good morning, everybody. i'm becky quick along with joe kernen and andrew ross sorkin. in iraq, islamic militants took control of another town yesterday. there have been reports of fighting south of baghdad. president obama telling congress that the united states is deploying up to 275 million personnel. they're going to be providing support and security for u.s. personnel in the embassy in baghdad. we will have more from michelle caruso cabrera on the ground. that is coming up in a few minutes. in another region of the world, russia cutting off gas supplies in ukraine after the two countries failed to agree on a payment. and then there are concerns about argentina. the country facing default if it does not repay $1.2 billion by june 30th. the u.s. supreme court ruling out an appealing against critters. u.s. equity futures at this

hour, if you take a look, you'll see right now they are indicated higher. they'll open up by about 32 points. plus, take a look at oil pries this morning. you'll see at least right now they're trading down slightly, down by about 42 cents. you're looking at wti trading above 106. right now, 106.48. on today's agenda, the may consumer housing starts coming up and the fomc begins a two-day policy meeting. andrew, over to you. >> thank you, becky. i feel whippinded. >> people that have not done this don't realize the feeling that you can have. >> where you're running and then you have to talk. >> really bad idea. and i will say 90 seconds ago, none of us were on set. >> i always move a little slow. >> it's frightening, too, because you have to key

breathing. >> it's a real panic. >> thanks for putting that out there. >> we were laughing so hard. anyway -- >> i was trying. i was trying to use the natural breaks. >> you can take your time coming back. relax. we'll continue that in just a second. let's get you caught up with some of the corporate news. general motors recalling 3 million more cars for ignition switch problems. gm saying the ignition can be jarred out of the run position. power brakes, power steering and the air bags could be affected. the engineer who designed those defective switches also designed the switches on the latest batch. he might be the right guy to do it. he knows the pit falls, obviously. knows what can go wrong and he'll make sure that doesn't happen. >> the good news, he was fired

after the earlier recall. here we are. >> no, no, he was responsible -- oh, i see. >> he was responsible for the problem on both vehicles. >> okay. i see. and these are recalled -- >> yeah. the guy from the first problem is behind the second problem. also with apple, they reached an out of court settlement in an ebook price fixing lawsuit. that claim and settlement still needs court approval. details have not been released as to what the terms of that settlement looks like. bob dudley making an announcement in london today that coincided with the arrival of the chinese premier for a three-day visit. let's now get to mcc with the latest situation in iraq. michelle caruso cabrera joins us

from the northern part of that country. there's probably a delay, michelle, so i'll just keep talking for a second. when i read it, it sounded to me like maybe some of these guys weren't just for the embassy, but might be providing some type of advisory logistical support if there are drone strikes or something. did i get that right or not? >> it's hard to tell. so the vast majority are for marines going to the embassy in baghdad and then to two consulates in the country, one where the oil production is and another consulate here in kurdistan in the northern party. but it did sound like there were support personnel advisory. hard to tell, joe. and, you happen, it's hard to make sense of it all in what we could call the fog of war here. let me give you some of the other headlines.

that is the first headline, up to 2735 troops are going to be deployed. the other headline is that nbc has confirmed that the u.s. and iran did discuss the situation in iraq and the margins of a meeting in vienna yesterday where the main event was supposed to away meeting about iran's nuclear program. now, they were quick to say the source said that they're not talking about military coordination in any way, but both the iranians and the u.s. are not happy with the sunni insurgency in the northwest of the country and they both find these two countries that are normally enemies on the same side of the issue in this particular case. there is fighting in bashir, which is south of kirkuk. the price of oil, hovering near highs, pulling back a little bit as we wait to see if any of the fighting gets further south where the vast majority of the production is. bill dudley, the ceo of bp was on earlier today. we're going to play that sound

bite in the next hour. we talked about production in the south. bottom line is, he said it hasn't been affected. our colleague, richard engle has gotten into pagd baghdad and he knows the city really well and he reports that the place is certainly empty. people have left. they're concerned about whether or not the militants are going to make it south. there's an intense amount of security. as we think about richard being in baghdad and the war that the united states fought there and the invasion, we put together some statistics since the war, the invasion and the subsequent occupation from march 2003 to december 2011. it's believed nearly 134,000 iraqis died. 4,487 u.s. soldiers were killed. the cost, $800 billion. but when you add in everything else, va costs that went along

with it, you're easily somewhere between $1 trillion to $3 trillion. so numbers that you think as you look at iraq right now and whether it's all of that effort, money, lives lost is just going to be a waste as we watch the country fall apart. back to you. >> all right. the more we think about it, though, you just wonder if it was ever really right for -- we think of it as it's only natural people want personal freedom and democracy and everything else. but you look at the hundreds and thousands of year old sectarian differences there and that's why we wonder if it was ever possible. that's why someone wrote a book and said biden has been wrong on every foreign policy decision in the last ten years, but maybe he was radio about splitting it

into three. and, you know, the boarders have changed so many times in the past couple of years, anyway, is it really that set in stone that there's no such thing as a kurdistan or a shiite area or a sunni area, michelle? >> well, it's interesting. when you look at the current boarders right now, they really stem from when this area sat in a room somewhere, looked at a map in europe and drew lines not relevant to the ethnicities that lived here, the languages spoken here. if a democracy had come along in a more wholistic way and if people had joined together in a more wholistic way, would you say a kurdistan? would you see a sunni country or a shiite country signed back during world war i in secret? so, yeah. by the way, in the papers here every day, the map that they

called the new iraq and the new iraq and the papers in kurdistan. >> all right, michelle, we're going to continue this discussion. joining us now, retired lieutenant jay garner, the interim administrator for post war iraq. in a nutshell, jay, is your take that we really can't help much here and that maybe iran has even a -- you know, a bigger interest in all of this and we should actually defer to iran on how to handle this? >> i think the only price we should support there is enough to support our people in the emp basy. the iranians cannot afford to have a sunni terrorist on their

bord border. what we should be doing is guaranteeing the survival of kurdistan. >> those are the people that i think the bush administration and cheney, when they said we're going to be greeted with flowers, those are the people who i think initially we were trying to unencumber saddam husain. did we not taken into account what the problems would be? the kurds have always been the most pro probably part of iran.

around 2004, we turned our back on the kurds and have not done anything to support them since then. it's a shame. >> that was part of the whole thing, and we didn't go into baghdad and we didn't finish -- and with the kurds, when you say fought with us, you meant on the same side and then we didn't provide the support after we left. >> they were our allies in 2003. >> so let me ask you kind of a political question. if the president had not removed all of our troops in 2011, there are going to be people that blame him for giving back all the gains that we made at great costs to our country.

and would you say that's a false narrative because it was never going to last? >> well, i think it's more than that. i think you go back to 2003. if we had set them up in a federal system, can kurds are already in a federal system and had a shia federal system and a suni federal system, i think he would have been ethnically comfortable. then we disbanded the army. it's impossible almost for us to stabilize a cup. then we turn our back on the kurds. around 2008 we turned our back on the sunnis. 2010 we supported maliki when we

knew he was pro iranian. 2011 we pulled out of there without a staff of forces, didn't leave an adequate force there to accomplish anything that we needed to accomplish to take care of the gains that we had made. 2014 we again supported malachite after we supported him for four years purse cute the sunnis and the kurds and support the iran i can't knows. this has been a long time building. in late 2013, early 2014, we saw the black flags flying and did nothing about it. so this has been coming for a long time. >> but lieutenant, is there anything we could do to set democracy in motion or is that not possible? >> yeah, i think there's a lot

you can do. >> we were molding elections for the iraqs, having a democratic government and a very poor americans. protective.they're modernized now because of all the weapons. >> jay, one of the things we worried about is a terrorist enclave, you know, that's why we went there in the first place. so are you telling me that iran, even though they still call us the great satan, they might prevent that from happening because it's in their own interests not to allow a terrorist haven to form in iraq? so we can let them make sure that there's not a terrorist training ground that would herd america to prevent that from happening? >> well, i don't see how the

iranians can allow a sunni terrorist organization to hold that part of iraq right on their border. i just don't see that the iranians will allow that to happen. and i certainly don't think that we should put any americans troops in there to try to defend malika or their government. since ran i can't knows have put in troops to iraq, and all that has done away with the myth that there could ever be a multi religious or multi ethnic iraq. so i think what we're seeing right now is the break-up of iraq. and what we need to do is make sure that part of iraq has great resources stay stable, stay safe and we should guarantee their production. >> can i just ask, do the kurds still feel that way? >> they're less pro american

than we used to be because we lied to them the last several years. we've lied to them, both administrations. >> shifting allegiance, the enemy of our enemy. we back both sides. it's like you need watering it down to keep everything straight. general, we appreciate it. thanks for your time. >> thank you. >> let's check on the markets this morning. take a look at the futures. you'll see they are indicated slightly higher. at this point, it looks like the dow futures are up by about 33 points above fair value. s&p up by 2 1/2. still looking at incredibly high oil prices to where we've been over the last couple of years. they're down about 49 cents

today for wti. 106.41 a barrel. we have that fed meeting that kicks off today to determine interest rates. we have had a press conference with the announcement that comes out tomorrow. and the dollar this morning looks like it is stronger against the euro trading at 1.3568. it's up against the yen, 101.98. gold prices with everything else that's happening are down by about $8. 1,266.90 an ounce. >> all right. so you know that hockey is over. and the reds are five games below .500. >> you watched it? >> i think i have caught the world cup -- >> oh, my gosh, i have been waiting for this day. it's finally like -- >> i've got a surprise. >> the guy hits the ball and you like it? >> i have a surprise especially for us because there is a match between the u.s. and ghana starting at 6:00 p.m. eastern time. i was messaging my associates here. if you didn't tune in from the beginning, you missed the first

goal of the match right away. then fast forward to the to the 81st minute of play when i was talking to dean with showing this and then he said oh, no, and i had it on delay. so i didn't know why he said oh, no. but ghana blasted the equalizer. what a goal it was. he kicked it to the right of the goalie. and then a very intense couple of minutes, which included a header. the first time a substitute has ever scored, it was the 86th minute. they added five minutes, soot last five minutes, between 90 minutes and 95 minutes was nail biting time. and actually, i was watching and my phone went off and i looked at it. it was from cbs sports and it said u.s. wins. and i still had four minutes. anyway, in what has been called the group of deaths for opponents -- >> i am so glad that you're into this now.

