern. >> futures this morning. after a great week, again, last week, a series of new highs that no one got that excited about. the s&p is now 19.49. so we're up 100 points from the close of last year. and as becky pointed out appropriately last week, if you sold in may, you missed -- >> half the gains, yeah. >> the 10-year this morning, we have gotten 2.42. all of a sudden back over to 2.6. 2.615. i'm kind of hoping for it to go up now. i don't know. in the headlines, tyson foods is the apparent winner in the bidding war for hillshire. tyson is bidding $63 a share. topping last week's bid for hillshire by pilgrim's pride.

apple's seven-for-one stock split, it's a lucky one, becomes effective this morning. it's apple's fourth stock split in history. but it's never gotten to 600 before or wherever before it split. it's the first since 2005. and usually the stock goes up. because reverse splits, they always go down. another stock we will be watching is family dollar. some guy that i'm not familiar with, carl icahn. do you know this gentleman? >> lovely man. >> i'm not familiar with anything he has ever done the. he takes 9.4% stake. activist investor nelson peltz is also a major shareholder in family dollar, which does well

in this new bifurcated economy. kraft foods raises retail price of coffee by 10% because of a severe drought in approximate brazil. our next guest is no stranger to the set. founder of pershing square capital management. bill, thank you for being here. we have a lot to talk about and to debate. i wrote a column last week about valeant. i don't think you were thrilled about it. other people have written similar things. let me let out the argument and i want you to come back at it. >> please. >> you have pursued allergan.

not a hardly matters company at all. they have done pretty well for themselves. >> correct. >> valeant, on the other hand, has basically been a roll up. not the most in know sraeufb company in the world. you will speak to that in a second. 2%, 3% of revenue. allergan it's up in the high teens. i wonder in the larger context. we always say around here what's good for america, whether going after a company like this that's pretty relatively successful and trying to slap it on another company which is basically just a roll up and appears to look like it needs to keep rolling up stuff simply to generate revenue is good. the floor is yours. >> the problem is with the premise. valeant is not just a roll up. let's talk about what a good roll up is. berkshire hathaway. becky asked warren buffett what

happens to the rollup when he is gone? it is a serial acquirer over the last 40 years. and it's done a fabulous job. when buffett gave an answer to the question he talked about a roll up is a company, bad roll up uses an overinflated stock price at a high multiple. and noncash earnings, heavily promoted by ceo to acquire companies at lower multiples. that's magically a acretive. eventually it craters. all of a sudden the competitive advantage, which was simply a high stock price, goes away. tyco is an extreme example. they play accounting games.

>> first of all, it is run by mike pierson. he has spent 20 plus years running the health care at mckenzie. he understood the payers, and sexuality industry. he came up with a strategy he implemented the last six years at valeant. it is very thoughtful. he has pursued particular markets, particular geographies and particular dermatologist, ophthalmology areas. where there is less risk of government payors are less of a risk. he's in markets like eastern europe, which is less competitive. he focuses on durable products. the vast majority are companies with portfolios, patented products, so-called blockbusters. they spend a ton of money every year trying to come up with new

blockbusters. he built a company that looks like colgate or procter & gamble than your typical pharmaceutical company. has he made a large number of acquisitions? yes. why has he made acquisitions that make sense. he runs a very low cost, zero based budgeting model. let me sort of make an analogy. burger king is controlled by the guys from 3g. they bought heinz. with buffett, 3g did a roll up which acquired anheuser-busch but started out as a small brazilian brewery 20 odd years ago. if you have a competitive advantage at operating at a low cost in an industry where everybody is operating at high costs, you can make a large number of acquisitions that are attractive. that's what valeant has done. since pierce has been ceo, if

you bought the stock and reinvested every dollar and dividend, you have made 26 times your money. >> i'm not suggesting to you that you can't make money doing this. i suggest there is a larger issue at play. here is a company, allergan, which is a pretty well-run company. >> sure. >> and the strategy is we're going to buy it and decimated it as much as possible. let me ask you a separate question. a short seller james does not like this. >> yes. >> he has come on this network and talked about it. he believes there are accounting issues. that there are so many one-time costs involved in all the acquisitions. if you backed all of that out, it's unclear whether they have made any money. >> i will start with jim. we were actually doing due diligence on valeant that talked

about his short thesis. i say, jim, i look to understand your thesis. i asked him for his thoughts. he sent me his 26-page analysis. i went through every word. i had inside information to valeant. jim does not have valeant right. he has never been a fan of serial acquirers. the accounting for companies that make large number of acquisitions is very complicated. and complicated doesn't mean wrong. >> it's not just accounting that he looks at. he look at the organic growth. it continues to be flat to negative the last five years. that concerned him too. >> here's what he was missing. again, since we disclosed our stake, i picked up the phone and called jim and left him two messages, sent him two e-mails. i asked him to come on the show this morning. >> he declined. >> your producer did the same.

by the way, if he really believed valeant was a bad company he's effectively a risk borrower. he bought allergan. short valiant. he makes money. he is saying if this goes through valeant is worth a lot more money. >> what was the other point you needed to address? >> i want to make sure i address each of them. 85% of its business is this sort of durable pharmaceutical business. otc. products that you don't need to spend a lot of money on r&d to continue. 15% looks like a typical pharmaceutical company. they brought products with a patent life of three, four, five years. pierson likes so-called tail products. products that other pharmaceutical products are selling. you can buy them very, very cheaply. if you look on a consolidated basis, they had flat organic growth. if you look the way we do, which

is the right way, look at 85% of the business that's a growth part of the business, it grows 7%, 8% per annum without huge investment in r&d. when the drugs go off patent, it goes to zero. you would never value a company -- if you have 85% growing at 10% and 15% shrinking at 30%, you don't put a multiple based on consolidated revenues. you look at this as two pieces. if jim were here, i would be happy to take him up. first of all, this is valeant and allergan are not cancer drug discovery companies. these are -- >> they're not going to win the nobel prize. >> this is determine tolling and wrinkles. becky will never need these products. but not everybody is like becky.