>> people said at the time when it was tie, don't blow it because it looks like ghana was going photo win for a while because you still get one point. now, yesterday, you only people

you know are the people that you saw at the safari enclave. here is my friend. remember i said i had a friend from ghana and you made fun of me. you didn't believe it. that's this morning. that is justice. >> he agreed to pose with you even after ghana loss lost? >> he gave me tons of grooe grief in 2010, tons of grief in 2006. i get my coffee there every morning. so we posed with the daily news to show you. that was this morning. not going to stop. that is proof of life. and just to show you that we, over time, our families have been together, but my daughter did a big report on ghana maus because of justice who told us all about the most democratic place -- that's justice' daughter. >> that's the project. >> yes. and you'll see where this is, andr andrew. you can go from new york city over here to ghana and there was accra. you go straight to where you have 20 people waiting on you and you've got the elephants

drinking water. but that is -- so, you see? >> i like it. good for pup. >> you see my my video? >> and the bike exchange they exchange gifts and everything else and she's a great basketball player and goes to a charter school and gets straight as. >> there you go. >> good. >> so there. >> what do you say when i told you i had my friend from ghana now. >> do you believe me now? >> you didn't believe me. you made a joke. you see, now you know. >> this is true. you're not outing me. proof of life. yes. next.up, coming up, this morning's executive edge, taking on robo callers, those annoying callers keep coming at dinner dinnertime. and cnbc is getting ready to roll out the disrupter list. we'll focus on the top ten coming up at 6:30 eastern time.

welcome back, everybody. right now, it's time for the executive edge. kidding, kidding. a new report today on the state of charitable giving. americans gave an estimate of $335 billion to charity last year. that was up 3% from 2012. there were signs of donations to institutions like universities, hospitals and the arts are very healthy. they've been driven by cash from wealthy ben factors. meantime, giving to church and social organizations, that is flat. the concern with this, guys, is it sounds like we are get intoog this wealth argument in the middle of charitable giving, too. >> that's what it is, though. i'm going to be boring here. it's an inequality and i always get tagged as being the -- >> or is it a story of declining church attendance? >> on the religious piece that could be. but i thought the larger take away was when you looked at

universities and hospitals which are getting the most money and the biggest dollars that that was coming from the high end, so what do you do about the middle piece? >> i think church giving and religious giving made up something like 31%. it was the only section that was down. the social services group were up, too, but up by less than the arts and some of the other university institutions and hospitals. a lot of wealthy donors stopped giving to universities and hospitals and the arts in particular after the crisis, the financial crisis back in 2008 because they wanted to make sure they were giving to social services to make sure they were helping care of the homeless and the hungry. so i read through the whole story, and it didn't have the breakdown of -- >> the overtone of the piece and the overtone of the numbers was trying to suggest -- >> again, i wanted to see all of the numbers. i wanted to his the breakdown from 2007 on. because they did make the point that some of the wealthy donors stopped giving to the arts and

other areas. i don't know if this is a one-year trend and if you looked at it over five or ten years how that would even out. but it doesn't surprise me to hear church giving is down because church attendance is down. >> the whole inequality thing that we always talk about, andrew, and the inequality of income, the most charitable people i know are some of the richest people. and they made it, most of them are self-made. then they've created enormous wealth and give so much away that would not be there. there would not be a langone medical center if it were not for langone. >> i agree. >> we have to admit we don't want the high end to accrue wealth rike that because they're incredibly philanthropic. it would be better if we took the low end and brought it up. otherwise, how could you do that? how can you cap income at $500,000 and pay 80% taxes on

anything above that? that is redistribution and it doesn't allow for wealth creation and it would be counterproductive to trying to help everyone rise, rise up. and that is why -- i was actually thinking about this last night, that you asked me how do i come up with this stuff? i think all day long about things to talk to you about. and i think you're thinking about your column or something. but i think you're thinking about on the one hand, you think about income equality and on the other, you think about like a 1%er or vacation or something. that's what i -- right? >> no, no, no. what was that place? >> that's darchbt argume differ argument. >> what is your argument? >> i say it's misframed so we need to lift the bottom half up. that's clear. and the middle class up. >> but to address a problem -- >> however, i think that people generally likely want the markets to be credible and fair. people want the system to feel

fair. and unfortunately when it comes to taxes and other things, people -- >> you don't think we have an aggressive tax system here? >> one thing i will say, guidguideys -- >> one piece that struck out in this, people who make $100,000 or less are giving major portions of their income back. >> much more opinion. >> 3.3% versus 2.5% for people who are in the middle. >> neither one of those is very high. >> neither one of those have very good, but the true philanthropy is -- >> i'd still rather have the million air -- >> 100,000 to a million, those people are less charitable than the people making -- >> i'd still rather have the millionaire giving 257% ksh. >> taxes, too. if someone who makes $2 million,

pays $1 million in taxes, i love that person. they're doing their part. but the million dollars is going further. i'm just telling you, it is. >> there is no question. >> so as many people that can get to that point is what we want to try to inspire, try to instill and try to make a fertile environment to do that. >> that part of it i will not disagree with you. >> when we come back, we'll take you through the disrupters 50 list unveiled. and a as we head to a break, take a loot yesterday's winners & losers. ♪ snoetsd ♪ ♪ iness, you can't settle for slow. that's why i always choose the fastest intern. the fastest printer.

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good morning. and welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. making headlines, a victory for tesla in new jersey. the state's assembly has passed a bill that would let the manufacturer of zero -- not just this one, but anyone with zero emissions vehicles, like tesla, skip dealershipes and sell cars directly to consumers. are you happy? >> yeah. >> in the spring, the state's motor vehicle commission ruled against tesla's direct sales

model and at the time, elon musk accused chris christie of cutting a back room deal with the auto dealer's lobby. yesterday we had rick perry on, the governor of texas. and he said he would cut a deal to get that manufacturing plant in texas. >> it sounded like it had to go through the legislature, it wasn't just up to him. >> yeah. that they would go around the dealership. ail my excess live in texas. that's why i live in ten ten. >> i thought you hang your hat in tennessee. >> right. but you've lived in texas. >> i was there for five years. >> how long were you in oklahoma? >> eight years, fourth grade through 11 1st grade. >> how long in indiana? >> i was born there, went to kidder garden there. i went to ohio -- i went to three states for kidnapped er gauard kindergarten. >> there's no way.

that added up to 70. >> i was born in indiana. six weeks later, we moved to ohio. >> that is why i took skating lesson from scott hamilton in bowling green, ohio. >> have you ever lived anywhere but skuldale? >> yeah, ithaca, new york. >> i don't mean seasonally living in scottsdale -- >> london snch. >> perfect. >> there you go. we are going to unveil the cnbc second annual disrupters 50 list, a look at the most innovative companies shaking up the status quo. coming from the west coast to tell us and unveil the top ten, good morning. >> good morning, andrew. from tending you to space to

tackling ibs, welcome to 2014 cnbc disrupter 50. this is our roundup of the private companies disrupting public giants. cnbc drew nominations from firms and investors from around the world. there was a range of criteria, including originality, whether they're creating a new market, the amount of capital raised and track record. numbers six through ten on the list, aero is so disruptive, its legal battle went all the way to the supreme court. medernis therapeutics is a disrupter with an entirely new approach to develop treatments for previously incurable diseases. >> and number 10 is uber. it has taxi drivers around the world protesting. it's raised $11.5 billion, the

most of any of offer disrupters at an $18 billion valuation. then over to numbers one through five. topping the list, space exploration technologies. spacex, raising nearly $250 million. it's not only wanting to send you to space, it's aiming to colonize mars. motif investors lookings at low cost investment portfolios for just a $10 commission. it koundz jpmorgan and goldman sachs among its backers. and pontiere technologies looks at solving the world's biggest problems including fighting credit card fraud,

combatting terrorism, prevents the spread of disease. for a full list, go to cnbc.com. we'll have more on the winning companies. coming up in the next hour of "squawk box," the founder and ceo of kaimetta. >> was there anything that really surprised you that was on the list this year? >> it's interesting how fas fast the pace of change is. 10 of the 50 from last year have become public or been acquired. >> wow. >> look at the trend. there's verizon mobile, cloud computing. these are forces impacting every sector, whether it's finance or health care. >> a huge number of them went public or were acquired.

were there others that flamed out? >> there were others. >> sniping health care and because it attracts, sort of analyses individual genes which would have helped create medicine. that was basically shout down by the fda. so it becomes of irrelevant because of the regulatory change. we have the ceo on towards the back half of the hour. >> and we'll find out, too. do you want to make a bet? >> it's difficult, but i'd say it's going to get shut down. >> colonizing mars? have you seen pictures of mars? >> i have seen pictures of mars. >> how long will it take to get there? >> that would be one hell of a backyard. >> you can move to afghanistan.

there's nothing there but mud and rocks. if you are pining for absolutely nothing, no, i'm not -- no, that's a dumb idea. whose idea was that? elon musk. >> i would pick venus. we don't know what's behind that atmosphere. i think it's lush, avenue tar -- >> i'm going to stick with yours. i like it here. when we come back, we'll focus on the markets ahead of the two-day fed meeting. and coming up at the top of the hour, dealing with the crisis in iraq. stewart holiday, the ambassador to the u.n. for special ambassador affairs will be our special guest. "squawk box" will be right back.

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welcome back to "squawk box." the fomc kicking off its two-day meeting. the decision will come tomorrow at 2:00 p.m. eastern time followed by a janet yellen conference. more economic data on the way. we've got may consumer pricing index and housing starts. both of those at 8:30 eastern time. on the earnings front, we've got adobe system out quarterly results on today's squawk planner. becky quick, back to you. >> andrew, thank you. a marginally positive start to the trading week despite tensions in iraq. investors will be focusing on that fed meeting set to begin today. jim russell, chief equity strategist at u.s. bank in cincinnati. gentlemen, welcome to both of you. jim, let's start off with you talking about what to expect from the fed meeting. do you think that things will look difference when we hear

from each of the fed officials about when they expect rates to start rising? >> yeah. good morning, becky. we think a couple of things are pending pb number one, they'll probably take their unemployment rate forecast for 2014 down a notch. we're down at 6-3. were clearly expect them to continue to taper another $10 billion per month down to 35 billion. we also think that they're going to adjust the growth forecast for 2014 given the first quarter that we saw earlier this year. so we think a couple of technical adjustments. but i do think that they're probably in no surprise mode. i think they want to be seen as maybe a source of stability at this meeting. >> michael, that's what they would like to have seen. we also have a press conference of what weir doing tomorrow. do you expect anything might happen? >> i don't think there's going to be any major surprises, but we will be taking attention to any incidental comments that

might affect when investors pekt expect the fed funds rates to start picking up. i think most people are speccing march of next year. if the employment numbers continue to improve and the gdp numbers improve meaningfully from a weak start this rt yeer, think we could be seeing perhaps earlier. >> michael, what do you expect in terms of the numbers overall? we have seen a decent year. it's not bad if the markets are able to match that for the second half of the year. >> i think so. and i think valuations right now, yes, they're trading at very close to record highs. but on the other hand, the corporate earnings underlying that are very strong and had very good reasons to expect strongly as we're beginning in the long-term durable goods cycle which i think can support the economy for a while. as the valuation we're looking at 15.5 to 16.5 times earnings.

>> and yet, we've been waiting and waiting and waiting for some sort of a correction. people are saying, look, you have to have a 10% pullback at some time -- the average construction occurs forever 18 months. but the fundamentals looks good. our objective this year is 20/30 on the southbound southbound. importantly, we think stocks perhaps will peak in the third quarter this year regarding the fed funds rate begins in earnest in the fourth quarter and could provide a little bit of a multiple headwind for the markets and markets participants. >> jim, it's interesting. you say you think the problem is going to come from the fed. we have all of these geopolitical tensions that have occurred. you think it's more likely that

the shock would come from the fomco the fed? >> we don't think it will be a shot. we think the departmebate will in earnest. we think that will rattle investors. we have new fed governors now with very strong opinions. we think that kind of debate perhaps will rattle investors a bit. we think the geopolitical events that are occurring now are basically manufacturing themselves in the oil price and we think the markets have crime a wall of worry through ukraine, braus this, as well. but i don't think anything is basic in. so we think there is an almost of the unknown. >> michael, would you be most concerned about the fed, too? >> i think the geopolitical is a bigger risk for the shot to the system that could cause a big down draft, perhaps 10% or more.

but if so, i think the underlying economy is strong enough to roll through that. we would be looking to buy on that dip. investors had been buying every time it goes down 5%, not giving the market a chance to go down more. so the fed, i think, is less of a risk right now. outside is probably more of a risk. >> michael, jim, thank you both for joining us today. >> thank you for being here. thank you. when we come back, could a quarter of all deals involve insider trading? we have that discussion. and as we head to a break, wti down about 60 cents, $106.30 a barrel. we'll be back in just a moment. r lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry, but you worry. what happens when your paychecks stop? because everyone has retirement questions. ameriprise created the exclusive confident retirement approach.

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which state will top them all. >> some states just don't get it. >> america's top states for business. on air and online, starts next tuesday on cnbc. welcome back to "squawk box." there's a new study out. it finds a quarter of all public company deals may actually involve some kind of insider trading. now the professors behind the report examined stock option movement to determine whether unusual activity took place in the 30 days before an announcement. as for legal enforcement, here's what's going on. the professors say the s.e.c. litigated 5% of the nearly 1900 deals included in their sample. i wrote a column about this. >> this is your column. >> this is my column today. and this is probably the most -- we know or we think we know that there's some form of leakage, and insider trading going on before transactions. but, we know it anecdotally and instinctively, perhaps, but this is probably the most exhaustive

study that's ever been done on this. >> you know about it because you're in the midst of all these deals. >> yes, i talk to people and you go, it's weird that you know that. >> right, right. >> but this study looked at deals from 1996, to 2012. which is the longest i've ever seen anybody try to do it. they looked at stock options in particular. it's probably the most detailed mathematically statistically significant study that's ever been done. they came to the conclusion just on the statistics that the sample they discovered literally would be 3 in a trillion like winning the lottery for them to be wrong. to claim that it was random. >> that it was just random. >> and it's remarkable. >> my question is how does -- >> 25% of the deals -- >> how does the s.e.c. decide which ones to go after? >> that's one of the things that actually came out in the study, which was they compared their own results with all of the litigation the s.e.c.'s pursued during that time period. and what you realize is the s.e.c.'s only going after small group of it. they mostly go after deals that

are huge. probably for head lines. >> or famous people. >> famous people. we talked about mickelson and whatnot. and clearly that's how they seem to approach it. for some reason they like to go after companies or deals where the buyer, if the buyer is a for gin buyer there's actually a stronger likelihood the s.e.c. will come -- will pursue it. what they miss, what the s.e.c. misses routinely is, deals that can announce but then collapse and aren't completed later. so, people may trade on inside information ahead of an announcement. if the deal doesn't happen the s.e.c. it's almost like they put blinders on and forget it ever happened. >> they figure you get hosed? >> it goes down. >> well, it depends how they're doing it. >> in wall street, the movie, you see those guys there. they seem like they know everything. i mean they see immediately see some trading in blue star, or whatever it was and they immediately go to james spader who is on the hit show, the "blacklist" now.

>> awesome. >> and he's buddy fox is using him for -- but they immediately find out. so it's not like that. you can get away with it. >> must be able to. i will never forget getting a phone call in davos, switzerland, from a hedge fund manager who said, i think it was guidance austin scientific something and said do you think this deal's going to happen or not. i said i don't know. >> you were in davos way back then? >> this is a long time ago. anyway finally he says to me, i know the answer. i said how do you know? >> he says i got guys on motor bikes behind this car with the ceos in it, they were supposed to go to goldman sachs and they went across the philadelphia bridge back to j&j. whatever it is. >> there was a jet at j&j, too. or monsanto. >> squawk is coming back in just a moment. if you're living with moderate to severe crohn's disease, and it feels like your life revolves around your symptoms, ask your gastroenterologist about humira adalimumab. humira has been proven to work for adults

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dealing with the crisis in iraq. president obama is sending 275 troops to secure the embassy in baghdad. and the u.s. is talking with iran about what to do within the war-torn country. we'll talk to a former ambassador to the u.n. about the options on the table. >> cnbc's new disrupters 50 list is out and the co-founder of kineto will tell us about transforming telecom. >> and the big story of the morning the u.s. finally beats ghana in the world cup. the highlights are coming up as the second hour of "squawk box" begins right now. ♪ good morning. welcome back to "squawk box" on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. our guest host today is senior fellow at yale university and a fine fellow. in addition to being a senior

fellow. >> thank you. >> former chairman at morgan stanley asia. i read just recently, when was that, last week, a piece in the "journal," right? >> that's right. on the need to negotiate a bilateral investment treaty between the u.s. and china at the upcoming strategic and economic dialogue early july in beijing. >> right. you're a big china enabler, defender. i think you wrote that on the anniversary of tiananmen square. >> on the eve. >> on the eve. >> no, but look. china's changing its model. and it's going to provide a powerful new source of demand in the world. we need a new source of growth. why can't we invest in to that model, and use that as a source of growth. >> and we've seen that trying to put american or democratic values on a region might not be -- might not work out that easily or that quickly. so maybe we shouldn't try. >> values out of the equation and just view this as an

opportunity. it's business. >> okay. >> we need growth. and where china's going to expand, which is in its -- right now embryonic services sector, is where our strengths lie. where the biggest service economy in the word, the most competitive services economy in the world. they need everything, from wholesale trade, retail trade, to health care, to domestic -- >> you would never make that another ten dissidents sitting in a jail cell new ones? >> i would take that one off the table completely. >> okay. let's go to futures quickly. see what's happening. after yesterday was not awful. today we're looking at up nine points on the dow. we've got the s&p at this point 1937. it was above 1950 for awhile. we pulled back but nothing like the -- still doesn't necessarily mean we're going to go 10%. i don't know if we ever will again in our lifetime. >> 10% for the year you mean? >> 10% down. >> oh, 10% down. >> in our lifetime, i don't think it will ever happen again. >> i think it will happen in our lifetime. >> i'm setting it up.

>> so we'll get it out of the way. >> so maybe we can finally do it. >> i'm ready for it. >> it's been like waiting for bonds to go to 3%. >> in our head lines this morning, take a look you'll see a busy morning for economic reports. at 8:30 eastern time, may numbers on housing starts and consumer prices. the cpi is expected to rise by 0.2%. housing starts are expected to fall by 3.7% to an annual rate of just over 1 million units. today marks the beginning of a two-day meeting of the federal reserve policymakers, the fomc, they have a press conference tomorrow that will be held right after the announcement. general motors is recalling more than 3 million more vehicles affected by the company's ongoing issue with those ignition switches. gm has now issued 44 recalls this year affecting about 20 million vehicles. 6.5 million of those involve the ignition switch problem. i saw a tweet yesterday saying are they going to run out of cars to recall. what happens after that? happenle assetled its case

involving alleged price fixing of electronic books. apple could have faced more than $800 million in claims if the case had gone to trial. terms of the settlement weren't announced and the deal does still need court approval. andrew? >> okay. at&t reportedly set to be named the exclusive carrier for amazon's new smartphone. the interesting note here, amazon hasn't introduced the smartphone yet. but there's a lot of speculation the news will be announced in an amazon event coming tomorrow. "the wall street journal" says that the phone's screen, this is the interesting part about it, it's going to be able apparently to display images that appear to be in 3-d without wearing special glasses. now at&t had an exclusive arrangement with apple. the iphone was launched back in 2007. that deal lasted more than three years. so we don't really know how this is all going to work. >> you think you could look at a little -- >> technology where you look at the phone, and it -- is it 3-d? >> would it be android? >> it is going to be based on perhaps on the android platform

but usually skinned. so, most of the -- >> skinned? >> did i just -- so most android -- most amazon products thus far in terms of tablet and everything else, the back end of it is android. and you can what's called reskin it. so that the -- >> put a new face on it? >> the interface, if you will is very amazonian and sort of looks like an amazon product as opposed to -- >> what does this have to do with retailing? >> if -- if this device becomes your -- your everything, and how you interact, you get your music, you get your video, i mean if the whole thing is running off the back end of the amazon cloud, that's -- >> the amazon cloud. i figure all these other apple and samsung and android they seem to have such a head start with applications and what makes a smartphone smart. i just don't know why amazon would be able to make a phone that was that smart -- >> why can't i put the amazon

app on my iphone and do the same thing? >> why do we need a smartphone from amazon? >> it's the same reason by the way you get your music if you're a prime member. i just got the e-mail about it. so there's a lot -- >> i guess it's amazon moving to build an ecosystem just like apple did. >> you have the whole ecosystem. soup to nuts. >> i want jimmy picking my music with dre. i don't need bezos' cropty music. i need cool guys -- >> but it's free if you're on amazon prime. >> you'll be wearing the beats head phones. in the meantime let's go to more serious news. the latest situation in iraq, cnbc's chief international correspondent michelle caruso-cabrera joins us from the northern part of the country. good morning to you, michelle. >> hey there, andrew. good to see you this morning. we are waiting to see if there's going to be any decision out of the white house and president obama as to what they plan on doing, if they plan on assisting the iraqis at all. this morning we hear of limited

fighting by reuters reporting out in the western part of iraq, in a city called bashir, south of kirkuk. about an hour and a half west of here. let's show you the price of oil which has stalled a little bit. it's still elevated but has not continued to climb today. the ceo of bp spoke with cnbc in europe earlier this morning, bob dudley, believe it or not, he says that actually increased production in iraq. >> bp's assets are down in the south near basra, down near the kuwait border. they're a long way from the trouble. production is being increased in response to requests by the government. it's a long way. we're, of course, very vigilant. we have removed nonessential production staff out of there. we continue to operate, we haven't missed a beat so far. >> we went earlier today, this morning we went out to one of the refugee camps. so we're in kurdistan. the border, we went out to the border where it meets with the

rest of iraq. remember this is a semiautonomous reege. there's fighting to the west of kurdistan. and as a result there's a lot of refugees crossing the border. so we went to a camp of roughly 2,000 iraqis are living in tents with limited running water. as you can imagine, it's a very, very tough, tough place to see, because it's just misery out there. it's extremely, extremely hot. they're lining up to get blankets, pillows, things to sleep with. and it's a tough -- it's tough to see the kids, et cetera, when you see what's happening, and what the number of people who've been displaced. guys, back to you. >> thank you, michelle. we're going to continue the conversation about iraq. before you go i have one other question, because you're my expert on this. which is argentina. i don't even know how much you focused on what the supreme court did yesterday but you've reported on it for so long i wanted to get your quick views on the impact of what that decision is, and what it means. >> i don't think there's going to be much impact.

i think in 45 seconds, i can tell you what's going to happen here. remember in the world there are two kinds of argentinean bonds. very small pile of old bonds that they never, ever paid. that's held by the elites of the world, paul singer, and then there's a new bigger pile of bonds which are the new bonds they exchange. those are the ones where the investors said okay, argentina, we'll take less from you. there is one clause in those new bonds which is extremely important, was negotiated by a guest that we have on cnbc sometimes, adam lairic from aei and when he negotiated that deal he put a clause in there that said if you, argentina, give anybody else a better deal for the next ten years, you have to give all my bond holders the same deal. that clause expires on january 1st of this year. of next year, right? so that means at that moment, argentina can begin to negotiate with any of the other old, old holdout bond holders. so i think, actually, they keep paying the new bonds, as they

always have, and they have the money to do it. and then when we get to january 1st maybe we start to see them really do negotiate a deal with those old bond holders. back to you. >> michelle caruso-cabrera in iraq talking about what's going on down in argentina. but we're going to go back to the conversation about iraq right now. stewart holliday is the former ambassador to the u.n. for the special political affairs. he's now coo of the largest program agency of the u.s. state department. and help us think through this at this point. in terms of what our options are. that are really on the table. and frankly what the president's just done by sending 275 troops back in. >> the united states really has to do three things. first it has to reinforce the iraqi army. that's going to be the 100 or so special forces that are being considered for training purposes. that's going to be a tough job. the second thing and really most important, it's got to get the maliki government to reach out to the sunnis, and to create more of a broader coalition.