>> there are therapeutic uses for botox. >> i thought your piece was almost as if a drug company is like a public broadcaster that has to have the about -- they are here to use research to prolong life and make suffering. they make botox, man. they stick needles in you -- it was just high and mighty. and a company that makes money and employs people and creates wealth doesn't have -- the it's not incumbent upon them to be somehow al truist. >> they're going to cut some r&d because it is wasted. allergan spends a billion dollars a year on r&d. about 80% is unproductive. this is not a company that has developed a lot of drugs the. it's just not. it is taking botox, which they acquired from another company.

doctors used it off label. all of a sudden they were getting rid of wrinkles they got fda approval for getting rid of wrinkles in your brow. that is very cost-effective r&d. the drug discovery r&d is not being done effectively at big pharmaceutical companies. >> let me see you look surprised. a little bit. those eyelashes aren't real. >> they're 100%. >> we have to snip in a quick break. one other question. you had a very good may. you know where i'm going with this. it came at the bitter end of the month. it came at the end when you and valeant upped the bid literally in the late afternoon of may 30th. allergan went up 5%. was that tactictal?

>> i met with thursday with the shareholders of valeant. we like the deal. we believe the cost synergies. make it easy for us. if you can get it to $180 a share. if you get the value of the deal today to $180 a share, we will support the transaction. one of the concerns is you never know what the other side is going to do when you want to be proactive. i said, let's get to this $180 a share and i think we can get it done. i met with 40 arbs. it was probably over half the shares in the room. they agreed to raise their bid. did i do it to have a good month? no. our investors don't pay us paved on -- >> i know. can you not cut the r&d with a needle stuck in your forehead.

>> it doesn't hurt. you could use some of these products, i think. >> i want it in a craft beer. >> we're going to continue this conversation. joining us next, class is in session for harvard university professor michael porter. why the phrma industry needs to evolve to survive. squawks box will be right back. e starts at 6:30 a.m. - on the nose. but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour. (announcer) at scottrade, we share your passion for trading. that's why we've built powerful technology to alert you to your next opportunity. because at scottrade, our passion is to power yours.

. welcome back. nittite mike wave for analog devices. kind of noticing. >> hittite, i think of ancient. >> did you handle any snakes over the weekend? >> no, not this weekend. our next guest is one of the foremost experts on competitiveness and widely considered to be the father of modern strategy. joining us to get his opinion on valeant is michael porter, professor on the harvard business school. our guest host is bill ackman. we should point out not only did you focus competitiveness, but you have been following what's happening in health care the

last 10 years or so. you're on the board of merry mack? >> i am. >> let's talk from your perspective what is happening? >> becky, first of all, it's great to the see you. what's going on here is sort of the shakespeareian drama playing itself out. they had a model. they had a playbook. very high r&d spending. focused mostly on europe and america because that's where the market was for what they did. what happened is about 10 or 15 years ago this model started breaking down. their ability to find new drugs to replace their pipelines started going down. >> why? >> it just got harder. >> the low hanging fruit was gone?

>> the old model was chemical screening. you tested every chemical. it was like monkeys the a typewriter trying to show something that actually showed results. the drug development now is not happening in big phrma. it's happening in universities, small biotechs that have the best in cutting edge science. yet big phrma has been struggling to evolve away from this very successful model. there's almost this moral fervor. we have to spend mass amounts on r&d. guess, what the new r&d models involve much lower spending. it's much more efficient. you outsource it. aller fan and valeant is in this battle between the old perspective and the new perspective. >> let me ask you. you're a friend of "squawk box". you've been on a lot. but you are hear because bill ackman is here today.

>> yes. >> i'm hearing it's not really bad because this is a changing model. should we be concerned from a history societal perspective? we don't have drug development like we used to. >> what's happening is there's a whole bunch of companies out there, including one i'm on the board of, merrimack. lots of progress being made. >> it's just done in a different way. it doesn't require billion dollar r&d budgets. i think innovation is alive and well. the best people don't want to work for big phrma. they want to stay close to the universities. universities are doing clingal trials. >> private sector helping enough? is this one part that actually might make sense? i think the government needs to make sure there is a good fundamental science. >> are they there right now?

>> shoe always debate whether they should be spending more. they are finding a new business model out of these drug development efforts. i was recently down at vanderbilt looking at them the doing clinical trials so they can license out for higher price. >> don't you think it might be quantum too? when we sequence the entire genome and we thought designing a key to go into a lock we thought it was going to be easy. you look at side effect profiles. it may work here. >> each one has a different lock. >> and there will be a folden age and it will be a quantum move. >> it's happening. >> it will be small biotech, university. >> and new drug development models i am seeing with my own eyes. this company has five products in human trials right now spending $100 million a year

burn rate. amazing productivity. >> you studied valeant's business model. in particular the numbers and some of the contentions from others who have said, look, there's just no true organic growth. if you back out the cost of these acquisitions and you don't consider them one-time costs, rather, that it's problematic. >> if you piece it together, i'm not nearly an expert as bill is, but the best i can tell valeant has significant organic growth in many different countries. they're also introducing tons and tons of new drugs the. they do it in a very low cost way. the other thing they have done, you know where the phrma drug market in the world is no longer in europe or america. it's in the rest of the world. valeant figured that out. they are very well established in the high growth markets. it's not just branded rx drugs

anymore. it's generic drugs that you brand, which work very well in developing cups. it's taking prescription drugs and moving them from consumer to over-the-counter. >> and lower tax rate. >> 3% in canada after they did it. >> in the top 50 drugs, what are t theones developed by big phrma? >> four. >> great science, new innovation, new approaches. and allergan is a good, solid company. but it could just be so much better. it could be so much more cost-effective. there's a tremendous strategic fit between valeant and allergan. and the amazing synergy opportunities here. >> you two are friends. we talked about that. is there a relationship between you two financially? >> michael porter is on our advisory board.

he was a professor at my harvard business school and investor in my fund. >> have they been granted yet? >> no. >> after the show? >> i'm responsible for all the success. >> this is your way of saying, see, i told you so. >> andrew's point, let's just talk about acquisition and these charges. assume for a moment a company is making acquisitions where they can lower the cost dramatically. let's take it as an assumption. that's been the case for valeant. verifiable case that pretty much every acquisition they have done they have high return for investors. every time they buy a company, the day they acquire it they let go a certain number of employees at valeant and the number they acquire. option vesting, severance and the other costs. the more acquisitions they do,

the more quickly they do the them, the bigger charges but the more value at the company. >> if they are creating value for the corporation, the gap accounting is not a way to think about it. >> michael, thank you so much for coming in. >> my pleasure. >> coming up, senator rob portman.