because a lot of sunnis in iraq view maliki as the problem, and they're very sympathetic to t the -- some of the isis ideology. >> how does he do that? >> well you mean the second one? >> yes. >> you have to get iran to put pressure on the maliki government. you also have to, frankly, leverage the situation where, he's facing an existential threat in terms of the survival of the country. he's in a situation now where he's got to consider that and he's got to go along, i think, with what the administration's going to propose. >> you had a third. i cut you off before you got to number three i think. >> three was to play iran in the right way. so if we go in and we talk about broad cooperation with iran, that could lead to an inflammation of the situation. again, this is a sectarian struggle where iran is seen as part of the problem. so the key thing is for the administration not to overplay that hand, and to effectively

focus on what they can do to get iran to get the maliki government to create a broader coalition, to reach out, include more kurds and more sunnis. because if we start coordinating with the iranians, it's going to lead to all kinds of problems. >> ambassador, how long does all this take? are we now in it for -- i mean, just sort of play it out for us. >> well, i mean, it looks like the government is going to hold this advance, this offensive by isis north of baghdad. that's going to be in the short-term consolidating the security situation in iran and baghdad. this group is going to resort to terrorist activity. they already have. they're going to be using car bombs, using assassinations, terrorist tactics. that could go on for many, many months, if not years. but what is more disturbing is really how do you get the isis out of western and northern iraq? again they've got the sympathy of a lot of the people who live

there who felt disenfranchised by the maliki government. that's going to take a lot of work and it's going to take a political solution. and ultimately we got to hold these people accountable who have been perpetrating these executions and these attacks. that's going to be a long haul. >> can we even contemplate democracy there again? >> i mean, i think if democracy is defined as an election, yes. if democracy is defined by security and strong political institutions, i think that, you know, we've seen the trouble that that region has had in adopting those principles. as long as people can resort to this kind of extremist violence, it's very intimidating for people. and it keeps them away from the ballot box. >> we're going to leave it there. ambassador holliday thank you for joining us. >> when we come back can china influence the situation in iraq? that, plus an in-depth look into the codependent nature of china's relationship with the united states. our guest host is steven roach. we'll dig into this when "squawk

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the fever in the u.s. got turned up a notch after the u.s. beat ghana. if you didn't tune in from the beginning you probably missed the first goal of the match by clint dempsey. one of the fastest goals scored in world cup history. then fast forward to the 81st minute of play when ghana blasted the equalizer.

to tie. that's the first one, i guess. and here it is. it was really, right to the left of our goalie. just squeaked into the corner. very intense final couple of minutes which included a header off a corner kick for substitute john brooks. first ever -- first goal ever scored by a substitute in the 6th minute. the u.s. still has matches against germany and portugal in what's been called the group of death for opponents because all the teams are so good. there's already been an incredible upset of spain and today i think it's brazil plays mexico. >> but you see very similar rules to hockey. i mean it's all the same offsides, the same sort of -- >> those guys, you know, we watch and it's like, we don't try -- well we saw you run from here to there to do the opening of the show. >> no, i used to play soccer

though. and when you play you run the entire field the whole time. >> i think maybe you're not -- >> this is joe's way of trying to tell me that i need to work out. >> no you look fine. but maybe you're a little out of shape. >> want to see you run up and down the stairs. it is hard to do -- >> my point was do you watch these guys and just take it for granted they go from here to the other side. >> they're running -- >> they're running back and forth. >> and they do cool stuff. one guy did -- >> i'm so glad you finally appreciate it. it's been years. >> i don't know if i really appreciate it. just that it gives countries that maybe don't have all of the health of our sports experience in this country. they don't have any kind of cling to. >> in ghana the number one sport is -- >> oh, yeah. >> soccer. >> did you see the people from ghana, they were going craze crazy. >> do you know what it ranks in the u.s.? >> better than ten. >> is it better than ten?

>> what's higher tennis or -- >> that i don't know. but soccer ranks nine. my guess is -- i don't know about tennis. but my guess is golf ranks above that. there are a lot of sports that rank ahead. but it's a growing thing here. >> i'm ready -- >> what is it up in new england, too, that -- >> badminton i think is my -- >> i like the way you say that, it's another thing. >> say that again? >> badminton. >> badminton. >> sorry. >> all right let's get to our guest host for his global outlook. steven roche is a senior fellow at the yale university. he's also former chairman at morgan stanley asia, and he is the author of unbalanced the codependency of america and china. steven published an opinion piece titled how to ride the next wave of chinese growth last week in "the wall street journal" which joe alluded to. before we get to that stephen i'm hoping you can tell us a little bit about china and iraq. it turns out that they are one of the biggest players there in

the oil fields. they get a significant amount of their oil. what does this mean for them? >> well, put in perspective, becky, i mean china is still the largest codependent economy in the world. 70% of its fuel comes from coal. so, if oil prices go up a lot or if they lose an iranian source of oil it doesn't deal the devastating blow to the chinese economy that more oil dependent nations could deal. nevertheless, china needs fuel at the margin. they do have influence in iraq. they're not about to intervene in the military problems that are emerging there. but certainly they're expressing their concern through normal diplomatic channels, as are we. >> would they do anything militarily? >> no, totally off the table. no. >> so this is something they're watching with interest obviously this has all kinds of implications. but beyond that it's going to be just a diplomatic situation? >> as far as china's concerned, yes. but again, the mix of their

demand for fuel does not leave them as vulnerable to an oil related disruption in the middle east as it might to other more oil dependent economies, like the united states for example. >> let's talk about the relationship between the united states and china. as you pointed out in your op-ed, both sides have a lot at stake in making sure that their economies continue to trade back and forth. you think that these strategic talks are incredibly important. >> well, i do. i mean, i wrote in the book i published recently that the relationship needs to be looked at through the psychological prism, if you call it that, of codependency. where both nations, both economies are very dependent on the other. for the sustenance of their economic growth. psychologists will tell you that codependent partners eventually get into trouble. they depend too much on each other. they lose their sense of self, they indulge in blame games. we're seeing that over issues like cyber hacking and the

currency issue. >> those are valid issues. and human rights -- >> they're all valid issues. take cyber hacking. i mean you know, the doj filed charges against five officers in the people's liberation army. we have some cyber hacking problems in this country too, right? >> i would not put what the chinese do on the same level with what we put -- >> that's your point of view. they're putting it on -- they're saying it's equally egregious to listen to the conversations of foreign leaders, trade negotiators, and cyber hack into companies like petrobras -- >> the difference and the difference from american business's perspective is that all of the spying that used to take place and the cold war mentality, everything that happened with russia and beyond, it was never a situation where nation states were spying on corporations, trying to steal their own intellectual property and get away with it.

that was kind of the rule that that -- >> i get that. that's our perspective, you know from the business community point of view. they would come at it and say, you know, you can have your perspective. we have our perspective. which perspective is right. that's something that needs to be adjudicated. by the way we're working on adjudicating the cyber hacking issue on a military-to-military basis. that's now been -- >> because it wasn't -- they weren't making progress. which is why they took the next step. >> i don't think that had anything to do with it. the doj just sort of acted on its own outside of normal diplomatic channels is what my sources tell me. >> from what i've heard. the roar that was first put out in "the new york times" -- >> which was cop bied by the doj's indictment. >> the mandieyt report was put out there to try to make them stop. it worked for a matter of weeks. so even public embarrassment hasn't set the chinese back, and prevented them from continuing that. >> look, you know, i don't

dispute or i don't really have the knowledge to dispute the validity of the mandient which was cut and posted into the doj indictment. this is a contentious issue. i think the bilateral military negotiations were making more progress than you alluded to. >> we'll continue this conversation. stephen is our guest. >> disrupter 50 when we return. the numbers are impressive. over 400,000 new private sector jobs... making new york state number two in the nation in new private sector job creation... with 10 regional development strategies to fit your business needs. and now it's even better because they've introduced startup new york... with the state creating dozens of tax-free zones where businesses pay no taxes for ten years. become the next business to discover the new new york. [ male announcer ] see if your business qualifies.

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today a cnbc disrupter exclusive. a game changer in cybersecurity. meet the ceo whose tech company is on the verge of supergrowth. unlock the most valuable hour in tech. squawk alley. >> the crisis in iraq has the global markets on edge. can some of the emerging markets, would they survive a shock to the system? find out next on "squawk box."

welcome back to "squawk box," everybody. new foreign investment in china shrinking by the most in 16 months. the flow of money was hurt by the country's cooling economy and weaker currency. stephen wants to talk about this, too. get your thoughts on what's actually happening with the economy there. after getting the okay from european regulators for the rapid review of an experimental all-oral regimen for people affected with hepatitis-c.

if approved could be available in the first quarter of next year. the fda has granted the product priority review. and tesla will soon be able to sell cars directly to con summers in new jersey. the state's assembly to allow it reversing a ruling by the state's motor vehicle commission that blocked the direct sales model. >> with iraq keeping investors on edge, many are worried about the resounding impact on global markets that we could have and the erosion of the risk appetite around the world. let's get more on that now. joining us is jeff dennis, head of global emerging markets equity strategy at ubs, and still with us our guest host stephen roach from yale university. all right. jeff, is that -- is it happening? because i don't think it has happened. i don't see it in the vix and i don't see in the averages. are we seeing where this could be some type of contagion from events in iraq that could actually infect the equity markets or the bond market, the currency markets? >> i think as far as emerging

markets are concerned, it's actually very minor. we did have a very nice little run in em a few days ago post the ecb meeting when they took all those explanatory actions and that did -- that has fallen back again. i think probably the rise in the oil price is playing a bit of a role there. we've always argued that there are some emerging markets that are very vulnerable to rising oil prices. india is a good example. turkey is another good example because turkey is very close by to the iraq situation geographically, as well. but you are dead right joe, we have not seen a -- an across-the-board pullback in em. it's not doing very much. we've not seen much of a pullback in response to the iraqi events. >> didn't we see a much bigger effect when -- when tapering was announced, or at least it was being anticipated and then it was announced, it was even worse than any of this, wasn't it? >> absolutely. and the reason for that is, of

course, we had a huge rise in u.s. bond yields about 100 basis points, very short period of time. and as usual that puts em under pressure because you get yields rising in em markets and spreads going up as well. the risk premium rises. we had a very big sell-off in the second half of last year on the back of that. it's also worth pointing out to your viewers that in the beginning of 2011 at the start of the arab spring when there was much wider turbulence, of course, in the middle east and oil prices did speak up, em had another very bad time then and at that point in time the reason for that was because inflation was higher in em. inflation generally in em is lower today than it was three years ago. except in a few countries like brazil and turkey itself. and that's probably one reason why this impact has been fairly muted. you're dead right. this has been much, much more quiet than we saw -- >> stephen roach is here. i would figure if china was a half a gd point above expectations that would probably offset even almost one of the worst case scenarios in the

middle east, wouldn't it? >> i think it would in the short-term of course. we have to see how the dreadful situation in iraq plays out and whether to be a sustained rise in the price of oil and indeed some threat to oil supplies not that that's necessarily going to happen. but that would be a more damaging long term factor. one of our arguments we got a report out this morning is the growth story in emerging markets is very disappointing this year both in terms of economic growth and earnings growth and if china were to get a positive surprise on gdp, yeah, i think that would actually fire the markets up quite nicely. >> this is steve. what would the what would it take in oil prices to get you nervous about ee emergencying markets. so far the backup has been de minimis. how much of an increase would really change your view on the linkage there? >> i think there are markets that have some effect and it's more of a rotational effect.

in other words, some markets benefit, some markets don't. i think if you got a -- it's hard to put numbers on it. but if you got a $20 to $30 a barrel rise in the price of oil which hurts inflation around the emerging markets, i think that would be the sort of thing that would really get people nervous. because it would not just be the direct effects of a rising oil price, because, of course, there's a number of emerging markets, as we know that are big oil exporters. brazil is a good example, russia of course, mexico. but i think it would be the impact of that on fears about inflation around the world generally. i venture to say a sharp rise in the price of oil would push u.s. yields up. that would have an indirect effect on em. i think it would have to be for want of a better number double or close to triple of the rise in price we've seen so far. >> so, your forecast for the emerging markets looks like it's almost mirrors what most people think for u.s. markets. up 10% for the year. 4.5% so far. >> yeah.