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woeub back to "squawk box". we want to look at futures. dow opens up slightly higher. two points. nasdaq close to a point and a half. s&p 500 looking down a point and a quarter off. making headlines this morning, shares of apple, they do begin trading at a new swift adjusted price today. watch that. the stock officially split 7 for 1 after the close on friday, cutting the price to $92.20 making it more affordable for some. a class-action suit has been filed against 13 different stock exchanges. a report that the suit alleges high frequency trade with profit at the expense of savers. the exchange discriminated by selling advanced access to

market data using private feeds and co-location services. hershey is suing a colorado maker of marijuana edibles. the ganja joy bars too closely resemble almond joy. >> i'm on hershey's side and i haven't even seen it. and they are knock-offs off other hershey candies. maybe the kiss has a little extra kiss in them. >> merck is announcing a merger of idenix. a great stock to watch. $7. it's indicated to open much higher. i don't know what that -- i don't know why that -- that's halted. i don't think that's the price. because i've got a bid of $20 on

this stock right now. merck values the inch at $3.85 billion. >> wow. >> so the market cap was a billion. >> there may be some debt. >> does this prove your point today? >> i'll have a chance to get to it. >> r&a and d&a. promising drugs to treat hepatitis c, which is something merck is already working on. it will help in terms of their research efforts there. $24.50 a share cash. let me say that again. $24.50 a share. closed at 7. so merck can't do it. >> look, the point here is big phrma, in order to develop drugs, has to make acquisitions

of entrepreneurial companies. >> idenix. thank you, merck. >> tyson foods, that deal we have been talking about, looks like it may be finalized at this point. headlines just coming through. tyson foods submitted that unilaterally binding bid. it's in excess of $300 million in annual synergies expected from their acquiring all outstanding shares of hillshire brands for $63 a share, well above where that bidding process started. it went from 50, went to 55. final bid 63 # from all the companies that were competing. when we return, bill ackman's other bets. getting better care for our veterans. senator rob portman is in washington. e

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senate finance committee will hold hearings this summer. senator rob portman budget, finance, homeland security and energy committees. great to see you today. >> thanks for having me on. >> the great state of ohio. >> absolutely. we had the mayor on.

my friend that i went to school with, it's his son. we are getting old, senator. you have that hair and everything, and it's very distinguished. we were talking to bill ackman about valeant. one of the reasons they are able to make a rich bid is because of the tax rate. pfizer wanted to move and take a billion dollars of tax revenue to the uk because of the tax rate. here we sit on both sides of the aisle while we are obviously losing competitiveness. it would help job creation and everything else. is that what we're talking about? corporate tax reform with you? >> absolutely. rome is burning. it's urgent. a lot of stuff you're talking about is tax driven. pfizer companies, smaller than it is. changes the the domicile to island or wherever. it's about losing out on acquisitions. you were talking about american companies competing for

acquisitions. a company in europe or asia can step in and say, hey, i'll pay a premium. we are not just losing companies in headquarters, we are shrinking american businesses. >> what was that group? >> us perm. >> all of these tax havens were these nasty u.s. corporations are trying to do avoidance of taxation. all it really was, other countries, all of which have lower tax rates than us. and they are being branded as tax havens. i don't know if you saw the tim cook and one of the ceos parading out. >> i said, guys, it's not their fault. >> biggest taxpayer in the country. apple pays more taxes than anyone else. they were being paraded as

evaders. the same senators that wrote the legislation that allows them to do it were there acting high and mighty. >> we did a little analysis before that hearing and talked about this at the hearing. samsung, probably their biggest competitor, pays a lower corporate tax rate. and they can move their money around where they need it. it's not just we have the highest tax rate. we have a worldwide system that makes us less competitive. look, we can continue to complain about it or do something about it. we have to lower the rate and change the international system. >> we have elections every two years. so the wedge issue is going to be minimum wage. how many jobs will be created if the president wins on the minimum wage versus how many jobs will be created if we were to do something with tax reform? >> tax reform is all about the workers. studies show about 75% will go to wages and salary increases. minimum wages, the economic

analysis is consistent, including the congressional budget office. they say they are going to lose jobs, a half million jobs, they say. others say more. look, there's a way to get the economy moving. >> i don't just have knee-jerk reactions. this the guy volunteered. he went over to fight their -- do you have a problem with the president bringing this guy back? >> i have a problem with the way he did it. it's a pattern now. the president going around congress. if he had followed the notification process he would have had to provide a detailed skwrufrgz for why he released the guys out of guantanamo. the negative would have been reaction and he would have re-thought it. >> bush did it many more times than president obama. what is it, a signature? and he started, the president, as i'm above the law. that's been going on for a while with executive power. >> the president has taken it to

a new level. obama care, 23 changes where he has gone around congress. the supreme court will decide a case about him going around congress on the nlrb. so it's kind of a pattern, joe. it is him simply saying i have a pen, i'm going to go around and elect representatives. >> there are times when i'm not sure whether it is. i'm not saying that's a bad thing either. but ted cruz winning all the straw polls down there. i don't know whether you can extrapolate anything. is he electable by the entire country? >> i don't know. look, that's so long from now. we have to get through 2014 first. i think republicans are not just electable but i think they will win the majority. >> we have run moderates before. president dole was quite a president. and president mccain and president romney. is that the way we should go? >> the way we should go is to

get somebody not just through a primary but a general election. in terms of national elections the republican party needs to change your approach. we need to talk to the people affected by these. you have high rates of poverty. relatively high unemployment. we have more people out of the workforce than we have had since the 1970s. we have to say, look, we've got a better way. and if we do that and explain it and how it helps folks at home and their kids to get a job, i think the republicans win. if we don't do that, it's tough to be in the national party and win. >> i'm trying to help you look moderate and reasonable, which i can do from time to time. anyway, good to see you. >> thanks, joe. do you know, senator, someone used your chicken imitation the on a competing network. they didn't ask us for us either. >> you ought to get a royalty for that. >> so should you too. that humanized you.