>> is it i guess it's always good to diversify. wouldn't it be less risky to keep it here domestically than to go out on the risk curve with emerging markets for the same return? or do it in the interest of just having noncorrelated asset? i think you make a fair point. global investors, u.s. is probably pretty attractive. and we certainly have that few. and what we're disappointed about with respect to em is the lack of growth. and what you need to get more than 10% upside is to see some positive growth surprises. now, when it comes to talking to investors i talk to mainly which is the investors themselves obviously have to invest in the emerging markets and can't go to the u.s. so i think there are grooeth stories in em that are worth looking at. we like korea, taiwan, mexico for example. but we don't expect the emerging markets overall to blow the doors off this year. and i think they'll probably do no better than the u.s. there would be some attraction, of course, as you say staying at

home. >> okay. all right. definitely appreciate it. you like mexico. mexico over brazil or you just like mexico? >> we do like mexico -- >> i meant for the soccer game. >> i thought you might say that. but i suspect brazil will probably win. >> i think so, too. we'll watch. nobody knows, right? >> indeed. nobody knows. >> that's why they play these games. all right, he probably likes football. got that accent. i'm sure you think football is with a round ball, right? >> correct, absolutely. >> wacky. >> for 100 years. >> give a little -- >> all right exactly. thanks, jeff. >> okay. coming up, enabling a world that is connected anywhere, all the time. that's what kimeta is setting out to do. the founder is joining us after the break to talk innovation and technology when we return. ♪ ♪

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making new york state number two in the nation in new private sector job creation... with 10 regional development strategies to fit your business needs. and now it's even better because they've introduced startup new york... with the state creating dozens of tax-free zones where businesses pay no taxes for ten years. become the next business to discover the new new york. [ male announcer ] see if your business qualifies. last year our first ever disruptor 50 included ten companies that filed for an ipo or went public. who on this year could meet similar success. the cnbc disruptor 50 continues on cnbc. >> welcome back, everybody. today, cnbc is unveiling its disruptor 50 list. right now we are sitting down with the innovators behind some of these game changing companies. we're joined by the co-founder and chief technology officer of kymeta. before we get to that julia boorstin will tell us what it is

and why it works. >> the business of internet connectivity is ripe for disruption. the companies on our list are working on a variety of new technologies. kymeta invented a reimagined satellite antenna with futuristic sounding technology, a meta material invisibility cloak. that kymeta antenna provides high quality broad band access to any moving platform like trucks, boats and airplanes. and the portable receivers can be a game changing for emergency responders, aid organizations and news reporters in the field. two other companies on the list have very different approaches to improving connectivity around the world. a company called fon lets users share their wi-fi with each other and kumu networks is removing radio interference. so joining us now to talk about this is kymeta's co-founder andrew. >> the chief technology officer of kymeta. help us understand this. there have been a lot of

companies that have gone after satellite businesses before. not all of them have succeeded. there is a long road of littered -- littered with failure in the satellite world. i think of aridium. why is now going to work? >> well, there's a couple things that i think are also different about the kymeta business model. usually when you see, you know, relatively large investments happening and satellite industries happening because they're investing in the space segment, at kymeta we're really developing the technology to serve those satellites so you can kind of think of it like selling blue jeans to the miners. and what we're bringing to bear is what the industry has really needed for a long time. so, one of the beauties of satellite connectivity is it's ubiquitous. it covers very large swaths of territory. but it's only so powerful if it's not mobile. bring the mobile component to that really increases the utility value of the capacity. that's why we see a lot of the

existing and highly profitable carriers working with kymeta. >> you're not in production yet. >> we're not. >> you'll be in production within? >> within the year. so next year we'll release our first product. >> who do you see your biggest customer being? is it the individual who is out in the field and needs to be able to access internet or these giant companies? >> really varies by vertical. what i'd say is typically most end user customers don't want to buy from us they want to buy services. so what we end up doing is partnering with either satellite service operators or other types of service providers to bundle our equipment with something they can provide allowing us to do a b2b transaction that gives the value the customer wants. >> larry page of google has grand ambitions for at lights and connecting the world through balloons and this sort of mesh that he talks about. is that realistic? >> you know, it's not just google. there are a lot of companies actually looking at that. and i won't go into the names right now. but, i think you were right before -- >> and you're working with a

technology that they are using? >> we are working with a technology that can help them dramatically. currently, both 3b is starting to deploy assets like that and we are working with them and google has invested in them. i will say unlike other people who have tried before the technology landscape and market landscape are very different. what they're trying to do is take satellite assets which are typically put 22,000 miles away and move them to about 1,000 miles away with dramatically reduced cost. the trick is you need to be able to scan across the sky in order to do that. historically, you're only able to do that with two dishes for the first time with our technology, you'll be able to do it from a flat surface. >> what's a gumbel dish? >> so you know what a dish is like a direct tv dish. when your mobile or if the satellite is moving what people have to do today is put it on motors and move them around. that's the competition. >> bill gates is behind your venture. >> that's right. >> how did that happen? >> it's an interesting story. so, bill works through the lab

at intellectual ventures where we were incubated. and a facility called global good where he invests in technology and development for humanitarian means. and while we were incubating we had a couple of opportunities to show him our technology and do what every engineer really loves to do which is tell somebody what you're going to do it, do it, and then show that you did it. and so after we had done that a number of times, when it came time to spin out, he ended up being one of our biggest supporters. >> okay. totally selfish question, the one technology that i'm actually excited about or use case is fast internet on airplanes. >> yes. >> how realistic is that? because as much as i love my go-go, i really don't. >> it's -- it's very realistic. we're starting to see even already some penetration into the airline industry. but only on the very widest bodied jets. and even then only with very heavy mechanically steered essentially dishes. >> right. so there's actually a satellite on top of the airplane that moves trying to keep its --

>> what's more important to you, the best internet on the airplanes or no babies in first class? >> that is a very, very critical one -- >> you could turn up whatever you're getting on the internet in your head phones and not worry about the babies? but they still throw up. it's a problem. >> i think i'd take the internet actually. >> you would take the internet? >> yeah. >> did you do something with like materials that allows this? what's the technology? >> there's a couple innovations -- >> invisibility cloak? >> uses a tool set that we call meta materials. we use the same tool set but we're not using the invisibility cloak per se. we're combining that with the use of liquid crystal for the first time in some antenna applications. one of the key points is we can produce our antennas on a liquid crystal display line which is amazing from an antenna standpoint because we get to leverage the $260 billion that's been invested in that industry today. >> i'll tell you what, there are obviously a lot of companies potentially interested in buying

you. you have any talks with them or try to do the ipo route? >> our focus right now is on the ipo route. >> how far away is that? >> i think it depends. like i said next year we'll be releasing our first product. we certainly want to see our way through a series of products and increase profitability. but the number of partnerships that we have coming up, and i think some of the announcements this year might make it happen sooner rather than later. >> when can i buy an invisibility cloak? what year would you say? full-on invisibility cloak? >> like harry potter? >> or like putting on the ring and frodo, something like that. >> that's going to take a longer time than we have here. i think -- >> 20 years? >> 20 years. you know, there's some fundamental physics in invisibility cloaks that really make it not going to happen in the way that it was designed. we did that work at duke. i was the first person to quantify some of the performance of the invisibility cloak. and it works well with microwave frequencies. it works a lot less well at

visible frequencies. >> can you put one on now? >> it might make me disappear. >> jim cramer asks about via sat. he says they have fast internet now that jetblue can use netflix on it. >> via sat is an example of a high through-put satellite. and they do have the ability to do that to airplanes with a concern style of terminal. but again it's relatively expensive and it's not used broadly because it can only fit on certain classes of platforms. but it is an example of some of the innovation we see in this space. so again we're selling the blue jeans. we get to leverage everybody else's innovation as well. >> nathan, thank you for being here. my friend josh says you're the smartest guy. he said he'd bet on anything you do. >> josh is great. >> thank you. >> and we should tell you that coverage of the cnbc disruptor 50 continues in the next hour of squawk, we have the ceo of aereo, number 7 on the list. >> when we return we have a live report from baghdad. checking in with with nbc foreign correspondent richard engel in just a bit.

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let's get back to our guest host, steve roach, senior fellow at yale university. former chairman at morgan stan

lay asia and author of "unbalanced: the codependency of america and china." . >> and market master. >> you are a market master. one of the original. you are. and -- >> this is how -- >> earlier watching you and becky go back and forth i dare say a master debater with her. when you were, i don't know who i would say won that. what's wrong? >> well i don't know who i would say won that argument. >> steven -- we continue the argument. >> may continue it a little bit later. but both of you did. held your own. so let's go to the america part of the america/china thing. because i always defer to you or at least try to find out from you how you feel about the american consumer which you always say is 70% of what happens. and they were totally overleveraged for a long time. she was since we talk about consumers on the she side a lot of times. has to be in a better position at this point. but you're always -- you never

are that happy with the position -- >> no, we made progress, joe, in terms of paying down debt. and rebuilding saving. but it's progress. we're maybe halfway on the road to balance sheet repair. so we've had over now six years of unprecedentedly, is that the right word? sluggish growth in consumer demand. the number's been 1.25% a year for six years plus. we're doing a little bit better than that right now but we're so far short of growing the 70% of the economy the way we used to that we seriously need to think about new sources of growth. >> is it the income? >> income is weak. >> income inequality has made things -- >> forget income inequality. income in general is weak. >> why? >> job growth is slow. real wage gains -- >> hangover from the financial crisis but also self-inflicted with some of the stuff we are or are not doing. >> absolutely. we're not generating enough internal income. we've got policies like the fed goosing asset markets to get consumers to spend through

wealth effects and that's not just getting attraction. in the broader global -- >> you think there really are some things that we could be doing if you were king? >> if i were king? i'd look at the problem. we've got a balance sheet problem. let's put in place policies that would enable people to pay down debt more quickly. and rebuild savings so they feel more secure about their long-term prospects for financial security. >> how about investment in terms of not the government but in terms of the private sector. just we haven't invested, have we? >> i think again that's sort of the -- it goes back to the consumer. if you're a company, and your demand is growing slowly, e.g. consumer demand, why are you going to put new capacity in place? why are you going to hire new workers? if you get demand up i think the investment because of all the cash flow sitting on corporate balance sheets will kick in big time. companies are waiting to see daylight on demand, and they're not seeing it yet. >> but isn't the function of inversions and everything else make this so much -- isn't that a great example of, we keep saying there's so much cash on the sidelines waiting to come in

but is it really waiting to come in here or waiting to come in somewhere else? >> it's a great, great question, andrew. i think if demand were to be more vigorous at home, the balance sheets would be put to work in expanding capacity in jobs at home. it's that simple. i think companies sure, they look to offshore markets for outsourcing and efficiency solutions but if demand were to return to where it used to be, on a sustainable basis, consumer demand companies would put that money to work here. >> but you don't believe that's coming any time soon? >> it certainly hasn't come in the last six years to the extent people thought it would. and i think it's probably overly optimistic to think we're right on the cusp of a burst of demand at home. >> great question. he said that about any of mine. >> thank you. >> with me he's kind of like i guess i'll answer this. but it seems obvious. and then you ask one and it was like --