if you do ever decide you want to contribute in an even greater way than you already are, you have that going for you. >> the chicken party is the way to go, right? >> we have talked about all the politicians being politicians being chicken at times. >> as we head to break, hillshire brands. tyson submitted a binding offer. it outbids pilgrim's pride. you can see right now that stock is responding. it's trading at $62. much more from our special guest host of pershing square capital management. "squawk box" will be right back. ♪

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let's get back to our guest host, bill ackman, pershing capital square management, founder and ceo. this is an exclusive. we have music and everything for you. let's get back to the day the deal was done. you may need andrew to argue your point. here's the way i see it. you're a company. you happen to be a hedge fund. if one says i'm looking to aller

january. why not band together to acquire this company because it is undervalued, that wouldn't raise many eyebrows. when you do it because i guess you invest in other companies separately, it looks like front running, like you went in with the knowledge that valant makes the bid for allergan. you're able to buy from unsuspecting shareholders that don't know about the takeover. so it looks like you have material nonpublic information to immediately have a 30-point once the deal is announced. why is that not the case? >> well, first of all, every time a shareholder activist takes a stake in the company, we have material not public company. canadian pacific, greatest railroad ceo of all time. we bought 14% of the company and announced him as ceo. >> you knew you were doing all of this? >> we bought 9.8% of air products. we were proposing a change in management of the company. so when an investor is allowed to trade on their own

information and allowed to trade on information he or she receives as long as he's not violating a share. if we teamed up with them, and put up the capital to buy a large stake in the company. we formed a partnership to do that. one of the ways -- everyone, as far as i can tell understands this is legal. if you go to the sec's own website. let me just say the following. i think what's more interesting, is this good for america or not? if you look at this transaction, clearly 100% of valeant shareholders have benefited by this deal. valeant becomes a lot more valuable. 93% of shareholders didn't share with us. they two from 116 to 167. huge beneficiaries. the question is what about the 9.7% who sold to us who didn't

know what our plans were. everyone got a better economic outcome. the only people who didn't get the full benefit were short-term investors who sold to increase the stock price who in turn could have bought it back the day after. shoe permit investors to trade on their own information and information from a source that did not file a duty. >> let me ask you this. for the credibility of the markets. >> okay. >> now we're going macro. >> sure. >> people, retail investors, other institutions look at this and say this doesn't feel right. it doesn't feel right that one guy who is a billionaire and has billions of dollars is able to attach himself down to this other thing. clearly legally getting inside information. and i'm just saying from a policy perspective, the optics. people say there's something

wrong here. >> the analysis is who is being helped and who is being harmed. who is being helped, 100% of valeant shareholders. >> without a doubt. >> just like with every other investment, the cost is you're selling to someone -- when buying stake in a company, they knew hunter agreed to be ceo. but if we weren't able to buy a stake we haven't have done it. if you think about shareholder activists, they buy large minority stakes. 6%, 8%, 10% of a company. they work hard. but the benefit is to all the shareholders. look at carl icahn 2.0 versus 1.0. he was a raider in the '80s. whenever he did something he did it for his own benefit. today he buys a stake in family dollar. didn't the people who sold to carl, the 9.7%, wouldn't they have preferred to know he is the buyer because the stock is up

10%. >> have you had dinner with him? >> i have had dinner with him. >> recently? >> you guys got together for lunch? >> you're friends again? >> we're friends. >> it's business. >> carl is smart, charming, great record. we happen to be on the wrong side. >> do you feel like you represent now, if you're a shareholder of allergan, whose side are you on? shouldn't allergan think he is on my side because he owns part of my stock or you did this whole fixed deal with them, now you have every incentive to buy it as cheap as possible. >> a week ago friday we got valeant to raise their offer to $180 a share. $72 in cash from $1.48. .83 shares. we got them to do that by going to them after talking to the largest shareholders of allergan.

if you get $180 a share, we will sign on to this transaction. make it easy for us. get us the price. in order to get to $180 a share, we agreed to take $20 a share less than every other shareholder. that's unprecedented. $6 million less than we took. to get the deal done, we said, fine, give it to the other shareholders. by the way, we will take 100% stock in valeant. i think it's unprecedented. for all the time about the business model of valeant, which are completely self-interested my allergan management, we said we're prepared to take 100% stock and combine the companies. there's no greater endorsement. the only way we make up the $20 is if it goes to 180. >> what is the next to read about herballife? >> i think the government will

start arresting people. >> don't sugar coat it. is there anything bad that can happen? >> we have a website. we pro filed the top 50. they are committing mail fraud, wire fraud. why is the fbi launching a criminal investigation of the company. i would go after the top distributors first. and then i turn on the company in exchange for leniency. >> you have spent, as has the company, lots of money in lobbying in washington on behalf of your side of this. and they have spent money on their side. >> they spent about 10, yes. >> public policy, how should we feel about that? an investor lobbying in truth to get something to happen by the regulators which then impacts

the stock. >> i don't think a regulator here is going to step in. here's an interesting point. we went public in december 2012 about herbal life. the fdc, it was on their radar screen just to summarize. after 15 months they launched a formal investigation. >> can you stay? >> absolutely. >> we want to finish this 245u9. bill is going to stick around. and the deputy chief. markets and jobs taught. we told you about tyson raising the bid for hillshire. we have more on the conclusion to that food fight. plus, mr. ackman will continue with us. spokesperson: the volkswagen passat is heads above the competition,

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in over 700 cities worldwide, products and services that make a citi client anywhere a citi client everywhere. are we still on for tomorrow? tomorrow. tomorrow is full of promise. we can come back tomorrrow. and we promise to keep it that way. csx. how tomorrow moves. what a day. can't wait til tomorrow. hammer that in. nice. wrench? what? aflac! so this is who you brought to help us out? oh yeah, he's the best. he doesn't look like he's seen a tool in his life. oh, he doesn't know anything about tools. aflac-ac-ac-ac-ac-ac-ac! but when i broke my arm, he lent a hand. he paid my claim in just four days. four days? wow!

find out how fast aflac can pay you at aflac.com. better. pimlico's cio. what he is expecting this week after friday's jobs report. world cup craze set to hit brazil. is the company prepared for a huge influx of fans. why some say this year's tournament could be a disaster. >> plus, the bad jobs lie. new data about where jobs are being created and why it is not low wage industry as we expect. the final hour of "squawk box"

begins right now. welcome back to "squawk box". good morning. i'm andrew ross sorkin. joe kernen is here. becky quick is here. merck is buying idenix for $3.9 billion. $24.50 in cash. it will expand their portfolio in hepatitis c products. >> up 235%. >> that's remarkable. as bill was saying, this potentially making the point for him about the acquisitions of good ideas. tyson foods outbidding pilgrim's pride in the battle for hillshire. $63 a share in cash. roughly 70% premium to

hillshire's price before all that bidding began. and an lag devices is buying hittite. >> i looked it up. it's in genesis. one of the 12 tribes. >> did you take latin? >> i did not. it's 29% premium over friday's close. part of a wave of consolidation. >> mesopotamia. the pershing square capital management ceo. we cut you off in the middle of a thought. do you want to finish that first? >> what has happened since the beginning of the year, the fdc launched a formal investigation. why is that significant? they had 15 months to watch the investigation. for them to launch a formal investigation, again, with a short seller, with all the profile and everything else,

means to me it requires a vote of the commissioners. you need a majority. so that's number one. they have launched criminal investigations. through the press disclosed things. the canadian competition bureau. if i were the government, the easiest points of access, when you go after a criminal enterprise you go after the weaker links in the chain. they go after the analyst before the ceo. >> so you think this is not just the top distributors. this goes all the way down. >> no question. the company knows exactly what their distributors are doing. the top 50 are fed every year. thief spend $4 million on a

boondoggle and pay mark hughes bonuses. you see how they fraudulently promoted the herbal life. >> i remember flying over that building. it's been 0 years. pyramid schemes normally don't stay around 30 years. >> you have to be good. it almost went away when the founder dies. a >> why does he die if -- >> drug overdose and alcohol. there are a lot of people in the world. they have to replace 2 million or 3 million distributors every year. 90% quit rates.

>> where is your bet right now? >> the biggest bet we have had in herbal life since the beginning of time mostly in the form of puts. it's been the same the last five or six months. if it disappeared tomorrow we would make $2 billion. it's notionally larger. how quickly will the government act? what will happen? >> where are you at this point? >> we have lost money. we shorted the stock 45 to 50. today it's at 64. i'll point one other thing out. after these investigations were launched, herbal life continued to buy back stock at the fastest pace i have seen. a billion in stock. the buyback program ends june 30th. so the stock went to 49.

>> the market cap is 6.3 billion. >> the support is almost done. june 30th. it's been a big supporting factor for the stock price. it is a billion six not available for victims. they are sending money out to shareholders while under investigation. >> is this one of the things you talked about with carl icahn? >> sure. >> is there a chance you could ever team up together? he said he likes your strategy. >> i like carl. we could team up together. i would love to find him a way out of herbal life. if he could get out now he would have a very nice -- >> does he agree with you? >> i can't comment on carl and herbal life. i think it would be great for carl to sell. i think it would be fantastic. >> he said awful things about you. you've said awful things about

him. >> it's business. >> is it really just business? >> again, i think carl and i i'm very protective of my investors. we had a transaction. i believe he owed my investors money. he didn't. court proved i was at least correct. but you know what, it's time to move on. ultimately i decided -- we had a year of sort of hating each other. he was very sweet to me on your very network. i called the guy up. we have a lot more in common in terms of -- as he said, it is a common enemy. there is a movement to shut down shareholder activism. the king is marty lipton. shareholder active i. is not short-termism. >> 1980. founded 34 years ago. he died at the age of 4 in a four-day drinking binge in combination with painkillers.

>> have you talked about any potential deals? >> no. >> thank you so much for coming in. >> thanks for having me. >> are you going to grow a beard? >> this latisse thing, if you need a little extra hair. >> my ears are clean as a whistle. >> can you speak to this. a lot of male viewers. will it be for hair? i know a guy who used it off label. >> where did he grow the hair? >> i walked in the room. i said, oh, my goodness. >> we have high-def cameras today. can you see the tag? someone said you could see the tag in. >> no. i think you hid it well. >> but the lights are going to melt the glue. >> let's talk markets right now. joining us is deputy chief

investment officer at pimco. long-term credit firm out grown by 1.2%. let me ask you this. people thought of pimco as being a bond house. but when you're looking and telling people where to invest, what are you telling them right now? >> well, we're telling them basically that, becky, the private sector is improving and low inflation is very accomodative. mario draghi's movement was an all in-in moment. pimco has been doing that. we have been outperforming this year and the last three and five years. >> the huge bull market we have seen for bonds, is that over do you think? >> no. we don't think it is over. bonds are a good place to be. the credit funds are yielding 4.5%.