>> no, it was an unusually great question from andrew. you always give great questions. >> there you go. >> always great. >> wait a minute. >> it was unusually great. >> a backhand -- >> that was such a smackdown. >> so for andrew it was unusual that it was great. not for the show. >> no, i overstated that. andrew, look i don't want to get into who's smarter. >> this is an -- >> i walked into something i probably shouldn't have. >> tension in life is good in a lot of different areas, i think. >> it sparks creativity. >> it does. it does. i agree. >> my most creative when i feel -- >> i agree. otherwise it's -- so it's good. right? andrew? i thought it was a good question. >> i thought it was a great question. >> i thought you had a great answer. >> unusually great. >> master debaters. thanks so much for joining us. what you're leaving? >> no, i -- if you want me to leave, i'll leave. >> no, thanks so much for joining us. thank you anyway for joining us. we'll have another -- >> thank you, joe.

>> you're welcome. >> it's nice to see you. >> coming up we're going to talk about all those great questions iraq and the markets, what you need to watch. and then we've got the ceo and co-founder udacity to talk about a new partnership he's doing with at&t. and a member of the cnbc disruptor 50 list the ceo of aereo is going to join us as our special guest. he wants to chain the way people watch tv. we'll see if the supreme court agrees with him. we're going to be back in just a moment.

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geopolitical tensions driving global market moves. russia, iraq, argentina. we will talk markets and what issues matter to your money with morgan stanley's david darst. and head of global strategies fund. >> higher learning meets telecom. at&t connecting with udacity for a chance to create jobs. details just ahead. >> and when the rich want to race. >> what are you doing? >> they head to this track. a look at the new superrich raceway is just ahead. oh! watch out! >> as the final hour of "squawk box" begins right now.

welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. let's get a check on the markets this morning. u.s. equity futures are indicated up about 21 points. right now, two on the s&p overseas in asia we'll take a quick look. a lot of this hinging on what's happening in iraq, what's happening in the international oil markets. check out europe quickly and then we'll get back to that story. the lead story in most of the papers today. nearly 300 u.s. forces are now being positioned in iraq to help secure u.s. assets, like the embassy and such. meanwhile militants have captured areas around baghdad. nbc's chief foreign correspondent richard engel as you might imagine is in baghdad

and joins us with more. richard, i just want to just get your observations, and your comments, just we haven't talked to you since all this started happening. so, take it away. >> well it's always good to be with you guys. first of all, things are not where they were a few days ago. last week we saw isis, this al qaeda offshoot that really germ natured in syria, charge forward in iraq, take town after town and it was right on the edge of baghdad. and it looked like this city could fall, and it looked like the embassy might need to be evacuated, and we could see a very horrible situation here. helicopters taking off, saigon style. now, it doesn't look quite as grave because the iraqi army has finally mobilized. the iraqi shiite religious community has mobilized. and i think that was the key difference here.

most people don't realize how sectarian iraq is, really has always been. initially the army didn't want to fight for prime minister maliki. he's not very popular in this country. the shiite community. the religious leaders stepped in. they issued a call to arms. a fatwa, a religious edict and called on their people to go out and fight and the shiites in this country, who are the majority, will fight for their religious leaders. and now, you walk around baghdad, you see cops on every street. soldiers are out, armored vehicles are out. intelligence agents are out. and these shiite militias are all over the place driving around in civilian cars. stopping people. checking their papers. there's a curfew in place overnight. if those militants, the sunni militants from isis tried to come into this city, they would be face a huge battle. so what people think is going to happen now is car bombs because when you can't enter the city and take it over you try and

soften the target by sending in suicide bombers, blowing up markets, and the u.s. embassy which looked like it was going to have to get everybody out a few days ago just sent in extra 170 soldiers and marines to protect the compound, an enormous compound right on the tigris river, and another 100 troops nearby to set up emergency air fields should that be necessary. these are the troops who basically can create an airport in a box. they pop up a control tower. they control the flight patterns, and should we need to evacuate all the personnel here, they could create an air field. but, so far we're not seeing that needed. >> well, just listening to you i see the three joe biden city states, a sunni north, the shiites in baghdad, and i see the kurds in kurdistan. seems like, you know, the only answer. i wanted to get back to something in our long running discussion richard about syria, i remember you thought maybe i

don't want to put words in your mouth but initially maybe we should have backed the rebels before they became too radical and then you pointed out that it wouldn't probably help to back them at that point. looking back on that, we would have been backing the same guys that are now surrounding baghdad from the north, wouldn't we? sort of, yes. maybe if we had done earlier it would have been different. as you were saying. so here's the situation. you have a -- the government of bashar al assad which is aligned with maliki. the rebels in syria started to fight against bashar al assad, and they didn't get any help, and they quickly lost control of their movement, and you instead saw al qaeda-like fighters coming in from all over north africa, primarily, but also from europe. and initially this was an al qaeda movement. an al qaeda thought, finally we can have a new base outside of

pkz. pakistan, afghanistan by the way, has always been an awkward home for al qaeda. most of the al qaeda thinking, their philosophers, fighters, are arabs. they don't like pakistan. they don't feel at home in pakistan. they certainly don't like afghanistan, which is far away in the middle of no place in the freezing mountains. they thought, okay, we've got a home in syria. but what happened is even al qaeda lost control of the movement, and isis, this new group, decided it was going to take over, it didn't need the old al qaeda leadership. it didn't need ayman al zawahiri, the guy who took over from osama bin laden. they were going to do it bigger and better and more radical. and they took over in syria. they joined up with disgruntled sunnis here in iraq. and have created a single front and now the situation is terrible. had the u.s. backed the sunni rebels, the moderate sunni rebels who were fighting against bashar al assad right in the very beginning, would that have

prevented these militants in syria from having a foothold? perhaps. it depends how much support there had been. but yes, it could -- it doesn't necessarily have to get as bad as it is right now. now you're talking about joe biden. it sounds simple, just slice the pie up into three and be done with it. where do you put the lines? who gets what piece of the pie? the kurds okay they generally live in one area in northern iraq. they just took kirkuk which is an enormous oil field about 15% of this country's entire known oil reserves. the iraqi government here in baghdad is livid that they took kirkuk. so, that's one issue. which is unresolved. the iraqi government once it deals with isis i'm sure is going to turn its attention to the kurds. then you have the sunni piece. does it now include syria? does it include all the west? does it include parts of baghdad? so where does this sunni piece go? and then you have the shiites who think since they're the majority they don't want just a

piece. they want everything. >> you know, richard -- >> this is a big one. >> right you laid out a crazy chart to try to figure out who's aligned with who. just the idea that maliki is aligned with bashar al assad, who we don't support just leads you to wonder what is any potential solution for the united states foreign policy on this. >> well, i think it has to be truly global. i think it has to look at the entire middle east, writ large. you have to see what your policy is vis-a-vis turkey. what's your policy with iran? what's your policy in north africa. because you saw several years ago at the start of the arab spring, the united states we were backing democracy. we were going to inject change in this system. and out of the fluidity that was being created we were going to have new, better regimes. it didn't happen. instead, when you for down the old systems, the rot that was

underneath surfaced, and now you have that situation here continuing. while in north africa, you're seeing the rise of more hard-line states. the government in sisi in egypt, looks like hard-liners are trying to take over in libya, as well. globally we have to decide are we going to go for another round of hard-liners and military-led regimes or try and manage this new, more free, more i don't want to say democratic, but certainly less organized middle east. >> all right. richard engel, thanks. we'll be watching you. probably watching on ms and probably see you on nightly with brian tonight as well. we appreciate you joining us. >> he's the best. explains it better than anybody else. >> after world war ii when we drew all these lines and made all these artificial boundaries that were set up. the idea of going back in and redrawing them, even if it's not not just with the u.s., if it's done with world leaders, i don't know how you -- he's right, i

don't know how you can possibly come up with what's fair and what's not and everybody's fighting over the oil fields. >> the sad part is, you always say, like i said, i get sad about it because i don't think -- this does not feel fixable. not even short-term or long-term. >> not easily. >> right. right. you heard the lieutenant general earlier, in talking about kurds, that's been the one constant, is they've been our allies. but then, i don't know, then you got to throw iran in there. >> richard was the first one to point out the baghdad government is livid over the kurds taking over kirkuk, which by the way the kurds would probably say they were doing it to protect it from the insurgents coming in. >> exactly. >> all right. for insight into how events in iraq and this week's fed meeting could play out we have with us you'rion timor, director of global macro for investments. and might be just as proud of the netherlands as that crazy skating coach. remember when we talked to him. the first thing he said was

netherlands have a good game in the world cup or something? >> robin van percy had this amazing head kick that led to a 5-1 win over spain. >> i saw that. okay. >> the flying dutchman. >> the flying dutchman. and our guest host for the next hour is david darst, independent investment consultant. i'll start with urian, do you think about iraq when you talk to clients now in a big way? >> yeah it's the question that comes up. and the question for me in terms of portfolio allocation and things like that is, does iraq become a big problem that boosts oil prices $20, $25 on a sustained basis and therefore constrain consumer spending? and then it has, you know, an impact on our economy and therefore on earnings and therefore on the stock market. or does it become like ukraine? after a few weeks the markets

went back to the fundamentals and we've been in this slow motion grind higher. so it's hard to tell which one it is. i think the bottom line, as far as i'm concerned is just to stay sort of diversified. there's a reason to have bonds in a portfolio even at 2.6% yields. and there's a reason to have equities in a portfolio because earnings growth is about 7%. >> oil amazing isn't it? people say the whole iraq war was based on securing oil or at least in some ways was based on the global situation. but it's always about oil. and that's the most important thing again here. >> oil is the key, because that's the most direct tax or tax cut on the consumer with how much we drive. especially going into the summer. and that is the variable as far as iraq can concerned. in terms of, other than the geopolitics and the human loss and all that stuff. in terms of what it means for

the u.s. economy. >> david? you have five reasons why we should do something? what do you got written there? >> i'll give you a copy after the show -- >> i want to hear it live. >> number one, you've got the global synchronized expansion. okay? number two, inflation is low. number three, monetary stimulus continues. and number four, cash levels are high all over the world. it's amazing. >> just put in the fake five since i asked for five? >> the fifth one is you look at iraq, iraq produces 3.6 million barrels of oil per day. does anybody here know how many oil barrels of oil per day exxon mobil produces? 2.2. iraq is 1.6 exxon mobils and it is very important because it used to be about two and we've gotten it up to 3.6 and they were hoping that we'd go to 6 million barrels per day. they have this kirkuk field is the second largest field in the world after the field in saudi arabia. i found it amazing that richard

not once was the word saudi arabia mentioned in the last segment and i think they're a key player here because they support their anti-muslim brotherhood. they support the generals, al sisi in egypt, and they are missing part of the equation. also, iran is a part of this equation in its potential to roil and unsettle markets. iran is 92% shiite. iraq is 67% shiite. and so there's a shiite -- there's a -- people want to set up this shiite caliphate. it comes from califha in arabic which means succession. like you're the pope in the church you're a succession of mohammed the prophet and you want to have a prophet ruled dynasty that spreads across nations. this is a fluid situation. 40 is the number one person who benefits from the higher oil price? vladimir putin. and he loves, you know -- >> he always comes up.