bill has been very vocal about the new neutral. we see a zero percent real funds rate the next three or four years. that's 2% nominal. in that world if you can earn 4.5% in credit, that's a good return for investors. that's an equity-like return with similar volatility or a third the volatility of stocks. so we actually like bonds. >> where would you tell someone? i know it's different for every age and risk perspective. in the past it's been 80/20, 70/30. >> for someone like myself, who is 40 i would like to be 60% bonds, 40% equities. a lot of it depends on the economic cycle. >> that seems high to me for someone who is 44 years old. >> i'll tell you what, i think

tax rates are going up. owning bonds are not a bad place to be. >> municipal bonds that aren't taxed? >> yeah. >> you said central banks are the ones controlling the environment right now. it's something we heard from mark grant as well. he talked an awful lot and said he doesn't think you are going to be seeing higher bond rates in the united states for some time to come, well beyond 2015 as most economists expect. what do you think? >> that's kind of our view too. one side you have a healing private sector. look at what's happening, the employment market. you have 7 million people working part-time who want a full time job. 37% of the people unemployed today are unemployed for more than 27 weeks. and basically wage inflation is benign. it will keep the fed on hold and keep central banks accomodative

for much longer, which should keep interest rates low for quite some time. >> you have 56 analysts looking for stock picks around the globe. you have some of the best picks you would like to share with with us today. let's talk about some of those, mark, starting with targa resource stpwhrs sus resources. >> sure, becky. we have call it a game changer. energy is growing 8% across the country. most, like oil, decline. we are focused on a handful that are delivering 15% growth. targa is midstream which gathers processes and fractionates. this is a fantastic company to own. >> usg is building materials. but housing could turn and that could help the stock. >> becky, we are transitioning from home building to what we call a very strong face for

remodel. usg is raising prices 10% a year. they are seeing 9% volume growth. how many companies in america are raising prices double digits and seeing double tkeupblg the its volume growth. it's unique situation. we think that company will do well. >> we have shown al rosa, delta air lines. we will have to have you back to talk about those. >> thank you, becky. >> ready or not, here comes the world cup. brazil under intense scrutiny as national teams and a half million fans getting ready for kickoff. we'll discuss all of that when we come back. became big busin? ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace

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welcome back to "squawk box". mcdonald the's rose 0.9% in may, better than the 0.4 increase that some had been expecting. >> they were expected to decline but only 0.3%. >> this was always going to be a big week for soccer but not the reasons you think.

michelle caruso-cabrera joins us with more on the scandal rocking the world cup as it gets ready to begin on thursday. >> can you scream goal? >> i worked at univision with that guy. >> they only do it if someone scores a goal. will it happen in the world cup? >> will there be goals? i think so. this is exciting. the game is tied 0-0. my favorite line from the simpson's. a huge scandal involving the organizing committee for soccer fifa. just below gambling in cast blanca, massive allegations of bribery to give qatar the world cup in 2022. how many people in the world surprised by this is absolutely vero. what makes it so compelling is somebody clearly has a vendetta

out because for two weeks in a row they have leaked incredible documentation to "the sunday times". qatar has come out to the bbc and vehemently denies. fifa says they have 100% currently being conducted by the fifa's independent. a lot of them put out statements. but they say what they are supposed to say, right? >> i haven't been following closely enough. qatar paid off fifa? >> there's a middleman who arranged for meetings between the key voters and the organizing committee or organizers of qatar who made big payouts to get the world cup in qatar. >> qatar will spend the money and make sure they are ready for the world company when it gets there. >> yeah. it may not et get there.

they had to move to winter because it's so hot they can't hold it when it's supposed to be held. brazil gets under way thursday. most of the infrastructure isn't done. half of the stadiums are barely completed. it's a real mess. and the whole rationale for holding these big events is it's good for the economy and for the people. we had the chance to sit down with two key brazilian ceos. this is the protest that started yesterday. the unions are protesting. there were reports of tear gas in sao paulo today. what the world cup will do for the brazilian economy. >> it is causing more uncertainties and add to get weakness of the brazilian. >> the worrell cup is adding to the weakness of the brazilian

economy? >> yes. >> why? >> here is the ceo of the big travel company backed by the carlyle group. >> people think the airports will be a mess. and the end of the day the airports will be empty. in defense he was saying these big games and stuff, that's when they will be empty. not nearly the massive disruption of travel. we will wait to see what happens with fifa. michelle, thank you very much. when we return, oil and gas. getting oil it on of the ground and refining it. names both upstream and downstream. later, forbes calls them one of the best small companies. from pickles and hot peppers. p and g foods can be found in many cabinets across the country. the ceo about small business success. "squawk box" will be right back.

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investing in oil and gas companies is all about the stream. how can you take advantage of upstream flows and downstream? sectornomics. >> andrew, the two best performing sectors in the s&p so far have been considered more

defensive. less sensitive to the ups and downs of the economy. utilities and health care. but number three, anythingly enough, is energy. it's up 8%. it outpaces the rest of the overall market. interestingly enough, for those energy investors it's a fun place to play. we talk oil and gas are split into more specific areas of expertise. one of them is refining and sale of finished products like gasoline. it is referred to as downstream. the ones that get stuff to the consumers. those stocks are 5% for refiners. phillip 66, a company that was spun off from conoco phillips. that's 7% upside. marathon oil is another one. price target of 43 bucks a

share. maybe 15% upside if of course the analysts are right. and valero has a target price per share of 63 bucks. that's a 15% potential upside for that stock. let's cap it off with another one. at least on the west coast that people are familiar w.tesorop. 20% up side. on the energy side, that's the down side. stay tuned all day. we explore other parts of the energy sector in sectornomics, including a look at the upstream companies. they get it out of the ground. exploration and production. back over to you guys. >> dom, thank you very much. when we come back on "squawk box", the bad jobs lie. coming up with data showing most job growth is in industries with the highest year-over-year wage gains. we're going to debate that next.

joe takes some issue with that. as we head to break, take a look at u.s. equity futures. they're essentially flat.