>> you know, he benefits from this. brent is 113. the high all time was 146. it's 28% below that high. steve roach asked on the previous segment what does it have to go to to really crimp the markets? i think another 10, 12 dollars a barrel might bring you back to wanting bonds. to you're yen's very relevant point bonds have a place because the fed cannot afford to let the treasury pay higher interest rates. we have so much debt today. 13 trillion versus 5 trillion when obama came in. secondly you got to stimulate. okay. thirdly, you've basically competing with europe. these ultralow yields. >> right. all right, jurrien. so just stay calm? stay long? >> just becomes a ukraine situation, then you just look at the fundamentals. p/e's are in the immediate

teens. you add two for dividends maybe another couple of points for share buybacks and you're in the 10%, 11% market. yield curve is so steep if you own five year notes you get the rolldown and make low single digits, and it's boring but summer's here and the world cup is on so boring isn't so bad. >> and you think the netherlands is going to go places? >> you bet you. orange. just think orange. >> okay. coming up creating jobs in the telecom industry. udacity teaming up with at&t to create a nano degree. we're going to speak with the founder in just a moment. customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and e-trade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity.

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welcome back, v. we're talking about higher education and getting your college degree online this morning. udacity and at&t announcing a new partnership for something they're calling a nano degree. it's a new degree to help close the skills gap by teaching students specific skills needed for jobs at at&t. joining us right now is sebastian tlun thrun, co-founder and ceo at udacity. it's great to see you. welcome back. >> it's great seeing you. >> so this new nano degree. how does it work? is it for people who already have computer science degree or some sort of programming degree?

what do you need in order to take these classes and then qualify for the nano degree? >> well, the at&t udacity degree is a very focused degree to basically get you a job. it's not really a big degree. it's a very small degree, that's why it's called nano. for each of those you have to be qualified to the point that you understand mathematics, and a little bit of computing. and what we do is take you from here to here. if you say programmer and software engineer we can turn you into a data scientist or into an ios engineer which is a very sought after skill in silicon valley and we can basically retool you. we can be doing this. we can do many of those. we can stack them together. and you do it very quickly in life not just once but many many times. >> is this a situation where you need a basic four year college degree before you take this or could you be a high school student who graduates who's got great aptitude for things and start up with one of these nano degrees right away? >> it's open for everybody. you can be a middle school student. in fact we have middle school students who do these things and

do amazingly well. turns out people of all ages are qualified to become great computer scientists and data analysts and find work here in silicon valley. >> so, this is something that we've heard from at&t for awhile. randall stephenson has talked about how it's really hard to find people who are qualified for the jobs that they have. is this just a sign that american business is taking matters into their own hands, and they're going to make sure they do train a work force? >> i have to admit i'm really impressed with at&t doing this and other companies now following suit. the idea that companies really go and say we are more much as a job and employment we also offer education that makes us suitable for our job. now everybody can play and everybody can take place and get a nano degree and be qualified. in fact at&t is doing a great job, they're actually reserving 100 internships for this. so if you are a top performer in one of these degrees, you might get an internship. >> you might get an internship. so, how do they choose? i know this is a massively open

online course. a mooc. how many people are in these courses? how do you evaluate their performance at the end? >> we have in udacity, way more than 2 million students so far in the two years that it's been alive. and these nano degrees we have a lot of interaction. you get a mentor. you get to work with somebody and they give you feedback and they assess you. and the top performers in this program we just funnel on to at&t and then they might end up hiring them. >> sebastian, andrew here. i was hoping you'd weigh in, i don't know if you saw what starbucks just did yesterday, howard schultz announcing a plan to allow this workers, it's a move to some degree in that it's going to be an online education that was a little bit of controversy after it was announced yesterday, because of the costs of -- that are involved and how it was being paid for. have you focused on that at all? >> i think starbucks getting involved is another example of a great company like at&t. kind of moving ahead and caring about their own workers. at&t cares about the entire world. but these are really different.

our nano degrees are meant for lifelong education. for people all ages. and they can be taken literally by anybody. you don't have to be an at&t employee. you can take it and be qualified. we have an increasing number of companies accepting those credentials. >> i still can't believe it takes two years to learn how to make a latte or -- i mean to be a barista, what do you get a degree? you know. >> arizona state? from arizona state? ♪ ♪

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breaking news, everybody. valiant is going hostile in its bid for allergan. in a conference call valiant said it would offer an exchange to allergan's shareholders. it's also soliciting proxies, seeking to replace the current allergan board. if it can do that the new board would deal with valeant. the consumer price index and housing starts for may being released at 8:30. we'll have the numbers and the instant reaction. as we head to a break. take a look at the u.s. equity futures. dow futures up by about 23 points above fair value. "squawk box" will be right back. [ female announcer ] there's a gap out there. that's keeping you from the healthcare you deserve. at humana, we believe if healthcare changes,

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today a cnbc disruptor 50 exclusive. a game changing in cybersecurity, meet the ceo whose tech company is on the verge of super

all right welcome back. we're just seconds away from the may ppi and housing starts. and rick will bring those to us. an dpru we're on the starbucks website. it could take two years to learn cafe espresso.

>> caramel ribbon. >> there's a lot of different things. it's very complicated. i was selling the barista short. no wonder they have this online degree. to learn how to do all these things. i commend them on that. >> i was going to save you for those who don't realize that this is a joke. >> steve liesman rick the numbers, please. >> all right. litany of may data. starting out with head line cpi. hot, hot, hot, up 0.4, strip out the all important food and energy up 0.3. no revision to last month. take a year over year up 23.1 head line. up 2% encore. let's look at housing starts. a whisker over $1 million. seasonally adjusted annualized units. i mean a whisker. that's down 6.5% from a 1.07, 1 million look last month. if we look at permits what may lie ahead it was down almost an identical percentage down whisker under 6.5%. and its number was 991,000 on a seasonally adjusted annualized

basis. and that is down, of course, from 1.05, 9 million. so the housing data may disappoint some just seems to sequentially fit with a lot of data series going back to mid 2013 trends. and we see that inflation, even down further than ppi is a little hotter than expected, i'm sure a lot of it is energy. but so what? energy is part of what we use on the commodities side. and i know everybody's going to talk about geopolitics. hey i'm a market guy. and you know what? the markets don't seem to be affected. i know that bugs people. that seems to be the case. back to you. >> yeah. i guess we heard oil had to go up another 15, 20 dollars before we'd start worrying. it's always about oil, isn't it? >> it's always about oil. what i found, that you know in the last 10 or 15 years for the most part, beyond kuwait, even the crazies have respect for energy because they need the money. i don't know. i look at crude oil, i look at all the markets, and i know it's

a big story. seems like freeways in war versus free speech but no matter what, i just don't see the market. wow, we're at 259 to 261. been there, done that. we're 12 points off all-time highs in the s&ps. just don't see it. now not to say we won't. and energy prices are affected by that and those do feat the market. we're up $2.50, $3 since all this began? >> then when you talk oil, rick, is the middle east more important to oil, or is an 800% increase in the balance sheet of the fed more -- >> oh, come on. that's maybe why the media is just loving this story. takes all eyeballs off things like gee i can't answer that question, i'm hillary, i'm not going to tell you what i'm going to do to keystone. we haven't pulled it yet. we need the energy! . this is really crazy. and the irs e-mails are destroyed. joe, next time you're audited tell them hey i lost e-mails when i was racing at the wealthy only track. >> the "journal's" got a great piece on hillary. her book is not doing too well.

"journal" has an op-ed piece on how you make decisions on what to weigh in on. the not weighing in on keystone is classic. let's get to steve liesman. who joins us now, and he's so serious. he's the -- what did you call him? the san antonio spurs of cnbc. you and bob pisani. >> here's what's going to trouble the fed here, it's not the energy thing which rick mentioned, which is a part of it, gasoline up 0.7. but it's the broader set of things that are out there. commodities up 0.3. medical care resuming normal rises of 0.3. so there's this notion here that you have this broad rise now it's only risen to the place where the fed wants it to be. 2%, 2.1%. i think one of the questions for janet yellen at the fed meeting which begins today is going to be what's your tolerance, madam chair, for inflation running hotter? now the fed's own inflation indicator is going to be a little bit lower.

>> steve on a day -- isn't it fitting that on a day when the head line is that the imf says inflation is going to stay at zero forever -- >> that it goes up above two. >> stay at zero longer. till 2017. >> there is so much wrong with that imf forecast yesterday that it was -- on the one hand they said the market is too complacent. on the other hand they said inflation is going to remain low and fed can remain low. >> don't you miss bsk? >> for a lot of reason. how many minutes do i have? one minute? two minutes. i just want to show you one thing which is the fed's going to try today -- >> for so many reasons. is that what you said? go ahead. the fed's going to try to keep things pretty much status quo. i want to show you the december 2015 fed funds futures. the fed has to be pretty happy with this. these are the expectations for where the markets think the feds fund rate will be at the end of 2015. you can see after that big tumult you talked about earlier back in the summer of 2013 it's

been very stable in this 50 to 75 basis point range right now it's about 75 basis points. fed is going to be very happy with that. now you do have this jump higher in the fed's own inflation indicators. which are now back between 1.5 and 2%. that's where it wants it to be. there's going to be people out there that are going to say maybe the fed can't control all of this. let's take a look what's changed between the last couple meetings. unemployment rate has fallen four percentage points, 0.4 percentage points to 6.3%. those forecasts from the fed for unemployment are going to go lower and the fed's pretty much going to ignore that as an indicator. q1 gdp minus 1% running down 1. 5%, minus 2%. two new bummers carney and iraq comes undone. i don't think iraq has an impact. if you look at what's happened to our imports of oil, they're way down they should have that

means that what's happening overseas should have less of an impact. >> you're basically saying mark grant might be right. >> what did mark grant say? >> we're not going to have inflation for a very long time. much longer than what the fed has ever said. >> yields aren't going up. going down to 2, 2.1, 2.2. >> we all thought that was crazy. not we all but on a relative basis -- >> i think dlz going to be some interesting issues here in the market if inflation keeps going the way it's going. if you get up above 2, heading towards.5 it's going to be a fascinating issue as to whether or not the fed can hold the line. >> do they ever take into account, like at the supermarket where you're -- they really do cut 20% out of like the bags of things. they cut out a couple of diapers. do they ever do that? >> that -- that adjustment is made by the bureau of labor statistics. the size that you get for it. and also, quality adjustments. >> the bond markets are saying that rates are going to stay low. france is at the lowest since

1740. 173, and spain is the lowest since 1789. >> hold that thought, steve. >> tomorrow, we have the chief oil economist of bp. >> okay. >> with his world outlook for oil. >> great. >> we'll have him on "squawk box" tomorrow morning. >> we will look for that. we also want to get to meg who has details on this hostile bit from valeant. >> that's right. officially valeant is going hostile for allergan. mike pearson saying they've got a plan to take this offer directly to shareholders. to make an exchange offer this week to allergan shareholders. they said they thought they might have to take it to shareholders all along. allergan is not sitting down with them so they are going directly to shareholders. bill ackman is going to solicit a special meeting. they need 25% of the vote on so pershing already has. they think that could happen as soon as august but not -- not

later than after the end of this year. sometime by the end of this year they think they're going to get that special meeting. they're going to try to replace a majority of allergan's board and negotiate to close this deal. so taking that offer directly to shareholders, now again it's worth about $53 billion. val youing allergan shares about $169.73 based on valeant's closing share price yesterday. valeant is trading up about 1.6% premarket. allergan up just a little bit. we should see how shareholders are reacting today to this going directly to shareholders. >> thank you for that. we should keep an eye on how they structure that with bill ackman giving some of the issues want to do an exchange offer gets a little more complicatcom. a newly coined cnbc disruptor 50 aereo looking to change the immediate yo landscape and it's upsetting and more than a couple of people. a few apples in the process. we're going to talk to its ceo next the supreme court taking a look at that too. and then, you love speed and have your own high end wheels but where do you keep the car?

the story of a very special racetrack with special homes just for vehicles. the kicker, these are million dollar homes. for cars. we've got that story when we come back.

today cnbc disruptor 50. see why space-x has rocketed to the top spot. elon musk on the future of space travel and the struggle to make it so. closing bell 4:00 eastern, cnbc. welcome back to "squawk box." continuing our disruptor 50 series unveiling another innovative company from this

year's list. joining us on set is a squawk exclusive, chet kanojia, the aereo founder and ceo. also julia boorstin sticking around with us. great to see you. >> thank you. >> you are waiting -- you're in waiting, if you will, for the supreme court. >> we are, yes. >> what is it like living waiting for this decision that basically will decide the fate of your company? >> you know, you just sort of tune everything out and focus on what needs to happen. >> you have said repeatedly that there is no plan "b." is there really no plan "b"? i saw an article earlier this week, i think saying what are you doing all day if there's no plan "b"? you've slowed certain things down. >> some of them are practical things that we want to slow down just because there's a lot of capital involved and expansion for example. we're still building up, i think building up five cities right now. and -- >> so you're still investing even as this is happening? >> absolutely. >> the media companies are determined to shut you down.

they say it's not fair, you're not compensating them for their content and they're really confident the supreme court is going to rule in their favor. do you think there's a chance that you'll win? because they say there's no chance. >> obviously we think that we have a good case otherwise why would we have said sure? >> what happens if it doesn't come down in your favor? >> i don't know. i think we'll have to look at it. >> let me ask you a question. is that a negotiating posture? meaning it's one thing to tell the world we have no plan "b" because you tell the judges, you tell everybody, we have no plan "b." that has an impact. if you said, well, actually we could do it this way, and if the judges say no good then we could do it this other way. you're saying there's no way to do it this other way? >> the ethos or the foundation of the company was to create a parallel system, a consumer centric system that is based on the internet model, right? the internet is transparent. the internet takes care of companies that are fair and balanced and punishes monopolies. so the whole point of aereo was to create that fair, open

platform. if we don't succeed in doing that then we don't succeed in doing that. we didn't start this to figure out some clever way of making money. this was as much of an emotional commitment -- >> wasn't this an emotional commitment and dare i say an emotional commitment to figure out a technological way to circumvent the rules? >> absolutely not. i think this was an emotional commitment to create a system that fully complied with the law, number one. number two, and i think it's ludicrous to assume that what a consumer -- that a consumer should be paying and making the broadcasters double or triple the money, allowing them to double the -- >> do you think it's unfair for cable operators, or rather for content providers, to require cable operators, the cbs, nbc, broadcast networks, to require cable operators to pay them carriage fees? do you have a fundamental, emotional reaction to that idea? >> i think it's worth clarifying

that even the cable operators pay no copy right fees in market. what they pay is retransmission fees which is a law that was enacted a decade later. because cable companies are regional franchise monopolies. it was an anti-competitive -- it was a competitive measure by congress. it had nothing to do with copyright. it's just a complete fallacy that people think cable companies pay copyright fees. no they pay their fees to have a monopoly right in that market. >> what about the argument that if people switch over from their cable or satellite tv provider to aereo, that content companies are not going to have enough revenue to create the kind of content that people want. that without those retransmission fees that you're not going to have good enough content for your systems? >> i think they make 90 plus% of their money in advertising revenue. i think that innovation needs to bring in how is it a company like google can make billions and billions and billions of dollars with text ads because they have great technology, and people with great content can't do that.

of course they can. it's purely they're reliant on a monopoly structure and that breeds anti-competitive, anti-consumer sentiment. >> but you're also providing differedvr technology which means people can skip through the ads. >> people have add vcrs since time immemorial. >> i have a question for you. would you be okay with this, if you said we're giving this service away for free, so we're not making any money on this service at all, unless you want to buy the dvr piece of it. so anybody could get it for free. because that would put you much more in line with actually what true broadcasting looks like. >> really? on what basis. >> because if you think about how tv operates today, broad band -- not broadband, broadcast over the air is supposed to get to people for free. traditionally. you are basically taking a piece for the over-the-air component. >> no we're not. ever since broadcasting started you paid an equipment company,

whether you paid an antenna manufacturer, whether you paid a television set manufacturer, everybody was part of the value chain that made money. and people made money in different ways. there's no prohibition in supplying technology that takes advantage of the broadcast. we charge for technology. we don't sell you content. we don't distinguish and say if you want four channels you pay $8. if you want 40 you pay me "x." >> would you disagree that you're providing a service not a hardware product? >> we're supplying a technology absolutely. >> but it's a service. it's an ongoing service. >> doesn't matter -- >> you're saying it's the equivalent of renting a antenna? >> it's not equivalent. it actually is if you read our terms of use. in fact this came up in oral argument as well. we rent you technology. >> even if the supreme court approves your technology, there are other companies like dish, which have said they want to copy it. they want to do something very similar. what do you do then? >> actually i think they haven't said that. it has been very clear that they admire what we're doing but they have no interest in doing what

beer doing. they're an nvpd. they're bound by the monopoly rights. all of these guys, satellite orbits, ground wires, these are monopoly rights these companies have and to address that imbalance congress said there must be -- >> can you not make the business model work if you had to pay some form of carriage fee? >> so where would you draw the line? would you say sony has to pay a carriage fee now because the signal is being rendered on their television set? i supply technology. of course i'm allowed to do that. there's no restriction. >> hold on. i can't get an nbc signal on a sony device. >> sure you can. >> how? >> if you have an antenna. tony is letting money making you see that content. >> but it's being retransmitted over a device. >> so now you're arguing the length of the cord that connects the equipment is somehow relevant. and i think that's the crux of the case. >> yes, because these are municipal markets that are unfortunately have specific licenses. >> but sony doesn't pay a license. so you're arguing the length of the cord that connects your television set to the antenna is

how now relevant. i don't know how you stop technology. or say everybody has to pay just because the copyright owner wants to make three times the money as opposed to saying -- >> i can't wait. >> we got to go. >> chet what in the appellate decision, and in the oral arguments before the supreme court, what gives you hope and what makes you a little worried and nervous? >> i don't think of things along those lines. >> i wish we -- we've got to go. >> chets thank you very, very much. >> futures are now down. piece last week that inflation is coming back quicker than people think. we'll be right back.

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there's the futures which are now lower. let's get to the new york stock exchange with jim cramer. we had feldstein last week after he wrote the piece that he thinks the fed really doesn't understand that inflation may come back quicker than people thought because of the kreuger idea that there isn't much slack in the labor market. >> i don't know where he gets that. i took his course. he's a smart man. he's just off base here. >> what about the number today? >> well, i think the numbers -- look. i heard the discussion on oil. obviously oil is key.

the thing that would make me hate this market would be a dramatic increase in oil. i'm listening to david darce and it's possible. the fact that the slack in oil has come out and saudi arabia needs to pump is important. the bad guys may want to attack their wells to make it happen . i know what mr. roach was saying is everyone needs oil pumped. i disagree. that's my fear. my fear is not inflation in this country. other than in gasoline at the pump. >> putin loveses the higher oil prices. >> that's true. he got in charge. sometimes -- david, i would love to hear this from you -- we put him in charge by dissing him. it's terrible. >> we put him in charge. >> see you in a few minutes, jim. >> thank you. >> coming up, $1 million homes just for cars if you can believe it ptment robert frank has details after the break.

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what are you laughing at? million dollar homes. robert frank is here. we call him clark kent. he joins us with more.

>> i'm laughing at how good my job is. super cars are getting faster as the roads get slower. one sbre are preneurohas a solution. take a look. ♪ >> tom gets it. he send s super high end luxury cars in one of the most luxurious parts of the city -- beverly hills. >> buying these cars is like buying a tuxedo. . the expectation is as a result of wearing that tuxedo that you will go to the party. a lot of times the party never comes. >> that's why o'gara and some of the wealthiest people in town are headed east, into the desert. for a party that's fast -- and furious. and your car always has a place to crash -- as in its own private villa. >> there is nothing else that exists like it in the united states. >> the easiest way to describe it is a high end country club

for car owners. >> it's called the thermal club. for your rubber to touch this asphalt, you've got to be a member. of course it's not cheap. >> membership is $85,000. we have a corporate membership that's $200,000. >> reporter: when it's done it will be a $120 million play ground for super rich car lovers. think private pavement meets golf resort and vip country club. >> in addition to the $85,000 membership you have to buy a lot, a piece of land on the track which starts at $400,000, goes up to $800,000 if it's on the track. then you have to build the garage which is several hundred thousand more. you're talking about million dollar garages for your car just to be close to the track. >> how much does it cost to be on the track? >> right on the track are the $800,000 -- >> no, no. can you build a house?

>> you want to be a member? >> they don't have the zoning for residential now. it's just for your car. >> no golf course either? >> not net. >> where do they stay? is there a helicopter pad? >> they are next to a big private airport. >> where is it? >> just outside palm springs near la quinta. >> a beautiful spot. >> beautiful mountains in the background. you cannot stay p in the million dollar villas. it's just for your car. they will have a spa, pool, kids' center. the idea is the family can go there. it's like a country club but instead of golf it's for cars. >> why not sleep there? >> the zoning doesn't allow it. >> it's permitted everywhere else. that's east-southeast of palm springs. >> five miles from la quinta. >> east? >> i'm not sure. it's beautiful, great area. >> i love it.

>> tons of golfing nearby. >> no beaches for gross, sticky sand. >> you can terrorize him at higher speeds out there. >> promote this man. 10:00 p.m. >> we want to thank david for eight reasons but i don't have time. thanks for joining us. >> and for the muffins. >> join us tomorrow. "squawk on the street" is next. ♪ good morning. welcome to "squawk on the street." i'm david faber with jim cramer live from are the new york stock exchange. carl quintanilla is on assignment. let's look at futures this morning. we are looking at what may be a down open. certainly after what's been, well, a good deal of volatility but we were up yesterday. >> yeah, fine. >> a little bit. after the cpi number we got, more on that in a moment. we climbed a little bit in yield. you can see we are above