welcome back to "squawk box". in the headlines, an active morning for takeover deals and potential deals. idenix is being bought by merck for $24.50 per share in cash or $3.85 billion. that is a huge, huge premium. 236%. by the way, that stock up in the premarket trading. another deal announced this morning, chipmaker analog devices buying hittite microwave. chips that are used in radiofrequency applications. and tyson is submitting a binding offer of $63 per share for hillshire. pilgrim's pride dropped the out

of bidding. they put out a statement in the last hour. tyson's offer is contingent on its own deal with pinnacle foods. >> eit's from genesis. hittite. >> i wasn't around during that period, so i don't remember. >> but you have heard of the bible. >> high frequency traders profited at the expense of savers. the case charges that the exchanges discriminated against some investors by selling advanced access to market data using private feeds and co-location services. thomas farley will be joining us a little on "squawk on the street" in the next hour. a little controversy about jobs and where they are being created. steve, we have been going back and forth a little bit all

morning. >> i thought it was more back than forth from what i can here. >> did you come up with the title "when jobs lie"? >> yeah. >> why call it a lie when there are so many nuances. that's annoying. >> that's not what i'm here to say. we don't necessarily talk about that. i came up with -- never mind what i came up with. a career in cable is a short-lived thing. you sent me a note on saturday. >> the consensus has been it's all low wage jobs. friday afternoon, wells fargo, sarah house sent me an interesting graphic. i asked her to go a little further with it. the story -- we use this tag internally. we say a lot of things internally. there's a lot more mix.

good earnings growth the past year. there's been some strong job. you can see natural resource, mining, transportation and warehouses have been some of the places where. places where we have had strong earnings growth and strong job growth. and then you look at the other side. dow have strong job growth as well in places where there's professional bids and services also has strong earnings growth right there. places like retail. places like leisure and hospitality. my point and my point all along, becky, is it's a more mixed picture than the the monday though lithic thing you keep hearing from sources, which is it's all just low wages. >> most of that has been leisure and hospitality. >> yeah. >> i'm only seeing this information for the first time. it strikes me this is only looking at average hourly earnings. we have said manufacturing jobs tend to come, some of them, with good benefits that come

alongside. does the picture change -- >> if you include benefits in. >> yeah. >> the picture when it comes to benefits -- >> we're talking about the shareholder revolution. >> yeah. but that's in there. >> it's been since the recession. what sarah house my read of the data says it may be changing. we may be getting more of a mix here. if that's true, the important thing is you might be getting a greater year over year change in hourly changes. the mix ends up on the higher end. and i have one more chart to show you. i have divided it into thirds. you have pretty good distribution. there's 11 subsets so it's hard to do it. to be fair, i did 4-4-3 in the middle.

800,000 on the top. 600,000. >> if you have that next screen, the full skroepb that i put up. the bottom is 880. the middle third is 656. and then the top is 859. my point is it's a little more balanced than this notion here. lawyers, accountants, if the economy was getting a little bit going you might see pickup in the support services. >> your bad lies -- what was it? bad jobs lie. jobs return. i don't know if we actually have the chart.

1.6 million net net fewer manufacturing jobs. >> right. >> 941,000 more guys at the drive-through. >> sure. >> was it possible to reproduce that chart? >> how do you respond to this thing here? more than 40% of the jobs the past year are low paying jobs, what about the other 60%? they don't say that in the article. and i don't know the answer to that based on how they calculated it. >> i just looked at the chart. i don't think they have the chart. you can scratch out basically the -- >> there it is. >> health care has been good. >> it's the start of the recession. it's probably worse than that. because the way to actually do the this, no offense to the journal; from the trough of jobs. february 2010.

>> reporters are losing their jobs but other parts of information are doing quite well. we make more money doing quite well. >> we spoke with drew. he said the thing that concerned him the most. he wasn't concerned about which jobs were coming in. >> any job is a good job he said. >> he said he was concerned about the temporary jobs. the increase in temporary jobs. and he worries that could be a much bigger sticking point. and the question remains if the affordable care act -- >> i think that's a legitimate question. and i think usually temporary jobs you see as a leading indicator. but you wonder now having gone to just in time production if not they go to employers go to just in time labor. because the pool of slack labor is so large they can draw temporary. i'm not sure that's the most

efficient way. you find out it's not the best way to go. >> on the internal memo i asked whether it was code for talking point from david plouffe. >> a wrote a six-paragraph response. i was actually out with my son at the time, for the record. >> i'm busting your stones. in the subject line i wanted to put bad lies. >> people who thought this was all manufactured fighting, now you know this is what we do for our weekend. >> on saturday i get this note accusing me of being a democratic operative. >> i got one too. i thought, oh, no. i. >> wish the first 20 notes i

wrote in my head i could send out to people. but the 21st was civil and directly in response to the data. looking at whether or not there's a quality change going on. you have a very, very slight increase in year over year wages. it's something going to be key. >> hittites were in ghost busters. >> and sigourney weaver? >> no. >> jews don't call it the old testament, in defense of andrew. >> we do old and new. you don't even consider ours? >> i have read both. better stories, i think. the literature. >> makes more better movies. >> we have to get on it of here. steve, thank you. from pickles to sauces, b&g is

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>> do you want to recuse yourself? we are talking summer grills. do you have a george foreman? >> no. >> hibachi? >> no. >> you're in this apartment. >> we don't even have a kitchen. room service.

you can leave early. >> thank you. good luck. >> president and ceo of b&g foods. >> hold on. do people cook their own food? >> i hope so. >> one of those hibachis you put on the fire escape, you don't even have that? >> no. >> fire thin? >> no. >> how is business? meat is expensive. >> luckily, we only sell one kind of meat. devilled ham. we don't sell the stuff you would barbecue. so that really doesn't impact us. grains and other commodities are slowly creeping down in price.

we are seeing very little price pressure. >> business is good for you? >> it is stable. >> ortega. emeril lagasse. spaghetti sauces and things like that. if you're from around here, b and g pickles and peppers. >> yeah. i see those all the time. >> you are in a business where -- why hasn't one of the big consolidatedors become available. >> big companies are spinning off smaller brands. we're an acquirer of brands under $100 million in sales usually. we look at bigger things, but we end up buying things under $100 million. cream of wheat, for example.

makes the decision to get rid of it. we're the acquirer of those kind of brands. >> pirates booty. you know this one, andrew. that became available. >> that was private equity selling that after they had built it up. we made a decision to start getting into the snack space. pirates is doing very well. we launched three new products, mac and cheese. all you have to say is pirate's booty and everybody knows what we're talking about. >> this whole tyson/hillshire -- >> fascinate to go watch. >> were you root for one other the other? >> it doesn't matter to us. i thought the acquisition on

pinnacle was interesting. they are kind of similar to us. >> your space, right? >> would you ever get together with a pinnacle? >> well, anything is possible. we're a public company. all we have to do is make the right offer. >> seems like a nice invitation, whoever is watching. >> have you ever been surprised at the increase in m&a activity? >> actually, no. growth is difficult in the food business. finance is ridiculously cheap. so in the context of i've got to grow my business somehow, i have to give my shareholders some action somehow, it's very easy to go out and do m and a at a very cheap financing cost. we just redid our bank libor plus 200, which means it has an interest rate under 2.5%. it is immaterial. it's easier to do it.

i advise you to look down the road and see if you're at a higher interest rates. >> what is your biggest brand? >> ortega. b and m is a $31 billion business. very regional. northeast business. >> you put in barbecue sauce that i have given you guys and onions. you can even improve. >> oh, yeah. >> i love them but they don't love me. >> it's a great product. our second is maple grove farm. we sell maple syrup. >> you mentioned something i had never heard of. liquid smoke? >> oh, yeah. i was advising someone who only has an oven and can't barbecue. you take some ribs. drizzle liquid smoke. hickory or applewood flavor. wrap it up and slow bake it. it will taste like you cooked it

on a barbecue. >> i just took notes from the chef. >> the brands we're looking to buy usually have very good distribution and margins. >> what do you do? >> we're looking for the synergies that come to bring it into our infrastructure. >> even delivery trucks, all that stuff? >> same warehouses, same trucks. same sales force. >> it doesn't sound like it's that hard. >> no, you're right. it's easy. that's what is wonderful. the execution isn't super wonderful. you're not betting on anything but what you know. by keeping 100 million in sales you can buy them at a reasonable margin. we did one in april. specialty brands. 25% ebitda margin.

we put it for 7.75 ebitda. we're valued at 13 timebitda. >> i don't think we knew about pirate's booty necessarily. >> i'm used to going on "mad money" and they don't like you to bring stuff. >> oh! >> nice comeback. >> we do, though. >> point taken. next time you get some pirate's booty. >> mac and cheese. >> we also came out with -- >> we're getting a booty call. >> fruity booty. this is why you like the business. you can have all sorts of fun with it. we have a pirate ship float in the thanksgiving day parade this year. >> you didn't have it last year? >> no.

we didn't own the business last year. >>. >> when we come back, monday morning strategy session with jim cramer, who never asks for anything like this. we'll talk deals, apple and much more right after the break.

let's get down to the new york stock exchange jim cramer joins us now. >> wow, hepc people have over paid. remember pharm aa set turned ou to be a good thing for gilliad. this is it. this is the killer pill p. i thought we already had the killer pill. i find this to be amazing. also a lot of stocks must be on that kind of bid. >> those are the -- we need a few days like that with this market. people are still so

unenthusiastic. couldn't agree more. these companies have been kicking around. if you look at the one the amerimerke bid. was can you do with a 4% cd versus a cd? at least the first year. jimmy you barbecue don't you? >> yeah. he's been on multiple times i guess he just wrote us off. >> no. he says when i go on. he says he doesn't get shaken down for pirate's booty. you don't accept things even a bag of pirate's booty? >> look at what he said to that? i foe that he is a banker by

background? he has some no growth areas. the fresh snack area has been great for him. all right jim. we'll tune in, in about six minutes. when we come back. talking rags to rich ares. >> broke to billionaires. including an entrepreneur who started out homeless in the streets of new york and is now living large in florida coming up. we route your order to up to 75 market centers to look for the best possible price, maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today.

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financial noise financial noise financial noise financial noise

welcome back. there are the ultimate rags to riches stories. >> look at these stats. the percentage of american households receiving inheritance has fallen. today's millionaires have made it themselves. we get millionaires and bi billionaires to revail their success. steve started out digging sewer ditches. we caught up with him and he still works 80 hours a week.

amazing guy. yeah and we are going to meet mark bell. he was born in the bronx. his high school guidance counselor told him he would be lucky to go to community college. he was once the owner of "penthouse". we toured his mansion in florida. now, my favorite guy, gino he grew up in new york. he was a homeless drug addict and cleaned himself up and moved to florida and started an oil company. he never forgets his roots. >> i ended up homeless for a year and a half in new york. who would think i would lucky enough to sit in one let alone have one. >> i raised it at 120 miles-an-hour.

i love covering the stuff. but my favorite part of this job is hearing the store yeses and hearing how these guys made it themselves. you know me. when i was 14 i was a "penthouse" guy not a "playboy" guy. >> i gave him your figures and he blew them off. he said those aren't real. >> he said half and half. i'm not sure where he is getting his data. most of today's wealthy. the vast majority are self made. not to say that you are stealing it from the people who don't have money. but what is great about these stories, these people tell you how they made it. >> you are doing a great service. and it is pure input but it is a great success too. >> and you have not pro pifiled

andrea yet. >> he's close. >> looking forward to that. got to get a grill. >> thank you. >> i think you have nice hair today. >> thank you, i like it too. >> make sure you join us tomorrow wasquawk on thstreet i next. ♪ i'm gonna knock you out >> good morning. we are live from the new york stock exchange. karl has his reigthis rainy day. futures are lower and the dow and nasdaq as well. the ten year note yield and what was the result? i don't know. 26 now. look at spain this morning 2.5. iran